Environmental quality issues have been increasingly disturbed because of the international business practices. The other areas of problems such as social issues, handling waste are in the fore. The environmental issues have recently raised a lot of flak from the leading countries in the world. Environmental concerns are weakening the developing countries and they cannot be ignored any further.
Several examples show direct connections between growth and environmental degradation; China logged over 75 million hectares of forests in the last decades of the past century. Expectedly, in 1997, severe drought caused by the drying of the Yellow River affected people and industries in northern China. The following year flash floods in the Yangtze caused damages worth $30 billion. The Chinese government concluded that deforestation was behind these events and it has banned logging.
Some countries prohibit the import of goods which cause ecological damage. For example, the US has banned the import of shrimp harvested without turtle excluder devise because of its concern for the endangered sea turtles. In 1994, the WTO intervened to address member concerns regarding the import of shrimps and its impact on turtles.. This became known as the Shrimp and Turtle case. The ruling was adopted on November 6, 1998. However, Malaysia persisted in their complaint and initiated DSU Article 21.5 proceedings against the U.S. in 2001, but the U.S. prevailed in those hearings.
Developing countries are affected by the relocation of polluting industries from the developed areas. Similarly, several products which are banned in the developed nations are marketed in the under developed world. Environmental integrity is crucial for a developing nation such as India and must be guarded under all circumstances. In the last couple of years acute water shortage has forced companies to shut down. Frequent incidences of droughts and floods have also caused incalculable financial losses. Over 2,000 Himalayan glaciers have reportedly melted in the past few decades causing floods and climatic changes.
The dumping of nuclear and hazardous wastes in developing countries and the shifting of polluting industries to the developing countries impose heavy social costs. In August 2006, the cargo ship Probo Koala discharged 500 tons of toxic waste in city Abidjan, West Africa killing 17 people and poisoning thousands more. In 1988 thousands of barrels of hazardous waste disguised as building materials were discovered in the village of Koko in Nigeria. Several barrels were unsealed causing leakage and serious health effects to the residents. The exploitation of the natural resources of the developing countries to satisfy the global demand also often causes ecological problems. African nations have long been at the center of incidents involving hazardous waste dumping.
When the multinationals exploit the under developed countries by using polluting technologies, they must be severely punished. When we don’t care for the environment, it destroys the mankind and living beings unbelievably. Environmental CSR aims to reduce damaging effects of the business processes. The CSR activities focus on energy use, water use, waste management, recycling, emissions etc. At times, developed nations raise environmental issues as a trade barrier rather than for genuine reasons.
The debate has intensified in recent years on the connection between trade and the environment, and the role the WTO is important in promoting environmental friendly trade. Vital concerns of those who have raised a roar of the environment issues in the WTO have a valid reason because of circumstances where trade and the pursuit of trade liberalization have had harmful environmental effects. Also, trade can have adverse consequences on the environment when property rights in environmental resources are ill defined or prices do not reflect scarcity.
When the ordinance of NAFTA expansion to Peru was passed in 2007, alert citizens and a host of environment groups warned that the Peru FTA (free Trade Agreement) would incentivize a massive sell-off of the sensitive Peruvian Amazon rainforest to oil and gas companies. Such situations result in the abuse of scarce environmental resources and degradation, which worsens through trade. Some of the pollution can be purely local, such as a polluting water bodies because of chemical waste from local factories, or noise pollution due to factories etc. Other pollution can have global repercussions, for example, the excessive emission of greenhouse gases, the destruction of rainforests, and so on.
An added fact to consider here is if some countries have low environmental standards, big businesses are likely to shift production of environment-intensive or highly polluting products to so called pollution havens. Worse trade induced competitive pressure force countries to lower their environmental and health standards. Women working in Cambodian factories supplying some of the world’s best-known sportswear brands are suffering from repeated mass fainting due to excess heat and pathetic working conditions. The factory owners have not properly invested in safety of work environment and are paying very low wages to the workers. Also, short-term contracts are a root cause of job insecurity; workers cannot refuse overtime, because they are insecure about their contract renewal.
A positive point to note in International Trade is that some nations have extremely high quantities of raw materials, which they are unable to use domestically. For example, Australia has the most iron ore reserves out of any nation in the world, at 35 billion metric tons. Venezuela has the largest oil reserves, with 297.6 billion barrels. With freer trade, Australia sells easily its excess iron ore and Venezuela sells oil to other nations, and takes advantage of their material surplus to benefit their economy.
Organizations like Unilever, IKEA, IBM and Adobe have the most comprehensive corporate social responsibility programs.
