Recognizing and Minimizing Tort and Regulatory Risk Plan In this day and age and especially in this economy, the laws and regulations carry severe penalties, fines, damages and in some cases jail time. Therefore companies like Alumnia should be aware of current compliance of regulations, that way they can adjust their business practices accordingly and minimize exposure to tort liabilities as a result of not complying with regulations. Five years ago the EPA conducted a routine compliance evaluation inspection of Alumnia; during the inspection Alumnia was found to be in violation because their PAHs were above the prescribed limit, although this violation was corrected (UOP, Business Simulation, 2010). Although Alumnia had maintained a clean record since, they should make it a policy to review all environmental regulations that pertain to the discharges and the chemical contents and the effects on the environment to avoid future violations.
In addition to the violation five years ago, the Erehwon Reporter along with Kelly Bates, a local resident were making claims that Alumnia continuously contaminated Lake Dira, which if proven would be negligence on the part of Alumnia, which would be a violation of the Water Quality Act; in addition they are pursuing a copy of the inspection report by the EPA via the Freedom of Information Act. Even though since that inspection Alumnia took corrective actions and has had a clean record since. In an effort to avoid bad press and possible defamation of this nature in the future, it is in the best interest of companies like Alumnia to conduct studies on a regular basis and conduct lab test to insure they stay in compliance with all federal and state regulations. They should be willing to release a statement a to the public via the media ensuring them of their clean record, whether it be print or television advising of the studies conducted and that under the Freedom of Information Act, this information is available, although due to the company confidentiality they will only receive partial information showing that the company has complied with all federal regulations of compliance. In terms of media outlets making false accusations, companies should be sure to have all of their documentation in order to defend their record against these types of accusations and at the same time demand that the media retract their statements, being they had no proof to base those allegations to begin with.
Kelly Bates implies causation, because she feels as a result of the lake being contaminated five years ago, is the reason her ten year old daughter was diagnosed with leukemia and therefore feels Alumnia is to blame, which means that Alumnia would have contend with a potential multi-million dollar lawsuit.
A lawsuit would be costly not only for Kelly Bates but Alumnia as well. It is important that when companies find themselves confronted with these situations they sit and look at all of their options, the best choice would be to consider the option of arbitration in resolving these types of disputes, which would save the company time and money and possibly preserve their reputation in the process.
In order for Alumnia and companies like it to minimize tort and regulatory risk they should adopt the EPA Incentive, where they do independent site evaluations, this way they can ensure that they are in compliance with EPA’s standards levels of allowable discharge of PAHs into the lake waters. By implementing this it will allow Alumnia to identify all of their potential risk in order to rectify them before non-compliance becomes an issue. References

Busniess Simulation (2010). Alumnia. Retrieved April 11, 2010 from https://ecampus.phoenix.edu/secure/aapd/vendors/tata/sims/legal/legal_simulation1.html