Exxon Still Reeling from '89 Oil Spill

It is hard not to dwell on the crisis management aspect of PR when it is at the forefront of publicity. Think about it, you know all about Enron but when's the last time you read a press release regarding the mayor of Oregon's plan to open a new general store on Main Street? Crisis management is important because instead of making the mistakes yourself, you can watch others and learn what NOT to do. We once discussed the Exxon Valdez oil spill of 1989 as an example of ineffective crisis management. Obviously, the crisis in question was detrimental to the environment of Cordova, Alaska but it seems that there are lasting effects on Exxon as well. Today the Associated Press issued a release citing that Exxon will go before the U.S. Supreme Court this Wednesday. Why, you may ask? Well, in 1994 a jury in Anchorage, Alaska awarded the victims of the incident $5 billon in punitive damages (recall the video the former Exxon CEO's response to how to fix the damages to the Alaskan fishing industry). Following the court ruling, Exxon Mobil Corp. made a series of court appeals and the amount to be paid in damages has since been cut in half. Now, it turns out that $2.5 billion is too much for a company which made a profit of $40.6 billion in 2007! Is it really so "unconstitutional" to ask Exxon to pay punitive damages which equates to a measly 6% of their annual profit? Is it cruel and unusual punishment to ask them to pay for an incident which is their fault?

33,000 plaintiffs including Alaskan commercial fisherman, natives, landowners, businesses, and local governments stand to lose the $2.5 billion judgment if the high court sides with Exxon. For the record, the oil spill ruined 1,200 miles of Alaskan shoreline and killed hundreds and thousands of animals which were indigenous to the region. In actually there is not amount of money that can make up for the loss of life to an ecosystem, but punitive damages meant to be paid out of moral responsibility apparently hurt big business far more.

In my opinion, Exxon seems to maintain a tone of insensitivity on the matter. Apparently Exxon should no longer be held accountable for the incident because of an estimated $3.5 billion paid in clean up costs (even though there is still an estimated 85 tons of lingering crude). Not to mention the fact that the skipper of the Exxon Valdez was the true culprit. Last time I checked, in a corporation the liability in a crisis does not rest on individuals.

Largest Meat Recall in History

PR STORY: The U.S. Department of Agriculture recently announced the recall of approx. 143 million pounds of raw and frozen beef from a Chino meat-packing company, proclaiming that it was unfit for human consumption because of repeated failures and lapses in required inspections. According to the department, this has been the largest beef recall that the United States has ever suffered. They also claimed that the there could be serious health consequences if the meat was in fact consumed, but officials say some of the recalled meat has already been distributed and consumed. (obviously a scary situation needing immediate attention) According to a news release issued by the USDA Food Safety and Inspection Service in Washington, D.C., the cattle did not undergo proper inspection. There has been information and evidence received by the agency shows that Hallmark/Westland Meat Packing Co. "did not consistently contact the FSIS public health veterinarian" as required when cattle became nonambulatory after being inspected, the release said. Department spokesman Keith Williams noted that today's beef recall was not based on the same levels of concern for public health as in some prior recalls. "There is a remote probability of any serious health concern . . . but we are taking this action because of our regulations" and in abundance of caution, Williams said of the recall. The first problems at the plant began when there was a release of a video showing inhumane treatment towards animals at the plant which occurred sometime between October 11th and November 9th of 2007. The video was captured by the Humane Society and prompted schools all over the nation to pull the beef from their cafeteria menus. This video shows a plant manager abusing and paddling a nonamulatory cow in order to get it to get up so they can take it to be slaughtered. According to the United States laws, cattle that aren’t able to walk, are not allowed to be slaughtered and processed for human consumption because they are more likely to carry mad cow disease. (Now the issue is not just the recalled meat, but animal cruelty, which fuels the crisis) Last week, the U.S Department of Agriculture suspended inspections at Hallmark, which immediately closed the plant (A first step in handingling the crisis). Earlier this month, several California lawmakers, including Rep. George Miller, called for an independent investigation (2nd step of action) into the National School Lunch Program, for which Hallmark was a top supplier. San Bernardino County prosecutors last week filed felony charges of animal cruelty and illegal movement of nonambulatory animals against the manager (Third Step of action). The agency placed a Jan. 30 hold on all Westland products in federal outlets, including the National School Lunch Program, the Emergency Food Assistance Program and the Food Assistance Program on Indian Reservations, USDA officials said Sunday (Another step of taking action). The USDA now has a recall list that they issued which includes several beef products with many of its vendors.

Watch News Report

NEWS REPORT TWO

APPLIED CONCEPT: The PR concept was crisis response/management. Although the response was not necessarily directed at the media, although there were several news reports, it is apparent the USDA officials took the situation in to control and did what they thought was necessary. After the problem became apparent, they immediately acknowledged it, researched/investigated, and handled it. The publics they talked to were clients and vendors of their meat product and also the department spokesperson, in this case Keith Williams, and the manager. After conclusive research, they recalled the 143 million pounds of raw meat and the San Bernardino Country prosecutors got involved with the animal cruelty aspect and took matters into their hands to charge this as a felony. Also another form of written PR they used as part of the crisis response is that the USDA sent out a news release discussing the situation and inspection process that was being undergone.