Just Business and Just War

Eleven years of experience in applied Business Ethics in the public and private sector have sensitized me to the responsibilities of organisations to not only care for their internal and external stakeholders, but also the society and environment in which they operate. Although more and more corporations realise their responsibility for their actions and its impact on all its stakeholders, there are still those who either do not ask the degree of harm their activities can cause to the environment and societies, or seemingly do not care.

Eleven years of experience in applied Business Ethics in the public and private sector have sensitized me to the responsibilities of organisations to not only care for their internal and external stakeholders, but also the society and environment in which they operate. Although more and more corporations realise their responsibility for their actions and its impact on all its stakeholders, there are still those who either do not ask the degree of harm their activities can cause to the environment and societies, or seemingly do not care.

The discourse about hydraulic fracturing – more commonly known as ‘fracking’ – in South Africa has resulted in lively debates among activists, government officials and communities. These have been informed by various motives ranging from self-interest, diverse ideological paradigms, competing monetary interests and concern for communities and the environment.

Fracking is a method that was first used in America in 1949 to ‘stimulate’ oil wells that were close to being depleted.  But in the 1990’s a new method was pioneered, namely breaking up rock deep underground by pumping millions of liters of water, sand and chemicals deep into the earth under high pressure. This creates cracks in the rock, releasing methane or shale gas that can be used to generate electricity.

Fracking uses vast amounts of water – an immediate red flag in a water-poor country like South Africa. Most of the towns and all of the farms in the Karoo Basin depend on groundwater for survival. Annual rainfall varies between about 50mm in the west to 350mm in the east.  By far the greatest worry among communities and activists is that the invasive process of drilling and fracturing and large quantities of chemicals and explosive gases will cause short-term and long-term problems with the groundwater. Oil and gas companies, however, maintain that fracking has not resulted in a single incident of contaminated groundwater. They classify fracking as a process of high pressure pumping that cracks open the shale, whereas activists and communities understand fracking to include the transportation of chemicals, the drilling, the creation of well-casings, capturing and disposing of the wastewater and closing the well up after completion.  Many people in America have reported that their water became discoloured, smelt bad, bubbled with methane and became flammable, and tasted bad after fracking started in their vicinity. 

The South African government made their point of view already clear in the 2014 budget speech to parliament when the Minister of Finance, Pravin Gordhan, stated that the government will pursue the exploration of shale gas to provide an additional energy source for the South African  economy. The president supported his sentiments when he told the nation that although nuclear had the possibility of generating well over 9000 megawatts, shale gas is recognized as a game changer for our economy.  As such government will pursue the shale gas option within the framework of “our good environmental laws”. In February 2016 it was finally announced that the first licenses for fracking would be issued during the course of this year and in March 2016 government stated that exploration of shale gas will start in the next financial year.

For a country that is almost wholly dependent on coal-fired energy generation shale-gas development could be the answer, yet the possible environmental impacts could also be devastating. Fracking could thus have an acceptable and desirable outcome for South Africa’s economy, while producing possible unacceptable side-effects – a phenomenon known as double effect.  The latter becomes a moral problem when the collateral damage is disproportionate to the benefits gained by the action.  Actors are blameworthy for harmful side-effects when they allow them to happen if they could have been prevented, or when they make no, or only an insignificant, attempt to minimize them.   The considerations on side-effect are entailed in the principle of double effect (PDE) which is best known from the ‘just war’ tradition, but important in many other fields of applied ethics.

Although the principle has been clearly defined, double effect remains a complex concept.   In short it states that it is permitted to engage in activities that may have harmful side-effects provided that four conditions are met, namely (1) the act is good in itself or at least indifferent. The goal must thus be legitimate; (2) the direct effect is morally permissible; (3) the intention of the actor is good and the side-effects are not a means to his goal; and (4) the good effect is sufficiently good to compensate for allowing the harmful side-effect.

The PDE was originally developed within the framework of Catholic moral philosophy.  It was subsequently applied to military and medical ethics, but many scholars agree that the PDE can also successfully apply to international business ethics because of the similarities between the morality of war and the morality of business.  Within Just War Theory a distinction is made between jus ad bellum (whether one should engage in war at all) and jus in bello (how war should be conducted). This distinction can also be transferred to the business framework.

Using the four conditions mentioned above, as well as the differentiation between jus in bello and jus ad bellum, one could determine whether fracking, in spite of its harmful side-effects, is morally acceptable.

This article does not aim to test the above as that would require an in-depth study.  But it does aim to stimulate thought about the moral acceptability or unacceptability of hydraulic fracturing in South Africa and elsewhere.  It might just be that the intended good outweighs the (unintended?) harm.

 -          Liezl Groenewald