Are Fines Enough When Harm is Done?
We are an opinionated bunch here at the Business Channel so this month we’ve got some debates going on between blogs known as the Odd Blog Couple. Liz at Business and Blogging and I are tackling the question of how to handle companies which engage in potentially harmful behaviors.
Companies which engage in potentially harmful behaviors with results such as environmental dangers or distribution of unsafe products often simply pay a fine as damages and move on. Should the punishment for these behaviors include a public mea culpa?
My understanding of the term mea culpa is to take responsibility, to say it was my fault and no one else’s.
While many companies just pay up and move on, there is something missing from this process: acknowledgment of the suffering that the actions caused. Or, in other words, the human element. The case of Dole and Dow in Nicaragua comes to mind.
Dole and Dow were recently found liable in a pesticide exposure lawsuit that spanned international borders and decades of legal battle. An LA Superior Court jury ordered the companies to pay $3 million in damages to Nicaraguan banana workers who were made sterile by exposure to the chemical DBCP.
To date, I’ve not found any public mea culpa from either company. Instead, both tout their corporate social responsibility initiatives, their efforts for the environment and their commitment to the human element, which is the tag line of Dow’s recent ad campaign.
To me it seems that the families affected by the chemical exposure – which left many people sterile – would benefit as much from an acknowledgment of responsibility as they would from the monetary damages paid. Somewhere, in the millions of dollars of ad money spent by these two companies, it would make a difference if the victims were acknowledged – we poisoned you, we’re sorry and it will never happen again.
Check out Liz’s take at Business and Blogging
Ali- I agree that fines, and even mea culpas, may not be enough. I’m posting on carbon trading in a few days – http://www.projectmanagement411.com/carbon-trading-as-global-warming-heats-up – it also deals with the confusion around paying for bad deeds.
Ali, why in the world would anyone expect an apology when companies and individuals often “settle while not admitting or denying guilt.”
No, fines are not enough: men respond to incentives, and fines are “threat” incentives. Harm is bad, it need a stronger retaliation, and certainty of being caught!
Thanks for the link, Bob. That’s a hot topic and I look forward to reading your article.
Miki, I don’t think anyone expects an apology and am well aware that companies often walk away without taking responsibilty. I have met many people who have suffered environmental injustice and have seen the frustration and pain that comes with being ignored and discounted.
The point is that companies which have been found liable or guilty should consider that avoiding a public mea culpa can do further harm and affect the company’s credibility.
I never claimed that the spin doctors had any commone sense, let alone a good feel for the real public. Perhaps what we really need is legislation similar to Englands Corporate Manslaughter law, not that it would ever get past the business lobby or the politicians they support.http://business.timesonline.co.uk/tol/business/law/article2097907.ece