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Tort & Regulatory Risk

In: Business and Management

Submitted By bobbyb
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Alumina Inc. is an international, United States based, aluminum maker worth four billion dollars. The company focuses on automotive components and the manufacturing of packaging materials, bauxite mining, alumina refining, and aluminum smelting (University of Phoenix). After the challenge that Kelly Bates posed, Roger Lloyd, the chairman of the organization (University of Phoenix), realized that the company needed to come up with a plan to manage torts and regulatory risks.
Common business torts include intentional torts, unintentional torts (negligence) and strict liability. Intentional torts refer to actions that are taken with the intent to cause injury to the plaintiff. Unintentional torts, or negligence, refer to actions that are not taken to directly harm someone but where harm is a foreseeable consequence. The third type of tort is strict liability which means liability without any fault (Cheeseman, 2010, p. 75). It is extremely important to manage tort and regulatory risks (Cooper, 2008, p. 80). When it comes to Alumina Inc. there has only been a case for possible negligence, as outlined in the business simulation. Regulatory risks are any risks from not following rules and regulations set in place by administrative or regulatory agencies. The regulatory agency that directly affects Alumina Inc. is the Environmental Protection Agency, when Alumina Inc. contaminated the water they violated the Clean Water Act and Environmental Protection Agency regulations (Cheeseman, 2010, p. 707).
A tort risk specific to Alumina Inc. revolves around the possibility of disease from contaminated water. There is a fear for the health of people in the future and a fear of damage to the environment and the ecological impact that it will have (Lahnstein, 2004, p. 513). Five years ago Alumina Inc. contaminated the local lake and was in violation of environmental…...

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