12/12/2014

Column: When the lines of business and morality blur

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By Edward Noga

Many years ago, at the ACS Rubber Division's first and only convention in Mexico City, our sales director was charged with distributing our issues. On the second morning of the meeting, and still no paper, I asked him what was up.

He told me the issues were at customs, and officials there kept coming up with more paperwork and rules and wouldn't give them up.

I sighed. I told him to ask “how can we fix this,” and pay the “fee.” The next morning the newspapers were delivered to our hotel room doors.

The point is this is how much of the world operates. In Mexico, “la mordita” is the accepted way to get things done, a supplement for poorly paid government workers. In the developed world, it's called bribery and a crime.

When does a payoff become collusion in corruption—or worse, much worse, like funding a brutal warlord? That was the dilemma Bridgestone Corp.'s natural rubber subsidiary in Liberia faced 20-some years ago. Was it better to abandon the world's largest natural rubber plantation, lose its investment, leave thousands unemployed and at risk in a brutal civil war, or do business with warlord Charles Taylor, a man now imprisoned as a war criminal?

It's in the news today because of an excellent collaboration between PBS' “Frontline” and ProPublica. If you haven't seen “Firestone and the Warlord: The Untold Story of Firestone, Charles Taylor and the Tragedy of Liberia,” or checked out the website of ProPublica, I highly recommend you do so. You can look at what the Bridgestone subsidiary did in two ways: It either agreed to pay taxes to the existing “state” that controlled the area in which the plantation is located, or it gave into extortion.

Bridgestone decided it was better to deal with the devil than have its plantation remain idle.

The rubber industry has dealt with many devils in its long history. The U.S. has long fostered “relationships” with dictators and non-democratic states to further what is seen as our country's interests. Companies are no different.

Often it has involved serious bribery. For example, Goodyear was spanked for paying $1 million in bribes to gain $19 million in truck tire contracts in Iraq in 1989. The devil running that country then was Saddam Hussein.

Morality and ethics in business are nebulous. Profit and loss statements are definitive, and companies such as Firestone Natural Rubber exist to make a profit. 

Firestone, before being purchased by Bridgestone, pulled out of South Africa rather than continue to do business with the apartheid regime. So did Goodyear. At the same time, I know of at least one U.S. rubber company whose products ended up as rubber bullets used by the racist regime in South Africa for crowd control.

Maybe doing the right thing is in the eye of the beholder.

 

Noga is a contributing editor to RPN and its former editor. He can be reached at elnmails@yahoo.com.