Tag: business ethics

Human exploration of space: a controversial debate (Part 2)

Posted on by fqzhang

For part 1, click here.

A second key contentious point is the role of private companies and national governments in space. The drive for space exploration was mostly led by governmental agencies since the very beginning, and currently a “virtual government space monopoly” exists.  In the US, National Aeronautics and Space Administration was created in 1958 to coordinate the government’s efforts to explore space.  The exploration itself is also closely linked to military endeavors, with intelligence gathering as one of the early reasons for the launching of satellites. Some argue that we should limit the role of governments and private interests in space and place exploration under the firm control of national governments, while others believed that we should open up space for commercial endeavors and to utilize space as much as possible.Edward-Hopper-s-Nighthawks-in-Space

Anti-Space liberalization groups based their arguments on several points: first, private companies would only be willing to undertake space exploration if and only if immediate and short term economic prospects are possible, and therefore they have no long range exploration goals that can serve public interests. According to pro-space advocates, private interests cannot utilize space efficiently because space exploration requires a large amount of initial capital investments that few companies can or are wiling to afford, and the fact that any ventures in space would require years to generate any results doesn’t favor private investments either.  Furthermore, there is an incentive for company to not do any original research at all and to instead rely on imitating others by doing what others have already began or done. This is not an issue when the government is the major source of research; however, with the privatization of Space R&D, company will sought to improve on their existing research than to build new ones, since the costs will be lower. According to the anti-privatization groups, only the government can sponsor basic research, without direct considerations for profitability.

Secondly, the exploration of space also brought up the points of who owns what in space, and how can governments regulate such claims of property or intellectual property. On land, the issues of property is quite simple, like in the American West in the 19th century, where the first ones to find the area and to use it to its full commercial potential can often obtain permission from the national government to gain ownership. However, no clear international agreements have been reached on using resources in space by each nation. The Outer Space Treaty of 1967 is an international agreement that guaranteed “outer space and celestial bodies are free for exploration” and under Article VI, signatory nations “bear international responsibility for national activities in outer space… whether such activities are carried on by governmental agencies or by non-governmental entities…”  In effect, the treaty defines that space is open to all and activities in space are the responsibilities of the government. This works in the days when commercial development of space seemed so far away, however, now with humans on the moon and potentially on the asteroids or Mars, the resources on those planets can have great implications.  For instance, asteroids are known to have rare-earth minerals which are commercially valuable even given the high cost of exploration.  The question therefore is who should own these resources or if they should be exploited.space shuttle leaving earth

Anti-privatization people believed that giving up space and celestial bodies, such as the moon and asteroids, to private interests is irresponsible. Indeed, if we fully privatize space among the large companies, they can effectively dominate space and create a private monopoly and close it off to future exploration, or having power concentrated in the hands of too few people. In addition, unlike governmental research where any research generated can be shared with the public, private company’s research and the technology spillovers from R&D would not be shared with others, to the detriment of society.

On the other hand, many pro-privatization advocates argue handing over certain aspects of space exploration to the emerging Space Industry will be beneficial to society at large. Among their arguments include the cheaper ways that private companies can get humans/robots to space and to utilize space resources. For instance, recently, the SpaceX Falcon Heavy launcher can in theory deliver about 50 metric tons of payload to low earth orbit at a price of $120 million, averaging to about $1000 per pound, much less than the tens of thousands of dollars per pound that NASA’s technology can deliver.  Currently, advocates of private interests in space argue, the government’s effective monopoly on space is encouraging waste, and if more company like Elon Musk’s SpaceX can be introduced to the competition, the costs of going to space will likely decline further as a result in refinement of space technology.

space vehiclesMoreover, private property rights in space should be established because only private companies can use the resources to its greatest effect. Many pro-privatization advocates pointed to the difference between the usage of Arctic (which are fully utilized economically) and the Antarctic, which have no development; whereas the Arctic’s property rights are well-defined, the Antarctic’s is highly ambiguous. Similarly, if the resources in outer space is well-defined, many people here on earth can reap its economic benefits through the efforts of private organizations.

Finally, the third main point of contention in the space debate is the effect of space exploration on long term human health, both mentally and physically. Many people cite the facts that prolonged exposure to space is fundamentally unhealthy for human beings and long term stays are simply unfeasible. However, pro-space advocates argue that we must adjust to living in space through technological means and that in order for us to survive as a race, we must look to the solar system as a source of survival.

Ever since the first human flight to space, scientists have been carefully observing the effects of space environments on the human body. For example, scientists noticed that astronauts can develop a greater “risk of getting a kidney stone as a result of space travel since the body quickly dumps a lot of fluid when gravity is no longer drawing blood down into the legs and the elastic vessels squeeze it upward”.  In addition, the body can lose large amounts of proteins, by up to 45 percent decrease in protein synthesis. In large part this is due to microgravity environment which results in a lack of muscular activity.  Other long-term health effect includes bone loss, cellular organization and radiation.liftoff1

Given these detrimental effects on human health, many argued that human travels to space should be limited in scope and argued that human settlement in space is impossible in the long run. Therefore, we as human beings should still focus our development on our only habitable planet as our bodies are physiologically adapted to life on Earth.

However, others believed that human beings should began to adopt to space. Some talk of an “astro-civilization” , where just like humans have moved from a nomadic to an agricultural then to an industrial society, our next logical step to expand to a space-based civilization. According to the pro-space advocates, the earth’s expanding millions required more and more resources to sustain itself.  Therefore, it is necessary for us to develop technologies to enable us survive in space and to produce habitats similar to those on earth in near-earth orbit. Some have outlined strategies for monitoring human reactions in space step by step, such as Edgar Mitchell, who was an Apollo 14 Lunar module pilot. He argued that humans should first continue space exploration by landing on Mars and later establish a scientific laboratory on the Moon.  This laboratory can be used to test how to adapt humans to the hostile environments in space. Once that is accomplished, we can then consider the establishment of more permanent bases with the eventual goal of settler colonies on Mars/Moon, or near earth space.

For part 1, click here.

Human exploration of space: a controversial debate (Part 1)

Posted on by fqzhang

I wrote about this topic of human space exploration a while back, somehow, I never bothered to post on my blog. But here it is, and divided up into two parts to make it easier to read. For the second part, click here.

The question of whether or not we should sponsor human space missions had been controversial ever since the modern exploration of space began in the 1950s. A variety of arguments have been made either in favor or against the exploration, and two opposing sides developed in this debate.  My thesis for this essay is that the human exploration of space is a controversial issue since the costs of sponsoring space exploration is extremely high and the money can be better spent elsewhere, the unclear role of government and the power of private (commercial) interests in space, and the long-term and unknown health effects that traveling to space have on human beings. Key questions like property rights in space and the extent of government funding has been debated, and while some supports the private funding of space, others are more reserved.  Moreover, the possibility of human settlement of space is hotly debated as well, with some believing in the future destiny of mankind laying in space, while others believed we should focus more on planet earth, using some of the technologies we gained from space exploration. space-exploration

Firstly, the costs of going to space is enormous, and specific criticisms includes the national funding for space exploration, the real scientific need for such funding and the alternative good that the money can be used for. Many criticize the decisions by national and private organizations to sponsor such an endeavor to space. It has been estimated that the launch of a space shuttle costs about 450 million, and there have been over 130 launches from 1982 to 2011.  Not to mention the 140 billion plus that the space station has been spending. Such costs indeed add up to astronomical numbers. Currently, the vast amount of the space exploration is funded by governments of various countries. Here in the US, the federal budget funds 17.7 billion for fiscal year 2014 to NASA . The federal governments reached this number after vigorous debate and many wanted NASA to focus on more tangible results in the near-earth orbit instead of pursuing large projects that have no direct results. In today’s world, where the fight for national budget is increasingly acrimonious, spending such a sum of money on science that have little practical values is useless according to many critics. The bottom line is simple: our national economy simply do not have the necessary resources to continue the space program on a regular basis.

Regarding the amount of money being spent in human space explorations, many critics also pointed out alternatives to human exploration for the advancement of science. Chiefly, they argued that many of things that require human presence can also be carried out by robots. Robots can reach far more different places than humans, and can conduct research in a variety of different (often hostile) environments. The Curiosity spacecraft currently exploring Mars is a great example of having robots do the exploration for humans, where it has continuously been sending back data for scientists based here on planet earth, without the need for humans to travel.  The costs of these development in space is cheaper and can achieve more scientific results. In addition, critics attack the argument that scientists can use the opportunity in space to perform experiments otherwise not available on Earth. Many simulated laboratory conditions achieve the microgravity and other conditions of space, without the need to send scientists into space to perform the experiment itself. Critics argue that it will make more sense to fund laboratory facilities than to build ones in space and requires travels to space to perform the experiment.Space-EXploration-Puzzle-900x1600

Finally the money being spent in space, many argue, can be best spent here on Earth. With food and water shortages in Africa, a global environmental crisis, a lack of healthy standards of living in many places, many argue that the billions spent in space can be used to directly improve life and living conditions on earth. As the CBS news anchor Katie Couric stated in October of 2006, “NASA’s requested budget for 2007 is nearly $17 billion. There are some who argue that money would be better spent on solid ground, for medical research, social programs or in finding solutions to poverty, hunger and homelessness… I can’t help but wonder what all that money could do for people right here on planet Earth.”  Money spent in space, some argue, is a long-term discretionary spending that can be eliminated to provide money here on earth.

In contrast, pro-space organizations argued that such costs are justifiable and can be brought down to more affordable levels as our investments in space R&D and infrastructures pays off in the future, and that our investments in space can bring tangible economic benefits to planet earth. Currently, the annual budget for NASA which amount to about 17 billion every year, is indeed a tiny fraction of the overall public spending. Indeed, “For every $1 the federal government spends on NASA, it spends $98 on social programs. In other words, if we cut spending on social programs by a mere one percent, we could very nearly double NASA’s budget”.  The costs of space exploration, when put in perspective is indeed not that great, and the 16.143 billion spent on NASA in 2007 is merely 0.58 percent of the total federal budget. Pro-space exploration advocates argue that even if all the money spent on space is allocated to other spending, the differences on our society would negligible. In addition, a key role of government, many felt, is to promote the arts and sciences and NASA argues that it is fulfilling this role. NASA provided an enormous amount of scientific knowledge about space and scientific endeavors in general, and helped to educated millions of students on science.  The scientific and educational value of space exploration can never be truly quantified, for such an investment in our nation’s scientific future and the education of the youths is something that goes a long way.satellites

Moreover, many scientists argue that the investments in space can bring tangible technological and economic benefits to here on earth, many of it in the forms of spin-offs from the products initially intended for space use, or as a result of space research. Some examples include cell phone cameras based on space cameras, memory-foam mattresses, aircraft de-icing, etc.  These new technologies spurred new industries, improved the quality of life and encouraged economic growth.  “A number of studies conclude that about 90 percent of the long-term increase in output per capita in the U.S. has been attributable to technological change, increasing educational achievements…”  The spin-offs from NASA research contributed enormously to economic growth in the US and the world in general.

For part 2, click here.

Reflections on India’s hydroelectric project

Posted on by fqzhang

According to a recent article on Reuters, “India approves projects in dash for growth, alarming green groups”, author Tommy Wilkes discussed the Indian government’s approval to build the country’s largest hydroelectric power plant. The construction of this dam will upset the ecological environment of the area considerably by cutting down trees and reducing biodiversity. Therefore, the debate in this case is whether or not the government should allow a plant to be built in the state to promote the economic growth of the area and the nation, or should they look to protect the environment and to help promote the long-term environmental welfare of the region?

While it is easy to simply blame the shortsightedness of greedy industrialists or government officials only interested in tax revenues, we must bear in mind that India is a large developing nation with its own needs. For us here in the United States, which enjoys a high standard of living and free from most material needs, it can be inappropriate to pass judgment upon others that are less fortunate and are behind the American standard of living. Imagine telling the American or British industrial worker of the late 19th century to leave their jobs behind and their families starving because of concerns for the environment! We can think of society as being in a long series of progress, just the US and Western World had undergone significant environmental degradation in the past, and moved beyond that stage to the present, I believe that the rest of the industrializing world will undergo a similar process, eventually becoming more green-conscious once they had developed to a certain level. For the government of a developing nation that is responsible to the people, protecting the environment should not be on the top of the list at the present.

I know some may find this view extreme, and may offer several counterarguments. For example, they may reason, when the West was industrializing, we do not understand the impacts of pollution on the environment – but now we do, and therefore we need to tell the nations of the developing world to place the environment at the top of their priority. However, recall that Abraham Maslow, the famed psychologist, once came up with the “Hierarchy of Needs” for human beings and I would extend this logic to society as well. When a society still has its “needs” unmet – clean water, reliable source of enegy, etc – they cannot be worrying about things in the “self-actualization stage”, such as environmental justice and minimal carbon footprint.

To use the terms of ethics, we can see that what India is doing by building the dam is to maximize the most amount of benefits for the most amount of people, an utilitarian approach. This approach (first expressed by John Stuart Mill and Jeremy Bentham in the 18th century), despite its many drawbacks, do have the important advantage getting the most amount of benefits for a given limited amount of resources, something that is crucial for developing nations. However, this is not to suggest that we can simply let them off the hook for all environmental degradations, for in the interconnected world today, pollution from developing nations affect the world as much as developed ones. But we cannot judge countries in the same standards because each one has its own historical needs and priorities. As India and the rest of the world close the gap between themselves and the West, we can expect more from these countries and how they can start to make a positive impact toward the environment in the framework of their overall development.

Oil companies and the ethics of overseas investment

Posted on by fqzhang

Corruption is an issue I care about deeply, and this will be one of a series of writings on it. This particular post is focuses on politico-economic corruptions with oil companies, and is written in a documented research format. (For other articles on corruption in China, see here)

Oil companies are constantly seeking new ways to acquire new resources and to expand overseas. Oil companies are no exceptions. In their case, the quest for greater access – in the form of drilling rights to oil and gas fields across the world – to resources has been intense and lead them to deal with governments around the world. However, this also presents an ethical dilemma: many of oil fields are under the ownership of governments that are often perceived as corrupt by international standards (as measured by the Corruption Perception Index[1]), so should big oil and gas companies deal with these inherently inefficient governments? On one side, oil companies have a duty to its shareholders to maximize value and a need to maintain its global competitiveness through investments; on the flip side, businesses should not provide funding to fuel corruption and social inequality, give aid indirectly to groups that threaten American national security, or to further human rights abuses as a result of economic exploitation. To narrow down the scope of this discussion, I would like to focus on the role of the six “Supermajors” in the oil industry: BP, Chevron, ExxonMobil, Royal Dutch Shell, Total SA, and ConocoPhillips, and their interactions with two countries in particular: Nigeria (ranked 144 out 175 based corruption levels, with 175 being the worst) and South Sudan (173 out of 175).

Let’s examine the societal impact that private oil companies have on the people in the countries they operate by presenting some facts. Oil industry is a multi-trillion dollar industry, and they operate in all regions of the earth.[1] In the example of Nigeria, Shell, ExxonMobil, Chevron, and Total all have stakes in Nigeria, with both on and off-shore oil production facilities, concentrated in the Niger River Delta. The companies are partnered with the Nigerian National Petroleum Corporation (NNPC), a state-owned enterprise. Nigeria, as a member of OPEC, maintains at least 51% ownership in all its joint ventures with foreign companies.[2] Foreign expertise in the oil industry is crucial for the development of Nigeria’s offshore drilling platforms, and much of Nigeria’s future earnings from oil likely will come from these areas in the Gulf of Guinea. Currently, oil and gas exports accounts for around 95% of Nigeria’s exports and 76.39% of federal government revenue, pumping hundreds of billions of dollars into the economy.[3]

These numbers all seemed great; and if indeed this is all the things that oil companies had done – creating jobs and helping provide a source of government revenue – then we have nothing to blame the Big Oil for. However, the presence of foreign companies on Nigerian soil is far detrimental than it appears at first sight. As oil increased in importance (from 3.43% of GDP in 1965 to 37.44% in 2009[4]), it fuels increasing corruption by giving an extraordinary amount of power to the government officials in charge of handing out government contracts. Kickbacks and briberies are commonplace and oil companies are unscrupulous in giving out sums of money to officials, in exchange for favorable deals. Government officials are intimately connected to the military and other social elites, giving the oil companies a leverage in influencing the politics of the nation as well. Nigeria underwent a serious of military coups since independence in 1960, and much of it occurred with the knowledge or the tacit approval of foreign oil companies, ensuring that their own interests are protected above all. This fueled an enormous amount of corruption at the very top of society. As an example, former dictator Sani Abacha, who ruled the country from 1993 to 1999, is estimated to have stolen the equivalents of 2-3 % of the nation’s GDP for each year he was president.[5]
As we can see, the presence of oil companies introduced an element of instability to the post-colonial landscape by giving rise to a plutocracy that are self-promoting and cares nothing for the nation. Moreover, oil companies, by interacting with these corrupt countries, are also destabilizing them. It causes social unrest between different groups in the county: oil vs non-oil producing regions, the business interests vs subsistence farmers. The Supermajors are extremely influential in world affairs by virtue of their size and the different areas that they operate. With this great power also comes a great responsibility: to promote the interests of the people living in the areas that they are operating. Energy companies are already under intense criticism for not being responsible, and it is time for oil companies to become more responsible stakeholders in society. From this perspective, oil companies should limit their interactions with corrupt governments such as that of Nigeria’s and restrict their investments to countries that score high on their political transparency. Companies should take into consideration processes of government approval of projects, have a basic idea of where the revenue is going, and refrain from bribery (this last point is somewhat unnecessary since bribery is already illegal under the Foreign Corrupt Practices Act in the US and elsewhere, but stricter enforcements are necessary.) Only through this careful evaluation of government transparency can the “oil majors” ensure that their investments are not only benefiting themselves but also others in the community that they are involved in.

Besides giving rise to further corruption in society, by interacting with corrupt or underdeveloped countries – they are often the same since one often leads to the other – oil companies also indirectly retards the growth of a domestic economy. Nigeria, for example, went from exporting large amounts of agricultural products such as coffee and grain, to becoming a net importer of food, even while millions of acres of its own land lay fallow due to a lack of investment in agriculture.[6] The presence of oil and natural resources shifted the focus of the company away from developing its industrial and agricultural base to becoming dependent on a commodity that fluctuates daily in the international market, a classic example of the resource curse. This causes a lack of diversification for the economy and contributes to volatile economic growth for the region.[7]

Once again, we must consider the role of the oil company as more than simply a profit-generating entity that can neglect its surroundings. Companies exist in their environment, and I believe that people tolerate the existence of corporations because of the possible benefits it brings to society. The vast majority of the people of Nigeria, a nation of over 170 million people, are not deriving any benefits from the black gold beneath their feet and off their shores. They had come to resent the oil companies for being the source of their misery and the ongoing crisis in the Niger delta (political and economic). This resentment is often expressed in the forms of oil stealing, negligence while working, and forms of demonstration. This causes disruptions in oil supplies and greater costs for oil companies to run their operations. Furthermore, tying into the overall theme of corruption, we see a relationship of how economic underdevelopment contributes to corruption: poorer people tends to favor extreme solutions to their problems, causing them to seek “strongman” to rule the country in the hope of solving their problem (or as President Truman once said, “The seeds of totalitarian regimes are nurtured by misery and want”[8]); this in turn causes concentration of power and wealth in the select few, who evolves into self-serving oligarchy; the oligarchy is afraid of losing that power and uses oppression to cement their rule, causing suffering to millions, and eventually a new leader will arise who will promise change, but who in fact only looks out for his own interests; and the cycle begins anew. Throughout this entire cycle, oil and oil companies are the lubricants that makes the machinery of corruption run. Oil companies in a country like Nigeria fosters corruption, increases reasons for oppression, and while at the same time harms the structure of an economy. It is advisable for oil companies to stay out of the market altogether, or at least not to return until conditions have changed and civil society had become stronger.

A final point arguing against the involvement of Big Oil overseas would be the existence of terrorists groups and parties hostile to the US that might benefit from the petrodollar flowing into their economy. In Nigeria, the Islamic terrorist group Boko Haram (whose name meant “Western education forbidden”) is busy stealing oil through breaking pipelines, taking control of oil fields and illegally refine oil [9]. Boko Haram, with links to the international terrorist group Al-Qaeda, presents a security threat to both the people of Nigeria and nations around the world. The group appeals to those Nigerians who felt cheated out of the benefit brought about by the exploding oil wealth in the country. The money gained from the oil refinery has given the group the means to recruit new members and increased its militancy, as demonstrated by the recent kidnapping of over 200 schoolgirls in northern parts of the country.[10] Oil companies can stop all of these by not conducting business in the country where terrorists groups operate, as listed by the US State Department. By not conducting businesses in those countries, we are decreasing the power of terrorist groups to obtain funding and eliminate some of the social inequalities that gives rise to terrorism in the first place.

Now that we have discussed several of the key points against oil companies operating overseas, let’s look at the pro-Big Oil side’s counterarguments.

The six Supermajors, whether they are the French company Total or Exxon of the US, exists in the structure of a corporation. A corporation is a separate entity distinct from its owners, but at the same time having many of the same rights as people, as the Supreme Court decision “Citizens United v. FEC” reaffirmed and expanded in 2010. Rights are necessary because companies need to be able to enter and enforce contacts with different parties with limited outside interference. These rights, as applied to businesses, essentially meant that they should be free to select who they would like to do business with without their home government come in and meddling with their decisions. From this point of view, even though governments that own the oil fields may be corrupt, this should not prevent companies from trying to enter their markets in its search for natural resources. Political goals and even human rights and global development should not be the main concerns of these businesses, and governments should not limit business operations based on these non-business goals. Corporations have a fiduciary duty to their shareholders and oil companies believe that as free entities, they should be able to pursue their interests in foreign countries. As many of the oil companies are struggling to remain competitive amid high costs, they are looking to get access to as much raw materials as possible at the lowest possible price. Furthermore, in regards to their social responsibilities, Big Oil lobbyists argue that by producing oil in foreign countries, they will eventually help the citizens of those countries by providing them with revenues for them to develop, while at the same time people in the developed world benefits by having access to cheaper fuel prices.

Another key point oil lobbyists make is that the Big Six are facing new challenges from a number of sources. Most significantly, many national oil companies (NOCs) have emerged as important players around the world. These enterprises are often state-owned, working on oil fields at home while at the same time expanding in underdeveloped areas in Africa and elsewhere. The largest among these include Rosneft and Gazprom in Russia, Petronas of Malaysia, China National Petroleum Corporation and other Middle Eastern and Indian oil concerns. In the past, the Supermajors are able to fend off these challenges because they possess the skills and technologies to outdo these competitors. But today, developing nations are catching up to the skills needed to be successful. In order to respond to these challengers, the pro-oil side argues that the oil companies must expand more overseas to markets that have been previously overlooked. However, often this is impossible because the US government has placed sanctions on certain countries, due to a variety of political reasons.

One example is South Sudan, where prior to its independence from the Republic of Sudan, US companies are not allowed to do business with due to the prevalence of state-sponsored terrorism. In 2011, Southern Sudan became an independent nation and US companies are eager to get in on this new market. However, they are still prevented from doing so; this is because South Sudan lack the proper infrastructure for transporting oil and requires pipelines through the Sudan, which is on the sanctions list by the State Department. South Sudan has also been considered to be a major violator of human rights due to the ongoing civil wars in the country. Despite these concerns, oil lobbyists pointed out that other Asian companies are not bound by these restrictions and are gobbling up oil fields in large tracts, and providing 98% of government revenue for South Sudan in the meantime.[11]

Why should Asian NOCs be allowed to invest in a corrupt government while Western companies are not? Oil lobbyists argue that this is unfair for American/European companies since they are being placed at a disadvantage by for political reasons. They argued that by staying out, we are not helping solve the human rights issue since other companies will simply step into the void, while at the same time, Western companies are missing out on a valuable opportunity to grow.

All of the arguments made in favor of oil investments in corrupt governments overseas all have good merits and deserve our considerations. However, each one also have its faults, and I will address each one individually.

Firstly, oil companies pointed out the divide between politics and business and urged governments not to interfere in the economic sphere. This division simply do not exist in real life; if anything, the natural resource extraction business depends on the protection and promotion of governments more than any other industry. Since the 19th century, oil and gas companies have often been the instigators of legislations and works closely with governments: the help the British governments provided to Anglo-Persian Oil Company (later BP) when faced with a possible nationalization in Iran[12], the substantial tax cuts of the Bush Administration on the oil industry are all some of the examples of businesses working with governments to secure their interests[13]. The hypocrisy is evident: even though the oil and gas industry actively lobbies the governments to help them, at the same time they continue to resist any form of government regulation. In this sense, we see that the oil company’s freedoms are not really affected, but rather, Big Oil have entered a sort of contract with national governments whereby oil company will get their interest promoted in exchange for some regulations, such as not doing business in countries with poor human rights records. This arrangement, in my view is fair, and Big Oil are not getting their rights violated, as they have often claimed.

Secondly, oil companies argues that if the West did not invest in African oil, then other Asian countries will simply step in. However, we need to remember that many of these Asian countries, such as China and Malaysia, also have human rights violations of their own, from cracking down on journalists to prohibiting the freedom of assembly. Can the United States and other western nations, areas with decades if not centuries of respect for human dignity, be held to the same standard as these countries? Oil and gas companies are our nation’s representative overseas, and what they do or don’t do reflect back on their country of origin, either enhancing or endangering the moral power of the United States and the West as a symbol of freedom in international relations. From another view, as countries in the developing world democratize and cast off their legacy of oppression, would the governments and people of those countries want to deal with companies that had fostered their oppression in the first place? Probably not. The developing nations also represents the biggest emerging market (Nigeria’s population are expected to more than double to 440 million by 2050[14], even exceeding that of the United States at the time), an area that oil companies simply cannot ignore. Oil companies need to consider this in the future, and good relations with these nations is crucial for Big Oil’s long term vision and success.

Finally, Big Oil companies argued that they need to bring benefits to all stakeholders. However, I would like to argue that not all stakeholders are of equal importance. It might be true that shareholders in the company can get some extra dividends through an investment, and certain government officials can become rich. But what about the millions in Nigeria or South Sudan that are living on less than $1 a day, and who are trapped in a cycle of poverty? Indeed, oil companies are neglecting the single most important stakeholder in oil development projects, which is the people who are living in the area affected the activities of oil companies. Imagine this: if a company comes by and decide to occupy large amounts of land without due compensation, pollutes the land and rivers with refinery wastes, and do not bring any job opportunities to the displaced peasants, would you support the company moving in? I would imagine not, and yet this is precisely what is happening in the Niger River Delta.[15] Can a company be said to be a responsible member of society if it brings nothing but misery to the area where it is present, no matter how much wealthier they are making executives back at home? In this situation, it is only ethical for companies to limit its investment or not invest at all.

To sum up, I believe that it is inherently unethical for Western oil companies to invest in overseas asset in corrupt/underdeveloped countries. As my examples have shown, the presence of oil companies in these regions will likely lead to economic underdevelopment, further human rights abuses and exacerbate political corruptions. In order for oil companies to be considered responsible corporate citizens, it is imperative for them to refrain from doing businesses in these regions.

[1] http://www.aei.org/publication/energy-fact-of-the-week-as-a-separate-country-the-us-oil-and-gas-industry-would-be-the-16th-largest-economy-in-the-world/

[2] http://www.nnpcgroup.com/NNPCBusiness/BusinessInformation/OilGasinNigeria/IndustryHistory.aspx

[3] http://www.ceicdata.com/en/blog/oil-dependence-hindering-nigeria%E2%80%99s-emerging-economy

[4] http://www.ccsenet.org/journal/index.php/jsd/article/viewFile/14891/10727

[5] http://www.unodc.org/unodc/en/frontpage/nigerias-corruption-busters.html

[6] http://www.ccsenet.org/journal/index.php/jsd/article/viewFile/14891/10727

[7]ITracy_l_moodledata_temp_turnitintool_793995179._60_1384335874_2108.pdf

[8] http://www.digitalhistory.uh.edu/disp_textbook.cfm?smtID=3&psid=1235

[9] http://www.trackingterrorism.org/article/new-financing-options-boko-haram/oil-theft

[10] http://www.huffingtonpost.com/2014/11/01/boko-haram-kidnapped-girls-married_n_6086420.html

[11] ITracy_l_moodledata_temp_turnitintool_793995179._60_1384335874_2108.pdf

[12] http://www.sjsu.edu/faculty/watkins/mossadeq.htm

[13] http://www.pbs.org/now/shows/347/oil-politics.html

[14] http://www.pewresearch.org/fact-tank/2014/02/03/10-projections-for-the-global-population-in-2050/

[15] http://epu.ac.at/fileadmin/downloads/research/rp_0707.pdf

[1] http://www.transparency.org/cpi2013/results