QUESTION 2

Read the following case and answer the questions that follow.

You are a consultant and you have recently received an email from one of your clients, ABL

plc (a major mining company).

Dear Sir/Madam

ABL plc has an opportunity to mine for coal in a remote and sparsely populated area. The

mining process proposed in this instance would remove all vegetation from the land

concerned. After mining has finished, there will remain substantial lakes of poisonous water

which will remain toxic for a hundred years.

The mining process is profitable, given the current high world value of coal. However, if the

company were to reinstate the mined land, the process would be extremely unprofitable. The

company has received permission from the government to carry out the mining. The few local

residents are opposed to the mining.

As you know, our mission statement says that we will endeavour to make the maximum

possible profit for our shareholders while recognising our wider responsibility to society.

We are aware that our decision relating to the above coal mining opportunity could potentially

cause a conflict between our objectives.

Required:

a. Advise the management of ABL plc about the potential cause of conflict between the

companys objectives and how such conflicts can be dealt with. (10 marks)

b. Outline the ethical issues surrounding the proposed coal mining operations.[KM1] (10 marks)

[KM1]