Enterprise Risk Management Alumina, Inc., Henceforth Being

¶ … Enterprise Risk Management

Alumina, Inc., henceforth being referred to as AI, is an aluminum-based company. AI is at the center of focus in the Business Regulation Simulation that was studied for the purpose of this paper. This paper will identify a significant tort that was committed by AI in regard to the legal issues and their corresponding principles as drawn from the simulation (Harb, 2008).

Negligence is the greatest tort committed by AI in the legal issues realized from the simulation. The first and most delicate legal issue arising from negligence by AI is the threat of a destructive lawsuit being forwarded by a 38-year-old lady, Kelly Bates. The lawsuit accuses AI's continual role in polluting Lake Dira's water that ended up affecting her 10-year-old daughter by contracting leukemia. The other legal issues that AI faced were the threat of defamation regarding AI's responsible in safeguarding human welfare, which also form its consumer base, and the issue of exposure resulting from release of highly confidential information that would have compromised the company's position in competition among its competitors. All these legal issues resulted from negligence of waste disposal mainly containing harmful carcinogens as explained in the succeeding paragraph (Lam, 2003).

A result of the release of carcinogens in the ocean that largely contain Polycyclic Aromatic Hydrocarbon, the lake's water was contaminated, compromising the ten-year-old daughter's health by infecting her with leukemia, a deadly and hard to cure blood cancer. The same negligence could be evaded by the release of some confidential information that was not a truly desired option by the company's board of directors as it would compromise its competition levels. Defamation came by due to the threat of the lady's accusations and also the fact that the company lacked responsibility in waste disposal.

Using the seven elements of Enterprise Risk Management, this tort could have been easily averted to avoid the entire current melee in legal issues that the company was entangled. The first element, management commitment, would tie the entire crew of employment with the responsibility to safeguard human right to a clean environment. This would also ensure responsibility and accountability from the workers of AI. Internal Audit (IA) would ensure an appropriate ERM framework for efficient maintenance and beneficial synergies. With this implementation, negligence would be a farfetched, and at the first option, no inconsiderable amounts of carcinogens would be disposed carelessly.

Element two, communication and consultation, would ensure relevant connection between the company's environmental branch and the disposal department to compare rates of pollution with their corresponding disposals. IA would ensure responsible environment regulations integration into the ERM. Element 3, policies and procedures would ensure compliant connection of company policies, strategies, procedures and plans in the ERM. IA would ensure proper alignment of these aspects in the ERM. Element 4, training and education, would ensure appropriate capabilities by the employees to perform the right actions. IA would ensure proper review of responsibilities using the imparted skills during training.

Element 5, stating effectiveness and efficiency of the framework would ensure risks are avoided with the virtue of appropriate technologies, methodologies and perfect documentation. IA would ensure no redundancy and productivity. Element 6 that commands application of Risk Management into actual practice would confirm the identification of the problem and put into accountability the solutions. IA in this case will facilitate support, reviews, evaluations and various knowledge sensitization workshops.