Stakeholder Theory and Adani Coal Mining Operations in Queensland

This report discusses the controversial Adani coal mining operations in Queensland from the perspective of stakeholder theory. It explores the positive and negative effects on three stakeholders and suggests ways to manage the interests of the indigenous community ethically. The report applies stakeholder theory to analyze the power, legitimacy, and urgency of different stakeholders.

Stakeholder theory
Adani coal mining operations in Queensland
9/5/2019

Stakeholder Theory 1
Contents
Introduction................................................................................................................................2
Literature review........................................................................................................................3
Background of Adani coal mining.............................................................................................4
Positive and negative affected about three stakeholders............................................................5
Application of indigenous group from ethical point of view.....................................................7
Apply stakeholder theory...........................................................................................................7
Conclusion..................................................................................................................................9
References................................................................................................................................10

Stakeholder Theory 2
Introduction
The aim of the report is to talk about the controversial of Adani Coal mining operations in the
area of Queensland. The report include the review of literature of the stakeholder theory
which include the ethical as well as the managerial branch and also the theory is explained
according to the Adani coal mining operations. The background of the entire case as well as
positive and negative effect of the controversy on the three stakeholders is the discussed. It
shows way through which the interest of the indigenous community can be managed from an
ethical point of view. The theory of stakeholders has been applied which shows the interest of
the three stakeholders groups.

Stakeholder Theory 3
Literature review
According to Jones, Wicks and Freeman, 2017, stakeholder theory is theory of the
organisational management as well as business ethics that can accounts for the different
constituencies that affected the business entities which consists of employees, local
communities, suppliers, creditors and many others. Agreeing to this, another Bosse, et al,
2019, said that theory provide the view of capitalism that majorly stresses the interconnected
link among the business as well as its stakeholders. This theory majorly argues on the
business that they should value for all the stakeholders. It has been found that in year 1984,
Edward Freeman founded the details about the stakeholder theory related to the
organisational management as well as business ethics that can address the morals as well as
values in managing the organisation effectively.
Harrison and Wicks, 2013 said that stakeholder theory majorly involves two different parts
that are managerial and ethical branch. There is difference in both the branch which can be
understood with the table given below: -
Ethical branch Managerial branch
Normative Empirical can be positivist
Promotes ethical values Has less interest in the ethical values which is
a value-free.
This state that business need to address the
requirements of entire stakeholders (Jones,
Wicks and Freeman, 2017).
This states that business will move to
acknowledge the requirement for the needs of
its most powerful stakeholders.

Stakeholder Theory 4
In addition, this can be said that the managerial branch of the stakeholder theory has achieved
the popularity in determining the disclosure decisions towards the environmental and
sustainable reporting.
The stakeholders of the Adani include employees, customers, government, suppliers and
many others who get affected due to change in the working of the business in market. Adami
group needs to consider their stakeholders on the priority basis as they have major contribute
in the revenue (Hörisch, Freeman and Schaltegger, 2014). Adani adopt the stakeholders
theory in which they shows that they follow the journey of the value-creation which is
majorly formed around an integrated approach of taking into the account of sustainability,
government as well as environment. The company has the faith the taking the consideration
of the stakeholders will lead to the better understanding as well as the long-term relationship.
In addition, the ethical value are also considered by the company which is clearly mention
when they asked or seek the permission for the forward plans to form the world largest coal
mines in the areas of Australia.
Background of Adani coal mining
Adani group is one of the massive Indian Conglomerate that wants to form a coal in the area
of Galilee basin in the Central Queensland. As per the CEO, Lucas Dow, this mine would be
capable enough to produce up to 27.5 million tonnes of the coal within the year (Werner and
Currell, 2019). The Adani case is in controversy as people are willing to stop this operation in
Australia due to the issue of climate change. It has been found that mining, burning as well as
exporting of the coal is considered as the massive contributors of change in climate. The
operation will lead to 4.6 billion tons of carbon dioxide that affects the environment and leads
to the bad imprint on the environment. In addition, the big concern is related to the rights of
the traditional land owns. The indigenous people are getting affects which include Wangan

Stakeholder Theory 5
and Jagalingou people who live in Queensland Australia (Jolley, 2017). In the case, this has
been found that indigenous people are the one who are affected the most from the working of
the company as they have to leave their land. Along with this, it has been found that
groundwater plans are approved by the by Environment Minister Melissa Price. The company
need to take the approval from the government for their new operations. Thus, this shows that
the government is also one of the major stakeholders in this case.
Another stakeholder involved within the case includes farmers as well as environmentalists in
Australia that are waging a fierce battle for the planned coal mine within the country. The
regions of the Queensland lead to the issue due to increase environmental issues that affects
the farmers as well as environmentalist (Reuters, 2019). In case, school student is also
considered as one of the major stakeholder which is led by the student activists inspired by
16-year old Greta Thunberg #SchoolStrikeForClimate protest. The students of the county are
considered about the environmental factor due to which they want to stop this operation.
Positive and negative affected about three stakeholders
Adani operations lead to the negative as well as positive impact on the stakeholders that are
presented with the help of table given below: -
Stakeholders Positive Negative
Indigenous people Adani Group offers the positive
opportunity by offering
employment opportunity to the
people. This leads to the
improvement in the living
standard of the people
The pople have to leave their
places or land which is a negative
side.
The environment will lead to the
rise in the disease which affect the
nearest people at most.

Stakeholder Theory 6
The electricity will be generated
which will contribute in
improving their life’s as these
people can easily use it (Clift,
2019).
Government The government gets the benefits
as they can enhance their
exporting which will lead to rise
in economy as well as position of
country.
The negative affect of Adani
operations is that it will affects the
lives of indigenous people and
environment which will lead to
negative image of government in
eyes of people.
Farmers and
environmentalist
Farmers get opportunity for
improving the ways of living due
to easy availability of electricity.
Farmers fear the situation of water
resource management because coal
mining required 200 litres fresh
water.
The contaminate groundwater will
affect the farmers as they take
can’t use groundwater for their
cattle (Bloomberg, 2019).
The environmentalist finds the
future generation in the danger due
to the environmental factor.

Stakeholder Theory 7
Application of indigenous group from ethical point of view
Adani group needs to manage interests of the company which is required to be managed from
an ethical point of view. Adani can perform this by performing such things: -
Employment: - The operations of Adani in the market of Queensland will make the company
to offer the employment opportunity that will save their interest ethically and also they
provide the high salary (The Hindu Business Line, 2019).
Housing facility: - Adani can safeguard the interest by offering the housing facility to the
people at the different location where they can easily spend their life with all the availability
of the resources.
Health and safety: - Health and safety is considered as important element for the indigenous
group as offering employment opportunities is not enough (Adani, 2019). The interest of the
people include being healthy and safe while performing the operations which is ethically
required to be managed.
Apply stakeholder theory
This section includes the application of the stakeholder theory which shows the way through
which the interests of the stakeholders group has been managed and will be managed in near
future. The three stakeholders of the company are managed on the basis of the power,
legitimacy as well as urgency.
 Power: - It is the ability of the stakeholders to impose their will. Adani stakeholder is
government on which this feature applies as they have the power which can influence
the working. The interest is required to be managed which can be managed by making
the government realise that there is opportunity of benefit to the economy and
development.

Stakeholder Theory 8
 Urgency: - The urgency is the need for the immediate action that is required to be
taken by company towards its stakeholders. Indigenous people need attention as it has
been found that they have to leave their home and get the same at different place
which is required to be treated Adani effectively. Along with this, the school students
who are doing strike to stop the action of company need to be acknowledged.
 Legitimacy: - It is to assess if their involvement is appropriate. The Farmers and
environmentalist are the major stakeholders whose involvement is required in the
business. The framers and environmentalist are involved which can be managed
effectively by Adani by taking the right initiatives towards the environment as well as
society.

Stakeholder Theory 9
Conclusion
In the end of the report, it has been found stakeholder theory is applied to the case study of
the Adani coal mining operations. This report majorly emphasis on the Adani coal mining
controversy going on in Queensland. The reviews of the different scholars are considered
while understanding the theory of stakeholders. The background of the case has been
presented which shows the different stakeholders that are involved in the operations. The
positive as well as the negative affect on stakeholders are mentioned. The applications of
theory to the indigenous people are required to be considered and managed by the company
from the ethical point of view. The theory of stakeholder has been applied on the basis of
salience feature based on three features power, legitimacy and urgency based on the
stakeholders which is required to be managed by Adani.

Stakeholder Theory 10
References
Adani (2019) Adani Enterprises Limited Annual Report 2018-19 [Online]. Available from:
https://www.adanienterprises.com/docs/download/Adani_AR_2018_19.pdf [Accessed on 5th
September 2019]
Bloomberg (2019) Gautam Adani doubles down on controversial Carmichael coal mine
[Online]. Available from:
https://economictimes.indiatimes.com/industry/indl-goods/svs/metals-mining/gautam-adani-
doubles-down-on-controversial-carmichael-coal-mine/articleshow/70137665.cms?from=mdr
[Accessed on 5th September 2019]
Bosse, D., Neumann, K., Priem, R.L., Snoeren, P.M., Stoelhorst, J.W., Bettinazzi, E.L.M.,
McFadyen, A., Tantalo, C. and Zollo, M. (2019, July) Value Creation from a Stakeholder
Theory Perspective. In Academy of Management Proceedings (Vol. 2019, No. 1, p. 15012).
Briarcliff Manor, NY 10510: Academy of Management.
Clift, T. (2019) Junk Explained: What’s Happening With Adani And Why Is It So Important
[Online]. Available from: https://junkee.com/adani-explainer/203739 [Accessed on 5th
September 2019]
Harrison, J.S. and Wicks, A.C. (2013) Stakeholder theory, value, and firm
performance. Business ethics quarterly, 23(1), pp.97-124.
Hörisch, J., Freeman, R.E. and Schaltegger, S. (2014) Applying stakeholder theory in
sustainability management: Links, similarities, dissimilarities, and a conceptual
framework. Organization & Environment, 27(4), pp.328-346.

Stakeholder Theory 11
Jolley, M.A. (2017) Adani coal mine 'devastating' for Australia [Online]. Available from:
https://www.aljazeera.com/news/2017/10/adani-coal-devastating-australia-
171016090146385.html [Accessed on 5th September 2019]
Jones, T.M., Wicks, A.C. and Freeman, R.E. (2017) Stakeholder theory: The state of the
art. The Blackwell guide to business ethics, pp.17-37.
Jones, T.M., Wicks, A.C. and Freeman, R.E. (2017) Stakeholder theory: The state of the
art. The Blackwell guide to business ethics, pp.17-37.
Reuters (2019) Adani's Australian coal mine moves closer, wins key environmental approval
[Online]. Available from:
https://economictimes.indiatimes.com/industry/indl-goods/svs/metals-mining/adanis-
australian-coal-mine-moves-closer-wins-key-environmental-approval/articleshow/
68788771.cms [Accessed on 5th September 2019]
The Hindu Business Line (2019) Adani to restart talks with stakeholders over Australian
mine project [Online]. Available from:
https://www.thehindubusinessline.com/companies/adani-to-restart-talks-with-stakeholders-
over-australian-mine-project/article8446078.ece# [Accessed on 5th September 2019]
Werner, A. and Currell, M. (2019). Adani is cleared to start digging its coal mine – six key
questions answered [Online]. Available from: https://theconversation.com/adani-is-cleared-
to-start-digging-its-coal-mine-six-key-questions-answered-118760 [Accessed on 5th
September 2019]