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IC602 - Final_Essay

IC602 - Final_Essay - Ithaca Brazil Restaurant Foods Corp.s...

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Ithaca Brazil Restaurant & Foods Corp.’s decision to pursue the current opportunity for development, installation and operation of infrastructure in Developian should be made with full consideration of the implications of corporate social responsibility and international labor law and how they may bear upon the company. I will begin with an overview of the situation and our current CSR policy/strategy. This will be followed by a listing of the potential positive and negative aspects of the Green Growth Project in light of our CSR. Then make recommendations for winning and limiting potential liabilities if the decision is made to go forward. Overview: Developia gained independence from European colonial rule forty years ago. It is a poor, underdevelopment nation far below the levels of Mexico and Thailand. This developing nation has insignificant markets, infrastructure, technology, and governmental system. Most of the country sustains itself through agriculture and utilizing the resources of their tropical rainforest. The capital city does have an export processing zone (EPZ) with low wage t-shirt assembly factories that employs a few thousand natives. Child labor is found in both agriculture and manufacturing sectors, which is common in developing nations. The current leader of the government is President X, who was an originally popular/loved for his leadership in their struggle for liberation. But in the past decade President X has developed into an authoritarian ruler that uses strong-arm tactics against political opponents, turning Developia into a one party state. Even though independent unions are routinely suppressed, the country does have a national trade union federation, Developian Federation of Labor, which is supported by the Ministry of labor. Employers who establish a DFL union in their workplace receive favorable treatment from the Labor Ministry. Global outsourcing of our manufactured goods to lower cost developing nations is our current economic model to remain competitive in the global market. These lower costs are associated with the delivery of raw materials and component parts, power, labor, transportation and regulation. For example the low cost of labor in developing nations arises from the transition of labor from a very-low cost agricultural base into the manufacturing sector, combined with low added costs associated with worker safety and labor standards thought to be reasonable in the more developed world. Competition among developing nations for foreign investment in manufacturing facilities is fierce, as producers from the US, EU, Japan, Korea and the Asian Tigers have demonstrated a continuing willingness to migrate production to the lowest cost jurisdictions as may be required to meet severe cost-based competition in their home markets. Therefore domestic and foreign operators and governments in developing nations resist adoption of practices which will undermine low costs, unless and until the social and economic benefits become evident as a natural part of the nation’s eventual transition to a more developed nation. Indeed, some
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