Memorandum

TO: FROM: SUBJECT: DATE: Gerald Barnett Wesley Smith BASF and Ethical Issues April 10th, 2014

Ethics are a part of everyday life in the business world. People are faced with challenges wit outcomes that can affect their whole lives. Badische Anilin-und SodaFabrik (BASF) is the worlds leading chemical manufacturing company. With such a huge company, many ethical issues are going to arise. Today I will be talking about one instance that occurred in Beaufort County in South Carolina. This issue involved the site for a new chemical facility and the local environment and economy, all of which will be elaborated in the coming paragraphs.

BASF started out in Germany in 1865 and began to expand to other areas of the world soon after it was founded. Pollution and destruction of the environment soon became a problem for this large corporation. BASF plants had polluted the Rhine and, in Belgium, the Schelde River (Donaldson pg. 1). This was a major problem for BASF and the locations that it owned. One potential area that BASF was looking to build a plant in was Beaufort County. Beaufort County is located in South Carolina along the coast and is home to the Hilton Head, which is a wealthy resort

Wesley Smith. Draft 1. BASF and the Ethics of Pollution.

community. Along with this up-scale community, we find the complete opposite in a majority of the community. Many of the areas are home to low-income black families who struggle to make ends meet while having seeing the luxurious lives that their neighbors live on the Hilton Head. In the late 1960s BASF was looking for a new site to build a new chemical plant, and Beaufort County was in the running.

Ethical Issues in Business by Thomas Donaldson and Patricia H. Werhane elaborate more on this story in the first chapter of their book. Beaufort was chosen as one of the final locations for the plant. At first the two sides debated whether a machine industry or a recreation industry was best: advocates and opponents of the plant clashed mainly over the type of development best suited for Beaufort manufacturing or recreation. (Bryan) Later, the Hilton Head was against the idea of BASF building a plant on the island because of environmental reasons. Hilton Head argued that since BASF had already polluted the Rhine and the Schelde River in Europe, that it would also pollute the air and the Colleton River in the area. Hilton Head also made note that BASF had only allocated one million dollars to pollution control.(Donaldson Pg 1) BASF had previously had to pay many different penalties resulting from the pollution of their plants. Hilton Head used this information against BASF. On the other side of the choice, the citizens of Beaufort County wanted to have the plant go in. Having a new plant would mean thousands of jobs and opportunities that the population did not currently have. Donaldson elaborates on this and adds a remark from a local business man: I would say 80 percent of the people in Beaufort County are in favor of BASF. Those who arent rich. (Donaldson

Wesley Smith. Draft 1. BASF and the Ethics of Pollution.

Pg. 1) This shows how big of a decision this was going to be the BASF in order to provide more jobs or keep the environment safe.

The ethics of this situation were not all present in this short passage in Donaldsons book. With further background information more facts come up about Hilton Heads intentions with the island and the issue of pollution. The island was mainly inhabited by black lower class that did not have many jobs, but owned large plots of land. With the BASF plant coming, this would provide many jobs for them and help to raise the poverty line they lived in. The Hilton Head wanted to use this land to develop their resort community more. They began to raise the tax on the land in order to drive the current owners out. The plantations as Hilton Head called them, were large plots of land with estates that wealthy owners would live on for vacationing time. The landowners, whose land had been in their family for generations, slowly saw it fall to the hands of the rich owners of Hilton Head.

Ethical Issues in Business makes it seem like the Hilton Head are doing this for the good of the community and the environment. By repeatedly mentioning how bad this is going to hurt the environment and ruin the tourism industry in the area. But in reality they are doing it to help their own business and they do not consider the lives that they are going to change without the plant being built and leaving the land for the rich upper class.

Wesley Smith. Draft 1. BASF and the Ethics of Pollution.

BASF had much to think about with regards to their decision. After talking about it, they decided not to have the plant go in on the island, and gave the land back to the state. Many were devastated when they heard the news that the plant would no longer be built, and they would lose out on the job opportunities it brought along with it. Although it is unclear why BASF abandoned the plans and gave the land back, BASF had to weigh the different options and choose what they thought would be the best for their company. With BASF out of the way, Hilton Head could not develop that land into resorts and apartments. The island soon became a vast real-estate community with high rises and apartments going up. The main attraction to the island was then additions to the resort community that were added. With all these new buildings and people living on the island, pollution soon became a problem for the people who had strived to keep BASF from coming and polluting the area.

Due to the increasing numbers of the Hilton Heads residents, and the lack of improved infrastructure, the surrounding waters, which included many oyster beds, began to become polluted from the sewage leaking from the old, cracking pipes (Bryan). Many miles of the shore were shut down in an attempt to clean the sewage that had leaked into the ocean. In 1995, about 500 acres of shellfish waters in southern Beaufort County, including parts of Broad Creek, were closed because of high levels of fecal coliform (Mitchell). The issues, which Hilton Head had previously tried to avoid, are now blowing up in their face. This brings the question of what their intentions were when BASF was thinking of building a plant there.

Wesley Smith. Draft 1. BASF and the Ethics of Pollution.

Hilton Head had displaced many of the islands original residents by increasing the land tax and making it unlivable while taking away a source of growth for the community. I do not believe that this was a very ethical choice for Hilton Head. They took away thousands of potential jobs for the citizens as well as future benefits from the fishing industry along the shoreline.

Ethics can take many different forms in the business world. And they can be portrayed many different ways in favor of a certain side or outcome. This was shown with regards to Hilton Head and the BASF plant. Hilton Head wanted to use the land to improve their business and not for a new plant that could potentially improve the lives of people living on the island. It may have seemed like Hilton head wanted to stop the plant production because of pollution and to preserve their environment. But they ended up polluting the same water years down the line because of the new apartments and other buildings relying on the outdated sewage system. This shows us that a companies real motives may be different than what they appear to be so they can advance their own interests and put ethics aside.

Wesley Smith. Draft 1. BASF and the Ethics of Pollution.

Sources

Bryan, W. (2011). Poverty, industry, and environmental quality: Weighing paths to economic development at the dawn of the environmental era. 16(3), 492522. Retrieved from http://envhis.oxfordjournals.org.offcampus.lib.washington.edu/content/16/ 3/492.full.pdf html Donaldson, T., & Patricia, W. (2008). Eithcal issues in business. (8th ed., p. 1). Upper Saddle River: Pearson Education. Mitchell, L. (2009, March 29). Are boats moored off polluting shellfish? town says no, dhec says maybe. Retrieved from http://www.islandpacket.com/2009/03/23/791089/are-boats-moored-offhilton-head.html Stuart, R., (1982, Dec. 14). big-city problems for hilton head. New york Times. Retrieved from http://www.nytimes.com/1982/12/14/us/big-cityproblems-strain-hilton-head.html

Wesley Smith. Draft 1. BASF and the Ethics of Pollution.