Our Series: Ethics in Business – ‘Fair Trade’ or ‘Fair Game’ – Who benefits, really?

Reading Time: 20 minutes
Firoz1
By Firoz Abdul Hamid

It has been said that the oldest business cycle in the history of mankind was probably developed in the time of Prophet Joseph (Peace be upon him). When the King had a dream about seven lean cows and seven fat cows and sought for its interpretation, Prophet Joseph (PBUH) would advise the King what we would today term as macroeconomic model and business cycle. Joseph advised him to keep a part of the grain sowed in the good years in the grain house as an investment/savings for the ensuing bad years. In essence the advise, if taken literally in today’s economic principles, simply says: In the good years, slow down your growth (or GDP), i.e. save as an investment for inevitable bad years. The Czech economist Tomas Sedlacek eloquently argues this case in his The Economics of Good and Evil model.

Much of the economic crisis today is not due to lack of growth. In fact many have argued it is due to too much growth. In an all-consumerised world, we seek our freedom through debt. We create things to serve us only to find we are enslaved to what we created. This can be seen in finance, technology, food, and the list could go on. We push our economies beyond the plateaus of what consumers can realistically and logically consume and sustain. In the most “idiot-proof” levels of my own understanding, and if I were to use the principles of Prophet Joseph (PBUH) in today’s global economy, the role of economists is not to chase GDP and/or growth. Instead they should be advising politicians to decrease the amplitude of business cycles so that we do not overspend in good years (i.e. not pump up growth) to save for the bad years.  So trim growth in good years not amplify!

As simplistic as this theory may sound, unwittingly we live in a world that pushes the envelope on competitiveness and growth beyond the means and capacity of human consumption and sustainability to remain “relevant”.

This is not a lesson on economics, and I most certainly am not an economist to give any advice. But suffice to say that the arguments of what is “fair trade” are truly vociferous globally. In Malaysia and the region of Southeast Asia, much has been written and debated on the topic of the Trans Pacific Partnership Agreement (also known as TPPA) with the US. The arguments and concerns have circumambulated the notion of “fair trade” and “fair game” and for WHOM exactly?

What’s cheap or rather value-for-money for one consumer is always done at the expense of someone else. The recent saga with the Bangladeshi garment factory and the ensuing tragedy would stand as testament to President Benjamin Harrison’s words, “I pity the man who wants a coat so cheap that the man or woman who produces the cloth will starve in the process”.

In July 2013, Russian TV news channel Russia Today debated the “McDonaldisation” of the US economy. The debate highlighted issues such as 100 million Americans are living below the poverty line and almost 50 million have no access to nutritious food. The US, once known for its upward mobility opportunities, is struggling to keep its middle class wages. High and middle wage jobs are now being converted into low wage jobs hence the programme debated “McDonaldisation” of the US economy.

Whether the US economy is on route to being “McDonaldised”, or whether Malaysia signs the TPPA with the US in its entirety or partly, the argument truly remains around and on – exactly what economic model are we aspiring? If it is “Fair Trade”, who exactly is benefiting from this trade “fairness”? Equally, if it is “Fair Game”, who are the adjudicators to the game’s “fairness”?  

The following interview with Excellency Datuk Dr. Rebecca Sta Maria, the Secretary General (Permanent Secretary) of the Ministry of International Trade and Industry of Malaysia, discusses the role of a government in instituting ethics in trade and business. How do policymakers stack ethics when competitiveness is at stake? Is ethics compromised to achieve ease of doing business in a country? Dr. Rebecca brings with her impressive and extensive experience and exposure in global and international trade and negotiations. She shares candidly her thoughts and deep insights into Malaysia’s approach to ethics in global business, trade and commerce.

All things said, in this whole debate on protectionism, free market and nationalism, one can’t but wonder how we can even begin to have this discourse in a space that is blurred by technology, innovation and mobility? How do we argue nationalism, when we desire ease in communication through technology? How do we preserve protectionism when we seek value-for-money products and services? How can we retain free markets when decisions by one or small groups of people in one part of the world can destroy livelihoods of those totally unrelated in another? It may do us good to reflect on what Martin Luther King Jr said 50 years ago, “Before you finish eating your breakfast this morning you’ve depended on half the world. This is the way our universe is structured.  We aren’t going to have peace on earth until we recognise this basic fact.” These words simply regurgitate Prophet Joseph (PBUH)’s business cycle  and are possibly a prognosis for the world that was to be.

Datuk Rebecca
Datuk Dr. Rebecca Sta Maria

Her Excellency Datuk Dr. Rebecca Sta Maria

Secretary General, Ministry of International Trade and Industry of Malaysia (MITI)

“The extent to which we can liberalise the sector depends on the ability and capability of the private sector. The government must focus on the regulatory framework. The private sector must be ready and willing and able to face competition.”

1. Ethics in Business – What is your understanding of ethics in business and its application across politics and business for all strata of society?

Let me answer this with two examples. One is the Enron case, and the other is the collapse of a garment factory in Bangladesh in April 2013.

For those not quite familiar with the intricacies of the Enron case, the movie Enron: The Smartest Guys in the Room, is arguably the best narration of one of the most complex business ethics scandals in modern history. In reality it was an intricate web of greed and callousness. I suppose, capitalism at its worst. Captured on screen, it provides us the opportunity to dissect the issues, look deep within ourselves and question whether we admire or despise the cunning and smarts of Kenneth Lay and Jeffery Skilling. Recall that at the time the shenanigans were taking place at Enron it was billed as the “most admired” corporation by Fortune magazine for the six years running. So this then highlights society, or at least the business communities’, view of how success is defined and measured. Wealth creation? Well, the folks at Enron did just that. For themselves! And the consequence? The company went bankrupt, the key protagonists were charged. From a “morality play” perspective, that is the right ending to this story. But what is more telling (and disturbing) is the business communities’ treatment of the whistleblower in this case – Sherron Watkins, the one who warned that the company would implode in a wave of accounting scandals. It appears she was labelled “radioactive” in the business world, which distanced itself from her. She now makes her living in the lecture circuit.

Closer to home, on 24 April 2013, an eight-story commercial building, Rana Plaza, collapsed in Bangladesh. The search for the dead ended on May 13 with the death toll of 1,129. It is considered to be the deadliest garment factory accident in history, as well as the deadliest accidental structural failure in modern human history, and one of the worst industrial disasters. It sparked global outrage, not at least because the factory manufactured apparel for a number of big brands. Bangladeshi media reported that inspectors had discovered cracks in the building the day before and had requested evacuation and closure. The shops and the bank on the lower floors immediately closed, but garment workers were forced to return the following day, their supervisors declaring the building to be safe. The managers apparently threatened to withhold a month’s pay from workers who refused to come to work.

A Bangladesh government investigation into the collapse of this multi-storey factory building has uncovered a series of violations. The report said the building had been constructed with sub-standard materials on unsuitable land. It also highlighted poor working conditions, low wages and poor safety standards in the country’s garment sector.

So who and what is to blame for this? The owner of the building? For sure. The managers of the five factories operating in that building? The international brand owners for the lack of oversight of the working conditions in the factories manufacturing for them? The average consumer who craves for cheaper apparel?

Hence my simple understanding of business ethics: Doing the right thing, even when no one is looking over your shoulder. It’s about the big picture, the impact of your business not just on your stockholders, stakeholders and clients, but on the citizens at large. It’s about being concerned about the impact on the environment, not just the bottom-line. It is not just about creating wealth while complying with national laws and regulations. Ethics also means transparency of your practices, your procurement methods. Being good corporate citizens.

2. Wealth distribution and ethics – There are heightened debates on global inequity, that wealth either lies in the hands of a select and small group, or that the principles of creation of wealth are inherently flawed.  Is there a correlation between global wealth inequity, wealth distribution and ethics in business?

The late CK Prahalad espoused the view that wealth creation is more important than to distributive justice. Income inequalities, he said, are as much a major issue in the US as in India, Brazil or any developing country. We must focus on increasing the income of everyone as we maintain our concern for income distribution. This essentially means allowing market forces to take the lead in dealing with the problems of the poor.

The prevailing mindset is that those at the bottom of the economic pyramid are at the responsibility of the government; that income inequalities can only be alleviated through a system of overt and implicit subsidies. Subsidised electricity, food, water, housing: Are such government funded support programmes sustainable? How long can we continue to rely on the strong intervention of the public sector?

In the words of Prahalad: “In the debate about ‘globalisation’ and the alienation of the poor and the disenfranchised, the argument is that globalisation will further accentuate the problems of income and opportunity disparity. We have to challenge this assumption…”

Herein lies the challenge. Can the private sector be trusted with making the required investments, infrastructure investments, and develop innovative solutions that will facilitate wealth distribution and opportunities for the bottom of the economic pyramid?

So yes, there is a correlation between wealth distribution and business ethics. Corporations should see the poor not as a problem that governments must deal with, but as an opportunity to supply goods and services to this part of the population, using new approaches to innovation. And there are examples of such innovative business models. The Grameen Bank is one such case in point. Likewise PlaNet Finance, an Internet site that links thousands of microcredit groups around the world into a network for sharing solutions and lowering costs. Or Hindustan Lever, which has received global acknowledgment for having done an exceptional job of serving the rural markets in India through innovative manufacturing and marketing models.

For these innovative entrepreneurs, targeting the bottom of the economic pyramid is not about philanthropy or corporate social responsibility, but is a core strategy of the companies.

business-ethics3. Politics versus ethics – What are the prerequisites for investment decisions in a country? How much of these decisions are led by political and national interests, and of ethics? How would one discern this?

In a world of intense competition for investments, whether domestic or foreign, an important criterion for investor decision making will ultimately be about the ease of doing business. Tied to the ease of doing business are concerns about transparency and predictability and the rule of law. The more transparent and predictable a regulatory system, the more likely it will be based on principles of governance and integrity, with little or no room for discretionary interventions.

A regulatory system driven by national or political interests need not be at odds with ethical principles if it is designed based on good regulatory practice. This means that legislation and regulations are drawn up in consultation with the relevant stakeholders; that regulatory impact assessments are undertaken to appreciate and address concerns that may arise from such legislations or regulations.

A system based on these principles sends a loud positive message to investors that the country is open for business, that it has a business climate that is friendly, where decisions are made based on a sound regulatory basis with no room for patronage and discretion. This is really a what-you-see-is-what-you-get business environment. This is as it should be.

And in Malaysia we have put in place the structure for public engagement. Integral to any introduction and review of legislation is a public feedback process. The April 25, 2012 circular from the Office of the Chief Secretary to the Malaysian government clearly spells out the processes and procedures for doing this. In addition, through the public-private sector Special Task Force to Facilitate Business (PEMUDAH), a host of initiatives are undertaken to ensure the ease of doing business. There are also oversight bodies such as the monthly meetings of the Chief Secretary with all Secretaries General and Heads of Service, as well the High Level Task Force on Integrity, which function to ensure that there is alignment between political and national interests and that of ethics.

4. Corporate governance and morality – There is also a discourse on corporate governance and regulating markets especially in free market environments to curb recklessness, greed and callousness. Can you regulate human character in businesses and markets?

The operative phrase here is “human greed”. It ultimately comes down to what and how much is enough? The 21st century is littered with examples of greed, from the Enron scandal to the Lehman Brothers role in the subprime mortgage crisis. And at the root of these scandals and crises is the lack of corporate governance. An important question is whether or not corporations can be left to police themselves. Clearly, the jury is out on this to enter corporate governance guidelines and regulations.

In the case of Malaysia, for example, we value corporate governance, but we will not leave it to chance. In 2011, the Securities Commission Malaysia (SC) released the Corporate Governance Blueprint 2011. The essence of the blueprint is to ensure corporate governance through strengthening self and market discipline and promoting good compliance and corporate governance culture.

Recognising the role of directors as active and responsible fiduciaries, the SC also put in place the Malaysian Code of Corporate Governance 2012. This focuses on strengthening board structure and composition. Both the blueprint and the code serve to point out that boards and shareholders must embrace the understanding that good business is not just about achieving the desired financial bottom line by being competitive, but by also being ethical and sustainable. They have a duty in ensuring that the corporation conducts itself in compliance with laws and ethical values, and maintains an effective governance structure to ensure the appropriate management of risks and level of internal controls.

In an ideal world, self regulation will be the order of the day. Until then we will have to have to regulate!

5. Ethics versus innovation versus legislation – What should the remits of ethics and progress be? How far should innovation go to solve the world’s predicaments before it balances the question of ethics in its work? How far do we develop our countries before we worry about carbon emission?  How do governments balance these and what are their bases to the balance – faith, universal ethics, local ethics?

Again let me use two very different examples from two different parts of the world to answer this question.

One: On August 5, 2013, the world was introduced to what has been billed as the world’s most expensive hamburger, made from meat grown in petri dishes in the lab of Dr. Mark Post of Maastricht University. And to think we have not yet seen global acceptance of genetically modified foods. Some of us are still trying to get over Dolly, the sheep! Then there is the whole debate over stem cell research…

The Maastricht research has its rationale in the need to reduce the effects of global warming. The UN Food and Agriculture Organization (FAO) report, Livestock’s Long Shadow–Environmental Issues and Options, states that cattle rearing generates more global warming greenhouse gases, as measured in CO2 equivalent, than transportation, and is the major source of land and water degradation.

Two: In late July 2013, the world was rattled by news that a Pakistani TV Game show was giving out abandoned babies as prizes! Are the producers just using this “creative and innovative” initiative to shore up the station’s ratings? Or is there a deeper altruistic motive behind this innovation?

The producers explained that they did this to change perception about adoption, to draw attention to the fact that there were increasing incidences of babies being abandoned. The couples taking part in the show too had their side of the story. They shared their experience of the onerous bureaucratic process of adoption in Pakistan.

These are two very different cases, but both are examples of innovation – one product innovation and one, I suppose, process innovation. Both can be justified on the basis of need, whether a larger global need or a societal/individual need. And clearly both also raise questions of ethics.

But the question is to what extent should such innovative initiatives be allowed free rein? Should the government step in to legislate? If so, then the next questions are: Legislate what, and, on what basis?

There are no obvious answers to both these questions. But perhaps the Pakistan case presents a relatively easier solution to dealing with the ethical issues around the initiative taken by the TV station. This would be in the role of the government in improving child welfare, and getting to the root cause of why is there the increasing incidence of abandoned babies; and perhaps making it easier for childless couples to adopt and provide good homes for the abandoned babies.

The Maastricht case is more complex. If one looks at the experiment purely from the perspective of “food production”, then it would seem a straight-forward case of ensuring the final product meets all the approved standards for food manufacturing. Going beyond food production, one then is confronted by the deeper ethical questions. Are we playing God? Should we be manipulating nature is this manner? Isn’t the issue of global warming pressing enough for us to appreciate this innovative solution? Therein lies the ethical dilemma for governments.

There are no easy solutions to ethical concerns arising from the Maastricht case or in stem-cell research. And we know that the debate between the pro-life and pro-choice groups on the issue of abortion is ongoing. Discussions, debates, arguments on all such concerns will be guided not only by morality and faith, but also by science and the rational mind. The role of the government is to allow this healthy debate, but ultimately, provide guidance in the interest of the larger humanity.

ethics26. Lobbying Culture – The private sector across other economies is often seen as being controlled by large lobbyist groups – especially in industries like pharmaceuticals, energy and defense, to name a few. What is Malaysia doing to address lobbying culture?

Adam Smith, in An Inquiry into the Nature and Causes of the Wealth of Nations (1776) states that the interest of manufacturers and merchants “…in any particular branch of trade or manufactures is always in some respects different from, and even opposite to, that of the public… The proposal of any new law or regulation of commerce which comes from this order ought always to be listened to with great precaution, and ought never be adopted till after having been long and carefully examined, not only with the most scrupulous, but with the most suspicious attention.”

Adam Smith warned that allowing businesses to influence policy would work against the consumer. A concern articulated in the 18th century is today being debated in the context of various trade agreements.

In the past couple of years, a number of countries in Asia-Pacific have been in intense negotiations towards the Trans Pacific Partnership Agreement (TPPA). And over the past few months, the voices of those concerned over the possible implications of such a plurilateral agreement have gained much attention. This is in large part due to the perception that these negotiations are being driven by huge corporations (read: US multinationals). These corporations are alleged to be lobbying their governments to ensure that the rules of trade are changed and tightened in their favour. Another claim is of course the fact that the rules are being negotiated under the veil of heightened confidentiality, with civil society and the general public being locked out of the process.

Amidst all the noise surrounding these negotiations are powerful lessons about globalisation, the democratisation of media and civil society, and the growing importance of engagement with all stakeholders. In the TPPA process, for example, the Malaysian government has had to review its process of engaging its public – a lot more direct and structured engagement with civil society and the media; a lot more listening.

Just as corporations lobby for rules to be formulated to further their bottom line, the interests of small businesses and the civil society too have an influence on the shape of environmental and labour regulations as well as human rights legislation. It is easy to paint big business as the villain and civil society as driven by altruism. The interests of these groups need not be diametrically opposed to each other. The role of the government is to find the balance among the interests of these groups. And this can find a solution in more engagement, openness and transparency.

7. Role of media – Companies sometimes buy advertisement space in media, and in those instances how does or can media balance their own bottomline pressures versus “doing the right thing”? Is media selective in the whole topic of ethics? What is the role media and citizen journalism can play in instituting ethics in business?

Advertising is about paying to have your voice heard. But it cannot be based on false promises and assertions. In an ideal world companies would advertise to inform and educate even as they try to sell their goods and services. But ours is not an ideal world. So it is incumbent on both the media companies and governments to step in to ensure consumer protection and to ensure ethical practices prevail.

Media companies are, unfortunately, more often than not, driven by their bottom line and the interests of their owners and shareholders. We have seen examples in Malaysia where advertisements are carried not only because they contribute to the balance sheet of the media companies, but also (and perhaps, more importantly) because they further the political cause of their owners/shareholders. And this applies across the board, i.e., both the print and online media. And again, there is the twin cause of the lack of the ability of governments to regulate, and the lack of will and/or ability on the part of the media companies to self-regulate.

Citizen journalism may have a role in the reining in some of the miscreants. This can be seen in the increasing use of social media. Unfortunately, the anonymity afforded by such media has allowed some parties to abuse the system by broadcasting misinformation and making wild allegations, and even defaming individuals and opponents.

Given such an environment, the easy way out would be to propose a higher degree of regulation to define the lines beyond which punitive action can be taken. But we know that this can easily be construed as impinging on personal freedoms. Yet another dilemma for the authorities! Ultimately, the answer must lie in the individual’s ability to discern and speak out against injustice and breaches of integrity and governance.

8. Role of government – What is the role of the public sector and government leadership, in your view, in strengthening ethics in business?

Is there a role for the government in policing ethics in the business sector? Yes, to an extent. But it is a sad commentary that business needs the government to provide the necessary oversight and ensure governance. In Malaysia there are enough regulatory bodies doing this: Bank Negara Malaysia, the Security Commission, Bursa Malaysia, the Competition Commission, the Energy Commission, the Multimedia Commission, the Malaysian Anti-Corruption Commission, just to name a few! And then there is a host of legislations to ensure that businesses stick to the straight and narrow.

Ultimately, businesses must self-regulate. Greater transparency that is required from the public sector must also apply to the private sector. Until then, in the interest of the public, the government’s strong arm must prevail through oversight bodies, regulations and legislations.

9. Watchdog bodies – How can the role of watchdog bodies be made apolitical to curb bribes and lobbying culture in investment decisions globally?

The easy answer, in the case of Malaysia, is to have these watchdog bodies report directly to parliament. But that’s not it. It is not just about legislating independence and autonomy. Such bodies must internalise the fact that they have a bigger, more noble cause to champion. They must also have the strength and tenacity to stand up to scrutiny and carry out their tasks in a fair and just manner. Autonomy must not only be granted through legislation but must be practised in its full sense. The bodies given this autonomy must also be seen to act independently, with justice and fairness as the guiding principles. And the government must have the will and the courage to accept the decisions made by these bodies.

10. Fair trade – Organisations like Fair Trade and Best Shoppers Guide in the US are pushing for ethical means of business production, safeguarding farmers and producers. What is Malaysia doing in driving ethical business production across big businesses like the financial industry, energy, technology or defence industry globally?

The practice of fair trade in Malaysia is undertaken at three levels:

  1. Through legislation;
  2. Voluntarily by corporations; and
  3. Oversight by non-governmental organisations such as specific  health and consumer groups.

Malaysia has a number of legislations to ensure fair trade and consumer protection: The Trade Description Act 1972 (rev  2011), the Consumer Protection Act 1999, and the Malaysian Competition Act 2010, which came into force on January 1, 2012. The most encompassing piece of legislation is the Competition Act through which the government will ensure fair trade and a business environment that is as much as possible free of abuse by dominant firms. This act covers all business entities involved in commercial activity, including government-linked businesses, statutory bodies, government agencies or public authorities if they are involved in commercial activity, whether within or outside Malaysia. While in a number of countries the implementation of similar acts has reached maturity, it is still early days in Malaysia. Implementation and enforcement of legislation is the challenge. Ideally, these legislations should only serve as deterrents.

Recent food scares in the region including product recalls, while not necessarily a case of breach of ethical practice, did bring into focus the need for governments to enhance their role in consumer protection and safety. Clearly, legislations alone cannot guarantee consumer safety. In an effort to instil good practice, the Malaysian government has introduced integrity pacts. This is to get the businesses supplying goods and services to the public sector to commit to governance and social responsibility. This of course is not legislated. It is encouraged.

Corporations, especially the larger ones, must take responsibility for their conduct. There are international standards which are mandatory for trade in the specific products. And there are also voluntary standards. In fact, many large firms undertake voluntary social responsibility practices through the implementation of the ISO 26000: Guidelines on Social Responsibility. This is a set of guidelines to assist organisations in addressing their social responsibilities in line with cultural, societal, environmental, legal differences and economic development conditions. In Malaysia, a number of the bigger corporations and government-linked companies are ISO 26000 compliant.

In addition, some corporations have included sustainable and environmentally friendly practices as core aspects of their business. The Roundtable for Sustainable Palm Oil (RSPO) certification is an example of a voluntary standard for fair trade. So is the Malaysian Timber Certification. These provide the assurance that our products are sustainably produced, given the (mis)perception around our production of palm oil and timber products. The challenge lies in getting importing countries to recognise the certification.

And this calls to the fore the role of NGOs and consumer groups. These groups must push for greater awareness of sustainable and environmentally friendly products and services. They must provide the additional oversight to ensure that businesses are socially responsible. However, they must do this in a responsible and rational manner. There is a fine line between creating the consciousness required and fear-mongering. Responsible push from the NGOs and consumer groups can contribute significantly to changing the attitudes and behaviours of corporations.

11. Religion and business- Does one have to be religious and spiritually guided to be ethical? What in your view drives one to be ethical in their transactions with fellow human beings at all levels?

Let me frame this from the various perspectives on ethics and morality. While every religion sets out the moral and ethical framework for its followers, there are other principles and codes that guide behaviour and thought. The Golden Rule (Do unto others as you would have them do unto you), for example, is a code that cuts across religion, psychology, philosophy and sociology. This ethic of reciprocity, as it is often referred to, is really about ethical transactions based on the principles of human rights, justice and equality.

In the Kohlberg-Gilligan discourse on morality, the issues are around the ethics of justice versus the ethics of care. Putting it simple, it is about what makes a better decision: One that is about considering the individual in a specific context, or one that is about the fair and equitable application of the rule of law.

The moral and ethical debates in the public domain today, whether they are about abortion, euthanasia, capital punishment or issues involving asylum seekers or treatment of migrant workers, can find their arguments in the ethics of reciprocity, the ethics of care or the ethics of justice. There are no easy answers to these matters. And in applying each of these codes one may draw on one’s religious belief and faith.

Leadership is about having, and being seen to have, a strong moral compass guiding your actions and decisions. It may be based on religion or faith. What is more important is that the leader has to be acutely aware of, and sensitive to, the diversity within her/his environment. She/he must be able to assert her/his views as guided by this moral compass. Ultimately, it is about finding a balance among that of the ethic of reciprocity, care and justice.

 

Datuk Rebecca1Datuk Rebecca Fatima Sta. Maria, Ph.D., is the Secretary-General of the Malaysian Ministry of International Trade and Industry (MITI). Prior to this appointment she was the Deputy Secretary-General (Trade) of MITI. In that capacity, she provided the oversight for the formulation and implementation of Malaysia’s international trade policies and positions. This involved Malaysia’s participation in bilateral, regional (ASEAN, APEC, OIC) and multilateral forums such as the World Trade Organisation, as well as bilateral and regional trade negotiations. Prior to her appointment to MITI, she served as the Senior Project Coordinator at the Leadership Centre, National Institute of Public Administration (INTAN). She began her career in the administrative and diplomatic service in 1981 and served in various capacities in the then Ministry of Trade and Industry. In 1988, she was seconded to the ASEAN Plant Quarantine and Training Centre as its Chief Administration and Procurement Officer. In 2006, she chaired the ASEAN Senior Economic Officials Meeting (SEOM). In this capacity, she was instrumental in ensuring the completion of the ASEAN Economic Community (AEC) Blueprint as well as the drawing up of the AEC Scorecard to track the implementation of the AEC Blueprint. She was also the ASEAN Co-Chair of the ASEAN-India Free Trade in Goods Agreement. She is now Malaysia’s representative to the High Level Task Force for Economic Integration in ASEAN. In the academic field, in April 2000 she was awarded the Malcolm Knowles Award for the best PhD dissertation in 2000 in the field of human resource development by the American Academy of Human Resource Development. She is a member of the Malaysia Competition Commission; a member of the Board of Trustees of MyKasih (an NGO that aims to assist in alleviating poverty), and a member of the Board of Directors of the Emmaus Counselling Centre.

Academic Qualifications:

Ph.D., University of Georgia in Athens (UGA), US, 2000 (In March 2001, she received the Malcolm S. Knowles Dissertation of the Year Award from the Academy of Human Resource Development, US)
M.S. (Counselling), Universiti Pertanian Malaysia (now Universiti Putra Malaysia)
Dip. In Public Administration, National Institute of Public Administration (INTAN) Malaysia, 1981
B.A. (Hons.) (English Literature), University of Malaya, 1980.

 

See other posts on Ethics in Business:

Ethics in Business: Perception of sleepwalking

Ethics in Business: Facing medical ethics head on in Malaysia

Ethics in Business: A take on business ethics in the US

Ethics in Business: Moving Islamic finance from conference rooms to humanity

Ethics in Business: Walking the ethical track in Malaysia a perspective

Ethics in Business: Soul of ethics in the new Dubai

Ethics in Business: A conversation with Professor Tariq Ramadan

Ethics in Business: Where is the education for narcissistic leaders

Ethics in Business. With whom does the heartbeat of a nation lie, Part 1

Ethics in Business: With whom does the heartbeat of a nation lie, Part 2

Ethics in Business: Are we aware of the Iagos in our midst?

Ethics in business: What moves the conscience when mortality is at stake

Please: CSR is not Ethics in Business

Panel discussion: Medical ethics (plus video)

(Firoz Abdul Hamid is an Inside Investor contributor. The opinions expressed are her own.)

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[caption id="attachment_8222" align="alignleft" width="163"] By Firoz Abdul Hamid[/caption] It has been said that the oldest business cycle in the history of mankind was probably developed in the time of Prophet Joseph (Peace be upon him). When the King had a dream about seven lean cows and seven fat cows and sought for its interpretation, Prophet Joseph (PBUH) would advise the King what we would today term as macroeconomic model and business cycle. Joseph advised him to keep a part of the grain sowed in the good years in the grain house as an investment/savings for the ensuing bad years. In...

Reading Time: 20 minutes

Firoz1
By Firoz Abdul Hamid

It has been said that the oldest business cycle in the history of mankind was probably developed in the time of Prophet Joseph (Peace be upon him). When the King had a dream about seven lean cows and seven fat cows and sought for its interpretation, Prophet Joseph (PBUH) would advise the King what we would today term as macroeconomic model and business cycle. Joseph advised him to keep a part of the grain sowed in the good years in the grain house as an investment/savings for the ensuing bad years. In essence the advise, if taken literally in today’s economic principles, simply says: In the good years, slow down your growth (or GDP), i.e. save as an investment for inevitable bad years. The Czech economist Tomas Sedlacek eloquently argues this case in his The Economics of Good and Evil model.

Much of the economic crisis today is not due to lack of growth. In fact many have argued it is due to too much growth. In an all-consumerised world, we seek our freedom through debt. We create things to serve us only to find we are enslaved to what we created. This can be seen in finance, technology, food, and the list could go on. We push our economies beyond the plateaus of what consumers can realistically and logically consume and sustain. In the most “idiot-proof” levels of my own understanding, and if I were to use the principles of Prophet Joseph (PBUH) in today’s global economy, the role of economists is not to chase GDP and/or growth. Instead they should be advising politicians to decrease the amplitude of business cycles so that we do not overspend in good years (i.e. not pump up growth) to save for the bad years.  So trim growth in good years not amplify!

As simplistic as this theory may sound, unwittingly we live in a world that pushes the envelope on competitiveness and growth beyond the means and capacity of human consumption and sustainability to remain “relevant”.

This is not a lesson on economics, and I most certainly am not an economist to give any advice. But suffice to say that the arguments of what is “fair trade” are truly vociferous globally. In Malaysia and the region of Southeast Asia, much has been written and debated on the topic of the Trans Pacific Partnership Agreement (also known as TPPA) with the US. The arguments and concerns have circumambulated the notion of “fair trade” and “fair game” and for WHOM exactly?

What’s cheap or rather value-for-money for one consumer is always done at the expense of someone else. The recent saga with the Bangladeshi garment factory and the ensuing tragedy would stand as testament to President Benjamin Harrison’s words, “I pity the man who wants a coat so cheap that the man or woman who produces the cloth will starve in the process”.

In July 2013, Russian TV news channel Russia Today debated the “McDonaldisation” of the US economy. The debate highlighted issues such as 100 million Americans are living below the poverty line and almost 50 million have no access to nutritious food. The US, once known for its upward mobility opportunities, is struggling to keep its middle class wages. High and middle wage jobs are now being converted into low wage jobs hence the programme debated “McDonaldisation” of the US economy.

Whether the US economy is on route to being “McDonaldised”, or whether Malaysia signs the TPPA with the US in its entirety or partly, the argument truly remains around and on – exactly what economic model are we aspiring? If it is “Fair Trade”, who exactly is benefiting from this trade “fairness”? Equally, if it is “Fair Game”, who are the adjudicators to the game’s “fairness”?  

The following interview with Excellency Datuk Dr. Rebecca Sta Maria, the Secretary General (Permanent Secretary) of the Ministry of International Trade and Industry of Malaysia, discusses the role of a government in instituting ethics in trade and business. How do policymakers stack ethics when competitiveness is at stake? Is ethics compromised to achieve ease of doing business in a country? Dr. Rebecca brings with her impressive and extensive experience and exposure in global and international trade and negotiations. She shares candidly her thoughts and deep insights into Malaysia’s approach to ethics in global business, trade and commerce.

All things said, in this whole debate on protectionism, free market and nationalism, one can’t but wonder how we can even begin to have this discourse in a space that is blurred by technology, innovation and mobility? How do we argue nationalism, when we desire ease in communication through technology? How do we preserve protectionism when we seek value-for-money products and services? How can we retain free markets when decisions by one or small groups of people in one part of the world can destroy livelihoods of those totally unrelated in another? It may do us good to reflect on what Martin Luther King Jr said 50 years ago, “Before you finish eating your breakfast this morning you’ve depended on half the world. This is the way our universe is structured.  We aren’t going to have peace on earth until we recognise this basic fact.” These words simply regurgitate Prophet Joseph (PBUH)’s business cycle  and are possibly a prognosis for the world that was to be.

Datuk Rebecca
Datuk Dr. Rebecca Sta Maria

Her Excellency Datuk Dr. Rebecca Sta Maria

Secretary General, Ministry of International Trade and Industry of Malaysia (MITI)

“The extent to which we can liberalise the sector depends on the ability and capability of the private sector. The government must focus on the regulatory framework. The private sector must be ready and willing and able to face competition.”

1. Ethics in Business – What is your understanding of ethics in business and its application across politics and business for all strata of society?

Let me answer this with two examples. One is the Enron case, and the other is the collapse of a garment factory in Bangladesh in April 2013.

For those not quite familiar with the intricacies of the Enron case, the movie Enron: The Smartest Guys in the Room, is arguably the best narration of one of the most complex business ethics scandals in modern history. In reality it was an intricate web of greed and callousness. I suppose, capitalism at its worst. Captured on screen, it provides us the opportunity to dissect the issues, look deep within ourselves and question whether we admire or despise the cunning and smarts of Kenneth Lay and Jeffery Skilling. Recall that at the time the shenanigans were taking place at Enron it was billed as the “most admired” corporation by Fortune magazine for the six years running. So this then highlights society, or at least the business communities’, view of how success is defined and measured. Wealth creation? Well, the folks at Enron did just that. For themselves! And the consequence? The company went bankrupt, the key protagonists were charged. From a “morality play” perspective, that is the right ending to this story. But what is more telling (and disturbing) is the business communities’ treatment of the whistleblower in this case – Sherron Watkins, the one who warned that the company would implode in a wave of accounting scandals. It appears she was labelled “radioactive” in the business world, which distanced itself from her. She now makes her living in the lecture circuit.

Closer to home, on 24 April 2013, an eight-story commercial building, Rana Plaza, collapsed in Bangladesh. The search for the dead ended on May 13 with the death toll of 1,129. It is considered to be the deadliest garment factory accident in history, as well as the deadliest accidental structural failure in modern human history, and one of the worst industrial disasters. It sparked global outrage, not at least because the factory manufactured apparel for a number of big brands. Bangladeshi media reported that inspectors had discovered cracks in the building the day before and had requested evacuation and closure. The shops and the bank on the lower floors immediately closed, but garment workers were forced to return the following day, their supervisors declaring the building to be safe. The managers apparently threatened to withhold a month’s pay from workers who refused to come to work.

A Bangladesh government investigation into the collapse of this multi-storey factory building has uncovered a series of violations. The report said the building had been constructed with sub-standard materials on unsuitable land. It also highlighted poor working conditions, low wages and poor safety standards in the country’s garment sector.

So who and what is to blame for this? The owner of the building? For sure. The managers of the five factories operating in that building? The international brand owners for the lack of oversight of the working conditions in the factories manufacturing for them? The average consumer who craves for cheaper apparel?

Hence my simple understanding of business ethics: Doing the right thing, even when no one is looking over your shoulder. It’s about the big picture, the impact of your business not just on your stockholders, stakeholders and clients, but on the citizens at large. It’s about being concerned about the impact on the environment, not just the bottom-line. It is not just about creating wealth while complying with national laws and regulations. Ethics also means transparency of your practices, your procurement methods. Being good corporate citizens.

2. Wealth distribution and ethics – There are heightened debates on global inequity, that wealth either lies in the hands of a select and small group, or that the principles of creation of wealth are inherently flawed.  Is there a correlation between global wealth inequity, wealth distribution and ethics in business?

The late CK Prahalad espoused the view that wealth creation is more important than to distributive justice. Income inequalities, he said, are as much a major issue in the US as in India, Brazil or any developing country. We must focus on increasing the income of everyone as we maintain our concern for income distribution. This essentially means allowing market forces to take the lead in dealing with the problems of the poor.

The prevailing mindset is that those at the bottom of the economic pyramid are at the responsibility of the government; that income inequalities can only be alleviated through a system of overt and implicit subsidies. Subsidised electricity, food, water, housing: Are such government funded support programmes sustainable? How long can we continue to rely on the strong intervention of the public sector?

In the words of Prahalad: “In the debate about ‘globalisation’ and the alienation of the poor and the disenfranchised, the argument is that globalisation will further accentuate the problems of income and opportunity disparity. We have to challenge this assumption…”

Herein lies the challenge. Can the private sector be trusted with making the required investments, infrastructure investments, and develop innovative solutions that will facilitate wealth distribution and opportunities for the bottom of the economic pyramid?

So yes, there is a correlation between wealth distribution and business ethics. Corporations should see the poor not as a problem that governments must deal with, but as an opportunity to supply goods and services to this part of the population, using new approaches to innovation. And there are examples of such innovative business models. The Grameen Bank is one such case in point. Likewise PlaNet Finance, an Internet site that links thousands of microcredit groups around the world into a network for sharing solutions and lowering costs. Or Hindustan Lever, which has received global acknowledgment for having done an exceptional job of serving the rural markets in India through innovative manufacturing and marketing models.

For these innovative entrepreneurs, targeting the bottom of the economic pyramid is not about philanthropy or corporate social responsibility, but is a core strategy of the companies.

business-ethics3. Politics versus ethics – What are the prerequisites for investment decisions in a country? How much of these decisions are led by political and national interests, and of ethics? How would one discern this?

In a world of intense competition for investments, whether domestic or foreign, an important criterion for investor decision making will ultimately be about the ease of doing business. Tied to the ease of doing business are concerns about transparency and predictability and the rule of law. The more transparent and predictable a regulatory system, the more likely it will be based on principles of governance and integrity, with little or no room for discretionary interventions.

A regulatory system driven by national or political interests need not be at odds with ethical principles if it is designed based on good regulatory practice. This means that legislation and regulations are drawn up in consultation with the relevant stakeholders; that regulatory impact assessments are undertaken to appreciate and address concerns that may arise from such legislations or regulations.

A system based on these principles sends a loud positive message to investors that the country is open for business, that it has a business climate that is friendly, where decisions are made based on a sound regulatory basis with no room for patronage and discretion. This is really a what-you-see-is-what-you-get business environment. This is as it should be.

And in Malaysia we have put in place the structure for public engagement. Integral to any introduction and review of legislation is a public feedback process. The April 25, 2012 circular from the Office of the Chief Secretary to the Malaysian government clearly spells out the processes and procedures for doing this. In addition, through the public-private sector Special Task Force to Facilitate Business (PEMUDAH), a host of initiatives are undertaken to ensure the ease of doing business. There are also oversight bodies such as the monthly meetings of the Chief Secretary with all Secretaries General and Heads of Service, as well the High Level Task Force on Integrity, which function to ensure that there is alignment between political and national interests and that of ethics.

4. Corporate governance and morality – There is also a discourse on corporate governance and regulating markets especially in free market environments to curb recklessness, greed and callousness. Can you regulate human character in businesses and markets?

The operative phrase here is “human greed”. It ultimately comes down to what and how much is enough? The 21st century is littered with examples of greed, from the Enron scandal to the Lehman Brothers role in the subprime mortgage crisis. And at the root of these scandals and crises is the lack of corporate governance. An important question is whether or not corporations can be left to police themselves. Clearly, the jury is out on this to enter corporate governance guidelines and regulations.

In the case of Malaysia, for example, we value corporate governance, but we will not leave it to chance. In 2011, the Securities Commission Malaysia (SC) released the Corporate Governance Blueprint 2011. The essence of the blueprint is to ensure corporate governance through strengthening self and market discipline and promoting good compliance and corporate governance culture.

Recognising the role of directors as active and responsible fiduciaries, the SC also put in place the Malaysian Code of Corporate Governance 2012. This focuses on strengthening board structure and composition. Both the blueprint and the code serve to point out that boards and shareholders must embrace the understanding that good business is not just about achieving the desired financial bottom line by being competitive, but by also being ethical and sustainable. They have a duty in ensuring that the corporation conducts itself in compliance with laws and ethical values, and maintains an effective governance structure to ensure the appropriate management of risks and level of internal controls.

In an ideal world, self regulation will be the order of the day. Until then we will have to have to regulate!

5. Ethics versus innovation versus legislation – What should the remits of ethics and progress be? How far should innovation go to solve the world’s predicaments before it balances the question of ethics in its work? How far do we develop our countries before we worry about carbon emission?  How do governments balance these and what are their bases to the balance – faith, universal ethics, local ethics?

Again let me use two very different examples from two different parts of the world to answer this question.

One: On August 5, 2013, the world was introduced to what has been billed as the world’s most expensive hamburger, made from meat grown in petri dishes in the lab of Dr. Mark Post of Maastricht University. And to think we have not yet seen global acceptance of genetically modified foods. Some of us are still trying to get over Dolly, the sheep! Then there is the whole debate over stem cell research…

The Maastricht research has its rationale in the need to reduce the effects of global warming. The UN Food and Agriculture Organization (FAO) report, Livestock’s Long Shadow–Environmental Issues and Options, states that cattle rearing generates more global warming greenhouse gases, as measured in CO2 equivalent, than transportation, and is the major source of land and water degradation.

Two: In late July 2013, the world was rattled by news that a Pakistani TV Game show was giving out abandoned babies as prizes! Are the producers just using this “creative and innovative” initiative to shore up the station’s ratings? Or is there a deeper altruistic motive behind this innovation?

The producers explained that they did this to change perception about adoption, to draw attention to the fact that there were increasing incidences of babies being abandoned. The couples taking part in the show too had their side of the story. They shared their experience of the onerous bureaucratic process of adoption in Pakistan.

These are two very different cases, but both are examples of innovation – one product innovation and one, I suppose, process innovation. Both can be justified on the basis of need, whether a larger global need or a societal/individual need. And clearly both also raise questions of ethics.

But the question is to what extent should such innovative initiatives be allowed free rein? Should the government step in to legislate? If so, then the next questions are: Legislate what, and, on what basis?

There are no obvious answers to both these questions. But perhaps the Pakistan case presents a relatively easier solution to dealing with the ethical issues around the initiative taken by the TV station. This would be in the role of the government in improving child welfare, and getting to the root cause of why is there the increasing incidence of abandoned babies; and perhaps making it easier for childless couples to adopt and provide good homes for the abandoned babies.

The Maastricht case is more complex. If one looks at the experiment purely from the perspective of “food production”, then it would seem a straight-forward case of ensuring the final product meets all the approved standards for food manufacturing. Going beyond food production, one then is confronted by the deeper ethical questions. Are we playing God? Should we be manipulating nature is this manner? Isn’t the issue of global warming pressing enough for us to appreciate this innovative solution? Therein lies the ethical dilemma for governments.

There are no easy solutions to ethical concerns arising from the Maastricht case or in stem-cell research. And we know that the debate between the pro-life and pro-choice groups on the issue of abortion is ongoing. Discussions, debates, arguments on all such concerns will be guided not only by morality and faith, but also by science and the rational mind. The role of the government is to allow this healthy debate, but ultimately, provide guidance in the interest of the larger humanity.

ethics26. Lobbying Culture – The private sector across other economies is often seen as being controlled by large lobbyist groups – especially in industries like pharmaceuticals, energy and defense, to name a few. What is Malaysia doing to address lobbying culture?

Adam Smith, in An Inquiry into the Nature and Causes of the Wealth of Nations (1776) states that the interest of manufacturers and merchants “…in any particular branch of trade or manufactures is always in some respects different from, and even opposite to, that of the public… The proposal of any new law or regulation of commerce which comes from this order ought always to be listened to with great precaution, and ought never be adopted till after having been long and carefully examined, not only with the most scrupulous, but with the most suspicious attention.”

Adam Smith warned that allowing businesses to influence policy would work against the consumer. A concern articulated in the 18th century is today being debated in the context of various trade agreements.

In the past couple of years, a number of countries in Asia-Pacific have been in intense negotiations towards the Trans Pacific Partnership Agreement (TPPA). And over the past few months, the voices of those concerned over the possible implications of such a plurilateral agreement have gained much attention. This is in large part due to the perception that these negotiations are being driven by huge corporations (read: US multinationals). These corporations are alleged to be lobbying their governments to ensure that the rules of trade are changed and tightened in their favour. Another claim is of course the fact that the rules are being negotiated under the veil of heightened confidentiality, with civil society and the general public being locked out of the process.

Amidst all the noise surrounding these negotiations are powerful lessons about globalisation, the democratisation of media and civil society, and the growing importance of engagement with all stakeholders. In the TPPA process, for example, the Malaysian government has had to review its process of engaging its public – a lot more direct and structured engagement with civil society and the media; a lot more listening.

Just as corporations lobby for rules to be formulated to further their bottom line, the interests of small businesses and the civil society too have an influence on the shape of environmental and labour regulations as well as human rights legislation. It is easy to paint big business as the villain and civil society as driven by altruism. The interests of these groups need not be diametrically opposed to each other. The role of the government is to find the balance among the interests of these groups. And this can find a solution in more engagement, openness and transparency.

7. Role of media – Companies sometimes buy advertisement space in media, and in those instances how does or can media balance their own bottomline pressures versus “doing the right thing”? Is media selective in the whole topic of ethics? What is the role media and citizen journalism can play in instituting ethics in business?

Advertising is about paying to have your voice heard. But it cannot be based on false promises and assertions. In an ideal world companies would advertise to inform and educate even as they try to sell their goods and services. But ours is not an ideal world. So it is incumbent on both the media companies and governments to step in to ensure consumer protection and to ensure ethical practices prevail.

Media companies are, unfortunately, more often than not, driven by their bottom line and the interests of their owners and shareholders. We have seen examples in Malaysia where advertisements are carried not only because they contribute to the balance sheet of the media companies, but also (and perhaps, more importantly) because they further the political cause of their owners/shareholders. And this applies across the board, i.e., both the print and online media. And again, there is the twin cause of the lack of the ability of governments to regulate, and the lack of will and/or ability on the part of the media companies to self-regulate.

Citizen journalism may have a role in the reining in some of the miscreants. This can be seen in the increasing use of social media. Unfortunately, the anonymity afforded by such media has allowed some parties to abuse the system by broadcasting misinformation and making wild allegations, and even defaming individuals and opponents.

Given such an environment, the easy way out would be to propose a higher degree of regulation to define the lines beyond which punitive action can be taken. But we know that this can easily be construed as impinging on personal freedoms. Yet another dilemma for the authorities! Ultimately, the answer must lie in the individual’s ability to discern and speak out against injustice and breaches of integrity and governance.

8. Role of government – What is the role of the public sector and government leadership, in your view, in strengthening ethics in business?

Is there a role for the government in policing ethics in the business sector? Yes, to an extent. But it is a sad commentary that business needs the government to provide the necessary oversight and ensure governance. In Malaysia there are enough regulatory bodies doing this: Bank Negara Malaysia, the Security Commission, Bursa Malaysia, the Competition Commission, the Energy Commission, the Multimedia Commission, the Malaysian Anti-Corruption Commission, just to name a few! And then there is a host of legislations to ensure that businesses stick to the straight and narrow.

Ultimately, businesses must self-regulate. Greater transparency that is required from the public sector must also apply to the private sector. Until then, in the interest of the public, the government’s strong arm must prevail through oversight bodies, regulations and legislations.

9. Watchdog bodies – How can the role of watchdog bodies be made apolitical to curb bribes and lobbying culture in investment decisions globally?

The easy answer, in the case of Malaysia, is to have these watchdog bodies report directly to parliament. But that’s not it. It is not just about legislating independence and autonomy. Such bodies must internalise the fact that they have a bigger, more noble cause to champion. They must also have the strength and tenacity to stand up to scrutiny and carry out their tasks in a fair and just manner. Autonomy must not only be granted through legislation but must be practised in its full sense. The bodies given this autonomy must also be seen to act independently, with justice and fairness as the guiding principles. And the government must have the will and the courage to accept the decisions made by these bodies.

10. Fair trade – Organisations like Fair Trade and Best Shoppers Guide in the US are pushing for ethical means of business production, safeguarding farmers and producers. What is Malaysia doing in driving ethical business production across big businesses like the financial industry, energy, technology or defence industry globally?

The practice of fair trade in Malaysia is undertaken at three levels:

  1. Through legislation;
  2. Voluntarily by corporations; and
  3. Oversight by non-governmental organisations such as specific  health and consumer groups.

Malaysia has a number of legislations to ensure fair trade and consumer protection: The Trade Description Act 1972 (rev  2011), the Consumer Protection Act 1999, and the Malaysian Competition Act 2010, which came into force on January 1, 2012. The most encompassing piece of legislation is the Competition Act through which the government will ensure fair trade and a business environment that is as much as possible free of abuse by dominant firms. This act covers all business entities involved in commercial activity, including government-linked businesses, statutory bodies, government agencies or public authorities if they are involved in commercial activity, whether within or outside Malaysia. While in a number of countries the implementation of similar acts has reached maturity, it is still early days in Malaysia. Implementation and enforcement of legislation is the challenge. Ideally, these legislations should only serve as deterrents.

Recent food scares in the region including product recalls, while not necessarily a case of breach of ethical practice, did bring into focus the need for governments to enhance their role in consumer protection and safety. Clearly, legislations alone cannot guarantee consumer safety. In an effort to instil good practice, the Malaysian government has introduced integrity pacts. This is to get the businesses supplying goods and services to the public sector to commit to governance and social responsibility. This of course is not legislated. It is encouraged.

Corporations, especially the larger ones, must take responsibility for their conduct. There are international standards which are mandatory for trade in the specific products. And there are also voluntary standards. In fact, many large firms undertake voluntary social responsibility practices through the implementation of the ISO 26000: Guidelines on Social Responsibility. This is a set of guidelines to assist organisations in addressing their social responsibilities in line with cultural, societal, environmental, legal differences and economic development conditions. In Malaysia, a number of the bigger corporations and government-linked companies are ISO 26000 compliant.

In addition, some corporations have included sustainable and environmentally friendly practices as core aspects of their business. The Roundtable for Sustainable Palm Oil (RSPO) certification is an example of a voluntary standard for fair trade. So is the Malaysian Timber Certification. These provide the assurance that our products are sustainably produced, given the (mis)perception around our production of palm oil and timber products. The challenge lies in getting importing countries to recognise the certification.

And this calls to the fore the role of NGOs and consumer groups. These groups must push for greater awareness of sustainable and environmentally friendly products and services. They must provide the additional oversight to ensure that businesses are socially responsible. However, they must do this in a responsible and rational manner. There is a fine line between creating the consciousness required and fear-mongering. Responsible push from the NGOs and consumer groups can contribute significantly to changing the attitudes and behaviours of corporations.

11. Religion and business- Does one have to be religious and spiritually guided to be ethical? What in your view drives one to be ethical in their transactions with fellow human beings at all levels?

Let me frame this from the various perspectives on ethics and morality. While every religion sets out the moral and ethical framework for its followers, there are other principles and codes that guide behaviour and thought. The Golden Rule (Do unto others as you would have them do unto you), for example, is a code that cuts across religion, psychology, philosophy and sociology. This ethic of reciprocity, as it is often referred to, is really about ethical transactions based on the principles of human rights, justice and equality.

In the Kohlberg-Gilligan discourse on morality, the issues are around the ethics of justice versus the ethics of care. Putting it simple, it is about what makes a better decision: One that is about considering the individual in a specific context, or one that is about the fair and equitable application of the rule of law.

The moral and ethical debates in the public domain today, whether they are about abortion, euthanasia, capital punishment or issues involving asylum seekers or treatment of migrant workers, can find their arguments in the ethics of reciprocity, the ethics of care or the ethics of justice. There are no easy answers to these matters. And in applying each of these codes one may draw on one’s religious belief and faith.

Leadership is about having, and being seen to have, a strong moral compass guiding your actions and decisions. It may be based on religion or faith. What is more important is that the leader has to be acutely aware of, and sensitive to, the diversity within her/his environment. She/he must be able to assert her/his views as guided by this moral compass. Ultimately, it is about finding a balance among that of the ethic of reciprocity, care and justice.

 

Datuk Rebecca1Datuk Rebecca Fatima Sta. Maria, Ph.D., is the Secretary-General of the Malaysian Ministry of International Trade and Industry (MITI). Prior to this appointment she was the Deputy Secretary-General (Trade) of MITI. In that capacity, she provided the oversight for the formulation and implementation of Malaysia’s international trade policies and positions. This involved Malaysia’s participation in bilateral, regional (ASEAN, APEC, OIC) and multilateral forums such as the World Trade Organisation, as well as bilateral and regional trade negotiations. Prior to her appointment to MITI, she served as the Senior Project Coordinator at the Leadership Centre, National Institute of Public Administration (INTAN). She began her career in the administrative and diplomatic service in 1981 and served in various capacities in the then Ministry of Trade and Industry. In 1988, she was seconded to the ASEAN Plant Quarantine and Training Centre as its Chief Administration and Procurement Officer. In 2006, she chaired the ASEAN Senior Economic Officials Meeting (SEOM). In this capacity, she was instrumental in ensuring the completion of the ASEAN Economic Community (AEC) Blueprint as well as the drawing up of the AEC Scorecard to track the implementation of the AEC Blueprint. She was also the ASEAN Co-Chair of the ASEAN-India Free Trade in Goods Agreement. She is now Malaysia’s representative to the High Level Task Force for Economic Integration in ASEAN. In the academic field, in April 2000 she was awarded the Malcolm Knowles Award for the best PhD dissertation in 2000 in the field of human resource development by the American Academy of Human Resource Development. She is a member of the Malaysia Competition Commission; a member of the Board of Trustees of MyKasih (an NGO that aims to assist in alleviating poverty), and a member of the Board of Directors of the Emmaus Counselling Centre.

Academic Qualifications:

Ph.D., University of Georgia in Athens (UGA), US, 2000 (In March 2001, she received the Malcolm S. Knowles Dissertation of the Year Award from the Academy of Human Resource Development, US)
M.S. (Counselling), Universiti Pertanian Malaysia (now Universiti Putra Malaysia)
Dip. In Public Administration, National Institute of Public Administration (INTAN) Malaysia, 1981
B.A. (Hons.) (English Literature), University of Malaya, 1980.

 

See other posts on Ethics in Business:

Ethics in Business: Perception of sleepwalking

Ethics in Business: Facing medical ethics head on in Malaysia

Ethics in Business: A take on business ethics in the US

Ethics in Business: Moving Islamic finance from conference rooms to humanity

Ethics in Business: Walking the ethical track in Malaysia a perspective

Ethics in Business: Soul of ethics in the new Dubai

Ethics in Business: A conversation with Professor Tariq Ramadan

Ethics in Business: Where is the education for narcissistic leaders

Ethics in Business. With whom does the heartbeat of a nation lie, Part 1

Ethics in Business: With whom does the heartbeat of a nation lie, Part 2

Ethics in Business: Are we aware of the Iagos in our midst?

Ethics in business: What moves the conscience when mortality is at stake

Please: CSR is not Ethics in Business

Panel discussion: Medical ethics (plus video)

(Firoz Abdul Hamid is an Inside Investor contributor. The opinions expressed are her own.)

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