Recognizing and Minimizing Tort and Regulatory Risk

Recognizing and Minimizing Tort and Regulatory Risk

This essay will explain how regulatory risks can be identified and managed through preventative, detective, and corrective measures. A business plan that addresses these issues will be developed. Common torts and regulatory risks and issues that are characteristic to businesses that affect the community will be discussed. The goal is to develop an effective business plan that complies with laws and is in agreement with the community.

Tort and Regulatory Risk

Alumina Inc., is a $4bn aluminum maker with presence around the world with the United States of America accounting for 70% of its sales. These types of companies are subject to environmental inspections by government agencies to continue operations and be in agreement with the community. “Environmental Protection Agency and its regulatory partners conduct inspections under the majority of statutory and regulatory programs” (Environmental Protection Agency, 2009). Alumina falls under the jurisdiction of region six of the EPA. According to EPA (2010), “Region 6 encompasses an ecologically, demographically, and economically diverse five-state region of Arkansas, Louisiana, New Mexico, Oklahoma, and Texas, as well as 66 Indian Tribes” (About Region 6, para. 3).

As background information, Alumina Inc. was in violation of environmental discharge in a routine EPA compliance evaluation test five years before, a negligence act. “Negligence is the omission to do something which a reasonable person would do or doing something which a prudent and reasonable person would not do” (Cheeseman, 2010a). The PAH concentration in test samples was above the prescribed limit, the EPA ordered a cleanup and Alumina was very diligent in quickly complying. Subsequent audits reported that the violation was corrected.

Recently, Alumina Inc. failed under the unintentional tort principle and was accused by Kelly Bates of contaminating waters causing her 10-year-old...