Damage Control Strategy for Alumina

Alumina Incorporated is a $4Billion aluminum-making industry operating in eight countries with the United States of America as its base which also accounts for 70% of its sales. It is situated in the fringes of Lake Dira in the State of Erehwon. Five years ago, Alumina Incorporated was reported to be in violation of environmental discharge norms in a routine EPA compliance evaluation inspection. The polycyclic aromatic hydrocarbon (PAH) concentration in test samples was above the prescribed limit of 5milligrams per liter of all hydrocarbons.

A clean-up was ordered by the Environmental Protection Agency (EPA), to which Alumina complied promptly. The subsequent environmental audit reported the violation as “corrected”. Barring this one incident, Alumina Inc. has enjoyed a good overall environmental record. Now, it is being accused by Kelly Bates, a 38-year-old single mother, of contaminating the waters of Lake Dira with carcinogenic effluents and that the alleged contaminated water is the proximate cause of the leukemia Kelly Bates’ 10-year-old daughter. This accusation was made through the Erehwon Reporter, a local daily.

Alumina’s reaction to control the damage caused by this accusation was to release a news story highlighting the efficacy of their system declaring that they use the best available technology for pollutant cleanup in compliance with the Clean Water Act. This strategy was suggested by Arthur Todd, the legal counsel for the company. This damage control strategy, at first blush, may seem to be too defensive as it is a direct counter to the accusation of Kelly Bates and is calculated to balance public opinion about the company. Even the Erehwon Reporter called this a defensive move in a double editorial.
Despite the fact that this may be a defensive move, this is the proper way to handle an accusation made through the press—to counter it through the press also. The media can be your friend or foe during a disaster (Baker, 2001). When charged for being defensive by the Erehwon Reporter, Alumina no longer used the press to counter the charge. Instead, it ignored the Erehwon Reporter editorial and went on to conduct an independent site study to check for new violations. This shows the company’s willingness to correct any mistake as soon as possible. And this also shows concern for the environment and for the populace.
This is a value which is very appealing to people. And truly enough, the independent site study showed that the PAH levels are lower than the prescribed limit of 5milligrams per liter of all hydrocarbons. This gives the company, as well as a large portion of the residents of Erehwon, a lot of breathing space. This should also quell Kelly Bates’ accusation against the company for a while. However, after a short while, a study made by an American Scientific Society showed that the PAH levels in Lake Dira are high, in fact, 100times higher than pre-urban conditions.
Although the cause of this was found to be the heavy traffic in Erehwon, and not the aluminum-making industry, this finding still puts into question the independent site study made by Alumina on the PAH levels of Lake Dira because their results are not in harmony with each other. This development prompted Kelly Bates and the press to approach the EPA to get hold of a copy of the environmental audit report that documented Alumina’s violation of the Clean Water Act five years ago. They were claiming their rights as citizens to be informed of audits made by government agencies.
Though they have such rights, the Freedom of Information Act (FOIA) allows the company to withhold confidential information. The environmental audit report is considered confidential information which the company may refuse to reveal. However, Alumina agreed to release portions of it which pertain directly only to the violations discovered five years ago. This erases any air of arrogance on the part of the company and shows their willingness to cooperate and desire to avoid any sensationalized dispute. And this is a proper way to handle this kind of situations. Statements should reflect concern, a call to action, and a move toward resolution.
Baker suggests: provide as much information as possible. If your company has an involvement in the situation, admit it. The public can be very forgiving unless they perceive you’re hiding something (id). Also, allowing only a partial release of the audit report kept the company from jeopardizing its business by keeping release of confidential information to a minimum. However, despite all the cooperation extended by the company, Kelly Bates still threatened to file her lawsuit. The company, seeking to avoid protracted litigation, sought an alternative dispute resolution to settle the case.
It sought a third party mediator to settle the dispute and it was a success. They saved money by eliminating litigation expenses. The company’s settlement offer was in no way an admission of guilt. It was more of a money-saving device. The cost of the mediated settlement is a fraction of what Alumina would have spent to defend against Kelly Bates’ claims in court. Alumina’s Values The primary value displayed by Alumina in cases of crises is its willingness to comply and cooperate and correct its errors, if any. It has a humble approach towards dispute resolution.
This value is shown by its immediate compliance with the Clean Water Act when it was audited five years ago. When Kelly Bates made an accusation, it made an independent site study of the lake. And this value was also shown when it was willing to allow a partial release of the audit report. The company never tried to hire a public relations officer or an image consultant. It did not turn to public relations firms to clean up their reputation rather than change environmentally damaging practices, as is the trend these days, even though the latter strategy is more costly (Beder, 1997). This is a noble trait.