TO: Gerald Barnett
FROM: Wesley Smith
SUBJECT: BASF and Ethical Issues
DATE: April 10th, 2014
Ethics are a part of everyday life in the business world. People are faced with challenges wit outcomes that can affect their whole lives. Badische Anilin-und Soda-Fabrik (BASF) is the worlds leading chemical manufacturing company. With such a huge company, many ethical issues are going to arise. Today I will be talking about one instance that occurred in Beaufort County in South Carolina. This issue involved the site for a new chemical facility and the local environment and economy, all of which will be elaborated in the coming paragraphs.
BASF started out in Germany in 1865 and began to expand to other areas of the world soon after it was founded. Pollution and destruction of the environment soon became a problem for this large corporation. BASF plants had “polluted the Rhine and, in Belgium, the Schelde River” (Donaldson pg. 1). This was a major problem for BASF and the locations that it owned. One potential area that BASF was looking to build a plant in was Beaufort County. Beaufort County is located in South Carolina along the coast and is home to the Hilton Head, which is a wealthy resort community. Along with this up-scale community, we find the complete opposite in a majority of the community. Many of the areas are home to low-income black families who struggle to make ends meet while having seeing the luxurious lives that their neighbors live on the Hilton Head. In the late 1960’s BASF was looking for a new site to build a new chemical plant, and Beaufort County was in the running.
Ethical Issues in Business by Thomas Donaldson and Patricia H. Werhane elaborate more on this story in the first chapter of their book. Beaufort was chosen as one of the final locations for the plant. At first the two sides debated whether a machine industry or a recreation industry was best: “advocates and opponents of the plant clashed mainly over the type of development best suited for Beaufort—manufacturing or recreation.” (Bryan) Later, the Hilton Head was against the idea of BASF building a plant on the island because of environmental reasons. Hilton Head argued that since BASF had already polluted the Rhine and the Schelde River in Europe, that it would also pollute the air and the Colleton River in the area. Hilton Head also made note that BASF had “only allocated one million dollars… to pollution control.”(Donaldson Pg 1) BASF had previously had to pay many different penalties resulting from the pollution of their plants. Hilton Head used this information against BASF. On the other side of the choice, the citizens of Beaufort County wanted to have the plant go in. Having a new plant would mean thousands of jobs and opportunities that the population did not currently have. Donaldson elaborates on this and adds a remark from a local business man: “’I would say 80 percent of the people in Beaufort County are in favor of BASF. Those who aren’t rich.’” (Donaldson Pg. 1) This shows how big of a decision this was going to be the BASF in order to provide more jobs or keep the environment safe.
The ethics of this situation were not all present in this short passage in Donaldson’s book. With further background information more facts come up about Hilton Heads intentions with the island and the issue of pollution. The island was mainly inhabited by black lower class that did not have many jobs, but owned large plots of land. With the BASF plant coming, this would provide many jobs for them and help to raise the poverty line they lived in. The Hilton Head wanted to use this land to develop their resort community more. They began to raise the tax on the land in order to drive the current owners out. The “plantations” as Hilton Head called them, were large plots of land with estates that wealthy owners would live on for vacationing time. The landowners, whose land had been in...
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