European Court of Justice

The court system is argued to play an important role in the protection of citizens against state in a liberal democracy. This is basically by protecting the people against unjust legislatures enacted by the executives, legislatures or any other, political institution. The acts which are annulled by the judicial system are those which conflict with the statutory or constitutional legal order of the society (Carrubba, Gabel & Hankla, 2008).

While the court has the important role in protecting the people, this role is not always effective as suggested by Carrubba, Gabel & Hankla (2008). This is based on the argument that the exercise of the power by the courts is always dependent on more than the de jure rules which specify the jurisdiction and function of the court. For instance, it has been found possible for the court to comprise its ruling to accommodate the interests of the executive or legislative institutions. This is basically because they have to defend the interests of those who are responsible for their promotion, term of employment and service, and assignment of judges or the allocation of budgets and resources of the court. Carrubba, Gabel & Hankla (2008) look at the two main constraining factors that affect judicial review in democracies. In implementing their rulings, courts depend on executive institutions and the legislature. As a result, when the case to be heard by the court involves the individuals, who control the executive and legislative institutions, the implementation can be threatened by these interests. This disruption can come in two main forms: the ruling of the court can be threatened by legislatures by developing new legislations, and court rulings can be obstructed, ignored or misapplied by executives.

However, as posited by Burley & Mattli (1993) all is not lost for the legal system. This means that while the legal systems of individual countries are constrained by the legislative and executive, there is a remedy in legal integration where nations are integrated as is the case in Europe. With the integration of nations, as in the European Community, there is a possibility of development of an integrated legal system, such as the European Court of Justice. The Court of Justice is established with the mandate of interpreting the European Union law to ensure that it is applied uniformly in all the member states of the European Union. This court is also established with the aim of settling disputes between European Union governments as well as European Union institutions. Individuals, companies or organisations are also able to bring their disputes before this court in case there is a feeling of infringement of rights by a European Union institution. The integration of the legal system therefore addresses the limitation of the legal system suggested by Carrubba, Gabel & Hankla (2008) in individual countries.

The European law, as enacted by the European Court of Justice, is argued to have a direct effect on national jurisdictions. This is the case even where the law is not enacted in the domestic laws of the said nation. The European law also has supremacy over contradictory domestic laws. The court of justice in Europe is mandated to oversee the interactions between member states as well as to oversee the behavior of governments in individual states (Garret, 1995). As a result, the room for national governments to have direct control over the working and judgments of the courts is denied. Some of the cases which are brought to the European court of justice are references from the national courts. They are brought in either for preliminary ruling or for direct actions. Preliminary rulings by the European Court of Justice emanate from requirements by then national courts of member nations for the European Court of Justice ‘to give preliminary rulings concerning’ either (a) ‘the interpretation of [the] Treaty’; or ‘(b) the validity and interpretation of acts of the institutions of the Community’ (Article 267 TFEU). This means that the European Court of justice has the role of providing uniform as well as authoritative interpretations of both primary and secondary Community law. On the other hand, direct actions refer to those cases that are normally brought to the European Court of justice by the Commission against different various Member nations which have failed to accomplish their obligation under Community law (Article 258 TFEU). They can also be brought to court by persons seeking to challenge legitimacy of European Union law which affects them (Martinico, 2012).

In conclusion, it is possible, and has happened before, that courts in individual democracies are constrained by executive and legislative institutions in their operations. This is done in the efforts to protect the interests of the players in these institutions as the operations of the courts benefit a lot from them. However, in an environment such as the European Community, where there is a high level of integration, the traditional constraints to the legal system are overcome. This is through the integration of the legal system which denies individual nations a chance to abuse their legal systems.


Burley, A. & Mattli, W. (1993). Europe before the Court: A Political Theory of Legal

Integration, International Organization, 47(1), 41-76

Carrubba, C.J., Gabel, M. & Hankla, C. (2008). Judicial Behavior under Political Constraints:

Evidence from the European Court of Justice, American Political Science Review 104(2) 435-252

Garrett, G. (1995). The Politics of Legal Integration in the European Union, International

Organization, 49(1), 171-181

Martinico, G. (2012). Chasing the European Court of Justice: On Some (Political) Attempts to

Hijack the European Integration Process. International Community Law Review, 14(3), 243-272


Introduction and summary

Economic development remains a priority for countries worldwide. The urgency to establish strong economic foundations has led to countries getting involved in trade organizations meant to provide wider and satisfactory participation economically. Majority of these organizations are based on treaties that encourage trade among members in what economists refer to as economic cooperation. The understanding among countries that no country is strong alone, and that can stand in self reliance remains a pillar behind these trade organizations. In such trade blocks, countries are able to export what they produce to member countries and place priorities on importing what the lack, first from member countries before considering outside sources (Bown, 2005). Disputes in such organizations occur from time to time. This may result from broken agreements or market sabotage.

The texts in reference address countries cooperation with the world trade organizations, disputes among the member states and possible avenues towards amicable and peaceful dispute resolution. The WTO as a global organization draws its members from a mixture of world economies. The countries are listed from the underperforming/ weak economies, developing economies and the developed. Disputes among member states vary as per trade they are involved. Large economies are more involved in trade disputes than the poor states. Developed nations control large trade activities and other factors. Legalization is the main approach discussed in the texts as a successful disputes resolution procedure. This includes formulation an independent judicial system that would replace the conventional state-to-state diplomacy. The judicial system would provide a procedure through which member countries are subjected to a neutral frame work of resolution. This approach would be similar to the current procure though providing fewer loopholes of state-to-state negotiation (Sattler & Bernauer, 2011). The assumption in such a setting is that weak countries would be given an equal chance to economic justice as their developed partners, and increased confidence to participate in the process.


However, critical analysis to the current and the proposed settings of dispute resolution exposes an-addressed issues that remain a hindrance. Procedures that aim at power limitations rather than judicial and economical limitations are founded on the assumption that all countries would adhere to such measures. Limiting already powerful states to some restrictions is not practical especially when addressing economic issues. Trade is not limited to member states alone, and no accountability is required from a member nation regarding its trade with non-members. Formulation of economic policies that would assist weak economies to ascend to same levels in trade as the developed nations would be key to;

  • Winning the respect of member states and second, raising their confidence to move ahead and

  • Initiate a dispute resolution process when they are offended.

The texts fail to address the key factors resulting to weaker states avoiding to initiating such processes. The majority of the complainants, as well as the defendants, are the developed states. Majority of these countries are capable of initiating new trade avenues even when WTOs judgments are against them. Their economic might, unlike the weaker countries that are afraid of losing economically, enables them to pursue other avenues (Sattler & Bernauer, 2011).

Any procedure that the WTO seeks to apply should focus on addressing the issues of concern among states. The formulation should be aligned towards four main concerns;

  • Expected benefits of any formal participation by member states

Any state, before getting involved in a legal process seeks to understand the expectations of a positive outcome. In designing the process, factors such as long term and short term benefits of getting involved in a process should be framed in a manner that encourages states to participate (Dunlop, 1984). It should aim at reducing the ignorance of developed countries, which result to economical intimidation if they feel they can access the disputed product from another member. In such a scenario, a weaker complainant would prefer not initiating the process than risk losing economically. A judicial system does not out rightly assure this as it does not restrict trade with other members.

  • Capacity to absorb litigation costs

Each litigation process, with it, comes costs that each participating country needs to meet. When it is a legal process, a country would need observers to monitor and identify the defendant’s trade involvements. These observers are a cost to the complainant and ones a country feels its lack to accommodate such costs, it withdraws from such processes. A resolution process should provide avenues by which weaker economies are supported in a litigation process. A process should guarantee economic assurance of a participating nation with limited costs involved (Bown, 2005).

  • The likelihood of success in a dispute process

The dispute approach within the WTO is such that it provides both avenues; for bi-lateral negotiations within states and a formal dispute settlement panel (Sattler & Bernauer, 2011). The other option, apart from the WTO approaches, is the legalization the process to enable equal participation. However, all the process is prone to external forces, most of which are oppressive against poor members. A poor nation would consider its chances low, compared to developed nations. Blackmail and sanctions are some of the tactics employed by the large economies to pressure poor nations to withdraw complaints. Due to the self-enforcing nature of WTO system, the chances of such a nation succeeding are low and would prefer non-participation at all than risk extra measure and possible retaliations.

  • Political and economic costs

The main challenge facing the disputes resolution system within WTO members is political influence differences. The delegate representation is different among members, with some enjoying larger representation than others. The assumption that a legal structure would provide a fair approach is assumptive. Before such an approach is implemented, equality among state should be sought. There lacks a formulation on how the legal panel to be involved in the process would be selected. How would their selection not be influenced by the massive representation enjoyed by some states? How would the progressive judgments not favor the nations they feel would safeguard their work? These are some of the issues the texts fail to address and expound.


The processes employed by the WTO should seek to provide results that are over the gravitational forces, discrimination powers and capacity biases. They should be formulated to handle factors that restrict justice such as delegate representation, intimidation and retaliations. Economic empowerment of poor countries rather than power limitations on developed nations should be considered to build confidence of involvement.


Bown, C. (2005). Participation in WTO Dispute Settlement: Complainants, Intrested Parties and

Riders. Oxford: Oxford University Press.

Dunlop, J. T. (1984). Dispute Resolution: Negotiation and Consensus Building. Greenwood:

Greenwood Publishing Group.

SATTLER, T. B. (2011). Gravitation or discrimination? Determinants of litigation in the.

Dublin: University College Dublin.

Compare and Contrast Neoliberal Institutionalist and Constructivist Approaches to International Organizations


The challenges of this present time would not have been conquered without the assistance of international organizations. International organizations are critical in ensuring that stability and harmony continue internationally (Jackson &Sorensen 166). Furthermore, these organizations ensure that the actions of the relevant parties ought to be in accordance with the international community’s interest (Cassese 70). For many years, international organizations scholars have restricted themselves in studying on the governance aspect instead of the internal workings of the organizations. Hence, international organizations ought to have a greater level of transparency, control, as well as regulation; so that they depict not only the interests of the participating nation States but also the interest of the entire international community (Jackson and Sorensen 166). To understand international organizations, various theories have been formulated to give explanations. For instance, the neoliberalism theory argues that States in the international community ought to be concerned with attaining total gains instead of gains that are average to other countries (Dunne et al 22). In addition, constructivist theory, which tends to look into how the most important features of international relations may be different from the notions upheld by the neoliberalism institutionalist theory. This research seeks to look into how the functioning and definition of international organizations is explained by the two theories liberalism and constructivism.

Neoliberal Institutionalist

Neoliberalism is an international relations approach that encourages countries to look for complete advantage instead of average profits to other countries (Keohane & Martin 47). This theory is founded in the theoretical work on functional integration done between the 1950’s and 60’s. Most of the international relations scholars based their work on communication, travel and investments. In addition, the theory is founded on the transnational literature studies done between 1970s and 80s. This theory states that institutions and regimes have a role in governing the international community. The state of anarchy is what characterizes the international community (Wendt 392). This state is responsible for the lack of cooperation amongst the nation states in the international community. Anarchy hinders the willingness of the nation states to cooperate and achieve world peace. This is because nation states believe that they are act as autonomy. This means that they desire to take full advantage of the absolute profits at the expense of others. Consequently, the new states cheat each other out of their own selfish interests. International organizations are therefore fundamental as they assist the nation states to come together and overcome the challenges affecting them. Constructivist approaches refuse the neorealist notion that anarchy may result in States assisting themselves. Normally, this relies on the interactions amongst individual States. Consequently, the processes of various interactions amongst nation states results in interests and identities being formed. In the neoliberal perspective, the identities and interests of the States are normally given by international organizations. States that understand what their goals are before entering into any interaction with another nation.

Neo liberalist theory employs the game theory to give reasons why there is lack of cooperation amongst the nation states (Keohane and Nye 23). In the games theory every nation state prefers to have shared cooperation to shared non-cooperation. They can also end up cheating successfully to have shared cooperation with each other. This is because they tend to stress on the probability of having shared victory as a feature of international cooperation. Furthermore, the theory look into institutions that ensures thee existence of joint compromises and agreements amongst the nation states. For instance, the UN has been known to ensure that the nation State’s behaviors and the international community are harmonized (Keohane and Nye 23). In spite of this, the UN has been known to have many obstacles in ensuring that its goals and principles are carried out. The UN has been noted to be a key in the decolonization of oppressed nation States, the safeguarding of the environment as well as international law (Keohane 22). The theory is aware that it may be difficult to achieve cooperation in regions where leaders of nation States do not see any interest. In most instances, nation States enter into cooperation with other States when they see that they have no common interest (Navari 29).

Neo liberalists looks into the role of the UN in cooperating with the regional bodies such as the Europeans Union (EU), the organization of American States (OAS), and the Arab League (Thompson 36) in ensuring unity exists in this anarchical world. In 1945, neoliberals turned to international institutions instead of the various nation States to be able to perform certain roles that the nation States could not do. This acted as a vehicle for the theory of integration in Europe and the US (Zehfuss 36). Pluralism in America led to new international actors such as NGOs and multinational corporations and other new styles of interactions such as integration and autonomy (Philpott 42). This theory tends to explain the durability nature of institutions despite the fact that there are vital changes that occur. Premised on the theory’s notions, international organizations place a fundamental force on relations amongst the international community (Keohane and Nye 23). Consequently, this forms the preferences that nations States have and in the end the cooperative arrangements that they may opt to engage in. The notion of identities ensures that the states do not become predictable in the international scene. Without state identities, the world will be full of chaos and full of insecurity much more than when there is anarchy. Identity is any choice that the state prefers and the preceding actions that may follow the choices made. While constructivism treats identity as a theorized question, neo liberalism assumes that most nation states have a shared identity.

Both constructivism and neo liberalism argue that states must make decisions on the interests that they choose to hold. However, constructivists argue that a nation state and other actors in the international community can be convinced to cooperate. This is because the nation states in the world were having other challenges apart from security and power to look at (Wendt 422). For instance, the nuclear weapons that had been created were making the cost of battle to be expensive. This made the nation states seek for ways through which they could cooperate and end the building up of weapons globally. Furthermore, the increase in links amongst nation states resulted in their reliance to each other to achieve national goals. This may occur when the States are convinced that countries are able to conform to the regulations, and that the cooperation will result in total gains (Keohane and Nye 23). However, this theory fails to discuss many notions such as explaining the behavior of foreign policy. Neoliberalism does not refute the international community’s anarchic nature. However, Neoliberalists argue that the significance and outcome of this nature has been overemphasized (Navari 43). According to the theory, anarchy in the international community occurs because of the coming together of different States with different self-interests perpetrated by anarchy (Wendt 422). Anarchy refers to the lack of government or political authority over and in the midst of any political system. This means that most nation States ought to depend on their strength in such a State (Wendt 391). Consequently, any agreements that States can make depend on them to be enforced. According to neoliberals, anarchy is a situation that can be curtailed if not resolved fully (Wendt 425). Anarchy possesses obstacles of teamwork and coordination to destroy the cooperation that exists amongst the States. However, these challenges can be resolved by offering information or make more credible commitments. However, amongst the constructivists

Constructivist Approach to International Organization

Many skeptics have been disregarded the employment of constructivism approach in international regimes. The theory employs ambivalence which makes it not acceptable in the global politics. Like the Neo liberal theorists, constructivist theory offers various notions on the various political practices that affect politics globally. Unlike the neoliberal theory, this theory advocates that the most important aspects of international relations are socially and historically dependent (Jackson and Sorensen 166). This is chosen rather than the human nature results or other features that characterize international politics. A scholar named Nicholus Onuf formulated the theory. The scholar desired to understand the international relations’ character that is socially formed. The social structures in the international community have three features practices, shared knowledge, as well as material resources (Jackson and Sorensen 166). Social structures are described by the knowledge, understandings, and various expectations that are shared (Zehfuss). In most cases, this normally comprises of the actors in a circumstance and the kind of relationships that they possess. The relationship may either have conflicts or cooperative instances. For example, a dilemma that is based on security may be placed as a social structure comprising of various inter-subjective understandings. In this case, nation States are so suspicious of each other that they end up making the worst perceptions on the intentions that they have towards one another (Zehfuss 96).

Constructivist approaches refuse the neorealist notion that anarchy may result in States assisting themselves. Normally, this relies on the interactions amongst individual States. Consequently, the processes of various interactions amongst nation states results in interests and identities being formed. In the neoliberal perspective, the identities and interests of the States are normally given by international organizations. States that understand what their goals are before entering into any interaction with another nation. According to Wendt (394), the interactions amongst various nations bring one structure of identity and interests. Normally, these structures lack fundamental powers from the main process. In most cases, States desire to continue to exist (Zehfuss). For instance, in the case of the Cold War, the war only ended when the USSR and the US have ceased to be foes. International actors get identities that are steady and understanding of the specific functions. In Western Europe, the end of the Cold War has resulted in the formation of the European Union (McNamara 418).

Unlike neoliberalists, constructivists do not seriously take norms and regulations seriously. In neoliberalist, norms are employed to ensure that nations are made to know the differences that make international States cooperate (Dunne, Kurki, and Smith 128). The norms that are formulated by these international organizations that assist in world peace and cooperation is maintained. Constructivists perceive an anarchy situation globally as something that is filled with the social functions of the nation States (Wendt 422). This means that in a state of anarchy, nations may portray themselves in a Hobbesian realist nature. However, in neoliberalism, the focus is the natural rights that human beings possess. The anarchy concept has been known to be the basis of various theories such as neorealist, liberal, as well as realist theories. Constructivist theory does not support the state of anarchy as the basis of the international community. Nation States have the ability to influence the content and effects of a specific structure (Wendt 391-425). According to Wendt, different nation States have different notions on what anarchy implies. Consequently, this leads to international anarchy. (391-425) Neoliberalism does not refute the international community’s anarchic nature. However, Neoliberalists argue that the significance and outcome of this nature has been overemphasized (Navari 43).

According to the theory, anarchy in the international community occurs because of the coming together of different States with different self-interests perpetrated by anarchy (Wendt 422). Anarchy refers to the lack of government or political authority over and in the midst of any political system. This means that most nation States ought to depend on their strength in such a State (Wendt 391). Consequently, any agreements that States can make depend on them to be enforced. In contrast neoliberals consider anarchy as a situation that can be curtailed if not resolved fully (Wendt 425). Anarchy possesses obstacles of teamwork and coordination to destroy the cooperation that exists amongst the States. However, these challenges can be resolved by offering information or make more credible commitments.

In the constructivist theory, the interactions that happened in the past set the pace for interaction in the future. The formulation of identities and interests by the theory of various nations result in the challenge of the relationship that may occur between agents and the structures (Keohane). Wendt gives an example of the American fear of nuclear weapons made by North Korea. In this case, the two nation States’ interactions may lead to a relationship that is premised on enmity. This may result in a wider change of social structures where the different international actors exist. This theory does not challenge the notion purported by the realists on the pursuit of interest. However, the theory criticizes the notion that interests are a result of by product circumstance. Human security in international relations deals with issues such as political community, the political economy of nation States, and the sovereignty of the countries. Constructivism believes that the behavior of States is normally constructed socially. This means that such ideas as well as values have an effect on the relations of the communities internationally. The materials employed to construct the reality in international relations employs the concept of anarchy has led to self-help in the international system. Nation States construct threats instead of them occurring naturally.


As such, the two theories have both similarities and differences in how they assist us in the explanation of international organizations. The first international organization was formed so that peace and security could exist amongst the nation states. This was premised on an agreement amongst the nation states to safeguard themselves from war. The research paper was able to expose the functions of international organizations in the global scene. However, the research found out the role of theoretical framework in understanding the functions of international organizations in the world. International organizations offer a platform as to where nation states can be able to bring national issues internationally. Hence, the two theories have been able to communicate the roles of international organizations in the global scene.

In constructivist theory, international relation is portrayed in the perspective of institutions and happenings in the international system. The theory assists us to understand how various international actors in the international organizations act in the international community so that peace and harmony may exist. Constructivist theory inquires on the basic assumptions of the other theories like neo liberalism and focusing on the link that the state and the various structures have. The theory gives us a different understanding of various themes in international organizations like anarchy and state identities. The neo liberalism is an international relations approach that encourages countries to look for a complete advantage instead of average profits to other countries. This theory purports that institutions and regimes may assist in governing the international community that is anarchic in nature. This may mean that the international community needs cooperation and multilateralism to secure the interests of any nation State.


Cassese, Antonio. International Law. New York, NY: Oxford University Press, 2005. Print.

Dunne, Tim, Kurki, Milja, and Smith, Steve. (eds.). International Relations Theories: Discipline and Diversity, second edition. Oxford: Oxford University Press, 2010. Print.

Jackson, Robert, and Sorensen, Georg.Introduction to International Relations: Theories and Approaches, 4th Edition. Oxford University Press, 2010. Print.

Keohane, Robert, and Martin, Lisa. “The Promise of Institutionalist Theory.” International Security 20,1 (1995): 47. Print.

Keohane, Robert, and Nye, Joseph. Power and Interdependence: World Politics in Transition. Boston: Little, Brown and Company, 1977. Print.

Keohane, Robert O. After Hegemony: Cooperation and Discord in the World Political Economy. New York, NY: Princeton Publishers, 1984. Print.

Mc Namara, Kathleen. The Currency of Ideas: Monetary Politics in the European Union. Ithaca, NY: Cornell University Press, 1999. Print.

Navari, Cornelia. “Liberalism.” Security Studies: An Introduction (2000): 29-43. Print.

Philpott, Daniel. Revolutions in Sovereignty: How Ideas Shaped Modern International Relations. Princeton, NJ: Princeton University Press, 2001. Print.

Thompson, Alexander, and Duncan Snidal. International Organizations. Chicago: Chicago University Press, 1999. Print.

Wendt, Alexander. “Anarchy is what States Make of it: The Social Construction of Power Politics.” International OrganizationCambridge Journals 46.2 (1992): 391-425.

Zehfuss, M. Constructivism in International Relations: The Politics of Reality. Cambridge: Cambridge University Press, 2002. Print.

The Northern Gateway Pipeline in Albert in British Columbia is an insult to the Rights, and Interest of Aboriginals hence should not be approved

Will the Approval of the Northern Gateway Pipeline in Albert be a misdemeanor or protection of Human rights towards the achievement of Social Justice?


The development of pipelines is advantageous since it carries significant benefits to the human population. They increase revenues, employment opportunities and new markets. However, some of these projects also possess several shortcomings. In this relation, there has been considerable debate in Canada regarding the approval of the proposed Enbridge Northern Gateway Pipeline project. The project aims at connecting twin bridges from Bruderheim in Alberta to Kitimat in British Columbia. One of these heads east and would serve as a transportation channel for condensate, natural gas. The second pipeline that is expected to head west would be a main channel for the exportation of bitumen from the oil sands in Athabasca. The bitumen will be diluted with the condensate to Kitimat’s marine terminal, transferred to super tankers and transported to Asian markets. The pipeline project is expected to cut across approximately 1000 streams and rivers. Although it presents a number of benefits related to the welfare of the people living along its route, it carries the risk of greater damages for the aboriginal groups. Thus, will its implementation be a misdemeanor or protection of Human rights towards the achievement of Social Justice? Both sides of the Enbridge debate will be herein presented and an explanation why it should not be approved offered.

Proposition for the Enbridge Project

The Enbridge Company has suggested the possibility of numerous benefits from the project. In relation to this, they have conducted a lot of research and submitted their safety-related evidence as part of their fear for human rights to the regulatory bodies. The company managers have provided an assurance that the project will be the safest in the continent. They have enhanced the details of the design and operations of the project. They claim that they intend to make a state-of- the-art construction that fulfills the safety and integrity of aboriginal groups through the use of the newest technology in the industry (ENGFGEJ, 2012). As depicted by Guy, this is an indication that they will uphold human rights towards the provision of justice (2012).

The other expected beneficial component of the project has been the creation of job opportunities. Enbridge claims that these opportunities will be made available in the related marine services as the company would have 104 positions of permanent operation and 113 other posts. It will be considered as a step towards providing justice in the society in which the project will run.

Additional stated benefits include training, programs in stewardship and community trust. Roggenkamp, Hernandez, Zilman, and Guayo observe that this project will create a positive change in Canada from a single market in the U.S to the extension of sales into Asian refiners. Asia would thus serve as a valuable new market for the crude oil from Canada and thus increase its proximity to some of the large and expanding oil markets in the world (Daniel, 2010). Enbridge purports that because of this, in over 30 years, Canadian GDP will be boosted by $270 billion hence generate more total revenues with direct and indirect beneficial outcomes to the provincial and federal governments (2010). The Government of Alberta has additionally recognized that the project bears the benefit of providing an access to the West Coast (Narine, 2012). With these, human rights that relate to movement and affordability are expected to be improved.

Enbridge specifies that an agreement can be reached between parties to solve the various land issues. According to Enbridge, most of the risks highlighted by the opposition groups including environmental concerns can be solved or mitigated through different approaches. They claim that most of them can be minimized as was depicted from their promise to offer equity stakes to those living within 80 kilometers of the original land together with individuals from British Columbia and Albert. They can also be compensated for their violated rights as shown by the company’s step to spend $500 to improve the safety measures of the project. As such, they state that the recommendations made from the assessment can be considered (The province, 2012). In addition, they promise to employ extra safety measures during its construction. It thus serves as an indication of their commitment to uphold the aboriginal rights and maintain justice.

The project bears an ambitious nature that makes it an economic catalyst. There is a notion that billions of dollars generated from it will be channeled towards the economy (Daniel, 2010). This is approved by one of the panel members for Alberta Government; Harold York who confirms that reasonable commercial and economic issues have been included (Narine, 2012). As such, despite the negative sides indicated this aspect counters them and provides justice to the aboriginal groups.

The project will also endow native groups with equal ownership opportunities, which include a ten percent investment of the project. It is expected that because of its high demand, shippers who will benefit from the pipeline as oil producers and refiners have made an eager commitment towards funding its regulatory phase. Their human rights will be protected in this way as the equality measures will enhance justice.

With regards to safety, Enbridge Inc. promises a number of strategies that include the thickening of walls on the project, installation of dual leak detection mechanisms and the increase in number of remotely operated valves (ENGFGEJ, 2012). These extra measures show the level with which the company considers the importance of justice.

Environmental, Economic and Social Challenges of the Project

Numerous criticisms against the Enbridge project have been received from groups like the Yinka Dene Alliance, First Nations such as Wet’suwet’en and Saiku’z, opponents of oils and sand as well as environmentalists. They have dismissed the development plan owing to its failure to address the issues concerning dangers of oil transporting tankers at the B.C coast. BC NPC through their leader Adrian proposes an environmental assessment for review by individuals from the province. It would ensure that the social, economic, and environmental interests of BC, and that of the First Nations, are met since it will be strictly based on the Province. Consequently, these people will be able to exercise the specific responsibilities and powers related to their rights.

Ethical Concerns raised by the Project Development

Lake; the minister for environment in British Columbia, has disregarded Enbridge’s promises asserting that they fall short of the providence of solid action (CBCNews 2012). The counsel for Alexandra; Caroline O’Driscoll argues that the First Nations have not been considered in the forecasting of oil production or economic benefits involved. It thus signifies the absence of aboriginal rights (Narine, 2012). In this relation, observations have been made that the inhabitants in British Columbia are not likely to get their fair share from the project’s benefits as indicated. They include people living in Victoria who will only receive 8% of the government royalties expected from the pipeline as opposed to the 100% marine related risk benefits promised (Hayward, 2012). This is proof that the project will not respect human privileges and cause social injustice.

Wood McKenzie asserted that the presence of labor, equipment and natural gas directly led to the development of oil sands. However, the decision by the operators to modify the portfolio of their oil sands did not take the rights of aboriginals into account (Narine, 2012). The federal government has disputed the job creation claim and informed several habitat members of staff at several fisheries about their possible termination. It will be an effort to reduce the operational budget in the department. In addition, the $6 billion project that aims at the speedy construction of oil sands has been observed to be accompanied by high inflation due to the cost of construction. Therefore, the project will have violated human rights by making their lives harder leading to great social injustice.

Opponents cite a likely reduction of Canadian refining power with the introduction of Asia as a new market. This will negatively impact a considerable number of the local people who will subsequently lose their jobs leading to a major social injustice.

There are claims that construction of the pipeline reduces the level of safety for people living in the area. It will increase sedimentation and water temperatures in marine environments rendering them unfavorable for trout and salmon. Conservatives note that it will destroy the integrity of the economy and ecology. Speculations are that, in the future, the climate destabilizing impact of the pipeline will be felt on other vital ecosystems such as climate change, hydro developments and forestry (Levy, 2009). It will offend human rights as the aboriginal environment will be destroyed.

Environmental concerns are raised regarding transportation of crude oil across Albert and British Columbia (Tatyana, 2012). It is because the Northern Gateway project is assumed to carry a serious risk of spills and harm to aquatic animals. The super oil tankers that will transport the oil will be extremely large and pose a serious risk of spills. It is hence expected to bear considerable influence on fisheries together with the health of salmon that inhabit such marine environments. In turn, it poses severe issues of social justice since the life of people living around these areas would be directly or indirectly affected (The petroleum economist, 2009). The social justice of aboriginals will not be upheld as they will not be given alternatives to the destroyed aquatic life. It is for this reason that a thorough assessment of risks will be considered necessary (Levy, 2009).

The project also poses an economic challenge to other economic sectors in Canada that do not deal in oil and its products. It is supposed that the project can only be successful if the prices of oil are increased by $3 per barrel yearly. This thus means that families will have less purchasing power, the cost of production in industries that use oil will increase and thus elevate unemployment rate. As a result, a reduction in the real GDP and government revenues would be experienced following increased inflation and interest rates hence the consequent appreciation of the Canadian Dollar (Berkow, 2012). This will be a principal disadvantage for the aboriginals and act against their justice.

The likely occurrence of oil spills has been of considerable concern since the pipes will be transporting extremely toxic petroleum products (Mickleburgh, 2012). Communities and first nations occupying areas near the pipeline’s course are also apprehensive that the project will consume a lot of their traditional land and destroy the wild salmon habitat (Levy, 2009). Because of this, it will tamper with the principle sources of food and vast quantities of marine nutrients that have been depended on for a long time for sustenance (Polczer, 2010). Thus, it is believed to be offensive to the interests and rights of people’s long term energy and a violation against environmental integrity (Hughes, 2011).

Pre-Existing Conditions for the Approval of the Project

The analysis of points from supporters and opposers shows that the approval of the Enbridge Gateway Pipeline would lead to more risks and problems to the aboriginals than the projected benefits. Most of the vital strategies have not been properly formulated (LjunggFren, 2010). It would hence present more challenges for Canada, and the British Columbia Province.

The project should ensure that roads are accessible. This has not been met as hazards related to safety and weather are posed on the oil tankers by the Douglas channel that heads to Kitimat and surrounds the coast waters in the northwest. The critics point out that there lacks sufficient time to complete the outlined science. This is in relation to the deadline mentioned by the federal government for environmental assessment.

Based on the merits and demerits highlighted, the Enbridge Gateway Pipeline project should not be approved. The company still needs to make an effort on the requirements as well as measures to handle emergencies.

Some non-governmental organizations use the prospectus company’s history to reveal the spotty nature of pipeline installation and numerous resultant spills. These would lead to numerous losses and expose the public to different safety dangers. It is for this reason that the Canadian Press indicate that the pipeline company has not instilled sufficient confidence regarding the safety of the project (2012). It is thus a critical issue since the safety of citizens should be given paramount consideration.

Moreover, the Canadian press asserts that, in case of natural hazards such as earthquakes, damage or degradation of pipelines along the route proposed for the Northern Gateway, chances of a pipeline rupture are high (Levy, 2009). The company should establish measures to deal with spills as citizens and taxpayers should not be involved in the responsibility presented by a potential spill. In addition, as stated by Ljunggren, Canada recently faced a serious oil spill that revealed insufficient data to monitor the consequences of development of oil sands on water bodies. Therefore, the country is not adequately prepared to handle a substantial oil spill emanating from a tanker since its emergency strategies are out dated (2010). Accordingly, it would not be a brilliant idea to approve the project since it would create danger and a significant challenge to the country and its citizens (The Province, 2012).

My Alignment as a Participant in the Debate

I believe that the opponents of the project have a stronger argument. According to reports, the company had not made appropriate plans to deal with spills since even six months before the commencement of its operations; a response preparation would not have been finalized. Particularly, the company’s efforts towards ensuring safety are not impressive. Enbridge Inc. retaliate by pointing out that it is impossible to have 0% risks in an oil company (CBCnews 2012). Levy emphasized this by noting that even the pipelines considered as having the best practices and operation practices are not sufficient to eradicate all risks (2009). Although this is true, they should attempt to keep the risks presented by the project as minimal as possible. The chief geometrical engineering at the project highlights that the key focus should be the mitigation of consequent oil spills. Nonetheless, the answers provided by the company have been found to be insufficient and still pose principal risks to human beings as well as marine animals. This, as Narine observes, is an indication that the company did not consider the aboriginal rights during their forecast (2012). Additionally, the company has not been able to honor its promises as no member whose land has been directly affected by the transverse line has signed the deal promising 60% compensation. So, this enormous risk cannot be taken by approving the Enbridge project since the taxpayers cannot take the threat of bearing full responsibility for emergency oil spills.

Currently, there are still numerous challenges brought about by the project as compared to the predictable benefits. Besides, the opportunities mentioned for the aboriginals as part of the heavy-oil project have not been well outlined. Owing to lack of proper strategies to gain enough funds, the Enbridge Company may not be able to honor its promises of an equal share to the aboriginals. This fact is confirmed by York who states that the rights issues of aboriginals have barely been included (Narine, 2012). It is indicated that the project will not guarantee job opportunities to most members of the community as previously indicated. It is evident as some of the aboriginal land inhabitants will get new job opportunities while some at the fisheries department will lose their jobs and thus face some challenges.

The Department of Fisheries and Oceans in Canada reveals that there are also risks posed by the pipeline at some of the major crossings. They include the Kitimat River tributaries, where the company and the fisheries department have conflicting views on the risks involved. It is still considered a serious threat as relevant measures to protect the fish and their habitat have not been taken (Dyck, 2012).


The government has placed several conditions that are yet to be met by Enbridge Inc. for them to earn the support of the Province. This is despite claims that the company is operating in accordance with approved guidelines. They include the necessity for Enbridge to develop a pioneer new industry as an initiative in British Columbia. It offers them room to boost their relationship with the community and aboriginal inhabitants, refine their approaches towards emergency preparedness, and response before the operation commences (The Canadian Press, 2012). The company will have to provide funding spill prevention systems in response and recovery, in world class land-based and marine. Moreover, they will need to prove to all individuals that the negative reputation associated with them has been corrected, and operations improved. These should be completed before it is approved to avoid disappointments on the traditional groups.

Unless further assessments are made to ensure that the concerns raised can be minimized by the steps indicated by Enbridge Inc., the development of the pipeline company should not be permitted. The Save the Fraser Declaration, which opposes the development of the project, should, therefore, be considered relevant. As such, as speculated by the regulatory regime the Enbridge Northern Gateway Pipeline should not be approved until it lays down the proper mitigation measures as concerns all the relevant issues. Additionally, all the relevant jurisdiction processes should be completed before the company is given permission to proceed with pipeline development (The petroleum economist, 2009).

As such, my opinion about its implementation has been changed. Previously, I had considered the project an immense economic and social advantage to Canada and the aboriginals of the British Columbia province. This was from the benefits projected by the company. However, the disadvantages of the project with regards to human rights still overrun the benefits. Its implementation will act against the achievement of social justice. It will only be solved if Enbridge meets the specifications placed by regulatory bodies. On the grounds of risks and benefits involved, the Enbridge Gateway Pipeline Project should not be approved as it still poses numerous environmental, cultural and economic challenges to the people in the Province and Canada in general. For this, it can be considered a violation of their rights and neglect against their social justice.


Berkow, Jameson. (July 13 2012). “B.C. lays out pipeline approval demands”. The Canadian Press. CBCnews.

Dyck, Darryl. (August 19 2012). “Northern Gateway review hobbled by budget cuts, critics say”. The Canadian Press. CBCnews.

Daniel, Patrick D. (2010). “Enbridge files Gateway Pipeline application”. Pipeline & Gas Technology. Vol. 2010 (6), p38-38. 1p.

Guy, Anna. (October 11, 2012). Exclusive Interview: Enbridge – Northern Gateway Pipeline Project. The international resource Journal.

Hughes, J. David. (2011). The Northern Gateway Pipeline: an affront to the public interest and long term energy security of Canadians. S.l.: Global Sustainability Research Inc.

Levy, David. (2009). Pipelines and Salmon in Northern British Columbia: Potential Impacts. The Pembina Institute: Levy Research Services.

Ljunggren, David. (Dec 7, 2010) Canada couldn’t handle big oil spill: watchdog. Reuters.

Mickleburgh, Rod. (July 30, 2012). “B.C. natives willing to ‘go to the wall’ against Enbridge pipeline”. The globe and mail.

Natives Protest Enbridge Pipeline” (NPEP). (2010). The Canadian Press. 2010-12-02.

Narine, Shari. (2012). “Revenue sharing, Aboriginal rights questioned at Gateway hearing”. Alberta Sweetgrass. Vol. 19 (11), p12-13. 2p.

Polczer, Shaun (January 21, 2010). “Panel struck to review pipeline to West Coast. Enbridge plan to undergo scrutiny”. Calgary Herald.

Roggenkamp, M. Martha, Hernandez, Lila, & Zillman, N. Donald. (2012). Energy networks and the law: innovative solutions in changing markets. Oxford: Oxford University Press, 2012.

Tatyana, Daniels. (2012). Saying no to the proposed Gateway pipeline is unselfish. Windspeaker, May2012, Vol. 30 Issue 2, p12-12, 1/2p

The Canadian Press. (2012, October 18). “Enbridge not impressing B.C. government on pipeline safety”. CBCNews, p. 1.

The Province. (July 23, 2012). “B.C. government outlines Enbridge Northern Gateway pipeline approval demands”. The Canadian Press.

The petroleum economist Vol 76. (2009). London : Petroleum Press Bureau.

Enbridge Northern Gateway Files Reply Evidence To JRP (ENGFGEJ). Pipeline & Gas Journal. Sep2012, Vol. 239 Issue 9, p75-76. 2p.


Question 1

A widely accepted philosophical view among contemporary philosophers is that the scope of obligation of social justice is defined by membership in a common political community. On such an account, people have obligations of justice only to other people with whom they live together under a common constitution or whom they recognize as belonging to the same nation as themselves. Social justice and its application on a global scale is complex, however, the principles of justice are under attack from those who believe that social justice is no longer a credible aspiration given the disciplines imposed by globalization and the shift in the balance of power between labor and capital. Evidently, globalization has significantly affected how we view social justice and the extent to which we believe it is attainable. Such a view calls for a differentiation between global justice and social justice.

One of the key differences between social justice and global justice is the application of the two concepts. To begin with, social justice is applicable within states because there are structure and frameworks that are democratically mandated by the people of that particular society. 1According to Miller, social justice is a construct of ethical communities characterized by collective autonomy, national self-determination, a sense of national identity. 2To Miller, the fact that we have national obligation necessitates the practice of citizenship and therefore the distribution of social justice in liberal democracies. Unlike social justice, global justice calls for acknowledgment and respecting of human rights against the claim for the traditional natural rights in social justice. However, the application of the principle of justice in a global scale is very challenging. 3For Miller social justice is practical at a national level because nations are groups whose members share certain beliefs, desires, and commitments; to him, they recognize one another as compatriots and have a shared wish to continue their life in common.

Global justice embraces an international redistribution of income, goods, or resources. Unlike social justice, global justice does not aim for specific consequences in the light of egalitarian equality, but rely on a decisive equal normative starting point namely the preservation of dignity for every human being. This dignity accords to all humans the justified claims to a fundamental provision of goods, given that everyone has a legitimate right to survival a right to a good life or to certain human capabilities. Global justice approaches accept the modern paradigm to work on the bias of ethical consensus. This means that norms and rights best argued for when being built on a consensus of all the people concerned and either justified on a hypothetical or on a factual basis human rights, rights of interaction and fundamental principle of justice should focus on the weakest and poorest. Such a view is not share in social justice frameworks.

Evidently, major differences exist between social justice and global justice but how can we promote the two in an increasingly globalized world? An effort to promote both social and global justice should be built on the works of David Miller and demonstrate how the basic principles of social justice and global justice might be interwoven and mutually reinforced rather than the fundamental incompatibility between the two concepts.4 As some philosophers would argue, it should not be a case of global justice versus domestic social justice but of how different conception of justice might be brought into play in order to advance ethical objectives such as the dignity and the equal worth of all. The relationship between principle of social justice and global justice is with no doubt complex, and while it is important to grasp how the world orderworks like miller elaborated, it is also critical underline that the need for justice is both similar and different across the national and global context. For instance, 5a familiar notion of social justice is the commitment to equality of opportunity, which realistically cannot be easily transferred to the global level. In the domestic context, such principles are pursued through the redistributive machinery of national governments, but such means do not exist on a global scale. Neither is there the same ethic of mutual self-interest and belonging globally that sustains collective risk pooling and social insurance in bounded national territories. As a result, the possibility of profound fundamental conflicts in the pursuit of both social justice and global justice is inevitable; however, it is vital to confront the potential dilemmas and tradeoffs upfront. What is critical is adopting a philosophical framework that recognizes these differences, supports a progressive change by ensuring that reforms at both the domestic and the international level acquire popular support, and leaves a lasting legacy.

Question 2

In the past few decades, the process of globalization has provoked a surge of normative analyses of forms of justice and democracy above the level of the nation-state. Global justice theorists coincide that the doctrine of human rights at a global scale is the articulation in the public morality of world politics, of the idea that each person is a subject of global concern. Rawls, Beitz, Nagel, and/or Pogge in most of their works commonly share such a view, but the paradox of a globalized world has resulted to suggestion of different approaches to the universal adoption of the idea that “we have universal duties to all human beings.” However, the question is; whose approach to justice among Rawls, Beitz, Nagel, and Pogge can better respond the implications of the globalizing world for normative concerns?

To begin with, the view of Charles Beitz’s lucid work Political Theory and International Relations is to distinguish international skepticism from the sounder idea of a theory that he characterizes as a “cosmopolitan.”6Beitz develop a major criticism to the idea of institutional cosmopolitanism as the best solution to global justice. According to Beitz, the two essential elements defining the cosmopolitan view are that it is inclusive and non-perspectival. In his view, moral cosmopolitanism applies to the whole world as the maxim that “answers to questions about what we should do or what institution we should establish, should be based on an impartial consideration of the claims of each person who would be affected by our choices.” A critical analysis of Beitz argument shows that moral cosmopolitanism leaves open the question of the ideal constitution of internal society. Moreover, where moral cosmopolitanism shows itself to be more distinctive is in its denial that membership of a society is of deep moral significance when the claims that people can legitimately make on one another are assessed. This differentiate it sharply from the ideas the the bounds of society are also the bounds of justice.

On the other hand, Nagel, works largely criticize the application of egalitarian view of justice in a global scale.7 A critical analysis of Nagel’s works reveals his closeness to asserting that the global justice could only make sense on the background of a pre-existing global democracy. 8According to him, demands of egalitarian justice can only legitimately arise to the extent that society does not only hold us responsible for obeying its laws, but also “makes us responsible for its acts, which are taken in our name and on which in a democracy we may even have some influence”; thus an egalitarian view of justice can only be triggered if we are “both the subjects and the co-authors of the coercive laws.9 This view is a major drawback to the application of Nagel’s view of social justice to the complex global scale. Furthermore, its application would mean those human persons with some purported say over the prevailing coercive rules should be expected to provide a justification for the rules to those expected to comply with them. In other words, what would be needed in Nagel’s view would be mutual acceptance as members of the same justificatory community.

10In the “Cosmopolitanism and Sovereignty,” in Global Justice and “Priorities of Global Justice”Metaphilosophy32, Pogge is consistently concerned about the current nature of the global institutional order as an effort to achieve justice. According to Pogge, the current global institutional order is imposed coercively by precisely those who are wealthy and powerful11.12For Pogge, the solution is embracing the three Ps: Protectionism, privileges, and pharmaceutical. An end to the protectionist measures by which wealthy nations protect their markets against cheap imports of goods and services from countries, abolishment of the international resource and borrowing privileges and redesigning the global pharmaceutical patent regime is what Pogge believes would bring justice to the world. While his argument seem convincing, the claim that the problem of global injustice can be solved by slight modification some global economic rules and that the changes would result to slight reduction in the incomes of the affluent is not realistic. Moreover, some of the underdeveloped countries have grown very tremendous under the current world order.

13John Rawls reinvigorated liberal political philosophy through a novel adaptation of the theory of the social contract. Beginning with the question of what principles of justice should govern the basic structure or major socials and political institution of a liberal democratic society. Rawls argued that the appropriate principle are those that would be chosen by representatives of the citizens in a counterfactual choice situation, the original position in which the parties would be ignorant to the social position whether relative privileged or disadvantaged of those they represent14. 15The resulting conception of justice, justice as fairness accords priority to a principle guaranteeing certain basic individual rights and liberties to all citizens equally and once these have been secured, advocates an egalitarian principle of distributive justice which states that social and economic inequalities are (a) to be attached to positions and offices open to all on the basis of fair equality of opportunity and (b), to be to the greatest benefit of the least advantaged members of the society.,

A key understanding why Rawlsian approach to social justice is the best compared to Beitz, Nagel, and Pogge is its egalitarian conception of justice and contractualist methodology. Its application to the global level can support powerful redistributive principles governing relations between individuals, states, and international associations. Moreover, Rawls consistently asserts that the primary subject of justice is the “basic structure of society” i.e. “the way in which the major social institutions distribute fundamental rights and duties and determine the distribution of advantages from social cooperation.”

Question 3

The level and trends in inequality in income are key inputs into any discussion of equality in a society, particularly for a proper understanding of how that society’s economy functions. Over the past few decades, the standard economic frameworks for thinking about poverty and inequality and human development in general have been under constant criticism for their inability to capture the economic welfare of a particular society in an equal manner. An alternative theory developed for the standard economic framework is the capability approach by Sen and Nussbaum. Amartya Sen and Martha Nussbaum are well known for their capability approach in measuring social inequality. While the two intellectuals have made significant contribution on how to measure social inequality, whose approach can better do justice to the world and why?

To begin with, 16Amartya Sen focuses on inequality and poverty by criticizing the existing literature on inequality measurement and the welfare economic over concern with complete rankings of different social states. For Sen, we should not assume away complexities or ambiguities and the underlying fact is that we can only make partial comparison when it comes to inequality. Taking her example, we can categorically state that a person or country is definitely better off than the other is but we may not be able to rank the wellbeing of the successive other. On the other hand, 17Nussbaum developed a list of what some critics call the normative things-to-do in order to address the inequality problem. 18For Nussbaum, there is one universally similar list that can be translated into more detailed and specific list to suit the context when addressing inequality around the globe, as such, Nussbaum seems to propose that Sen should endorse one definite list of capabilities. While consenting that her list need further adaptation and elaboration by context, Nussbaum argues that such a specification is an essential first step towards addressing inequality.

Given the existing economic framework deficiencies, whether from the standpoint of what is either a cardinal element of the ideal of the rule equality or widely share principle of justice, namely, equality before the law and from the standpoint of a fairly wide range of principle of distributive justice, Sen capability approach would do justice if applied to the world as compared to Nussbaum’s. Unlike Nussbaum, 19Sen’s capability approach makes broader and less specified claims. Moreover, given the intrinsic underspecificaiton of Sen’s capability approach, there cannot be one catch all list. According to Sen, a list of capabilities must be context dependent and it application can be very diverse. From a normative perspective, functioning’s and capabilities as suggested by Sen are properties of individuals thus the capability approach is a normatively individualistic theory which when interpreted correctly should mean that each individual will be taken into account in our normative judgments. In this view, the capability approach is therefore a major improvement over standard wellbeing approaches in welfare economic. Furthermore, the wellbeing approaches use implicit assumptions about gender relations with the family, which are unrealistic and deny or ignore intra-household inequalities. Furthermore, contemporary studies show that the assumption that people have the same utility functions or are influenced in the same way and to the same extent by the same personal, social, and environmental characteristics is wrong. The choice of Sen’s capability approach as the best approach to global justice is also founded on the fact that this approach is not limited to the market but looks at people’s beings and doings in both market and non-marketing settings. The inclusion of non-market dimensions of well-being in normative analysis reveals complexities and ambiguities in the distribution of well-being that an analysis of income and wealth alone cannot capture.

Question 4

Within the political scientific research, three democratic dimensions are elaborated in relation to the international system: democratization within states, between states, and the international system. Just like many other cosmopolitan theorists, David Held and Jurgen Habermas focus on the relationship between democratization within states, between states and how they affect the international system. Held and Habermas share many aspects in common but their approach to democracy and justice at global scale differs significantly. For instance, Unlike 20Habermas who views deliberative democracy as critical to creating global political institutions that will help coexists harmoniously and bring justice to the world, 21Held’s views cosmopolitan democracy of critical importance to create new political institution that can coexist with the states system and revoke state sovereignty on those defined and demarcated fields of activities that have consequences which exceed their boundaries. According to Habermas, any political community that wants to understand itself as a democracy must at least distinguish between members and non-members. The self-referential concept of collective self-determination demarcates a logical space for democratically united citizens who are members of a particular community. By assuming that there is an evolutionary striving towards developing the international state system, Held adheres to democratic possibilities for the global political system that he claims realists cannot comprise by starting out from the notion of anarchy. A key concern to Habermas is that the presumption that democracy can only result from a nucleus of democratic units made by held and most cosmopolitans is not defensible from a normative point of view. However, Held counter this view by arguing that even if democratization in most cases takes place from the bottom up, from the grass roots level new forms of political participation and of deliberative processes from the top downwards could also contribute to defining a human rights arena stabilized by for example, global institution. For Habermas, although there is an opposition between democracy based on exclusion and human rights based on inclusion, there is nothing but an opposition between democratic process and human rights from a discourse of theoretical perspective.

22While Held and Habermas are significantly committed to cosmopolitan democracy, Habermas engagements in liberal theory and the continuum of appreciation for liberal constitutionalism and other liberal institution is a major departure form Held view on global justice. Habermas whose “discourse principle” stipulates that principles of global justice should be constructed through a process of appropriately framed actual deliberation between the people concerned. Such a proposition raises concern according to Held who seems to suggest that the correct assumption that duties of justice are only well defined on the basis of democratic process should not be confused with the faulty claims that duties of justice cannot arise in their absence. From Habermas’s perspective, claims of justice based on the equal moral worth of all human beings are intelligible before any political institution are in place at the relevant level and indeed can motivate and support the urge to create the democratic institutions that could specify and implement what justice demands.

Another point of departure between David Held and Habermas proposition for global justice is how the process of appreciating “the different others” should be executed. To address the complexities associated with globalization, 23Habermas’s seems to propose an imaginary multilayered coherent system of democratic institution which when consistently interpreted can act as the guided by a concern for global justice. According to Habermas, it is simply impractical to think that the egalitarian view of global justice can be achieved across the globe. To him, it is up to the actual global deliberation to determine how egalitarian a distribution global justice will require. On the other hand, the cosmopolitan view held by David Held suggest that just because something is difficult and improbable under current circumstance does not also mean that it is impossible, or more importantly, that it is not something we ought morally to do. Furthermore, there exists a compelling evidence to suggest that the world has already become and is slowly becoming more cosmopolitan in both moral and institutional terms. Held argues that cosmopolitanism operates at the global level both morally and institutionally beyond traditional state-centric models. The underlying argument behind cosmopolitanism is the fact that the world is getting smaller and that the forces of globalization have increasing impact upon our shared human existence. As argued by 24David Held, the forces of globalization have made our lives inextricably interconnected and the world is increasingly faced with pressing collective action problems such as climate change, disease, abject poverty, terrorism, genocide, nuclear proliferation, and financial crisis. Such a dawn of the common global risks is increasingly becoming the basic tenet in cultivating a universal belief in a globally shared collective future.


AmartyaSen, “Equality of What” in Global Justice
AmartyaSen, “Justice Across Borders,” in Pablo de Greiff and Ciaran Cronin ed

Charles Beitz, “Justice and International Relations”in Global Justice

David Miller, “National Responsibility and Global Justice (December 2008)
David Miller, “The Ethical Significance of Nationality” in Global Justice

John Rawls, “Justice as Fairness(April 1958)
John Rawls, “The Law of Peoples” in Global Justice,

Jurgen Haberms, “Citizenship and National Identity,” in Global Justice
David Held, “Democracy from City State to a Cosmopolitan Order,” in Global Justice,
David Held, “Restructuring Global Governance: Cosmopolitanism, Democracy and the Global Order”, Millennium: Journal of International Studies 37, no.3, (2009): 535–547.
Jurgen Habermas, “A Political Constitution for the Pluralist World Society,” in, The Cosmopolitan Reader, 267-278

Martha Nussbaum, “Beyond the Social Contract: Capabilities and Global Justice

Martha Nussbaum, “Human Capabilities: Female Human Beings,” in Global Justice
Thomas Nagel, “Justice and Nature,” in Concealment and Exposure, (Oxford University Press, 2002)
Thomas Nagel, “Poverty and Food: Why Charity is not Enough?” in Global Justice,

Thomas Pogge, “Cosmopolitanism and Sovereignty”, in Global Justice

Thomas Pogge, “Priorities of Global Justice”Metaphilosophy32

1David Miller, “National Responsibility and Global Justice (December 2008)

2David Miller, “National Responsibility and Global Justice.

3David Miller, “The Ethical Significance of Nationality” in Global Justice

4David Miller, “The Ethical Significance of Nationality” in Global Justice: “National Responsibility and Global justice.

5David Miller, “The Ethical Significance of Nationality” in Global Justice: “National Responsibility and Global justice.

6Charles Beitz, “Justice and International Relations” in Global Justice

7Thomas Nagel, “Poverty and Food: Why Charity is not Enough?” in Global Justice

8Thomas Nagel, “Justice and Nature,” in Concealment and Exposure

9Nagel 2005: 129

10Thomas Pogge, “Cosmopolitanism and Sovereignty”, in Global Justice

11Thomas Pogge, “Cosmopolitanism and Sovereignty”, in Global Justice

12Thomas Pogge, “Priorities of Global Justice”Metaphilosophy32

13John Rawls, “The Law of Peoples” in Global Justice

14John Rawls, “The Law of Peoples” in Global Justice

15John Rawls, “Justice as Fairness(April 1958

16 AmartyaSen, “Equality of What” in Global Justice

17Martha Nussbaum, “Human Capabilities: Female Human Beings,” in Global Justice

18Martha Nussbaum, “Beyond the Social Contract: Capabilities and Global Justice

19AmartyaSen, “Justice Across Borders,” in Pablo de Greiff and Ciaran Cronin ed

20JurgenHabermas, “A Political Constitution for the Pluralist World Society,” in, The Cosmopolitan Reader, 267-278

21David Held, “Restructuring Global Governance: Cosmopolitanism, Democracy and the Global Order”, Millennium: Journal of International Studies 37, no.3, (2009)

22JurgenHaberms, “Citizenship and National Identity,” in Global Justice and David Held, “Restructuring Global Governance: Cosmopolitanism, Democracy and the Global Order”, Millennium: Journal of International Studies 37, no.3, (2009).

23JurgenHabermas, “A Political Constitution for the Pluralist World Society,” in, The Cosmopolitan Reader, 267-278

24David Held, “Democracy from City State to a Cosmopolitan Order,” in Global Justice

International Finance

The countries trade with each other to buy and sell the required and extra goods and services to each other respectively, now in the era of globalization, few MNC makes major portion of world trade. The changing trend has evolved to such an extent that now a product is manufactured in multiple countries due to the availability of cheap labor and proximity of raw material has caused the companies to change their pattern of trade and now most of these companies make their products in multiple countries and sell it to specific market.

The product which the United States established, Multinational company plan to sell or offer to the client country is related to automobile sector. The product is targeted to the high income class and the specialized characteristic of that automobile vehicle is its latest technology which differentiates it with its competitors who offer the similar vehicle at a much higher rate. The country which is targeted for this product is Asian economic giant, People’s Republic of China, as with the increasing urban class with the higher per capita income of more than $ 8,400 PPP, according to 2011, estimate, the Chinese market is very much suitable for our product to make enormous sell and as a result to make good amount of revenue.

The business plans which will more perfectly work in this targeted country, is of exporting finished automobile parts and assemble the vehicles in the land, as it will cause to retain the technology only by United States, and will also cause decrease in our cost of labor and other variable costs. The company will sell its highly innovative parts of automobile car which will not only supersede the local market players in technology but positively impact the mind of producers and buyers of such products. Due to the strategy of providing high tech product at a reasonable rate, a new trend would possibly emerge, and our MNC will be consider as a pioneer in the automobile sector of China.

There are various factors which will affect the demand of the automobile, and for easiness we can divide them into two sub-parts:

  • Internal factors

  • External factors

Related to internal factors, we assume the political instability, increase in minimum wage rate, economic environment of China, such as: the increase inflation rate, the legal amendments affecting the investment of the company etc.

While, external factors include, the unavailability of raw materials, unstable political condition around China and stakeholders of the production of the related vehicles and more importantly, another global economic and financial crisis.

Now, the company must consider the current account balance condition and performance of China, as to strengthen the case of selling its products to the Asian giant. The current account balance of china is the highest in the world and for the past decade it is in surplus which makes it an ideal place for investment in terms of security of economic feasibility. As current account deficit is the mother of all evils, related to economic terms, and a country having control over it can confidently open its business environment to the world, similar is the case here, where the well managed current account balance of china makes feasible not for herself but also for those companies who want to invest there.

Here is the data regarding current account balance of China, over a decade.


Current Account Balance (Billion USD)





















Here, we analyze, the current account balance has been tremendously increasing over a period of time and a slight correction appeared in the year 2009 and 2011, which is obviously due to number of reasons, some of them are as follows: economic and financial crisis, Chinese relaxation to imports, and removal of policy of supporting Yuan.

Now, we look into the categories of product which china imports:

China’s Top Imports (2010)

US Billion ($)

Commodity description


Electrical machinery and equipment


Mineral fuel and oil


Power generation equipment


Ores, slag and ash


Optics and medical equipment


Plastics and articles thereof


Inorganic and organic chemicals


Vehicles, excluding rail


Copper and articles thereof


Iron and steel


Here, we found that the import of vehicles are in the top 10 items of Chinese imports, the point to be given more emphasize is that China is the biggest exporter to the United States or more easily we can say, US biggest trading partner is China. Hence, encouraging the imports of finished goods to China will stabilize the trade balance in favor of US market, as currently; Chinese exports are heavily dependent upon US demand pattern. A slight effect in the consumer patterns either in favor or against to Chinese imports can exorbitantly affect the Chinese trade balance.

If, we only analyze the trade list categories or more specifically, only the top US imports to mainland China then the results are more in the favor of MNC project to launch its product to China. Here, is the list of main exports to China from US:

Top Ten US Exports to China, 2011

(US $ billion)

Commodity Description


Power generation equipment


Oil seeds and oleaginous fruits


Electrical machinery and equipment


Vehicles, excluding rail


Aircraft and spacecraft


Optics and medical equipment


Plastics and articles thereof


Pulp and paperboard


Copper and articles thereof


Organic chemicals


Now, analyzing the above mentioned table, it is more surprising to observe that exports of vehicles to Chinese market is higher on the category list, in comparison to total imports category of Chinese trade balance. Hence, we can conclude that, the Chinese market welcomes the United States made vehicles more warmly in comparison to the vehicles of any other country. So, there are more chances of earning more revenue from Chinese market as the company will have an edge over its contemporaries in terms of price and technology, which makes the breakeven cost to cover earlier.

The Chinese imports are lower related to exports which cause the surplus current account balance. In order to determine, the trend in Chinese imports, we can easily determine our future expected cash flows, over a period of 2001 to 2011; the Chinese imports are on constant rising trend, except for the year 2009, when due to financial crisis the Chinese imports were also hurt. The country recovered quickly from the economic crisis which effected the whole world specially the United States, and its indirect aftershocks affected the major imports to China, as US is the major trading partner of China and one of the top 5 exporter to China after South Korea, Japan and Taiwan.

In the past, there were very strict policy regarding import of goods and services in the mainland China and only very few companies were allowed this facility, but in 2004, due to WTO agreements Chinese government has made the import of goods and services relatively easier. Now the imports are divided into three categories which are as follows:

  • Prohibited

  • Restricted

  • Permitted

The waste and toxic material are included in the prohibited category and Chinese government is strictly against any such imports related to it, while products in restricted categories are subjected to import on quotas and on the presence of proper licensing. Most of the products fall in the category of permitted items, and Chinese government does not differentiate among importers, but give specific import rights to state run companies.

There are factors to be considered as well, such as importation of goods and services requires licensing of imports of specific products and services, as it helps the government to track down the imports. The Chinese government has also made export processing zone and trading zones and these are the main causes of Chinese healthy trade trend. The Chinese government has made a system of inspection of imports and certification, in order to avoid the dumping of third class category of imports. (Import Regulations in China, 2012)

By analyzing all these main regulations regarding imports, the company should not worry, as not even a single point is disturbing for the MNC, as our company is focused on the strategy of assembling the vehicle in Chinese trade zone, and for our greater sale, we would definitely import best parts. Hence, the trade regulations in china will act as a boon for the company.

As the country which we have targeted for our product is China and it has recently changed its exchange rate system from fixed or pegged to free floating exchange rate system. For a long time, the United States was urging the Chinese government not to support Yuan by devaluing as it was causing detrimental effects to other currencies especially Us Dollar, and US exports were adversely affected.

The US dollar at the beginning of calendar year 2011, was traded at 6.6 Yuan and at the end of the calendar year 2011, its value downed to 6.3 Yuan, since, Chinese government stopped to artificially devalue its own currency to increase its exports and to have surplus trade balance. In the longer run the Chinese imports will increase and it will also affect the current account balance.

Analyzing, the trend in whole year of Yuan with respect to US Dollar, it emerges that the US Dollar was constantly sliding down. The main key factors which can affect our business in longer term are that the due to upcoming surge in imports by China from US due to the regulation regarding removal of keeping the Yuan undervalued, can cause China to reverse its policy. Apart, from this fact there does not seem to be any major factor which can cause major change in the value of foreign currency.

The hedging of exchange rate risk which may arise due to any financial, economical, or geo-political reason, of our MNC’s can be done through various methods.

We can buy the currency swap agreement over a period of time, if we observe that the MNC may face the liquidity problem, as in such a business, there is also a risk of exchange rate fluctuation and risk of regulation change by the Chinese government. The MNC must engage in forward contract in order to remove the exchange rate risk, as in forward contract the exchange rate risk is managed between the parties but as it is not traded over the counter; therefore it may still have some risk. Therefore, the MNC must deal in currency swap to manage its finances as to bring more stability to its business.

Similarly, the MNC must also find a way to minimize its risk by trading in options, i.e. call and put options. If the MNC think that the price of the stock of the company will increase to a great extent then it should buy the call option and if the market appears to show bearish behavior then, it should trade in put options and according to market performance trade in it, in order to hedge its exchange rate risk. The company should engage in exchange-traded funds, and smartly respond to the market move, only this method can cause the MNC to cover its invested amount and to become a victim of any risk.

Hence, we can say, that the MNC is targeting a large market of china and can grow exponentially due to the advantage it has over its competitors already present in the market. As the MNC is going to launch and offer its new high tech automobile at a reasonable price, this makes this MNC to be distinguished from other market players. The MNC will hedge its currency exchange rate risk by trading in forward and futures and to avoid the risk of exchange rate fluctuations, it will develop a way forward by dealing in currency swaps, as well.


Import Regulations in China (2012, April 24). In Foreign Affairs and International Trade Canada. Retrieved May 19, 2012, from <;

Tobacco bonds

Briefing Note: Tobacco bonds


The payments from tobacco companies back tobacco bonds in United States. These payments are for compensating states for the costs of treating smoking-related issues. The tobacco-bond market in the United States faces the problem of declining cigarettes sales. This has lead to declining revenue stream that underpins the bonds way short of forecasts. The decrease in total U.S. cigarette sales has lead to declining money allocation to each state. States are using conservative estimates on tobacco bonds with declining cigarette sales. Alabama has used ultraconservative assumptions for its bonds. This poses some questions. What is the best estimate of annual decline in cigarette sale to be used in tobacco bonds? What are the alternative bonds available for people to buy? Why is the cigarette sale fluctuating?

Situation analysis:

Alabama bonds generate funds from payments by tobacco companies under the 1998 settlement at the time valued at more than $200 billion. Alabama an ultraconservative assumption is that securities will default only if cigarette sales in the country fall beyond 25 percent per year until the debt mature. This is because Alabama sold $93 million of tobacco bonds that will mature from one to nine years (Cherney, 2012). These bonds have a yield of 2.93 percent, which is about 1 percent point more than a benchmark of top-rated municipal-bond yields. In other states, many bonds issue is under the assumption that sales would decrease at the rate of 2 percent per year. In 2009, there was a decline of 8.6 percent in cigarette sales followed by a decline of 3.8 and 3.5 percent in 2010 and 2011 respectively. Alabama sold a nine year bond at $1.16, which since risen to $1.17. Traditional tobacco bonds are doing poorly as they are trading below their sale value. Tobacco bonds are doing better with 5.66 percent return in February as compared to municipal-bond retunes of 4.73 percent. Projections show that bonds issued several years ago could default by 2024.

Economic Analysis:

The sale of cigarette and tobacco bonds trends can be analyzed using microeconomic theory of consumer behavior, production and costs, expected utility and demand induced supply. This can also be analyzed using macroeconomic theory of prices and theory of economic fluctuations. The cigarette consumption patter if the influence by the population composition and growth. The economy will undergo recession in 2013 and then have an average growth of 2.1 percent up to 2020. The unemployment rate will rise in 2013 but reduce gradually up to 2020. The interest rates will go up in 2013 but remain steady over the next several years. Inflation will rise in 2013 but stabilize slowly up to the year 2020.

Reports show that, between the year 2000 and 2011, the consumption of tobacco has fallen by 27.5 percent from 451 billion to 327 billion cigarettes. During the same period, the sale of non cigarette tobacco products has the rise from 3.4 percent to 10.5 percent. The rate of tobacco bonds default has also increased with Ohio 40 year bonds yields declining from 99 cents to 72 cents. Taxes on cigarette have increased over the last decade. The economic analysis show that taxes will increase in 2013 but reduce slightly in the next several years. Projections show that prices of cigarette will rise in 2013 but remain stable up to 2020. Prices on other products will also follow the same path. Under the benefit-cost analysis, the benefits will be a stable cigarette prices thus boost in sales. Therefore, the share for the states under the 1998 settlement will increase. The costs include increased non cigarette tobacco products, and increased stable prices. The use of other tobacco products is cost effective.

Risk analysis:

The number of cigarette smokers in U.S. is declining. This has caused the cigarette consumption to decrease by 3 to 4 percent annually in average. Nearly 80 percent of tobacco bonds are getting four levels below investment grade. Frequent inflations in the economy might occur in the next several years. Bonds issued several years ago may default by the year 2024. These risks will have a negative impact on tobacco bonds yields as they will decrease or default.

Option Analysis:

The states should use high rates of annual decline in cigarette sales as assumed in new Alabama tobacco bonds. The states should consider offering other bonds like municipal bonds. The government should reduce taxes on cigarettes and increase amounts on the 1998 settlement.

Assessment of the Proposal:

One of the proposal strengths is the consideration of the projections of cigarette sales over the next eight years. The economy’s progression and growth in the next several years are under consideration. The study also considers the future of tobacco bonds especially up to the year 2020. The study also incorporates the increase in sales of non tobacco products.

The study has the weakness of considering the economy’s and cigarette sales projections for up to 2020 only and not up to 2030. The study has also made one sided projections on taxes imposed on cigarettes.

Personal Recommendations:

More research should be done on the yields of tobacco bonds subject to different assumed annual decline in cigarette sales. The state should also sell bonds with different time periods and different assumed decline percentages to determine best terms for tobacco bonds. The government should carry out a research to known how to balance taxes on cigarettes with tobacco bonds.


Issue: The tobacco bonds in U.S. are defaulting due to declining cigarette sales. This leads to the following questions: Why is the cigarette sale fluctuating?

Situational analysis: The tobacco bonds’ yields depend on the sale of cigarettes. The sale of cigarette has been declining from 2009 to2011 by above 3 percent in average. The states have been offering these bonds at assumed sale decline percentages. Alabama sold $93 million of tobacco bonds at 25 percent assumed decline in cigarette sale.

Economy analysis: The U.S. economy will have a recession in start of 2013, but grow at an average rate of 2.1 percent GDP. . Under the benefit-cost analysis, the benefits will be a stable cigarette prices thus increase in sales. The costs include increased non cigarette tobacco products, and increased stable prices.

Risks analysis: The numbers of smokers are decreasing in the country. The sale of cigarette is declining at an average rate of 3 to 4 percent. The tobacco bonds might default as early as 2024.

Option analysis: The states should use high rates of annual decline in cigarette sales as assumed in new Alabama tobacco bonds. The states should consider offering other bonds like municipal bonds.

Assessment of proposal:One of the proposal strengths is the consideration of the projections of cigarette sales and the economy over the next eight years. The study has the weakness of considering the economy’s and cigarette sales projections for up to 2020 only and not up to 2030.

Personal recommendation: More research should be done on the yields of tobacco bonds subject to different assumed annual decline in cigarette sales.


Cherney, M. (2012). A New Flavor of Tobacco Bonds. Retrieved on 22 November 2012, from

London Olympics



London Olympics and UK Businesses

Consumer and Retails Businesses

Aviation Industry

Visa Statistics




London Olympics


Making a profit in business has to do with strategic management and being prepared more than anything else. There are other factors which determine the success of a business but the two factors named above are equally significant especially in the context of this article. The London Olympics were definitely good for UK businesses. This applied for the short term and will equally apply in the long term basis.

London Olympics and UK Businesses

Consumer and Retails Businesses

There are two major ways that UK businesses benefited from the London 2012 Olympics: increased demand for their goods and a likely future demand as a result of tourism. A property and industry correspondent with The Telegraph, Graham Ruddick, reported that by the end of the first week to the games 42 percent of businesses surveyed had felt an increase in demand for their products. Consumer businesses were shown to have benefitted most: “68pc of companies in the tourism and hospitality sector and 59pc of retailers reporting an increase in demand” (Ruddick, 2012, p. 1). The increase in demand was attributed to Olympic tourists as 77 percent of the retailers said their additional demand was due to new customers.

It has been shown that the increase in demand was reaped by businesses that had prepared in time for the games. Some of the ways that businesses tapped into the increased market presence was by flexing their opening and closing hours. Some stores were reported to have used transport data to identify which of their stores would be near busy transport hubs and adjusted their stocks accordingly. Some stores still went further to hold special events to lure customers into making purchases (Ruddick, 2012).

It should be noted that even before the Olympics games started there were many UK businesses which greatly benefitted from the preparation of London for the Olympics Games. The UK construction industry greatly shared in these benefits. It is estimated that the games “generated orders worth £360 million for East Midland companies” (Pettinger, 2012, p. 1).

Aviation Industry

The aviation industry had an increase in demand with a 40 percent increase in bookings. However, much of these bookings were not from Olympic tourists but rather from Londoners who were fleeing the games. Apart from the increased demand in air flights to London during the games, the airport management took advantage of that platform to present an excellent impression: “the services have been seamless, with many positive comments received from our VIPs” (Learmount, 2012, p. 1). This was evidently the best marketing platform for the UK aviation industry and it is more likely to bring more benefit in the future as a result: “the business aviation industry’s experience of the London Olympics will bring long-term benefits to the UK private aviation sector” (Learmount, 2012, p. 1).

Visa Statistics

Spending statistics released by Visa showed a great benefit to UK businesses from Olympic tourists: between July 23 and July 29, “International visitors to London spent $700 million on their Visa accounts” (Kiernan, 2012, p. 1). It is noted that this value is significantly for services and goods bought within the UK excluding airline and hotel costs as these are pre-paid in most cases. Statistics released by Visa showed that $95.5 million was spent on entertainment and $ 71.8 million on purchases from retail shops. Furthermore, $ 133.7 million was spent on services which included “jewellery purchases, shoe repairs and trips to the spa” (Kiernan, 2012, p. 1).


The games helped the city of London to be lifted a level higher in terms of infrastructure. New transport links were created especially in the east of London: “the East London Line (London Overground) and DLR Woolwich extension” (Pettinger, 2012, p.1). As a result of this the east end of London has better transport network and has grown; this means more business opportunities for the UK businesses. The East Village is yet another result of the Olympic Games. Business can tap into this village and provide extra services which might be needed by the residents. It has been argued that sports participation will be on the increase. It is estimated that with time more than 110,000 persons will engage in regular exercises. This to the UK businesses specializing in sports ware is good news (Pettinger, 2012).


The London Olympics has rated well by all business quarters. The biggest disappointment across the board has been that the increase in demand which was experienced was below the London and UK business expectations. Business across the UK and especially in the UK had invested in preparing for a huge demand but unfortunately the demand levels did not rise as high as they were expected. This meant that the projected profits and gains were not met implying that somehow losses were realised. On the light side however, the London Olympics Games have been good for the UK businesses. There have been many benefits which the UK businesses have gained from London hosting the Olympic Games. The construction sector started reaping the benefits early as it was intensely involved in the preparation of the games. Transported network was boosted especially in East London and now there is a new neighbourhood. Consumer businesses later greatly benefited. The aviation industry also reported an increase in demand for their services. The preparation for the London games was greatly successful and this has left a long lasting legacy about London and the UK in general. This legacy is very important for the UK businesses and is likely to boost tourism to London and the UK. Therefore, the Olympic Games helped the UK business to make profits before the games were started, during the games and the benefits are likely to continue through tourism.


Kiernan, J. (2012).The Olympics of Spending: Visa Stats from the Games’ First Week Reveal Surprising Trends. Retrieved from

Learmount, D. (2012). London assesses Olympic-generated business traffic. Retrieved from

Pettinger, T. (2012). Economic Legacy of London Olympics. Retrieved from

Ruddick, G. Good News Britain: How the Olympics is boosting businesses. The Telegraph 10 Aug.

Benefit and drawbacks of setting up a limited or public limited company

Benefit and drawbacks of setting up a limited or public limited company

There are several benefits and setbacks of setting up a limited liability company. The benefits include protection of assets in that the owners will not be directly responsible for business debts as well as the liabilities of the company. There is heightened credibility of the business in that a newly formed limited liability company will be able to establish credibility with its potential customers. A limited liability company also has a flexible management structure and this makes it easy to manage the company effectively. There are few restrictions for a limited liability company including the number of owners who may own the business. It is easy to introduce new shares and investors for the company once it is formed.

The disadvantages associated with limited liability companies include formation and ongoing expenses as articles of organization must be formed and the state fee applicable paid. It is often hard to transfer ownership for a limited liability company since all owners must approve addition of new owners (Zahorsky, 2012). A limited liability company is less precedent in that a limited liability company is a newer kind of a business structure. It may at times prove a bit difficult raising the financial capital that is required in starting up a limited liability company. The structure of management of a limited liability company may be quite unfamiliar to many since unlike other forms of business like corporations they need not necessarily have a board of directors

Definition of cash flow

Cash flow is either revenue or even an expense stream which will change the cash account with a specific period of time. Basically, cash flow will basically mainly from three activities which include financing, operations or investing despite the fact that this may occur due to donations or gifts as far as the personal finance is concerned. Cash flows are generally essential to solvency since a company may result to bankruptcy if it is insolvent and does not have adequate cash to finance its routine operations. Cash flow in business thus entails keeping a proper balance between cash coming into business and cash going out of the business.

As such, cash should flow into as well as out of the business as appropriate in order for the business to remain solvent. As such, cash flow will basically involve the movement of money in and out of the business in order to facilitate its routine operations and keep it making the necessary progress (Zahorsky, 2012). In terms of accounting, it can be termed as the difference in the amount of cash which is initially available at the beginning of a specified period and the amount the amount available at the end of that period. It will be positive if the closing balance is found to be higher than the opening balance. Thus for a company not to run into bankruptcy, cash must come in from customers buying products or services and it will go out by way of paying expenses to the creditors or the relevant deserving parties. If no cash is available to settle debts, then the business may easily be considered bankrupt.



Zahorsky, D. (2012). Limited liability Company 101. Retrieved from, (Accessed 26 October 2012)


Research summary

  1. Identify the legal status of the organization you have chosen to investigate and explain briefly how it would been formed

The company that I am going to investigate is Colgate-Palmolive. The legal status of Colgate-Palmolive is that it is a corporation incorporated in the United States. The corporation is one is one of the most recognizable companies in the consumer products industry, only behind Unilever and Procter and Gamble.1 It first started operations in 1806, under the management of its proprietor; William Colgate. In 2011, the company posted revenues of US$16.73 billion, operating income of US$ 3.84 billion, and net income of US$ 2.43 billion. The company’s assets totaled to US$ 11.1 billion and its total equity figure was US$ 2.6 billion. Colgate-Palmolive initially traded as Colgate & Company until 1938 when it was bought by the Palmolive-Peet Company; a leading company in the production of soap using palm oil. After the acquisition, the Company’s name was changed to Colgate-Palmolive Company. The company is focused on the production and distribution of healthcare, household, personal products, such as detergents, soaps, and oral hygiene products. Some of Colgate-Palmolive’s popular brands include ABC, Cold Power, Dynamo, Fresh Start, Irish Spring, Mennen, Murphy Oil Soap, Speed Stick, and Colgate toothpaste. The company is currently headquartered in Park Avenue in Midtown Manhattan, America, and its current chief executive office is Ian M. Cook.

  1. Examine how the organization is structured; explain which model of business structures it most closely resembles. Justify you answer

Colgate-Palmolive has a hierarchical organization structure. At the top of this organizational structure is the organization’s chief executive officer; Mr. Ian Cook, who oversees the operations of the organization in all parts of the world. Below the chief executive officer on Colgate-Palmolive’s organizational structure are five continental senior executives. Each of these executive officers is in charge of a continental trading block; namely European Market, North American Market, African Market, Asian Market, and South American Market. Below the continental managers are the country managers who are in charge of respective countries in which Colgate-Palmolive has a presence. The company’s organization structure also has the human resource managers and the information technology executives. The justification that Colgate-Palmolive has a hierarchical organization structure is that all decisions are made by the strategic managers at the top of the organizational structure.2

  1. Outline the various functional of areas within the chosen area within your chosen organization. Choose 3 functional areas and explain what they do as individual areas and explain how they are linked together.

There are various functional areas at Colgate-Palmolive. The first functional area is the human resources management function. This function is responsible for the management of the organization’s human resources. Some of its functions include recruitment and selection, human resource training and development, remunerations and compensations management, and performance evaluation. The second functional area within Colgate-Palmolive is the information technology management function. This function is tasked with ensuring that the organization’s information technologies are operating effectively. The third functional area is the operations management function which is tasked with ensuring that the organization is producing optimally so as to meet its objectives. These functional areas are linked together by the fact that they are all very important to the overall success of the organization.

  1. Outline the way in which your organization might look to use information both from the external environment and from the internal environment to help it run its business.

Colgate-Palmolive is one of the organizations which are renowned for effective utilization of information for business success. The organization uses information from the external environment, for example on issues such as political issues, economical issues, social issues and technological issues, so as to prepare itself to deal with them and continue operating smoothly. The organization also uses information from the internal environment, for example on issues such as its competitors, its customers and its suppliers so as to position itself appropriately for optimal business operation.

  1. Produce A PEST Analysis of your organization

The biggest political factor affecting Colgate-Palmolive is bans placed on some of its products in some countries on the global market. This has hindered the organization’s global activity. The other political factor affecting the operations of Colgate-Palmolive, especially on the global market, is wars and uprisings in various countries. This has it difficult for the organization to carry out its business activities in these regions. On economical factors, the biggest factor affecting the organization is the global crisis which started in 2008. The global crisis has led to reduced incomes among the population members; hence, reducing the levels of sales realized by the organization. The other economical factor affecting Colgate-Palmolive’s operations is high inflation rates in some countries, which has made the company to lose significant finances on the money exchange market.3

On the social scene, the biggest issue impacting the operations of Colgate-Palmolive is the belief by some people that Colgate Toothpaste has too much chemical additives; hence, not good for human use. This has reduced the level of sales for Colgate Toothpaste realized in the affected regions. Finally, the biggest technological issue affecting Colgate-Palmolive is the rapid advancements in technology. The organization has adapted this new technology in its operations; hence, high productivity and improved quality. Technological advancements have also eased communication and transportation activities undertaken by Colgate-Palmolive, hence boasting its global operations.


Kotler, P. and Keller, K. (2006). What is geographic segmentation: Marketing Management. New York: Prentice Hall

Smith R. J. (1994). Strategic Management and Planning in the Public Sector. London: Longman Publishing.

Taylor, B. and Harrison, J. (1990). The Manager’s Handbook of Business Strategy. Oxford: Butterworth Heinemann.

1Kotler, P. and Keller, K. (2006). What is geographic segmentation: Marketing Management. New York: Prentice Hall

2Smith R. J. (1994). Strategic Management and Planning in the Public Sector. London: Longman Publishing.

3Taylor, B. and Harrison, J. (1990). The Manager’s Handbook of Business Strategy. Oxford: Butterworth Heinemann.