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Simran Persaud 400020837

Ms. Katrina Welch

FOUN 1004: An Introduction to Argument (CRN 10660)

26.11.2024

Corporate Comfort or Corporate Exploitation: Do MNCs Have a Responsibility To Give Back?

Social Responsibility is not merely a choice, but an obligation to the countries and the

people that sustain their operating profits. Multinational Corporations (MNCs) are companies

that have business operations in at least one country other than its home country and

generates revenue beyond its borders (Investopedia). These are often large corporations that

generate some of the biggest profit margins in the world. For example, KFC in Trinidad yielded

revenue which exceeded one billion dollars for the third quarter of 2024 (Mouttet, 2024).

However, these products that give comfort and convenience are often the result of exploitative

business operations. The conventional strategic decisions of Multinational corporations have

incited academic and policy discourse based on issues surrounding social justice, morality and

environmental responsibility (Dunning and Lundan, 2008). Therefore, MNCs have a social

responsibility to give back to Caribbean countries they benefit from because they operate

unethically, unsustainably and by operating with accordance to Corporate Social Responsibility

frameworks, they can receive great benefits.

Firstly, MNCs business operations are unethical and often violate humanitarian rights or

engage in immoral business. "For example, our results show 88 human rights violations in the
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USA involving 68 companies.” (Ullah et al., 2020) MNCs often take advantage of weak labour

laws and relevant lack of enforcement to exploit lower class labour, paying them wages below

what is legal for extensive hours in dangerous working conditions. Companies like H&M and

Zara operate sweatshops in Bangladesh where “sweatshop workers suffer gruelling workdays

and meagre pay that does not cover basic expenses, while in cruel working circumstances

(Nguyen, 2022).

This also ties into another aspect of ethical operation with regards to sourcing of input

materials for production. As Erika George says in her TedxTalk ‘Reimagining Corporate

Responsibility to Respect Human Rights’, products we benefit from are connected to human

rights abuses. Cobalt used in electric cars and cell phone batteries are sourced from mines in

Congo, “regulated” by militia groups. Cobalt is mined by children, getting paid 50 cents per day

where the minimum wage is $1.83 for 12 hours a day in dark tunnels that often collapse and

result in fatalities (Benjamin, 2022).

This fueled by the profit maximization agenda of MNCs which is the primary motive of

corporations. “Profit maximisation agenda of MNCs lead to labour exploitation and human

rights violations in emerging economies indicate that profitability is the firm’s primary

objective” (Friedman, 2007). However, profitability should never come at the expense of

human beings and their rights. Companies have a moral obligation to find a balance between

profit and ethics as they owe it to the countries they profit from to treat them with the respect

they deserve.
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Secondly, unsustainable operation has profound negative impacts on Caribbean islands.

71% of greenhouse gas emissions, 80% of deforestation, 90% of biodiversity and water loss is

attributed to the private sector (Steinbrink, 2023). Unsustainable operations by MNCs

accelerate the effects of climate change, which have the greatest impact on Caribbean islands.

The changing climate has clearly been shown to have devastating environmental impacts on the

Caribbean such as hotter and dangerous temperatures, hurricanes that develop quicker and

stronger which result in island wide destruction which is expensive to repair and can further

exacerbate the already present economic dilemmas. “The country’s infrastructure had been in

decline for decades, even before the earthquake and other storms weakened it further.”

(Ahmed, 2016). More sustainable modes of operation should be adopted to ensure the long-

term safety of Caribbean countries, extending to companies that even operate outside the

Caribbean as their emissions also contribute to climate change.

Additionally, short term profit maximisation can lead to unsustainable resource usage.

Companies like BP and Shell in Trinidad exist to take advantage of natural gas reserves. In 2022,

BP was the leading producer of natural gas in Trinidad and Tobago, producing an average output

of about 46.2 percent of the country’s gas production (Statista Research Department, 2024).

However, this level of production has left a 10-year supply of natural gas for Trinidad. Trinidad’s

economy is dependent on oil production, which if not sustained, could see detrimental

economic impacts after the 10 years.

Both environmental and resource unsustainability are important to understand as this

can adversely affect business operations. Depleting resources means production quantity will

decrease and consequently, so will profit margins which can lead to bankruptcy. Additionally,
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Infrastructure damage due to natural disasters like hurricanes and flooding affects tourism as

tourists are discouraged from visiting. In gas industries, it damages the production infrastructure

which is expensive to repair as well. Therefore, for both companies and the countries they

operate in, adopting resource and environmental sustainability is crucial for corporation to

ensure the safety of the Caribbean and the company.

Lastly, implementing Corporate Social Responsibility (CSR) frameworks has corporate

benefits. Companies that use sustainable business practices such as biomimicry, have seen

increased product reliability, reduced material and production costs and cutting after sales

costs. Volvo’s use of biomimicry to imitate the vision of locust’s and its ability to avoid collisions

has been implemented into vehicle production to develop safer cars. (Sprinkle et al., 2010) They

are also able to attract more consumers to their products as there is great appeal in corporate

sustainability. Louis Vuitton has been introduced eco-friendly products and supporting

environmental cause which has enticed customers to purchase the company’s luxury items

(Dodes & Schechner, 2009). There are increasing public concerns following environmental

degradation, therefore companies are also pressured into doing so as customers are

stakeholders in the companies. “Empirical studies have shown that customer pressures are an

important determinant of firms' environmental conduct in domestic settings”. (Christmann,

2004) Stakeholder opinion is also an important aspect pertaining to the government as they are

included. For companies that operate in compliance with emission quotas and waste disposal

regulations, federal entities can grant tax credits for their CSR sustainability efforts. For

example, RBC bearings received $8.3 million in federal tax credits for their use of wind turbines

in production. (Sprinkle et al.) These benefits not only reduce environmental impacts of
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operation, but also cut costs which further increases profit margins. Corporations primary

motive is profit maximization and by implementing CSR frameworks, they are able to do so

while giving back to countries and people they gain from.

Others may argue that corporations are business entities which only operate to

maximise profit and therefore do not have to give any social and moral contributions. Economist

Milton Friedman for The New York Times in 1970 stated that,"The social responsibility of

business is to increase its profits,” that profits themselves are the only social responsibility of a

business. However, while profitability is essential to business, it does not justify exploitation to

generate said profit. Violating humanitarian laws and engaging in unsustainable business can

lead to other dire consequences such as legal action by humanitarian enforcements entities like

the UN, boycotting by consumers and damage to company reputation which results in profit

losses. As aforementioned, the cost of profit should never be at the expense of human well-

being, environmental degradation or negative economic outcomes, especially when they

benefit immensely. Therefore, by breaching these ethical and social borders, they are now

obligated to compensate.

Conclusively, MNCs are able to generate substantial profits from their operations in

countries such as the Caribbean. However, at the expense of human rights, environmental

health, and long-term sustainability. By engaging in labor exploitation and resource depletion

they not only cause harm to local populations, but also jeopardize the very resources and

stability they rely upon to generate said profit. Moreover, unsustainable business models

exacerbate climate change, impacting vulnerable regions such as the Caribbean. However, by

adopting Corporate Social Responsibility (CSR) frameworks, corporations can not only mitigate
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these harms but also benefit from increased consumer trust, reduced operational costs, and

improved stakeholder relations. This is the reason why corporations are socially obligated to

give back to the countries that sustain them, ensuring mutual growth and a sustainable future

for all.
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Steinbrink, Laura. “The High Cost of Ignoring Sustainability: A Wake-Up Call for Business

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