The Ethical Business Practice of AA

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1.0 Introduction:

AA is one of the largest mining companies in the world; company headquarters located in the UK and operates with 158 900 employees. A Corporation was founded by Sir Ernest Oppenheimer on 1917. Initially AA company is mainly focus on gold mining industry in South Africa later on they expanded their scope of the business. 1920 to 1930 is the decades of growth for AA Company, play major role in the African explosives and chemical industries. In 1960 AA started to expand the business around the world and they succeed on the action. Angel American first of the global who stated professional managed social investment vehicle in South Africa on 1974,this social socials still continue as of now with effective manner.

Mainly AA produces the following materials in the global business and global head in both platinum and diamonds.

  • Iron ore (and manganese)
  • Metallurgical coal
  • Thermal coal
  • Copper
  • Nickel
  • Niobium
  • Phosphates
  • Platinum
  • Diamonds

AA one of the large earning company in the world, earned 6.6 US$ billion profit in year of 2013 which is the biggest achievement compare to competitors. Year by year AA company service continues globally. AA company established their business in following places and become the leader of the deep mining industry

  • South America
  • Africa
  • Australia and Asia
  • North America
  • Europe

Mining operations always impact on the environment and the communities where company operates but AA never fails to consider about environment and the communities when they establish new business .AA succeed in all the possible ways in the competitive market and show case them as preliminary for corporate social activities this resulted to achieve few social responsibility awards .AA is the first mining company awarded for the prestigious Community Mark award by UK this is awarded for best and responsible business practice. AA generates company strategy to distribute best returns to the stakeholders and most excellent working environment to employees.

This report mainly focuses on ethical business practice of AA and how ethical practices help to be successful in the business. AA operates globally with best business principles, “Good citizenship” and “SEAT” business principles are the unique principle they have followed in the trend. AA ethics mostly concern related to safety, health, social development and about environment. Likewise AA had certain exceptional business ethics which have to been briefly coved in this report.

A best ethics choice helps AA company to achieve the good reputation, stake holders’ attraction and government supports which directly impact on the company revenue. AA management and employees had high concern about ethical business practices since which creates viable in the market even though mining operation harmful for environment and the societies.

2.0 Business Ethics:

2.1 Definition

In current competitive business world to sustain in the market business ethics is essential for each and every company who are operated locally and globally .Business ethics describes what constitutes right and wrong or good and bad, in human behavior the background of the organization. Business ethics vary by company to company and business field to field, business ethics creates by organization based the on the organization govern .Business ethics are like principles ,guidelines which are motivate the organizational employees to make decision based on the company’s stated beliefs and attitudes toward business practices within its industry.

Organizations can be defines as the group of peoples who effort together to achieve their common organization objectives. In this situation organizational general business ethics is essential to companies to generates superior reputation and create superiority working environment for the employees. Business ethics act as soul of the organization growth since best ethics choices shows the different between success and failure. Certain forces assist to generate unbeatable busbies ethics for the organization.

2.2 Ethical business practices:

  • According to the Anglo American case study:

Anglo Americans commit to operate with three highest levels of business ethics are known as good citizenship .where business principles guides their decisions and actions to adhere to consistently high standards of business enter gritty and ethics.

  • Balancing investor returns with good community well being as a best corporative citizen, respects dignity and human rights of individuals and communities wherever they have their operations.
  • Being a good employer and steward .they universally supports fair labor practices and promotes work place safety and equality in their operations

Mean time Anglo Americans one of the most popular ethics is good citizenship principles as per their ethics and principles they mainly dedicates they policies into:

  • Environment
  • Safety and health
  • Social
  • Sustainable developments

They have different visions on each polices which they practices how ever in this report I would like to discuss the policies which is crucial as per author aspects:

Firstly Anglo Americans have their environmental vision plans which plays the vital role to minimize the impairments or harm to the environment by designing ,operating their all operations in an environment responsible citizens ,eve dually they proves the have good citizenship principles .more over we look forward of their principles ,according to the vision they have three basic fundamental principles:

*Zero mindsets

*Non repeats

*Non negotiable standards and rules

What does the principles means zero mind sets means they apply the mitigation hierarchy of avoiding, minimizing and mitigating environmental impact from their activities ,products and services .non repeats in necessary steps will be taken to learn from environment impact, evident and audits findings and other non conformances to prevent their recurrence non negotiable standard and common rules for environment preferences standards and produces should be applied throughout the group as a minimum requirements .except this principles their policies are more detail about they standards .

In their first policy they talk about leaders, it say leaders hold the responsibility for the environmental managements of their activities and it continues by following policies:

*They expect all their superiors to provide effective leadership in environmental managements.

*Managers of every business or operation are responsible for the full implementation of Anglo environments management’s formworks and participation in the Anglo assurances programmer.

*They must conserve and product environmental resources through amongst others, through, amongst others .the efficncents use of energy and water ,reducing waste and pollutions.

*They able to respect people’s cultures and heritages.

*They must comply with environmental legislation and other requirement to which we subscribe and develop a culture of continual improvement.

*They have level commitments to open communication with their employees and other related patties, local communities where their policy engorges an environmental responsible culture to the community.

Except this major managements system policy they have different principles according to their standardization for how to perform in environment, group policy for climate change and water policy which is enormously to reduces environmental impact. Second important policy for employees where they approach safety and health which contain:

*anglo American group HIV/AIDS policy

*the anglo American occupational health way

*the anglo American safety way

*the anglo fatal risk standards

Anglo Americans are the one and only company where they recognizes the human disaster caused by the HIV/AIDS epidemic .according to their policy they consider the following fact are major aspects of the policy

  1. Elimination of stigma and discrimination –basic of real or perceived HIV statutes they carry out with confidentiality with all reasonable precaution are taken to secure and control the information about individual HIV status .anglo Americans does not abide any form of unfair discrimination against those infected with HIV .all reasonable steps to respects their dignity and individual human rights .Anglo Americans equally treat all genders there’s no partiality in genders
  2. Employments –applications for employments for any occupation or position must pass the standard pre placement medical examination .how ever this is not include HIV test .
  3. HIV counseling and testing –Anglo Americans encourage all employees particularly those living in countries with high risk of HIV infections
  4. Prevention –keep on informing and awareness programmers on HIV /AIDS are available for all employees .education strategies are based on consultation between employer and employees
  5. Care ,support and treatment-medical assistants is provide by the company for HIV positive employees and their dependants including medical benefit arrangements pertaining from time to time
  6. Monitoring and evaluation –Anglo Americans always monitor evaluate and evolving AIDS disease.

Next major policy in occupational health where they have their vision says ,determines to achieve zero harm and productive work force through the effective managements of occupational health rights .according to their vision they have basic principles in occupational health.

  • All occupational illness is preventable.
  • Learning from their monitoring of exposure and surveillances of disease
  • Consistent application of common, simple, and non negotiable occupational health standard throughout the group.

The above polices of Anglo Americans are tremendously engrain the society in the environmental and health prospects .how ever still their facing few drawbacks in safety, HIV/AIDS. Climate change and occupational health in major. In conclusion the principles ethics of anglo Americans are more reliable ethics where the similar kind organization can precede the ethics. Mean time their polices enormously benefit the environmental safety and health of employees and the social community.

2.3 Unethical business Practices:

  • General Perspective

Unethical business practices are actions and behaviors pursued by organization which only concern about employee and company revenue not about global, environment violation. Following are few unethical business practices followed by organization globally.

  • Child Labour
  • Anti corruption
  • Unlawful activities
  • Harmful to environment and communities
  • Sexual discrimination
  • False financial documents to reduce government tax etc…..

There are few globally well established and reputational companies are still doing several unethical practices to earn additional profit and some are occur due to careless principles and business policies. Following statements describes the unethical business practices followed by some international organizations.

Toyota is one of the best auto motors company in the world, which manufacture 08 million vehicles with faulty brakes and sticking pedals in 2009 to save little money. In the automobile industry safety is more essential, in this aspect Toyota fails to provide proper expected safety to consumers which create certain hiding death cases.

Apple is the one of the biggest company in the world, Apple products manufacture is Foxconn located in Taiwan. In this company tiny child slaves used for manufacturing operation and force to work on dangerous working condition for more than 10 hours per days, seven days of week. According to the international labour rules below 18 years child are not allowed to be seated for work but foxcoon continue this unethical behavior.

Trafigura is American multinational metal and energy trading company, operates in 56 countries and third largest private metal and Energy Company. This company produces the toxic wastes by their production operations which produced more harmful to the environment and community. Later company illegally dumped the toxic waste without processing it by help of dumping company, which cause few diseases to thousands of people.

3.0 Benefits of Ethical business:

3.1 Benefits to the business:

  • General Perspective
  • According to the Anglo American case study

Angelo American ethical activities never fail to benefits communities and business and company mutual benefits make stronger to sustain in the global market. AA continuously focal point on developing sustainability on area water wastage, employee health and safety and community health and safety and climate change and stake holder’s commitments.

AA business ethical practices are mostly associated to environment, community concern and sustainable approach which create competitive advantages to the company than other rivalry mining companies. This behavior creates share holders returns, reputation and government supports and makes best partner choice for many governments for mining operation which shows future assurance for business opportunities, shareholders returns.

SEAT (Socio-Economic Assessment Toolbox) is the main implementation and development of AA, which is helps to become leader in the mining industry and helps to understand the requirements and realism of the communities where they operates the business and helps to react to their needs .SEAT provides major business values to AA operation and proper guidance to future enhancements, Shareholders and business point view SEAT play key role. Followings are few business benefits AA achieved through SEAT.

  • SEAT offers a structure and outline to make positive and clear relationship with stakeholders.
  • SEAT facilitates management to indentify the business approach for current and future projects
  • SEAT create path to organization to discover the social issue, economic impacts that need to organized and control.
  • SEAT helps management to improve their risk management based on the local communities and stakeholder’s views.
  • SEAT initiates the management to using local procurement to benefit the business.
  • Helps to identify international practice guidelines for global business which create sustainability and exclusivity among other competitors.

AA introduces the VCT program to encourage their employee to test HIV/AIDS and TB, in 2010 more than 94 % of AA employees were tested HIV. As result more than 4000 employees are indentified as HIV positive, how ever AA provides ART for all the effected employees and the depended. ART program cost is 3.4% of company payroll but even though it is costly program which save 93 $US per month in individual level and no decline in the employee productivity and skills.

Another ethical business practice which benefits to AA business and shareholders and the communities is strategy for reduce water usage by implement “WETT” toolbox .Emalahleni water reclamation plant project is good example for ethical business practices followed by AA and which benefits for business environment, the local community. AA invested $US100 million to develop reclamation water plant which reduces the water wastage and offers 8 megaliters water to other nearby Anglo mining projects, this project designed under WETT tool box approach. Likewise AA made large investment in MBD energy project which designed to reduce the carbon emissions using algae and build 4 solar farms in South Africa to generate electricity for their own usage and to reduce CO2 emissions. AA saved around $US 180 million in costs by followed few water, carbon and energy saving programs in ethical manner.

67 % of water used for AA ‘s operation is recycled

3.2 Benefits to the Local Community:

  • General Perspective
  • According to the Anglo American case study:

AA s’ ethical business practices are contains concern about local community which they are operates, SEAT define the local community needs, views and priorities. In 2006 AA started nickel operation in Brazil originally; at this situation company used SEAT to indentify the local community needs. As a result company spot out that community needs and invest more than $US 5 million to develop the community infrastructure and create few employment opportunities .Additionally AA combined with NGOs and provide few required helps to local farmers to increase the productions.

AA is the first company who launched first free work place for HIV/AIDS treatment in the world for employees and their family members. AA continually provides free ART and education to HIV /AIDS positive, tuberculosis patients to reach their goal to create community with zero new HIV infections. In addition AA manages the Mother-to-Child Transmission program to provide HIV negative babies to the society, as of now 60 babies are born as HIV negative by use of this programme.

Another ethical business practice which gives benefits to local community is Emalahleni water reclamation plant project since 12% of city water supply through this plant which reduce percentage of people without water from 14 % to 2 % .in addition, this project created 700 temporary job opportunity and 57 permanent employment.

4.0 Importance of engaging with local communities in decision making & impact to reputation

  • General perspective :

In the international market, in recent years company managements are mandatory to work with their communities where they operate business because community views play major role in company decision making and future planning. Organizations can involves community to decision making followed by main three engagement strategies:

Community Investment: This strategy basically one way communication, this is about notifying the information to the community which basically creates awareness about company.

Close relationship with local communities help organization to obtain community members suggestion and views, which will assist management to make decision, best results and facilitate on sustainability strategy. Community engagements are helps to identify following aspects that facilitate organization to make decision.

  • Help to identify community needs, opportunities and resources.
  • Help to identify possible positive and negative impacts from the business operations.

Good relations with local community create attractions about company to employees and investors and build reputation within the local community. When organization consider local community views for the decision making which make good reputation among public ,that is long term asset for organizations.

Midwestern Oil & Gas Ltd (MWOG) located in Nigeria, inaugurated the basic operation in 2001 same time federal government offered mining licenses to the company in 2003.However before initiate the mining operation MWOG gather local community concerns and views, that facilitate management to start mining operation by knowing positive and negative impact to the community and help to reduce conflicts. In addition MWOG provide electricity facilities and health care facilities to rural areas which form reputation and trustworthy among local community.

  • Anglo American point of view: