6-14. International Lawsuits Resulting from Inconsistent EHS Standards at Global Locations

Failing to standardize EHS (Environmental, Health, and Safety) standards across global operations can expose multinational corporations to significant risks. There have been numerous cases where a lack of consistent management—failing to account for local laws and cultural contexts—has resulted in international lawsuits. This article examines the problems caused by inconsistent EHS standards and the lessons learned.

1. Background of the Case

As multinational corporations expand their manufacturing bases into multiple countries, it is not uncommon for headquarters to delegate EHS management to each site without providing clear standards. This leads to a disparity in standards, with strict regulations applied at sites in developed countries, while those in emerging countries only adhere to minimum legal requirements. This gap can lead to industrial accidents and environmental pollution, resulting in international lawsuits.

2. A Typical Case Leading to a Lawsuit

In one manufacturing company, safety management at its European sites was strict, but at its Asian sites, workers were routinely not provided with protective equipment and wastewater treatment was inadequate. Health problems and environmental pollution occurred locally, and the victims filed a lawsuit through an international NGO. As a result, the headquarters was held responsible, leading to substantial damages and reputational loss.

3. Causes of Inconsistency

Inconsistency in standards often stems from the misconception that "adhering to local laws is sufficient." However, there is a growing global trend for companies to be held to a higher, more uniform EHS standard that goes beyond minimum national requirements. Furthermore, as responsibility is increasingly demanded across the entire global supply chain, a lenient approach at one site can directly translate into risk for the entire company.

4. Lawsuit Risks and Corporate Impact

International lawsuits not only result in financial losses but also have cascading effects, such as a decline in ESG ratings, loss of investors, and termination of business relationships. The viral spread of information on social media, in particular, can globally damage a company's brand, risking a loss of trust in a short period.

5. Prevention and Countermeasures

It is essential for global companies to establish common internal EHS standards that exceed national regulations and ensure their implementation at all sites. Audits and training can help instill these standards in local employees, while third-party verification can ensure transparency. Additionally, while considering local cultures and regulatory environments, companies must adopt an attitude of "striving for the highest, not the minimum, standard."

Conclusion

Inconsistent EHS standards across global sites pose a serious risk of international lawsuits. To ensure sustainable growth, it is crucial for a company to establish high-level, standardized EHS management across all its operations and fulfill its social responsibility.