Recognizing and Minimizing Tort and Regulatory Risk

Recognizing and Minimizing Tort and Regulatory Risk

In this paper we are going to write an organizational plan for Alumina Inc. to identify and minimize torts and regulatory risk to reduce litigations and tort liabilities. Aluminum Inc. is a 4 billion company that operates in eight countries on the USA on manufacturing automobile components, packaging materials, bauxite mining alumina refining and smelting. Alumina Inc. has to important incident that affect image publicity and sales on the industry. The first one five years ago an environmental discharge norms in a EPA routing evaluation, the second one a new accusation from a 38 years single woman ,Kelly Bates that accuse the organization to develop a leukemia on his daughters because a contamination of carcinogenic on the Lake Dira waters.

Risk Management

The first think to do on the organization is to implement on his corporate culture is a risk management department. The function of this department is to collect and know all the regulation and law who directly or indirectly could affect his internal and external operational and all social responsibilities, evaluating the risk and administrating the risk. The risk as defined it is the possibility of occurrence of an event that has an impact on the achievement of objectives, so the risk is measured in terms of consequences and likelihood. In short, the uncertainty is the condition in which an organization does not have the information necessary to assign probabilities to the outcomes of alternative solutions to this should have tools that facilitate the collection of information, this arises from the objective probability and subjective. The objective probability is the possibility of occurrence of a specific result based on concrete facts and numbers. Knowing the business on which it is acting, to identify all relevant strategic risks.

Weigh your risk in terms of their impact and probability of occurrence with the proper use of tools and methodologies. Evaluate the effectiveness of existing and potential controls to mitigate its impact, according to their geographical environment, profile, market segment, characteristic of the product cycle and the economic process. Do a mapping of risks according to their impact and importance of materiality. Make decisions concerning the residual risks in proportion to its impact. Adopt continuous improvement.

Prevent Detect and Corrective Measures

When the risk management department structure is implemented they need to establish organizational procedure and plans to make the organization aware of all the violations, regulations and torts the organization could be managing. The organization could address this information establish mandatory trainings or thru formal communication channels on the organization (Bulleting's boards, emails, intranet, etc.) Because the risk is