Importance of utilitarian benefits of Caltex in Apartheid South Africa
I believe that the utilitarian benefits of a Caltex plant were more important than the violation of moral rights and justice going on at the time. The benefits that the plant was willing to provide for the African natives were; non segregation of Africans in the company, fair and equal employment practices, equal wages with their White counterparts in the same job description, more management positions for Africans, and improvement of life outside the work place. These benefits at the time (1977) were unheard of in any company. Life in the Apartheid era for Africans was very much against the benefits provided. Therefore, I believe that offering them these benefits would be like a step towards achieving the freedom they yearned for. This is anchored by the Chinese saying that a journey of a million miles begins with a single step, which in this case is the listed benefits in Caltex.
In analyzing the possible violation of human rights and justice when the Caltex plant is built, the importance of the plant becomes an ethical dilemma. This is because the presence of the Plant shows that they are supporting the apartheid system of government. The support is through selling products to the military, paying corporate taxes, and economic and political support for the government since it was mandatory for the government to own a stake in the company (Case Study 4). Since the government was so bent on promoting White supremacy at the expense of Africans, it would be easy for Caltex to be arm twisted by the government into following their system sooner or later. The Apartheid government had the power to change policies and legislations into favoring them. Like when an embargo was set in the 1980’s against selling oil to the government, the policy set up was aimed at forcing the sale of oil and its products to government agencies (Case Study 4).
However, the violation of African rights is not that important considering the fact that some of the human rights and justice violations were being lifted by Caltex. The benefits provided through the ‘six principles’ are like a form of corporate social responsibility that would have rubbed on to other international companies. The numerous international companies offering the benefits would have succeeded in influencing the government into lessening their grip on the apartheid system. Furthermore, the plant continuing operations would have also provided an opportunity to Africans to experience equal treatment. It was also speculated that if Caltex pulled out, the people who would have suffered were Africans compared to Whites. There would have been more unemployed Africans, which would have caused civil strife, and high cost of living like in the 1985 strife. Therefore, I believe the benefits of Caltex setting up a plant in South Africa bring far many benefits than the violation of justice and human rights that are associated with it.
Decision as a stakeholder in Chevron
As a stakeholder in Chevron my decisions would be based on utilitarian principles, which would be those that benefit the majority of people. Therefore, on the first decision which would be to terminate operations in South Africa, I would vote against it. In withdrawing from the South African Market, the parties that would be negatively affected would be: shareholders of Caltex who would lose their investments, thousands of employees, and the South African government who would lose taxes. Therefore, the only benefit in the company withdrawing operations in the country would be the government being forced to negotiate on their extreme laws on White Supremacy because of loss of finance. However, it was highly improbably that the government would be forced to negotiate on their system, and add to the complexity is that Caltex would find it hard to enter the South African market in the future. Hence, voting against moving out operations from South Africa would be the best option.
In the second decision, of not selling products to military or police, I would vote for it. The decision would serve as a sign that they do not support the Apartheid system. Even though the government may not take it lying down like what they did by forcing suppliers and manufacturers to sell them products when a similar situation presented itself, the message brought forward by the move would stimulate other international companies to decide similarly. Furthermore, Africans would be motivated by believing that they are not alone and that the international community is also supporting them in the struggle for equality. If the company voted for selling products to the police and military, it would be a very bold statement that they supported Apartheid. Furthermore, the military and police would be stronger through having advanced products, which they would use against Africans; hence more fatalities and deaths.
Lastly, I would vehemently vote for the Tutu Principles which are: ensuring black voters stayed with their families, recognition of black labor unions, opposition of labor control, and fair employment practices (Case Study 4). Voting for the principles proves that the company has corporate social responsibility in ensuring that they promote positive societal expectations. This would also help in other international markets such as South America, Asia, and Europe that had placed embargos on products from companies that supported Apartheid in South Africa. Africans would also have a chance of experiencing equal treatment first hand, a situation that would have led to motivated employees who would increase production and operation levels. On the part of Whites and Asians in the company, the decision would have enabled them realize that Africans can also solve problems and work like they do. This would help in changing the mentality of Whites at a local level before moving on to the entire country.
Recommendation for Responses for the Managers of Caltex
In the first resolution that the managers made, which is to withdraw operations from South Africa should not have been made. The best response would be in voting against moving operations out of South Africa. In the second response on not allowing products to be sold to the military and the police, I believe the decision was the correct one. Furthermore, in the last decision of implementing Tutu’s Principles, I also agree with the response of implementing them in the workplace.
The managers of the two companies have the responsibility of; ensuring that shareholders investment is preserved, allow for future operations in the country, motivate employees in the company for better productivity and operations, and maintain the corporate image of the company (Case Study 4). Therefore, in the first response they were wrong to decide to pull out. The company had invested $ 100 million and had been assured that they would be getting 20% return on investment annually (Case Study 4). Therefore, pulling out would mean that shareholders would not get their returns, which is against the duties of the managers. Furthermore, in carrying out their decision, they would be creating a hurdle for future expansion in the region. Moving out would mean that in the future, there might be a possibility of the government frustrating Caltex’s efforts of setting base in the region.
In the second response, the managers were right as they based their decision in accordance to the duty maintaining the corporate image of the company. Selling products to the military and the police would have damaged irreversibly the international image of Caltex. This is because they would be among the black listed companies that supported apartheid. The management was also right in agreeing to implement Tutu’s Principle in the work place. In the principles, the management was able to carry out their duty of employee motivation and provision of favorable environment for maximum production and operation.
Therefore, in analysis of the case study of Caltex in South Africa, it is important to note that companies should not look entirely at the law and the rate of returns on investments as the major aspects of making decision. The reason is that many countries have unique legislations which may or may not affect operations in international companies. In the case that legislations negatively affect operations, then the corporate image, employee motivation, and future expansions might be in jeopardy. Hence, it is important that decisions be objectively debated upon all with a utilitarian perspective (benefit to the majority).
Reference
Case Study 4: A South African Investment. PHI445. Personal and Organizational Ethics. Ashford University. Pp. 8-13
