We Are All Stakeholders

The story of Erin Brockovich drew great attention with a movie in which Julia Roberts portrayed the legal assistant as a heroic single mother fighting for the legal rights of the citizens of Hinckley, California. The culprit, the villain was the Pacific Gas & Electric Company (PG&E). The lawsuit accused PG&E of allowing a rust inhibitor to leach into the water table, thus contaminating the groundwater for Hinckley residents. Over a 30-year period, it was alleged the leaching of this toxic substance resulting in debilitating health conditions of local residents. Eventually PG&E reached a multi-million dollar settlement with Hinckley residents.

The case brought fame to Ms. Brockovich and the law firm where she worked, and the movie which was a blockbuster brought additional fame and a watchful eye. A columnist, Michael Fumento started to make accusations against some of the facts in the case. Specifically, he pointed out that according to some the toxic substance was a carcinogen but only when inhaled. Also, he pointed to a study by a university chemist that the toxic substance when ingested would be innocuous. Fumento then highlighted the fact that other communities with adjacent landfills containing the toxic substance found no ill health effects.

Brockovich was given an opportunity to respond to Fumento’s accusations. She cited PG&E’s own documentation confirming the substance was toxic, and stated that there was no doubt that PG&E acted irresponsibly in dumping the rust inhibitor.

For me, this was a classic case of a company abandoning its corporate social responsibility. Clearly, PG&E appeared to desert its commitments in allowing the pollution to take place, and the situation was further compounded by its apparent lack of concern for citizens of the local community in Hinkley, many of whom were both employees and customers.

Also, and as it regards PG&E choosing to settle, by the time the settlement was reached, the case had reached the court of public opinion rather than a legal court. The stories of the tragic deaths and medical suffering had painted a picture so bleak that no scientific data could have swayed opinion. In addition, their conduct in the early stages of the process had created a perspective that they had something to hide.

This case pointed out that companies need to be held accountable for their actions in order to ensure social responsibility. We are all stakeholders when it comes to the environment.