Business and the Economy Essay Example

had PVB levels 50-100 times higher than recommended by pollution inspectors. A document from the Welsh Water Authority stated that excessive amounts of lead, copper, zinc, and nickel were discharged into sewers by the Pontypool plant, surpassing permitted limits up to 82 times. Balancing negative publicity surrounding safe chemical disposal with efforts to prevent air pollution and contamination of nearby areas has become a challenging task. PCBs are highly dangerous substances known for causing cancer and liver damage.Transporting PCB-contaminated shipments via road, sea, or air poses significant risks as accidents could have disastrous consequences for both British citizens and wildlife. Dock workers refuse to handle PCBs from Canada, and most major ports in Britain also decline handling PCB materials. Despite facing planning permission restrictions domestically and internationally, Rechem has thrived in the chemical waste disposal industry due to a strong demand for its services. In the fiscal year ending in March 1988, Rechem achieved a profit of 4.5M from a turnover of 13.4M, resulting in an impressive profit margin of 33.5%. Additionally, during its inaugural year with a turnover of 19.5M, Rechem generated a profit of 8.8M with a remarkable profit margin of 45%, highlighting the potential for significant financial gains within this sector.

More recently, Rechem made an initial public offering on the stock market by selling 2.6 million shares. This move increased their exposure to external pressure groups and introduced another aspect to consider: striking a balance between internal and external expectations.
Internally, businesses are responsible for generating profits for shareholders, managers, and other stakeholders.
Externally, they face challenges such as competing in a saturated market and complying with governmental regulations while considering the interests and

pressures from various external stakeholdersNeglecting concerns raised by pressure groups like Friends of the Earth, National Anti-Vivisection Society, and Greenpeace may result in worldwide consumer boycotts that could harm Rechem's global operations.Additionally, banks, investment entities such as pension funds, and the general public are increasingly worried about their association with environmental risks and companies with poor environmental track records.It is important to note that not all pressure group activities receive equal attention as Greenpeace since they come in different forms and have varying objectives.Pressure groups like the Confederation of British Industry (CBI), Greenpeace, and Friends of the Earth act on behalf of interest groups to influence the government rather than take control themselves.Some pressure groups even participate in elections, such as green interest groups focused on the environment.Most interest groups focus on pressuring specific issues or engaging in other types of activities.These various forms include media outlets (newspapers and television), Wildlife Trusts like RSPB, trade unions representing employees and dockworkers, professional associations, consumer groups, and businesses.The Anti-Incineration Campaigners from Communities Against Toxics (CATs) in the UK along with Norwegian and British Green Parties actively oppose waste incinerators.These pressure groups have distinct purposes. Media organizations are focused on informing the public about economic and environmental matters, as well as highlighting threats to the environment and British citizens. They also analyze actions taken by potentially "dangerous" companies or industries.

Wildlife Trusts, on the other hand, concentrate on preserving ecological balance and protecting local wildlife populations. They monitor various parties involved in preventing water pollution that can harm fish and animals, disrupting the food cycle.

The Local Community actively monitors factors that may impact their quality of life as residents.

These factors include declining property values due to undesirability, health concerns for young children, and potential effects of pollution on well-being.

Local farmers have a responsibility to maintain livestock quality and safeguard food sources such as crops and land. Negative environmental factors can result in financial losses impacting both their quality of life and livelihood.

To address these concerns, the National Government implements Codes of Practice and legislation like the Environmental Protection Act 1990 and Waste-Management legislation.

Additionally, Local Councils/governments ensure various aspects of the community are well-maintained including streets, land, houses. Their aim is to create a desirable environment for tourists and residents while avoiding a negative reputation as an unsafe place to live.Trade Unions represent workers in specific industries, prioritizing employee safety, fair treatment, and representation. They may organize strikes to prevent companies from taking advantage.

Professional Associations play advisory roles in their respective fields, promoting best practices. Examples include associations for accountants, marketers, engineers, etc.

Consumer Groups advocate for safer products, improved labeling, and environmental issues. The Consumer Association actively participates in these efforts.

Businesses like the CBI and Trade Association closely monitor developments and engage in lobbying the government for changes during the national budget drafting.

Anti-Incineration Campaigners work against the use and incineration of chemicals. Friends of the Earth also actively lobby to preserve the Earth's natural state.

The National Trust dedicates itself to preserving and safeguarding the nation's heritage including buildings, land, habitats,and natural environments.

The question arises about whether private sector firms should profit from hazardous waste or if dangerous materials' disposal should be nationalized.

In recent years, companies have given increased attention to health and safety concerns. Accidents at chemical plants in North Sea can negatively impact

an organization's reputation.

Organizations are increasingly aware of how their products can adversely affect consumer health and safety.The integration of ethical and environmental considerations into corporate strategies is crucial. New tools for environmental management, such as Environmental Impact Assessment (EIA), Environmental audits, Product Life-cycle Analysis, and Environmental Accounting are being implemented to assess the impact of capital projects, analyze current activities, evaluate the environmental impact of products throughout their lifespan, and document the value of environmental assets and liabilities. To effectively implement the environmental policy, it is essential to develop an Environmental Management Programme that clearly outlines responsibilities, requirements, and procedures. The UK's less strict approach towards environmental control attracts German chemical companies due to its allowance for more innovation. Surveys indicate that consumers are increasingly interested in obtaining information about product composition and manufacturing processes in order to make informed choices between sustainable options like furniture sourced from sustainable forest programs versus those depleting timber resources without considering replacement. Various important areas are covered by environmental laws including development control, emission control, waste disposal, protection of species and habitats preservation of landscapes and heritage as well as the impact on people's health safety.Companies are responding to concerns by reassessing their mission statements and corporate goals in order to demonstrate a commitment to environmental and corporate responsibility. This may involve adopting a more environmentally friendly approach to growth, fulfilling staff obligations, and planning for long-term company activities. Appendix C includes a sample environmental policy.

To achieve environmental excellence, it is recommended to follow the incremental approach outlined by John Elkington in "The Green Capitalist." This approach involves developing and publicizing an environmental policy, implementing an action program,

and organizing the company's structure and staffing. It is crucial for representation at the board level.

Organizations should allocate sufficient resources, invest in environmental science and technology, provide education and training, monitor and audit their activities, report on their progress, evaluate the green agenda, contribute to environmental programs, and establish connections between interested groups. Proactively engaging in the adaptive process is considered good management practice for organizations before facing penalties or costs associated with non-compliance of European and UK legislation that require rectifying issues.

Many countries struggle with nationalizing hazardous waste disposal due to a lack of technology and expertise compared to Britain.Consequently, outdated waste disposal methods such as landfills, dumping in the North Sea, or burning waste at low temperatures may be used. Many countries rely on the UK for waste disposal and incineration. Pressure groups like Greenpeace argue that industries producing hazardous waste should be legally responsible for its safe disposal. They advocate for proper waste management near factories and within the country of origin. Responsible disposal is necessary while also ensuring profitability to support future investments. The process is governed by laws, codes of practice, and regulations such as the Environmental Protection Act 1990, BS7750/ISO14001, and waste management legislation.

Some countries lack the technology or expertise to nationalize their own waste management systems and therefore depend on other countries like the UK for assistance with disposal and incineration.

Task 4: The pollution incident in Indonesia from August to October 1997 has caused significant social and financial costs. This incident created a thick fog known as a "pea-souper" that affected entire cities and a large portion of Southeast Asia. This toxic smog covers an area inhabited by

over 70 million people and reaches tourist destinations like Phuket in Thailand, southern Philippines, islands surrounding the Java Sea, and even Papua New Guinea. People of all ages and health conditions are experiencing distressing symptoms due to this toxic smog.The rainforests of south Sumatra and Kalimantan, known as the "lungs of the Earth," are currently burning and emitting smoke. This smoke causes symptoms like watering eyes, breathing difficulties, itchy skin, throat irritation, and a constant feeling of choking. The overall impact is intensified by the pervasive smell of smoke. This crisis not only has physical effects but also has other consequences in daily life. The lack of sunlight creates persistent morning mist that oppresses spirits and covers everything in soot. Indoors, furniture becomes caked with grime and food tastes polluted. Even drinking water leaves an unpleasant aftertaste. Attempts to remove the dirt are futile as it quickly returns. As a result, people stay indoors, sealing their windows and doors tightly while the streets remain deserted without signs of life.

A householder shared that initially they could still see houses on the other side of the road, but over time only the road itself remained visible until it disappeared completely. Pollution-related illnesses have taken a devastating toll, with hundreds already losing their lives to these diseases. Tragically, the smog has indirectly caused incidents such as a collision between two ships in the Straits of Malacca resulting in 29 crewmen's loss and an Indonesian jet crash in northern Sumatra claiming all 234 passengers' livesThe haze in Southeast Asia, considered a symbol of catastrophe for a region already facing significant challenges such as natural disasters, poses an uncertain long-term

impact on the health of affected countries including Indonesia, Malaysia, Thailand, Philippines Singapore Papua New Guinea and Thailand. City dwellers in this area are accustomed to inhaling a hazardous combination of car exhaust fumes and industrial pollutants. This haze exacerbates symptoms for individuals with existing respiratory conditions, eye and skin irritations, and heart problems; even healthy individuals may begin developing these illnesses. Authorities have limited options for addressing this issue - one suggestion to relocate two million people from affected areas was deemed impractical while another proposal involved using water sprayed from skyscrapers to dissolve the soot. To protect themselves, ordinary individuals have resorted to measures like staying indoors whenever possible. The smog's effects have caused prices of surgical masks to more than double. An official statement indicates that fires in Indonesia continue to burn and thus the haze is not expected to clear until November when the northeast monsoon season arrives. Over 1,000 Malaysian firefighters have been dispatched to Sumatra in order to assist Indonesia combatting the fires responsible for widespread smog.The smog in Malaysia has resulted in various consequences, such as a collapse in the stock market and devaluation of currency. Mega-projects like the Commonwealth Games were also cancelled due to this issue. These financial impacts have had significant ramifications for countries known as the "Asian Tigers," with currency crises and stock market declines greatly affecting them. Additionally, the smog from forest fires in Indonesia has significantly reduced visibility in Kuala Lumpur, making famous skyscrapers and even the Petronas Twin Towers appear ghostly within the mist. This has led to decreased production levels in factories, potentially impacting the global economy and causing rising

prices in the electronics industry dominated by this area. To address this ongoing smog problem, tour operators are offering alternative holidays or refunds for those who had planned trips to Southeast Asia. However, it is expected that the tourism industry will suffer greatly as people may be hesitant to visit a country marked by heavy pollution. This decline in tourism could result in a decrease in foreign income, leading to unemployment and unrest. The economic impact of these forest fires is evident as both the Malaysian ringgit and Indonesian rupiah reached record lows in September. Concerns about these fires have caused toxic smog across Southeast Asia, negatively affecting tourism and investor sentiment within the region.
The Malaysian ringgit has depreciated by 20% since July, reaching a closing rate of 3.1800 against the dollar compared to its previous rate of 3.1300. Similarly, the rupiah also experienced a decline from 3,100 to 3,220. Currency economist Peter Von Maydell from UBS noted that these countries already had weak economic fundamentals before this crisis occurred.

In contrast, the Thai baht remained stable at a rate of 35.50 to the dollar after constitutional reforms were approved by the Bangkok parliament. This paved the way for Thailand to receive a $17 billion IMF loan package. However, in November 1997, Thailand underwent its fifth change in prime minister within five years while Chuanpis Charoenigam sold one of her nine Mercedes-Benz cars at a flea market in Bangkok.

Despite attempts to prevent Thailand from becoming Asia's biggest economic embarrassment, former property brokers were unimpressed as they witnessed a former banker selling two Mercedes for $100,000 (60,000 pounds) and offering a small passenger plane for free. Another

estate agent is also selling his wine cellar with Chateau Lafite 1981 bottles priced at ?30 each.

These luxury items are casualties of an economic crisis that resulted in a devaluation of the baht currency by 50%, leading to factory closures and tens of thousands job losses. The International Monetary Fund has spent over ?10 million on unsuccessful measures attempting to provide aid during this period of turmoil.Thailand, once known as Asia's most successful economy with annual growth rates as high as eight percent, is now facing a drastic collapse and preparing for a severe recession. This stark contrast to its previous confident position is evident in the frequent opening of new Mercedes showrooms and rapid construction of skyscrapers amidst polluted congestion. It is worth noting that Thailand lacks state welfare programs to support its citizens during these challenging times.

In Indonesia, President Suharto took significant measures to address corruption in their banking sector by shutting down 16 banks, demonstrating his commitment to cleaning up the economy. On the other hand, Prime Minister Chavalit Yongchaiyudh led a borrowing frenzy that resulted in defaults across various sectors. Western banks were attracted by Thailand's economic success story and provided billions in loans at favorable interest rates to finance companies owned by individuals closely associated with those in power.

Unfortunately, these loans mainly financed unnecessary costly construction projects given Thailand's declining economic stability. The subsequent June bank run and currency crisis in Southeast Asia were ignited, leading to significant consequences.