WHAT BUSINESS ETHICS!

By Diana Lee

(Published by Gate.39)

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UNIORB: ASIAN TREND: JAPAN

Mirroring the fall of business giants involved in scandals — Enron, World.com, Tyco International, Adelphia Communications – many Japanese corporations are facing the same fate for unethical business practices. In revelations to a spate of scandals, the Japan Business Federation responsible for establishing ethical standards for business operations recently revised its 10-point charter to include expulsion of scandal-hit company members. The charter emphasizes that member companies develop and provide products and services with the utmost concern for safety to consumers and engage in fair and open competition in accordance with the law. Some companies in sole pursuit of profits have violated these points by deliberately deceiving the public with mislabels and endangering lives with faulty products and cover-ups.

The ongoing scams involving food companies and nuclear power utilities have dealt a severe blow to public confidence already sinking in the gloom of economic recession. These companies lacking social consciousness appeared to justify their irresponsible behavior with the mentality “everyone is doing it.” One food company after another has conducted fraudulent schemes on a massive scale, leaving the populous angry and helpless. If food products were mislabeled, who could know what was in the food? Adding fuel to corporate misconduct, nuclear power plants in succession have acknowledged the concealment of cracks and other defects found in reactors during voluntary inspections. Although the experts claimed that the flaws are not problematic, the Tokai nuclear disaster that resulted in two deaths is still fresh in people’s minds. If the managers of nuclear power plants were more concern about the cost of repairs than public welfare, who could feel safe living in Japan?

After the discovery of mad cow disease last September, Nippon Ham, Japan’s largest meat processor, falsified labeling imported beef as domestic meat to benefit from the government compensation scheme. Snow Brand Foods, which was accountable for an outbreak of food poisoning in 2000, showed no compunction to consumers as it falsely tagged Australian beef as domestic products to take advantage of the government subsidies. Following the footsteps of the leading corporations to cheat consumers, the Starzen Company fabricated labels for low quality as higher-grade meats. Putting profits before public safety, the president of the Shinsho Trading Ltd. admitted to marketing stale ready-made egg rolls in several metropolitan department stores because “they tasted good.” Breaking the law, Mr. Donut franchise sold 13 million meat dumplings containing a banned additive.

Hence, consumer confidence plunged, prompting the government to review food safety regulations and to impose stiffer penalties on those implicated in mislabeling. In addition, the Agriculture, Forestry and Fisheries Ministry intends to introduce a comprehensive tracking system with which consumers can trace food products to their sources, providing information on the producers and the distribution routes. The food tracking system may boost consumer confidence, but will it be reliable since the information evidently depends on the producers and the distributors for input?

Known worldwide for adamantly opposing nuclear weapons, Japan ironically possesses in total of 52 nuclear power plants which supply one-third of the nation’s electricity. Any one of these utilities encounters a nuclear mishap would indeed cause alarm to society. The Nuclear Industrial Safety Agency, a unit of the government, disclosed that Tokyo Electric Power Co. (Tepco), the largest utility in the nation, had concealed reports on 242 cracks found in 282 stainless steel pipes carrying cooling water to nuclear reactors. The problem came to light when a whistle blower reported it to the Agency. The fact that the Agency took more than two years to divulge Tepco’s falsification of 29 voluntary inspections and that it betrayed the informant by turning him in to Tepco for dismissal heightened the suspicion that the Agency has been having a cozy relationship with the nuclear power companies for years.

In the wake of Tepco’s scandal, a number of nuclear plants throughout the nation have started to come forward with their confessions. Even after cracks were detected in a core’s shroud, Japan Atomic Power Co. kept running the nuclear reactor in Fukui Prefecture. It filed a full report to the Agency only after the shroud was replaced. Tohoku Electric Power Co. and Chubu Electric Power Co. failed to report the faulty pipes because they thought the cracks weren’t significant enough to cause serious problems. Although short of admitting their reports were inaccurate, the Chugoku Electric Power Co., Hokkaido Electric Power Co., Kansai Electric Power, Shikoku Electric Power and Kyushu Electric Power promised to investigate their own previous nuclear reactor inspections.

The nation’s top food corporations and nuclear power plants have shown no sense of responsibility or integrity to society. Besides the government’s call for harsher punishment and stricter safety rules, company management must do some soul-searching as to the role they play in society. Is it worth to lie to the public and gain an ill reputation afterwards? Is it worth to reap a profit for a short period and later suffer plunging sales that might lead to eventual bankruptcy? Is it worth risking people’s precious lives for the sole reason of making quick profits? Sad to say, these companies got away with fooling all of the people some of the time. But their mistakes lay in their belief that they could fool all of the people all the time.

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