Decision-Making Scenario:

News has travelled fast of how well you and your team handled a report on the ethical dilemmas faced by Healthstart. As a result of the strong reputation that you are beginning to develop as a great resource for firms that are struggling to manage ethical issues in their businesses, you have been approached by a new firm called Can-Rock Corp., a publicly-traded Canadian mining company that has its own unique set of problems. You and your team agree to take on Can-Rock Corp. as a client.

Can-Rock Corp.'s executives agree to meet with you to explain their troubles. It seems that over the past decade or so, the company has been running out of viable potential mining sites to invest in in Canada, where many of the best deposits of ore for valuable minerals have already been discovered and harvested. Moreover, the costs of doing businesses in Canada have also risen sharply. Strict government regulations have been put place in the mining sector that are meant to ensure worker safety and minimize environmental damage that results from the mining process. And because most of the best mining sites in Canada are found in remote geographic locations that are far away from the country's most densely populated regions, Can-Rock Corp. has had to spend a fortune on transporting workers to work at their mines and pay very high wages in order to recruit the highly-skilled workforce that they need. In addition to these pressures, the high costs of recruiting a suitable workforce and ensuring compliance with the government's regulations are making it difficult to attract new investors.

For all of these reasons, Can-Rock's executives took the opportunity to start exploring opportunities to invest in new mining sites in other countries. This is what led them to consider the possibility of expanding their business operations into the developing country of Loskombo ten years ago, in 2012.[1] Can-Rock's executives explain that Loskombo is a fairly mountainous country with very limited farming land. As a result, the country has difficulty producing enough food to feed its population and most of the people who live there are quite poor by Canadian standards. However, Can-Rock was able to open three mining sites in the country, two focused on gold extraction and the other one on mining for cobalt, and the company is employing about two thousand local people as a result of these activities. In turn, Can-Rock's profits from these mines total approximately 890 million dollars so far, and they forecast that the mines will generate another 650 million dollars in profits over the next ten years if they continue to produce ore that is nearly as good in quality as the ore that they have been producing to this point. Most of these profit's find their way back to Can-Rock, where they are used to pay the business's operating costs, such as paying their workers. The rest of these profits are used as compensation that is paid to the company's executives and shareholders or are held in reserve for future investment opportunities. It even looks like there are several other potentially excellent mining sites in other parts of Loskombo that Can-Rock can invest in, depending on whether the local government agrees to let them.

Yet, Can-Rock's executives find themselves in a really tricky position. Mining is an environmentally-risky industry at the best of times because miners need to sort out valuable mineral ore from all of the other rocks and earthy materials under the Earth's surface that the ore is buried alongside. This requires the mining companies to create tailings ponds, which are where wastewater, chemicals and the residue from non-valuable minerals are stored after the valuable ore is processed. However, two of Can-Rock's mines have reported multiple leaks of these dangerous materials over the past five years, and both local government authorities in Loskombo and investors back in Canada are beginning to ask Can-Rock's executives some difficult questions about the environmental sustainability of the mines. Can-Rock's executives tell you that the leaks have all been easily contained, while at the same time they have been reminding government officials from Loskombo that their mines employ thousands of local people who might have difficulty getting the same wages in other sectors of Loskombo's struggling economy.

The executives explained that the job that they have in mind for you is to take your team to the mines in Loskombo and conduct a detailed investigation into the condition at these worksites. Then, they want you and your team to write a short report for them so that they can show their investors and government officials that the mines are safe and that they are good both for Can-Rock's profits and for contributing towards local economic development. Armed with this information, you set off to examine the mines. But what you discover over the next four months while conducting your investigation is that Can-Rock has not been entirely honest with you or the government of Loskombo.

It turns out that Can-Rock's engineers warned the company about the possibility that their tailings ponds at the various mining sites could fail due to shortcuts that were taken in their construction. These shortcuts were possible because Loskombo's government does not have the same capacity for enforcing environmental regulations and safety standards as Canada's does, and small amounts of the chemicals from these ponds have been leaking into what small supplies of groundwater the local communities can use for themselves and their modest crops. Meanwhile, you also discover that Can-Rock's local worksite managers have been sending small monthly payments to the local government officials responsible for overseeing the mines and ensuring that they are run properly, and it becomes clear to you that these payments are the reason why none of these local officials have ever spoken out about the issues with the tailing's ponds. You have good reasons to believe that the executives at Can-Rock that hired you know about the engineering problems at the sites, as well as the payments to local officials to keep them quiet. You also know after speaking to local Loskomban men and women who work at the mines that they feel like the work is very difficult and dangerous, but that it is slowly making a difference in terms of helping their families save money and improve their livelihoods. You realize after speaking with a few dozen of these employees that none of them have been informed about the chemical leaks and what they might mean for the long-term viability of their water supply or for their health. You are alarmed, but decide to think carefully about what to do in your next steps.

After your investigation is over, you assemble your team to examine the evidence and make some decisions about what your report. However, just as in the earlier investigation with Healthstart, you discover that there are many different opinions about how to handle the situation. One team member still prefers to look at the situation from the perspective of classical ethical theory, and suggests that utilitarianism could provide some real guidance in this situation. Meanwhile, a second team member encourages you to consider the problem from the perspective of corporate social responsibility and international business ethics. Finally, a third team member thinks that you should blow the whistle on Can-Rock, even though you are their agent. Once again, you find yourself in a position where you need to listen to all of their arguments before drawing your own conclusions for the final report.

1. What would the Utilitarian team member say? What would they say about thinking about both the costs and benefits of this situation?
2. What would the team member in favor of using corporate social responsibility and ideas from international business ethics say?
3. What advice would you give to Can-Rock Corp.? Explain the final business recommendation to Can-Rock Corp. about what they should do in this situation. Whether or not you would choose to blow the whistle on Can-Rock Corp. and give a clear explanation about why or why not.