Download Oil Concessions in Angola

Ethics in a Globalising
World
Oil exploration in Angola
The ethical dilemma
Knowingly supporting a corrupt government
versus
Encouraging economic development in the Third
World
Angola oil - the facts
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Produces 2-3% of world’s oil production
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Approx 2m barrels per day.
Oil industry contributes 45% of GDP
New off-shore reserves available
Low cost of oil exploration – 20% of av. cost
7% of oil revenues devoted to public expenditure in
1998
Large scale corruption of oil revenues
Civil War – Govnt v UNITA
Stakeholder analysis
Stakeholder
Pros
Cons
World Economy
Increases / diversifies
supply
Reduces tomorrow’s
consumption
Oil Companies
Increase profits,
production options,
diversifies risk
PR issues
Ethical issues
Security issues
Angolan people
Increase in public
spending/employment
Entrenches corruption
Depletes nat. wealth
Govnt officials
Increase wealth
Social Bonus Fund
Military
Cash & Guns
UNITA
Strengthens govnt
Should oil companies invest?
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Milton Freedman view – YES (?)
Utilitarian view – MAYBE
Deontological view – NO
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Our conclusion / Virtue ethics: NO
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Knowingly propping up / encouraging corruption
Implicated within corrupt system
Respect for Angolan people
Marginal benefits for society as a whole
Encouraging ethical conduct within
the oil industry
Discouraging misconduct
 Pressure groups
 Consumer / media pressure on companies
 Govnt pressure
Encouraging ethical conduct
 Ethical awards
 Independent ethical body
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Industry code of conduct
Ethical awareness seminars / ethical awareness day
Encouraging ethical conduct within
the oil company
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Support independent body
Code of conduct
Market reputation of the firm
Close alignment with aid organisations /
environmental groups
Change company culture – become a standard
for the industry