Ethical decision-making is becoming an important framework in an organisation. Companies are starting to recognize that they have a wider responsibility to the communities within which they operate. By making ethical decisions, a win-win situation can be achieved between the company and its stakeholders. BHP learnt this the hard way, with the Ok Tedi mine case. There were flaws in the original decision-making process as BHP did not closely take into account of some factors -- such as social and environmental impacts.
It is said that there are two kinds of responsibilities in a company - commercial and social. Commercial responsibilities involve running a business successfully, generating profit and satisfying shareholder expectations. Social responsibility on the other hand is being aware of the issues being presented in the community and the working environment. When BHP intended to build the mine, it focused more on the commercial responsibilities rather than social.
The Ok Tedi River was one of the last untouched wilderness areas in the world, where civilisation was still at its basics. Building the mine looked appealing to the shareholders and government as large profits could be made. However, lack of social responsibilities bought a very poor return on this investment.
In the late 1970s the Ok Tedi environmental controls were designed carelessly and not much thought was put into it. During project construction, it became apparent that the assumptions on which those designs were based on were wrong. Press reports of the time blamed the government for being greedy on not building an adequate waste dam. This led to larger amounts of tailings residue being dumped into the river, bringing devastating changes to the environment.
Instead of quickly correcting this environmental disaster, complaints from landowners were simply ignored by the government and the mining company. This sparked considerable controversy...