You are on page 1of 21

ABSTRACT SUMMARY

Case deals with a transnational corporation, Union Carbide, which established a


subsidiary named, Union Carbide India Ltd. (UCIL)
Union Carbide owned 60% shares in UCIL, but later it was reduced to 50.9%.
Union Carbide built a pesticide plant in Bhopal in 1969.
Disaster came from this juncture.
QUESTION 1
Who was responsible for the Bhopal accident? How should the blame be apportioned
among the parties involved, including Union Carbide Corporation, UCIL, plant workers,
governments in India, or others?
ANSWER
Every entity is responsible for what happened in Bhopal
Union for not forcing strong policies over its subsidiary UCIL
UCIL for the lack of management over its employees
Employees for not following emergency procedures
Indian Government for not allowing Union Carbide to do a proper investigation

QUESTION 2
What principles of Corporate Social Responsibility and Business Ethics are applicable to
the action of the parties in question?
MANDATED ACTIONS
1975: City of Bhopal enacted a development plan requiring dangerous industries to
relocate 15 miles away from population.
Worker safety and environmental inspections by State Department of Labour employing
15 inspectors for 8000 plants.


UCIL ACTIONS
UCIL employees did not regard MIC as a legal hazard.
Deliberate sabotage from angry employee falsified logbook to hide transfer of contents;
supervisors withheld information from upper management.
Refrigerators that cooled the MIC tanks were shut sown for 5 months. MIC processing
required these refrigerators to be on ALL time.
UNION CARBIDE U.S ACTIONS
December 7, 1984 Chairman Warren Anderson accepted moral responsibility for the
tragedy and flew out to India.
He donated $ 1 million to emergency relief fund.
Carbide never made public the operator to be blamed due to Privacy Act.
n 1994, the Supreme Court of India allowed UCC to sell its 50.9 percent interest in UCIL
to Eveready Industries India Limited (EIIL), which subsequently merged with McLeod
Russel (India) Ltd.
QUESTION 3


How well did the legal system work? Do you agree with the decision to try the lawsuits in
India? Were victims fairly compensated? Was Carbide sufficiently punished?
HOW WELL DID LEGAL SYSTEM WORK
Arrest warrant for manslaughter was issued against Anderson, which has still not been
served as on date.
Criminal trial of several UCIL managers began in 1989, still being dragged on with no
end in sight.
Only half of the several 100 scheduled witnesses have been called.
The court convicted 7 managers of causing death by negligence, all released on bail.
Petition still pending, for Dow Chemicals to pay compensation of $1.1 billion to victims.
DECISION TO TRY LAWSUIT IN INDIA
We agree with the decision for the following reasons:
Disaster site
Evidence
Investigation
Victims
Witnesses

COMPENSATION TO VICTIMS
A settlement of $470 million was agreed upon.
This value of money was greater 30 years ago, yet no amount can compensate for the
magnitude of the disaster, and the suffering that victims endure even today.
Victims group felt the compensation was too small
But Indian government slow and inefficient in distributing settlements.
Activity riddled with corruption.
WAS CARBIDE SUFFICIENTLY PUNISHED
Certainly not sufficiently punished
Several lawsuits have not gone to court.
No action mentioned against the disgruntled employee
Managers were let off easily, and released on bail
Arrest warrant was issued for Anderson, which has never been served.

QUESTION 4
Did Union Carbide handle the crisis well? How would you grade its performance in
facing uniquely difficult circumstances?
ANSWER
Sent Emergency medical supplies, respirators, oxygen and an American doctor with
knowledge of MIC.
Dispatched a team of technical experts.
Anderson himself went, but placed under house arrest.
Paid respect to the fallen workers, $1 million to emergency relief fund and another $5
million.
B+
Showed remorse and cleaned up someones mess.
Did their best to respond to the incident

QUESTION 5
Does Dow Chemical Company has any remaining legal liability, social responsibility or
ethical duty to address unresolved health and environmental claims of Bhopal victims?
ANSWERS
Legal Liability: No
Union Carbide had already paid and settled what they were supposed to pay. Hence, Dow Chemical has no
pending legal responsibility.
According to the settlement (1989), Carbide agreed to pay 470 million to Indian government for the welfare
of victims and their families.
Subsequently, India agreed to stop all legal actions against Carbide.
Moreover, in 1994, Carbide sold its 50.9 percent of equity in UCIL to Indian subsidiary of a British company
for huge 90 million $. It also gave money to Indian Govt. for building hospitals.
Social Responsibility: Yes
Despite paying huge amount for settlement, Carbide did not fulfill its all social responsibilities which in turn
created problem for Dow Chemicals.
Chemical waste at the site had contaminated the ground water. After Carbides negligence, people
demanded Dow to pay for cleaning up the contaminated plant site and further compensate injured
survivors. Dow denied any legal responsibility for Bhopal and therefore it had to bear the opposition from
local residents.


Ethical Duty: Yes
Union Carbide did not fully enforce safety regulations.
Faulty safety measures: not using slip blind during washing, shut down of refrigeration
unit to save electricity, inoperable vent gas scrubber.
Carbides employees were involved in false log entries to disguise their involvement.
Hence, the first and foremost ethical duty for Dow would be taking proper safety
measures and recruiting trustworthy employees .


QUESTION 6
What lessons can other corporations and countries learn from this story?

CORPORATIONS
Proper safety regulations must be installed in order to prevent these catastrophic
consequences.
Safety rules must be enforced.
Better communication must be facilitated between the parent and the sister companies in
terms of
1. Day to day reporting systems.
2. Proper training programs.
3. Proper functioning safety devices must be used.



COUNTRIES
Industrial facilities should not be allowed to be built in the urban areas. The local
government should take care of this.
As the shortage of physicians and beds in the four hospitals in the city was also a
reason for high number of deaths due to delay in timely medical assistance, it is
suggested that industry and local government should provide financial support to
medical and other services to reduce the number of casualties and deaths in case of
accidents.
Build proper public health infrastructure like hospitals and providing ambulances near
these type of industries in case of accidents in order to provide immediate medical
treatment.