Ethical Corporation’s latest update on responsible business stories

Patagonia dam fight to continue

Environmental campaigners in Chile suffered a setback in April when the country’s supreme court ruled that approvals for five planned hydroelectric dams in the southern region of Patagonia had been correctly given. The hydroelectric projects were proposed by HidroAysen, jointly owned by the Chilean arm of Spain’s largest utility, Endesa, and the Colbún power company.

The projects have been the target of widespread protest because of concern over their impact on pristine wilderness areas. Though the appeal against the approvals was rejected, two dissenting judges say the dam plans had not sufficiently taken conservation issues into account. Another judge, who voted to reject the appeal, says his holding of Endesa shares had not clouded his opinion. Environmental campaigners have vowed to fight on.

Canada fights back

Canadians should refuse to buy Chiquita bananas because the corporation has decided not to use oil derived from Canadian tar sands in its transport fleet, according to a somewhat mysterious lobby group called EthicalOil. Chiquita agreed to the boycott after pressure from the US group ForestEthics, but EthicalOil has hit back, saying that ForestEthics is “foreign-backed” and companies should not “unfairly target Canada just to suck up to a few fringe environmental radicals”. According to EthicalOil, tar sands oil is ethical because it comes from democratic Canada, whereas “conflict oil” comes from countries such as Saudi Arabia, which oppress their people. EthicalOil’s funding is unclear, but the group does say it will not accept money from “foreign corporate interests”.

Paper chase

French yoghurt and bottled water giant Danone has become the latest company to drop Asia Pulp & Paper (APP) as a supplier on the grounds that the Singapore-based group contributes to deforestation. Danone says its purchases from APP, which supplies 1.5% of the material for its packaging, will be suspended by the end of June. The suspension, Danone says, was decided on in the wake of Greenpeace research that shows the company might be “using packaging that incorporates endangered and protected plant species”. Danone says it will soon publish a “zero deforestation” policy. The company joins Kraft, Unilever and Xerox, among others, which have already stopped buying from APP.

It’s the environment, stupid

A Brazilian court ruling could set a precedent in the world’s sixth largest economy by deciding that environmental concerns should trump economic considerations, according to environmental lawyers. In a recent decision on the burning of sugar cane stalks, the São Paulo state superior justice tribunal said that “economic harm” arguments (in this case, that bringing in mechanised removal of the stalks rather than burning them off manually would increase unemployment) could not be used to overrule environmental arguments. Though it only applied to sugar cane, the ruling could conceivably have an impact on, for example, decisions that dams should be built because Brazil would suffer “economic harm” if they were not, environmental law firms said.

Emissions and prices down

Greenhouse gas emissions from about 10,000 power plants and industrial facilities covered by the European Union’s emissions trading system (ETS) were down by an average of 2.4% in 2011 compared with 2010, according to European commission figures. The data has surprised analysts, who had expected a pollution increase because of the gradual economic recovery. While good for the atmosphere, the decline was bad for the ETS, causing carbon prices to drop and calling into question the credibility of the system, which already suffers from an oversupply of carbon credits.

Demand pressure

Supplier codes of conduct conceived by multinationals have, at best, a mixed impact, according to research by Richard Locke, a Massachusetts Institute of Technology professor. Locke has studied the attempts of some major companies, including HP and Nike, to make their supply chains more responsible. He found that auditing generally produced only short-term improvements.

The main factor leading to supplier workplace shortcomings, however, was the extremes in demand that the multinationals put them through, such as the radical scaling up and scaling down of orders at short notice. This resulted in high pressure and instability for factory employees. Locke’s research will be published in a book, Promoting Labour Rights in a Global Economy, later this year.

Oil’s hidden cost

The serious gas leak under Total’s Elgin platform, 150 miles off the Scottish coast, has underlined the scale of the headache that will be the decommissioning of North Sea drilling infrastructure over the next three decades. According to the International Energy Agency, the Elgin incident “is likely to portend difficulties at other mature fields in the medium term”.

As North Sea operations wind down because of declining reserves, about 500 platforms, 8,000 wells and numerous pipelines and other facilities will have to be safely decommissioned. The Elgin gas leak, which started on 25 March, led to the evacuation of the platform. Concerns about environmental damage have been played down, with Scottish government tests finding that fish from the area around the platform have not been contaminated.

Here comes the sun

“Crowdfunding” as pioneered by microloan organisations such as Kiva could have a role to play in renewable energy, according to Solar Mosaic, a Californian company. Individuals and groups that want to put solar panels on their roofs, but cannot afford the investment, can propose their projects to Solar Mosaic, which will crowdsource the funds through their website. Those that receive the funding make monthly repayments to investors. Solar Mosaic’s initial projects have been based on repayment without interest, but the company plans to offer returns of up to 10%. Solar Mosaic says it carefully vets each project to ensure it “creates local clean energy, green jobs and benefits a site host that is financially secure and has a good roof”. 

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