Saturday, 29 December 2012

Meaningless conditions

"Global aluminium giant Alcoa is facing a fine of up to $125,000 after being charged with breaching its operating licence conditions" (Daniel Mercer, 'Alcoa charged over dust', The West Australian, 29 Dec 2012).

An "operating licence" sets the conditions under which the organisation can operate. The conditions were -- allegedly -- breached. So why is Alcoa still operating?

What is the point of a trivial fine? In terms of the profits being made by Alcoa, the amount is trivial. In terms of the operating costs of Alcoa, the amount is trivial.

Alcoa -- like Varanus -- will have made a sensible business decision: reduce operating costs by one billion, at the risk of being fined a tiny fraction of that saving.

It's a simple business decision. Save a large cost now and accept the risk of a very minor cost later.

The cost of damage due to dust is transferred away from Alcoa. The cost is carried by the environment.

An "operating condition" should be just what it says, a condition under which the operation is allowed to continue.

The current "operating condition" is simply a minor cost to be factored into the business plan.

Breach an operating condition -- stop operating. It's as simple as that.

You're allowing dust to blow onto the neighbours? So stop operating. Immediately. When can you start operating again? When you have proven that no more dust will blow.

But the cost of dust prevention is too high? So stop operating.

There is no point in operating conditions which can be breached at will.

If an essential condition cannot be met -- then the operation should never have been allowed. If the condition has not been met -- the operation must be stopped.

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