GAIL PIPELINE BLAST

TRAGEDY
MANAGERIAL ETHICS: TAKE HOME ASSIGNMENT-1
APPLICATION OF AOL-1, AOL-2 AND AOL-3
UNDER THE GUIDANCE OF:
Ozzie Mascarenhas, S.J., Ph.D.

SUBMITTED BY:
Domnic Shree (G14017)
George Komban (G14018)
Jithin Mathew (G14021)
Naga Sai Uma Mahesh Puvvala (G14028)
Rakesh Melangi (G14040)
Salin Kumar G (G14047)

On June 27, 2014 a massive fire broke out following a blast in GAIL Pipeline in East Godavari district of
Andhra Pradesh, India. The accident took place near Tatipaka refinery of Oil and Natural Gas
Corporation (ONGC), about 180 km from state capital Vijayawada. 22 people were reportedly killed and
over 40 injured in the accident. The injured were shifted to hospitals at Amalapuram and Kakinada towns
GAILS Arguments
1. GAIL reportedly found sulphur, carbon dioxide and water in the trunk pipeline at Nagaram.
2. This indicates that the petroleum products supplied by the oil companies were not properly
desulphurized and filtered has resulted in corrosion of the pipelines used by Oil and Natural Gas
Corporation (ONGC), Reliance Industries Limited (RIL) and Cairn Energy.
The primary reasons that we chose this case for our study are:
This was a recent industrial disaster that brought national and international attention. This is a Live case
with accusations and blame put on different stake holders and the real issue is still unresolved.
The purpose of this paper is to challenge the view of Gails Manger. Although we do not wish to either
exonerate or indict Gails manager in this process, we do wish to establish that the decision made by them
was laden with substantial factual and moral uncertainty. The most important moral failure on part of
Gail was the ineffectiveness in monitoring the safety precautions and the preparedness to take action on
such large scale disasters. By the end of 2020, India will lay 32,737 km across the length and breadth of
the country. We as a team believe that GAIL needs to lay down pipelines and should comply with strict
safety standards especially since some of these pipes will go through areas of dense habitation.

ASSURANCE OF LEARNING-01
Domain
Search/Identify

Inputs Analysis:
Key Questions

Key facts, Key

figures,
Key data, Key
information

What: A explosion in state run gas utility Gails underground Tatipaka- kondapalli
pipeline in Nagaram village which claimed 22 lives.
Who:
P1: State run Gails whose pipeline is was built in 2001 to move dry gas.
P2: Nagaram village which lost 22 precious lives and wide scale destruction in assets.
P3: ONGC and LANCO as a third party to the accident.
P4: Government regulator and safety department.
Where: Nagaram Village Andhra Pradesh India
When: 5 Am on June 27 2014
How: Gail was contracted to transport gas to 37 industrial units, including the Lanco
power plant. The water and condensate coming from ONGC wells corroded the pipeline
leading to gas and condensate leaking to surface where lighting of a stove lead to the blast
and subsequent fire on 27 June 2014.

Key subjects, Key

objects,

Key Subject:
Gas Authority of India Limited, Oil Industry Safety Directorate, Petroleum and Explosives

Key properties and

Key events (SOPE
analysis),

Timeline of key
events

Safety Organisation and Petroleum, Natural Gas Regulatory Board and Andra Pradesh
State Government
Key Objects:
Nagaram Villagers, National Disaster Management Authority
Properties:
GAIL, a government of India undertaking, procures natural gas in the region from ONGC,
Reliance Industries and Cairn Energy and supplies it to 37 industrial units, including the
Lanco Kondapalli power project from ONGC, Reliance Industries and Cairn Energy and
supplies it to 37 industrial units, including the Lanco Kondapalli power project
Events:
a) Encroachment along the pipeline route
b) Corrosion of pipelines by water and condensate a mixture of hydrocarbon liquids in
gaseous form led to leakage of Natural Gas
c) The pipeline exploded near Navgaram village resulting in the death of 15 people and
injuring 18 others

The GAILs Tatipaka- Kondapalli pipeline, was built in 2001 to move gas from ONGC
wells to Lanco power plant.
27th June 2014
1. Blast and subsequent fire .
2. Compensation announced by both State Govt and Central Govt .
3. AP govt announces probe.
30th June 2014
Compensation announced by GAIL India and other rehabilitation measures for the
victims and their families.
08th September 2014
CCOE submits the probe report.

Explanations of
SOPE?
Key explanation?

Why SOPE? Why did it happen? Why not?

Major Antecedents of SOPE
1. The agreement between the producer ONGC and transporter GAIL does not
provide for the quality of gas to be supplied.
2. An audit conducted by pipelines regulator PNGRB in August 2011 did not make
any observation in connection to composition of gas and associated issues.
3. The pipeline was audited by OISD even then no observation on wet gas content
was recorded.
Major Determinants of SOPE
1. Installation of separators to strip gas of liquids before transportation was not done
since it was not economically viable at all places due to small quantities of fuel
being produced from these fields.

2. There was no evidence of any efforts by Nagpur based Petroleum and Explosives
Safety Organization(PESO) to enforce putting up of gas dehydration unit to drain
out water and liquids.
3. The state Govt on its part did not act on the representation by the GAIL regarding
the encroachments on the vicinity of the pipeline.
4. GAIL has apparently flouted the declaration to the statutory authority as well as
the declared design basis by not providing GDU at Tatipaka and Mori. Absence of
GDU contributed to increasing of internal corrosion rate in the pipeline.
5. The wet gas contains free water carbon dioxide and sulphur which induced
internal corrosion in the pipeline.
Major Concomitants of SOPE

Problem
Identification
Key Problems?
Underlying key
problem?

Controllable variables (X)

1. Installation of separators to strip gas of liquids before transportation.
2. Putting up of gas dehydration unit to drain out water and liquids.
3. Installation of Gasoline Desulfurization Unit.
Uncontrollable variables (Y)
1. Apparent encroachment of land in the vicinity of the pipeline by the villagers
was a law and order situation which was a state subject.
2. The quality of Gas to be supplied by ONGC.
3. The presence of water, carbon dioxide and Sulfur which lead to internal
corrosion of pipeline.
To what extent Y dominates X
Y doesnt dominate X significantly since all the actions that are in control of
the company as given above could negate the problems given in Y.

Problem
Formulation

The accountability for the negligence on part of various parties responsible for the
accident which led to the blast and subsequent fire accident which led to the death of
22 lives and destruction of property.
Definition of X: All controllable factors in the purview of the company which could
have averted the tragedy.
Definition of Y: All the factors which are not in control of the company which could
have resulted in the tragedy.

Problem solutions
alternatives?

Problem Solution alternatives :

1. Installation of dehydration facility for removal of water and condensate prior
to feeding natural gas in the pipeline.
2. Recommendation for putting up of leak detection system.
3. Patrolling using modern gadgets along the pipeline route.
4. Installation of GDU to reduce the internal corrosion due to sulfur content.

5. Installation of gas dehydration unit.

6. Comprehensive procedure for repair of pipeline in case of a leak so that the
procedure is standardized and proper supervisory and control systems for
maintaining the health of pipelines.
How do you rate them in terms of efficiency, effectiveness, sales earnings, market
share, profits, growth, development, and market valuation?
Optimal problem
solution

The solution provided is an exhaustive list which take care of all the factors which
has led to the tragedy.
What are its tradeoffs?
The magnitude of tragedy in terms of human life, property and companys
reputation and survival requires for stringent measures to avoid accidents in the
future. The increased safety measures adopted by the company will come at a cost.
Hence the tradeoff between cost and safety is more favorable towards higher safety.

Optimal strategy

The implementation of optimal problem solutions have to be taken as soon as

possible because any accident due to the failure to maintain such standardized
equipment and procedure can lead to future tragedies which can cause an
irreparable damage to the company and human lifes.

Consequences

The consequences of optimal solution alternatives to different stakeholders are as

follows:
Gail: Survival, Sustainability, Risk reduction and Corporate responsibility.
People and environment : Prevents future accidents and reduces the chance of
environmental damage arising due to any such accidents.
Government and other regulatory authorities : Compliance of all legal regulations ,
reduction of risk and any chance of accidents in the future.
Suppliers and Customers : Reduction of supply disruptions, and quality products.

ASSURANCE OF LEARNING-02
Problem Process Exploration Process Analysis

Ethical Analysis

Who are the key subjects,

what are the key objects,
Properties and events
(SOPE) in the problem
Process domain?
Key Subject:
Gas Authority of India
Limited, Oil Industry Safety
Directorate, Petroleum and
Explosives Safety
Organisation and Petroleum,
Natural Gas Regulatory
Board and Andra Pradesh
State Government
Key Objects:
Nagaram Villagers, National
Disaster Management
Authority
Properties:
GAIL, a government of India
undertaking, procures
natural gas in the region
from ONGC, Reliance
Industries and Cairn Energy
and supplies it to 37
industrial units, including the
Lanco Kondapalli power
project
Events:
a) Encroachment along the
pipeline route
b) Corrosion of pipelines by
water and condensate a
mixture of hydrocarbon
liquids in gaseous form
led to leakage of Natural Gas
c) The pipeline exploded
near Navgaram village
resulting in the death of 15
people and injuring 18
others
What are the basic legal,
ethical and moral issues
involved in the SOPE
process domain?
a) GAIL on its part did not
maintain the pipelines
affected by accelerated

What do SOPE say and why? What do you

observe? Where are SOPE and why? When did you
notice this problem and why? What are the
economic and social processes involved? How did
it come about and how often? And with whom?
a) The pipeline infrastructure installed by GAIL is
15-20 years old and is defective
b) Andra Pradesh State Government did not act on
GAIL's representation for removal of
encroachments along the pipeline
b) GAIL was not maintaing the pipelines adequately
inspite of numerous complaints from the Nagaram
villagers regarding gas leaks from the pipeline
c) Audits by Petroleum and Explosives Safety
Organisation, Oil Industry Safety Directorate and
Petroleum and Natural Gas Regulatory Board did
not make any observation on the presence of water
or other liquids in gas

Is your SOPE
observational and
analytic search
honest, objective,
comprehensive
and unbiased?
Yes our SOPE
observational and
analytical search is
honest, objective,
comprehensive
and unbiased

Why do you consider them legal, ethical or moral?

Are there other legal, ethical and moral issues you
have not identified?
a) Not maintaining the pipelines adequately is the
legal and ethical responsibility of GAIL
b) It is the ethical responsibility of the auditors to
provide reasonable assurance to the shareholders

What are the

implications and
ramifications of
these legal,
ethical and moral
issues?
If these legal,

corossion
b) The audits performed by
various regulatory agencies
did not identify the issues in
connection to composition
of gas
c) Andra Pradesh State
Government did not act on
GAIL's representation for
removal of encroachments
along the pipeline
d) Absence of any clause
over quality of gas that it
should be without water or
condenasate in old
agreements between ONGC
and GAIL
e) Post the blast, non of the
stakeholders have accepted
responsibility for the mishap
History or narrative of key
SOPE process elements
The GAILs TatipakaKondapalli pipeline, was
build in 2001 to move gas
from ONGC wells to Lanco
power plant.
27th June 2014
1. Blast and subsequent fire .
2. Compensation announced
by both State Govt and
Central Govt .
3. AP govt announces probe.
30th June 2014
Compensation announced
by GAIL India and other
rehabilitation measures for
the victims and their
families.
08th September 2014
CCOE submits the probe
report.
Explanation of the SOPE
narrative and processes
from an ethical and moral
perspective
The fundamental ethical and
moral issue in this case is

on the existance of effective and efficient controls

to minimise risks
c) Absence of critical clauses pertaining to
specifications of the gas being transported in a
legal issue
d) Stakeholders not proactively accepting
responsibility for the blast is a moral issue

ethical and moral

issues are not
resolved, it risks
such untoward
incidents occuring
again

Whom do you include or exclude in the SOPE

narratives, process and why? With what
consequences, and to whom?
All the stakeholders have been included in the
SOPE narratives, because leavingout any of the
stakeholders can result in a biased and incorrect
analysis

Is your SOPE
narrative, history
and analysis fair,
accurate and
factual?
The SOPE
narrative, history
and analysis is
fair, accurate and
fractual

Why? Why did it happen? What laws not complied

with? What ethical codes violated? What moral
principles compromised? What brought this
about?
a) Non-compliance of laws:
Regulations (Integrity Management System for City

Is your SOPE
narrative and
explanation
exclusive,
inclusive, valid,
useful, objective

that GAIL, even though

aware of the possible
consequences of a gas leak
and pipeline blast did not
perform its duties of
upkeeping the pipelines
through adequate
maintenance. Further it
showed a laxity in response
to the numerous complaints
by the villagers which if
heeded could have saved the
lifes of many
On the other hand, there is
the ethical and moral issue
of the regulatory bodies such
as OISD, PESO and PNGRB
not having performed a
prime duty of ensuring
safety standards by gas
transporters
The fundamental ethical and
moral issue in this case is
that GAIL, even though
aware of the possible
consequences of a gas leak
and pipeline blast did not
perform its duties of
upkeeping the pipelines
through adequate
maintenance. Further it
showed a laxity in response
to the numerous complaints
by the villagers which if
heeded could have saved the
lifes of many
On the other hand, there is
the ethical and moral issue
of the regulatory bodies such
as OISD, PESO and PNGRB
not having performed a
prime duty of ensuring
safety standards by gas
transporters

or Local Natural Gas Distribution Networks vide

notification F.No. INFRA/IMP/CGD/1/2013
16/05/2013, Technical Standards and Specifications
including Safety Standards for City or Local Natural
Gas Distribution Networksv vide notification GSR
808(E)
11/11/2009, etc) laid down by PNGRB in exercise of
the powers conferred by section 61 of the
Petroleum and Natural Gas Regulatory Act, 2006
b) Absence of code of ethics for auditors providing
assurance on maintenance of safety standards

The SOPE elements are ethically and morally

interrelated as the stateholders have a collective
responsibility to ensure such untoward incidents do
not occur. There are strong and significant corellations among the SOPE that exonerate guilt as
one lapse has lead to the other, finally culminating
in the disaster

and unbiased?
We have taken
due care to
ensure, that our
SOPE narative and
explanation is
exclusive and
inclusive. The
validity of the
explanations have
been researched
and verified

We have tried to
be unbiased in our
analysis so as to
identify the right
relations and
interdependencies
without
projecting,
overstating or
understating the
same

Categorize SOPE processes

from an ethical and moral
perspective
The fundamental ethical and
moral issue in this case is
that GAIL, even though
aware of the possible
consequences of a gas leak
and pipeline blast did not
perform its duties of
upkeeping the pipelines
through adequate
maintenance. Further it
showed a laxity in response
to the numerous complaints
by the villagers which if
heeded could have saved the
lifes of many
On the other hand, there is
the ethical and moral issue
of the regulatory bodies such
as OISD, PESO and PNGRB
not having performed a
prime duty of ensuring
safety standards by gas
transporters
Problem SOPE processes
Characterization from an
ethical and moral viewpoint
The fundamental ethical and
moral issue in this case is
that GAIL, even though
aware of the possible
consequences of a gas leak
and pipeline blast did not
perform its duties of
upkeeping the pipelines
through adequate
maintenance. Further it
showed a laxity in response
to the numerous complaints
by the villagers which if
heeded could have saved the
lifes of many
On the other hand, there is
the ethical and moral issue
of the regulatory bodies such
as OISD, PESO and PNGRB

Any analogies to past experiences across

industries? How and why do you categorize SOPE
and its interdependencies?
Many incidents which are analogous to the incident
being discussed have occurred in the past. Notably
the Chernobyl disaster and the Deepwater Horizon
oil spill are disasters which have had major and far
reaching ramifications

Are your analogy

and
categorization
objective,
reliable, valid and
meaningful?
The analogies
mentioned are
disasters that
have occurred due
to gross
negligence and
lapses in safety
procudures by the
stakeholders in
the respective
cases. Hence we
believe that our
analogies are
objective, reliable,
valid and
meaningful

How do you characterize your SOPE processes

ethically and morally? Why and why not? What
are the major ethical concepts and constructs
involved or should be included in your SOPE
analysis & why?
a) The pipeline infrastructure installed by GAIL was
15-20 years old and was defective, however GAIL
did not discharge its duty of adequately
maintaining the pipelines
b) Andra Pradesh State Government was supposed
to act on behalf of the villagers, however it did not
act on GAIL's representation for removal of
encroachments along the pipeline
c) GAIL was not maintaing the pipelines adequately
inspite of numerous complaints from the Nagaram
villagers regarding gas leaks from the pipeline
d) Audits by Petroleum and Explosives Safety
Organisation, Oil Industry Safety Directorate and
Petroleum and Natural Gas Regulatory Board is the
responsible authority to regulate the perfromance
of the gas transporters however it did not make
any observation on the presence of water or other

Have you
identified and
characterized the
key ethical, moral
and social
processes of the
problem?
Yes, we have
identified and
characterised the
key ethical, moral
and social
processes of the
problem

not having performed a

prime duty of ensuring
safety standards by gas
transporters

liquids in gas

Problem SOPE processes

Formulation from ethics
theory perspective
This is a case of
Organizational crises Normal Crises:
System-Breakdown (a low
probability, high-impact
event that threatens the
viability of the organization
and is characterized by
ambiguity of cause, effect,
and means of resolution, as
well as by a belief that
decisions must be made
swiftly- Pearson and Clair
1998:60).
Problem SOPE processes
Formulation from moral
theory perspective
This is a case of
Organizational crises Normal Crises:
System-Breakdown (a low
probability, high-impact
event that threatens the
viability of the organization
and is characterized by
ambiguity of cause, effect,

How do you understand your SOPE analysis using

major ethical theories and why? For instance, how
do you empower this analysis using Rawlsian
distributive justice principles and why?
A society in which incidental inequalities in
outcome do not arise would be considered a
society guided by the principles of distributive
justice. In this case distributive justice has not
occurred as, had the objects been people from the
higher strat of society, due care would have been
taken by all the stakeholders to prevent such a
disaster

Have you invoked

the right ethical
theories to
understand the
problem and to
what effect?
Yes, due care has
been taken to
ensure that we
have invoked the
right ethical
theories to
understand the
problem

How do you understand your SOPE analysis using

major moral principles and to what effect? For
instance, how do you empower this analysis using
Kantian moral universal principles and why?
Kant states that to act in the morally right way,
people must act from duty. In this case, the
subjects GAIL, OISD, PESO and PNGRB by not
having performed a prime duty of ensuring safety
standards have acted in a immoral manner

Have you invoked

the right moral
principles to
understand the
problem and to
what effect?
Yes, due care has
been taken to
ensure that we
have invoked the
right moral
principles to

and means of resolution, as

well as by a belief that
decisions must be made
swiftly- Pearson and Clair
1998:60).

Problem process solutionalternatives?

Based on the analysis,
following are the process
solution alternatives:
a) The corporate governance
methodology within GAIL
should be reviewed and
increased accountability
should be established within
the organization.
b) The government should
ensure that the performance
of the regulatory bodies is
increased through
performance linked
incentives such as in the
private sector
c) Autonomy for the
regulatory bodies need to be
increased along with
empowerment to levy
stringent penalties for
defaults in adhering to the
safety norms
Learning
We have learnt to use the
AOL2 framework to
structure and analyse the
problem in a systematic
manner from a moral and
ethical perspective.

understand the
problem

How many ethical and moral solutions can you

identify? How do you rate them in terms of
effectiveness and moral value?
We have identified three possible solution
alternatives which are based on ethical and moral
principles

Are your legal,

ethical and moral
problem solutionalternatives
MECE?
We have taken
due care to
ensure that the
solution
alternatives are
MECE

What have you learnt from AOL2?

Critical thinking from a moral and ethical
perspective should be employed during decision
making
Organizational processes should embed moral and
ethical perspectives so that organizational crisis
situations are minimized

How can you

reinforce good
learning?
As future
managers, we will
be in leadership
positions making
critical decisions.
We need to
ensure that our
decisions are
ethical and moral
in nature and
consider the well
being of all the

stakeholders

ASSURANCE OF LEARNING-03
PROBLEM DOMAIN EXPLORATION
Key outcome-consequences to subjects, objects, properties and events (SOPE)
The fundamental ethical and moral issue in this case is that GAIL, even though aware of the possible
consequences of a gas leak and pipeline blast did not perform its duties of upkeeping the pipelines
through adequate maintenance. Further it showed a laxity in response to the numerous complaints by
the villagers which if heeded could have saved the lifes of many
On the other hand, there is the ethical and moral issue of the regulatory bodies such as OISD, PESO and
PNGRB not having performed a prime duty of ensuring safety standards by gas transporters

ANALYSIS KEY QUESTIONS

Who were affected?
The people of Nagaram Village, East Godavari District, Andhra Pradesh got affected.

When and where did this happen?

It occurred around 4:30 am, Friday, June 27, 2014 near Nagaram Village in Amalapuram Mandal, East
Godavari district about 560 kms from Hyderabad, Andhra Pradesh.

How serious was the incident?

The explosion caused due to the leakage gas from the GAIL pipeline claimed 22 lives and injured several
others, damaged 50 houses, vehicles and nearby coconut plantations, leaving a trail of destruction in the
village. The accident also left GAIL with no reputation as this incident clearly showed a huge gap in their
monitoring system.

How often do such incidents occur?

Due to serious gaps and lack in the regulatory systems, these chemical disasters have become more or less
frequent. The list below shows the list of events that have occurred in the last 2 years.

March 18, 2014: 7 workers at a dying unit died in Perundurai, near Erode after inhaling toxic gas.
June 5, 2014: 54 people went unconscious in Tuticorin after inhaling harmful ammonia gas that leaked
from a cold storage plant.
June 12, 2014: 6 were killed and 29 were injured after leakage of poisonous gas at Bhilai Steel Plant in
Chhattisgarh.
May 16,2013: 1 person was killed and 39 sustained critical burns due to fire at crude distillation unit in
HPCLs Vizag Refinery.

What were the harmful consequences?

The consequences of the accident was large enough to affect many stakeholders:

22 people dead and over 18 injured

Damage to over 50 houses, residential building, nearby vehicles and coconut plantations
In-depth enquiry into the disaster and the managerial practices and monitoring systems of GAILs
by Oil and Gas Ministry, tarnishing the image of GAIL.
ONGC had to shutdown 2 of its gas fields associated with the pipeline.
2 Senior GAIL officials
Key subjects, Key objects, Key properties and Key events (SOPE analysis)

Timeline of key events that led to beneficial or harmful consequences

The GAILs Tatipaka- Kondapalli pipeline, was built in 2001 to move gas from ONGC wells to Lanco
power plant.
27th June 2014
1. Blast and subsequent fire .
2. Compensation announced by both State Govt and Central Govt .
3. AP govt announces probe.
30th June 2014

Compensation announced by GAIL India and other rehabilitation measures for the victims and
their families.

08th September 2014

CCOE submits the probe report.

Explanations of harmful consequences with respect to SOPE

The major reasons behind the disaster:
Improper maintenance of pipeline by GAIL officials, inspite of frequent reporting of gas leaks by
villagers. The pipeline were laid in the year 2001 and have not been replaced since then. Due to the minor
gas leaks at many points in the area, the gas had been gradually leaking in the surrounding area, a major
leak occurred on 27th June and a spark generated due to nearby stove might have started the fire which
spread in the entire vicinity.
Major Concomitants:

Official enquire into the incident and the practices of GAIL by Oil & Gas Ministry.
2 Senior officials were suspended
GAIL had to pay 3.89 Crores to district administration as compensation to the families of the
deceased at 20 Lakhs each while a sum of Rs 50,000 to all the injured.
A total of 5 Lakhs as ex gratia from both state and central governments.
Destruction of property by angry villagers at ONGC gas collection station.
Loss of property which included residential building and houses.
Loss of agricultural properties like coconut plantations.
Defamation of GAILs image due to the incident.
Loss of value to shareholders of GAIL.
Loss of trust in state governing authorities due to incompetency in enforcing law relating to
encroachment of land above/near pipeline areas.
Loss of trust in safety regulatory and monitoring authorities and their negligence in monitoring
and checking the implementation of safety standards and procedures in Oil & Gas industries.
Classify, categorize and characterize harmful consequences in relation to SOPE
Classification of consequences may be done as follows:
Loss of Life:
The disaster left 22 people dead and more than 18 injured:
Loss of Property:

More 50 houses, residential buildings, vehicles and coconut plantations were destroyed due to the
disaster.
Shutting down of two gas fields connected to the pipeline.
Loss of Reputation:

The incident severely tarnished the image of GAIL.

GAIL had to pay heavy compensations to the affected families
High-level enquiry into the incident and practices of GAIL.
Loss of trust in state regulatory authorities to keep the populations at bay from restricted pipeline
areas.
Suspension of 2 senior GAIL officials.
Loss of trust in safety regulatory and monitoring authorities and their negligence in monitoring
and checking the implementation of safety standards and procedures in Oil & Gas industries.
Intended and unintended consequences in relation to SOPE

Nature of Consequences:
All the harmful consequences were totally unintended. It occurred mostly due to lack of knowledge and
heavy negligence on part of all the stakeholders pertaining to the incident i.e. the villagers, state
governing authorities and also the safety regulatory authorities, particularly by the GAIL authorities.
Severity of Consequences:
Loss of life and property by the villagers, loss of image and reputation of GAIL and regulatory authorizes,
monitory loss due to compensations paid. Loss of trust and credibility of regulatory authorizes and
practices adopted in general in oil and gas companies towards safety. Total overhaul and recheck of safety
framework of oil and gas industry.

Teleological analysis of the consequences:

Analysis with ethical perspective:
Based on the analysis of benefits relative to the costs of the large number, here in our case at no point we
can see that there were any benefits reaped due to the consequences. The consequences were solely due to
the utter negligence of GAIL personnel and their management. The loss of life and property was so large
that these cannot be written off just by paying compensation to the affected. Even now neither of the oil
companies have accepted the gross mistake on their part, but are fighting amongst themselves. The
responsible solution would be to accept the fault and help the villagers to reconstruct their homes and
modes of living in order to understand, feel and assuage the pain that has been caused by this horrific
incident.
Ethical Analysis:
It is completely unethical on the part of the oil companies right from ONGC, GAIL, LANCO, and StateGovernment to the petroleum safety regulatory authorities for not performing their duties. Gross
negligence and careless attitude of these entities mentioned above has led to this incident and paying
compensation to cover up the destruction and pain caused will not heal the wounds.

Deontological analysis of the consequences:

Analysis with ethical perspective:
The suspension of senior officials, payment of compensation to the affected families, closing of wells of
ONGC, enquiry into the incident and the company are not completely justifiable as these are only
temporary measures. The acts would have been justifiable if they were focused on the affected families
and the village, where the incident had taken place. Serious work like rehabilitation, renovation of the
affected area was needed which was not done by the accused parties, instead they are still fighting
amongst themselves as to who was responsible. Considering the example of Johnson and Johnsons
Tylenol incident, which led to many deaths due to the companys negligence, every effort was made to

rectify and build the trust back by accepting the responsibility. Even today Tylenol is still one of the most
selling brand of paracetamol. The behavior and attitude of none of the companies associated with the
incident is justifiable in our case.
Distributive justice based analysis of the consequences
Analysis with ethical perspective:
Distributive justice with regards to the compensation packages to the affected families has been done
based on whether the person was dead, injured or permanently disabled. Two senior officials being
sacked may not be very justifiable as these people might have been only the instruments and have been
victimized by some higher authority. The proper distribution of justice could have been done effectively if
management responsible for this incident were given stringent punishment like termination instead of
suspension as this would serve as an example. Over hauling of the entire framework of the organization to
avoid such embarrassment and loss of image in future was needed. Effective justice in ethical point of
view would have been done if the companies involved in the incident took up some village reconstruction
and restoration initiative to alleviate the pain and rebuild trust.

Virtue-ethics based analysis of the consequences:

The incident served as an eye opened for most of the companies in oil and gas domain, especially the
safety regulatory authorities, whose prime role and responsibility was emphasized by this incident. The
government authorizes took responsibility and tried their best to bring the situation under control but need
to check the ethical behavior of individuals in oil and gas companies is to be done, this incident shows
that people have become negligent especially in terms of their ethical and moral responsibility towards
protecting and serving the citizen using stringent safety standards and norms while operating their units.
The government and other regulatory authorities have realized that major work needs to be done as far as
enforcing these norms is concerned. Such concern towards unethical standards is welcomed.

Trust-ethics based analysis of the consequences:

This incident was a severe blow to the oil companies like GAIL who chose to ignore the repeated
complaints of the villagers which ultimately led to such a disaster and also to regulatory authorities and
their name sake audits and procedures which were actually never carried out or implemented to the fullest
leading to such horrible accidents. The trust towards the companies could have been strengthened if GAIL
and other companies linked to the incident, took the moral responsibility of restoring the village at their
expense and ensured that life was restored, thus creating empathy towards affected families.

Hindsight versus foresight analysis of the problem-resolution:

By Hindsight we have learnt that no disaster just happens but is a series of systematic failure. The
incident shows that there was a serious laps in the monitoring and managerial practices adopted by GAIL

and regulatory authorizes. The consequences could have been avoided had GAIL taken sufficient
responsibility and care towards monitoring the condition of pipelines and involved regulatory authorizes
to check the same through periodic audits and implement the changes if any. ONGC and LANCO could
have pressurized GAIL to show the safety audit reports of the pipeline and operating facilities of GAIL,
forcing GAIL to change or check the condition of the pipeline at all the sensitive inhabited areas. State
government should have taken sufficient measures to avoid encroachment of area above and near the
pipeline area, this would have reduced the impact of destruction of life and property.
By foresight we have learned that high risk companies like oil and gas companies should be always
prepared for the worst case scenario such as this and should take at most care in keeping themselves
prepared for such exigencies hence should practice frequent checks and implement monitoring
mechanisms. In addition to that the employees and management of these companies should be sensitized
about the inherent danger, damage and loss to property that can occur due minor faults on their part
especially while working in such high-risk zones. The company should heed to all the alerts and warning
signals of both employees and people who might get affected like the villagers, technically knows as
near-misses like gas leaks which was a clear signal that the conditions of the pipes were fast deteriorating
and either needed to be closed or replaced rather than wait for the disaster to happen.
Assurance of Learning:
Learning by applying AOL3 to this case:
The analysis of the problem by AOL3 is a systematic approach towards the problem, clear conclusions
were arrived at from the in-depth analysis of the issue at hand. The retrospective nature of the case clearly
demanded an efficient framework, which AOL3 helped to dissect the case in terms or technical, moral
and ethical nature. Helping us to understand the need to look at such grave incidents with a broad and
objective approach.

Summary:
Based on the facts, evidences and probe results which have been substantiated by AOL models 1-3 it is
clear that the GAIL accident was a clear case of negligence by various parties which includes GAIL in
principle and other agencies such as PESO, Government which did not act on the encroachment issues.
As seen in AOL 1 using various safety mechanisms could have negated various uncontrollable factors.
This case is a classic example which shows us the effects of negligence coupled with lack of ethical
business practices can lead to a tragedy of enormous proportions even leading to loss of life and
irreparable damage to environment. As the probe result has affirmed, its a collective failure of
responsibility in implementing safety measures and hence as amounted to gross negligence on the part of
GAIL, Government and regulatory agencies.