Application To Contemporary Business Practice

Analysis of actions of Origin Energy and Others

Discuss about the Application to Contemporary Business Practice.

On 14^th October 2014 a 68 year old cotton farmer from Chinchilla, Queensland commits suicide by putting some weed poison on his lips. The farmer who took his life after the 10 years of fight against the CSG industry was named as George Bender. George Bender was a person who speaks truth, and stand for the rights of the farmers to say no to the gas industry. He analyses the effects of gas industry operations on land, agriculture and other ways. Therefore, he decided to say no to the gas industry after seeing the impacts of mining operations on his neighbors land. He fights for his right, and to save his property at Hopeland, southeast of Chinchilla (Hinman, 2015). Many agriculture landholders think that effect of CSG on agriculture land was not good and such operations polluting the ground water reserves which results in loss of land productivity for food production.

In this report we discuss the theories of ethics, corporate social responsibility, stakeholder management and ASX P&R (principles and recommendations) related to behavior of origin energy and other towards the farmers, and we also discuss whether it is ethical or not for Origin Energy and other, to obtain CSG against the will of land owners.

Owners of business make various decisions, and it is necessary that those decisions are ethically correct. Business owners take decisions after considering the theory of ethics whether they believe in it or not. Various business owners take help from ethical theories to solve their ethical issues, and there are various ethical theories such as utilitarianism, Kantian deontology, justice, rights and ethical relativism theories. In this we discuss the behavior of origin energy in the light of utilitarianism theory.

This theory states that action of organization is considered right or wrong on the basis of its consequences and effects on the majority of the people. Decision and action of organization is ethically correct if it effect positively to the large number of people (My portfolio, 2013). In the present case, George Bender was a farmer who believes in green and clean produce, and he reject the offer of the mining companies after seeing the effect of CSG mining on the land of neighbors. He fought for 10 years against Queensland Gas Company, Arrow Energy and origin energy. Origin Energy pressurize the farmer to access the property of the farmer, so that company drill 18 CSG wells on the property.

Corporate Social Responsibility (CSR) and Mining

The productions of CSG caused adverse effects on the property of farmers, and dry the bores of farmers and also produce noxious methane. The actions of these companies clearly state that they only care about the extraction of gas, and the companies does not care for the lives of farmers on whose land they are extracting the gas (Whiting, 2016). Companies activity related to extraction of CSG will result in adverse impacts on land, families of farmers and on agriculture. Before discussing the impacts of CSG on land and environment it is necessary that we understand the concept of CSG. Coal Seam Gas is extracted from the seams of coal which was present underground and also known as unconventional gas. In Australia, this gas was extracted and used from last thirty years but this activity was come in public scrutiny in recent years. Many concerns are raised on account of effect of CSG on farmers, agriculture and environment. Agriculture landholders believes that this gas not only affect the farming but also pollute the ground water reserves.

CSG industry argues in favor of the effects of gas on environment and states that CSG produce lower gas emissions than coal also provide a large amount of water which is used for irrigation, and also gives energy for the economies of China, India and South East Asia. Scientific views are also differs in this matter one report supports this expansion while other report refuse the claims of first report. In few years, Australia becomes the place where there is major expansion of natural gas in which the major role is played by CSG. It is estimated that 40 new well are extracted for CSG in Queensland only (ABC Rural, n.d.).

Therefore, we can say from above facts that companies’ actions are not ethical in the light of utilitarianism theory, because it does not leave positive impact on environment, farmers and land.

Now we discuss the actions of mining companies in respect of corporate social responsibility (CSR). In this respect actions of mining companies refer to those actions which either improve the living conditions of the communities in lieu of economic condition, social condition and environmental condition or remove the negative effects of mining projects. Usually in the activities of CSR the importance is given to infrastructure project, social capital, preserve and work for the benefit of human capital, environment, etc, (AMMA, n.d.).

Stakeholder Management

There are various reasons because of which mining companies are engaged in the CSR activities. Usually mining companies are compensating the society in lieu of social and environment cost which is associated with the projects and activities of mining. Programmes related to CSR activities do not give any direct benefit to local communities. Not only community but the companies also get various benefits from the activities such as they build a good image in the community and build up good relations in the community in which they conduct mining operations. Good relations with communities help the companies in avoid the delay in projects and closure of projects, and companies also avoid economic risk elated to project.

Secondly, companies answering the concerns of their consumers through CSR activities related to production of products consumer consumed. In last companies which conduct good CSR activities and compensate the society as well can get priority in working with government (Miningfacts.org, n.d.).

CSR activities refer to management of business process by companies, so that society gets maximum benefit from the activities of company. Every country has its own framework which defines the criteria of activities for the organizations of that country. In Australia, companies must ensure that they are following the laws and rules made by the government of Australia in respect of their industry. Government of Australia expects from their companies that company comply with all the laws and regulations, and conduct their activities in that manner which leaves positive impact on society. Government also expects from mining companies that they conduct their business in that manner which leaves less damage on environment and society. It is necessary for mining companies in Australia that they conduct their activities and take those preventive measures which reduce the environment and social damages (Jenkins & Yakovleva, 2005).

In the present case, the activities of Origin Energy and companies are not leave very great and positive impact on environment and society. In this case it is clearly stated that the activities of three companies that is QGC, Arrow Energy and Origin Energy are not impacting the society in positive way. A farmer committed suicide, because his two underground water bores are  dry because of the CSG industry activities. Origin Energy wants to drill 18 more well on the property of the George bender. Bender fears that these wells cause huge interruption in the ruing of farms. CSG mining activities not only affect the food supply chain, but also adversely affect the ground water reserves (Hagemann, 2015).

Conclusion

The impact of CSG mining activities on the environment is not good at all and these activities are extracted four more gases that is carbon monoxide, carbon dioxide, hydrogen and methane. These gases polluted a large number of area, and result in lung problems with human and animals and cause even death. The pigs and cows are started falling ill, dying, breaking out in rashes, and sows were delivering stillborn litters.
In one interview, daughter of George Bender makes a statement that this issue is not local because it affects the food chain and water supply, which is for sure not a local issue (Hannam, 2015, Queensland Country Life, 2015)). The environmental impact of CSG activities are not good, and companies only care about the extraction of gas, and the companies does not care for the lives of farmers on whose land they are extracting the gas. Gorge Bender was the farmer who was affected by the gas plant of Linc Energy, but still Origin Energy wants to drill 18 new wells (ABC, 2015).

Companies are not following the ethical conduct because they are getting the lands of the farmer by pressurize them for conducting their CSR activities. However spokes man of QGC and origin says that facts related to dry bores on chinta are not correct and they get dried not because of CNG activities but because they are not using from decades. Spokes Man of origin also said that companies are trying to find the way to working with the community, and company offer to purchase Chinta on the price excess of market value that is almost double (The Chroncile, 2015).

Stakeholder management is a concept which ensures the success of any project, activity or programme. Any individual, organization or group which can be affected by the project, activity or programmed is known as the stakeholder of a company. If company effectively manages its stakeholders that it can create a positive relation with the stakeholders, and help the company in ensuring the success of their project and activity. It is necessary that company take care of its stakeholders, and prepares its strategy by compliance with the principles and guidelines.

It is necessary that company conveys positive message to its stakeholders, and give importance to all the stakeholders because only shareholders are not the only important content of company. Society and general consumers who are affected by the activities o companies are also the stakeholders of the company, and it is necessary that company give importance to them also (TCS, n.d.). In this case, farmers and their families are also the stakeholders of the mining companies because they are directly affected from the activities of the mining project. In this case the main fight was about the rights of the farmers to say no to the CNG companies. Government does not give any right to the framers so that they can reject the proposals of CNG companies.

George bender states in his interview that no one is listening, and companies are only taking care of extraction of gases, without thinking about the impact of extraction of gases on environment and farmers. The ground water reserves are destroyed and two bores of Bender are dry. The impact of mining activities is effect the environment and farmer lives in very negative way (Lock  the gate alliance, n.d., Walker, 2015). In this case companies do not have any effective stakeholder plan for the farmers. A plan for stakeholders is effective if it identifies the stakeholders, discuss the goal of project with stakeholders, work methods are determined, and risk in projects are already identified. Stakeholder plan is for the help of public which are directly affected by the project of companies (APMknowledge, n.d.).

In this case companies do not take any measures to identify the risk and minimize the effect of mining activities on land and agriculture. For example one of the company offer air conditioners to the Bender after the death and illness of pigs and cows, which shows that company compensate the farmers after the loss, and does not take any preventive measures to reduce such risk.

It must be noted that companies are acquiring the land of farmers without their will to conduct the mining operations. George Bender fought against these companies for 10 years, and in last he gets tired and depressed and chooses to end his own life. The death of this farmer proves the pressure of companies to acquire the land of the farmer without his will.

In the view of company, we can state that it is necessary for companies to acquire the land of landowners from the economic point of view to carry and conduct its activities, but from ethical point of view companies are not taking the right decision to acquire the land of farmers without their will.

In last, we analyses the behavior of companies on the basis of ASX P&R (principles and recommendations). Australian Stock Exchange issues the principles and recommendations for companies to ensure the corporate governance in their company. In this paper we discuss the principle 3 of ASX that is Act ethically and responsibly. This principle states that for a company its reputation is the most important thing because if one it spoils, it’s hard to get it back. It is necessary for companies that they complied with its legal obligations, but ethical obligations are even important than the legal obligations which involves acting honestly, integrity, and conduct activities which are expected by the society (ASX, n.d.). Following are the activities are described below which are expected from the company to conduct:

• Respecting the rights of the human society, and taking care of its activities impact on human, society and environment.
• Creating an environment which is safe.
• Acting in such manner which shows responsibility of company towards the environment.
• Conduct those activities which ensure safety of society and environment (ASX, n.d.).

In the present case, it is clearly stated that companies and government both are declining their ethical duties towards the farmers and environment. Companies conducting the mining activities which are negatively affect the farmer’s lives and environment. We already discuss the impact of mining activities on environment and farmers lives in this paper, and from the above discussion we can say that companies are focusing on economic benefits only not on their ethical duties towards the society and farmers.

Helen Bender, states that his dad’s last words are no one is listening, and he is wasting his time which proves that not even government and politicians support the farmers. No laws are there which give rights to the farmers to say no to the CNG companies, and farmers have no way to protect their land from the companies.

From the above discussion we can clearly state that it is not ethical to take the land of farmers without their will, and the behavior of Origin Energy and other companies are correct and legal from economic point of view, but from the ethical point of view their behavior was not risht at all.

Conclusion:

In this paper, we discuss the issue from ethical point of view and conduct whether it is ethical or not to take the land of landowners without their will for the purpose of extracting gases from their land. In this we note that companies are following their legal obligations, but do not behave ethically towards the society and farmers. The effect of CNG extraction is clearly visible on the environment and farmers, but companies only take care of the extraction of gas and do not think about the farmers from whose land they are extracting the gases.

In this report we first discuss the behavior of Origin energy and other companies on the basis of ethical theory and use utilitarianism theory to describe the actions and conduct of the company. In this it is clear that behavior of the company is not ethical. Then we analyses the conduct of company on the facts of corporate social responsibility, and conclude from the actions of the companies that companies are not fulfilling their responsibility towards the society. Later we discuss the behavior of origin energy and other companies on the basis of stakeholder management policy and determine that company is not considering the benefit of farmers and environment and give emphasis to economic benefit only. In last we analyses the behavior of company on the basis of ASX principles and recommendations, and discuss principle 3 of the ASX that is act ethically and responsibly.

From the above discussion we conclude that it is not ethical to acquire the land of farmers without their will, and farmers also has right to say no to the CNG companies.

In this paper we recommend after discussing the facts that it is necessary for the government to make law and provisions which determine the rights of the farmers and landowners against the CNG companies. A farmer took his life after the struggle of 10 years, and stand against the mining industry to get his right. Government must recognize the rights of farmers and make law which give right to the farmer to say no to the CNG companies in conducting their mining activities in the land of landowners.

References:

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