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Corporations and the Exploitation of Inadequate Environmental Regulations

Michelle Stepanek

Innisdale Secondary School

Global Perspectives

Mr. Torlee
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Preface 3

Significance 4

Background 5

Experts 7

Ramesh Agrawal 7

Andrew Green 8

Role of Control 9

Logic of Evil 11

Role of Religion 12

Case Study 1: Nigeria (The Niger Delta) 13

Case Study 2: China 16

Case Study 3: Northern Mexico 18

International Organizations 20

The United Nations 20

Centre for International Environmental Law 21

Canada 23

Solutions 24

Appendix 28

Works Cited 29
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Preface

There are currently around 7.5 billion people inhabiting the Earth, and of those people
over 1.7 billion of them are a part of the consumer class, a group of people who have access to
goods and services beyond those that sustain their basic needs (W. Stead, & J. Stead, 2014).
Since the dawn of the industrial revolution, the world has seen economic growth and
technological advancement on a massive scale as companies compete for the consumers dollar.
World trade and globalization have made production more efficient and less expensive; however,
many nations have grown concerned about the impact this has had and will continue to have on
the environment. As a result, they have created environmental laws to help regulate and mitigate
the ecological impact of human activities. Environmental law encompasses a vast range of
corporate responsibilities, such as, waste management, greenhouse gas emissions, pesticide use,
and extraction of resources. Unfortunately, many countries do not have adequate environmental
regulations and companies move their production facilities to these nations to cut production
costs.
A corporation is a legal entity comprised of a company or group of people that has many
of the same rights and responsibilities as an individual, so many argue that they should be held
accountable for their ecological footprint. Corporate Social Responsibility (CSR) describes a
range of business practices and initiatives meant to benefit society, such as charity events,
volunteering, and ethical labor practices. Corporate Environmental Responsibility (CER) is a
subset of CSR that deals specifically with the effects of industrial practices on the environment
(Mazurkiewicz, n.d.). Although CSR and CER have certainly had an impact on corporate
practices, they are a response from companies to the increasing environmental awareness
amongst consumers and do not generally encompass any legal repercussions the company might
face for neglect. Many companies run eco-friendly campaigns in order to increase publicity but
quite often their efforts are nothing more than propaganda. DuPont, General Electric, Exxon
Mobil, and Alcoa all have websites that specifically discuss their environmental practices, yet
those four companies all rank in the top 10 corporate air polluters in the United States. (Wilson,
2015). Enforced legislation and regulations are far more effective in the fight against
environmental destruction.
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The purpose of this paper is to find solutions to the corporate exploitation of the
environment in countries with minimal or non-existent environmental regulations. The paper will
first outline the significance of this issue and provide background information on
environmentalism and anthropogenic climate change. Experts on the issue will be identified and
their contributions, analysis, and potential solutions will be reviewed. Then, the paper will
identify what power governments, corporations, and citizens have; explain the logic of evil, why
rational parties partake in activities that are destructive to ecosystems; and identify the influence
religion has on the issue. Three different case studies will be presented, analysing the history,
influences, impacts, and solutions in each region. Finally, the paper will explore the role played
by international organizations, how the issue impacts Canada, and potential solutions.

Significance

Without sufficient legislation regulating the environmental impact of corporations, there

could be disastrous consequences on the environment. Unmonitored corporate actions can lead to
increases in global carbon dioxide levels, the contamination of water sources, and the destruction
of native habitats, which in turn have numerous, interconnected impacts on human and
environmental health (Globalization, 2016).
Carbon dioxide, methane, and other greenhouse gases are an important component of the
Earths atmosphere, as they reflect some solar radiation and absorb the rest, re-emitting it as
infrared radiation, or heat. This thin blanket of gas regulates the surface temperature of the Earth,
keeping it from becoming too hot during the day and too cold at night. Unfortunately, as a result
of the insulating nature of these gases, an increase in their normal concentration also leads to an
increase in global temperatures (Lallanila, 2016). This increase in air and sea temperature causes
thermal expansion of the oceans and the melting of ice caps which in turn causes sea levels to
rise. Increased intensity and frequency of floods, droughts, and tropical storms is directly
affected by changes in sea levels (The effects of climate change, n.d.).
The increase in carbon dioxide specifically also causes ocean acidification. When CO2 is

held in the atmosphere, some of it dissolves into the Earths vast bodies of water, creating
carbonic acid and raising their pH. This acidification is extremely dangerous to aquatic
ecosystems, like coral reefs, which are particularly sensitive to shifts in the pH level (Chu, 2016).
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Another reason adequate environmental regulations are important is to manage resources

used by corporations in the manufacturing of products. The Earth has a limited amount of
resources that need to be properly managed, but many companies exploit the lack of legislation
in some countries to gain access to inexpensive and abundant materials. This overconsumption
encompasses many issues, including habitat loss, species loss, depleted food supply, depletion of
freshwater, and even long-term sustainability of corporations. It is important for companies to be
mindful of the sustainability of their practices as the overuse of non-renewable resources can
severely impact its ability to produce goods. Local communities are dependant upon resources as
well for their own use and for trade. The environment provides humanity with the primary
resources necessary to sustain industries such as agriculture, building materials, and even the
production of pharmaceuticals (Vaidya, 2012).
Finally, companies often produce in countries that have little to no laws or enforcement
of laws on the treatment of waste and toxic compounds that can contaminate the surrounding air,
water, and soil. These compounds may have hazardous effects on local populations and wildlife.
According to The World Health Organization, An estimated 12.6 million people died as a result
of living or working in an unhealthy environment in 2012 nearly 1 in 4 of total global deaths
(An estimated 12.6 million, 2016). The report states that many of these deaths can be attributed
to air, water, and soil pollution, as well as chemical exposures. The effect of industrial waste and
human health shows the need for adequate environmental regulations and enforcement of
environmental law.

Background

Although anthropogenic climate change is a relatively new phenomenon, environmental

protection and management has been prevalent throughout human history and can be traced back
even before the dawn of agriculture, to hunter-gatherer communities who, believed that they not
only had to kill animalswhich were economically important as nourishment and raw
materialsbut also that they had to avoid their revenge. (Nature worship, 2015). Although
there is some debate over the exact origins and causes of agriculture, these ancient cultures were
very concerned about the wellbeing of their crops. Their survival depended on it. Many ancient
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religions also believed that plants and animals possessed divine spirits that were sent from the
deus otiosus, or idle god, to do work on earth.
Arabic writings concerning the contamination of air, water, and soil were discovered in
the Middle East, dating back to the Arab Agricultural Revolution. The writings also contained
assessments of the environment in certain areas. This was the beginning of environmentalism
Nature worship is the term used for a religion that had great respect for natural
phenomena. The ancient Romans are well-known for their rituals surrounding nature. They
would observe the cycles of nature and keep note of any miraculous signs or bad omens sent
from the gods. They performed harvest rituals, worship of trees, and rain ceremonies. They
performed many animal sacrifices, but no part of the animal would be wasted (Roman
Environment, 2016).
In 1306, Edward I, the king of England, banned the burning the sea coal because it
produced little heat and lots of dark, sulfurous smoke. Until the 12th century, wood was used by
most because it was cheap and reliable, but as forests began to dwindle, wood became more
expensive and the Londoners turned to the abundant coal at Englands Northeast coast.
Unfortunately, despite the new legislature, the lower class couldnt afford to use wood and the
ban went mostly ignored (Brisack, 2012).
Modern day environmentalism started during the industrial revolution and became more
popular in the early 20th century when efforts were being made to support wildlife. In 1916, The
National Park Service was created by Woodrow Wilson. In 1972, the United States
Environmental Protection Agency banned the agricultural use of DDT (Environmentalism, n.d.).
As environmental regulations became stricter, many companies began offshoring their
manufacturing to countries with fewer laws in order to increase profit margins. In 2011, 60% of
all shoes, 70% of all phones, 80% if all air conditioner, and 90% of personal computers were
produced in China alone, and global output is expected to be 85% higher in 2020 than it was in
1995 (Schiavenza, 2013). As a result of the exploitation of the environments in developing
nations, environmental law is a field that is rapidly growing and it is projected to continue
growing at a faster than average rate (Environmental Lawyer, n.d.).
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Experts

Ramesh Agrawal

Chhattisgarh is the tenth largest and seventeenth most populous state in India. It is the
source of almost one fifth of Indias coal reserves, which are becoming increasingly sought after
as the economy and population grows (The Editors of Encyclopdia Britannica, n.d.). This has
created a conflict between coal companies and the residents of Chhattisgarh who live on top of
coal reserves, but are denied their right to information about proposed energy projects.
Information that is actually released is often vague and unhelpful and those requesting the
information have their information publicized, making them targets for supporters of the
industry. Ramesh Agrawal was previously a social worker in the region and witnessed firsthand
the neglect of social justice, public health, and the environment by the industry. He brought
information about these issues to a broader audience using the internet and founded Jan Chetana,
a movement to protect citizens and the environment from industrialization (Drolial, 2014).
Agrawal continually checked the Department of Environments website for new
development projects in Chhattisgarh and informed the locals who did not have access to the
internet. He kept watch for environmental violations and filed Right to Information (RTI)
applications on behalf of citizens to protect their information from industry supporters. in 2008,
Agrawal organized and filed petitions against Jindal Steel and Power Ltd (JSPL) and their
proposal to burn more than 4 million tons of coal a year, neglecting to hold mandatory public
meetings or obtain environmental clearance. In April 2012, the National Green Tribunal revoked
the companys permits in response to the various violations highlighted in Agrawals petitions.
Unfortunately, Agrawal became a target for the industry and their supporters. Shortly
after the victory against JSPL, gunmen broke into his shop and shot him in the leh. He survived
the attack, but the bones in his leg were shattered, leading to a lengthy recovery and limited
mobility.
Despite his injuries, Agrawal continues to help villagers fight for their rights. In April of
2014, he won the Goldman Prize for his influence on environmental policy. The Goldman Prize
recognizes the efforts of individuals around the world in environmental activism, such as
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promoting sustainable development, protecting endangered species, or striving for environmental

justice, like Agrawal did in Chhattisgarh (aputov, 2016).

Andrew Green

Andrew Green is an associate professor from the University of Toronto in the Faculty of
Law. Prior to joining the Faculty, he practiced environmental law at many law firms in Toronto
for six years, his practice including prosecutions, administrative appeals, civil actions and
transactional work. Professor Green, working alongside Professor Michael Trebilcock and Dean
Ronald Daniels, was Senior Research Fellow for Ontario's Panel on the Role of Government,
which seeked to identify major issues in the province, including education, health, environment,
economic policy, and taxes. He has received an Honors Bachelor of Arts from Queens
University in 1987, a Master of Arts for Economics at the University of Toronto in 1988, an
Honors Bachelor of Law from the University of Toronto in 1992, a Master of Laws From the
University of Chicago in 1994, and a Doctor of Science of Law in 1997 (Andrew Green, n.d.).
Professor Green conducts research and teaches in the areas of environmental law,
international trade and administrative law, discussing how the fields overlap and influence one
another. He has published several reports about the impacts and implications of environments
laws and trade policies on the environment and economy. In one of his papers, Reconciling
Trade and Climate: How the WTO Can Help Address Climate Change, he discusses the
implications of international trade rules set forth by the World Trade Organization on domestic
policy, how to encourage other countries to take action against climate change, and effective
multilateral solutions.
One of the main roles of the WTO rules is to reduce unnecessary barriers to trade. (__),
which often leads to conflict with domestic policies, which aim to benefit local industries and
protect the environment. Taxes placed on high emissions products may asymmetrically impact
nations seeking to import certain goods, especially if those goods are a primary source of income
for the country. Likewise, pre-existing trade laws make limit a country's ability to implement
environmental regulations. Furthermore, countries may be apprehensive to adopt policies
addressing climate change because they feel others will not follow suit and subsequently have an
advantage over them economically, therefore they may wish to provide incentives to take action,
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such as increased taxes on those who do not comply with climate policies. The economy of
smaller countries, however, may be too greatly affected, so many countries are trying to find
multilateral solutions, or solutions involving multiple nations. The Kyoto Protocol was an
attempt at a multilateral agreement, but it had many shortcomings. It did not include any way of
compelling countries that did not sign it to comply and it did not ensue that signatories would
meet their commitments.
If future agreements are to be successful in todays complex economic and political
landscape, institutional design needs to be considered. Local climate and labor policies are
created by governments that, in theory, represent their citizens, whereas WTO rules are created
by international institutes. If governments are given complete control, domestic industry will be
prioritized over foreign affairs, but if the WTO is given complete control, the views and values
of individual countries may be neglected, so creating successful agreements requires the input of
all parties. One of the key elements that benefit both economical and environmental interests is
the creation of stable and predictable conditions that promote innovation, the efficient allocation
of resources, economic growth and increased income levels, fueling the economy in a way that
protects the environment and providing developing nations with the funds to contribute to the
fight against climate change (Epps, T., & Green, A., 2010).

Role of Control

Before discussing the possible solutions to global issues, it is important to identify who
has control and how they contribute to or mitigate the issue. There are three groups of people
who affect environmental regulations: governments, corporations and citizens.
Governments have the ability to create legislation in relation to the environment and
manufacturing. Certain levels and forms of government hold different positions of power. In
countries like Canada, with a representative democracy, the power is divided amongst municipal,
provincial, and federal governments as well as the different parties, if the party in power has a
minority government. It is in the best interest of this style of government to answer to the needs
of the voters in order to gain support, so the citizens hold more power. In dictatorships,
oligarchies, and other forms of totalitarian governments, the power is concentrated amongst few
individuals, making them more likely to make decisions that benefit their interests (CGPGrey,
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2016). Governments have the power to create laws, but they also need to enforce them.
Institutions with more money can provide subsidies to corporations, but if the government has
less money to spend, they lose the ability to influence companies operating in their countries.
Internationally, countries can create sanctions, refusing to trade with countries that do not
conform to their views on environmental law (Omoju, 2014).
Corporations have the power to choose where and how to create their products. If they
already have very high profit margins, they can create the product for a higher price without
much affect on their earnings, but companies with smaller margins may not have that luxury. If
they choose to use a more costly manufacturing process, they may need to charge more for their
product (Profit Margin, 2017).
Citizens have the power to choose what they buy. Like corporations, their ability to
influence environmental policies of companies is dependent partially on income. Families and
individuals with low income may not have the luxury of buying an expensive product, even at
the expense of the environment (Mainwaring, 2011). Furthermore, citizens have the power to
vote for and support parties that share their views on environmental regulations (Henderson,
2014). Citizens of dictatorships or impoverished nations hold little to no power because they
cannot express their views politically or financially. Internet plays an important role in the fight
for environmental protection because it provides a medium for scattered groups of
environmentalists to fight together (Horton, 2004).
People who need power are those who are oppressed or in developing countries. Their
opinions are not being heard or consider, even though they are often directly affected by this
issue. Wildlife also needs power, but the lives of animals are often overlooked and neglected
because they are viewed as inferior to humans. Wildlife is directly affected by corporate
exploitations of the environment, so many activist groups have started to fight for the rights of
animals (Wildlife, n.d.).
In recent years,many groups have been created to advocate stricter environmental
regulations. One of these groups is The International Union for Conservation of Nature (IUCN),
a union comprised of government and civil society organizations that provide private and public
organizations with the tools and knowledge to progress economically and environmentally. Their
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experts are organized into categories, two of which are, environmental law and social and
economic policy (About, 2017). The Blue Dot Campaign is a movement started by the David
Suzuki Foundation whose goal it is to earn Canadian citizens the right to live in a healthy
environment (The Plan, n.d.).
Environmental Regulation is an issue that everyone should care about. The implications
of environmental neglect are apparent in all aspects of life and affect everyone. Air pollution
leads to more violent storms, floods, droughts, and an increase in disease; water and soil
pollution infect large amounts of people and wildlife; and the overconsumption of resources
hurts governments, citizens, and corporations in the long term. Environmental regulations are the
only method that is guaranteed to be effective against the destruction of the environment.

Logic of Evil

It is clear that climate change, habitat loss, and toxic waste all have profoundly negative
impacts on human civilization around the world, yet, despite the devastating impacts
manufacturing and consumerism have on the environment, many parties continue to use harmful
practices in the manufacturing of goods and services. There are two sides to this issue,
corporations and countries. Many countries, especially developing ones, have inadequate
regulation to attract corporations, who exploit their environments in order to reduce production
costs.
A production possibilities frontier or PPF (See Appendix 1) is a curve that shows the
maximum possible production of two goods with fixed resources. This mean that is the
production of one good increases, the other must decrease. Anything on the curve is considered
an efficient use of resources, whereas anything inside the curve is inefficient and anything
outside of it is impossible. The graph is used to demonstrate the advantages of specialization and
trade, but it can also demonstrate the tradeoff between economic growth and environmental
protection. If a country creates stricter regulations, they subsequently hinder economic
development, but countries that strive to increase the rate of growth of their economy need to
loosen environmental laws. Having optimal environmental regulations and maximum economic
growth is impossible (The Tradeoff, 2002). This is why, in general, industrialised nations have
better environmental regulations than developing nations. They can afford to slow economic
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growth in order to protect the environment, whereas developing nations want to stimulate
economic growth in order to support their citizens basic needs.
Corporations seek to increase their profit margins, therefore, it is only logical for them to
set up productions where it is cheapest. Many countries require corporations to have sustainable
development, waste management, controlled consumption of resources, limited greenhouse gas
emissions, and other regulations that increase the cost of production of goods. Unfortunately,
these regulations rarely have their intended outcome as most companies will produce in a
country that does not have these laws (Palepu, 2014). According to The World Health
Organization (WHO) with regards to inappropriate use of toxic chemicals in developing nations,
toxic chemicals may be emitted directly into soil, air, and water from industrial processes,
pulp and paper plants, tanning operations, mining, and unsustainable forms of agriculture
(Toxic hazards, n.d.).
Countries and corporations do not have a desire to see the planet destroyed by
industrialization. Instead, they are trying to increase profits with little regard for how the
environment will be effected and the whole world is facing the consequences.

Role of Religion

Religion is not a large factor in environmental laws and regulations, but there is evidence
to suggest it may have some impact on environmental awareness. Religions appear to have
similar viewpoints on the role nature play in their faith. Many religions, whether Christian,
Muslim, or Hindu, respect the environment and view nature as something holy or divine.
Many Catholic leaders, including the current and previous pope, have put forth
statements outlining the importance of protecting creation. For the world day of peace, Pope
Benedict XVI put forth a statement saying:
no less troubling are the threats arising from the neglect if not downright
misuse of the earth and the natural goods that God has given us. For this reason,
it is imperative that mankind renew and strengthen that covenant between human
beings and the environment, (B. 2010)
The Evangelical Environmental Network has influenced many Evangelical leaders to
Creation care. Hindu leaders are urging protection of the environment in growing numbers. With
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regards to the Muslim faith, the Torah does not condone the extinction or harm of any species
(Religious Teachings, 2007).
Controversially, some research suggest that, in reality, religious groups may be less
inclined to take action against the exploitation of environmental regulations. Researchers
conducted a mixed methods study on Christian, Muslim, and non-religious communities and
found that the belief in the afterlife and divine intervention reduces the sense of urgency about
climate change (Morrison M, Duncan R, Parton K, 2015).
The importance of environmental protection also varies between religious groups. A
study from the Pew Research surveyed members of different religious groups on their opinions
on environmental regulations (See Appendix 2) and found that Buddhist and Hindu followers
were significantly more likely to support stricter environmental regulations, with 77% and 69%
respectively saying that environmental laws are worth the cost. On the other hand, members the
Mormon and Evangelical faith are the least likely to value environmental protection over the
economy, with 42% and 45% respectively stating that the benefits of environmental regulations
do not outweigh the costs (Funk, C., & Alper, B. A. 2015).
Despite these conclusions, researchers are conflicted about the exact effect religion has
on the creation and enforcement of environmental law and more research is needed before
anything can be accurately determined.

Case Study 1: Nigeria (The Niger Delta)

Nigeria is the most populous country in Africa, with an area of 910,802 km2 and a
population of 190 million, about half of which live in urban locations (Nigeria Population). It is
situated on the Gulf of Guinea in West Africa and borders Benin, Niger, Cameroon, and Chad.
The country Nigeria is part of the Niger Delta, a geographical region about 240 km inland from
the Gulf of Guinea, that is characterized by extremely fertile land, etched with rivers, lakes, and
wetlands (Mabogunje, 2009).
On Oct. 1, 1960, Nigeria gained independence from Great Britain and joined the United
Nations; however, in 1966, military leaders took control of the country and, in 1967, civil war
broke that lasted for 31 months. In 1979 Alhaji Shehu Shagari was elected as president and the
country saw the return of civilian leadership, but internal conflict continued to slow the countrys
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development. During the 1970s an oil boom brought wealth to the country, but its corruption
and internal conflict brought it down to the 13th poorest nation by the 1990s (Nigeria, n.d.).
In 1958, Royal Dutch Shell discovered oil reserves in Nigeria and have uncovered more
than $30 billion of oil reserves since, but the oil extraction involves many complex and
damaging procedures. (Shah, 2010). The explosion of dynamite in aquatic environments caused
huge die offs of fish and fauna.
Destabilization of sedimentary materials associated with dynamite shooting causes
increases in turbidity, blockage of filter feeding apparatuses in benthic (bottom
dwelling) fauna, and reduction of plant photosynthetic activity due to reduced light
penetration. (Collins N. C. Ugochukwu & Dr. Jrgen Ertel, 2008)
Native farmlands and habitats were destroyed by oil spills and acid rain as a result of unsafe
practices. Between 1976 and 1997, 2.8 million barrels of crude oil were reported to have been
leaked into the surrounding environment, mainly mangrove swamps, one of the most productive
ecosystems in the world. The oil prevents oxygen from dissolving into the water, effectively
suffocating the marine animals to death. The plantlife fared no better, unable to photosynthesize
without the penetration of sunlight through the water. After the crude oil has been extracted, any
natural gas that cannot be distilled is disposed of in a process called flaring, which basically
means it is burned at an extremely high heat. This process releases over 250 toxins and is
particularly harmful to agriculture, killing virtually all crops in a 200 meter radius, and creating
significant damage for up to a kilometer more (Collins N. C. Ugochukwu & Dr. Jrgen Ertel,
2008).
The Nigerian government drew the attention of environmentalists around the globe after
the execution of environmentalist and founder of the Movement for the Survival of Ogoni People
(MOSOP), Ken Saro-Wiwa, in 1995. Large oil companies destroyed his countrys environment
for profit, but only 100 jobs were created for the local Ogoni people. Most of the money that the
country received was kept by a small group in the corrupt government. In 1993, Ken Saro-Wiwa
gathered over 300 000 Ogoni citizens to peacefully protest for compensation from Shell and
greater political autonomy. The next year, he was arrested several times and jailed along with
several other MOSOP leaders. The year proceeding that, he was tried and convicted of murder.
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Despite global outcry that the trials were fraudulent, Ken Saro-Wiwa and his eight defenders
were executed on November 10, 1995 (Ken Saro-Wiwa, n.d.).
The tensions within the country led to the formation of the controversial Niger Delta
Avengers or NDA, a heavily-armed militant group that wants the Niger Delta to receive a higher
share of oil revenue (DiChristopher, 2016). The group has made several attacks against large oil
extraction sights, including bombing, armed assaults, and even the abduction of oil company
employees for ransom. Their actions decreased the exportation of oil significantly. The country
began a disarmament, demobilisation and reintegration programme, also known as the amnesty
program in 2009, aiming to decrease violence in the country. The government offered
compensation in the form of formal education, monthly income, and business loans to militants
who gave up their weapons. Leaders of the militant group were even granted large contracts with
the oil sectors and increased political power. The program was an initial succes, attacks were
mitigated and oil exports rose to normal levels, but it was not sustainable. Oil prices began to fall
and the amnesty program was increasingly difficult to fund. By May 2015, the monthly income
had to be completely removed, and violence against oil firms subsequently rose. The program
also offered no environmental protection or revitalization (Ebiede, 2017).
Governments are now looking at sustainable ways to remedy the social, economic, and
environmental conflicts in Nigeria and the Niger Delta. Many groups have begun biological
remediation or bioremediation in damaged habitats. Bioremediation is defined as the use of
microorganisms to eliminate waste and contaminants, most notably hydrocarbons.
Biostimulation, or the addition of nutrients to grow pre existing microbial populations, or
bioaugmentation, or the introduction of new microbes to degrade petroleum, are both methods of
bioremediation. The use and effectiveness of either method varies and is case-specific,
depending on a variety of factors, such as contaminant concentration, redox potential, nutrient
concentrations, moisture and temperature. The proper use of these methods contribute to a
degradation rate of 50& to 75% (Adams, Fufeyin, Okoro, & Ehinomen, 2015).
Although the Niger Delta has seen improvements in restoration of native habitats, it is
important for the government to move towards sustainable development. Several regulations and
committees have been created to mitigate harmful effects of MNCs on the environment. One
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such committees is the National Environmental Standards and Regulation Enforcement Agency
or NESREA, whose goal it is to protect the environment and it sustainable resources. They have
the authority to enforce both local and international environmental laws and to review
regulations on air and water quality, effluent limitations, control of harmful substances and other
forms of environmental pollution and sanitation (Environmental Law, n.d.).
Despite the countrys efforts to protect their environment from the exploitation of MNCs,
there is still a monumental amount of progress that needs to be made in the restoration of the
environment and the creation and enforcement of environmental regulations. Nigeria needs to
take extreme prudence in order to protect their land from oil spills and other forms of
contamination, without triggering a complete economic collapse. The first step that corporations,
and citizens need to take to create a sustainable economy, environment, and society is
cooperation and respect.

Case Study 2: China

The Peoples Republic of China, more commonly known as China, is a country in Asia
with a population of roughly 1.37 billion people, 711.82 million of which live in urban areas,
with population densities over that of 300 capita per square kilometer. They are arguably the
biggest polluters on Earth, responsible for 27% of global greenhouse gas emissions in 2014, or
35.3 billion tonnes of carbon dioxide (China, General Information, n.d.). To understand how
Chinas policies are created and how they impact corporations and industry, it is necessary to
understand how their government is structured.
The country is run under a democratic authoritarian government, that blends certain
aspects of democracy and totalitarianism. Any Chinese citizen above the age of 18 is able to vote
for local representatives. These representatives are then able to vote for the representatives in the
next tier of government, continuing the trend until the National Peoples Congress, roughly 70%
of which are part of the Communist Party of China, votes for the president. The government hold
complete power over the state and its regulations (Bell, 2015). Economically, China is a
socialist country, where profit are shared equally amongst all working citizens, but recently there
has been a shift towards free-market capitalism as the communist regime began to realize that
global trade was beneficial to the economy. The economy is still mainly socialist, with
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pro-socialist foreign policies, but some government programs such as universal health care have
been cut. The country has also allowed the right to private property, entrepreneurs right to take
profit, and a special economic zone for international trade. This shift is important because it
allowed for rapid economic growth, but was unsustainable due to its disregard for environmental
conservation. (Seth, 2014).
Private companies consumed increasing amounts primary resources and expanded
productions to keep up with the demands of growing consumerism and MNCs set up their
production facilities in China to take advantage of their cheap labor and lack of environmental
restrictions. Chinas exponentially rapid economic growth caused a, dramatic increase in the
demand for natural resources of all kinds, including water, land and energy (Economy, 2003).
Deforestation triggered devastating effects such as desertification, flooding, species loss,
destabilized food chains, and increased severity of storms. Along with economic output, water
and air pollutions skyrocketed, leaving the citizens without clean air to breath or water to drink,
increasing incidents of infectious disease and asthma. They remained unable to participate in
decisions concerning industrial development or seek compensation for the violation of their
human rights. This inability to create environmentally sustainable development has lead to
social unrest with the country (Economy, 2003).
Out of necessity, China has to develop stricter environmental regulations on corporations
operating within their borders. Two new systems have been introduced to control greenhouse gas
emissions; one to cap emissions and the other to issue permits that allow to corporation to pollute
within a certain limit. Companies are required by law to disclose emissions data, actions taken to
reduce pollution, and plans for further action. Businesses are being held accountable for any
ecological damage they cause, and there is no upper limit on fines. In fact, the government now
has the power to shut down organizations that dont comply (Zhang, 2015). The directors can
even be detained for up to fifteen days (Kaiman, 2014). Subsidies will be provided to companies
that do well in environmental protection.
The main issue in Chinas environmental policy is in the gap between regulation and
implementation, but they have significantly increased enforcement of their laws. Over the past
three years, 33 MNCs were punished for violating environmental laws and regulations. Among
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the offenders were American Standard, Panasonic, Pepsi, Nestle, and 3M, punished for
substandard wastewater treatment and unauthorized construction that did not have environmental
impact assessment (Multinational Corporation, 2017).
As China continues to develop and shift towards environmental sustainability, it will
provide a learning opportunity for other countries as to what works and what does not work. Out
of necessity and desperation China has been forced to innovate and explore new ways to protect
and restore their environment. No one knows for sure what affect new environmental awareness
will have on the Chinese economy, but China will most likely need the support of other countries
to negotiate sustainable trade deals and development.

Case Study 3: Northern Mexico

Mexico is located in the southern region of North America, home to 122 million people,
spanning an area of 1.96 million square kilometers. The countrys carbon dioxide emissions have
remained relatively consistent since 1982, currently hovering at 3.9 tonnes per capita each year.
(Mexico, n.d.). Despite a relatively consistent output of greenhouse gases, Mexico is facing
increasing environmental concerns due in large part to MNCs from the United States.
The border between Mexico and the United States spans 3 201 km and is the optimal spot
for corporations to set up productions, as a result of cheap labor costs and short transportation
distances. Over the past 30 years 3000 manufacturing plants have been constructed along the
border, producing goods for export to U.S. markets. These facilities are known as maquiladoras
and they have been a central cause for environmental concern in Mexico. In 1965, a free trade
agreement was signed between the United States and Mexico, allowing for US corporations to
bring materials into the country, stimulating the economy of northern Mexico and providing
cheap production to US companies, with wages often less than a dollar an hour. Unfortunately,
the production from maquiladoras was not properly regulated, leading to adverse effects on the
environment and public health in surrounding villages (Bolterstein, n.d.).
One such village is Matamoros, which now has over 90 maquiladora factories, built by
large corporations such as General Motors, AT&T and Zenith. The town has felt the
environmental effects of these operations. Environmental assessments behind the Stepan
Chemical plant revealed concentration of xylene, an aromatic hydrocarbon used as a solvent for
 19

a wide range of industrial and medical practices (Kandyala, Raghavendra, & Rajasekharan,
2010), 50 000 times higher than safe levels for drinking water, and levels 6000 times higher in a
canal near General Motors' Rimir plant (Love, n.d.).
The situation only deteriorated after the creation of the North American Free Trade
Agreement, also known as NAFTA, by Canada the United States, and Mexico. The purpose of
the agreement was to alleviate many of the border disputes caused by the pre existing free-trade
zone, improve working conditions, create more sustainable environmental regulations, and
decrease the concentration of maquiladoras along the US-Mexico border. Unfortunately, the
agreement did not achieved the desired outcomes and maquiladora concentrations actually
increased after NAFTA was signed. Furthermore, the original free trade agreement required that
foreign manufacturers return all waste to the country of origin, however NAFTA allows all
materials imported to the maquiladoras to remain in Mexico, including waste. Even if the
company is shut down, they may still continue to pollute the surrounding environment if their
waste is not properly disposed of. In Tijuana 1994, the lead smelting facility, Metales y
Derivados was shut down after its owners failed to comply with toxic waste disposal laws. Their
misconduct and neglect severally polluted the surrounding environment and communities with
heavy metals and other toxic byproducts. Yet despite being shut down, the waste was never
properly treated or relocated and is currently leaking through its containers, seeping into the
ground, and inflicting more damage on the plants, animals, and water supply (Bolterstein, n.d.).
Like many countries, inadequate regulations are only half the problem. Even with the
proper regulations put in place, it is necessary to enforce them to make any difference. MNCs
and other companies must be held responsible for not following regulations and guidelines put in
place and any subsequent damage they cause to the environment. That is currently not the case in
Mexico. In 1988, The Law of Ecological Balance was enacted to establish corporate liability and
to create guidelines surrounding water, soil, and air pollution; protected natural areas, plants and
species; and ecological emergencies. A new environmental law come into effect in 2012
(Stiftung, n.d.), but it has yet to be properly implemented and enforced. and many companies still
have not adjusted their practices accordingly (Rodrigo, 2015).
 20

Activism has played an important role in the creation and enforcement of environmental
laws in Mexico. The people of the aforementioned Matamoros campaigned for stricter
environmental laws in response to their deteriorating ecosystems. Neighborhood leaders worked
with religious, environmental, and political groups to create a tour showcasing the environmental
destruction caused by maquiladoras, also known as the toxic tour. They created a global
presence large enough to bring US House Majority Leader, Richard Gephardt, on their tour in
the fall of 1991.
The government has also begun to demand compensation from companies that exploit the
land. On 6 August 2014, Buenavista del Cobre, a copper production company in Northern
Mexico, spilt 40 000 cubic metres of copper sulphate acid into public waterways in the state of
Sonora, impacting seven cities and contaminating 2 large rivers. In total, 24 000 people were
affected, many of them becoming infected from the water. The Mexican government responded
by calling it, the worst environmental mining disaster in the countrys history (Wilton, n.d.).
The company has settles to pay for the least 3.4 million for environmental clean up and they have
already started a trust fund for 150 million USD to pay for cleanup, restoration, and
compensation to affected residents. (Stiftung, 2015).
Mexico is a country with potential. They have lots of resource and hold a surprising
amount of power when it comes to global trade. It is the role of the citizens of their country and
the citizens of more developed countries to help advocate for improved laws surrounding the
environment and industry near the border.

International Organizations

There are several large organizations that deal with corporations in countries with
limited environmental protection. Theyre main goal is to assure that their land and environment
is not exploited or damaged by industrial processes.

The United Nations

The United Nations, or UN, is a foundation consisting of 193 member states, which the th
goal of taking action against global issues and keeping peaceful relations between countries. The
 21

UN has two main programs that encompass this area: the United Nations Environment
Programme (UNEP) and the United Nations Development Programme (UNDP).
UNEP is a global environmental authority that sets the global environmental agenda and
promotes sustainable development. Their work encompasses the assessment of global, regional
and national environmental conditions and trends, strengthening institutions for environmental
management and encouraging cooperation in environmental affairs (Overview | About UNEP,
n.d.).
UNDP, on the other hand, is a subset of the UN that deal specifically with sustainable
global development. In January 2016, they developed The Sustainable Development Goals
(SDGs), also known as Global Goals, a list of 17 goals that serve as a call to action to strive
towards true equality and a better future. Ever since they were implemented, the UN has seen
improvements in each category, and they will continue to guide UN policy and funding for the
next 15 years. Of the 17 SDGs, numbers 11, 12, and 13 are relevant to this paper. They are
sustainable cities and communities, responsible consumption and productions, and climate
action, respectively. This organization has the influence necessary to protect the environments of
countries with weak economies from large corporations and the dangers of globalisation
(Sustainable Development Goals, n.d.).

Centre for International Environmental Law

Established in 1989, the Center for International Environmental Law, also known as
CIEL, is a non-profit organization that seeks to protect the environment through legal research,
advocacy and education. CIEL seeks to create a world where laws reflect the codependency of
humanity and the environment, respects the planet, protects the rights of all individuals, and
creates unity between communities (Our Mission, n.d.). There are four legal methods that CIEL
uses to create the largest impact towards the achievement of their goals: strengthening
international laws and enforcement that protect the environment, empowering communities to
defend their rights, creating financial reform to support countries that would not otherwise be
able to afford environmental regulations, and increasing corporate accountability and liability.
These four methods are arguably the most effective way to prevent the exploitation of the
environment by corporations and progress towards an environmentally sustainable economy.
 22

CIEL also focuses their resources into four main categories: protecting families from toxic waste
and pollutants, aiding in the shift to clean, renewable energy, slowing the expansion of extractive
industries, and safeguarding forest ecosystems (Strategy, n.d.).
Keeping with the trend, CIEL focusses their programs into four areas: Climate and
Energy (C&E), Environmental Health (EH), Human Rights and Environment (HRE); and
People, Land, and Resources (PLR). The C&E program uses international law to address the
threat of climate change and take steps to prevent further increases in global greenhouse gas
emissions. Part of their strategy is to hold corporations legally responsible for their actions and
inactions that contribute to this issue and to push financial institutions to fund the shift towards
clean energy.
EH deals with improvements in the regulations of toxic chemicals and prevention of
actions that will undermine progress already made. To achieve this, they seek to create a strong
legal network and leverage progress in some regions to make change globally. CIEL has worked
with the EU in two main areas for concern, which are endocrine disruptors,____ and
nanomaterials,____. They also work with Non-Government Organizations, or NGOs, to prevent
leakage of toxins into vulnerable communities and repair damage that has already been done.
The HRE Program seeks to increase awareness of current international environmental
rights and create activism in all levels of society. They try to achieve this by providing access to
information about environmental regulations and human rights laws to create a sense of
autonomy. CIEL wants to protect communities, especially those dependant upon natural
resources, from environmental degradations and secondary effects, such as food shortages and
intense storms.
Finally, the PLR program defends environmental and human rights against negative
impacts of development and seeks to hold corporations and governments responsible for
unsustainable development and human rights violations. They work at all levels, from grassroots
to international, and scrutinise all parties involved, using the best legal leverage available. The
areas that the program focusses on are those that pose the greatest threat to the environment and
human rights, such as extractive industries and agribusiness (Programs, n.d.).
 23

Canada

Canada has the good fortune of being a developed nation with the infrastructure and
funds available to create sustainable development, yet, out of 27 wealthy nations monitored by
the Centre for Global Development, Canada ranks last environmental protection. In fact, Canada
is the only monitored country that has a commitment to development index, or CDI,that
decreased. This score reflects Canadas continued dependence on fossil fuels, mainly in Alberta,
and other forms of extraction. (Waldie, 2017).
The introduction of the Liberal majority government, lead by Justin Trudeau brought an
increase in environmental awareness into the government, and, in 2016, for the first time in 10
years, a committee of parliament examined the effectiveness of the nations primary
environmental law, the Canadian Environmental Protection Act (CEPA). The results were not
positive. Despite large investments in the screening, assessment, and management of existing
chemicals in Canadian industry, emissions for the most harmful of them have increased. These
substances significantly increase the risk of cancer and reproductive and developmental
problems. The compounds are also persistent, meaning they take long periods of time to
biodegrade, bioaccumulative, and/or toxic to plant and animal life. Heavy metal concentrations
increased significantly, with lead rising 125% between 2006 and 2012 and arsenic and cadmium
rising 85% in the same period, indicating regulatory failure.
One of the main issues is that the government has created many regulations that are not
legally binding to certain industries. There is also an appa wnlt correlation between these soft
regulations and soaring levels of their emissions. Take, for example cadmium. whose usage
increase 900% since 2006. Similarly, the province of Ontario grants exemptions from certain
regulations to companies and even whole sectors, explaining why Ontario has the fourth highest
level of carcinogens in the air out of all the states in the US and provinces in Canada (Castrilli,
2016).
Exploitation of Canadas environment for resources is not a new phenomenon. It began
when the first settlers arrived in Canada and could not resist the abundant resources. Canada
produces an abundance or wood, coal, oil, hydroelectricity, fish, and fertile land. The Europeans
divided the land for colonization and began to transform the landscape. They clear-cut the
 24

coastal forest, causing the topsoil to erode away and no crops could be grown. In New
Brunswick, Saw dust from the timber industry was dumped into streams, turning sodden and
sinking to the bottoms, disturbing wildlife and reducing fish populations. Demand for resources
intensifying as Canadas economy became more dependent on trade, putting more strain on the
environment, until after World War Two. The economy after the second World War was
optimal, and in the 1950s, outdoor recreational activities, specially provincial parks, which
became so overcrowded that the natural ecosystem was at risk. Even the conservative
government now recognizes the need to environmental protection, giving way to nature
preserves and increased size of protected parks (Canada: A History, 2016).
The role Canada plays in this issue has a lot to do with other countries and the
exploitation of their environments and resources by Canadian MNCs. An example of this is the
mining in Latin America. Severe damage is being caused by destroying glaciers, contaminating
water, and cutting down forests. Canadian corporations are just as guilty as other corporations of
neglect and exploiting the environment of a less wealthy country. Some who have protested such
an event in other countries have been prosecuted, threatened, or accused of terrorism. Stronger
regulations need to be created to impact corporations that are based in Canada, but import from
other countries (Hill, 2014).
Despite being a developed country, Canada has a lot of work to do, both in protecting its
own environment and fighting against the exploitation of others. Canadian policies are outdated
and need serious review in order to be kept up to date with modern day trends and needs. As
environmental pressures increase, Canada will be one of the countries the world turns to for
guidance, so the country must decide now what kind of message they will relay.

Solutions

The purpose of this paper is the find solutions to the issue of corporations exploiting
inadequate environmental laws in other countries, mainly those in the developing world.
Throughout the paper, many different aspects of the issue were explored, including the Logic of
Evil and the Role of Religion, and certain solutions emerged. The possible solutions to this issue
are the strengthening of international laws and their enforcement, an increase in corporate
 25

accountability, financial aid for countries that may not be able to affords stricter environmental
regulations, and the empowerment of previously overlooked communities
First, international environmental regulations need to be reviewed and assessed in order
to understand what areas are acceptable and what areas need improvements. International law
should protect fragile ecosystems by improving current waste management policies, levels of
greenhouse gas emissions, use of toxic chemicals, and consumptions of native resources. The
United Nations Environment and Development Programmes play a large role in the formation of
agreements in these areas. On a local scale, countries need to adjust their own environmental
policies. For example, a large issue in the Niger Delta is that there are minimal laws to regulate
oil extraction and flaring, which attracts MNCs and fuels economic growth, but wreaks havoc on
the land. Organizations such as NESREA are not nearly funded enough or given enough
authority to properly mitigate these harmful effects. China has made tremendous progress in their
regulations, with systems to control greenhouse gas emissions and subsidies given to businesses
that comply with environmental laws and quotas. In Mexico, the production from maquiladoras
needs properly regulated and corporations should abide by the regulations set forth to protect
local communities.
There are several methods that can be used to enforce environmental regulations. One of
the most effective is inspection, which ensures that laws are obeyed by companies and
individuals and that legal action can be taken against offenders. Governments may also require
corporations to acquire certain permits, licenses, or certifications before setting up productions in
their country. If inspection teams find that regulations have been violated or that the correct
permits are not in order, seizure, arrest, and criminal prosecution are some of the consequences
the offenders may face (Ijaiya, 2014). As stated in Professor Greens report, International trade
deals should reflect the values of industries and individual nations by creating a stable and
predictable system that increases the chances of innovations that benefit the economy and the
environment.
Nations should also work to restore areas of the environment that have been destroyed by
corporate activities, using methods such as bioremediation, biostimulation, and bioaugmentation.
 26

Assessment groups can monitor the damage that has been inflicted on certain ecosystems in
order to work out the most appropriate path to recovery.
There should also be an increase in corporate accountability and liability, as can be seen
with country like China, where there is no upper limit to fines and corporate officials can be
detained for an extended period of time. This helps in two large way. First, charges brought upon
the company can be put into clean up and reversal of the damage caused by their actions.
Second, with increases in the severity of punishment for environmental misconduct, decrease the
likelihood that the land will be exploited.
Unfortunately, as explained in The Logic of Evil, many countries cannot afford to have
environmental protection laws. They cannot even afford to provide their citizens with basic
needs, so their focus is on increasing national income. These countries keep minimal to no
environmental laws in order to attract corporations, who manufacture in these countries to reduce
production cost. Environmental safeguards can be quite expensive, and a corporation will
typically choose to set up wherever is cheapest to increase profit margin. By offering financial
aid to these countries, it gives them the opportunity to protect their land and create sustainable
infrastructure that fuels the economy. Organization such as the UN and CIEL have begun
programs that develop eco-friendly industries in the third world.
Finally, activism plays an important roles in environmental law. Communities need to be
empowered to defend their rights and freedoms, especially from corrupt leaders. In countries like
Nigeria, however, the citizens are often oppressed and punished for speaking up against their
leaders, so it is imperative that members of more privileged societies support politically
oppressed communities in any way possible, because they are safe from persecution and can
make a large impact. Social media also plays an important role here. Organizations such as
Amnesty International and the United Nations share important information about current events
through social media, bringing attention environmental injustices around the world. Social media
can be used to raise awareness as well as funds for impoverished communities battling against
corporate greed, political corruption, and neglect.
The exploitation of inadequate environmental regulations is a complex, interconnected
issue with many causes and effects. Tackling global issues as large as this can seem quite
 27

daunting and discouraging, but through education and activism, people can learn how they can
contribute towards the end goal. Harmony with the environment is not an unattainable dream, it
is a reality that the world just needs a little more work to get to.
 28

Appendix

Appendix 1: A Production Possibilities Frontier (PPF) showing the relationship between

production of corn and number of trees. The graph is meant to show the tradeoff between
economic output and environmental regulations in a simplified manner.
 29

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