Report on Supply Chain Compliance 3, no. 13 (June 25, 2020)
In a gripping session[1] in the Superior Court of California County of Butte, Pacific Gas and Electric Company (PG&E) CEO and President Bill Johnson pleaded guilty on behalf of the company to 84 separate counts of involuntary manslaughter and one felony count of unlawfully causing a fire. According to a grand jury report released June 16, the California utility was found to have failed to maintain aging power lines, ignored repeated warnings that the aging equipment could cause fires and violated several California state regulations.
PG&E was fined the maximum under the law—USD 3.5 million—for the fire that killed 85 residents and destroyed about 14,000 homes.[2] The utility must also pay a USD 25.5 billion settlement[3] to compensate victims and rebuild areas destroyed by fires. Judge Michael Deems stated in a press conference[4] following the arraignment that the fine was inadequate and that corporations tend to escape just punishment under current law.
The fires that ravaged California in 2017 and 2018 were exacerbated by a severe drought linked to climate change. Risk assessments and guidance from regulators[5] increasingly require companies to factor climate change and extreme events into their compliance programs.