Case Study - Morales Incident

Incident at Morales involves a variety of ethical issues faced by a company that wants to quickly build a plant in order to develop a new chemical product to gain a competitive edge over the competition. Potential technical and ethical issues arise from choices of designs, including valves, piping, chemicals, etc. The process to develop the product is designed to be automated and controlled by computer software.

The process also involves high temperatures and pressures and requires the use of chemicals that need special handling. Because of environmental considerations related to the chemicals used in the process, the company decides to construct their plant in Mexico. Technical, environmental, financial, and safety problems arise that involve ethical issues.

Case Synopsis:

Phaust Chemical manufactures "Old Stripper," a paint remover that dominates the market. On learning that Phaust's competitor, Chemitoil, plans to introduce a new paint remover that may capture the market, executives at Phaust decide to develop a competing product. To save money in manufacturing the product, Phaust decides to construct a new chemical plant in Mexico and hires chemical engineer Fred Martinez, a former design engineer for the consulting company Chemitoil, to design the plant.

Problems arise when Chemistré, Phaust's parent company in France, slashes budgets 20% across the board.

In response, Chuck, the vice president of engineering at Phaust, strongly encourages Fred to reduce construction costs.

Fred confronts several engineering decisions in which ethical considerations play a major role:

- Whether to use expensive controls manufactured by Lutz and Lutz, which has an inside connection at Phaust

- Whether to line the evaporation ponds to prevent the seepage of hazardous substances in the effluents into the groundwater, although local regulations may not require this level of environmental protection

- Whether to purchase pipes and connectors made with stainless steel or a high pressure alloy When samples of Chemitoil's new paint remover, "EasyStrip," become available, it is clear that to be competitive with "EasyStrip," Phaust must change the formulation of its new paint remover, which requires higher temperatures and pressures than originally anticipated. Some unexpected problems arise:

- Leakage occurs in one of the connections

- The automatic control system fails so the plant manager offers to control the process manually

After the plant goes into full operation, an accident occurs, and the plant manager is killed while manually controlling the manufacturing process.

Case Characters:

Fred: .............Chemical Engineer hired by Phaust to design a new plant to manufacture a new paint remover
Wally: ...........Fred's supervisor at Phaust
Chuck: ..........Vice President of Engineering at Phaust
Dominique: ...Corporate liaison from Chemistré (parent company in France) to Phaust
Maria: ...........Fred's wife, a compliance litigator for U.S. Environmental Protection Agency
Hal: ...............Market Analyst at Phaust
Jen: ................Research Chemist at Phaust
Peter: ............Project Manager of the construction firm that builds the new plant in Morales
Jake: .............Plant Manager for the SuisseChem plant in Big Spring, Texas
Manuel: ........Plant manager for the new Phaust plant in Morales, Nuevo Leon, Mexico

Report Questions:

1. What is CHUCK (Phaust's VP of engineering) motivation for hiring a P.E.? When Dominique asks him whether it is ethical to hire an engineer who has recently worked on a competitor CHUCK replies that while employed as a contractor at CHEMITOIL, Fred was not required to sign a non-disclosure agreement. Does Fred have any obligation of confidentiality to CHEMITOIL even if he has not signed a non-disclosure agreement?

2. Wally (Fred supervisor at Phausts) tells Fred he has one rule: whether it's good or bad news, Fred must always tell Wally first. What is the motivation and potential impact of Wally's "one rule?" What would you respond be if you were Fred?

3. Chuck alludes to inflating the budget as a hedge against potential budget cuts: what is the difference between inflating a budget and providing contingency funds as line item.

4. What happens to a project when engineers are faced with budget cuts across the board? If you were the engineer in this case what would you do?

5. According to Wally, Chuck's brother-in-law is the U.S. representative for LUTZ & LUTZ. What ethical questions does the procurement process raise when the in-law of a corporate officer works for the supplier? How does this situation look from the viewpoint of other potential suppliers?

6. It is proper for Fred to share his concerns with his wife Maria, especially when Fred's work is regulated by Maria's employer? Fred says that the new plant is outside Maria's jurisdiction because it will be in Mexico. Do our professional responsibilities for the environment and for safety change when we cross national border?

7. Did Fred act responsibly in lining the evaporation ponds but specifying cheaper controls?

8. While talking with Peter, Fred is inspired to make the couplings a maintenance issue, specifying that the couplings should be replaced regularly. Is it appropriate to convert design decisions into maintenance procedures without including operations people in the process?

9. Although the chemical process was supposed to be automated, Fred and Manuel decide that human operators should release the product manually. Is this reasonable?

10. Do you think Fred is responsible for Manuel's death because he is the project engineer in charge of the design of the plant? What would you do to protect your career and professional integrity if you were Fred in this case?