9/10/2004

Dupont Ditches Waste and Gets Caught

In this particular article, Dupont is settling a class action lawsuit which alleges that the company is guilty of contaminating water supplies in West Virginia and Ohio with a key ingredient used in its Teflon products. While no admissions of guilt have yet been heard from Dupont, interestingly it has promised to pay a sum of at least $85 million and possibly up to $340 million to settle the case.

I find it hard to believe that a company can, in good judgement, knowingly contaminate the environment and in-turn possibly do harm to millions of people. What is wrong with the way businesses operate? Are we only taught in school to care about the almighty dollar? Aren't the lives of our children and further generations in our minds or do we just worry about what happens on earth doing our lifespan?

Maybe I'm getting too deep, I mean the contamination of water by Dupont is only going to affect a few states back East. Why do we care? We have to care because who knows what and where Dupont will contaminate again. Hopefully, the public becomes aware of this behavior made by a company as well regarded as Dupont and holds them responsible in cleaning up not only the contamination, but also their behavior.

3 comments:

Anonymous said...

This is not an isolated incidence of environmental contamination. This is just one incidence that got publicized.

Student 01 said...

What ever happened to being innocent until proven guilty, paying someone to get off your back does not constitute guilt. Let us not forget that.

If Dupont is guilty of contaminating water supplies maybe they made the tradeoff to do so. It may save them so X amount of dollars in environmental cost to just dirty up something else. That is an economically sound decision from their point of view. Yes, company’s need to be more responsible, but they are not going to be the ones to pay for it in the long-run the consumers will be the ones to pay for it. Whether it be a lost investment if the company goes out of business, lost jobs and lost tax revenue because the company moves to a place were such laws do not exist, or higher prices for the products they sell.

Dr. Tufte said...

Keep in mind that in our legal system, the settlement out of court like this does not necessarily mean that harm was done - only that the company conceded a fight it probably couldn't win.

But let's take the accusation as true. Why would "the company" pollute? There are two parts to this.

First, "the company" didn't make the decision. Individual officers in the company did. That's why we talk about ethics so much in business schools.

Second, why did those individuals make that choice when they could have cleaned up their mess, and passed that cost on to consumers? The typical explanation of that is that the costs could not be internalized because they did not fall on identifiable parties that were harmed. This is usually due to the absence of property rights. Also, firms can get into a prisoner's dilemna with their competitors about cleaning up pollution - they'd both be better off if they did it, but neither is willing to go first.