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Business Regulation Simulation

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Business Regulation Simulation

Michael Wiler

University of Phoenix


Alumina Inc. is a 4 billion aluminum maker based in the United States. Alumina business interests are automobile components and manufacture of packaging materials, bauxite mining, aluminum refining and aluminum smelting. Alumina, Inc operates in eight countries around the world with 70% of their business being in the United States. The company is located around Lake Dira in the state of Erehwon. Region 6 of the EPA has jurisdiction over Alumina, Inc (University of Phoenix Business regulation simulation). Alumina Inc is a company that faces a multimillion dollar personal injury lawsuit from a local resident who claims that five years ago alumina violated environmental regulations which is believed to be the cause of leukemia in the residents’ ten year old daughter. This incident five years ago is the only environmental regulation incident Alumina has ever had. The company has enjoyed a good overall environmental regulation compliance record (UOP Business Simulation). Environmental regulation remains the most expensive area of Government’s regulation of business (Reed, 2004). Regulatory law concerning business consists of Antitrust, The Constitution, Securities regulations and environmental regulations. The regulation that is looked at in this business simulation concerns environmental laws. Environmental laws are administered at the federal level by the environmental protection agency. Since many laws provide for joint federal-state enforcement many states have strong environmental agencies (Reed, 2004)

Key facts, regulation and legal issues

Five years ago Alumina Inc was reported to be in violation of environmental regulations. Alumina discharged into Lake Dira was above EPA standards. This was discovered in a routine EPA compliance inspection. The PAH concentration sample was above the limit. The EPA ordered Alumina to clean up the lake which Alumina did promptly. The EPA reported the violation by Alumina as having been corrected by the company (UOP, Simulation). In this simulation Bates a local citizen of Lake Dira has claimed that Alumina has consistently polluted the waters of Lake Dira with a carcinogenic substance (PAH) and consumption of that water Bates believes is the cause of her ten year old daughters’ leukemia. Bates believes that Alumina has repeatedly contaminated the lake waters with carcinogenic effluents. Mrs. Bates has threatened to file a 5 million personal injury lawsuit against Alumina to recover damages as well as punitive damages. Bates also believes that her daughters’ disease may be as old as Alumna’s first instance of environmental law violation ( UOP, Simulation). Alumina conducted their own independent site study as part of the EPA self policing and found that the report came back favorable to Alumina. The report stated that the carcinogenic (PAH) where lower than the prescribed levels. Also, there was an article that came out in the American scientific society journal that increased traffic in the heavily industrialized state of Erechwon is poisoning the waters of Lake Dira. The journal reported that polycyclic aromatic hydrocarbons, or PAH concentrations have been found to be 100 times greater than pre-urban conditions and pose a danger to animal, aquatic, and human life (UOP,Simulation). Bates and the local newspaper have approached the EPA to get a hold of the environmental audit report done on Alumina violation of the clean water act five years ago. The EPA has notified Alumina that disclosure under the freedom of information act is being considered.

Environmental laws exist because of a recognized problem in society. The EPA which is in charge of enforcing environmental laws at the federal level exist to provide specificity, expertise, protection, regulation and services (Reed, p353., 2004). In the simulation Alumina was guilty of violating the clean water act. It appears it was there only violation and they very promptly took care of the violation. The law was passed in 1972 and is administered by the states according to the EPA standards (Reed, p519 2004). This act has goals that will eliminate pollution in waterways, making them safe for drinking, swimming and also for the protection of fisheries and wildlife. One legal issue that Alumina, Inc. faces in the simulation are environmental laws has a citizen enforcement provision that allows citizens to file a lawsuit to challenge failures to comply with environmental laws. Alumina could not get this lawsuit thrown out because the environmental federal law gives citizens a right to file the lawsuit. Another legal issue facing Alumina in this potential lawsuit is tort laws. When pollution directly injures private citizens, they may sue offending polluters under various tort law (Reed, p.533, 2004). Private nuisance is a principal tort theory. It states that the unreasonableness of the interference is measured by a balancing process in which the character, extent, and duration of harm to the plaintiff are weighed against the social utility of the defendant’s activity and its appropriateness to its location (Reed, p.534,2004). In the simulation the courts will look at the needs of society weighed against private citizens’ right to tranquility. People must put up with certain amounts of pollution if they live in industrial areas. Negligence would also be a tort law used in pollution type cases. In the simulation Alumina was guilty of negligence five years ago. Most damaging to Alumina in the simulation is the tort doctrine of strict liability which states. Tort liability arises when the defendant injures the plaintiff’s person or property by voluntarily engaging in ultra hazardous activity that necessarily involves a risk of serious harm that cannot be eliminated through the exercise of due care. No finding of fault, or failure of reasonable care, on the defendants’ part is necessary ( Reed, p.534, 2004). The simulation has the press reporting on Bates and her ten year old daughter. Bates and the newspaper approached the EPA to get hold of the environmental audit report that documented Alumina violation of the clean water act five years ago (UOP,2002). The attorney for Alumina questions the yellow journalism by the erechon reporter. Under the freedom of information act Bates and the press are entitled to receive this information. Citizens may requisition data relating



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