Reference no: EM132214171
Anglo American PLC in South Africa: What Do You Do When Costs Reach Epidemic Proportions?
Anglo American PLC is a mining conglomerate that operates in 45 countries. Founded in 1917 as the Anglo American Corp. of South Africa and now headquartered in London, Anglo American is the largest producer of gold in the world. With a South African workforce of more than 105,000 permanent employees, the firm is one of the largest in the region. Heavily affected by the HIV/AIDS epidemic, Anglo American was one of the first companies to establish a proactive, comprehensive strategy to combat the raging effects of the disease on its workforce and production systems. Along with many other MNEs, Anglo American also joined the Global Business Council on HIV/AIDS, an organization that focuses on (a) alleviating the effects of AIDS throughout the world and (b) protecting the rights of infected workers. In response to the failure of its AIDS prevention policy, the company announced in 2002 that it would be providing free antiretroviral therapy to HIV-infected employees at its South African operation. Previously the company had developed AIDS prevention education and awareness training to employees because the disease was so widespread among its workforce and was having financial consequence for the company. Anglo American now spends an estimated $4,000 per year per employee on the drug treatments, and estimates that it will cost the company $1 billion or more over 10 years. There are many challenges facing the company such as getting the drug manufacturer to provide lower costs, employee compliance with the program, and criticism from various constituencies that the company isn’t doing enough to help solve the problem. Given these problems, some have suggested that the company would be better off stopping the program rather than pouring more resources into it.
Questions
1- Because such a large percentage of its workforce consists of migrant workers who are more likely to acquire and spread HIV/AIDS, should Anglo adopt the policy of not hiring migrant workers? Should the South African government close the doors to migrant workers?
2- What role do pharmaceutical companies play in responding to the HIV/AIDS epidemic in South Africa? Given that HIV/AIDS drugs can be exported from India at a lower cost than from the pharmaceutical companies themselves, should Anglo just import the drugs to be used for their employees?