Ethics for Managers - May 2016

1. Table of Contents
Abstract.........................................................................................................2
1. Introduction............................................................................................2
2. Company Background – IJM Plantations ..............................................3
3. The Unethical Environmental Issues......................................................3
3.1 Loss of Biodiversity......................................................................................................... 4
3.1.1 Flora, Fauna and People............................................................................................ 4
3.2 Deforestation.................................................................................................................... 4
3.2.1 Local Communities Activities .................................................................................. 5
3.2.2 Land-use and Human Rights..................................................................................... 5
3.3 Impact to the Firm............................................................................................................ 6
3.3.1 Financial Impact........................................................................................................ 6
3.3.2 Reputation Damage................................................................................................... 6
4. Root Cause of the Problems....................................................................7
4.1 Laws, Policies and Regulation......................................................................................... 7
4.1.1 Customary Land Rights Violation ............................................................................ 7
4.1.2 Weak National Regulations ...................................................................................... 8
4.2 Lack of Environmental Impact Assessment (EIA) System.............................................. 8
4.3 Unethical Business Conducts - Corruption...................................................................... 9
5. Ethical Models......................................................................................10
5.1 Utilitarianism (Consequentialism) ................................................................................. 10
5.2 Deontological ................................................................................................................. 10
5.3 Virtue Ethics................................................................................................................... 11
6. Recommendation..................................................................................11
6.1 Protect Indigenous People Land Rights ......................................................................... 11
6.1.1 Benefits and Consequences..................................................................................... 12
6.2 Sustainable Palm Oil Development Concept ................................................................. 13
6.3 Fight against Corruption................................................................................................. 14
7. Conclusion............................................................................................16
References...................................................................................................17

BMEM5103 - Assignment Nor Helmee Bin Abd Halim
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Abstract
This report talks about the environmental issues committed by a well-known organization in the
palm oil industry. Subsequently, root causes of the issues are analyzed and based on the common
ethical models – utilitarianism (consequentialist) approach, deontological approach and virtue
ethics approach, recommendation on how the issue could be avoided in the future is presented.
1. Introduction
Environmental issues, damages and concerns are some of many global issues that have been widely
discussed and debated since decades ago. The issues and concerns are usually associated with air
pollution, climate change, river pollution, water quality, land-use change or any harmful human
activity that impacting the variety of life on earth or commonly referred to as biodiversity. In the
early 1970s, global warming was the main subject of discussion among environmentalist after
global temperatures have begun to rise. Prior to that, the temperature has been relatively constant
since 1945 (IPCC, 2016). Later, degradation of natural resources and all parts of biologically
diverse earth became the subject of international debate.
In Asia, particularly Malaysia and Indonesia, palm oil industry is one of the main
contributors of the national economic growth. Together, the two countries were the major
producers in the world contributing million tons of the commodity in yearly basis. Palm oil
plantation is deemed suitable to be planted in the lowland tropical rainforest, particularly peat
swamp area that supports the highest biodiversity of any terrestrial ecosystems and covered almost
all areas in Southeast Asia particularly Malaysia and Indonesia. While the commodity market is
increasingly growing, the industry carries a number of risks. This paper intends to reflect on these
risks by exploring the impacts and root cause of oil palm development activities in Malaysia and
Indonesia by IJM Plantations Berhad, a subsidiary of IJM Corporation Berhad. The impact of said
activities is on the natural resources with rich biodiversity, and at the same time it tarnishes the
image and reputation of the responsible company committing such an unethical activity.

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2. Company Background – IJM Plantations
IJM Corporation Berhad is one of Malaysia’s largest conglomerates with operations in
construction, property, minerals, infrastructure and plantations. The company is listed on Bursa
Malaysia in Kuala Lumpur. Under plantations business unit, the group is run by IJM Plantations
Berhad or “IJMP”. The parent company has 55.11 per cent shareholding of this group which is
also stock-exchange listed in Bursa Malaysia.
In 1985, the company engaged in cultivation of oil palm, selling crude palm oil, crude palm
kernel oil, palm kernel expeller, stone quarrying, cement production and provides plantations agro-
technical and advisory services. The company headquarters is in Sandakan and primarily operates
in Sabah. As reported in the annual report, the company currently has more than 11,000 employees.
The company has 11 plantations totaling 30,000 ha in which 87% is appear to be fully developed.
The company expanded its operation in Indonesia after the stagnation of new land expansion in
Sabah. The company holds majority stakes in nine plantations in Indonesia with a total of 50,000
land-bank. The plantations in Indonesia are still under development as 64% of the trees are
immature between 1 to 3 years (IJMP AR, 2015; AmResearch, 2015).
3. The Unethical Environmental Issues
Many researchers indicate that agricultural expansion activities are causing worldwide tropical
biodiversity loss (Foley et al., 2005; Green et al., 2005). For example, palm oil plantation
development causes major impact to the ecosystem of the forest, causes pollution, it is also
impacting the socio-economy of people living in the development area. In a research conducted
by Norwana et al. (2012) indicates the villagers affected by development are can no longer hunt
or collect wild fruits and they are forced to encroach on surrounding forest reserves for hunting
activities. Typically, any oil palm operators are directly and indirectly responsible for committing
this issue, however the most recent highlights were given to IJMP for the alleged environmental
damages particularly in East Kalimantan, Indonesia (Daily Express, 2015).

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3.1 Loss of Biodiversity
In essence, biodiversity boosts ecosystem productivity. Each living thing on earth has an important
role to play. Nevertheless, human activity in converting forests for oil palm plantations is causing
massive extinctions to this ecosystem (Wilcove & Koh, 2010) and the primary threat is due to
deforestation (Fitzherbert et al. 2008; Koh and Wilcove, 2008). The consequences of native forest
removal always associated with flora, fauna and indigenous people.
3.1.1 Flora, Fauna and People
There are more than 300,000 different animals found throughout of Borneo and Sumatra. One of
the endangered animal species is orangutan. The animal used to be the common icon in these areas,
but due to excessive deforestation for oil palm development, its habitat has been destroyed. In a
related article reported by Dailymail (2011), hundreds of orangutans were killed for food by
villagers in Borneo for survival. In addition, other endangered animals such as Sumatran Tiger,
Sumatran Rhinoceros, Sun Bear and Pygmy Elephant have been reported declining in numbers as
a result of oil palm development (Schoeman, 2015). All animals in the forests depend on each
other to ensure survival, the erosion of animal diversity causes imbalance ecosystem, and therefore
it is important to preserve the diversity in wildlife.
A larger number of plant species means a greater variety of crops which ensures natural
sustainability for all life forms. It provides a food source for the animals to maintain the ecosystem.
In another example, the indigenous communities have adapted their lifestyles to the forest
environment by using hundreds of products from the natural forest such as medicinal herbs, wild
fruits and rattan. Deforest for oil palm development impacted the availability of such products. As
a result, the indigenous people changed their lifestyle by purchasing such products instead of
sourcing it themselves (Norwana et al., 2012).
3.2 Deforestation
Palm oil development has been long associated with deforestation. Deforestation has been
recognized as one of the primary threats to biodiversity in tropical forests around the world.
According to Kricher (1997), deforestation results from activity such as cutting, clearing and

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removal of rainforest or related ecosystems into less bio-diverse ecosystem such as pasture,
cropland, or plantations. Norwana et al. (2012) highlighted the introduction of commercial oil palm
cultivation in Sabah primarily affected in fish stocks, loss of access to forest resources, and loss of
cropland. Every new development of plantation areas continues giving the same negative impact
to the biodiversity.
3.2.1 Local Communities Activities
Fishing – being the main livelihoods activity of the villagers, reduction in fish stocks has led to
substantial economic losses. The use of pesticides and herbicides in the palm oil plantations
polluted the rivers. River pollution affecting fish populations and thus reducing their household
income. As a result, the villagers have to venture further afield to coastal areas to fish (Norwana
et al., 2012).
Limited hunting activities – the loss of forest cover has led to decreasing hunting activities among
villagers. They now have to travel further and deeper into the forest hunting for wild boar and deer.
Commercial logging – while the organization enjoying the profits of commercial logging, the
logging activity affected the non-timber forest products such as wild fruits, rattan and traditional
herbs. As a result, the villagers have no longer access to natural forest resources to make a living
(Norwana et al., 2012).
3.2.2 Land-use and Human Rights
In a research conducted by Norwana et al. (2012) mentioned the villagers or the indigenous had
occupied the land area long before it was converted to oil palm. They have been practicing the
activities for livelihood as well as performing small-scale cultivation of predominantly rice for
household consumption. The villagers claim that most of the time, they were not informed about
the establishment of the plantation in their area. They were forced to give up their land to the firm
as they had no land titles.

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Without formal land titles, they have no rights to continue living in the area. As a result,
the villagers lost their cropland to the firm. Although the firm’s action is legal, but it has been
deemed unethical doing that to the villagers. The research also indicates resistance of the villagers
to the formal plantation employment as it would reduce their “independence” and time for their
household chores. In sum, the oil palm industry has also abuse the indigenous people rights in
many ways as mentioned.
As reported by (Daily Express, 2015), IJMP’s activity in converting natural forest has
resulted irreversible alteration of ecosystems and vegetation, with major consequence of
biodiversity loss due to deforestation and logging. The environmental degradation and human
rights violations mentioned above reflect how complex the impacts have been from the rapid
development of the palm oil industry in Malaysia and Indonesia. Consequently, the impact is also
felt by the company as they have to pay the price on certain actions imposed by its shareholders
and the stakeholders.
3.3 Impact to the Firm
There are at least two significant impacts from the unethical conducts by IJMP;
3.3.1 Financial Impact
IJMP, Genting Plantations Berhad and nine other companies have made major headlines in
newspapers and investment blogs and articles (Daily Express, 2015; Clean Malaysia, 2015;
Rainforest Foundation Norway; 2016; Salt, 2016) after Norway’s Government Pension Fund
Global (GPFG), the world’s largest sovereign wealth fund excluded the companies from its
investment portfolio. The main reason of the exclusion is mainly due to the risks of “severe
environmental damage” by IJMP and Genting Plantations Berhad at Indonesian palm oil
plantations. The immediate consequence is IJMP is no longer receives financial aids from GPFG.
3.3.2 Reputation Damage
Apart from the financial impact, IJMP’s integrity and ethical conduct have been questioned. In a
report produced by GPFG (2014), IJMP has been found clearing forest in the buffer zone outside

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the concession boundaries. The company also failed to provide any information on the location of
its concession, or on forest condition and biodiversity. IJMP is said failed to outline the steps taken
to reduce the loss of biodiversity and IJMP did not conduct any conservation assessment in which
the important action of reducing biodiversity loss due to deforestation. The company is also found
continuing conversion without implementing measures to preserve the ecosystem. IJMP also failed
to respond when GPFG asked about its operations. Such public revelation has tarnished the image
and reputation of IJMP and it has jeopardized the company future endeavors in the industry.
4. Root Cause of the Problems
The root cause of the issues can be viewed from different perspectives such as laws, policies and
regulations, lack of an environment impact assessment system, and corruption.
4.1 Laws, Policies and Regulation
There are a few common areas of interests in this manner;
4.1.1 Customary Land Rights Violation
The customary land rights violation has always been the primary discussion in this weak area.
According to Schoeman (2015), there are over two million indigenous people in Malaysia, and
Indonesia has somewhere between sixty to ninety million people, and many of whom live in or
near tropical forests that rely on these forests for livelihoods. Government and Malaysian courts
have different opinion on these people’s land rights which resulting more customary land rights
have been converted to state forests. Once it is within state jurisdiction, the land is converted into
private concessions for development.
The weak recognition of customary land rights allows government agencies to develop
indigenous lands to palm oil plantations. As timber can be sold to subsidize the initial costs of
planting and maintaining palm oil plantations, the firm started with slash-and-burn as the
traditional approach of logging. The remaining land is then cleared by burning, which then
contribute to greenhouse gas emissions that increase global warming. The deforestation activity is

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to make way for palm oil plantations in which a lot of environmental damage is done in between
the process (Norwana, 2012; Schoeman, 2015). The palm oil development can be done in a
controlled environment and environmental damage can be minimized if standard rules and
regulations of new land acquisition and opening new development areas is in place and enforced
by the authorities.
4.1.2 Weak National Regulations
In 2004, a group of stakeholders formed the Roundtable on Sustainable Palm Oil or “RSPO”. The
organization is intended to “develop standards that are meant to make an entire commodity chain
more sustainable (Schouten et. al, 2012), and the RSPO seeks to accomplish this by advocating a
balanced, multi-stakeholder approach, with considerable emphasis on environmental
sustainability. According to RSPO (2015), the vision of the RSPO is to transform markets to make
sustainable palm oil the norm. The organization will certify companies that are compliant with the
requirements and allows them to label their products as containing sustainable palm oil. Examples
of the requirements include conducting environmental impact assessment, implementing
mitigation measures, or having appropriate wastewater management systems (RSPO, 2015).
Nevertheless, (Schoeman, 2012) highlighted some institutional weaknesses which have
prevented the vision and transformation of the RSPO. The significant weakness is the RSPO is
already dominated by industry members. As such, it is more difficult for environmental groups to
pursue their interests as the industry members are unlikely to support the rigorous standards to
keep their operating costs lower. Another weakness is the RSPO has not actually banned
deforestation, but only urged against such practices (Schoeman, 2012). This is the case for IJMP
where the company is yet to be RSPO certified (GPFG, 2014) but continue business as usual
without risking serious consequences.
4.2 Lack of Environmental Impact Assessment (EIA) System
In 2009, the Government of Indonesia imposed a new environmental law that puts a greater
restrictions on industry and harsher penalties for noncompliance. All palm oil companies, must
conduct environmental-impact assessment and obtain a permit as a precondition to securing other

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business permits. Part of the law entails that companies must set up a fund that may be used for
environmental rehabilitation and recovery (Schoeman, 2012).
The companies that are likely to have significant environmental impacts or are already
suspected of noncompliance must conduct periodic environmental audits. However, according to
the findings of Schoeman (2012), lack of enforcement, such as discrepancies and loopholes in the
system, the companies have seen taken the law for granted. It was highlighted in GPFG (2014)
report that IJMP has nothing in place when asked to produce their impact assessment procedures.
While in another research conducted by Varkkey (2013) found that some Malaysian palm oil
operators are “almost untouchable” due to its close relationship with Malaysian Government, as a
result these companies continue its business despite being noncompliance to the impact assessment
policy.
4.3 Unethical Business Conducts - Corruption
Fitzherbert et. al (2008) argue that ambiguities in the land tenure, corruption, bribes and combined
with increased regional autonomy in Indonesia have made it easier for palm oil operators to obtain
permission to clear millions of hectares of forest under the name of plantation establishment.
Schoeman (2012) mentions that decentralization of authority increases corruption in giving out
logging and palm oil plantation permits or license in Indonesia.
Local officials often do not share information on logging and palm oil permits, resulting more
deforestation which including in the protected areas. Foe, (2005), reported approximately 270,000
hectares in six provinces had been excised from protected forest for palm oil project without the
approval of the ministry. Another factor that leads to corruption is because the country is trying to
reach a palm oil production output of forty million tons per year by 2020. Although there is no
evidence of Malaysian company's involvement in such activities, corruption is known to be one of
the contributory factors to the unethical environmental damage.

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5. Ethical Models
Treviño and Nelson. (2014) the authors of “Managing Business Ethics – Straight Talk about How
to Do It Right”, discuss three major ethics theories - utilitarianism, deontological and virtue ethics
that specify and justify moral rules, principles and integrity. In short, utilitarianism is the principle
of the best ethical decision to be taken that has the best benefits of a greater number of people,
while deontology focus on duties, obligations and principles rather than the outcome. Virtue ethics
approach focuses on the integrity of the moral actor than the act which is the decision or behavior.
Nevertheless, ethical decision making in business is not always straight forward as there is
dilemma or ethical dilemmas in between the process in which two or more “right” values are in
conflict. The approaches discussed and used in the given theories will assist in making the
appropriate decision through this tough ethical dilemmas.
5.1 Utilitarianism (Consequentialism)
Utilitarianism is also called consequentialist theory focuses attention on the results or
consequences of the decision or action. The theory is based on the principle of utility where an
ethical decision would maximize benefits to society and minimize harm. The ultimate goal is the
good consequences over bad for society overall.
A utilitarian would approach an ethical dilemma by systematically identifying a particular
situation of stakeholders as well as the alternative actions and their consequences for each.
Consequentialist approach usually conducts consequentialist analysis in a table format to weigh
each stakeholders’ impact or consequences (harm of benefits). This approach can be practical and
helpful in thinking through an ethical dilemma, however, this approach often difficult to obtain
information required to evaluate the consequences for all stakeholders who may have impacted by
an action or decision.
5.2 Deontological
The word “deontological” comes from the Greek “Deon”, meaning “duty”. Deontological
approach, focus on the duties, obligations or process rather than the consequences. According to
Treviño and Nelson. (2014), the moral principles are predetermined regardless of the impact,

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which means deontologist focuses on doing what is “right” based on moral principles or values.
On the other hand, consequentialist focuses on doing and providing the best for others in the
society. In a real life example where a deontologist auditor would insists, telling the truth about
the company’s current financial difficulties in which will cause the company to be out of the
business and employees out of a job. In contrast, consequentialist would be more willing to
compromise the truth and defer the announcement so that the company could take corrective action
to be back on course.
The challenge in the deontological approach is how to determine what rule, principle or
right to follow. Deontologist would rely on three ethical rules in making a business decision, the
ethical rules include 1) Kant’s categorical imperative, 2) Rawl’s veil of ignorance – for deciding
what’s fair and, 3) Golden Rule – treat others as you would have them treat you.
5.3 Virtue Ethics
Lastly, the virtue ethic approach focuses more on the integrity of the moral actor which is the
person than on the moral act itself which is the decision or behavior. The goal is to be a good
person as that is what everybody wishes for. A virtue ethics perspective considers the actor’s
character, motivations and the approach is particularly useful for individuals, who work within a
professional community that has developed high standards of ethical conduct for community
members for example, lawyers, accountants, physicians, and psychologists.
6. Recommendation
Based on the above discussion about the unethical environmental damage, possible root causes of
the issues, the impact of the firm, and brief discussion of the three main ethical theories, the
recommended solutions for the problems are;
6.1 Protect Indigenous People Land Rights
As highlighted earlier, customary land rights violation of the indigenous people has been the main
discussion among environmentalist and other interested party in palm oil development. The land

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of the indigenous people has been acquired easily and converted to palm oil plantation areas. The
land of the peoples must be protected and preserved. Any development in this area must be
restricted. The unethical environmental damage begins soon after land acquisition. It starts with
land clearing, logging and pollution. The damage is uncontrollable due to the size of the
development area. Therefore, through national law or human rights law, the customary land rights
for these people must be protected and preserved for many reasons.
The suitable ethical model for this suggestion is utilitarianism. There are many stakeholders
are involved in the process such as 1) the indigenous people, 2) the palm oil operators, 3) the
government 4) the importers, and 5) the workers of the palm oil operators.
6.1.1 Benefits and Consequences
The benefits and consequences of this suggestion for the stakeholders are;
The indigenous people - this group of people will enjoy the benefits most, as their land will be
protected. As mentioned, deforestation has degraded their quality of life as they are not able to
continue their normal chores like before. Activities like fishing, hunting will continue as usual and
access to natural resource will be secured. As mentioned by Schoeman (2012), the indigenous had
to change their lifestyle by purchasing items like fish and wild fruits instead of sourcing it out
themselves.
With land use regulations become stricter, the negative consequences are likely to;
The palm oil operators – the operators are not able to expand their business to new plantation
areas. The operators will suffer financial loss and may have to cease operations or venture new
businesses.
The government – Similar to the palm oil operators, the government will not able generate income
for the country and will not able to achieve the vision of achieving palm oil yielding rate of six
tons per hectares by 2020 (Alang Mahat, 2012).

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The palm oil importers – China and India are the major importers of Malaysian palm oil (Alang
Mahat 2012; Schoeman, 2012), lack of palm oil production from Malaysia will divert these
importers to other neighboring country like Indonesia.
The workers – Due to cheap labor and other reasons, the operators invested in foreign workers,
mostly Indonesian to work on their palm oil plantations. These workers will be out of a job and
the skills they have learned while working in Malaysia will be brought back to their home country.
Malaysia is on the losing side while Indonesia re-hire them to work for their local operators (Alang
Mahat, 2012; Schoeman, 2012).
Although the decision will have greater impact to many stakeholders, the ultimate reason
implementing or strengthening the rule is to protect the indigenous people and its land. It will
improve the socio-economy of these people as well as to protect the environment and natural forest
from improper deforestation planning. The consequences can be further refined and reduced by
implementing the second recommendation, as below;
6.2 Sustainable Palm Oil Development Concept
Sustainable development can be defined and interpreted in many ways, but its main objective is to
balance between the needs and awareness of the environment, social and economic limitations of
the nation (Alang Mahat, 2012). In other words, it is an approach to oil palm development that
aims to produce palm oil without causing deforestation and biodiversity loss. Part of the
sustainable palm oil development concept is the introduction of Roundtable on Sustainable Palm
Oil (RSPO) in 2004. One of the initiatives of this organization is the introduction of RSPO
certification for all industry players (Schouten et. al, 2012; RSPO, 2015). As discussed, this
concept is not fully embraced by many industry players yet, in fact, many loopholes were found
and industry players have taken advantage of the weaknesses to continue business as usual without
worrying to be penalized. As such, it is imperative for the organization to improve the current
initiative for a better industry standards and the environment is well protected.
Deontological is the most appropriate ethical model for this suggestion. Environmentalist,
public and other stakeholders found there is a sense of urgency to improve the industry standards.

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Using the RSPO certification as an example, all operators must obtain the certification prior
continuing its palm oil development activity.
RSPO standards are not to ban deforestation or refraining palm oil operators from opening new
plantation area, but urging the RSPO members (industry players) to be compliance with the
guidelines. For instance, operators must conduct impact assessments before de-forest and have a
proper planning of restoration (Norwana; 2012, Schoeman; 2012). There are a lot benefits of being
compliance with the industry standards. The natural resources of the forest, flora and fauna,
indigenous people and the public will enjoy the most of the benefits. For example, the industry
standards do not condone open-burning activity after land-clearing. Open-burning increases
greenhouse gas emissions that lead to global warming. The entire world will enjoy a healthier
environment if the operators follow the industry standards.
However, being compliance comes with a price. For example, RSPO certification is very
costly (Schoeman, 2012), consequently, not many operators are able to invest in obtaining the
certification. IJMP for example, has yet to obtain RSPO certification (GPFG, 2014), although the
company has been operating its palm oil business in Indonesia for many years. Although there is
no indication that cost is the reason for IJMP not being certified, small-scale operators may use
cost as a reason for non-compliance. On the other hand, findings from many research (Colbran,
2011; Schoeman, 2012; Alang Mahat, highlight corruption as one of the consequences of a tighter
policy. The operators chose the unethical manner by committing bribery to keep on its operations.
6.3 Fight against Corruption
Rapid expansion of palm oil industry is caused by the high demand of vegetable oil in the global
markets. Palm oil has become the most important source of vegetable oils due to its advantages
over other oilseed crops such as trans-fat-free edible oil that protect a person from some chronic
diseases as well as delay the ageing process (Alang Mahat, 2012). Due to its popularity and
demand, operators are competing with other operators for expansion of their plantation areas. As
highlighted by Schoeman, (2012), due to lack of control and transparency in the decentralization

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process of giving out plantations permits, it introduced another ethical issue – corruption. Foe,
(2005) suggested bribery is a common activity in Indonesia for illegal expansion of oil palm
plantation and excess of the legally permitted plantation areas. When they are detected, the
authorities are not taking any action as the authorities have been “bought”. As a result, forests are
lost and operators are free to indulge more illegal activities such as open-burning or simply left the
plantation areas undeveloped after illegal land-clearing or illegal logging. This unethical activity
causes many issues and the government or the ministry must revisit the current practices to curb
corruption.
As corruption and bribery are deemed to be a serious offend and unethical, virtue ethics is
the appropriate model to be used. In this particular issue, the authorities, government or the
minister himself must possess a high level of integrity in curbing the issue.
There are many benefits from fighting the corruption issue. The indigenous people will be
benefited more as their land is protected from illegal expansion of oil palm plantation. A
transparent process in giving out permits and license will impose fair competition among operators
acquiring for an expansion of new palm oil plantation areas. The authorities or government will
also generate stable income from licensing fees as well as tax structure (Foe, 2005) as tax is
calculated based on the plantations land size. Another benefit is by having a clean and transparent
process will facilitate the success of the second recommendation on sustainable palm oil
development concept. It is nearly impossible to have a congruent sustainable palm oil development
without having a clean administration process in place.
While the consequences for having a clean process may sound too flashy as the impact for
an organization with “close” relationship with the government (Varkkey, 2013) may no longer
enjoy the special privilege after fair competition is in place. Regardless of its reputation, the
operators must follow the intended process like any other operators. The other possible impact for
operators being caught committing unethical conduct may face stern action from the authorities
such as operating license is revoked as well as receive negative perception from the shareholders

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about the organization. The closest example is when GPFG (2014) dropped its investment link
with IJMP.
7. Conclusion
In essence, environmental conservation is paramount activity to preserve the natural resources of
the forests. It has been highly debated that organizations from agriculture sector have been the
major contributors to environmental damages. According to ethical theory of utilitarianism, if the
end results justify the activities implied in the ethical decision making process, and therefore the
determination is considered accepted by all stakeholders. Consequentialist will analyze all possible
consequences to justify the final ethical business decision. Being utilitarian or consequentialist
decision maker enables them to provide detailed explanation of why such decision is made. While
the deontologist decision maker is based on predetermined moral principles. The example given
on building sustainable palm oil development illustrates how deontologist works – process
orientation. Virtue ethics decision maker on the other hand, focuses on integrity. In the presented
example, bribery is deemed to be unethical and the decision is to completely put out the unethical
conduct. In sum, when confronted with ethical dilemmas, the three common ethics models provide
a list of choices before a final decision is made.
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