Globalisation, Fdi, Regional Integration and Sustainable Development: Theory, Evidence and Policy by Anthony Bende-Nabende

Author:Anthony Bende-Nabende [Bende-Nabende, Anthony]
Language: eng
Format: epub
Tags: Political Science, General
ISBN: 9781351783910
Google: UloPEAAAQBAJ
Goodreads: 36872640
Publisher: Routledge
Published: 2017-10-05T00:00:00+00:00

FDI and Environmental Protection and Social Responsibility

Theoretical Review

Environmental protection The environment comprises the four gifts of nature: land, water, air and living organisms. The former three are basic necessities for the survival of all living things, be it animals or plants. Unsurprisingly then, environmental protection has of recent become a factor of interest to all nations, both developed and developing. No wonder, since the 1992 Earth Summit in Rio de Janeiro, heads of states nowadays gather together on an annual basis to discuss environmental issues.

It has become apparent that in the absence of appropriate action, economic growth can on the one hand be the key factor that downgrades the environment. On the other hand, economic development offers new opportunities for environmental protection by increasing and diffusing more advanced environmental technologies and management systems (UNCTAD, 1999). Although moral and regulatory imperatives were the traditional principle drivers of environmental responsibilities, non-government organisations (NGOs) have of recent played the dominant role. Through the NGOs’ vigilantism, national governments have come to realise the need to protect the environment, and not to treat environmental damage as part of a price paid for development as was the case traditionally. Consequently, other stakeholders have joined arms in addressing environmental issues. These include, consumer groups, local communities, shareholders of companies and even employees of companies. National governments have responded by increasing stringency in environmental regulation. Thus, it is becoming accepted that environmental protection and economic growth should be attained simultaneously, and both the public and private sectors are becoming increasingly active in addressing environmental issues.

This aside, environmental protection still remains a challenging issue most particularly in developing countries. For instance, policy makers in developing countries may be desperate to achieve projected economic growth rates and securing FDI, and in the process accept to undertake environmentally risky activities. In addition, investors may pursue a deliberate strategy of shifting the location of their pollution-intensive production in response to lax environmental standards. Likewise, the imported technology may be vintage and therefore, environmental-unfriendly. Alternatively, developing countries may simply lack the resources and technical expertise to inspect, monitor and enforce appropriate environmental legislation. In this case, TNCs can be called upon to bridge the resource gap.

TNCs have at their disposal strong strategic assets and capabilities. For instance, they have sufficient resources to research and apply new techniques of environmental management, and also new techniques of production. In addition, they have not only the experience of handling environmental problems, but also the ability to respond and adapt to change. Because most TNCs originate from the developed countries, the parent firms are already under considerable pressure to innovate environmental-friendly technology. Thus, even if their affiliates may be at liberty to use environmental-unfriendly least-cost strategies in developing countries, this can be reversed if the respective host governments demand for environmental-friendly technologies similar to those used by parent firms. Indeed, where there are commercial benefits to being environmental-friendly, the use of clean technology may spur domestic consumers to acquire such knowledge (UNCTAD, 1999). There is also a linkage component in environmental issues.

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