Orica Releases Cancer-Causing Chemical, Fails To Warn Public
At 6.30PM on August 8 2011, a loud bang came from Orica’s ammonia plant at Kooragang Island. Over the road, Karl Hitchcock’s kitchen shook. Moments later, one of Mr Hitchcock’s contractor buddies ran in saying, “Don’t go outside. It’s raining acid.”
The next day, Mr Hitchcock noticed yellow spotting on parts of the boat parked in his front yard, and when he went over the road to work, he found a green film covering some of the plant equipment.
A kilogram of chromium-six had sprayed into the atmosphere, with some 60 grams of it falling locally, onto the surrounding suburb of Stockton.
Neither the company nor the state government communicated with local residents until three days after the leak.
Panic Fills the Information Vacuum
In the absence of official information, locals and the media were left to speculate — and to “freak out”— as a prosecuting lawyer later put it, in court.
In their distress, people naturally wondered: What had gone wrong? Had there been a leak? Was it toxic? Had it been contained? Was it safe to go outside, to work, to school? And frustratingly… Why had no-one from the authorities or the company given any information about what was going on?
Immediate and intense media scrutiny filled the information vacuum. The narrative was inevitably about the evil “chemical giant” versus “victims” in the local community.
NGO representatives and self-proclaimed experts readily fed hungry media stories about company practices, its history of breaches, chemical dangers, safety oversights and failures — and the need for better, stronger regulation.
Among the reports were claims that Orica had also leaked arsenic, ammonium nitrate, sulphuric acid and mercury vapour, in a series of breaches at plants across the state.
The Wash-up is Never Clean or Easy
Any Google search readily locates harmful effects of chromium-six: skin allergies, nasal septum perforation, lung cancer, asthma symptoms, thick rashes, scarring and crusty skin sores.
Thankfully, no-one (that we know of) was physically harmed as a result of the Kooragang Island accidents. What did happen? While the company survived and is performing strongly in several areas, it has suffered financially and its reputation is damaged:
- Local resident pressure and global media coverage embarrassed and forced the State’s newly elected Premier, Barry O’Farrell, to apologise to the public and to commit to an overhaul of state environmental law.
- Initial Environment Protection Authority (EPA) and Department of Health reports heavily criticised the company.
- In the face of publicly perceived arrogance and incompetence, Orica shut its Kooragong Island plant for several months. The Premier threatened the company with loss of license to operate.
- The short term hit to company revenue was $90 million.
- The CEO at the time, Graeme Liebelt, left the company six months before he had been due to leave.
- A subsequent NSW upper house committee enquiry strongly criticised the Minister for Environment, Robyn Parker, as well as Orica, for the “unacceptable delay” in notifying the public and for causing “unnecessary community distress”.
- The company was fined some $9 million.
- Class legal action is pending.
- Orica is spending (at least) tens of thousands of dollars trying to heal the lack of trust it now has with local communities.
- Resulting legislative changes require companies to report faster and impose heavier fines for breaches. The EPA has more power.
The Hard Lessons Everyone Already Knows
After a crisis, everyone has an opinion about what beleaguered companies did wrong and what they ought to have done. Judgments always covers not only the crisis incident, but how the company responded (or not).
Karl Hitchcock again: “People eat their vegetables out of their gardens. And this stuff would have went all over them. I think they [Orica] handled it very poorly. The communication is what really got me.”
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Footnote: This blog has been republished at Bernstein’s Crisis Management blog.
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