STAT1060: Business Decision Making Assignment 1 This assignment must be submitted online (via link on course schedule, see ‘Course Structure and Materials’) before 10pm Sunday (9 April) of Week 6 PLEASE READ - IMPORTANT INSTRUCTIONS  This assessment item contributes 10% towards your final grade.  This assignment may examine material covered in lectures up to and including Lecture 4, and labs up to and including Lab 4 (Week 5). We suggest you DO NOT leave completion of this assignment until too near the submission date.  A completed ‘Assessment Item Cover sheet’ must be included with your submission in PDF format o by entering your details on the sheet and including with your online submission we will treat this as you having signed the sheet. o you must complete all details and attach otherwise we cannot award marks o The assignment must be typed and converted to a PDF file. o ONE MARK WILL BE DEDUCTED FOR NOT INCLUDING A COMPLETED COVER SHEET AND IN PDF FORMAT. THE ASSIGNMENT WILL NOT BE MARKED UNTIL SAID SHEET AND FILE FORMAT IS PROVIDED  Please read the course outline regarding assessments and penalties.  Ensure you appropriately and accurately word your responses: review lectures, readings and tutorial materials to assist.  Ensure that each answer relates to arguments/concepts/theories from the lectures, readings and tutorial materials.  Read the included case ‘Living under a cloud’ and answer the following questions. Living under a cloud Children in Mount Isa have been found to have dangerously high levels of lead in their blood, yet few officials or even residents believe the town's huge lead mine is to blame. John Molony is being uncharacteristically coy. We're sitting in his rather swanky mayoral office at Mount Isa City Council, talking about the health risks of exposure to lead. Or rather, I'm talking about them. Molony keeps changing the subject. He is positively garrulous, for instance, about the dangers of swine flu. But it's hard to persuade him even to utter the word "lead". That might seem strange, given that lead - together with copper, silver and zinc - represents Mount Isa's economic lifeblood, indeed, is its raison d'être. A vast mineral seam was discovered here in 1923, and the mine that squats on the town's doorstep is one of the world's largest, with millions of tonnes of ore clawed out of the rust-red soil every year. While the industry has brought jobs and prosperity to this corner of north-west Queensland, there are ominous signs that Mount Isa's inhabitants are paying a steep price. Homes, gardens and waterways have been contaminated, and a recent study found that more than one-tenth of young children have high levels of lead in their blood. I ask Molony, a jovial rough diamond with grey bouffant hair, whether he is concerned about these results. "Every aspect of health in the community concerns me," he replies, carefully. Including lead? "Every aspect." Lead's known to be harmful to small children, though, isn't it? "A lot of things are harmful." I mention that there's an enormous lead mine nearby. "We're surrounded by all sorts of things. What if I went to a petrol station and a tank exploded?" In one sense, his reticence is not surprising: the council, along with the state government and the mine's owners, Xstrata, is being sued by seven families whose children's lead levels exceeded safety guidelines. In addition, Molony is still bruised from a mauling he received last year when he urged "beauty disadvantaged" women to move to the town to redress its gender imbalance. What's surprising is that no one else in Mount Isa seems to want to talk about the lead problem, either, despite the fact that the town - notwithstanding its hard-bitten image - is largely made up of young families. Health officials struggled to muster 400 volunteers for the blood lead survey, and only reached their target after staging endless sausage sizzles and "Lead Fun Days", complete with bouncy castles and a catchy slogan: "Get Bled for Lead." "I've never worked so hard to get a blood sample out of a kid in my life," says the state's environmental health director, John Piispanen. Yet lead's toxicity has been documented for centuries. The Romans were aware of it, although that didn't prevent them from sweetening their wine with a grape syrup brewed in lead vessels. The infamous Italian duchess Lucrezia Borgia, it is rumoured, employed the invisible, slow-acting poison to dispose of her enemies. In Japan, geishas suffered severe skin disorders as a consequence of using lead to make their white face masks. In recent decades, following recognition of the effects of even small quantities - particularly on children under five, in whom it can impair physical and intellectual development - lead has been eliminated from paint and petrol. As a result, children these days have negligible amounts in their systems - with the exception of those who live in areas where lead is mined and smelted. From the air, Mount Isa emerges as a scrabble of houses in a parched landscape, dwarfed by three tall stacks thrusting skywards. On the ground, too, the mine dominates the horizon, with its jumble of industrial architecture - pylons, conveyors, crushing plants, concentrators, pits, smelters and slag heaps - occupying a sprawling site just west of the town. As a first-time visitor, it is hard not to be taken aback by the mine's location, slap bang next to a community of about 23,000. Only a road and railway line divide it from homes, shops, motels, schools, sports fields and playgrounds. There are suburban streets just a few hundred metres from chimneys belching out fumes around the clock. Directly opposite the smelters are a well-frequented swimming pool and skateboard park. An industrial operation on this scale would never be established so close to a populated area nowadays. But the town grew up around the mine, and residents, many of whom can trace their family history back to Mount Isa's foundation, are unfazed by the juxtaposition - just as they appear to be unfazed by the threat to their children's health. Of the 45 children from the survey found to have blood lead levels above 10 micrograms per decilitre (mcg/dl), the limit set by the World Health Organisation, only 13 were brought back for follow-up tests. Most parents completely spurned the free screening program, which was prompted by concerns aired by a government whistleblower. Picking up her children from a primary school in Happy Valley, one of Mount Isa's oldest neighbourhoods, Louise Armstrong shrugs at the mention of lead. "I didn't get my kids tested, but I know they're okay. I grew up here and there's nothing wrong with me. I haven't got two heads, and neither has anyone else I know." Adds an-other mother outside the school, Lauren Brown: "Some people stress about it, but I don't. There's pollution and rubbish in every town.” In fact, Mount Isa Mines (MIM), which was bought out by the Anglo-Swiss giant Xstrata in 2003, is Australia's biggest emitter of lead. In the 2007-08 financial year, it pumped 290 tonnes into the atmosphere, topping the national charts for arsenic, cadmium, antimony, zinc and sulphur dioxide as well. Rather than blame the mine, though, locals insist the lead in their children's bodies must be coming from outcrops of naturally mineralised bedrock - which is, in essence, the argument of the company, the council and the state government, which receives tens of millions of dollars in taxes and royalties from Xstrata annually. Fiercely protective of their jobs, history and heritage, Mount Isans have adopted a siege mentality. The problem, they maintain, has been manufactured by the "southern media" and "a few women chasing a quid" (a reference to the mothers bringing legal action). One man told me: "You don't move here expecting it to be like the Maldives. They mine ore here, so it's in the air, it's in the ground. That's the nature of the beast.” The women in question see things differently. Daphne Hare moved to Mount Isa in 2002, when the place was booming, and found work at a busy hotel. Her infant daughter, Stella, though, was frequently sick. When her blood lead was tested, she recorded 13 mcg/dl. "You could have blown me off the chair with a feather," says Hare. "I was in shock. I would wake up crying in the night." By May last year, Stella's reading had risen to 17. Hare decided to return to her native Townsville, but not before launching the first lawsuit against Xstrata, with the help of Slater & Gordon, the litigation experts. The lawsuit alleges negligence not only by the company but also the Queensland government and Mount Isa City Council. For while Xstrata has been polluting the environment, they claim, the authorities have long known about the risks but failed to take steps to protect the community. All three parties are defending the action; however, documents seen by Good Weekend indicate that the alarm was first raised in 1986, when Mount Isa City Council's then chief environmental health officer, Ted Prickett, noticed deposits of lead around town. Prickett notified the Queensland Department of Health, which reassured him: "It appears there is no real cause for concern." In 1990 Prickett discovered lead outside a church-run kindergarten; a subsequent investigation identified widespread soil contamination in the area, prompting a major clean-up. A survey completed in 1994 found excessive lead in 36.4 per cent of the town's children. Under pressure to act, the council distributed a brochure, Being Lead Smart in Mount Isa, but gave it minimal publicity, for fear "the matter may get out of hand and cause a panic", according to an internal memo. Most locals ignored it. However, as Prickett noted, they were not aware of "the extent and levels of heavy metals contamination". The then mayor, Ron McCullough, declared: "Our kids are fine. We don't have concerns for our kids.” Prickett had no doubt where the lead was coming from: the mine site. In 1995 he quit his job of 25 years and moved to the Sunshine Coast. "I had worn out my welcome in Mount Isa," he told me, adding that he finds it "reprehensible" that more than a decade of official inaction followed his departure. Just as he was leaving, Brenda Oliver and her husband, Jeffrey, arrived in town from Mudgee, NSW. Jeffrey, a firefighter, worked at the mine, and Brenda, who was pregnant with their son, Ryan, used to wash his overalls. They never heard anything about the perils of lead. Ryan, now 13, has learning difficulties and behavioural problems. Brenda says: "I don't think I would have had him up there, knowing what I know now.” Mount Isa doesn't have the look of a town that was prospering until recently. It is a place of potholed streets and dilapidated fibro houses, with utes parked in driveways and snarling dogs chained up in dirt backyards. Road trains clatter through on the Barkly Highway, past shops such as Mansworld, Fashion for Passion and Dollars and Sense. At the mine site entrance, a large sign states "Zero Harm is Our Goal." It turns out to be a reference to workplace safety. When Xstrata took over in 2003, the lead controversy had gone quiet; there had been no routine blood screening, and even children pinpointed in the early 1990s as having elevated lead levels had not been followed up. Then, in 2006, a senior manager with Queensland's Environmental Protection Agency (EPA), Tim Powe, resigned after publicly accusing the government of neglecting the health of Mount Isa children. The mine was an unusual case: governed by legislation passed by Joh Bjelke-Petersen's government in 1985, it was allowed to release triple the emissions permitted under national environmental regulations. Moreover, rather than the EPA monitoring its operations, the company had been left to monitor itself. "It was an extraordinary situation, a major industry polluter testing its own levels of pollution. MIM were a law unto themselves," Powe told Good Weekend. The authorities "buried" the lead problem, he claims. "I think they were scared to take on the company because it was one of the largest employers in the state. So the people of Mount Isa have not enjoyed the same levels of public health protection as the rest of us in Australia.” Powe's resignation triggered a flurry of activity. The Department of Health announced the first blood lead study for 12 years. The government abolished the mine's special status. Xstrata said it would investigate the "pathways" by which lead might be entering the community. And these parties all formed a Living with Lead Alliance to educate Mount Isans on "living safely with lead", their key message being that people should mop their houses regularly and keep their children clean and well fed. There was no mention of tackling the problem at its likely source: the mine. Instead, politicians and company executives emphasised the role of "naturally occurring" lead. Labor's Betty Kiernan, the state MP for Mount Isa, declared: "The reality is lead is literally part of the foundations of our community and we all have a responsibility to ensure we manage our exposure." John Piispanen suggested children might be ingesting lead from home-made fishing sinkers. (This notion was repeated to me by senior figures in Xstrata and the EPA. Piispanen also said health officials had identified children "who ate dirt and rocks, licked the ground".) At a public forum last year, one mount Isa resident, Erroll Nilson, proclaimed: "I've lived here for 37 years, raised two healthy sons, and I know many other people that have successfully brought up children here." There was loud applause. Then Sharlene Body, an Aboriginal woman whose three-year-old son, Sidney, had recorded the highest lead reading, 31.5mcg/dl, stood up. Body told the meeting: "I've lived here for 35 years as well, but now I'm the one with a child whose blood level is 31.5. Don't tell me not to be concerned about my child.” A year later, I am sitting with Body in her back garden; Sidney, a smiley, impish boy, has plonked his Superman chair down beside us. Body is still fuming. She knows there is a scurrilous whispering campaign depicting the mothers bringing the legal action as "blow-ins" motivated by financial greed. Body is a local, though: her father was born here in 1936 and his miner's wage supported a wife and eight children. And while other families involved in the case have left, she has nowhere else to go. Since the mining company employs 4000 people and another 5000 depend on it indirectly, criticising it is tantamount to treachery. "They say, 'Don't bite the hand that feeds you,' " muses Body. "But what if that hand is poisoning you, too? We're supposed to just shut up and deal with it, but I want to get it out there, what Xstrata are doing. They're not accepting responsibility. I want them to take responsibility, because we're going to have to live with what their irresponsibility has done to our kids.” There is another element to the whispering campaign. As one mother outside school confided to me: "When you see the way some of these people live, it's no wonder their children have lead." Body sighs. "According to everyone around town, we're dirty. Because we're Aboriginal, we're dirty people." Similar things are said of Sharnelle Seeto, originally from Papua New Guinea, who moved to Mount Isa in 2007, hoping to "get ahead". Seeto's daughter, Bethany, had a blood lead level of 27.2mcg/dl; dust from the air-conditioning unit in her bedroom contained 30 times the maximum safe limit for lead. "She was breathing that in," says Seeto, incredulous. Bethany's reading has dropped since they returned to Brisbane, but Seeto still frets about her daughter, now 3 1/2. "She has a lot of problems with communicating.” In Mount Isa's CBD, one local, Bob Jepson, pauses during a lunchtime amble along the main street. "Greg Norman came from here," remarks the old-timer. "Pat Rafter came from here. If the place is killing people, how come they hit the top of the tree?" Jepson gestures up and down the street. "Without the mine ... none of these shops would be here. Without the mine, there wouldn't be a town. So just bugger off and leave the mine alone.” In the 1990s, scientists at the northern Territory's Charles Darwin University tested Mount Isa's soils for an official study of the mine's environmental impact. They discovered high levels of lead, copper and arsenic, which they concluded came from smelter emissions and dust generated on the mine site. When the study was published in 2001, their data was not included. The omission was revealed last year by one member of the team, Niels Munksgaard, who was infuriated by government claims that no evidence existed linking contamination to the mine. Queensland ministers attempted to discredit Munksgaard, calling him "confused" and suggesting he had accused the EPA of removing the data. An investigation by the university later exonerated him, and work by another scientist, Mark Taylor, of Sydney's Macquarie University, added weight to his findings. An eminent American professor of environmental toxicology, Russell Flegal, visited the site and wrote that Mount Isa's soils contain more lead than notoriously polluted mining towns in China and Romania. (Flegal, like Taylor, is an expert witness against Xstrata.) Xstrata defends its environmental record, pointing to its removal of contaminated waste from Mount Isa's river and to a new project aimed at cutting emissions. Fumes are carried away from the town by prevailing winds for much of the year, and at other times the smelters are shut down when necessary, according to Ed Turley, the company's environmental manager. Turley describes Xstrata's 15 air-quality monitors as "the most intensive monitoring system in Australia". At the state's EPA, meanwhile, senior operations director Ian Wilson says it is normal practice for industries to scrutinise their own emissions. Mount Isa, he explains, was not, in the past, considered "a big enough community to warrant" independent monitoring. Taylor, for one, is unimpressed. He notes that dust blows off the mine's enormous piles of waste rock, and observes that while the smelters may occasionally be turned off, "they can't turn off the slag heaps, can they?" During a site tour, Turley stops his vehicle to show me a handful of slag - too coarse to fly away or be easily ingested, he maintains. In Brisbane, Damian Scattini, the lawyer representing the families, has already staged a little demonstration of his own. Picking up a jar containing lead waste from Mount Isa, Scattini gives it a vigorous shake. The coarse granules disintegrate into dust. "That's what happens when trucks drive over the slag," he says. Residents' testimony suggests his concerns may be founded. Seeto recalls "whirlwinds of dust" blowing through the streets, while Prickett says, "Quite often you'd see smoke dropping over the town, so obviously the wind was ... dropping heavy metals." It is also claimed a ban on dirty overalls and vehicles leaving the site was not strictly enforced until recently. Says Daphne Hare: "You'd see trucks coming from the mine full of lead dust, and you couldn't go to Coles without bumping into some bloke covered in black dust." Outside the government, council and mining company, it is hard to find anyone who believes mineralised rock is a significant source of lead. Former EPA man Tim Powe says: "The Kalkadoon Aboriginal people lived in the area for tens of thousands of years without poisoning themselves. The pathway is clearly the mining activities.” When I meet Gordon Teague, head of Xstrata's Air Quality Control Centre, I ask him where he thinks the lead is coming from. "Airborne from the [mining] lease," he replies, without hesitation. Turley and an Xstrata colleague are standing behind me, but I can feel them wince. Outside, Turley tells me: "You know, Gordon's not really privy to the information in our pathways study, so you should take that comment as his personal opinion, not the company's official stance.” The good news," says Queensland health, is that "blood lead levels can be naturally reduced by introducing a few practical lifestyle and household measures", such as washing children's hands regularly. Piispanen explains: "It's like if you go to the tropics, you protect yourself from the sun. On the coast, you watch out for sharks and stingers." In Brisbane, Scattini asks: "Suppose this was asbestos and they were saying that really it's just a matter of using soap and a towel? If it was asbestos that was pouring into houses, what would people say?" The EPA now has its own lead monitor in Mount Isa, and a follow-up study of young children is planned for 2012. To which Scattini comments: "More monitoring: what does that do? You can note that another generation has passed with brain damage.” In Townsville, Daphne Hare worries about the future for Stella, a lively seven-year-old: "Will she be able to have her own children or hold down a job? These are things we won't know until she's older ... but there's not a day goes by when you don't think about it." In Mudgee, Brenda Oliver says, sadly: "Ryan's never really had friends his own age, never had sleepovers, the normal things kids do." In Mount Isa, Sharlene Body hugs Sidney. "I think it will start affecting him soon, and I'm just regretting the day it does," she says. "The lead's going to be in his system now, and I don't think he'll ever get rid of it. People say we're only doing this for the money but I could never put a price on my child. Nothing can replace those moments when he comes up and says, 'I love you, Mum.' I would rather he was healthy than all the money in the world." Story by Kathy Marks in GOOD WEEKEND – September 12, 2009 Issue Question 1 (Week 2: Judgemental decisions) (5marks) a) Provide two possible reasons for why the Queensland government decided to let the mining company monitor itself. Use case material to illustrate your arguments. [2 marks] b) Provide three possible ways for the Queensland government to strengthen their decision making. Use case material to illustrate your arguments. [3 marks]. NOTE: Each response should be no longer than 100 words Question 2 (Week 3: Ethical decision making) (10 marks) a) Provide three issue related factors in ethical decision making to explain the residents’ unwillingness to act against the mine company. Use case material to illustrate your arguments. [6 marks] b) Give two examples of how Xstrata can promote ethical decision making in the mine as a workplace. Use case material to illustrate your arguments. [4 marks] NOTE: Each response should be no longer than 200 words Question 3 (Week 4: Qualitative research for decision making) (5 marks) You are hired by Mount Isa’s council to find out how the residents perceive the mining company’s role in the community and why there are differentiating opinions on the mining company. a) What type of qualitative research would you undertake? Use case material to illustrate your arguments. [2 marks] b) What would be the disadvantages of the chosen method? Use case material to illustrate your arguments. [3 marks] NOTE: Each response should be no longer than 100 words