Business Regulation Erm

Business Regulation ERM

Our team selected option one the business regulation simulation of the assignment. After reviewing the simulation, Team C used the seven-step method of risk management to ease the business regulation risk related to the violation. In addition, Team C identified the tort violation from the simulation. The business regulation simulation dealt with the ethical issues business managers face involving resolving destructive lawsuits and the best legal way out of certain predicaments. In addition, this business regulation simulation highlights the level of importance government places on the preservation of the natural environment and its means of implementing environmental regulations.

After analyzing the Business Regulation Simulation, three main potential tort risks were identified. The first potential tort risk dealt with a potential negligence on the part of Alumina Inc. when five years ago it was found in violation of environmental discharge norms in a routine Environmental Protection Agency (EPA) compliance evaluation inspection. The PAH concentration in test samples was above prescribed levels. Alumina Inc. promptly rectified the violation and was cleared in a subsequent audit. Whether this one instance ultimately contributed to leukemia would need to be further researched and examined. The connection at this point is inconclusive.

A second potential tort risk is any violation of EPA rules and regulations for the safe disposal of industrial by products into the environment. The Environmental Protection Agency (EPA) is the strong arm of the law in overseeing and monitoring compliance with existing environmental laws. By taking the initiative and conducting its own independent site survey to determine if there are any existing violations, Alumina Inc. is positioning itself in a favorable light with public sentiment and regulatory agencies.

A third potential tort risk deals with invasion of privacy issues. The senior management team at Alumina Inc. bounced around the idea of having Kelly Bates privately investigated to determine the details leading up to this serious allegation. While trying to pinpoint the exact cause of her daughter's leukemia is a natural course of action, delving into people's lives without their consent has many legal ramifications. It has the potential to put Alumina's public image into an even shadier state in light of the newspaper articles.

Mitigation

Mitigation is the effort of being proactive rather than reactive to reduce loss of life and property by lessening the impact of disasters (FEMA, 2012). For mitigation to be effective all parties need to understand any local risks, deal with the hard choices involved, and devote time and effort in the long-term well-being of the community (FEMA, 2012). There are seven steps to help the effectiveness of the mitigation process: build awareness, take an inventory of systems, assess exposures and assign priorities, draft plans for remedy when possible, establish contingency plans, complete corrections, test for compliance (Gebhardt, 1998).

Management's involvement in the mitigation process is extremely important, they need to understand and have full comprehensiveness of what enterprise risk management