Term Paper: Tension Between Businesses Interests

Pages: 11 (3563 words)  ·  Bibliography Sources: 10  ·  Level: Master's  ·  Topic: Transportation - Environmental Issues  ·  Buy This Paper


[. . .] This is because it will result in the best legal outcome for the sector and its shareholders. Under this approach, insiders can show how they are following the different environmental guidelines (without having to make dramatic changes to their practices). Instead, they can use the various loopholes to illustrate how they are incompliance with these regulations and have made the necessary changes. However, in reality, these practices have led to the same activities of the past and no improvement in the underlying amounts of air quality. Instead, many regions are reporting that these standards have become worse from the industry taking this kind of approach. (Lewis, 2001) (Reitze, 2001) (Casper, 2010)

Relevant Law

The most relevant law that is applicable in these kinds of situations is the Clean Air Act. This is designed to enforce the total amounts of pollution that is being emitted. Under the law, there are a number of provisions which are designed to achieve these objectives. The most notable include: air quality / emissions limitations, ozone protection, the prevention of significant decreases in air quality and the establishment of new procedures. (Martineau, 2004)

Air quality standards and emissions are determined based upon national / regional standards which were established. This is accomplished by setting mandatory guidelines and providing support / assistance in helping these facilities to comply with these regulations. Ozone protection is concentrating on limiting the total amounts of fluorocarbons that are emitted by power plants. These substances can harm the ozone layer (in the upper atmosphere) and have been shown to have a negative impact on global / regional weather patterns. The prevention of deteriorating air quality standards is designed to protect the health of the general public through measuring the total amounts of pollutants a particular facility is emitting. The establishment of new procedures is when there is a focus on keeping an inventory of what substance are being released, having the necessary permits for various activities, ensuring control provisions are in place and having contingency plans available. These different areas are showing how the Clean Air Act is designed to address the activities of polluters through introducing new practices and helping them to change their procedures. On the surface, this is supposed to ensure that they have manageable controls for following these guidelines and taking into account the needs of stakeholders. (Martineau, 2004)

Under these provisions, the Environmental Protection Agency (EPA) has the responsibility for enforcing these regulations. However, on the state and local level, these guidelines can be imposed more strictly on stakeholders. This means that they can go beyond them, by setting their own amounts of pollutants, which can be released from new and existing facilities. ("Environmental Protections Rules and Regulations," 2012) ("EPA To Set Modest Pace," 2010)

The regulations fall under an agreement that was reached in 2010 called New Source Performance Standards. These guidelines require that all power plants have a 28% decrease in the total amount of pollutants being emitted 672 MeHG. At the same time, they must demonstrate how they have implemented measures to change their practices by implementing new controls and eliminating the use of pollution credits. This took place July 1, 2012 and it is designed to enhance enforcement inside these areas. ("Environmental Protections Rules and Regulations," 2012) ("EPA To Set Modest Pace," 2010)

The industry has agreed to this settlement based upon the fact that they were facing increased amounts of litigation from the EPA. At the same time, the public was placing pressure on states and local government to control the total levels of pollution which are being emitted. As a result, these new practices are changing company policies by forcing them to take a different perspective surrounding the impact of the industry's activities on stakeholders. ("Environmental Protections Rules and Regulations," 2012) ("EPA To Set Modest Pace," 2010)

For instance, Southern Company has imposed changes which are designed to create a shift in these practices by limiting the total amount of sulfur dioxide to .50 btu / lbs. This is a part of the increased provisions from the Clean Air Act (which the entire industry agreed to). These practices, are showing how there has been a shift in the way ethical standards and guidelines are enforced. ("New Source Litigation," 2013)

At the same time, the sector realizes that the ethical approaches of the past will have a negative impact on the lives of different stakeholders. As they can no longer use legal loopholes (such as: the trading of pollution credits) to illustrate how they are following the law. When in reality, these individuals are making the situation worse by not effectively reducing the total levels of emissions. ("Environmental Protections Rules and Regulations," 2012) ("EPA To Set Modest Pace," 2010)

However, the increased amounts of regulations and the new agreement are forcing the industry to embrace a deontological approach. This is taking place with them realizing that public anger about their activities is leading to changes in their practices. At the same time, the political and legal climate has made it impossible for them to be able to continue with the same policies of the past. This is because the courts have found that many firms are in violation of the law from following these guidelines and must embrace new controls. The only way that this can occur, is for them to change their attitudes about the laws and the ethical approaches they are using in the process. ("Environmental Protections Rules and Regulations," 2012) ("EPA To Set Modest Pace," 2010)

To address these challenges, there are some cases where plants are constructed in other countries (such as: Mexico) in order to avoid the new regulations. This is when company officials can establish facilities a few miles away from the U.S. And not have to worry about these issues. In these kinds of situations, they can use their influence, money and power to corrupt government officials who may be adversely influenced by the activities of the company. This is the point when these challenges could become so extreme that they will have a negative impact on the environment by allowing large power producers to avoid U.S. regulations. (Cassin, 2008) (Jennings, 2010)

Under the Foreign Corrupt Practices Act, any entity which is involved in these activities will have the responsibility of ensuring that they are following the highest ethical standards. This means that even though these firms are beyond the scope of U.S. officials. The fact that they have significant operations in the country; requires them to not engage in: bribery, kickbacks or special favors. This means that these facilities could have increased amounts scrutiny about what is occurring from Mexican officials (who will impose their standards on emissions). (Cassin, 2008) (Jennings, 2010)

For instance, Mexico is a signatory of the Kyoto Protocol. This requires that each nation cut their greenhouse gases dramatically starting in 2006. The fact that a firm could build a plant in these locations, will subject them to these provisions of the law. When this happens, it means that they may face tougher amounts of scrutiny and not have the ability to address critical challenges in the process (through bribing government officials). (Cassin, 2008) (Jennings, 2010)

As a result, the various international, national, state and local laws are creating a change in the activities of power producers. This means that they cannot engage in the same practices of the past. Instead, they will be subject to sanctions (such as: Foreign Corrupt Practices Act) which will hurt their ability to deal with critical challenges. At the same time, there is the possibility that international agreements will be imposed upon these operations. This is further evidence of how these firms have no choice, but to embrace a deontological approach in their practices and attitudes. (Cassin, 2008) (Jennings, 2010)


The best way to reduce any kind liability and enhance ethical practices is to improve different regulations. The most effective way that this can occur is to expand the provisions of the Foreign Corrupt Practices Act. Under the law, it is specifically applied to the actions taken by company executives in relation to foreign officials. This is provides a solid start. However, more needs to occur to change these behaviors. In this case, the law could require that firms show, how they are not engaging in any kind of unethical or illegal activities. As they could demonstrate the way these provisions are being followed (based upon sworn affidavits they are submitting to regulators). This will require companies to show that they are abiding by different aspects of American law and not trying to circumvent them through going to other locations outside of the U.S. (Deming, 2010) (Martineau, 2004)

At the same time, new environmental guidelines need to be imposed on the international level. This is because the Kyoto Protocol does not go far enough with the U.S. effectively exempting itself from these provisions. If a new agreement… [END OF PREVIEW]

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