This paper discusses the breach of professional ethics by Volkswagen when it deceived the U.S. regulatory body for emission standards. It analyzes the violation in terms of the engineering professional standards of Australia and the U.S.
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Running head: BUSINESS LAW Business Law Name of the Student Name of the University Author Note
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1BUSINESS LAW Executive Summary Engineers are required to maintain a high standard of integrity, morality and ethics, or else it would adversely affect the lives of different category of people in the society, be it the common people whom the engineers serve directly or indirectly, the workers working under the engineers, the financial condition of a company and even the economy of a country. Therefore, the engineers must adhere to the designated code of conduct and ethics specified in every modern country. Honesty, fairness, equity and impartiality are the attributes that are expected from the professional engineers. This paper comprises of the case study on the violation of professional ethics by Volkswagen when itdeceived the U.S. regulatory body for emission standards by a defeat device software so that they emission standard of their vehicles are not detected to be higher than the allowable limit. The paper also discusses the breach in terms of the engineering professional standards of Australian as well as the U. S. The purpose of the study is to understand the different professional code of conduct for engineers in different countries, like Australia and U.S. in context to this study. The paper would give an idea of the breach of professional code of ethics by Volkswagen and the subsequent issues that cropped up due to this breach. The study also gives a clear picture of the professional conduct of the engineers pertaining to Australia as well as the U.S.
2BUSINESS LAW Table of Contents Introduction................................................................................................................................3 The Volkswagen case.............................................................................................................3 Code of Ethics of Engineers in Australia...................................................................................4 American Society of Civil Engineers’ Code of Ethics...............................................................5 Conclusion..................................................................................................................................6 Reference....................................................................................................................................7
3BUSINESS LAW Introduction Engineers are supposed to exhibit the highest standard of professional integrity and ethics, otherwise it would have an adverse impact on the lives of different category of people, be it the common people whom the engineers serve, the workers working under the engineers, the financial condition of a company and even the economy of a country. Therefore, the engineers must adhere to the designated code of conduct and ethics specified in every modern country. Honesty, fairness, equity and impartiality are the attributes that are expected from the professional engineers. The purpose of the study is to understand the different professional code of conduct for engineers in different countries, like Australia and U.S. in context to this study. The paper would give an idea of the breach of professional code of ethics by Volkswagen and the subsequent issues that cropped up due to this breach. The study also gives a clear picture of the professional conduct of the engineers pertaining to Australia as well as the U.S. The Volkswagen case To increase global market share,Volkswagenembarked upon an ambitious plan. It emphasized in designing small diesel autos, which are in contradiction to the United States standard pertaining to the emission of nitrous oxide. The technology for meeting the US standard was costly for the company to invest in the mid priced vehicles. The engineers at Volkswagen created such software which circumvented the US emission test of vehicles, instead of fixing the standard issues. The software was made to recognise the U.S. regulator test admission software called Chassis Dynamometer and function like a regular U.S. standard vehicle immediately [1]. However, in normal conditions, the vehicles functioned with their small diesel autos emitting a higher amount of nitric oxide, which was 40 times higher than the allowable level. By such falsification, Volkswagen managed to get U.S.
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4BUSINESS LAW approved certificate from the U.S. Environmental Protection Agency as to its new clean diesel autos, meeting the U.S. emission standards. In 2014 a team of Volkswagen engineers found out that the small diesel auto engine vehicles are being claimed of high rates of warranty for they have been spending more time on the ‘emission tight mode’ that gets activatedwhenever the vehiclecomesto recognise the U.S. regulator’stest emission program. To handle this issue the Volkswagen engineers announced a software update which was essential for all car owners to improve their vehicles performance. In reality the engineers wanted to repair the defect of the vehicles by devising into those vehicle another way of distinguishing real-world driving and emission testing program so that they do not spend more time on ‘emission tight mode’ [1]. This fraudulent action of Volkswagen was reported in 2011 when the vehicles were emitting excessive nitrous oxide than permitted. A report to the California Air Resources Board resulted to further thorough investigations where Volkswagen keeps on defending its fraudulent act. Volkswagen claims to fix its emission issues voluntarily in 2015, where it only fixed the matter to a negligible extent, instead of addressing the true cause behind the problem. However, in late 2015 the company accepted of its fraudulent act and its use of defeat device to mislead the US regulators standards of vehicle,thereby settling for a compensation of $17 billion with the US customers and dealers along with a criminal penalty of $4.3 billion imposed by the government of US [1]. In this case a clear picture of breach of ethical code of conduct on the part of the engineers can be witnessed. The case study is therefore analysing in terms of the code of ethics of the Engineers in Australia along with that of the American Society of Civil Engineers' Code of Ethics.
5BUSINESS LAW Code of Ethics of Engineers in Australia The code of ethics of Australia for the engineers list down four code of conduct that includes: Integrity: The engineers are directed to act as per there right conscience and therefore act impartially. They are meant to be honest and trustworthy to their profession and should not engage in fraudulent or craft activities leading to criminal conduct. Even though they are directed to maintain confidentiality pertaining to their profession and client, yet day are suggested not to indulge in any immoral activity that breaches the code of conduct of their profession [2]. Competence: The engineers are meant to develop knowledge and expertise and act carefully in a diligent manner in their profession. They are advised to seek peer reviewsfromtheirfellowengineersinthesamekindofbusinessformutual development and growth[2]. Leadership: They are under the responsibility to uphold the trustworthiness and good reputation of their profession. They must encourage diversity by giving scope to newer talents[2]. Sustainability: The engineers are responsible for promoting sustainability in their profession along with fostering a good health and safety of the community as well as the environment at large[2]. For the above discussed case of Volkswagen, they have clearly violated the code of ethics for the engineers in Australia. They have breached their professionalintegrityby being dishonest in their business by creating the software to defraud the US regulatory standards of vehicle. This leads to the fact that at the engineersfailed to practice their profession
6BUSINESS LAW competentlyas they were unable to find a solution to decrease the nitrous oxide emission and instead they found it easier to fool the system. American Society of Civil Engineers’ Code of Ethics As per the code of ethics of the American Society of Civil engineers the engineers of Volkswagen hadbreached Canon 6 of ASCE'scode of conduct and ethics. Canon 6 of ASCE’s code says that the engineers are meant to act in a manner to uphold theintegrity, dignityandonusof the profession and they shall not act for bribery, corruption and fraud [3]. The canon also states that the engineers are not to engage themselves in any unethical or fraudulent activity e even if it is within the ambit of his profession which involves deceiving someone or an authority. In this case the Volkswagen engineers not only fooled the U.S. emission regulation but also deceived so many customers who purchased the vehicles believing it to be environmental friendly. In addition the engineers submitted several false reports pertaining to the performance of the vehicle and its emission standard to meet the US compliance, thereby breachingCanon3of the ASCE's code of ethics [3]. Conclusion Therefore, from the above discussion it can be evaluated that Volkswagen had breached the professional code of ethics as per both the engineering standards of Australia as well as the U.S. The company adopted several fraudulent ways to befool the U.S. regulatory body for emission standards by a defeat device software. It severely breach the integrity and honesty of the profession, as per the Australian and the U.S. code of professional conduct of engineers. In this context, the company was made to pay penalty to the government for violating its code of conduct and for acting dishonestly.
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