University of Oregon Indonesian Community Essay

University of Oregon Indonesian Community Essay


Read very carefully the 2016 Palm Oil case here:

You are the executive assistant to the CEO of Wilmar, a company that imports palm oil from Indonesia. The palm oil industry has “created social tensions as many rural inhabitants claimed that large plantation companies had violated traditional land rights. Indonesian land-use laws were ambiguous and land ownership unmapped. This indeterminate state of affairs had led to widespread corruption, as companies ‘convinced’ local and national officials to support their land claims and look away when it came to environmental regulation.”[1]

As a consequence, some of the leading palm oil companies signed a pledge, IPOP, brought by different NGOs to endorse, “a strong NDPE (no deforestation, no peat, no exploitation) standard.”[2] Because of IPOP, Wilmar is facing a series of challenges: “First, Wilmar had to find a way to police its supply chain, identifying violators and determining ways of dealing with them, especially in the face of continued NGO pressure. Secondly, some groups had indicated that they might try to bypass Wilmar and sell their CPO directly to China and India; countries which had shown no interest in sustainable palm oil. Finally, the Indonesian government’s displeasure with IPO and the NDPE meant that Wilmar might lose portions of its concessions that it decided not to develop to uphold the pledge. All of these challenges could represent substantial hits to Wilmar’s business if not handled correctly.”

The number and character of conflicts in Wilmar have also increased. There is a group that thinks that Wilmar must respect the agreement and do the best to fulfill IPOP. Another group believes that the financial future of the company is in jeopardy, and the only legal obligation they have is to protect the investment of the shareholders.

The CEO of Wilmar asks you to write a report in which you address the following concerns

1. Does Wilmar have moral obligations to the people in Indonesia? Why? Which obligations? You must justify your answer using at least one normative ethical theory.

2. What are the possible conflicts within Wilmar? Could you use the conflicts to promote moral values in your company? How? In your eyes, what, if anything, must Wilmar avoid doing even if it would lead to substantial hits to Wilmar’s business?

3. What is the best way to manage the conflict with the Indonesian Community?