Global Meets Local: How General Counsel Navigate Clashes Between Global Standards and Local Law and Custom

Michael Solender, Global Vice Chair and General Counsel, EY

You are the general counsel of a large U.S.-based multinational company with operations around the world. Your phone rings at 3 a.m. with a call from your counsel in a large developing country where your company has an aging manufacturing plant up-river from a city of a million people. An internal environmental audit conducted by your company has found that discharges from the plant of a certain chemical, while in compliance with local environmental regulations, would exceed comparable regulations in the U.S. by more than 250%. Other developed countries have standards comparable to the U.S. The discharge is colorless and odorless. There are studies showing longer term adverse health effects of the chemical at the exposure that could be expected from a discharge of this nature. Your company believes the science behind these studies is subject to challenge. Because the facility is old, it will cost more to retrofit the plant and remedy the problem than the profits of the facility itself. Your counsel in this country advises you that the plant is operating legally, and in any event, long term environmental problems are not among the priorities of the regulators and law enforcement in the country, nor a great concern to the population at this point in time. He recommends the company do nothing and continue to operate the plant. What to do?