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Pharmacare Colberia Case

Pharmacare Colberia case: Ethics and Corporate Responsibility

 

The Colberia venture of Pharmacare has several stakeholders at its centre but most critical among them are the local residents of Colberia that are at the receiving end. A stakeholder is associated with a project. He can be critical to its success or is influenced by it and its outcome (success or failure) in one or other way.  It can be an individual, a group or even an organization having an interest in project’s outcome. Internal stakeholders can influence important project decisions, play a critical role in the operation and completion of a project or their interests are critical to the project’s success. External stakeholders have an important influence over the project. The stakeholders can also be direct or indirect based upon how they influence the project and vice versa. In the Pharmacare Colberia case, the employees and executives of the company are important stakeholders. Apart from it, the indigenous population of Colberia is another important external stakeholder influenced by Pharmacare’s Colberian venture. The customers and investors of the company are also stakeholders.

 

Pharmacare’s treatment of the indigenous people of Colberia gives rise to several ethical and human rights issues. Indigenous tribes have always faced exploitation at the hands of finance hungry corporations and governments. The issue of Colberia is similar and rights of Colberians need to be protected. In history too, the indigenous people have always been at the receiving end. Whether it is for their culture or their resources, the more dominant groups have always exploited them for their benefits. The developed society has generally seen them as savage and illiterate people. Historically, they have been being exploited for labor. They are indigenous and illiterate but can’t be deprived of human rights. Pharmacare is exploiting them through its venture.  The company is using them for cheap labor. The indigenous people are uneducated and unaware of their rights. The poor people live in thatched and temporary houses. They have never seen power or running tap water. Mostly, they have lived far from developed life and depended on natural resources for their living.

 

The indigenous people have a simple lifestyle and are generally content with what nature provides them with. They live in natural settings and get the water they drink from natural tanks and rivers.  These people do not expect much from life. Still, the company is using them as cheap labor making them do hard and inhuman work. They carry fifty pounds for 50 miles for as little as a dollar a day. That’s not at all ethical. There are several things Pharmacare can do to change the situation. Pharmacare is using their land and resources. In return it should fairly compensate them. It could take following steps to be ethical in its approach:

  • Pay them fair wages. Pharmacare should pay the indigenous people with fair wages for the back-breaking work they do. They carry pounds of weight for miles. Just a dollar a day is too meager and mean. The company can compensate them better. If there is no law or any other authority to watch over its conduct in Colberia, Pharmacare must not feel free to be involved in unethical business.
  • Assist them at raising their living standard by providing them with access to better living. Pharmacare can provide the indigenous people with better housing and electricity. It can do these things as a part of its CSR. If Pharmacare is taking the indigenous people’s services, it should try to improve their living standard. It can do so by providing them with facilities like better housing and other basic amenities which can make life easier for them.
  • Start educational initiatives to educate the indigenous workers and their families so these people can be more self-dependent. The best that the company can do for the indigenous people is to provide them education which will raise their living standard and make them aware.

 

Pharmacare and Superfunds taxes:

 

The Superfunds taxes were enforced in 1980 with an aim to make the polluter pay. Under this act, chemical and petroleum industries has to pay taxes for cleaning of the orphan sites. Orphan sites are sites with hazardous waste and for which no responsible party could be identified. Such sites become the responsibility of the government. However, the problem was that while these Super funds became an attractive source of revenue for the Federal government, a small part was spent on the real task. Pharma care has been able to defeat several environmental laws and regulations including an extension of the Super funds through lobbying. However, if these taxes are brought again, they can financially harm several businesses. Pharmacare has also started its own initiatives focused on the protection of the environment.  Moreover, it is not responsible to tax the businesses that have not created those orphan sites for their clean up. In the long run, taxes like Super funds become a source of revenue only and are not used for the purpose they were meant for. So, whatever Pharma care has done to repel such acts is worth appreciation. Every organization must focus on environmental care and sustainability. Pharmacare apart from its environmental initiatives, worked upon reducing its carbon footprint through recycling and other initiatives.

However, compare it with its treatment of the local people in Colberia, the actions of Pharma care are not ethical. The hard work they do is nothing less than physical torture. The company compensates them for their work with very little because the people do not ask for more. If Pharmacare has to be ethical it would need to do more for the indigenous people.

 

The actions of Pharmacare judged by various ethical perspectives:

 

Utilitarianism: By the Utilitarian perspective of ethics, actions are ethical proportionate to the happiness they create. However, Pharmacare’s actions are not meant to promote happiness for the people of Colberia. They are aimed at satisfying its own needs. Moreover, the company is leaving the most important stakeholders, the people of Colberia dissatisfied. The meager compensation and the torturous work are not meant to promote happiness. So based upon the utilitarian perspective the actions of Pharmacare are unethical.

Deontological ethics: The deontological ethics are concerned with the ethicality of the actions rather than their consequences. They are also known as duty based ethics.  Exploiting the people is not like being dutiful. The indigenous people carry fifty pounds for miles and are compensated meagerly in return. If Pharmacare were doing its duty, it would at least compensate them fairly. So, based on deontological ethics too, Pharmacare’s actions are unethical and irresponsible.

Virtue ethics: Virtue ethics rather than judging the action or its consequences, judge the moral character of the doer; his intentions. A right action according to this perspective is what a person of character would do under the same situation. In this case, any virtuous person would not act like Pharmacare. Any good company would act responsibly and bear the responsibility of its people. It would pay them with fair wages and care for their rights. Even if Pharmacare claims that it has provided the local people with employment, it is exploiting them and using them for cheap labor. Company can do a lot to improve the living of the local people. However, it has not taken any step in this direction. Its actions are neither virtuous and nor ethical.

Ethics of care: Ethics of care espouses values like care and affection for the weak and the dependent. In the current case, the indigenous tribes are poor vulnerable people who depend on Pharmacare for a source of living. If Pharmacare truly cared it would pay them fairly and care for their living. These people are illiterate and do not know their rights. So, Pharmacare is not being ethical by paying them unfairly and by not caring for their development.

Person ethical compass: Any person would find it unethical as per his own ethical compass. Your own ethical compass would tell you that these people deserve to be treated with care and kindness. However, Pharmacare is not doing so.  So, again the company is being unethical.

 

A Comparison with Enron:

 

This is a case of corporate irresponsibility. It is damaging not only to company’s social image and organizational values but also social trust. You must be remembering Enron’s case and ethical violations by its managers which led to introduction of SOX. Enron is among the most well known cases of unethical business.  Its managers kept their personal integrity aside and worked against the welfare of the stakeholders to achieve short term financial gains. Enron fraud led to a loss of reputation and the company being declared bankrupt. The managers cheated not only their customers but also the employees and left the community shocked by their actions. In fact apart from the primary and secondary stakeholders in their case, the entire society was affected. Such actions reduce the trust between the businesses and the customers. Pharmacare’s ethical violations are not as severe as Enron’s. Still, its violations are serious. They are against the human rights of the Colberians. While its own managers live in well supplied houses, the indigenous people living in wooden huts are forced to earn every penny from hard work. That’s a clear sign these poor people are being exploited. The company is serving its own ends, taking advantage of people who are unfamiliar with progress and a better life.

There is always a mutually beneficial relationship between businesses and society. Businesses must care for this relationship and try to give back what they take from it. This trustful relationship should continue. Pharmacare would not have to incur any major expenditure if it cared for the local people of Colberia. Rather than exploiting them and their resources, it must treat them like its own workers. It should pay them and take initiatives under its CSR program for the empowerment of the poor. Keeping aside the losses that have occurred due to its actions, Pharmacare can take fresh steps to reverse the damage. It should mind its social image also and provide the indigenous people of Colberia with better working and living conditions.

 

Written by Abhijeet Pratap

Abhijeet has been blogging on educational topics and business research since 2016. He graduated with a Hons. in English literature from BRABU and an MBA from the Asia-Pacific Institute of Management, New Delhi. He likes to blog and share his knowledge and research in business management, marketing, literature and other areas with his readers.

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