Alumina Legal Analysis

Running head: ALUMINA LEGAL ANALYSIS

Alumina Legal Analysis

University of Phoenix

March 10, 2008

Alumina Legal Analysis

Regulatory and legislative compliance is a critical element for the success of any American company. The regulatory environment can be extremely challenging and diverse depending on the nature of the business and the applicable oversight agencies responsible for monitoring and enforcing key regulations. One of the most daunting, yet vital regulatory agencies policing American businesses is the Environmental Protection Agency, which is charged with “protecting human health and the environment” (Environmental Protection Agency, 2008).

Alumina, Inc. is an aluminum manufacturer specializing in the manufacture of aluminum products for automotive manufacturing, packaging materials, and raw alumina and aluminum smelting for use in other manufacturing processes. The company is based near Lake Dira in the fictional state of Erehwon, and enjoys revenues of $4 billion from sales throughout the global marketplace. Like other companies operating in manufacturing and smelting industries, Alumina is regulated by the Environmental Protection Agency (EPA) with regards to the impact of operations on the populations and locales in which the company operates (University of Phoenix, 2008).

Situation Analysis

Issue and Opportunity Identification

Five years ago, Alumina was cited for non-compliance with environmental regulations, specifically the presence of waste products (Polycyclic Aromatic Hydrocarbons, or PHAs) that were in excess of the prescribed maximum levels. Upon notification of the violation, the company took efforts to correct the action, and has remained in compliance since that time. Despite efforts to maintain regulatory compliance, a local citizen has announced allegations against the company, placing blame for her daughter’s leukemia on the company’s failure five years ago. What initially began as a report in the local newspaper has escalated to a potential lawsuit by the citizen, seeking damages in excess of one million dollars. The purpose of this paper is to analyze the situation and determine the possible alternatives and associated risks towards addressing this situation. Key to successful mitigation is the minimization of risks, maintaining positive public image, and reducing the potential losses that may stem from losing litigation and possible opportunities for competitors to capitalize on the situation.

Stakeholder Perspectives/Ethical Dilemmas

There are a number of ethical dilemmas present within this scenario. The management team, comprised of Chairman Roger Lloyd, Chief Operating Officer (COO) Chris Blake, Head of Public Relations Diane Richards, and the company’s legal counsel Arthur Todd, all hope to minimize the impact of the previous violation and ensure ongoing success of the company. Roger Lloyd has taken a substantially defensive posture towards the plaintiff in this case, and believes that Gene One’s leadership team faces a number of challenges based on opposing or differing perspectives from the various stakeholders. The company’s management team, particularly Mr. Lloyd and Mr. Blake, both hope to reduce the total financial exposure (losses) as a result of this threat. Ms. Richards hopes to retain the loyalty of customers, suppliers, and members of the community by reducing the potential damage to the company’s reputation, while Mr. Todd has a vested interest in ensuring that the company exercises its legal rights and responsibilities.

Ms. Kelly Bates, the mother and potential plaintiff in this case, is clearly concerned for her daughter’s health and well-being, though some within the company have questioned her motives to some degree. While one can understand the pain and frustration that this mother may be experiencing, one can also question the choice to pursue action against Alumina specifically based on one specific violation. It would also appear that Ms. Bates may not be willing to entertain potential other causes for her situation, creating a more difficult environment in which to negotiate through towards any type of settlement.

Discussion

There are a number of facts related to this case. First, Alumina was cited for violation of EPA regulations, specifically those related to the Clean Air and Clean Water acts governing the amount of traceable emissions into the air and water supplies by any business or entity. The company was able to promptly