Alumina Simulation Paper

Managing Regulatory Risks

Brian Carter

LAW 531

David Walker

11-23-2009

University of Phoenix

Alumina is a $4 billion aluminum maker which operates in the United States and countries around the world. Companies such as Alumina must be proactive with respect to its conduct. For any business, regulatory compliance can be very challenging. Regulatory risks, such as tort liability have been changing companies’ governance for years. In the case of Alumina, the torts they are dealing with are related to environmental processes. As a manager my goal is to ensure that Alumina complies with environmental regulations and promotes the best business and ethical practices responsibly.

The Environmental Protection Agency (EPA) is the government agency responsible for enforcement of environmental laws at the federal level. Five years ago, Alumina was cited for violations for non-compliance with environmental regulations. Through corrective measures, Alumina complied with EPA regulations and has not had any issues since that time.

Just recently, Alumina has been hit with a multimillion dollar lawsuit by a local citizen named Kelly Bates. Ms. Bates is a 38-year old single mother who believes her 10 year old daughter is suffering from leukemia due to Alumina contaminating bodies of water. This lawsuit creates tort liabilities and regulatory risks.

Ms. Bates claim would immediately put Alumina in violation of the Clean Water Act. The Clean Water Act places federal standards on the amount of pollutant discharge into waterways (Jennings, 2006). The Safe Water Drinking Act which sets national standards for contaminant levels would be in violation as well.

Ms. Bates accusations were made public in the Erehwon Reporter, a local newspaper. As a result of this, Alumina’s reputation has suffered a severe blow. The company now faces the potential of sacrificing its public image and community standing. Defamation is an intentional tort. Defamation is an untrue...