Case 5: XYZ Cement Company

In 1982, XYZ Cement Company began its plant operation in Pampanga. Local residents were very
happy because of the economic benefits they got from the plant especially the 400 local residents
employed. After a few years of operation, the plant started to emit large volumes of pollution. Local
residents noticed the constant vibration and loud noise coming from the plant.

Local residents filed a suit against the company asking the court to issue an injunction to close
the plant. The residents claimed that the loud noise and the vibrations posed dangers to their health and
damage their property.

The company was using the best available technology in their operation. The court refused to
issue the injunction arguing that closing that plant would mean more harm than good to both parties.
The court instead ruled that the XYZ should pay the residents a one-time fee to compensate them for
the damages done. The amount was computed based on the fair market price the residents would
receive if they were inclined and able to rent their property,

Question:

1. Was the decision of the court fair? Why or not?

2. If you were the owner of the cement plant, what will you do to solve the problem?

3. Discuss the cost and benefit of the case from the perspective of the principle of utilitarianism.