Ok, Tedi Mining Limited scenario puts the question of whether investing in health and education infrastructure and services is a reasonable venture. Thus, it is imperative to evaluate the ethical dilemma faced by the management at Ok Tedi Mining Limited. It is also imperative to note that the development of health care facilities was largely influenced by the health problems accrued by villagers as a result of the Ok Tedi Mining activities.
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As such, continued mining meant that people’s health would continue to suffer. On the other hand, while closing Ok Tedi Mining activities meant that such health concerns would be eliminated, there are bigger social-economic concerns. The local communities whose traditional means of livelihood had been irreparably destroyed, and thus would lose the only means of livelihood due to them. Additionally, the closure of mining means that health and education services due to the people would be discontinued.
While Tedi Mining Limited case smacks of corporate management malpractices, it also reveals the complex nature of the ethical dilemma facing corporate managers especially with regards to social accountability. Additionally, based on the outcomes of Tedi Mining Limited’s case, it is not entirely impossible to question the contribution of social accounting and reporting towards sustainable development in the long term. This argument is based on the fact that social accountability involves disclosing information about the negative effects of a company’s business practices to all stakeholders, including local communities (Crane et al, 2008, p. 35).
This is likely to have one, or both of the following implications. Pressurized by human rights groups, governments are likely to take sterner actions to protect less powerful stakeholders, such as the local communities. Additionally, corporate might be discouraged from undertaking socially risky investments, due to the social, environmental, and economic costs (Davis, 2003, p. 204). Yet, amidst these fears, it is imperative to note that social accounting is aimed at mitigating severe impacts of uncontrolled utilization of natural resources on earth’s survival (Holdaway 2005).
Holdaway (2005), Davis (2003), and Crane et al (2008) assertions should be considered alongside the knowledge that Ok Tedi Mining Limited made a significant contribution towards infrastructural development within and around the Ok Tedi area. These developments had primarily targeted health and education. Schools and hospitals developed within this region had significantly improved education and health standards for the locals and were perceived as one of the major socio-economic activities within the Ok Tedi area. However, there were concerns about the long-term sustainability of the project after the closure of mining activities, expected in 2010.
These fears are further compounded by the fact that the government in Papua New Guinea misappropriated over 46% of the developmental funds provided by Ok Tedi Mining Limited, much to the detriment of social development initiatives. While this intensified the conflict between the local communities on one side and the Ok Tedi Mining Limited and the government on the other, it also put the long term sustainability of such initiatives in jeopardy.
A social accounting matrix developed for BMW stipulates that the development of basic infrastructure goes beyond sustaining economic growth. A credible social accounting matrix overarches the improvement of the quality of life for those affected by the company’s business activities. Therefore, the development of social amenities such as hospitals and schools should not be perceived as basic CSR activities but an ethical responsibility for the lives of the local communities.
Thus the economic cost should be overlooked (Kinlen, 2003, p. 63). Based on Kinlen’s (2003, p. 63) assertions, the development of health and education services at the Ok Tedi area seems more relevant despite the ethical dilemma facing the managers at Ok Tedi Mining Limited regarding the implications of the company’s mining activities on health and education. Additionally, the fact that the sustainability of education and healthcare projects in the long term is dependent on the continuation of mining should not overlook the need to improve the quality of life for the villagers.
In theory, Davis (2003, p. 45) asserts that the development of social amenities by firms operating in remote areas has an indirect contribution to a country’s GDP. This is attained through the provision of quality but cost-effective health and education services, which effectively empower the local communities. Companies should explore the most cost-effective ways to sustain such projects. However, the implementation cost should not overlook the desire to improve the quality of people’s life.
Therefore, it is imperative to note that the long term sustainability of both the health and educational services in the Ok Tedi area is seriously in doubt. However, amidst all the complications facing infrastructural development in the Ok Tedi area, the question is not whether the development of school and hospitals is a reasonable decision, but the most cost-effective way to sustain such a project. Therefore, the development of education and healthcare facilities in remote areas is a very reasonable decision, which should be undertaken in the most cost-effective way.
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