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Business Regulation Simulation

Essay by   •  January 29, 2011  •  1,824 Words (8 Pages)  •  1,328 Views

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Alumina Inc. is an aluminum maker that operates in eight countries worldwide. Accounts in the United States make up 70% of the companies $4 billion worth. Located on Lake Dira, in the state of Erehwon, Alumina has business interests in automotive components and manufacturer of packaging materials, bauxite mining, aluminum refining, and aluminum smelting. The company falls under the jurisdiction of region 6 of the EPA.

Five years ago, Alumina was in violation of environmental discharge norms in a routine EPA compliance evaluation. PAH concentration in test samples was above the prescribed limit. A clean up was ordered, with which Alumina promptly complied. A follow up audit reported the violation as corrected. Other than this single isolated incident, Alumina has a good record of compliance before and after.

Kelly Bates, a 38 year old single mother, accused Alumina of repeatedly contaminating the waters of Lake Dira with carcinogenic effluents, and has alleged that consumption of the contaminated water is the proximate cause of her 10 year old daughterпÑ--Ð...s leukemia. Bates also alleges that her daughterпÑ--Ð...s condition may be as old as AluminaпÑ--Ð...s first instance of environmental law violation.

As a corporation, AluminaпÑ--Ð...s first interest must be being profitable, as that is what keeps them in business. To that end, they are responsible to their shareholders. Alumina also has a responsibility to the communities that it operates to be a good neighbor. That means to respect not only the surrounding environment, but also the people and animals that inhabit that environment.

The stakeholders in this situation are as follows: Roger Lloyd, the company chairman, Chris Blake, the company Chief Operating Officer, Diane Richards, the Head of Public Relations, Arthur Todd, the company legal counsel, the Erehwon Reporter, the newspaper that initially broke the story, Kelly Bates, the mother who actually filed the claim, the shareholders, who actually run the company. The company officials could actually be listed together under the company, which must report to the shareholders, the actual owners of the company. Another group of stakeholders would be the lower level employees of the company, who have a great deal of concern over the outcome of the matter, as their jobs, and ultimately their livelihood is at stake. The newspapers stake in the matter is to remain credible. Kelly Bates stake in this issue is the care of her daughter.

The ethical dilemmas that lie in this situation are numerous. One of the options presented in the simulation was to investigate Kelly Bates. This option raises issues of invasion of an individualпÑ--Ð...s privacy. Almost all of the options in the simulation bring a significant financial cost to the company. The company wants to protect its image and come up the best possible solution, but it must always keep the stakeholders interest at the top of the list. This means finding the most cost efficient solution.

The legal counsel at my organization was not available for an interview, so I used the template provided.

Q: Did the organization actually violate or break any laws, rules, or regulations as alleged?

A: In almost all situations when dealing with a large organization and complex operations, the answer to this type of question is hard to determine at the outset. When faced with public allegations that contain the risk of significant litigation, the first and most necessary step is to do a comprehensive investigation in order to obtain all the facts. The organization must proceed systematically to gather all of the relevant information, including all internal and public records, data, and reports that it reasonably can obtain. Evaluating this material establishes how the organization will make further decisions; how it will respond to the allegations; and how it will defend itself, if necessary. Importantly, however, the organization must understand that the information gathered and the results may, in fact, be obtained later by its adversary in the process of litigation (i.e., through the courtпÑ--Ð...s пÑ--Ð...discovery processпÑ--Ð...). Accordingly, the organization must be committed to handling the results of such an investigation in an appropriate and ethical manner (i.e., if problems are encountered that show violations of the law, the organization would be well advised to address them in a straightforward manner and with all due haste). The advice of legal counsel throughout the process is indispensable.

Q: If a party in a potential legal matter requests records or reports from a governmental agency pertaining to the organization, should the organization object to the agencyпÑ--Ð...s release of any of the organizationпÑ--Ð...s information?

A: The Freedom of Information Act (FOIA), 5 U.S.C. пÑ--Ð... 552, ensures public access to government records subject to certain exemptions and exclusions. The policy behind FOIA is that of opening agency actions to the light of public scrutiny. However, before the agency may release any information, it must notify any affected organization to allow the organization to make an objection based on FOIAпÑ--Ð...s exemptions or exclusions. The most frequently invoked basis of objection is that the information contains privileged or confidential information of the organization. If notified by the government agency that it has received an FOIA request affecting the organization, the organizationпÑ--Ð...s first efforts should be focused on ascertaining in a realistic manner what truly пÑ--Ð...confidentialпÑ--Ð... information is contained in the agencyпÑ--Ð...s report. Many organizations object to the release of any information on the basis of a generic notion that anything that pertains to the organization is пÑ--Ð...confidential.пÑ--Ð... Rarely, however, is that truly the case. Instead, the organization should focus on narrowly tailoring its objections to only those aspects the disclosure of which would subject the organization to a demonstrable competitive injury should such information become generally known. Once that is completed, it is generally prudent to allow the government agency to disclose the remainder of the report.

Q: What factors should be considered in deciding whether the organization should defend itself in court, attempt negotiations, or seek alternative methods to resolve the dispute?

A: There are several considerations that make litigation generally undesirable, except in certain limited situations. Some of these are as follows:

Financial Costs: The cost of a protracted legal battle can easily run into the tens of thousands of dollars for an organization. These costs often include expert witness

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