1.

0 INTRODUCTION

The reality of life, many people choose to be a businessman as a way to gain an
advantage and as a way to fulfill their daily needs. To becoming a successfull person, a
businessman must know how ethics in business. If the company has a good products quality
and useful for society because managed with proper management in the production, financial,
human resources and others, but do not have ethics that will be the cause of why a business
can fail. And what is business ethics ?

Ethics, sometimes known as philosophical ethics, ethical theory, moral theory, and
moral philosophy, is a branch of philosophy that involves systematizing, defending
and recommending concepts of right and wrong conduct, often addressing disputes of
moral diversity (Wikipedia)

A business, also known as an enterprise or a firm, is an organization involved in the
trade of goods, services, or both to consumers (Wikipedia).

And how shall we define business ethics ? A simple definition is easy enough. The
term is, just a combination of two very familiar words, namely business and ethics. Just
as we can talk about medical ethics as concerned with the morality of medical practice and
policies, or political ethics as concerned with morality of political affairs, so also can we talk
of something called business ethics as being peculiary concerned with moral issues in
business.
Business ethics is about rights and wrongs in the world of business. It is about
honesty, trust, respect, and fairness in all business dealings. Business ethics in the company is
a very important, it is to establish a good company and can be a high competitiveness , and
has the ability to create a high value. Business ethics usually starting from strategic planning,
good organization, the transparent procedures system is supported by reliable company
culture and company ethics are implemented consistently.
Basically the practice of business ethics will always be a profitable for a company,
because : able to reduce costs due to averted the possibility a friction of internal and external
companies, able to increase the motivation of workers, protect the principle of freedom of
trade , able to increase competitive advantage .
Inevitably, unethical actions by the company will provoke retaliation from consumers
and the public and will be counter- productive. This can reduce the value of sales and the
value of the company. While companies that uphold ethical values of business, in general
including companies that have high satisfaction ratings work as well, especially if the
company does not tolerate unethical. A businessman should understand that the qualified
employees are the most valuable asset for the company. Therefore, the company should have
to retain their employees as much as possible.
Business ethics in a study of; First, our moral standards insofar as these apply to
business. Second, how reasonable or unreasonable these moral standards we have absorbed
from society are. Lastly, the implications our moral standards have for business activities.
There are some kind of ethical issues of business ethics; First, Systemic ethical
questions about the social, political, legal, or economic systems within which companies
operate. Second, Corporate ethical question about a particular corporation and its policies,
culture, climate, impact, or actions. Lastly, Individual ethical questions about a particular
individuals decisions, behavior, or character. It is helpful when analyzing the ethical issues
raised by a concrete situation or case to sort out the issues in terms of whether. Often, the
world presents us with decisions that involve a large number of extremely complicated
interrelated kinds of issues that can cause confusion, unless the different kinds of issues are
first carefully sorted out and distinguished from each other. Moreover, the kinds of solutions
that are appropriate for dealing with systematic or corporate issues are not the same as the
kinds of solutions that are appropriate for dealing with individual issues. If a company is
trying to deal with a systemic issues then the issues must be dealt with on a systemic level;
that is, it must be dealt with through the coordinated actions of many different social groups.
On the other hands, corporate ethical issues can be solve only through corporate or company
solutions.
Development is happening in the developed and developing countries is economic
globalization. The distinctive feature of globalization is the development of economic
freedom, democracy or no longer attempt to protect the ecology. As a result of economic
freedom, the world is now experiencing a major transformation which in essence is a great
assault on all aspects of human life. In this global market, everything must be sold even those
parts of life which was originally considered sacred such as health and education, culture and
heritage, code of ethics and plant seeds, as well as natural resources, including air and water.
Economic globalization is essentially a long hand of the rise of liberal capitalism today is the
only way out to overcome the bottleneck of economic growth after the collapse
Developmentalism.
Technology consists of all those methods, processes, and tools that humans invent to
manipulate and control their environment. To an extent never before realized in history,
contemporary business and societies are being continuously and radically transformed by the
rapid evolution of new technologies that raise new ethical issues for business.
New technologies developed in the closing decades of the twentieth century and the
opening years of the twenty-first century are again transforming society and business and
creating the potential for new ethical problems. For most among this developments are the
revolutions in biotechnology and what is sometimes called information technology, including
not only the use of powerful and compact computers, but also the development of the
internet, wireless communication, digitalization, and numerous other technologies that have
enabled us to capture, manipulate, and move information in new and innovations ways. New
technologies raise new ethical issues for business; the agricultural and industrial revolutions
introduced new ethical issues, information technology raises new ethical issues related to
risk, privacy, and property rights, and nanotechnology and biotechnology raise new ethical
issues related to risk, and to the spread of dangerous products.
In business case we know about green business. What is a green business ? the
adjective green cover a multitude of virtues. To be green can mean responsible disposal of
industrial waste, affirming animal rights and saving endangered species, saving trees and
preserving the countryside, recycling, reducing or avoiding noise pollution, minimize the
greenhouse effect and damage to the ozone layer, conserving energy and employing
alternative source of energy and bunning nuclear power. Some would content that
vegetarianism form part of what it is mean to be green, while other protagonists wish to
include employee health and safety as part of a green programme.
Although the aim of being green may seem a loudable one, the apparent
comprehensiveness of green issues has weakness as well as strengths. It is difficult to see
what could not be included under this comprehensive umbrella. Literally everything is our
environment, and therefore everything we do affects it; we are always inside our environment
and can never go outside it, whatever what would mean.
It may seem difficult to relate environmental damage to sums of money, this ought
not to be beyond the wit of the accountant, who is quite familiar with cost benefit analysis
and with placing valuations on intangible assets. If it is possible for firms to assign values
to intangible assets, then it ought to be possible to attribute national figures to disbenefits
which are caused by the activities of certain.
For the green campaigner, of course, our responsibilities cannot be shed so easily. Our
obligations, they argue, must place respect for the environment above those of commercial
gain. Even if economic considerations prevented us from killing the last whale or felling the
last tree, it may be contended that we have duties to our environment and, espesilly, to
subsequents who ought not be the prived of resources, scenery or species simply because the
present generation has depleted the stocks.










































2.0 STUDY CASE

Lapindo Brantas Inc Mudflow

In concept development policies already incorporate environmental sustainability
factors as being absolute to be considered a mistake, but in its implementation policy
orientation that is reflected through the various laws related to natural resources. Rules are
make tend to optimize the use of natural resources without adequate protection, thus opening
space as possible for the owners of capital.
Weak implementation in the fields of law governing the conduct and supervision of
preservation occurs also in the environmental field. For example, the Environmental Impact
Assessment ( AMDAL ) and the General Spatial Plan (RUTR), implementation is only a
reactive policies and temporary or a policy that is a good concept, but the implementation is
not monitored continuously, weak in management control, tend to be consistent and
persistent. Something similar conveyed that the high damage of natural resources in
Indonesia because one of them is the number of sectoral policies and exploitative overlap in
the management of natural resources.
The impact of the exploitation of nature as a result of a mistake of implementation of
the development policy of the Indonesian people began to be felt in recent years. Various
disasters occur frequently occur, ranging from the disaster caused by the effects of natural
phenomena such as the tsunami in Aceh, landslides and floods in many areas until the
disaster that caused the human error factor in the attempt to exploit nature as Buyat case in
Sulawesi, in Freeport Papua up with who is now a national disaster that is the case of the
Lapindo mudflow in Sidoarjo, East Java.
Lapindo mudflow case is one example of the implementation of development policies
has been a shift in orientation, ie development policies tend to ignore environmental
sustainability factors. Or a policy that does not include environmental factors as being
absolute to be considered from the planning phase to the implementation phase. One example
is his unfulfilled environmental policies that should be taken into consideration before a
company gets permission to do business. Environmental policy considerations include: the
distance of houses with exploration location, standard operating procedures comply with
exploration techniques, and environmental sustainability for the future.
Broadly speaking, implementation, monitoring conservation and environmental
protection, among others, run the AMDAL law is a preventive procedure that provides a
thorough and detailed analysis of all the possible direct effects of the proposed project,
possible ways to overcome them and work plan manage, monitor and evaluate the impacts
caused and effective implementation of the work plan.
Lapindo Brantas Inc gas drilling contractor drilling through Medici Citra Nusantara
Inc which is an affiliated company of Bakrie Group. The contract was obtained Medici with
the tender of Lapindo Brantas Inc worth U.S. $ 24 million. But in the case of licensing
procedures have occurred at the misunderstandings that there are several levels of licenses
owned by Lapindo. Lapindo exploration concession granted by the central government in this
regard is the Oil and Gas Management Agency ( BP Migas ), while its concession license
granted by the Government of East Java, while approvals for activities issued by the Local
Government in Sidoarjo district that gives freedom to the Lapindo to conduct their activities
without realizing that the Spatial Plan ( RUTR ) Sidoarjo regency is not in accordance with
the plan of exploration and exploitation.
The impact of mudflows sourced from wells in the village Renokenongo, Porong,
Sidoarjo regency, East Java since May 29, 2006 This has resulted in a heap of mud mixed
with the gas as much as 7 million cubic meters, equivalent to a distance of 7,000 kilometers,
and this number will continue to grow when handling the mud flow is not seriously
addressed. Lapindo hot mud gas besides causing environmental damage, with average
temperatures reaching 60 degrees Celsius can also cause damage to the physical environment
of communities living around the mudflow. Writing above the physical environment is to
distinguish the natural environment and artificial environment, which in this case David
Silalahi consider this as the beginning of the crisis because of the human environment as well
as the perpetrators become victims. The destruction of the physical environment has been
perceived for various parties, there are :
1. Collapse of the industrial sector in Sidoarjo. Which is known as a buffer Sidoarjo East
Java, especially in Surabaya in the industrial sector. Until now 25 can not operate a
business sector which resulted in the loss of livelihood of thousands of employees
working in the industrial sector.
2. Collapse of the economic sector as a result of damage to terrestrial infrastructure such
as damaged roads, highways and other land such as economic track railroad etc.
3. Losses in other sectors such as agriculture, aquaculture etc. So far it has been
identified in the form of agricultural land area of rice fields were damaged, according
to the Director General of the Ministry of Agriculture Food Crops Sutarto Alimoeso
said agricultural area in Sidoarjo, East Java, which is exposed to the Lapindo
mudflow area of 417 hectares. Mud has inundated twelve villages in three districts, no
less than 10,426 units of houses submerged in mud, flooded public infrastructure,
stagnant About 30 factories were forced to suspend production and lay off thousands
of workers. Carrying 1,873 workers affected by the mud, and moving force of more
than 8,200 lives and displaced 25,000 people there.
4. The social impact of people's lives around as a means of shelter, education, health,
water supply etc. That the direct effect of mud causing respiratory tract infections and
skin irritation. Further explained that the sludge also contains carcinogens that
accumulate in the body when excessive can lead to cancer and excessive
accumulation in children will lead to reduced intelligence.
5. Laboratory test results also find that it contains Toxic and Hazardous Materials ie
content (B3) which already exceeds the threshold. The results of water quality testing
Lapindo mud on June 5, 2006 by the Public Works Department of East Java Province,
showed that laboratory testing of the water contained in phenol content. Direct contact
with the skin can cause skin itching like burnt and itch rash. Phenol can cause a
systemic effect or chronic effects if the phenol into the body through food. Systemic
effects of phenol can cause rupture of red blood cells ( hemolysis ), palpitations
(cardiac arrhythmia ), and renal impairment. This suggests that in addition to the
impact of physical environment, the mud also lead to other threats that are very
detrimental health effects in the future and this would not be known to the victim
community at large .

In a grammatical sense, corporate crime is a violation or criminal offense committed
by the corporation, which is certainly related to civil relationship, meaning that the
relationship that raises the criminal offense is a civil action. Drilling aimed at the mining
Brantas gas block by Lapindo Brantas Inc, According to the definition of corporate crime is a
criminal act, while the continued existence of the human error or human error and result in a
loss for others is a criminal act.
Human error made by Lapindo Brantas is not the installation of casing pipe in drilling
activity resulting in the disaster. Installation chasing ( casing ) is not done earlier by Lapindo
can be used as an omission of a corporation with the non-performance drilling safety
standards prior to implementation. Corporate crime corporate crime in question is the field of
the environment, which is the action of pollution and environmental destruction committed
by a corporation called Lapindo Brantas Incorporated. The impact caused by the presence of
such corporate actions detrimental not only materially, but also have adverse environmental
community Sidoarjo. Things like this can be regarded as a criminal act.
In the case of Lapindo found several violations of the law could be charged under
provisions in the legislation include environmental law (UULH), criminal law (KUHP) and
civil law (KUHPer). Up to this time that efforts in the response to the perceived impact of the
various sub-optimal compared to the damage that occurred. Until now, the real action of
Lapindo Brantas (Lapindo) as holders of exploration permits and exploitation in the Brantas
Block new limited indemnification against physical damage suffered by the citizens of the
affected areas. While efforts to stop the mud flow and the response to impact damage and
other environmental pollution as a result of the disaster has not been handled properly and
systematically. These events are certainly inviting the public to comment on the question
where and to what extent the location of Lapindo Brantas Inc accountability.
From the description above cases, it is known that negligence by Lapindo Brantas Inc
is a major cause of the overflow of hot mud in Sidoarjo, but instead argued Lapindo and
reluctant to take responsibility. When viewed from the side of business ethics, what is done
by Lapindo Brantas Inc has clearly been violated business ethics. Lapindo Brantas Inc has
done over exploitation and negligence to cause a major disaster which resulted in severe
damage to the environment and social .

Ethical view of the Lapindo mudflow

Large-scale exploitation by Lapindo Brantas Inc proves that is willing to justify any
means to gain an advantage . And reluctance Lapindo Brantas Inc is responsible for proving
that Lapindo Brantas Inc prefer to protect their assets than do the rescuers and improvements
over the social and environmental damage that they cause .
This is done by Lapindo Brantas Inc has violated the principle - ethical principles
exist. The principle of the right and deontology which emphasizes that every human being
has the right to environmental quality, but with the events of the mud, residents experienced
the impact of poor environmental quality. While the perspective of utilitarianism asserts that
the environment no longer be treated as an economic externality. If environmental impacts
are not taken into account in the cost benefits, this approach becomes unethical especially if
environmental damage imposed on others. However, in the case of Lapindo Brantas Inc
precisely extract resources in Sidoarjo to economic interests alone, and are less likely doing
maintenance on nature, as evidenced by operational cost savings on installation of chasing, so
menumbulkan great distress. Furthermore, the damage caused by such errors Porong impinge
on innocent citizens.
Business ethics on the principle of distributive justice is also violated by Lapindo
Brantas Inc, because the company does not do justice in terms of equality, the principle of
fair saving, and social justice Lapindo Brantas Inc was judged not to have concern for fell/
ow human beings or the environment, because it considers the event a natural disaster
which is then used as an excuse to escape liability company. With all the actions taken by the
Lapindo Brantas Inc is automatically also means virtue ethics has been violated.
It is proved that the business ethics held by a company will greatly affect the viability
of a company. And all kinds of business ethics waiver would threaten the security and
continuity of the company itself, the environment, natural, and social .


3.0 QUESTIONS

1. What are the systematic, corporate, and individual ethical issues raised by this case?
2. As a big company, why Lapindo Brantas Inc doesnt take responsibility for the
disaster is caused by their negligence as a gas company?
3. What the governments response to business ethics conducted by Lapindo Brantas
Inc?
4. Is there a possibility Lapindo Brantas Inc already cooperating with the government in
a negative context to not make this tragedy into law?
5. The condition of Lapindo Brantas Inc which is a source of livelihood and employment
of local people, especially residents in Sidorjo, East Java. What will happen to them
after this tragedy?
6. Does its incident could lead to rising unemployment and poverty in Sidoarjo?
7. How to evacuate local residents from the effects of Lapindo mudflow?
8. For the local government, what should they do with the disaster?
9. Whether ethical standards in the problem of Lapindo mudflow?
10. How responses Supreme Court related problem being faced by the Lapindo Brantas
Inc and Sidoarjos resident
11. How government to anticipate a similar incident which could possibly occur in
companies in the same field?
12. Who would be responsible for the accident of Lapindo mudflow? Is it Lapindo
Brantas Inc as a manager or the government as a provider as a business license?
13. As a injured residents, what should they do to sue Lapindo Brantas Inc as a manager?
14. As we know that this conditions was since 2006, is it possible to stop the disaster?
15. What is the most realistic way for local resident to faced this tragedy?













4.0 SUMMARY, COMMENT AND SUGGESTION
Summary

From the beginning of the Lapindo mudflow case is not conscientious workers
prior to drilling into the earth. Wherein the magnitude of the gas pressure in the bowels
of the earth is not proportional to the strength of drill pipe so that the gas find loopholes
to get out of pressure, and happen to land around drilling including soil class not hold
pressure so forth mud mixed gas of holes that are not supposed. From the above
description of the various cases of excessive environmental exploration conducted by
Lapindo Brantas Inc can be concluded that: According to Law Number 23 In 1997, the
environment is unity with all things space, power, state, and living creatures, including
human beings and their behavior, which affect the lives and welfare of human continuity
as well as other living creatures. The Lapindo Brantas Inc case has justified the means to
benefit greatly from their efforts. They do not want to be responsible for what happens to
Sidoarjo caused by the negligence of Lapindo Brantas Inc. Seen from the case of it has
committed a breach of ethics in business, because of negligence that resulted in a lot
done for a person who suffers a loss, such as damage to infrastructure and places where
people earn a living thus resulting in paralysis of the economy because Lapindo Brantas
Inc, Sidoarjos society is a source of livelihood of local people and probably many are
unemployed and led to increasing poverty. Another effect that is felt by the people is the
destruction of land transportation such as highways and railroads. The social aspects
surrounding communities is a matter of residence, education, health and water supply
already pollute their environment and the effects of sludge directly to their health are
respiratory tract infections and skin irritation. Sludge contains carcinogenic substances
that accumulate in the body if it can give rise to cancer cells and excessive accumulation
in children can lead to reduced levels of intelligence. Laboratory test results showed that
the content of toxic and hazardous gases already passed the threshold of normal and in
laboratory tests the waters there have a very high content of phenols. Direct contacts with
phenol can make the skin burn, burning and itching. Phenol could be systematic effects
and chronic effects if it enters the body through food. Systematic effect of phenol can
cause rupture of red blood cells (hemolytic) and palpitations (cardiac arrhythmia), and
renal impairment. This shows that the mud does not only affect the physical environment
but also the health of the communities are very disadvantaged in the future and this
would not be realized by the victims of the mud.

Comment an Suggestion

Advice from me as a writer is better for entrepreneurs business activities related
to the exploration of the natural environment must always be vigilant and do not justify
any means to make a profit so that it becomes redundant, as this will affect the balance of
the environment itself. If this continues it will cause damage to the environment and can
endanger people living around the exploration activities. And the government should not
just provide business licenses to all entrepreneurs, especially with regard to the lives of
many people. I see that the government has paid great possibility to launch an entire
business entrepreneurs to set up their business but it's very high risk. Moreover, should
Lapindo Brantas Inc employs a workforce skilled in the art and not arbitrary in recruiting
employees that do not lead to human error and negligence fatal work against the
company and the surrounding community. As well as indigenous communities should
contribute significantly to the company 's performance related because they will have a
direct impact on firm performance both in economic terms are positive they have a lot of
jobs and economic level and in terms of their increased and the negative effect that they
directly affected by a company that has removed the treasure objects and their own
health. So hopefully Lapindo mudlow events serve as a valuable experience that should
not be repeated again in the future for the benefit of all mankind on this earth.

5.0 APA DOCUMENTATION
Valesques, M. G. (2012). Business Ethic Concept and case. (7th ed). United States,
America : Pearson Education Inc.
Chryssides, G. D., & Kaler, J. H. (1993). An Introduction to Business Ethics. London,
United Kingdom : International Thomson Publishing Inc.
Donaldson, T., & Werhane, H. P. (1993). Ethical Issues in Business. (2nd ed). United
States, America : Prentice-Hall Inc.
http://kesmasuh.blogspot.com/2013/05/makalah-etika-bisnis-kasus-pt-lapindo.html