Should business sometimes break the law?

Legal compliance 6 Comments

A recent case in which two American journalists were arrested in North Korea on charges of illegal entry earlier this year has prompted me to reflect upon the matter of whether indeed there are types of circumstances whereby businesses and their staff are actually doing the right thing from an ethical viewpoint if they purposefully engage in conduct is considered to be illegal within the jurisdiction in which they operate.

In brief, the two journalists concerned, Laura Ling and Euna Lee are said to have been working on a documentary relating to the trafficking of North Korean women across the border between North Korea and China when they were arrested by North Korean guards. They were sentenced on June 08 to twelve years of hard labor (read more about the case here)

It is indeed possible that the actions of the two did indeed represent a breach of North Korean law (there is some dispute about the facts of the case). But if that is indeed the case, this is because of the oppressive nature of North Korean law, not because of any lack of personal ethics on the part of either journalist.

Furthermore, in my view, the case illustrates the point that there may be an extremely limited range of circumstances whereby actions on the part of companies or their staff do not indeed represent a form of unethical conduct even if they result in a breach of regulations to which the organization concerned is subject.

 
Generally, companies and their staff must respect the law ..
In the vast majority of cases, the situation is clear-cut, and ethical considerations dictate full compliance with all applicable laws and regulations in every jurisdiction in which the company concerned operates.

Moreover, ethical considerations aside, I certainly would have thought that in the vast majority of circumstances, business case considerations dictate that companies observe complete respect for and full compliance with all relevant legal requirements. This is not only due to the desire to avoid any adverse reputational impact of run-ins with the law (not to mention fines and penalties), but also because of the ability of government officials at all levels to make life difficult for those who get on their wrong side.

 
.. but there are exceptions
But are there exceptions?

I would think so – especially concerning firms which operate in countries whose practices are repressive from a human rights perspective.

I could think of at least three examples:

 
• Media coverage.

The plight of those who suffer from war, famine, poverty or oppression should never be hidden from the broader global community, and I feel that media organizations do have a fundamental duty to raise worldwide awareness in cases where such conditions do indeed occur.

Such a duty extends to parts of the world where the law attempts to place unreasonable restrictions upon the activities of local and/or foreign media, whereby media organizations and journalists would be more than justified, in my viewpoint, in undertaking whatever forms of action which are reasonably necessary to report on the plight of the people, even if this necessitates a breach of some forms of legal restrictions in the country concerned.

(Naturally, media correspondents who enter countries illegally should do so only where absolutely necessary and should observe appropriate regard for their own personal safety at all times)

 
• Protection of individual privacy.

Firms which are required to sensitive information (such as contact details or information pertaining to patterns of online activity) with regard to individuals such as political activists or opponents, prominent religious leaders or prominent academics would, under certain circumstances, be more than justified in withholding such information this may constitute a breach of legal requirements.

This is particularly the case where there is a reasonable likelihood that the provision of such information will either: (a) place the safety of the individual concerned in unwarranted jeopardy; or (b) assist in any form of government attempt to crack down on any form of expression of political or religious freedom.

 
• Organization of labor unions.

This is one issue which relates more to the workers that businesses employ rather than businesses themselves. Nevertheless, since employees represent such a critical group of stakeholders (it’s hard to imagine businesses running without them), I feel that the formation of unions in countries where labor organizations are not legal is well worth a mention in this discussion.

The right of workers to organize themselves into unions is specifically recognized under the Universal Declaration of Human Rights as a basic form of human right. In countries where the abuse of employee rights represents a common practice, I would be more than supportive of any attempt by workers to organize some form of labor union, even in (and especially in) countries where labor organizations are prohibited.

 
Over to you
Can you think of any other cases whereby you think firms may be justified in refusing to act according to the law?

6 Responses to “Should business sometimes break the law?”

  1. Karen Swim Says:
    June 25th, 2009 at 1:55 am

    Hi Andrew, your points are excellent. I have followed the case of Laura Ling and Euna Lee very closely and have signed petitions and added my voice to their support. While the facts of this case are not yet clear, I agree there are instances when breaking the law is needed. However, in willingly doing so you must also be prepared to suffer the consequences. In the US civil rights activists willingly and defiantly went up against the law to bring about needed change in this country. They knew the risk and were willing to take it for the greater good. In the case of these journalists, I do not believe the punishment fits “the crime” and believe they deserve to be let go.

    Karen Swims last blog post..No Time For Fishing

  2. Fred H Schlegel Says:
    June 25th, 2009 at 12:43 pm

    Well thought out arguments Andrew. While it would always be preferable for organizations to act within the law, some regimes make that near impossible. (Maybe so they can always hold enforcement over the head of going concerns?) Journalists operate within especially difficult circumstances since by exposing truths they often enrage the organizations and individuals who they are up against. Then, even if acting within the law, rules are found to be broken in order to try and silence or humiliate the speaker. Very difficult circumstances to work under.

    Fred H Schlegels last blog post..Buffalo Bill, Eiffel, Otis and The Keys To Success

  3. Brad Shorr Says:
    June 25th, 2009 at 9:00 pm

    Hi Andrew, I think we have to make a distinction between moral law and civil law to make sense of these issues. When a country (e.g., North Korea) clearly violates moral law, we have an obligation to resist. That’s why I see the actions of Laura Ling and Euna Lee as being truly heroic. Yes, there will be disagreement as to what constitutes moral law, which is why there will probably never be totally clear cut answers.

    Brad Shorrs last blog post..The Branding Power of Search Engine Optimization

  4. Andrew Says:
    June 26th, 2009 at 7:07 am

    Karen,

    You would receive few disagreements about your last point.

    To be sure, I could certainly understand why any country would consider any form of breach of their entry related laws on the part of foreigners to be a serious issue. But even assuming that the two actually did enter the country (which they would have been ethically justified in doing if that’s what they had to do to properly cover the story), twelve years of hard labor is simply a ridiculous punishment.

    Fred,

    Agree with you there, journalists who operate in countries like Zimbabwe, North Korea and Myanmar deserve a medal.

    Brad,

    Very good point, and although there are some cases whereby moral law will not be clear, there are also cases where moral law is clear cut, and in regimes where civil law blatantly violates any form of decency, we do have an obligation to follow moral law as opposed to civil law.

    Andrews last blog post..Should business sometimes break the law?

  5. Ana Says:
    June 26th, 2009 at 12:41 pm

    The question is whether businesses (corporations, sole proprietorships, partnerships, LLCs, etc.) should sometimes break laws in other countries. In my opinion, this is singularly distinct from whether individuals have moral obligations to break certain foreign laws they believe are unethical. I would say the journalists in North Korea fall under the latter category so my answer excludes them.

    I believe that businesses as defined above should respect the laws of the countries in which they operate, even if they are considered unethical by the operating company. A law is a law. For example, a business may not agree with China’s laws, but if it is operating within their country, it must follow them.

    The danger lies in what is ethical and what is not. Let’s say a Saudi business comes to the US and decides that one of our laws is unethical and decides to disregard it. Is this okay? Perhaps in Saudi Arabia, everyone would agree that Law A is unethical, but everyone in the US would say it IS ethical. I think this is murky territory and opens a can of worms where businesses can decide which laws are okay and which are not.

    If a business cannot operate legally in a country, for whatever reason, then it should either not enter the country in the first place or remove operations altogether.

    Anas last blog post..Slow News Day at ALF?

  6. Andrew Says:
    June 26th, 2009 at 9:58 pm

    Anna,

    Thank you for your clear thinking in terms of drawing a distinction between illegal behavior on the part of business entities on ethical grounds as opposed to that on the part of individuals.

    I do agree that the distinction to which you refer is an important one in the context of this discussion, particularly as the question raised in this discussion relates primarily to the question of the conduct of business entities (as do the vast majority of discussions on this blog).

    With respect to the conduct of business entities, I can certainly see your point in terms of the ‘murky territory’ as you put it that we enter when business entities feel that it is OK not to observe certain requirements of the law simply on the basis of inconsistencies between the law and their world view. And of course, business entities who are not comfortable with certain legal aspects in certain countries can indeed refuse to operate in such countries.

    Nevertheless, I am inclined to (respectfully) disagree with your viewpoint in relation to this matter. I would think that there would be some circumstances (albeit an extremely limited range of circumstances) where business entities would be right, from an ethical viewpoint, in disregarding certain legal requirements, especially in cases like the second example that I mentioned, whereby there exists a very real prospect that compliance with requirements to provide sensitive information about individuals to government agencies may potentially place the physical safety of the individuals concerned in jeopardy.

    Andrews last blog post..Should business sometimes break the law?

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