‘Wicked problems’ and complex operating environments demand ethical skills

Nobel Laureate and former US Vice-President Al Gore recently toured Australia as part of a global whistle-stop in advance of December’s United Nations Conference on Climate Change. Delivering his updated message on 2006’s Academy Award winning An Inconvenient Truth, Gore emphasised that global warming remains an issue which will end catastrophically without immediate intervention. But new to this round of talks was a more optimistic outlook and presentation of probable solutions. In Climate Change and a Case for Hope, and in his parallel article in Rolling Stone, Mr Gore notes that the US has reduced its total energy intensity by 49 percent since 1980; that India has leapfrogged fossil fuel power in preference for solar for over 400 million Indians currently without electricity; and that China will be generating 70 gigawatts of photovoltaic power by 2017.  

I was privileged to be in the audience for Gore’s Melbourne visit. And his talk surely made me appreciate the imperative actions we must take as local and global societies to tackle climate change. But even more than this, his delivery got me thinking about how ethical issues are considered and attended to in the Australian resources industry. Because the way Gore presents it, climate change is an ethical issue. In public policy parlance, we call it a ‘wicked problem’. These issues represent ‘some of the most difficult problems of the modern era…complex, intractable, open-ended’, according to leading policy scholar, Professor Brian Head.

The contemporary resources industry is arguably rife with exceedingly difficult problems, only some of them truly wicked. But all of them demand nuanced, careful and determined consideration. Issues of environmental protection, conservation and rehabilitation; community relations; anti-corruption; operating in transnational environments with potentially low government capacities; human rights; economic imperatives; resettlements; indigenous land rights and cultural heritage all make the list of ethical dilemmas bearing major implications for the industry.  

The breadth of environmental and social issues linked to the global resources sector also relates to big questions about the role of corporations in contemporary society; and to companies’ capabilities to respond to the problems which face them. Globalisation sociologist Saskia Sassen, for example, raises the relationship between corporate leadership and public obligation, saying that ‘transnational institutions and regimes do signal a shift in authority from the public to the private when it comes to governing the global economy.’ Writing in the Harvard Business Review, Professor of Strategic Management John C. Camillus says that this global operating environment is now so complex, many companies cannot develop models to fully understand them nor do they have the planning techniques required to address them. Considering the ‘new political role of business’ and its implications for corporate social responsibilities, Swiss business scholars Andreas Scherer and Guido Palazzo write that the firms face widening remits in tandem with the rise of the post-nation state.

These processes are contributing to a greater politicisation of corporations, increased corporate contributions to public goods, reconsiderations of corporate governance and even a rethink about the traditional ‘theory of the firm’.

And how do these rather intellectual debates relate to the day-to-day resources company?

Because the complexity of problems within this unsettled environment places both greater responsibility on resources operations and influences an accretion of ethical concerns. This situation means that good ethical decision-making processes must be an integrated part of the successful operation. But what can resources companies do?  

Universal principles, local diversity and rational decision-making

There are, unsurprisingly, no easy answers. But research suggests there are three key issues we can consider when puzzling ethical ways to address very difficult or even wicked problems in the global resources sector: universal principles, local diversity and rational decision-making.

Ethicists have struggled and failed for centuries to define a checklist of universal ethical principles to inform decision-making. While such principles may be elusive or unrealistic, attempts to articulate them can offer helpful guidance, if not a strict solution. Principles like those of the International Council on Mining and Metals’ Sustainable Development Framework, the UN Global Compact or the Ruggie Principles for Business and Human Rights encourage consideration of a wider array of factors than might traditionally be included in corporate decision-making. In other words, such frameworks influence what firms consider important. This provides a good starting point but not the final word for ethical decision-making.

Business ethicists Campbell Jones, Rene Ten Bos and Martin Parker argue that universal principles encourage firms to deal with each dilemma on its merits. But they point out that companies must allow for incorporation of diverse social, cultural and political perspectives. Philosopher Emmanuel Levinas captured this idea in his notion of ‘the Other’; very simply, putting yourself in someone else’s shoes. In this way, ethics for the global mining sector necessitate a considered balance. They require appraisal of universal principles, like those set out in commonly adopted frameworks, tempered by expertise in local contexts and a prudent ability to discern how to weight and respond to each in any given dilemma.

The responsibility for global miners to understand and adopt ethical ways of thinking and doing poses a substantial challenge. In many ways, good ethical practice is accomplished through the very processes that make it difficult to define conclusively and universally or to systematise. This is partly why Lawrence Kohlberg’s theory of moral development—wherein individuals progress in their ability to consider the positions and concerns of others through experience and responsiveness, with those most developed appealing to universal justice—retains prominence in the teaching of business ethics. Questioning and experience lead managers to ‘cognitive sophistication’ of the type that facilitates ethical decision-making.

Such holistic considerations are well and good. But they presuppose a business environment that supports the often abstract rationality and reasoning required for ethically based decision-making. 

This is a critical consideration. Although the global resources sector might seem uncongenial to the abstract requirements of ethical reasoning, the industry is driven by a technical rationality and precision not dissimilar to the rational contemplation demanded by subjective and imprecise ethical dilemmas. While ethics cannot be equated with a wholly unfeeling rationalism—something deduced through an almost mathematical analysis—ethical decision-making does demand rational thought of a particular style. For example, such rationality requires the ability to view complex issues from varied perspectives and to evaluate the ‘moral intensity’ of the issue in question. Decision-makers must attempt to understand how individuals or groups in different positons rationalise their own ‘right’ answers. For philosopher John Rawls, the understanding necessary to inform ethical choices is possible solely behind the veil of ignorance, where impartiality is the only position. Or, as Weber suggested, rationalism ‘embraces a world of opposites’.

From climate change to community relations, the contemporary resources operation faces myriad ethical challenges. Yet many of these firms take for granted a rationalism required to run a successful mining operation which may be equally applicable to ethical deliberation. If aligned with universal principles, tempered with local values and open to the perspectives of others, ethical decision-making can be better integrated throughout resources operations.

This article originally appeared in the September 2015 issue of Australian Resources and Investment magazine.