Legal Versus Ethical Arguments
Contexts for Corporate Social Responsibility
MATTHEW W. SEEGER STEVEN J. HIPFEL
On December 3, 1984, the Union Carbide plant in Bhopal, India, experienced a major crisis, resulting in the leak of 45 tons of methylisocyanate, a toxic chemical used to produce insecticide. As many as 10,000 people died from the disaster with many thousands more suffering long-term physical damage, including blindness, respiratory problems, birth defects, and neurological problems. Union Carbide's initial response was to deny responsibility for the accident. The company did make emergency relief payments and later settled all civil liability for the accident with $470 million. Claiming it had met its legal obligations, Union Carbide began to extricate itself from India. Responsibility for the plant site and for victims was eventually turned over to the Indian government. The company did fund a relief trust and built a clinic to help treat victims, but the legacy of longterm disability, contaminated water, and lingering health effects has remained unresolved.
The Union Carbide Bhopal accident, as well as a number of other both dramatic and mundane examples, illustrates the debate over corporate social responsibility (CSR). Companies such as Exxon Mobil, Wal-Mart, Enron, Merck Pharmaceuticals, Microsoft, American International Group, Royal Dutch Shell, and many others have been accused of hiding behind minimal legal requirements and avoiding larger social responsibilities. This debate has been framed by a variety of competing positions, including practical versus desirable goals, minimal acceptable versus optimal required actions, and ethical versus legal behaviors. This last tension often frames much of the larger debate over CSR because legal restrictions usually carry the most direct consequences for organizations. The law, although bearing some general relationship to larger ethical principles, is comparatively narrow in its dictates and does not account for a broad range of ethical positions or moral obligations. In addition, important arguments have developed around the competing legal versus moral obligations that organizations have to various stakeholders and the ways in which these obligations can be balanced and met. The larger debate over corporate responsibility may also become mired in discussions of specific legalistic requirements or narrow competing values, which avoids larger moral questions and issues.
Here we focus specifically on four forms of CSR that include both legal and ethical dimensions: product responsibility, worker rights, environment responsibility, and communication responsibilities (Metzler, 1996; Seeger, 1997; Werhane, 1985). We first examine the concepts of CSR and responsiveness and then explore the general strictures and obligations posed by legal versus ethical codes. We also explore three views of the relationship between ethics and the law: (1) legal positivism (separate realms model), (2) natural law theory (correspondence model), and (3) the social responsibility model.