Mick Wallace (Wexford, Independent) | Oireachtas source

I move amendment No. 59:

In page 240, between lines 2 and 3, to insert the following:"(c) environmental law;
(d) health and safety law;
(e) employment law,
and relevant obligations relating to paragraphs (c), (d) and (e) shall be interpreted in accordance with both national and European Communities law;".

This amendment is a bit more self-explanatory. It extends the obligations on directors in respect of their compliance statements to cover not only tax and company law, but also public interest considerations such as environmental, health and safety and employment law. It is hoped that this will encourage a wider sense of corporate responsibility towards society and shared natural resources rather than just towards a company itself.

In today's language, these amount to externalities and are not considered as being costs to the company. Externalities are unintended side effects of the market economy and are the impact of commercial transactions that fall outside the two parties to that transaction. For example, when a consumer buys gardening tools and materials, a positive externality is experienced by others in the community, as the consumer uses those materials to make an attractive garden from which everyone in the community can gain enjoyment and benefit. On the other hand, if a consumer hires a contractor to cut down the trees on his or her property in order to park an extra car, the community experiences a negative externality, as the scenic beauty, shade, animal habitat and fresh air provided by the trees are lost.

Externalities can be positive or negative. For the companies that organise the production of goods and services in the professional economy, however, they are to be ignored. Since externalities do not directly affect the responsible parties, profitability is not harmed by them. This principle has led to significant economic impacts. For example, the large-scale outsourcing of America's mass production has had considerable effect, including the decline of large urban regions due to depressed demand, resulting in increased rates of crime, family strain and domestic abuse. These are external side effects of corporate investment strategies, as they do not directly hurt earnings. Too often, capital is pushed forward despite these side effects. The world would be a better place if companies had a responsibility to consider externalities.