A corporate dilemma: To be a learning organisation or to minimise liability

Companies are faced with a dilemma when it comes to information about safety problems. Should they seek out such information and learn from it (so as to reduce the risk of accidents), or should they suppress such information in the hope that this will somehow reduce the risk of litigation if an accident occurs? The disadvantage of suppression is that it creates organisational learning disabilities. It also promotes public outrage that may turn out to be very costly. This article argues that, in Australia, concerns about legal liability are misplaced. The article takes the explosion at Esso's Longford gas plant in 1998 as a case study and shows that so-called "guilty knowledge" played no part in the record fine imposed on Esso. Furthermore, guilty knowledge was irrelevant in the subsequent compensation cases brought by both the workers and their families and by businesses affected by the loss of gas supply.