Alcoa and Corporate Social Responsibility — Rhetoric vs. Reality

Alcoa has made "Fortune" magazine's list of Most Admired Companies and the prestigious Dow Jones Sustainability Index, but the aluminum company's rhetoric doesn't always match its performance.

On a Web page labeled "vision and values," Alcoa says it intends to be "the best company in the world — in the eyes of our customers, shareholders, communities, and people." And Alcoa has made Fortune magazine's list of Most Admired Companies and the prestigious Dow Jones Sustainability Index, but the aluminum company's rhetoric doesn't always match its performance.


The Rhetoric:
"Alcoa's foundation is our integrity. We are open, honest and trustworthy in dealing with customers, suppliers, coworkers, shareholders and the communities where we have an impact."

The Reality:
The U.S. Department of Justice and the U.K. Serious Fraud Office are investigating allegations that the company was involved in a long-running bribery scheme in Bahrain. A 2008 civil lawsuit brought by Alba, a state-owned Bahrain firm, triggered the criminal charges. It accused Alcoa and the company's longtime agent in the Middle East of overcharging the company millions of dollars during a 15-year period while paying kickbacks to at least one Alba executive. Alcoa spokeswoman Joyce Saltzman told the Pittsburgh Tribune-Review in February that the company denies the allegations and plans a vigorous defense.

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The Rhetoric:
"We relentlessly pursue excellence in everything we do, every day." Alcoa touts environmental restoration projects, such as those in Point Comfort, Texas, and Troutdale, Ore., extolling the cleanups as its commitment to sustainability and corporate social responsibility.

The Reality:
Alcoa neglects to mention that rehabilitation of both sites was ordered by the federal government in the terms of consent decrees accompanying the settlement of civil pollution lawsuits. Both are Superfund sites.


The Rhetoric:
"We work in an inclusive environment that embraces change, new ideas, respect for the individual and equal opportunity to succeed."

The Reality:
Alcoa has been accused of union busting at its Mexico and Central American operations.*


The Rhetoric:
"We work safely in a manner that protects and promotes the health and well-being of the individual and the environment."

The Reality:

The Environmental Protection Agency charged Alcoa with Clean Air Act violations at its Warrick, Ind., plant in 1998 and reached a consent decree in 2002. The company began installing pollution controls in 2008. The company's Rockdale, Texas, smelter was long the country's No. 1 source of sulfur dioxide and nitrogen oxide. For decades, the company argued the plant had grandfathered status that exempted it from installing pollution controls required by the Clean Air Act. Finally, in April 2003, Alcoa reached a consent agreement with the government to settle allegations it had upgraded the Rockdale plant in the 1980s without going through a mandated permitting process or adding required pollution-busting technology. In 2006, the EPA returned to Rockdale and fined the company again for failing to follow through on the consent decree. Two years later, Alcoa closed Rockdale. In 1999, Alcoa first warned its employees that they may have a higher risk of getting lung or bladder cancer from carcinogens encountered at its refineries and smelters, but the company continues to face lawsuits by workers who claim they were exposed to toxins without being told of the risks. They range from class actions involving thousands of workers to plant-specific cases.


The Rhetoric:
"We are accountable — individually and in teams — for our behaviors, actions and results."

The Reality:
In January 2009, the Tennessee Supreme Court ruled in favor of Amanda Satterfield, whose father had a long career hauling asbestos for Alcoa. At 23, Satterfield sued Alcoa alleging the company was responsible for her mesothelioma, a rare form of cancer linked to asbestos exposure. She had never worked for the company but argued that, since birth, she had been exposed to the asbestos fibers her father brought home on his work clothes. The company argued that holding it accountable would set a dangerous precedent and open a floodgate of lawsuits. But the court ruled that the company knew the families of its workers could be made ill and "has a full duty to prevent its employees from going home at the end of the workday in clothes that are contaminated with asbestos fibers." Satterfield died before the Supreme Court ruling. Alcoa reached a settlement with her family for an undisclosed sum.

* This story previously mentioned a class-action lawsuit, Curtis v. Alcoa, in which former employees and their families sued over changes in their union-negotiated retiree health insurance coverage. That suit ended in March 2011 when a U.S. District Court dismissed the plaintiffs' case "with prejudice on its merits."

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