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Tuesday 9th
posted by Morning Star in Features

BILL BENFIELD looks at so-called ‘ethical capitalism’ and finds the big lie just keeps on getting bigger

ONE of the great businesses of the world, in terms of size at least, is Tata Industries.

Whenever the name of this steel-based corporate juggernaut comes up, the great and the good immediately leap to praise the company’s legendary ethics.

According to the Tata lexicon, good governance has to stretch way beyond staying on the right side of the law. “Yes, we have a code of conduct, but ethical behaviour cannot be enforced by diktats and through written documents alone,” says Tata Industries chairman Kishore Chaukar on the company website. An implicit sense of ethical business conduct has been the cornerstone of the Tata way of corporate governance, according to Chaukar.

So, when the Indian steel giant took over Corus in January 2007, the Corus staff were entitled to feel that they were going to be treated fairly, at the very least.The deal made front-page news in papers all over the world. “Tata takes the world by storm,” one Indian paper crowed.

“The deal outlines the potential of liberalisation and globalisation,” another paper said.But elsewhere, The Hindu newspaper wondered whether Tata had “paid way too much.”

“Only time will tell,” it said, “whether Mr Tata is right in his assertion that the asking price was well worth … the gamble of taking on a huge load of debt on the assumption of a sustained demand for steel over, at least, the next decade.”

Well the ex-Corus workers at Tata got the answer to both that question and the depth to which Tata’s ethical commitment runs. And neither answer gave them much joy.

The Tata family is intent on proving itself right about the gamble — even if it costs its British workers their jobs or pensions to do so.

Tata released an open letter to employees which said Tata’s British operations were losing money and claimed that its pension scheme had a £2 billion shortfall.

Profits in the British steel industry are being squeezed by cheap imports and weak demand, the company said.

And to recoup its losses, it proposed changes to pensions which could see employees retiring at 65 instead of 60, possibly including the closure of the scheme or hacking back its pension returns.

So Tata, just like every other capitalist enterprise since the first boss made the first profit, squeezes its workers to up its profits and makes them pay for its losses.Not much ethical about that, you might think.

And you’d be right, even though Tata Steel has received the “2015 World’s Most Ethical Company” Award from Ethisphere Institute, the self-styled global leader in defining and advancing the standards of ethical business practices.

This was the third year that Tata Steel was awarded the title.Tata isn’t alone, however, in its boasting about its ethics and its morality.

As 21st-century capitalism gets greedier and greedier — even to the extent of seeking to sue national governments through TTIP-style deals for the heinous crime of affecting company profits by honouring their democratic mandates — their claims to ethical sainthood grow ever more strident.So where do these awards and paeans of praise come from?

Well it turns out that there’s a whole huge industry dedicated to administering pats on the head to predatory capitalists for being nice bunnies with hearts as big as their wallets.

God help us, there are even agencies which make a very nice living, thank you, out of introducing companies to the awards circus.

And some pretty odd companies have found their names on the honours list.

Look at this year’s list of the Ethisphere Institute’s ethically approved medallists and you will find some unexpected entries.There’s UPS, for example. In March 2013, the giant shipping corporation paid $40 million to end a federal criminal probe linked with deliveries it made for illicit online pharmacies.

The US Department of Justice said in a press release dated March 29 2013 that the fine was equivalent to the money UPS had received from suspect online pharmacies to ship their illegal drugs. Following the fine, the DoJ did not file any criminal charges against UPS.

Then there’s Elbit Systems, an international electronics company engaged in a wide range of programmes throughout the world, including unmanned aircraft systems — drones. There’s not the space to go into that cesspool here, but we can safely leave the ethics of drone manufacture to our readers to make their own determination.

There’s also the the Alyeska Pipeline Service Company, which operates the 800-mile Trans-Alaska Pipeline System. It was exposed twice in the 1990s for harassing staff whistleblowers.

In 1993, a government-commissioned audit uncovered lax management, falsified reports and faulty leak detection. Alyeska hired a company to spy on whistleblower Chuck Hamel.

Eventually Alyeska pledged to end the harassment of workers and develop a more ethical environment. But in 1999 troubles flared up again. Six anonymous whistleblowers aired 57 new charges against the company, including concerns about safety and slow responses by managers. Alyeska admitted to more internal problems including the harassment of whistleblowers.

Incidentally Alyeska is a consortium of major oil companies that includes BP, Conoco, ExxonMobil and Chevron.

But let’s move on to the Fluor Corporation, another 2015 award recipient. On February 2 this year, the US Department of Energy (DoE) proposed $243,750 in civil penalties to Fluor for violations of nuclear safety and radiation protection regulations.

The violations were associated with the improper alteration of radiation protection documents and other violations in the areas of information requirements, quality improvement, routine testing for operability and work processes, records management and training.

That’s not an isolated instance either. In 1996 the DoE was conducting a $50bn to $60bn clean-up of its Hanford site. After a chemical explosion in 1997, 11 workers filed a lawsuit alleging they were denied appropriate medical attention and protective gear.

Later, in 2005, the DoE fined Fluor for safety violations and that same year a jury awarded $4.7m in damages to 11 pipe-fitters who were fired after complaining that an inadequate valve was being used.

Also in 2005 Fluor agreed to a $12.5m settlement in a suit filed under the Federal False Claims Act. The suit filed on behalf of Cosby Coleman contended that from 1995-98 Fluor knowingly overbilled the government.

The costs disputed included multimillion-dollar bonuses paid to Fluor’s management, $13.2m invested in land, $7.3m spent for improvements to office buildings Fluor leased to other companies, $2.6m spent for construction of a parking garage Fluor leased to another company, $410,000 spent for luxury condominiums in Palm Springs, $1.8m spent on a fine art collection, $75,000 spent for a Mercedes Benz convertible driven by the company’s president and $20,000 spent for an antique Chippendale chair.

And just in case you want some variety, there’s the Knights of Columbus. This well-known Catholic organisation also took an ethics award in 2015, although for the life of me I can’t see why.

This organisation, while using thousands of volunteers, also acts as an insurance organisation for its members. Because of the use of volunteers, it enjoys non-profit status in the US.

It has accrued millions through its operations and, it seems, has no compunction about spending them to advance political causes of a far less than charitable nature.

The Knights donated an incredible $1m to support Proposition 8 in California, the bigots’ charter created by opponents of same-sex marriage.

Proposition 8 was also ultimately ruled unconstitutional by a federal court in 2010.

The Knights of Columbus is notorious for its anti-LGBT stance and progressive priests are fighting an enduring battle against its entrenched bigotry, so much so that US priest Father Geoff Farrow has advised insurers to “borrow the full amount against your Knights of Columbus life insurance policy immediately. “Take the cheque and invest the funds with an LGBT-friendly fund.

“If every priest and KofC insurance policy holder were to do this,” he said, “it would create a considerable capital drain on KofC and cripple their ability to write large cheques to thwart LGBT legislation and ballot initiatives.”

And just to round it all off, with no comment, there’s Walmart…Go through the list of so-called ethical award-winners and you will find this is just a random selection of what capitalism considers to be good and ethical companies.

So Tata employees shouldn’t be surprised that their employer’s “ethics” don’t match up to expectations.

And when you wonder why so many decent working people vote Tory, remember the sheer size of the multibillion-pound industry that is built around dressing the wolves in sheep’s clothing to conceal the truth that they are a pack of conniving vultures dedicated to separating the worker from the fruits of his or her labour as cheaply and expeditiously as possible.

To misquote a favourite phrase from Ricky Tomlinson — who once took on unethical employers himself — ethics, me arse.