Alumina_Regulatory_Risk_Plan

Running Head: ALUMINA, INC. REGULATORY RISK PLAN Alumina, Inc. Regulatory Risk Plan Erin Burns University of Phoenix LAW/531 Professor Wicker March 1, 2010 Alumina, Inc. is a $4 billion aluminum maker recently under fire for possible EPA violations stemming from a single violation that happened five years ago. Although that situation was resolved, a woman by the name of Kelly Bates recently made claims against Alumina alleging that her daughter’s leukemia is directly linked to Alumina and that they continue to pollute the water. Alumina was required to do some quick thinking in order to keep damage control to a minimum regarding this situation. Although the situation was resolved in the best possible way, a system should be in place to handle such an occurrence should a similar thing happen again in the future. Alumina did indeed have a problem with the EPA five years ago, when, during a routine check, it was discovered that the PAH concentration was over the limit. The EPA ordered Alumina to do a thorough cleanup, which they did very promptly, and the situation was put to rest as “corrected.” However, Kelly Bates recently came forward with accusations against Alumina once again, claiming that her daughter’s leukemia started with the EPA violation five years ago and that Alumina is continually poisoning the environment and the lake. To counteract this situation, Alumina ordered an independent study to be done to determine if there actually is another PAH problem. The study showed that the PAH levels are actually significantly lower than the standard, which put the bad press to a halt for the moment, but did not quell Ms. Bates’ insistence that the previous problem was the cause of her daughter’s illness. In fact, she threatened Alumina with a $5 million lawsuit and spoke again to the press, which prompted Alumina to order a partial release of the EPA report concerning their previous violation. They released certain parts of the report, leaving out the confidential and financial information, as they are allowed to by Exemption 4 of the Freedom of Information Act. Doing so again counteracted some of the bad press being generated by Ms. Bates’ allegations, but didn’t solve the problem of the potential lawsuit. In order to avoid a lawsuit that could potentially bring with it bad press and many thousands of dollars in legal fees, Alumina sought out the services of AAA Mediation Service to help negotiate a settlement between themselves and Ms. Bates. This turned out to be a very efficient solution. AAA was able to generate a mutually acceptable agreement that benefitted both Ms. Bates and Alumina by awarding Ms. Bates reimbursement for past medical bills relating to her child’s illness and also giving her a lump sum meant to be used for future bills, as well as a college fund for the child when she became of age. In return, Ms. Bates released all claims against Alumina and signed a confidentiality agreement. Alumina was very generous in their treatment of Ms. Bates, but still saved a large amount of time and money, as well as the continued bad press that always goes along with such lawsuits. In future, a plan will be put into motion to head these situations off before they can become too damaging to the reputation of the company. Alumina has always been, and will continue to be, consistent in its efforts to meet and exceed EPA guidelines and continue to be an upstanding corporation in the eyes of both the public and its shareholders. The following plan will help the corporation continue to keep its good standing in the communities it does business in. Because of Alumina’s size and global presence, it will always be at risk for tort litigation. Due to this risk, one of the best things it can do is make public its intentions and efforts to keep itself well within EPA guidelines regarding its emissions into the lake and any other parts of the environment as a whole. Therefore, the first step in the litigation prevention plan for Alumina is going to be the hiring of an unbiased third party to continue to do random site studies on at least a twice per year basis. This will keep Alumina well on top of any potential problems before they arise and become public issues. Along with the site studies, Alumina will appoint a small committee whose sole purpose is to keep abreast of any new or developing federal guidelines and monitor the company’s adherence to those guidelines. This type of proactive approach will minimize any potential future issues or possible violations. This same committee will then issue occasional press releases in order to educate the public about EPA guidelines and the company’s continued efforts to comply with them. Alumina has always been a community-minded company, so, in another effort to put a positive spin on the company, the above-appointed committee will also be finding more ways to get Alumina involved in the various communities in which it operates, and press releases will also be made about these efforts. This will put a positive spin on Alumina as both an environmentally friendly company, as well as one that really cares about its communities and the people in them, generating a positive feeling for the company and its efforts. This will also keep opportunities for defamation and slander at a minimum and will make it more difficult for people to make false accusations that could ever get to court. If, by chance, litigation is brought against Alumina for any reason, any issues will always be attempted to be solved by mediation proceedings first. This is always a less expensive alternative to the actual litigation, and can often resolve issues before they become too complex and emotionally charged. Any mediation proceedings will be agreed upon by both Alumina and the complainant in writing, and will be handled by a third party mediation service agreed upon by both sides. Lastly, if all other efforts fail and litigation becomes a reality, every effort will be made on the part of the company to settle the issues before they ever actually get to the inside of a courtroom. This effort to settle saves time and money in the long run, as well as the possibility of consistent bad press that could happen in a long, drawn-out litigation process. In conclusion, Alumina has continuously shown in the past that it is a friendly organization with a strong desire to serve the public in a non-threatening way. It has made known repeatedly that it has no desire to take shortcuts that could put people at risk. Also, by becoming more proactive in its approach and efforts to follow EPA guidelines, as well as its more public positioning of itself as a friendly presence, the company will decrease its future risk for defamation and tort litigation. References: Introduction to the Clean Water Act (2008) Retrieved from http://www.epa.gov/watertrain/cwa/ FOIA Basics (2009) Retrieved from http://www.gwu.edu/~nsarchiv/nsa/foia/guide.html Freedom of Information Act Guide (2004) Retrieved from http://www.justice.gov/oip/ Exemption4.htm