Question
Cleanit Ltd manufactures a chemical compound which is widely used in industrial cleaning. One of the raw material, Chem Z, used in its manufacture is
Cleanit Ltd manufactures a chemical compound which is widely used in industrial cleaning. One of the raw material, Chem Z, used in its manufacture is scarce and purchased from a supplier in a developing country. Chem Z is very toxic and can cause serious damage to the health of anyone who is exposed to it. It is also known that the local environment around factories that produce Chem Z are subject to extensive contamination. Following a major industrial accident one week ago at the main manufacturing site of a supplier of Chem Z, there has been wide-spread and intensive reporting campaign in the press and television and have further identified Cleanit Ltd as a major user of the product. An action group has been formed that seeks to ban the import of Chem. Z into the country and is actively seeking the closure of Cleanit Ltd manufacturing sites. The Board of directors of Cleanit Ltd believe that the public concern is excessive and unjustified, but the directors now recognise that they should have done more to report on the risk from Chem Z, and the measures taken to deal with them, in their social and environmental report. Required: a) Identify at least 2 externalities created by the supplier of Chem Z, as described in the facts of the case. (2 marks) [Answer here] b) Examine four alternative courses of action that Kemix may take in response to the damaging media reports about its association with Chem Z and its social and environmental dangers .
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