Agencies of development: TNCs 2
- Created by: hannah8
- Created on: 05-05-14 14:28
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- Why are TNCs able to act in unethical ways?
- Global economic influence
- Largest TNCs are more powerful than some developing countries
- Are able to put pressure on individual countries/IGOs
- E.g. World trade rules now allow TNCs to patent medicines/foods that should belong to developing countries
- This is bio-piracy
- Largest TNCs are more powerful than some developing countries
- Parent-subsidary relationship
- TNCs often operate through smaller companies
- When there is a court case, the smaller subsidary company is prosecuted
- The parent TNC is protected, both financially and reputation-wise
- E.g. Chains of clothes shops can claim to be unaware of child labour if they do not own the factories
- Regional economic influence
- TNCs hold power within particular countries and regions
- Can force/blackmail governments into overlooking what they do
- TNCs hold power within particular countries and regions
- Whose legal system?
- Where can a TNC be prosecuted?
- TNCs might break a law in their country of origin
- But there may not be a law in the developing country
- How and who to punish?
- Where TNCs/subsidaries are prosecuted for breaking regulations/laws, fines are tiny as proportions of profits
- The cost can simply be passed onto consumers
- Who, at what level in a TNC is responsible?
- If a chief executive resigns, they will be replaced by someone similar
- Where TNCs/subsidaries are prosecuted for breaking regulations/laws, fines are tiny as proportions of profits
- Global economic influence
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