The Dark Side of Light-Handed Regulation: Mercury Energy and the Death of Folole Muliaga

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CASE STUDY. Folole Muliaga died following the disconnection of her home power supply for an overdue bill. Mrs. Muliaga had been receiving oxygen therapy at home for treatment of breathing difficulties associated with her obesity, and the cessation of oxygen caused by the disconnection led directly to her death. The case focuses on the social responsibilities of both Mercury Energy and the government.

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The Dark Side of Light-Handed Regulation: Mercury Energy and the Death of Folole Muliaga: Abstract

The Dark Side of Light-Handed Regulation: Mercury Energy and the Death of Folole Muliaga is a case study by Todd Bridgman.

On May 29, 2007, Folole Muliaga died following the disconnection of her home power supply for an overdue bill. Mrs. Muliaga had been receiving oxygen therapy at home for treatment of breathing difficulties associated with her obesity, and the cessation of oxygen caused by the disconnection led directly to her death. The power company, Mercury Energy, initially denied any wrongdoing, but in the days following Mrs. Muliaga’s death it became apparent that Mercury Energy was not compliant with government guidelines on disconnections involving low-income consumers. The guidelines, created by the national regulator, the Electricity Commission, were voluntary rather than compulsory, in keeping with a government approach that preferred self-regulation by companies to « heavy-handed » regulation by government. The case focuses on the social responsibilities of both Mercury Energy and the government.

Teaching objectives

To highlight the tensions between economic responsibilities and social responsibilities in profit-seeking organizations operating in a capitalist system:

  • To highlight the debate between mainstream and critical management scholars on what constitutes ‘business ethics’
  • To raise questions about how we define ‘corporate social responsibility.’ Is it just about visible programs in the community or should we also take into account the day-to-day profit-seeking practices of organizations?
  • To explore the relationship between CSR and government attitudes towards regulation

Additional information

Teaching notes are available for professors. Contact the HEC Montréal Case Centre.

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