Responsibility in World Business: Managing Harmful Side-Effects of Corporate Activity

By Lene Bomann-Larsen; Oddny Wiggen | Go to book overview
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7
The principle of double effect and
moral risk: Some case-studies of
US transnational corporations

Patricia H. Werhane

The classical principle of double effect (PDE) states that “in cases where a contemplated action has both good and bad effects, the action is [morally] permissible only if it is not wrong in itself and if it does not require that one directly intend the evil result”.1 The PDE revised and proposed in this volume rephrases the classic doctrine by claiming that “[n]egative side-effects do occur, even when businesses pursue legitimate objectives by legitimate means”, but this being so it is a requirement that “consultation with affected parties, as well as risk assessment, is carried out prior to and during the business operation in order to identify negative side-effects” and “negative side-effects that arise from a business's operations are not made to serve as means to achieving its legitimate objectives”. The revised PDE further adds three other qualifications: that “negative side-effects can be justified as proportionate to the legitimate objectives”, that “active measures are taken to prevent or minimize negative side-effects”, and that “the negative effects are inescapable it is not possible to achieve the legitimate objectives with fewer or no sideeffects”. It is proposed that the PDE, with its qualifications, can become a tool to measure moral risk, particularly as companies venture into transnational relationships.

To illustrate the revised PDE proposed in this volume, in what follows I shall present and analyse two case-studies of American transnational companies operating in China and compare those cases with one casestudy of an American transnational company operating in Africa. Before

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