Risk Rap

Rapping About a World at Risk

Baggin Bears in Jersey

Locked and loaded their going for bear in New Jersey’s Highland Region.  The Highlands is one of the states last stand of expansive underdeveloped woodlands and critical watershed that provides drinking water to over two million state residents.  The Highlands is also the preferred habitat and home to most of the states black bears.  But starting Monday, the Highlands will become a deadly killing ground for the lovable species as the state appeals court threw out a suit brought by two animal rights groups to halt a six day bear hunt.

Environmental Commissioner Bob Martin signed off on this year’s hunt, saying it’s needed to help control a growing black bear population. The agency estimates the state’s black bear population at 3,400, up from 500 bears in 1992.

“The Comprehensive Black Bear Management Policy is full of scientific flaws and outright fabrications,” APL contends. “In their zeal to hold a recreational trophy hunt, the council has slapped together a scientifically sloppy, self-contradictory document that pretends the hunt is necessary when in fact, the science does not support a hunt.”

The suit filed by the Animal Protection League (APL) contends that the scientific assessment of the bear population and its environmental impact is flawed and its findings are biased.  The suit also alleges that proponents of the hunt,  The New Jersey Outdoor Alliance made illegal contributions to Gov. Chris Christie’s election campaign.  The  New Jersey Outdoor Alliance disputes the claims made by the APL and issued a response that appears on the Ammoland website.

During public hearings comments ran 3 to 1 against the bear hunt.  Public opposition to the hunt has been vocal and considerable.  If the voice of the public counts for nothing why go through the charade of soliciting public comments?  A recent public hearing on the expansion of the El Paso Corp gas pipeline through the Highland region had a similar tenor to it.  Of the twenty of so citizens and groups who spoke at the meeting not one supported the expansion of the pipeline.  Local residents and groups affected by the El Paso expansion initiative are concerned that their opposition to the project is falling on deaf ears of regulators and government officials responsible for green lighting the project.  If the project is a fait accompli regardless of public criticism why solicit  public comment and go through the motions of participatory democracy?

The Highlands Commission was formed to determine how the resources of the region are managed and how the area will be developed.  The Highland region is a critical watershed area and a vital open recreational space for an overwhelmingly urban state.  The Highlands Commission is the stewardship body chartered to reconcile the competing interests of a complex community of stakeholders.  The immediate needs of wildlife preservation, smart development and long term sustainability of an environmentally stressed ecosystem will require effective engagement of all Highland Community stakeholders.  Governor Christie’s slate of nominees to to the Highland Council  is being criticized as too pro development.   This may auger well for stakeholders like El Paso Corp but it may have deadly consequences for endangered bears and other species struggling to hang on in an increasingly hostile environment.

You Tube Video: Junglebook, Bare Necessities

Risk: environment, bears, sustainability, water, open spaces, democracy

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December 3, 2010 Posted by | associations, democracy, ecological, environment, government, politics, regulatory, sustainability | , , , , , , , , , , , , | Leave a comment

PCA Goes To The Lonesome Valley

PCA RIP

PCA RIP

On Monday came the not surprising news that Peanut Corporation of America (PCA) has filed for bankruptcy.

The practice of selling food additives laced with salmonella bacteria makes it difficult to win back the trust of customers that had been so grievously violated.

PCA’s actions to knowingly ship contaminated products that have resulted in nine deaths and have sickened 637 people in 44 states. PCA’s salmonella laced peanut paste has contaminated 2,226 processed food products. A full list of recalled products can be found on the FDA website. These potentially criminal acts by PCA’s management has demolished the PCA corporate brand making it impossible to continue as a going concern.

The Chapter 7 bankruptcy filing will liquidate the company. This strategy will protect the PCA shareholders in the privately held firm from the significant legal liability that this event has created. It does not however protect PCA’s company management and accomplices that knowingly shipped contaminated products from potential criminal prosecution. Criminal persecution of those involved should be pursued and if anyone is found guilty punishment must be severe.PCA released its contaminated product into a large and extensive supply chain. Many leading brand food processing manufacturers that use PCA’s peanut paste as an ingredient in their packaged goods products have suffered severe reputational damage to their product and company brands. Though PCA’s corporate liability may be mitigated with the bankruptcy filing, aggrieved consumers will continue to have have legal recource by filing suits against the major consumer product companies that are still in business. This could make for a record breaking class action product liability suit.

Unfortunately this tragic occurrence could have been prevented. PCA’s actions demonstrate a disturbing ambivalence toward effective sound corporate governance practices. Companies that willingly sacrifice risk management and ethical business practices for the sake of short term profits consistently undermine corporate sustainability. All may not result in a dramatic corporate implosion like PCA. But ultimately the song of corporate liquidations remains the same. Unemployment for workers, aggrieved consumers, community desertion, tortured consciences and and in some instances criminal prosecution.

RIP PCA.

You Tube Video: Fairfield Four, Lonesome Valley

Risk: corporate goverance, ethics, risk management, legal

February 18, 2009 Posted by | associations, compliance, manufacturing, Peanut Corporation of America, product liability, supply chain, sustainability | , , , , , | Leave a comment

Peanut Corporation of America

A salmonella breakout that has been traced to peanut products marketed by the Peanut Corporation of America (PCA) is an unfortunate and severe example of a company with poor risk management, weak corporate governance controls and questionable ethical business practices. In most instances poor risk management and corporate governance violations primarily victimizes the company that fails to institute them. In the case of the PCA, unsound business practices has unleashed a deadly viral bacteria into a vast consumer market. Since its outbreak in October the salmonella infection is believed to have claimed the lives of 8 people and has sickened over 500. PCA violations will also cast a long shadow on the vibrant US peanut growers and processing industry.

A brief examination of some of the public disclosures that have come to light concerning the PCA speaks of a telling breakdown in sound risk management practices. These disclosures also hints at potential instances of fraud to cover up lax controls and compliance violations cited by FDA and State of Georgia food safety examiners.

The PCA had been cited for violations and lax operational controls during past inspections by regulatory agencies. Inspectors found evidence of roach infestation and mold in the production and storage facilities. Inspections also revealed that product quality had been compromised due to a degraded manufacturing process and improper maintenance of the operating facility. After bringing this to the attention of company management PCA executives sought out food testing companies that would provide results to indicate that product quality met federal safety standards and were safe to ship.

Utilizing industry standard risk analysis tools like the Profit|Optimizer would have revealed several breaches in sound risk management practices at PCA. Lax operational controls, poor facilities and the evasion of corporate governance practices will likely put PCA out of business due to the damage its actions have done to company product brands and reputation.

Problems and risks associated with process manufacturers like PCA add layers of complexity to determine product risk due to its role as a supplier in an intricate and expanded supply chain for processed consumer food products. The melamine contamination of Chinese milk products and the mortgage backed securities market crisis provide examples of how product liability and consumer risk is leveraged due supply chain complexity. The pervasiveness of products that use the peanut paste manufactured by PCA is very similar in many respects. Cookies, ice cream, crackers and other products are subject to recall. Some of the companies affected by PCA’s contaminated products include premium consumer product and brand marketing companies like Kellogg, General Mills, Jenny Craig, Nuti-System and Trader Joes.

Severe product liability events like this unfortunately also cast aspersions on an entire industry. Associations like the American Peanut Council are most concerned that the poor manufacturing practices and product quality standards exhibited by PCA will reflect on how consumers view the industry as a whole. It is a valid concern for the industry association and it must demonstrate to the regulators and consumers that its membership is committed to sound manufacturing practices, product quality and corporate governance excellence. This is not a PR problem. Nor is it a problem born from an industries anathema to regulatory control or a problem unleashed by some renegade industry member. Industries and their representative associations must also help address sound risk management and corporate governance excellence as a cultural issue that is endemic to its membership. Then industry excellence becomes synonymous with product quality and consumer satisfaction.

In all the FDA uncovered 10 violations and has published its report and carries a full listing of recalled products and other resources on the FDA website.

You Tube Video: Dizzy Gillespie’s Big Band, Salt Peanuts

Risk: product, operations, regulatory, reputation

January 29, 2009 Posted by | associations, manufacturing, operations, Peanut Corporation of America, product liability, regulatory, reputation, risk management, supply chain | , , , , , , , , , , , , | Leave a comment