BUS 1057 Final Assessment – 202402

Question 1

Stakeholders

Interests/impacts regarding the Heritage Laws

Brief Introduction of who are Stakeholders

Stakeholders can be defined as groups and individuals having stake in organisation, project and decisions. They are indirectly or directly involved and have different levels of impact and influence (Banton, 2019). Some examples of stakeholders include the internal and external stakeholders along with primary and secondary stakeholders. The internal stakeholders comprise of executives, managers and shareholders. External stakeholders comprise of government agencies, suppliers, competitors and customers. Primary stakeholders are involved directly with the decision or project. The secondary stakeholders are affected indirectly by decision or project.

It is stated by Freeman’s Stakeholder Theory that companies must be considering interests of their stakeholders and not just the shareholders (Freeman, 2023). The key points of this theory include stakeholders having obligations to the different groups and individuals, which can include customers, employees, communities and agencies of the government. Moreover, there is interdependence as most stakeholders are interconnected and business success depends to manage responsibilities with them. In terms of ethical responsibility, the businesses have moral obligation in considering the stakeholders interests and not just maximisation of profits. The key points of Friedman Argument are the primary responsibility, agency relationship, market mechanism along with social responsibility. Kenton’s article includes profit, people and price. Ultimate goal is financial endeavour, which is difference between expenses and revenue. Price refers to values customers will be paying for service and product.

Stakeholder 1:

The positive interests of Santos are the financial gain from gas project, which can include an increase in market share and revenue. It has also been including securing energy supplies in the long term for potential export markets and Australia. Another positive interest is to enhance the reputation as a leading company of energy.

Santos have stake to ensure the energy security of Australia. This project will be contributing to domestic supply of gas, which can be reducing the reliance of the country on their imports. It will help in stabilising the prices of energy along with protecting Australia from disruptions. Numerous jobs will be created in the region both indirectly and directly. It can be boosting loyal economy along with providing opportunities of employment for the Northern Territory residents.

The project will be requiring deployment and development of technologies, which are advanced which include pipeline construction and deepwater drilling. It can be driving innovation and enhancing capabilities in the sector of energy (Giddings et al., 2002). On the contrary, the negative interests include the potential regulatory and legal challenges associate with the overall project. It also includes environmental impacts and risks on the ecosystem of marine life. It also includes the cultural and social conflicts with communities, which are indigenous.

Opposition is faced by the project from Tiwi Island elders who have been arguing negative impacts on traditional culture and lands. Legal challenges can be encountered by Santos along with social unrest if it is failing to address concerns of communities, which are indigenous. Moreover, the project has been a subject to different regulatory approvals, which include permits and impact assessments. Denials and delays of the approvals can be increase jeopardize and costs of the viability of the project.

Stakeholder 2:

The positive interests of Tiwi Island Elders are protection of cultural heritage and traditional lands. It also includes the economic benefits for Tiwi community though opportunities of employment along with the royalties. The focus is to improve standards of living along with assessing to services, which are essential.

However, the negative interests include the environmental risks, which are posed by marine ecosystem pipeline along with the cultural sites. It also includes the loss of fishing grounds and traditional hunting. There are potential negative impacts on the cultural identity and way of life of the community.

Stakeholder 3:

The positive interests of Australian Government include job creation and economic growth, which is associated with gas project. It also includes reduction in reliance on the imported fuels and energy security. The Australian government is also interested in an increase in revenue of the government through royalties and taxes.

Another positive interest of the company is the export opportunity. With successful project, Australia can be exporting the excess gas to markets globally. It will help to generate additional revenue and strengthen the position and exporter of energy. Moreover, the project can be reinforcing the leadership of Australia in region of Asia pacific especially in the sector of energy.

However, the negative interests include the risks of environment and damages to the marine ecosystems. It also includes the cultural and social conflicts with communities, which are indigenous. The next negative interests are the potential liabilities and regulatory challenges, which is associated with the overall project.

Opposition is faced by this project. Hence, the government must be balancing economic project benefits with interests and rights of the communities, which are indigenous.

Use and extraction of fossil fuels can be contributing to changes in climate. Increased pressure is faced by the government to transition into energy sources, which are cleaner along with reducing the emissions of greenhouse gases of Australia.

List all references for Question 1 here:

Banton, C. (2019, April 14). Shareholder vs. Stakeholder: What’s the Difference? Investopedia. https://www.investopedia.com/ask/answers/08/difference-between-a-shareholder-and-a-stakeholder.asp

Giddings, B., Hopwood, B. & O’Brien, G. (2002). Environment, economy and society: fitting them together into sustainable development, Sustainable Development, 10(4), pp. 187–196. https://doi.org/10.1002/sd.199

Freeman, R. E. (2023). The politics of stakeholder theory: Some future directions. In R. Edward Freeman’s Selected Works on Stakeholder Theory and Business Ethics (pp. 119-132). Cham: Springer International Publishing. https://link.springer.com/chapter/10.1007/978-3-031-04564-6_5

Question 2

Introduction: This case study will discuss 3 different models of ethical decision-making which will be applied to the case. It will help to analyse how the decisions were made and the implications of the entire case.

Approach 1:Deontological

Description of theory:

Deontological theory is often referred to as duty-based ethics which is a moral philosophy that emphasises the inherent rightness or wrongness of certain actions, regardless of their consequences. A central principle of deontology is the idea that moral principles should be universalisable which means that a moral rule should apply to everyone in similar circumstances without exceptions. It could also mean that the individuals should select the justice principles without knowing the economic or social status. The approach focuses on the significance of equality and fairness in social institutions which is an essential component of the human society.

Application of ethical theory:

It is a valuable theory that can be used to analyse the Santos vs. Tiwi Islands Elders case as this theory will provide insights into the moral considerations that are being executed in this case. One of the core principles of deontological theory is the idea of duty which is a significant factor of ethical concepts. In this case, Santos had a duty to conduct its operations in a manner that respected the rights and interests of the Tiwi Islands elders, which includes their cultural heritage. The elders had a duty to advocate for the protection of their sacred sites and cultural traditions of their culture. The concept of autonomy is also a part of deontological theory where explains that the Tiwi elders were asserting their autonomy by seeking to protect their cultural heritage from potential harm. On the other hand, Santos was asserting its autonomy as a company to pursue its economic interests in the nation.

The actions of Santos were consistent with principles that it would be willing to see being applied universally. Santos could argue that its actions were necessary for economic development and the well-being of the broader community. On the contrary, some of the arguments against the organisation could be in disregarding the cultural heritage of the Tiwi Islands, as it is a fundamental aspect of the island’s well-being and identity. Santos could also be accused of failing to adequately consult with the Tiwi elders and address their concerns before proceeding with the project.

Approach 2: Consequentialist theory

Description of theory:

Consequentialist theory can be described as teleological ethics which is a moral philosophy that judges the rightness or wrongness of an action based on its consequences. The central principle of consequentialism is to maximise utility which is often defined as the greatest good for the greatest number. Many consequentialist theories are based on hedonism which is the belief that pleasure is the only intrinsic good. This means that the morally right action is the one that produces the most pleasure and the least pain for everyone affected. Right actions can be crucial ethical criteria that should be maintained by the companies while conducting their operations. Consequentialist theory can be described as teleological ethics which is a moral philosophy that judges the rightness or wrongness of an action based on its consequences. The central principle of consequentialism is to maximise utility which is often defined as the greatest good for the greatest number. Many consequentialist theories are based on hedonism which is the belief that pleasure is the only intrinsic good. This means that the morally right action is the one that produces the most pleasure and the least pain for everyone affected. Right actions are considered as a crucial ethical criteria that should be maintained by the companies while conducting their operations.

Application of theory:

The project could generate significant economic benefits for Australia including jobs, revenue, and energy security which is a crucial factor for proceeding with it. However, it could have negative impacts like inflicting damage to the marine ecosystems and increasing the emissions of greenhouse gas. The project could also damage underwater sacred sites and cultural heritage sites of the Tiwi Islands. On the other hand, halting the project could lead to significant economic costs which could include job losses, reduced investment, and increased energy costs. The stop of this project will not make the island prone to all the impacts on cultural heritage as other projects of development could still impose risks to the sacred sites.

Approach 3:Virtue theory

Description of theory:

Virtue theory is a moral philosophy that focuses on the development of good character traits, rather than on specific rules or consequences. It is also seen as habits or dispositions that could lead to morally good actions making it an essential component of ethical theory.

Individuals can become virtuous and act morally without having to constantly deliberate about the right thing to do by developing good habits.

Application of ethical theory:

Virtue theory emphasises character development and the cultivation of virtues which provides a framework to analyse the case of Santos. The case raises questions about the justice of the actions of Santos in relation to the Tiwi Islands elders. A respectful person would recognise the importance of cultural heritage and would strive to preserve it as the Tiwi elders were seeking to protect the cultural heritage of their ancestors. Conversely, Santos could be criticised for lacking respect for the Tiwi elders and their cultural traditions. The case demonstrates the importance of wisdom in making moral decisions as a wise person would be able to consider the long-term consequences of their actions and make decisions that are in the best interests of all parties who are involved. Compassion is the ability to understand and share the feelings of others which is emphasised by the virtue theory. A compassionate person would be empathetic towards the concerns of the Tiwi elders and would strive to minimise the harm caused by the project.

List all references for Question 2 here:

Darr, R. (2023). Teleology and consequentialism in Christian ethics: goods, ends, outcomes. Studies in Christian Ethics, 36(4), 906-925. https://doi.org/10.1177/09539468231187775

Dick, S. (2024, January 15).Santos wins legal battle against Tiwi Islands elders over $5.7b Barossa gas project's underwater pipeline. ABC. https://www.abc.net.au/

Tseng, P. E., & Wang, Y. H. (2021). Deontological or utilitarian? An eternal ethical dilemma in outbreak. International journal of environmental research and public health, 18(16), 8565. https://doi.org/10.3390/ijerph18168565

Wright, J. C., Warren, M. T., & Snow, N. E. (2020). Understanding virtue: Theory and measurement. Oxford University Press. https://books.google.co.in/books?hl=en&lr=&id=bGkLEAAAQBAJ&oi=fnd&pg=PP1&dq=Understanding+virtue:+Theory+and+measurement&ots=CU_LA7N4bg&sig=rdHXPd3IUGzlOVPjmK6ijB_IH98&redir_esc=y#v=onepage&q=Understanding%20virtue%3A%20Theory%20and%20measurement&f=false

Question 3

Introduction

The Santos and Tiwi Islands case over the Barossa project presents an important case study on the legality and ethical considerations in regard to the environmental consequences of business activities. The case essentially involved a group of Tiwi Island elders lodging a legal challenge against Santos Ltd. – an Australian domestic gas supplier, with the goal of forcing it to revise its environment management plan in light of the potential risks to sacred underwater sites (Dick, 2024). The ruling, which granted permission to resume, laying the planned underwater pipeline, has several sustainability implications, which will be discussed in the following section.

Sustainability

Issues evident in the case

Social

At the centre of this issue is evidently the claim that the company has not adequately assessed the risk that its project poses to many underwater cultural heritage sites and “sacred dreaming places” along the pipeline’s route. According to traditions, people on the Tiwi Islands bury their dead under the ‘Pukumani’ - carved and painted poles, which are believed to be submerged in waters to the west of the islands, which the pipeline is about to pass through. As such, many natives believe that this project brings dishonour to their culture and heritage, and hurts their beliefs. Opposing these claims, Santos argued that there are no specific indigenous underwater cultural heritage places along the pipeline’s route (Terzon, 2023). This presents significant ethical and social dilemma, as there is no easy and definitive way to prove that there are burial grounds or sacred sites near the pipeline that is about to be laid down.

Based on the evidence presented by both sides, the court judged that there is a negligible chance that there may be cultural sites in the area of the pipeline's planned route (Dick, 2024). That said, all said and done, the social issues are evident and can still have repercussions for the company. There is no doubt that the reputation and image of the company among the Tiwi Islanders and other aboriginal natives is significantly affected, which goes against the social and sustainability responsibility of businesses that require them to have positive influence and correlations with the communities in the area where they operate. In this case, there is an impact on the community’s welfare.

Economic

The Australian Government though, which has invested $1.5 billion in taxpayer money to Middle Arm – a proposed gas hub in Darwin, Australia, is under growing pressure to make sure that the facility is used to produce clean energy and not fossil fuel pollutants (ACF, 2023). Moreover, the gas project is worth $6.4 billion to the economy of the Northern Territory in Australia, including creating around 600 local jobs in roles like construction, and hundreds more over the years. Considering the study by Giddings et al. (2022), which highlights the political reality when it comes to sustainability in business, it can be argued that the economy dominates society and the environment. From that viewpoint, large companies often dominate decision-making, including in many governments. From the viewpoint of Freeman's stakeholder theory, businesses serve a greater good than just making a profit for stakeholders but also look out for the community, suppliers, and so on (Freeman et al., 2020). This is in conflict with other social and environmental aspects.

Environmental

In regard to environmental issues, the case brings to focus several negative impacts. With the Barossa gas project being one of the biggest new coal and gas project proposals in Australia, it has been forecasted to possibly emit 380 million tonnes of greenhouse gas pollution over a 25-year period, which is equivalent to 81% of the country’s total emissions as of 2022. Essentially, the Barossa project will fuel significant climate change and bring harm to nature. More specifically, the extraction, processing, and burning of gas in the Barossa gas project is likely to drive further coral bleaching of the Greater Barrier Reef and lead to extreme weather conditions like floods and forest fires, which can wipe out critical habitat for threatened species like Platypus, Swift parrot, Northern Quoll, and so on (ACF, 2023).

It may also have a direct impact on marine life as the pipeline connecting Barossa gas to the Middle Arm cuts through the Oceanic Shoals Marine Park’s habitat protection zone. For instance, a blowout due to drilling for gas, or a ship collision could result in an oil spill that harms the local nature. According to estimates, the project would create around 380 million tonnes of CO₂ emissions – 1.4 tonnes for every ton of liquefied natural gas (LNG) produced, which is triple the levels of similar gas projects. It will also release methane, which has even more negative consequences for the environment (ACF, 2023). Overall, it is evident from this that the case presents significant negative environmental consequences, which makes it a huge sustainability issue. Overall, this means that the organisation is severely failing in its sustainability responsibilities.

Potential conflicts between the three sustainability aspects:

In this case, it is evident that the decisions are being made by the large company here - Santos Ltd, with the traditional owners of the land – the Tiwi Island people, not being consulted. This has already led to legal conflict and can result in the continuing perception of economics over social consideration and environmental protection. There is also internal conflict among the elders of the Tiwi Islanders, which affects the social leverage they have over the company’s operations.

List references for all parts of Question 3 here:

ACF. (2023). What is Santos’s Barossa gas project proposal? Why is it cast in uncertainty? ACF. https://www.acf.org.au/what-is-santos-barossa-gas-project

Dick, S. (2024). Santos wins legal battle against Tiwi Islands elders over $5.7b Barossa gas project's underwater pipeline. ABC News. https://www.abc.net.au/news/2024-01-15/santos-wins-barossa-project-battle-against-tiwi-islanders/103320182

Freeman, R. E., Phillips, R., & Sisodia, R. (2020). Tensions in stakeholder theory. Business & Society, 59(2), 213-231. https://doi.org/10.1177/0007650318773750

Giddings, B., Hopwood, B., & O'brien, G. (2002). Environment, economy and society: fitting them together into sustainable development. Sustainable development, 10(4), 187-196. https://doi.org/10.1002/sd.199

Terzon, E. (2023). Tiwi elders fear Santos pipeline risks committing an undersea Juukan Gorge-style disaster. ABC News. https://www.abc.net.au/news/2023-10-26/santos-tiwis-underwater-sacred-sites-pipeline-legal-fight/103022256