The best option for the plant will closely align with the values TAPC established in the recently rebuilt mission statement.
Option 1 is to purchase electricity from the City of Sabah. The main benefit is a reliable supply of electricity at a low cost. This would lead to fewer shutdowns of the plant and increased profits. The plant would remain in the same location, so there are no job losses.
To continue to receive a low price for electricity, a charitable donation would have to be paid on behalf of a City official. Because the intent of the bribe is to retain business with the City at a lower cost than is available to other customers, it is illegal under the Foreign Corrupt Practices ...view middle of the document...
The co-generation plant provides more local jobs than the paper plant alone. This option provides predictable long term returns and increased equity which is the number one objective in the mission statement.
In Option 2, waste water from the power plant can be used for the paper dryers, but no other plans are proposed to decrease waste runoff into the local river. Coal burning as the source of energy for the electricity plant may have associated health risks to the employees. It would be ethically sound for TAPC to implement health and safety standards above those of the host country in alliance with human rights objectives in the mission statement.
Option 3, building a new plant, is the least costly because all of the capital is provided by an investment group, WIG. A new plant is built with efficient machinery that increases output and decreases labor and production costs. The new technology would address environmental concerns by recovering significant amounts of chemical and biological waste that is currently dumped into the river. WIG also has a patent for a new use of the recycled sludge.
In Option 3, TAPC loses decision making control of this new subsidiary. WIG is the new majority owner (51%) and TAPC cannot influence decisions regarding the future of the plant. Profits are allocated according to ownership, which decreases income potential for TAPC. An ethical dilemma also arises with Han Wei’s connections to City government through a local construction company. Electricity must be purchased through the City; Wei has connections to obtain a low rate. The specific connections are unknown, but potentially involve bribery or unscrupulous relationships with the government. It is against TAPC’s values to be involved in such unethical behavior, and also illegal.
Option 4 is to close the plant in favor of relocating to the US. Investment incentives in the US for creating jobs and implementing green technology make this option attractive. US...