Business Ethics

I recently read an Article in the Globe and Mail discussing how the Canadian company Embridge is facing possible government actions after several oil spills occurred due to their unmaintained oil pipeline.
This brought me to the question if it was Embridges social responsibility to monitor its pipeline and preemptively replace portions of it that were still functional.  Freidman’s theory that companies should have no social responsibility seems to be the path that Embridge has taken as they have repeatedly refused to spend stockholders money on replacing their current pipeline with newer pipes.  Up until now this viewpoint has been profitable for Embridge but after there most recent pipeline leak they are are facing possible government fines, costly cleanup for the leaks and a temporary shutdown  of their pipeline until it has been repaired or replaced.  The American government is also considering further regulation of the pipelines standards which could end up costing Embridge more to replace the entire pipeline.  Had Embridge followed Freeman’s stakeholder theory and considered the repercussions they could face by ignoring their social responsibility to the community and environment, they could of avoided the new fines and regulations that threaten Embridges future profit in the area.