Risk Reviews: Poisonous Gas From Air Conditioners, On-line Carcinogenic Shoes And Drug Company Turns Its Back On Leukaemia Sufferers

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Now I have retired from my day job in the oil business I would like to share with visitors to this site some risk insights that they might not have picked up elsewhere. As with my more ‘fun’ focused articles which you can read in the Alpine Press section I often get my ideas for risk reviews from current topics mentioned in non-English language publications.

Using an approach I developed in my internal audit role I will dig a little deeper into some of these stories to try and understand what are the underlying causes and consequences behind the attention grabbing titles. I have to admit this risk focused investigative approach didn’t make me the oil industry’s most popular auditor but it did help to raise the profile of some very important problem areas.

In my blog I will, from time to time, present a summary of my latest risk reviews with links to the more detailed reports I have prepared on each subject (don’t worry they are all free and you do not have to register to read them!). The full list of my latest risk reviews can be found in the Risk Articles section of this website which can be found by clicking here.

Poisonous Gas From Air Conditioners

Obviously most of us do not expect be poisoned when we turn on our air-conditioning. This is especially the case when the air-conditioning is used in a very confined space like a car.

My report on this subject illustrates one of the major risks manufacturers face when they develop new products or try to enhance the properties of existing ones. In my auditing life one area I would sometimes look at was the control processes for ensuring the quality of jet fuels and lubricants. A mistake when developing new products in this area could result in a major airline catastrophe. As a result you need a zero tolerance culture to try and ensure product quality mistakes can not occur. For a Jumbo jet full of passengers any residual safety risk is simply unacceptable.

To eliminate any residual risk when developing or improving critical safety products it is important to try and identify all the potential problems that could be associated with their use. In particular you need to brain storm for any unexpected or unintended risk causes and consequences especially under extreme or harsh operating conditions. In my report I describe a current product development initiative from the auto industry which is trying to make vehicle air-conditioners more environmentally friendly. The report describes some potentially serious unexpected consequences of using a new coolant product.

Many vehicle air-conditioners over the last few years have used a coolant which was efficient but placed an unacceptable burden on the environment. To deal with this problem and comply with new more stringent environmental regulations car manufacturers have started to introduce an alternative coolant which can be used without needing to change vehicle equipment or manufacturing processes. This alternative coolant is environmentally much better than its predecessor.

My concern about this development is that everyone appears to be rushing to introduce the new coolant before it has been comprehensively investigated. In particular testing of the new product under the extreme conditions which could occur when a vehicle is involved in an accident is still incomplete. Some recent research carried out at the University of Munich, and also by the manufacturer of Mercedes cars indicates a serious risk that under certain conditions the new coolant might give rise to extremely dangerous toxic and corrosive gases if released in a vehicle collision.

If you would like to understand more about this subject please read the article by clicking on the following title:

11th May 2014: Product Development Risk: New Air Conditioning Coolant Gas Produces Carbonyl Difluoride (Highly Toxic – Related to WW1 Gas Phosgene) in Vehicle Fires

Currently car manufacturers and the relevant authorities have different views on the suitability of this coolant and many new ‘approved’ vehicles are already on the road. Read the article and decide for yourself – especially if you are contemplating buying a new car.

On-line Carcinogenic Shoes

Buying things on-line has for many of us become a way of life (and in some cases it is almost an addiction). The competition to supply on-line is intense and internet retailers are constantly trying to find ways to reduce their costs. Established branded products normally charge a premium. In part this is to pay for having appropriate product quality processes in place to protect their brand image and reputation. These processes need to exist all the way from the raw materials’ supplies to the company that stores and delivers the product to the end-user.

Independent on-line sellers are clearly envious of the profit margins obtained by branded product manufacturers and are keen to take advantage of this. One way of doing this is by introducing their own-name products. However the pressure on profit margins means that sometimes resellers do not invest adequately in the quality control of their raw materials, manufacturing processes or distribution networks. As a result the product quality and the end-user may suffer. The example in my report concerns the quality of on-line shoes.

The shoes of the company involved were the subject of a random testing by the authorities in Germany. They were found to have chemicals in them which were potentially harmful when coming into contact with the human body. To learn more about this please click on the title below:

6th April 2014: Product Quality Risk: Shoes Sold On-line By Zalando Recalled Due To Chromium 6 Contamination – Known Allergen And Carcinogen

As with many products sold on-line this is not just a local or national issue. These products are sold internationally. If an international on-line retailer is supplying contaminated products these could end-up almost anywhere in the world where that company is prepared top deliver.

Drug Company Turns Its Back On Leukaemia Sufferers

Coming from much loved big-oil I am only too aware of the importance that ethical behaviour can have on a company’s reputation and its potential to impact to the bottom line results and overall value. One of our challenges in auditing is to make sure that short term considerations do not get in the way of correct ethical behaviour.

I was therefore rather disappointed to learn that the manufacturer of a drug which had for many years benefited leukaemia sufferers had decided to withdraw the product so it could be re-introduced under a new name for a new more lucrative market – at a vastly increased price per gram.

You can read the details by clicking on the title below:

16th April 2014: Ethical Pricing: Same Drug – For Leukaemia 21 Euro (Now Withdrawn) – For Multiple Sclerosis 888 Euro

I am sure most of us appreciate that it costs money to develop new drugs especially since the introduction of a new drug can take many years. However I do not believe this argument can be applied to the withdrawal of an already successful and useful cancer treatment. In fact it is still far from certain how useful this drug will be in its new much larger Multiple Sclerosis market. Prior to the decision to ‘drop’ the leukaemia market the company was purchased by a much larger drugs group. Perhaps securing post merger ‘synergies’ rather than recovering research costs, played a significant part in the decision to change the business focus? I will let you judge whether this was appropriate ethical behaviour.

I would like to dedicate this week’s blog to Ulrike and Astrid and all of my Safety and Financial Control colleagues in Bochum (Germany) to try and make up for the fact that I was unable to get over to see them just before my retirement. Good luck in keeping Germany safe from those nasty risks.

Chris Duggleby

If you found this article interesting you may like to read some of my other recent business risk reviews which are listed below (just click on the title):

29th March 2014: Intellectual Property Risk In China – INEOS Takes Sinopec to Court Over Acrylonitrile (A Lovers Dispute – With Cyanide Thrown-in)

25th March 2014: Competition/Antitrust Law – Major Companies Go On The Offensive Against Corrupt Suppliers: Deutsche Bahn’s Anti-Cartel SWAT Team

Pandemic Risk Management Article by Chris Duggleby (February 2012) (or ‘How to Prepare for the Consequences of Microbial Sex!‘)

21st July 2012: How can I get a human liver – without waiting? (Try Göttingen) – German Transplantation Scandal “Livers for Sale”.

23rd June 2012: “Doctors are legally allowed to accept gifts from Pharmaceutical Companies” – In Germany.

When I produce new business risk related articles these will be published under the risk articles section of my website which can be found using the link here. If this kind of information is of interest to you please visit the site again or add http://www.chrisduggleby.com to your browser favourites.

 

 

 

 

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2 thoughts on “Risk Reviews: Poisonous Gas From Air Conditioners, On-line Carcinogenic Shoes And Drug Company Turns Its Back On Leukaemia Sufferers

  1. Hi Chris,

    The issues you raise regarding air conditioning are of interest. I am President of the Australian Refrigeration Association. We advocate for commercially and environmentally responsible refrigeration and air conditioning. I have been trying to find a clear statement about the toxicity of carbonyl halides and hydrogen fluoride. I can find lots of half truths and mumbo jumbo but very little that calls a spade a spade.

    The fact is that the world must transition to low GWP refrigerants. Low GWP synthetic refrigerants are flammable and generate these materials via thermal decomposition. It is very easy to think of ways this might happen.

    I wonder if you can assist. Happy to provide full disclosure.

    Regards

    Tim

    • Thanks Tim,
      for both your comments and the additional supporting information you have sent me separately. I also found the Australian Refrigeration Association website well worth a visit and would recommend it to any other readers interested in this important area (The ARA link is: http://www.ausref.org.au).
      Although the focus of my article was the risk associated with insufficient research into new product development I believe it fully supports your objective to ensure an open informed debate prior to making decisions in this industry. I simply looked at air conditioners in the automotive industry and it was worrying to see the lack of knowledge about the potential harm from thermal decomposition of products already in used. This is in an industry which should, by now, have learned from recent major vehicle recall actions related to safety issues. I was however encouraged that some of the auto-manufacturers (notably the Germans: Mercedes, BMW and VW) are now pushing not to use R1234yf but have asked for some more time to allow them to adapt their equipment so that it can use the natural refrigerant CO2. I believe this is exactly the direction you are also recommending.
      I fully concur with your point about the lack of reliable knowledge. More to the point Prof. Dr. Andreas Kornath and this co-workers at the University of Munich, having recently looked into the thermal decomposition of R1234yf also recommend that more work is needed here. If you have not already read it you might like to take a look at their paper published on 7th April (there is a link in my main article) or alternatively contact Prof. Kornath direct for more info (the link to his research paper also has his e-mail address). If you are not already in-touch you might also consider contacting the Mercedes R&D department to get them to explain why they were horrified by the results of their simulated vehicle collision involving R1234yf.
      I chose this subject because I am looking for examples where industries release products without appropriate evaluation of the potential risks involved (as a case study for a future publication). However I would much rather that the US auto producers also move directly to natural refrigerants like CO2 and I lose a case study (there will be plenty of others).
      So in summary Tim I think we are fully aligned and wish you all the best with your laudable initiative.
      Kind regards,
      Chris Duggleby.

Please share your comments on the site with me (or use this box to simply contact me). Add 'confidential' at the top if you do not want your comments to be published. Thanks - Chris

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