Pollution Havens in South-East Asia: Examining Japanese Multinational Enterprises in the Philippines

Abstract

Of the significant foreign investment by Japanese multinationals within South-East Asia, the Philippines is a key recipient and location for the establishment of subsidiaries. While foreign investment is thought to bring significant benefits to host nations, the Philippines is considered ecologically vulnerable with extensive pollution and environmental challenges. Within national contexts of this nature, debates ensue about manufacturing multinational enterprises using emerging markets or developing nations as pollution havens when their environmental regulations are less stringent than those of the home nation. This study adopts a case study approach to explore the behaviour of Japanese multinationals operating in the Philippines with respect to environmental regulations. The study’s findings indicate that the firms demonstrated environmental management practices at a level beyond requirements set by local laws and regulations, with supplementary benefits to the surrounding local communities. These results indicate that the Philippines’ environmental regulations could be strengthened or tightened up with little negative impact on the investment of Japanese manufacturing multinational enterprises. With scant research conducted at the organisational level, our research findings contribute to a multinational management perspective on pollution haven/halo research, providing an additional dimension alongside the macroeconomic and large-scale environmental effects.