MIT-IST
Written Exercise Some key legal dimensions – Business Models and Contracts Francisco Furtado 1/28/2009
799 words
Action Plan •
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Get the facts right: exactly what happened, when, how, to who, and why. Conduct a “Blitzkrieg Audit” on Olympic, the pipeline and people involved in the accident. Results tomorrow at 08:00 top! Make short memo of what we already know; Go through the contract with PipeCo, related legislation and regulations. Assemble all documents relevant (letters, meetings resumes, etc…). Look to all that was concerned with PipeCo proposal to renew the pipeline and document why that option was refused. Get past history on similar events, and legal problems. What compliance programs have we set up? If we don´t what are our safety regulations/procedures, how did we enforce them?; Establish the cause of fact of the accident, and what are the legal causes of the plaintiff´s harm, assess each company responsibilities. What are our strict liabilities, what vicarious liabilities may fall on us; Assess individual responsibilities of every employee, starting from my own, Carl Cracker, our Board and Superiors, then the workers in Olympic. Check for breaches in the fiduciary duties of every one; Immediately call outside lawyers team, get them by all means (pay a private plane if necessary), immediately after our own meeting we will have another with them!; Set up a “Crisis Comitie”, including one outside lawyer(not tall off them); Arrange a meeting tomorrow morning with PipeCo and have another of the JVCo; Contact immediately the Authorities and be available to them; Wright a memo for Boss Lady: What Happened, our main problems(“loose ends”), proposed plan of action. “No rest for the wicked!”
Get everybody aware of the gravity of the situation, but with a cool head. It´s very important to show there wasn´t intent on our part, we probably won´t stay away from civil liability, let´s limit damages and avoid criminal liability. To make any decision first we need to know what happened, and then we should see what everybody (companies and individual) responsibilities are. After that we can establish a strategy to deal with the problem, it´s important to have people that deeply know what we are up against and how can we defend ourselves, its also important to talk to the other parties. Speed is essential! We must check everything before the dust settles and be ready to stand the onslaught.
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Main differences, me and Enco: -
I can get arrested, Enco no; Enco as a lot of resources to defend itself, if they don´t stand by me I will have a lot less; This is very serious, people died. They will hit hard and want heads to show to the populace; They want to make an example, and as responsible of Enco for the pipelines I am in a very hot seat. They(prosecutors) might try to isolate me and push the company against me. Me and Enco can actually become opponents, it´s important to don´t have blind allegiance and take personal precautions.
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Risk Management The Justice System might be somewhat lenient in first offences. The second time prosecutors will be implacable. That´s why Enco, and me, are on a hot position and this issue is mandatory. Even if cost reduction is the priority, the risk of having a second accident and the associated costs would be devastating. First thing is to get Boss Lady to see reason. The time taken in responding to the investigations can be useful in compiling information related to Enco security status, and assess what are the most risky operations and infrastructures. I would arrange a dinner/lunch with Boss Lady, bring the report and one of the lawyers that worked with us (the one she trusts more). After that, draw a set of actions trying to combine cost reduction and improved security. Focus more on People, Paper, Information Technology, not Infrastructure: Workers awareness; strict procedures, compliance programs; implement an ITS system with database and sensors to monitor/manage infrastructure and operations – this provides better control both in costs and security. Deactivate infrastructures with high risk, they are old and with the slowdown we don´t need to produce as much.
I´me the Pipeline guy, a second offence would be devastating (reputation/jail time). I keep personal records of everything relevant. I developed a close relationship with one of the Lawyers and talk with him often about these issues. I try to be upmost professional in my work and get my superiors fully aware of the situation. I define a minimum of resources they must provide so that I (and them!) are not placed in a risky situation. If that minimum threshold isn´t met in due time (each minute the probability of an incident increases) I will quit. Besides, it´s more likely that I will leave in good terms before an accident, then when the house is already burning.
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