Response to a South Africa Investment
Leon Grier
Personal & Organizational Ethics
Dr. Tina Engle
March 19, 2012

Response to a South Africa Investment
In my judgment one of the benefits to continue with the expansion project of the Caltex plant is it would continue to keep Caltex black employees employed. Caltex has improved the life of its current minority employees even though the country itself hasn’t tried to improve the welfare of the rest of the black community. Another benefit is that that expansion project promised an annual return of 20 percent on the original investment, which is good for the shareholders. Finally, the benefit that I see is that Caltex is helping the economy of the South Africa by continuing its oil operations in its country. On the other hand by continuing operations in South Africa, and they are helping the government financially support the mistreatment of the black community. If Standard and Texaco did not build the plant, someone else would, likely a company with less global standards or stake in moral and ethical dilemmas. While most reasonable people, even in 1977, found apartheid to be cruel, unjust, and certainly morally wrong, one can think that it would be easier to change a situation from the inside out rather than the outside in. Even Caltex ended operations there in South Africa, the employees that had a little of success would be forced to return to where they began. Apartheid laws were designed to preserve the racial purity and supremacy of whites by keeping other races socially and physically separated from them , restricting nonwhites to inferior jobs, housing and farmlands, and strengthening earlier laws that made whites the effective rulers of South Africa’s diverse population (Velasquez. 2012). The first proposal of asking Caltex to terminate its operations, I would say yes to terminate if the South African government doesn’t improve the rights of the employees affiliated with our company, in term hoping in the future that it trickles down to every citizen in South Africa. If the government do decides to make the necessary changes then it would be no need for Caltex operations to cease. Even though, the commitment of Caltex to improve the conditions of its employees was evidenced, because it adhered to the 1977 “Sullivan principles”. According to Dr. Leon Sullivan the Sullivan principles contain six statements which are as followed: First, Nonsegregation of the races in all eating, comfort, and work facilities. Second, Equal and fair employment practices for all employees. Third, equal pay for all employees doing equal or comparable work for the same period of time. Fourth, initiation of an development of training programs that will prepare, in substantial numbers, blacks and other nonwhites for supervisory, administrative, clerical , and technical jobs. Fifth, increasing the number of blacks and other nonwhites in management and supervisory positions. Sixth, improving the quality of employees’ lives outside the work environment in such areas as housing, transportation, schooling, recreation, and health facilities. The second proposal asking to sell to the military or police of South Africa, I would vote no. We would have to continue to provide petroleum to the military or police of South Africa, because it is the law. The South Africa’s National Supplies Procurement Act Gave the government the authority to require any business to supply it with goods. Moreover, the Price Control Act of 1964 also gave the government the authority to prohibit companies from placing restrictions on the sale of their goods. According to the managers the South African government had “directed Caltex to refrain from imposing any conditions or reservations of whatever nature in respect to the use, resale, or further distribution of petroleum products and, also, from refusing to sell except subject to such conditions”(IRRC, 1984). The third proposal asking Caltex to implement the Tutu principles, as a shareholder I would have voted yes, because the Tutu principles represent change for the Caltex employees for the good. It was aimed towards trying to eliminate apartheid. According to Bishop Tutu, the Tutu Principles which are as followed: First, house the workforce in family-type accommodations as family near the place of work of the breadwinner. Second, recognizing black trade unions as long as they are representative. Third, recognizing the right of the worker to sell labor wherever the best price can be obtained, calling for labor mobility, an opposing any ultimate implementation of influx control. Finally, enforcing fair labor practices and investing massively in black education and training.
The first resolutions based on them pulling out of South Africa and to abandon their Caltex expansion plans, they opposed the resolution. I think it was the right decisions as managers to not cease operations because of a moral issue. The fact is the Caltex was doing its part with trying to improve the work conditions and lives of its employees. They cannot control the leadership of the country. Also the managers should have stated something along the lines of we know that the apartheid that exist in this country isn’t fair, but at the same time we cannot control that. We can only affect what is within our boundaries and that is the conditions of the Caltex employees. As I stated earlier in this essay the evidence shows that Caltex has improve the lives of their employees, and has offered them opportunity that they would have not received any where else in this country. Plus, if we pull out of Caltex, some other company would come in with no regards to the conditions of the employees here and just want profit. We as an organization have already started the foundation of trying to improve the conditions here in South Africa, so lets press forward with expansion, and continue to strive to communicate with the government and improve the lives of all South Africans to the best of our abilities. The second resolution the mangers opposed because it would consist of them breaking the law. As a manager I would have said, that us ceasing to provide petroleum to the military or the police is wrong in accordance to the laws of South Africa. We have been directed by the government to not do this. Plus this is not example we want to set, we want to show people that we follow the law and that they should too. If we don’t agree with a law we will go through the proper channels to express our concerns about it. The third resolution about the Tutu principles was opposed as well. The managers should have responded to this resolution with that we can implement these principles in the Caltex policy, but because we do this at Caltex, once again doesn’t mean that we are going to change the culture of South Africa. We as a company always strive to improve our workplace and workforce conditions.
I think management does have a responsibility to ensure the best interest of its stockholders beyond just ensuring they have a high return. It’s more to running a company than just high return. Me as stockholder I wouldn’t want to have my name associated in any way with a company that all they care about is high return. I want to be a part of a company that invests in its employees; an environment where employees want to do their best, so they can produce the best product for our consumers. I don’t think that management of a company should only look to the law and the rate of return on its investment as the deciding factors of what investments it should make. Of course majority of people who invests in something look for a good return. I think management should also look how can they help the environment around their company and how can they invest the enhancing of their employees. Also management should take into consideration ethical principles which provide the foundations for numerous modern concepts for work, business and organizations, which widen individual and corporate main concerns far beyond usual business aims of profit and shareholder enrichment.

References

Velasquez, M. (2012). Business Ethics, Concepts and Cases: Seventh Edition. Upper Saddle River: Pearson Education, Inc.