The Jurisdiction of Alumina Inc - Essay Example

Running Head: RECOGNIZING & MINIMIZING TORT AND REGULATORY RISK RECOGNIZING AND MINIMIZING TORT AND REGULATORY RISK Business Essay in APA Style ………………………… University Recognizing and Minimizing Tort and Regulatory Risk Background The Company The US based aluminium manufacturer, Alumina Inc, a $ 4 billion company, is into the business areas of bauxite mining, packaging materials, automotive components, alumina refining and smelting of aluminium. Operating from the periphery of Lake Dira in the state of Erehwon, and spread over 8 countries the company’s major sales contribution of 70% comes from the markets within USA. Region 6 of the Environmental Protection Agency (EPA) controls the jurisdiction of Alumina Inc. The History About five years back the company was found to have violated the regulatory compliance after being subjected to an evaluation audit. The prescribed limits of Polynuclear Aromatic Hydrocarbons (PAH) in test samples taken by the EPA compliance test team was found to be violating the environmental discharge norms. However this was corrected by the company by taking suitable corrective measures and the compliance was ratified in a re-evaluation audit and the company certified subsequently as regulatory compliant. The incident was the only black mark in the ethical history of the company thus far. The Individual Kelly Bates is a 38-year old single mother who resides in the state of Erehwon near the Lake Dira with a now 10-year old daughter. The Accusation Kelly alleges that the main cause of the disease of leukemia which struck her 10-year old daughter was the contaminated waters of Lake Dira owing to the carcinogenic effluents discharged from Alumina Inc. She further alleges that this could have been happening ever since the days of violation of EPA norms reported with Alumina Inc five years ago. The Legal Issues and Principles As per the allegations of Kates, the legal issue of an act of negligence purportedly committed by Alumina Inc has led to her daughter’s distraught plight and the legal principle of negligence has to be applied to her appeal for justice and legal redress of her unfortunate daughter. Also from the viewpoint of Alumina Inc, it could be argued that though it was known in advance to Ms.Kelly that the water could have remained contaminated (with reference to the previous reported findings of regulatory compliance violation five years back by EPA which was made public subsequently) and it is dangerous for exposing her daughter to such contaminated water conditions, she had willfully ignored it and hence the company may not be liable to respond to such allegations. The legal principle of “assumption of risk” applies to the situation developed herein and may be proceeded with for protecting the commercial interests and public image of Alumina Inc. Again from the standpoint of Alumina Inc, the legal principle of defamation could be cast over the allegations of Ms.Kelly, which due to the absence of any factual support for the claims made and their further substantiation by others, leads to the probable depiction of her initial conduct as seeking torts from the company. If her actual remarks and allegations cast on Alumina Inc are falsified then there are enough grounds for applying the principle of defamation since harm has been caused to the public image of the company. While mere vocal accusation could be sufficient grounds for slander, a lawsuit could be filed for defamation against Kelly for propagating the vocal accusation by written communications, publication and dissemination thru the Erehwon Reporter. The Task-at-hand Now the objective of the management of Alumina is to preserve its environmental and commercial interests while protecting the sullied public image and minimize any huge losses to them resulting from the legal issues arising out of Ms.Kelly’s serious public allegations. And while taking this as a learning experience draft an action plan to introduce various preventive, detective and corrective measures to minimize tort and regulatory risk by identifying all possible legal issues and principles that could possibly arise and endanger it. Action Plan Minimizing Torts Intentional Infliction of Emotional Distress could be another tort against which sufficient safeguards and preventive measures are to be taken. This tort claims damages against pains and sufferings resulting mentally. In the above referred background scenario Ms.Kelly could as well claim punitive damages with this kind of tort and Alumina Inc would have to adopt the right preventive, detective or corrective measure to overcome or minimize the loss due to such torts. The company in this case could definitely invoke the legal principle of assumption of risk had it given a public notice to that effect from time to time stating that though the Lake was contaminated some years back and later the effluent discharge was declared as under controlled levels, still the water may not be safe for direct intake or exposure. If the company Alumina Inc intends to do a private investigation into the allegations made by Ms.Kelly as above then it stands to go under the scanner for the “Invasion of Privacy” tort which exposes any intrusion into the private affairs of the allegedly affected party by the agencies of the accused party. The tort just requires the proof that the defendant was in fact present when the plaintiff was investigating into something very private of the defendant. So Alumina Inc would be better off not considering this as a suitable option since any detection of infringement or invasion on the privacy of the party being investigating will lead to the materialization of a tort and the resultant loss accompanying it. Negligence in another tort which can impose liability when one is careless. The company Alumina Inc would have been better placed to deal with the scenario developed following Ms.Kelly’s allegations had it released periodical news to the media about its regulatory compliance and non-contaminated state of the condition of water in Lake Dira. This would have to a large extent been a deterrent to the ulterior motives, if any, on the part of Ms.Kelly to levy false allegations on the company purportedly with an element of malice to extract a tort from the company. Minimizing Regulatory Risks The company Alumina Inc would do well if it complies with the stipulations of the Clean Water Act which was the result of an amendment in 1977 of the earlier Federal Water Pollution Control Act of 1972, having the twin goals of (i) swimmable and fishable waters by 1983 and (ii) zero discharge of pollutants by 1985. Also the company would do well to obtain a National Pollution Discharge Elimination System (NPDES) permit which regulates as per the effluent guidelines the discharge norms of effluents by direct discharges such as Alumina Inc who discharge all their PAH effluents into the clean water of Lake Dira. These permits are issued by the EPA after ascertaining that there are proper provisions for either Best Conventional Treatment (BCT) or Best available Treatment (BAT) depending on the nature of effluents being discharged is conventional or non-conventional and toxic. The EPA considers the resulting impact on the environment aspect only rather than any other economic aspect due to the discharge of effluents for the ultimate clearance and award of the permit. Compliance with the Safe Drinking Water Act passed in 1986 by the Congress will also pave the way for Alumina to justify its take on any tort being extracted from it unduly and qualifying for proactive self-policing incentives of the EPA. By complying with the Resource Conservation and Recovery Act of 1976, Alumina Inc can effectively deal with any false allegations that the company has discharged hazardous or toxic substances without restraint or restriction to limits imposed by the federal legislation. Over and above all the compliances recommended for adoption by Alumina Inc to successfully deal with the issue of minimizing tort and regulatory risks the company should also actively consider the option of publishing periodical environmental reports which will proclaim the high ethical commitment of the company and help in cases of false allegations, such as the ones made by Ms.Kelly, and if unfounded later on can help launching a libel suit if any publication of its purported wrongdoings are made. References Environmental Law, Wikipedia, the free encyclopedia, Web, Viewed February 3, 2009, Jennings, Marianne M., 2005, Business: It’s Legal, Ethical and Global Environment, Edition: 7 illustrated, Thomson West, ISBN 0324204884, 9780324204889 Kotler, Philip, Lee, Nancy, 2005, Corporate Social Responsibility: Doing the Most Good for Your Company and Your Cause, John Wiley and Sons, ISBN 0471704520, 9780471704522 Legal Environment of Business, University of Phoenix, Web, Viewed on February 3, 2009, Pkg: Study Guide to Accompany Business It's Legal, Ethical and Global Environment, 2001, Edition: 5, Thomson South-Western, ISBN 0324179782, 9780324179781 Read More