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Business versus Environment Essay

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Businesses would always want to make more profit but this should be accomplished while also taking into account its social responsibilities. In the long run, there is an aggregate need for business entities to balance between profit and the adverse effects the business causes to the environment in its natural course of operations. Choosing not to consider the social and environmental costs associated with the business will result in less spending for operations but this in turn may affect the survivability of the business entity.

            Many businessmen executives have realized that aggressive environmental programs result in profitability and competitiveness by reducing risks and avoiding additional costs from regulatory compliance programs. Environmental initiatives has its benefits for a business. It acts as morale and productivity boosters for the workers, enhanced brand image, streamline time-to-market and improved relations with regulators and the community. It is now understandable that an understanding of socio-economic, political and cultural processes and structures is necessary to understand environmental problems and in order to establish sustainable development.

[1]

            It cannot be denied that through the course of its operations, business does affect the environment in many ways such as pollution and introduction of new chemical compounds which may prove harmful to people or the environment, genetic engineering and others. How a business affects the environment may be deliberate or accidental but there are also some businesses that improve the quality of the environment.[2]

            To cite, all countries are very much dependent on the oil industry and the industry is essential in any kind of economy. It produces huge amounts of profit for oil producing countries while non-oil producing countries have showed dependence on oil because of the need to run vehicles or to fuel industries. But with the production of oil also stems a need to provide funding to numerous environmental concerns that arise with it.

            An oil spill is just one of the risks associated with the oil industries. It is a grave threat to the marine ecosystem and also to the people living near the coastline who depend on the marine resources for their food and income. In an oil spill near the coast of Guimaras Islands in the Philippines, one of the oil tankers of Petron carrying millions of liters of oil sank to the bottom of the sea floor. The incident was the worst oil spill in the country which affected the 40,000 people living on the island who are mostly dependent on the sea. Guimaras Governor Joaquin Nava was frustrated over the absence of commitment from the government sector and Petron to solve the oil spill. Greenpeace on the other hand has much fear that the remaining 1.9 million liters of oil inside the sunken tanker will cause more damage when released into the sea.

There was public demand that Petron immediately raise the sunken tanker to prevent more oil spillage or to pump out the remaining oil from its tanks. Relief operations were also needed to compensate for the people of Guimaras Islands because of the loss of livelihood. Greenpeace urged that the local government should hold the oil company liable and that it should be accountable for the long-term rehabilitation of the affected areas including the marine sanctuaries, mangrove areas, reefs and coral ecosystems.[3]

            The situation urged Petron to perform its social responsibility for the disaster or it would face charges from environmentalist groups or other consequences such as banning their products or paying fines if proven guilty when the case is brought to the court of law. Taking responsibility for the environmental hazards will even give the company a better image that it cares not only for profit but  also gives importance to its social responsibilities. The business should see that environmental concerns could turn into an instant marketing opportunity.[4] Instead of having bad effects, this could make the people patronize their products and instead of adding more cost, it would add more benefit.

            Environmental degradation, although the more devastating effect, is not the only concern  brought about by oil spills. Fishermen are the ones that are greatly affected by such disasters because the fish are being killed. Oil spills also results in the ban of catching and selling fish and shellfish from the contaminated area to maintain market confidence and to protect fishing gear. Other industries that rely on seawater in their course of operations are mainly affected by oil spills. These may include hotel and restaurants that rely on tourist trade or water treatment plants.[5]

            On the other hand, Transneft, an oil transporting joint stock company initiated the Baltic Pipeline System project which would would help in securing the safety of the environment through this pipeline system and also add a new transport route for Russian oil which is greatly needed. The system aims to minimize the negative impact of oil on the environment. The project is believed to be one of the most excellent projects in the history of Russia. In an ecological assessment of the construction of the Baltic Pipeline System, it was found out that the project complies with the environmental norms.[6] This action proves that safety measures can be done to ensure environment safety while also taking into account the needs of the economy.

            Companies do affect people the same way that people affect the companies. Almost all countries have been dependent on oil and oil exporting countries have been gaining a lot of income from this. People rely on oil to fuel vehicles, run heavy machinery and others. The escalating prices of oil have urged many countries to find other sources of energy such as biofuels. This somehow reduced the dependence of mankind on oil.

            A reduced dependency on foreign oil leads to economic problems for the oil producing countries. Low oil prices are good for oil consumers because it means less spending for petroleum products but this has adverse effects on oil producers such as the countries in the Middle East which is reflected in the performance of the economy.[7]   On the other hand, effects of rising oil prices can be seen when the US experienced oil shortages in 1973 and 1979. During these instances, the US reacted harshly and its citizens even get into fights at gasoline stations until an effort to conserve oil was established by the president.[8]

            Oil companies are expected by the the people to take responsibility for any environmental hazards caused by the company. One example is Shell Oil which has initiated and participated in many environment and social campaigns. However, the company still faces a lot of accusations that it still contributing greatly in the destruction of the environment and its refineries, depots and pipelines threaten human civilization.[9]

            A report states that Shell has been overstating its social and environmental performance and despite of adhering to its public commitment which is sustainable development, Shell has been putting the environment in much more trouble.[10] The report shows scenarios from different countries wherein Shell allegedly does not address social and environmental problems caused by faulty pipelines and others instead of going by its adherence to environment safety and sustainable development.

            In Canada, Natural Resources Minister Gary Lunn explains that there should be a balance between the environment and economic growth. He also said that the two are intertwined. He agreed that the solution to address the needs of the environment is balancing the its needs with the needs of the industry. He also emphasized the production of clean energy technology such as tidal energy. Other environment-friendly projects that Canada would pursue are development of clean coal, improvement of biofuel technology and technology that would reduce green house gases emissions and pollution.[11]

            Logging is another industry that greatly affects the environment. It is very harmful to the environment especially illegal logging. The loss of many trees result in many adverse effects such as the loss of habitat for many special of mammals, birds and other animals. It also contributes to global warming and other natural disaster such as flash floods and land slides.

            In the Philippines, illegal logging was a major factor in the loss of lives due to flash floods and even land slides during the rainy season particularly in the provinces of Quezon, Nueva Ecija and Aurora. Government hydrologist Richard Orendain said that it may be hard to determine whether floods may be attributed to illegal logging or just because of heavy rainfall although it is safe to assume that illegal logging has in  a way contributed to the natural disasters while Vice President Noli de Castro directly blamed illegal for floods and other past cases of flash floods and land slides.[12]

            In Indonesia, many people rely on the forests for their source of livelihood. According to Edward Pollard from the Galung Palung National Park, illegal logging is the major industry in the region. It is the main source of income for many citizens. However, despite economic gains from timber companies, the entire community does not receive much benefit with the diminishing resource. Illegal loggers constitute to a large decrease in forest resources and no taxes are being paid to fund development projects for the citizens. People who work as loggers usually come from poor families and logging is not a permanent and a stable source of income and with the rate of the depletion of the forest resources, people will have to find other sources of income in the future.[13]

            Indonesia has been plagued by illegal logging particularly caused by poverty and corruption. The exploitation of the natural resources was a vital factor in the economic development of the region but the government does not reap all the gains because of illegal loggers that contribute greatly to the depletion of natural resources but do not pay the necessary taxes which could have been used to fund various environmental problems.[14]

            Loggers should be responsible enough to aid environment because this is where they get their income. The rapid loss of forest resources which contributes greatly to global warming and loss of biodiversity would also affect the loggers. Instead of clear logging in which all the trees are being cut down in an area, loggers can resort to selective logging  which is much less harmful and would give the forest time to recuperate.

            In the end, there is a strong need for businesses to balance between their income and social and environmental responsibilities. It may not seem beneficial and actually results in more spending for the company. However, taking to account the social and environmental responsibilities of the business would prove beneficial in the long course of business operations. Just like in the logging business, taking aggregate measures to avoid total destruction of forest resources will ascertain that the business will not run out of available resources. Likewise, oil production, which is associated with many adverse effects to the environment, may still choose to have an environment-friendly image which could boost its marketing drive. These additional costs should not be considered as expenses but rather as investments.

Bibliography

Al Marashi, Habiba, Business vs. Environment, March 19, 2002, Retrieved  23 March 2008 from             http://www.dqg.org/qcentral/dqg_events/seminars/mar02/business.asp

Petron oil spill affected 40,000 people says Governor, InfoShop News, 2006 Retrieved 23 March 2008,             from http://www.infoshop.org/inews/article.php?story=2006082101433380

Economic Impacts, The International Tanker Owners Pollution Federation Limited, 2007, Retrieved      March 23, 2006, from http://www.itopf.com/marine%2Dspills/effects/economic%2Dimpacts/

Baltic Pipeline System, Transneft, 2002, Retrieved 23 March 2008, from             http://www.transneft.ru/Ecolog/Default.asp?LANG=EN&ID=219

Koepp, Stephen, Oil Prices, April 1986, Time Magazine,  Retrieved 23 March 2008, from             http://www.time.com/time/magazine/article/0,9171,961087-1,00.html

Refinery Reform/Global Community Monitor/Friends of the Earth, Behind the shine – the real impacts of Shell’s work around the world, June 23, 2004, Retrieved 23 March 2008, from             http://www.refineryreform.org/PR_062304.html

Behind the shine: The other Shell Report 2003, 2003, p.2, Retrieved 23 March 2008, from             http://www.refineryreform.org/downloads/shellreport_behindtheshine.pdf

Barlow, John, Tories want balance in environment and economy, June 30, 2007. Vol. 32 No. 44,             Retrieved 23 March 2008, from http://www.westernwheel.com/070606/news-tories%20want     %20balance.htm

Terra Daily, Illegal logging a major factor in flood devastation of Philippines, December 1, 2004,             Retrieved 23 March 2008, from http://www.terradaily.com/2004/041201072557.jj82upor.html

The Timber Mafia, Consequences of Illegal Logging: Environmental Implications,2002, Retrieved        24 March 2008, from http://www.abc.net.au/4corners/content/2002/timber_mafia/resources/

[1]   Al Marashi, Habiba, Business vs. Environment, March 19, 2002, Retrieved 23 March 2008, from http://www.dqg.org/qcentral/dqg_events/seminars/mar02/business.asp

[2]   Al Marashi

[3]    Petron oil spill affected 40,000 people says Governor, InfoShop News, 2006, Retrieved 23 March 2008, from http://www.infoshop.org/inews/article.php?story=2006082101433380

[4]   Al Marashi

[5]   Economic Impacts, The International Tanker Owners Pollution Federation Limited, 2007, Retrieved 23 March 2008, from http://www.itopf.com/marine%2Dspills/effects/economic%2Dimpacts/

[6]          Baltic Pipeline System, Transneft, 2002, Retrieved 23 March 2008, from

            http://www.transneft.ru/Ecolog/Default.asp?LANG=EN&ID=219

[7]   Koepp, Stephen, Oil Prices, April 1986, Time Magazine,  Retrieved 23 March 2008, from http://www.time.com/time/magazine/article/0,9171,961087-1,00.html

[8]   Koepp

[9]   Refinery Reform/Global Community Monitor/Friends of the Earth, Behind the shine – the real impacts of Shell’s work around the world, June 23, 2004, Retrieved 23 March 2008, from http://www.refineryreform.org/PR_062304.html

[10] Behind the shine: The other Shell Report 2003, 2003, p.2, Retrieved 23 March 2008, from http://www.refineryreform.org/downloads/shellreport_behindtheshine.pdf

[11] Barlow, John, Tories want balance in environment and economy, June 30, 2007. Vol. 32 No. 44, Retrieved 23 March 2008 from http://www.westernwheel.com/070606/news-tories%20want%20balance.htm

[12] Terra Daily, Illegal logging a major factor in flood devastation of Philippines, December 1, 2004, Retrieved 23 March 2008 from http://www.terradaily.com/2004/041201072557.jj82upor.html

[13] The Timber Mafia, Consequences of Illegal Logging: Environmental Implications,2002, Retrieved 24 March 2008, from http://www.abc.net.au/4corners/content/2002/timber_mafia/resources/

     resources_consequences1.htm

[14] The Timber Mafia

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