Response to Faulty USB Drives scenario

As a junior engineer, it is my role in the company to ensure that my supervisor is aware of the issue. My supervisor has told me to ignore the problem, however it is my role in society to adhere to my own personal ethics and codes of conduct. If I ignored this problem and as a consequence, someone was injured or even killed as a result of this, I would feel personally responsible.

As a member of the IEEE, I have an obligation to follow their Code of Conduct [1] which states that it's members should "accept responsibility in making decisions consistent with the safety, health and welfare of the public, and to disclose promptly factors that might endanger the public or the environment"

Legally, the company are required to inform the enforcement authorities if they know that a product they have placed on the market is not a safe product [2]. If injury or harm is caused by a defective product, the company will be liable and can be sued for compensation. Additionally, the company could be fined up to £5,000 for supplying an unsafe product [3].

It is similar to a car manufacturer selling it's cars knowing that a small percentage of them could leak fuel and explode - possibly resulting in injuries or even fatalities.

In my opinion, dispatching a batch of products before checking the safety test reports is extremely bad practice, especially when those goods are going to an important client. Not telling the client that the products are defective, could damage relations and trust with the client and they may not want to deal with the company in the future. This would have further financial impact on the company through loss of future sales.

In my current job as a Computer Engineer, I have previously built a batch of computers using a budget power supply. After delivery, the customer notified me that one of them blew up, and another was showing signs of doing the same. I reported this problem to my manager and instead of replacing just the two at fault, it was decided that we would replace the whole batch of power supplies in order to prevent any further problems, and mantain customer satisfaction.

I must take action and see that the product is recalled. I can see a couple of different courses of action that I could take:-

Take the issue further up the management chain, by arranging a formal meeting with my supervisor's superiors and asking them to recall the product. I would make sure that they are aware of the problem, that my supervisor told me to ignore the problem, and the possible financial and legal consequences of this decision.
Inform the client directly about the fault, by telephoning or emailing the people within that organisation who are responsible for buying products and warning them of the batch of faulty goods. This would damage the reputation of the company and it is likely that they wont deal with the company in the future. It is also very likely that I would lose my job over this.
Leak the information about the defective product to the press/media, by phoning the local newspaper and alerting them of the faulty products, the possible consequences, and that the manager of the safety testing group said to ignore the problem.

My decision is to first attempt to approach the management as stated in Option 1. However, the management may not listen to me if I tried to speak to them directly, and say that I should only report to my supervisor. Should this happen, I will be forced to leak the information to the press as stated in Option 3. Making this information public would damage the company's reputation, but would definitely result in a product recall, preventing harm to customers, and ultimately ensuring that the company could not afford to ignore a safety concern again.

References
[1] IEEE Code of Conduct
http://www.ieee.org/web/aboutus/ethics/code.html
[2] The General Product Safety Regulations 2005.
http://www.opsi.gov.uk/si/si2005/20051803.htm
[3] Consumer Protection Act 1987 (CPA)
http://www.opsi.gov.uk/acts/acts1987/pdf/ukpga_19870043_en.pdf