Question

Business Ethics

Case Study: Discuss the important ethical issues in this case. In your response examine the ethical issues in this case especially from the viewpoint of the consumer. In your response, please identify and evaluate the systems (if any) that were put into place to regulate the product, protect consumers, and ensure corporate compliance.
Please use the text box of this journal link to enter your response (minimum 200 words) for the case study.

CASE STUDY 7.1 Hazardous Homes in Herculaneum

TWENTY FIVE MILES OR SO OUTSIDE OF St. Louis, Missouri, lies little Herculaneum, a town of only 3,500 people. Looming over the town’s economy and the local environment is the Doe Run Company’s lead smelter, which dates back to 1892 and is the largest in the United States. For decades, federal and state regulators have been after the company for polluting. In 1991, they required Doe Run to replace the contaminated topsoil in the gardens of about ninety houses in the vicinity of its smelter. In 2001, a study found that 24 percent of the children under six living within a mile of the company’s plant had dangerously high levels of lead in their blood.

As a result, Doe Run agreed to clean up the site and started installing new pollution-control devices to prevent further con- tamination.97 In the meantime, however, environmental investigators found lead levels as high as 300,000 parts per million on a road used by the plant’s trucks. Because of the health hazard that lead contamination poses, the state put up signs warning residents of Herculaneum not to let children play outside, and the federal government helped out by advising people to alter their diets to resist lead poisoning (the gist: Don’t drink tea but eat more liver, eggs, whole-grain bread, and ice cream). Not so surprisingly, many residents of Herculaneum found this sort of assistance insulting. Instead, they urged the federal government to step in, declare Herculaneum a Superfund cleanup site, and use federal funds to buy up the whole town. The Environmental Protection Agency (EPA), however, maintained that adding Herculaneum to the long list of places seeking a Superfund buyout would only delay a solution.

The EPA is right not to exaggerate the speed with which Superfund projects move. When Congress created Superfund in 1980, sponsors of the legislation believed that the program could mop up the nation’s worst toxic dumps and other danger-ously polluted sites within five years and do so for a relatively modest $1.6 billion, to be covered by sales taxes on chemical and petroleum-based products. Superfund was authorized to recover its costs from the polluters themselves and to use this money to pay for future cleanup efforts. In this way, Superfund would become self-financing, with industry, not the taxpayers, picking up the tab. But the hopes of Superfund’s sponsors have yet to be realized. Congress has repeatedly had to pour money into the program to keep it going; there are continual complaints about inefficient, top-heavy administration, and to date only a portion of the country’s most environmentally damaged sites have been restored.

Moreover, Superfund has grown increasingly and stagger- ingly expensive. Its cleanup efforts have become mired in law- suits, with the resulting litigation costs climbing to the stars. The problem, many observers believe, goes back to the initial Superfund legislation, which permits the EPA to penalize com-panies for dumping and polluting that was not illegal at the time it occurred. In addition, it makes individual polluters liable for the entire cleanup costs of toxic sites that may have been used by many other firms. Corporations dislike these liability principles, and they find it less expensive to resist the EPA in court than to pay up. “From the individual corporation’s perspective,” says David Morell, a toxic removal consultant and an expert on Superfund’s history, “lawyers’ bills are still cheaper than pay- ing for an entire cleanup.” And he adds: “The longer you can stall—and convince yourself that you may never have to pay at all—the more the legal fees seem like a bargain.”

As a result, a flood of lawsuits has slowed Superfund’s cleanup efforts to a crawl while the costs of those efforts have ballooned. “The idea [behind Superfund],” Morell says, “was supposed to be ‘shovels first and litigation later.’ Instead, it has become ‘litigation first and shovels never.’” Many experts agree that Superfund has become a financial black hole. Legal fees, transaction costs, and administrative overhead associated with its cleanup projects are projected to exceed $200 billion.

Others put the bill as high as $2,000 per person—paid in price increases on countless everyday chemical and petroleum- based products. And this sum doesn’t pay for the removal of hazardous wastes; it covers only litigation-related costs.

According to critics, Congress has done little to solve the problems with Superfund, except to keep digging deeper into the national coffers to keep it going. However, Congress did exempt small businesses from Superfund liability if they con- tributed only a relatively small amount of hazardous waste to a targeted site, and it required the EPA to consider a company’s ability to pay when negotiating a settlement. For its part, the EPA contends that it is making good progress. It reports that 1,306 or close to three-quarters of the toxic waste sites designated as National Priorities List Sites have been cleaned up. Still, every day of delay increases the clean up costs as waste from untreated sites seeps into the ground water and increases the size of the polluted area. “These sites are not like fine wine,” John O’Connor, director of the National Campaign Against Toxic Hazards, has explained. “They get worse with age, and they get more difficult and costly to clean up.”

Meanwhile, back in Herculaneum, Doe Run—in accord with a plan drawn up with the state of Missouri—purchased more than 130 local homes. Some of these were torn down; others were left vacant. The buyouts removed many young children from harm’s way, but they left many blocks of Herculaneum with an eerie ghost-town quality. Doe Run also removed contami- nated soil from an additional 700 properties, including nearby schools and parks, and it fenced off the area around the plant, posting it with warning signs about lead. Despite $12 million worth of environmental upgrades, however, the plant continued to regularly exceed legally permissible limits on lead emissions. (Herculaneum was one of only two places in the nation failing to meet federal air standards for lead.) In 2010, the company announced plans to introduce a new proprietary technology that would greatly reduce sulfur dioxide and lead emissions. In the end, though, Doe Run decided that doing so would not be financially viable in the current business climate and closed the smelter altogether on December 31, 2013, with about 75 of its 300 workers staying on through 2014 to wrap up some second- ary projects.

Besides the loss of jobs, the closure will have other lasting effects on the community. The company paid $500,000 a year in local taxes and funded scholarships and athletic events. In 2010 it had helped build a fire station and in 2012 a $6-million bridge. “There were the negatives with the smelter,” says school superintendent Stan Stratton. “But they were always good partners.” Kathleen Logan Smith of the Missouri Coalition for the Environment acknowledged the loss to the community, but said the quality of life will improve. “For the folks living closest to the plant and the people who have endured lead dust on their streets, their lives are hopefully going to get better,” she said. “There’s an opportunity to re-envision what Herculaneum is and ought to be.”

Answer 1

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Once the whole case has been read, it is noted that Doe Run was created and still operating in 1892. Through supplying jobs, good wages to the poor and taxes to governments, they benefited society, local residents in the region, and the local government. Both the Congress and the EPA support the management of the company from its very beginnings.The most of the people who are in the city, and around the world, suffer from the highest level of plumage in your blood have been confirmed to the latest environmental studies. Actually, roughly 24% of the childerns suffered with the problem. The waters in the region are drunk, the air polluted by the company breathes and these two factors are the cause of the problem. For every 10 billion people, not only the kid, over 3 lakh people suffered from the same problem.

Later the EPA and other environmental agencies lodged a case against Doe Run in order to take environmental measures, clean up pollution and launch some measures to overcome the problem. All these organizations are approved and the introduction of all these has begun.But here is the issue, which is the long-term work of local authorities, local authorities and environmental agencies. Industrialization causes losses that can not be recovered, everyone knows. The company's environmental abuse that people have fought for. It is the government's responsibility to guide, plan and demand that the organization follow such environmental procedures. But it wasn't happening in the given case. More than $1.6 in taxes received by local governments has already been charged to the company.

The company was at last shut down and most people lost their jobs, where they worked for the company for decades. The local schools, local community financial support is withdrawn. The local community. The company is removed from its activities due to the costs of the new technology, hence the overall economic growth. Alternatively, several external companies will run the company with the help of it. It might be.

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