Question

What role to multinational companies play in the environmental degradation taking place in many developing countries? Why do developing countries permit investments by the companies? What responsibilities do these companies have to the host countries?

Answer 1

Major pollution is caused by manufacturing multinational companies (MNC's) since while making finished product they burn fuel, dump waste material and water on the ground and which reacted with environment and releases many gases and it can be summarised as per below.

1 Burning of fuel which increases CO2 level in the environment and other gases.

2 By products in the form of solid and liquid.

3 Water contamination.

4 Bad effect on land's feetility.

5 Health issues like cancer, etc.

6 Decrease in greenery due to fertile/agrarian land occupooc by multinational companies in developing countries.

Developing countries allow multinational companies in their countries due to below given factors.

1 Due to economic growth

2 To increase employment level or to decrease the unemployment level.

3 To increase the standard of living of their people.

4 To get needed foreign exchange in the form of FDI(Foreign Direct Investment) and FII's(Foreign Institutional investors) in order to finance their imports and interInternat loans.

These multinational companies have great responsibility towards the host countries since host has given them entry in their countries apart from sizeable market and growth prospects.

Also multinational companies produce in large quantities which is both for the domestic consumption and well as for exports and multinational companies uses host countries resources and it is their responsibility to save their environment too and host country's laws also require them to fulfill their obligations towards environment.