Whistleblowing After a complete analysis of the situation, our team believes that the whistle blower at SNC-Lavalin was justified. To come to such a conclusion we can borrow an analysis of the ethics of whistleblowing created by philosopher Richard DeGeorge. According to DeGeorge, for whistle-blowing to be considered ethical there first must be a serious harm that the whistleblowing aims to prevent, which is greater than the harm it causes the firm and stakeholders. In this case, the corrupt activities are very serious and would have posed a greater harm going undetected than the negative media attention and charges brought against the firm.
DeGeorge’s second condition states that the whistle-blower is required to first attempt to prevent the harm internally before going directly to the public. By writing a letter to the company executives and board members as oppose to going straight to the public, the individual has attempted to solve the harm internally. Since he or she did so, DeGeorge’s third requirement of exhausting all internal means to prevent harm does not apply because the whistle blower did not go straight to the public.
He or she clearly made their best effort to reduce the harm caused to the firm (Desjardins, 2014, p. 168). Bribery Scandals Paying bribes to Libyan officials to win lucrative contracts can be considered unethical if considered from deontological and virtue ethics perspectives. Deontology or principle based ethics states that the morality of an action should be based on its adherence to a law or rule, and as such the consequences of the action are not as important as the act itself (Desjardins, 2014, p. 7). With that being said, offering a bribe is an illegal act that clearly goes against the principles embedded in fair business. In this case, even if offering a bribe is the only way to conduct business in Libya and leads to short term gains of profits, the ending circumstances of profits do not justify the means by which they were achieved. If business cannot be conducted in an honest and fair manner in a country, SNC-Lavalin should not chose to do business there at all.
Not paying off Libyan officials would indeed have led to short-term losses of some contracts and thus profits, but in the long run adhering to principles of fairness would have meant no allegations of corruption damaging their reputation, no pending charges against the firm and they would not be facing sanctions which may potentially shut down the company. Another perspective through which SNC-Lavalin’s actions can be considered unethical is virtue ethics. This perspective brings forth the idea of aiming to promote the collective and individual good in all actions taken by ensuring they are morally good (Desjardins, 2014, p. 1). If the employees within a firm always act in ways that they themselves feel are virtuous and morally right all stakeholders of the firm will benefit continuously. In SNC-Lavalin’s previous practises, offering bribes were clearly actions which employees knew were morally wrong. The employees, the Libyan officials paid off and the communities for whom the infrastructure was built may have benefited as a collective, but this came at the expense of other individuals, such as engineering firms who are unable to or chose not to pay bribes.
These individual firms are restricted to compete and thus sacrificed as firms such as SNC-Lavalin continue to offer bribes, fostering a corrupt environment where only those firms which act illegally can prosper. Before deciding on a sentencing for the firm, it is fair to consider why SNC-Lavalin may have considered bribery ethical. The perspectives of utilitarianism and ethical relativism can be can be used to provide a sense of the firms thinking. Beginning with utilitarianism, this theory mainly focusses on the consequences or end results of actions taken and does not focus on the morality of the actions themselves.
The actions are seen as mere means to justify the ends (Desjardins, 2014, p. 29). Keeping this in mind, when making deals in Libya by offering bribes, SNC-Lavalin employees were able to obtain contracts for deals which benefited the company, the officials and the community members for whom the infrastructure was built. These actions themselves lead to the greater good for all the parties involved in the transaction. If the bribes were not offered, the deal would have gone to another firm who was willing to pay the bribes and the community and Libyan officials would have still benefited while SNC-Lavalin would have been at a loss.
It can be fair to assume that committing illegal acts which lead to the benefit of many parties, can seem justified from a utilitarian perspective. Using the idea of ethical relativism, and even further crosscultural values, individuals may have easily decided that the bribes were justified in Libya. When doing business in another country, there will always be differences in cultural values. Adhering to these values can make business much more profitable (Desjardins, 2014, p. 265). Furthermore, as cultural values are adopted in business, ethical values can be adopted just as easily.
An act that may be an ethical violation in Canada and be punishable by law, such as bribery, may be seen as common place in a country such as Libya where the government officials themselves are the ones taking the payments. Even though bribery is illegal in Libya, it is presumably not considered as unethical. As SNC-Lavalin focussed on following the norms within the Libyan society to close on a deal, or multiple deals in this case, it looked to maximize profits while keeping its clients happy and as such is simply following the notion that, “When in Rome, do as the Romans do. The acts of bribing government officials in order to conduct business may not have seemed unethical from a relativism perspective, due to the widespread acceptance of it in the Libyan society. Social Responsibility of the Firm Many allegations and charges have come forth regarding the corrupt activities which SNC-Lavalin has been accused of, however these activities have occurred under past regimes of the firm (Nicol, 2015, February 20).
These actions have hurt many of its stakeholders, including the communities in which SNC conducts business, stockholders as the share price has fallen drastically and the faulty infrastructure has even hurt their clients (Nicol, 2015, February 20). All of these instances showcase only the negative parts of SNC-Lavalin’s image; digging deeper into the company’s initiatives, we have discovered that both before and after the scandals, SNC has made numerous efforts to be a socially-responsible firm. One specific source for us was the Sustainability reports the company has been producing since 2010, before the scandals emerged.
This report details many efforts the firm makes which go beyond simply making profit, such as the Local Resource Development Initiative (LRDI) which ensures that the projects in developed and developing countries benefits communities by, for example, hiring and training locals to work in construction projects and find employment with those skills after the projects are completed. These reports also detail fair hiring practises, health and safety training for employees, the efforts made to improve their environmental footprint (SNC-Lavalin, 2015).
After the ethical misconduct was discovered in 2011, the firm began to revamp their approach and culture within the firm, while sticking to their roots. Activities to aid communities, to take care of their employees and their other stakeholders remained, however the focus transitioned towards correcting their faults. The company initiated and reviewed many policies to ensure that corrupt activities of the past were not repeated, such as ensuring 100% of their employees and consultants abide by the code of ethics annually.
Simply put the company has always been looking to aid their stakeholders, both before and after the ethical scandals had arisen. These scandals took place in a different era, under a different management team and by small group of employees. As such, these actions should not be used to judge the entire firm. The company has always done its best to remain socially-responsible, and after the ethical misconducts they have made changes to go even further in ensuring all their stakeholders are treated fairly (SNC-Lavalin, 2015).
Recommendations Going Forward After considering the facts and doing a thorough analysis of SNC-Lavalin, both relating to the ethical violations and their general business practises, our recommendation for the Canadian Government is that SNC-Lavalin should not be barred from bidding on government contracts for the next 10 years. The main criteria our team considered in making our decision is whether the company is “too big to fail. ” When it comes to SNCLavalin, corruption allegations put against the firm are very serious and have far reaching effects on numerous individuals.
However, the company should not be forced to fail. This is not simply because it has become too big and has a large impact on society, but also because the members of the firm are making extensive efforts to act ethically and were not the ones who committed the crimes (Nicol, 2015, February 20). In general, all of a firm’s stakeholders should not be punished for the actions of a limited few who are no longer a part of the firm. In the case of SNC-Lavailin, will a punishment that forces it to discontinue operations do the greatest good?
It will set an example to other firms who may consider or currently partake in corruption, but the far reaching effects of closing down a firm which is trying to change its ways do not outweigh the benefits. An example can be set through a lighter sentence to the firm which does not force it to shut down and does not cause further harm to the stakeholders. Such punishments will both lead to the greater good of society, as immoral actions are being punished, and the individual good, as innocent stakeholders are not being held liable for crimes they are not responsible for. Taking all of this into consideration we once again recommend the Canadian Government not to bar SNC-Lavalin from bidding on government contracts for the next 10 year. Such a punishment will make it unable to operate, and thus unfairly punish stakeholders who did not commit crimes deserving of such a punishment.