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Business Ethics. Does corruption kill?

By: Karla Valdés

 

In this post we are going to discuss a topic that is very relevant – business ethics and its day to day use. I will specifically address the unfortunate event that occurred a few weeks ago on Line 12 of the CDMX metro, which deeply affected our society.

It is important to view the results of the ongoing investigation and expertise before reaching firm conclusions. The comments below are questions and reflections based on the limited information we have now. We still need much more evidence before assigning blame.

What was the objective of Metro Line 12?

To understand the objective better, I decided to listen to the inauguration speech of Line 12, also called the Bicentennial Golden Line, attended by politicians, businessmen and other very important Mexico City (CDMX) figures.

The main objectives of the line were to offer “Safety and Comfort” to CDMX passengers. In the opening video, it is mentioned that the project cost about 24 billion pesos, most of the resources were provided by the government of the then Federal District, another part from the Federal government, as well as by Deputies and Senators, especially from the party that was in power in the Federal District. It was also mentioned that about 7 delegations would be served by the line and the travel time would be reduced from 2:45 hours to 70 minutes and would transport more than 385,000 people a day. 

Regarding the technical construction, the project was complex as it covered more than 25 kilometers, passing through 9 different types of soil, the project also had an elevated section with prefabricated pieces to “accelerate” its construction, and a large part of the construction was underground.

Was ethics taken into account in the development of the project?

These types of large infrastructure projects that involve several million pesos are always on the lookout for corruption, according to the records, the proposal process for the project was transparent, it was assigned two large consortia, but some ethics questions arose:

  • Did the materials used meet the required quality standards?
  • Was the structure of the elevated section optimal for a city with seismic activity?
  • To speed up and reduce project costs, was it a better idea to build an elevated section than a tunnel?

These are questions that should have been asked from a business point of view, but all of them have an underlying ethical element as well. We are talking about the fact that the project was promised as a “safety” priority to the passengers, that is an important point to cover, not the speed of the project, nor the reduction of costs due to the raised section.

 

And what about the maintenance of Line 12?

As in any public or private project, it is essential to provide continuous maintenance, this relatively young construction project had severe visible structural damage, that even went viral in photos where the cracks and column gaps were apparent, and not only in this line, but in others as well.

According to statements by the Director of the Metro, the Sub-Directorate in charge of maintenance was not busy for a long time and she took over these functions. Regarding this, I ask the following questions, does an adjustment of a position and saving a salary imply  stopping the job functions? Did the companies hired for maintenance do their job? Who supervised their work?

Throughout the project there were several alerts and red flags raised, which no one paid attention to until the collapse of large structural columns that killed 25 people and left several injured and their families affected.

Mexico ranks 124 out of 180 in the international corruption index, the main root cause is impunity. Transparency International reported that between 2016 to 2019, none of the transnational corruption cases involving Mexican companies or officials were punished. The risk of impunity remains, after such cases were identified and not sanctioned by the authorities. 

I believe that if corruption kills, if crimes are not prosecuted and responsibilities are not met, it is essential that when doing any kind of business, the ethics, values, ​​and purpose of the project must always be taken into account. We are talking about business and decisions, people should avoid putting themselves in positions that represent a conflict of interests, which will not allow them to make the best decisions.

I hope this post provides you with something to reflect upon. Business ethics should be one of the pillars for decision-making, to fight corruption we need people in society and in decision making positions with values, integrity, and clear policies.

At Miranda Compliance we have certified and specialized professionals with experience in the areas of Ethics, Compliance and Corporate Integrity, if you need advice, we will be happy to assist you.

 

C O N T A C T

Miranda – Compliance

 

Karla Valdés Posada

Partner

karla.valdes@miranda-partners.com

Ernesto Gómez Gallardo

Partner

ernesto.gomez@miranda-partners.com  

 

References:

https://www.youtube.com/watch?v=RliGFOgMX8E

https://www.transparency.org/en/countries/mexico

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