1)
Yes, I agree with the statement that the accountability was inappropriate and there is still an issue
pending regarding trust. According to Utilitarianism, a decision should be based on what benefits
majority of people as well as supports decisions or actions which are responsible for happiness for
the greatest number of people (Harrison, J.1952)
If we look at this statement and case study from a utilitarian lens , we can make an argument
which both supports the statement and opposes it by weighing the benefits to a certain group vs
the harm to another group and vice versa.
It might be beneficial to keep Mr. Jacques, Mr. Salisbury and Ms Niven in the company due to their
expertise. The chairman of Rio Tinto, Simon Thompson has stated that” they are the best people
to lead the critical reforms” (Nick, T.2020). Furthermore, they are already established at highranking positions which demonstrates their personal capabilities. However, for the growth of the
business it is not only important to improve its net profits but also create a reputation of being
socially responsible.
Rio Tinto under the leadership of CEO Jean-Sebastian Jacques and two senior executives destroyed
two culturally significant rock shelters which created unhappiness for society, especially to the
Puutu Kunti Kurrama and Pinikura (PKKP) people (Nick, T.2020).
The PKKP people are the lands traditional owners and a vital part of society and the destruction of
the rock shelters have caused mistrust between Rio Tinto and society. As a result, Rio Tinto is
given a bad reputation as a company.
If further action to display appropriate responsibility to the damage that occurred doesn’t take
place then Rio Tinto may suffer as a company as consumers would not want to invest in a
company they can’t trust and the downfall of a multinational like Rio Tinto would negatively affect
the world not only on a societal level but on an international level because of the loss of benefits
such as increased GDP , economies of scale and increased employment of skilled labor (GeorgeAnokwuru, 2018).
To ensure the benefit of most people as stated by Utilitarian ethical theory, Rio Tinto should take
action to rebuild the trust with those affected by the blasts of the rock mines by suspending the
people in charge and put measures in place to ensure such an event does not occur again. This can
be done by internal investigations within Rio Tinto and providing additional training to employees
to help spread ethical awareness. Once appropriate action is taken internally, Rio Tinto should
clarify the situation between shareholders, government authorities and the traditional landowners
and make sure there is a clear communication of boundaries between the mining business and
well-being of society.
To conclude, once Rio Tinto changes its procedures and emphasizes on being more ethically and
socially aware, the trust between society and Rio Tinto will be reestablished. As a result, Rio
Tinto’s reputation will be positive again and this means as a Multinational Company they will be
able to provide a great benefit to the majority of people.
References
[1] Harrison, J., 1952, January. Utilitarianism, universalisation, and our duty to be just.
In Proceedings of the Aristotelian Society (Vol. 53, pp. 105-134). Aristotelian Society,
Wiley.
[2] Nick, T., 2020, September. ‘Rio Tinto CEO, top executives resign amid cave blast
crisis’. Available at: https://www.theage.com.au/business/companies/rio-tinto-ceo-topexecutives-resign-amid-cave-blast-crisis-20200910-p55uf8.html (Accessed: 26 November
2020).
[3] George-Anokwuru, C.C., 2018. Economic Globalization and Growth of the Nigerian
Economy. International Journal of Economics and Business Management, 4(2), pp.51-60.
5)
The Friedman Doctrine can also be referred to as the shareholder or stockholder theory ,
according to Milton Friedman “ an entity’s greatest responsibility lies in the satisfaction of the
shareholders” , which means that a business’s main responsibility should be to its shareholders
(Friedman, M., 1970).
According to Friedman, any executive of a business are employees of the owners and are required
to deliver quality service to the employer first before anyone one else. Furthermore, the Friedman
Doctrine states that decisions made concerning social responsibility is in the hands of the
shareholders, not the executives of the company. (Friedman, M., 1970).
According to (Nick, T.2020), the destruction of the rock caves was an unfavourable decision for
aboriginal groups, top shareholders, and government leaders. In this case Rio Tinto is going against
the fundamental principle of the Friedman Doctrine which is to provide satisfaction to its
shareholders. It can be argued that the Friedman Doctrine states that” the only business of the
business is to do business and make money” (Friedman, M., 1970) thus Rio Tinto’s actions are
justified, however it also states that a company should take social responsibility if the shareholders
decide so which nulls the previous argument and does not justify the actions of Rio Tinto
In my opinion this business approach does not justify the actions of Rio Tinto, it is argued that the
Friedman Doctrine is out-dated and not applicable in today’s world where situations are much
more dynamic. Companies should recognize that they are not operating within a bubble, and
social and natural capital have a price. According to Harvard Business School professor Rebecca
Henderson “the reign of shareholder primacy led corporations to treat social capital, like workers’
livelihoods, and natural capital, like the health of the environment, as “free””(Feloni, R., 2020).
Businesses employing the Friedman Doctrine are giving their shareholders an upper hand but
neglecting the society surrounding their actions. In the Rio Tinto case , the destruction of the two
sacred caves is beneficial to certain shareholders who benefit from the extraction of the high
grade iron ore and $135 million net value (Richard, P., 2020) and if we create a bubble around
these individuals then according to the Friedman Doctrine the action is deemed appropriate and
justifiable , however in reality the action taken in this case has caused unhappiness to a large
amount of society and this is not acceptable.
According to Canadian social activist Naomi Klein , “Friedman Doctrine impoverishes the
community while enriching the few corporate elites” (Klein, N. , 2008) , in the case of Rio Tinto
blasting two sacred caves , the PKKP are being impoverished and a few people such as the CEO are
benefitting from the action. To conclude, due to the arguments stated and the Friedman Doctrine
being deemed inappropriate for todays day and age. I do not agree that the business approach
justify Rio Tinto’s actions.
References
[1] Friedman, M., 1970. A Friedman doctrine: The social responsibility of business is to
increase its profits. The New York Times Magazine, 13(1970), pp.32-33.
[2] Nick, T., 2020, September. ‘Rio Tinto CEO, top executives resign amid cave blast
crisis’. Available at: https://www.theage.com.au/business/companies/rio-tinto-ceo-topexecutives-resign-amid-cave-blast-crisis-20200910-p55uf8.html (Accessed: 26 November
2020).
[3] Feloni, R., 2020. “50 Years After the Introduction of the ‘Friedman Doctrine,’ It’s Time to
Create a New Capitalism” Available at: https://justcapital.com/news/50-years-afterfriedman-doctrine-its-time-to-reform-capitalism/ (Accessed: 26 November 2020).
[4] Richard, P., 2020. “Rio Tinto tells inquiry Australia sacred cave blast worth $135
million” Available at: https://news.yahoo.com/rio-tinto-tells-inquiry-australia015756861.html (Accessed: 26 November 2020).
[5] Klein, N. and Smith, N., 2008. The shock doctrine: a discussion. Environment and
Planning D: Society and Space, 26(4), pp.582-595.
3)
If I was the new CEO of Rio Tinto I would ensure that I conduct business in a manner which fulfils
my five core values as well as implements ethical theories such as Kantianism and Utilitarianism in
a dynamic manner to create a business model which is balanced between maximizing profits and
being socially responsibility.
As the new CEO of Rio Tinto if I were faced with a similar situation as what occurred during the
destruction of the heritage site, I would use my value of Integrity to ensure such an event never
occurred again. According to the article, Rio Tinto was given four options of which three did non
include the destruction of the caves (Richard, P., 2020). As the new CEO with the value of
integrity I would recognise that even thou the destruction of the caves would lead to higher
economic value it would create a huge uproar and cause unhappiness to the indigenous people
and society. Instead, I would go with one of the three other options which did not include the
destruction of the heritage sites.
According to the article, the PKKP people were not told about all four options and were only made
aware of one option. With my value of honesty and respect, I would have been truthful and
emphatic towards the (PKKP) people and discussed all four options with them rather than
withhold information and create a scenario of asymmetric information. I believe being honest with
the PKKP people would lead to mutual respect and a better decision could have been settled
between Rio Tinto and the indigenous people.
With my value of knowledge, as the new CEO I would provide training and awareness courses and
ensure that the Rio Tinto is knowledgeable about indigenous people and the importance of their
culture and how to respect their lands. I believe with ethical training courses the entire company
from top executives to lower-level management this sort of incident would not occur because
everyone will be knowledgeable and capable of making ethical decisions. Furthermore , I would
establish a team of in-house specialists to work as a social responsibility team who’s primary goal
would be to oversee all major decisions and evaluate the consequence of the decision in relation
to the social well-being and provide top-executives with consultation on how to keep the balance
of maximizing profits and being socially responsible.
Lastly, as the CEO of Rio Tinto I would ensure my team conducts in-depth research into the areas
where business will be conducted. According to (Karen, M., 2020), the executives of Rio Tinto did
not know the high significance of the area until May, despite conducting numerous archaeological
reports. I would ensure the highest quality of archaeological testing is being conducted if a similar
situation ever occurred.
References
[1] Richard, P., 2020. “Rio Tinto tells inquiry Australia sacred cave blast worth $135
million” Available at: https://news.yahoo.com/rio-tinto-tells-inquiry-australia015756861.html (Accessed: 26 November 2020).
[2] Karen, M., 2020. “Rio Tinto didn't tell traditional owners there were options to save
ancient Juukan Gorge rock shelters” Available at: https://www.abc.net.au/news/2020-0807/rio-tinto-had-options-to-save-juukan-gorge-rockshelters/12534092#:~:text=Executives%20unaware%20of%20significance%20until,high%
20cultural%20significance%20until%20then. (Accessed: 26 November 2020).
6)
The globalization movement refers to the social, cultural, political, and economic aspects of an
increasing interconnected world where communication, technology, culture, and ideas have
become universally shared instead of being localized (Shaw, W., 2016). The rapid increase of
globalization allows a myriad of benefits from being internationally connected. However, there are
areas of concern regarding globalization including ethical and moral issues.
Multinational Corporations (MNCs) are one of the main drivers of expanding the globalization
movement. Due to their enormous political, economic, and social power they are able to leverage
themselves into a high position and partake in unethical business practices. As a result, the
operation of MNCs can have particularly negative affects on the operations of local environments
and their communities. (Shaw, W., 2016)
One of the disadvantages of globalization is that it fuels inequality, the rich get richer and the poor
get poorer. In the Rio Tinto case, the MNC had four options to pick regarding the heritage site and
chose the option which lead to the destruction of the cultural heritage site because it was a good
business decision to maximize profits , the blasting of the two sacred caves allowed Rio Tinto to
reach high grade iron ore worth about $135 million (Shaw, W., 2016) ( Richard, P., 2020).
This disadvantage also ties into the argument of the operation of multinational companies being
harmful to the environment, as globalization increases there is increased international trade,
lower price, and higher wages. These factors contribute to higher demand for consumer good.
Resulting in, MNCS having more pressure and demand to exploit raw materials. In the case of Rio
Tinto, this increased demand for high grade iron ore could be a reason for their unethical actions.
(Leamer, E.E., 1996)
This is not the first time Rio Tinto is involved in unethical actions being detrimental to the
environment, The Ranger uranium mine in Kakadu National park is run by Rio Tinto and they have
been accused by the local Mirarr people of allowing a million liters of radioactive waste to pour
into stormwater drains in 2013(Shaw, W., 2016).
As globalization increases and MNCs operate around the world, their actions and operations lead
to the dilution and change of national culture. In this case, Rio Tinto decided to destroy two
culturally significant rock shelters in Western Australia. As a consequence, the evidence of
Aboriginal culture tracing back 46,000 years has been destroyed (Nick, T., 2020). According to
(Schechter, A., 2004), the operation of McDonald’s in Samoa has led to a rapid increase of
Samoan Youths to gravitate towards unhealthy fast food and abandon the traditional cuisines of
Samoa.
Both these examples of aboriginal culture being destroyed, and traditional food being replaced
with unhealthy food supplied by MNCs is a concern and is leading to the homogenization of world
culture. The continuation of globalization in this manner could lead to a lack of diversity between
countries.
References
[1] Shaw, W. H., Barry, V., Issa, T., Catley, B. and Muntean, D. (2016). Moral Issues in Business
(Third AsiaPacific Edition), published by CENGAGE.
[2] Richard, P., 2020. “Rio Tinto tells inquiry Australia sacred cave blast worth $135
million” Available at: https://news.yahoo.com/rio-tinto-tells-inquiry-australia015756861.html (Accessed: 26 November 2020).
[3] Leamer, E.E., 1996. Wage inequality from international competition and technological
change: theory and country experience. The American Economic Review, 86(2), pp.309314.
[4] Nick, T., 2020, September. ‘Rio Tinto CEO, top executives resign amid cave blast
crisis’. Available at: https://www.theage.com.au/business/companies/rio-tinto-ceo-topexecutives-resign-amid-cave-blast-crisis-20200910-p55uf8.html (Accessed: 26 November
2020).
[5] Schechter, A., 2004. McDonald's and Samoan Youth: A Case Study of
Globalization. ISP Collection, p.489.