egal issues associated with the crisis was the extent to which the response of the Ashland Oil management team could have and did in fact protect or prejudice its liability exposure. The ethical issues dealt with whether its response was consistent with its moral responsibilities as a corporate citizen and its obligations to its various external constituencies and to its own shareholders and employees.
Shortly after the oil spill at Floreffe became public, Ashland Oil was the subject of a number of civil class action law suits by parties seeking to recover commercial losses caused by the spill. In September 1988 it was indicted by a federal grand jury for negligently discharging oil into the Monongahela River in violation of the federal Clean Water Act of 1972 (33 U.S.C. secs. 1251-1387). The requirements placed on owners and operators of aboveground storage tanks were considerably tightened by the Environmental Protection Agency (EPA) after Congress passed the Oil Pollution Act of 1990 and the Oil Pollution Prevention Regulations thereunder. However, even in 1988, they were subject to the reporting requirements of EPA's SPCC (oil spill prevention, control, and countermeasures) program which effectively placed the onus on industry to prevent such spills and to clean them up if they occurred.
a. Relevant facts. What was difficult about the facts in the case is that Ashland Oil may have opened itself up to liabilities to third parties, which were more extensive than mere cleanup responsibilities, because of its failure of obtain the necessary permit from Allegheny County for the construction of the storage tank, its use of previously used 40 year old steel and the failure to run a standard safety test, namely, filling the tank with water before pouring oil into it. Even before Hall and his senior team arrived in Pittsburgh on January 5, unauthorized leaks concerning these facts emanating from within the company had appeared in t...