Quiana Fryar University of Phoenix Business Law/531 Recognizing and Minimizing Tort and Regulatory Risk Plan Mrs. Lillian Watson June 14, 2010 Recognizing and Minimizing Tort and Regulatory Risk Plan In today’s business environment it is important for all organizations to develop and maintain a plan to avoid regulatory risks. Management should be able to manage any risks through preventive, detective, and corrective measures. As a manager it is important to prevent extensive loss, environmental and commercial, preserve the companies’ public image and abide by pertinent environmental statues.
Ensuring the company follows an extensive plan will help to eliminate any risks, by outlining steps that should be taken to resolve these risks in a timely and effective manner. Alumina is located on Lake Dira, located in the state of Erehow. Alumnia is a global company that has business interest in automotive components and manufacture of packaging materials, bauxite mining, alumina refining, and aluminum smelting. During an EPA compliance inspection, the concentration levels of PAH were above the prescribed limit. Polycyclic Aromatic Polycarbons are pollutants that have been identified as carcinogenic, mutagenic, and teratogenic.
PAH are produced as byproducts of fuel burning and can be found in foods and water. Alumina quickly complied and was said to be within compliance at subsequent inspections. Since this one issue, Alumina has maintained a very good compliance record. Recently, Alumina has been accused of repeatedly contaminating the waters of Lake Dira by a local woman named Kelly Bates. Ms. Bates is claiming that her 10 year old daughters’ consumption of the contaminated water is a proximate cause of her daughter leukemia. She also alleged, to the newspaper, that her daughter ailment may be as old as Alumina’s first instance of environmental violation.
To preserve their image as an organization, Alumina quickly conducted independent test to ensure they did not have any new violations. The decision of the company to run their own test proved to the public that the claims “repeatedly contaminating Lake Dira’ of Ms. Bates, were inadequate. Alumina also considered a few other ways to deal with the news. If Alumina would have decided to immediately release a statement to the news stating the claim was false without first testing the water or performed an extensive investigation on Ms.
Bates, would have involved the organization in other issues. Alumina, handled the situation well. As a preventative measure, Alumina should perform routine tests to ensure these risks are not possible. Ms. Bates’ claims to the newspaper quickly brought to light past issues of the organization. Although Alumina did prove that they were not in any current violation when they performed the test, it did not prove that there was not a proximate cause five years ago. Mrs. Bates quickly requested to review the results of the EPA audit reports.
The public does have a right to review governmental documents under the Freedom of Information Act with exemption 4. The fact that Alumina did not appeal this decision shows that the mistake was unintentional and they have nothing to hide. Alumina could also remain competitive in their market trade. The issue five years prior did show negligence on the part of the company. Not proving to have safety measures in place can violate both the Clean Water Act and the Safe Drinking Act. Both acts were put in place to ensure that the environment, public, and company are safe.
Since these acts were proved to be violated five years ago, Ms. Bates still had a legitimate claim. At one point the organization wanted to violate the right to privacy and investigate Ms. Bates to find other reasons to accuse Alumina. This violation should never be sought out by the company since there is a failure to exercise care in ridding of waste products. Alumina owes to the public duty of care. Violating Ms. Bate could have also held the company liable for libel and defamation of character, had they performed an investigation and made public use of it. Ms.
Bates and the newspaper could have publically damaged the company by causing critical harm to the organization reputation. Posting these types of damaging stories could also been confirmed as libel. It is important that all information is true statements and should include an ethical decision. The decision of Alumina, to settle the dispute through alternative dispute resolution was a great decision. This decision allows for both parties to come together to discuss the issues at hand without the input of the public or media. Both parties decided to reach a decision through mediation.
The mediator has no direct relation to either party, so able to facilitate a win-win outcome. This allowed for Alumina to safeguard their reputation and save money by not going through litigation. Ms. Bates received punitive damages and signed a strict confidential agreement. All claims were dismissed and all information remains confidential. All organizations are expected to comply with local, state and governmental laws. If an organization experiences non-compliance to any laws, they are subject to repercussions from the agency and the public.
It is extremely important to have a good public image as this is the main way to attract business. The first step is to be able to identify the risks that are associated with the organization. After identifying the risks it is important to understand ways that these risks can be prevented and detected. If the risks have already occurred it is important to understand the necessary ways that the risk should be corrected. The best way for Alumina to avoid risks to the public and the environment is to set up routine tests that will identify anything that is not within the limits of the EPA guidelines.