Bhopal Gas Tragedy: Revisited after Twenty-five Years

            
 
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Please note:

This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.



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Finalist in the 2010 Dark Side Case Writing Competition organized by Critical Management Studies Interest Group of the Academy of Management (AOM).

Case Details:

Price:

Case Code : BECG115 For delivery in electronic format: Rs. 500 ;
For delivery through courier (within India): Rs. 500 + Rs. 25 for Shipping & Handling Charges

Themes

Business Ethics / Corporate Accountability / Multinational corporations in transnational accountability
Case Length : 34 Pages
Period : 1984-2010
Organization : Union Carbide Corporation / Dow Chemicals Company
Pub Date : 2010
Teaching Note : Available
Countries : India
Industry : Chemicals

Abstract:

December 3, 2009, marked the 25th anniversary of the world's worst ever industrial disaster - the gas leak that occurred at Union Carbide India Ltd's (UCIL) pesticide plant in Bhopal (Madhya Pradesh, India). The tragedy that instantly killed more than 3,000 people and left thousands injured and affected for life, occurred when water entered Methyl Isocyanate (MIC) storage tank No. 610 of the plant on December 3, 1984. MIC is one of the deadliest gases produced in the chemical industry and is known to react violently when it comes into contact with water or metal dust. Though the plant was closed down soon, the after-affects of the accident left an estimated 25,000 people dead and around 600,000 people affected due to gas-related disorders.

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What compounded the tragedy was that the victims failed to get adequate compensation and the generation that followed continued to suffer from health complications. However, the multinational corporation responsible for the disaster still continued to evade responsibility.

The US-based Union Carbide Corporation (UCC), the parent company of UCIL, stuck to its outrageous argument that the incident had occurred due to an act of sabotage by a disgruntled worker. It, however, failed to name the worker. It downplayed the health effects of MIC and discredited the victims and activists fighting for justice. It tried to evade responsibility by shifting the blame on to the Indian subsidiary and the Indian government. UCC claimed that it did not have any say in the operations of its subsidiary. The company engaged in lengthy litigation which led to a delay in compensation being provided to the victims. Even the people who obtained a paltry amount years later, as UCC agreed to pay US$ 470 million, had to continue residing in the surroundings of the plant that had not been cleaned up, exposed to the toxic environment. Contrary to UCC's assertion, independent experts believed that the disaster had occurred due to negligent management practices and that corporate greed had played a role in this. They also did not buy UCC's argument that the company did not have operational control over its Indian subsidiary.

In 2001, UCC tried to enter into oblivion by merging with the US-based Dow Chemical Company (Dow). After the merger, Dow too refused to take responsibility for the incident, arguing that it had never operated the plant at Bhopal and that it had insulated itself from UCC's Bhopal liabilities by virtue of how it had structured the acquisition. Not only did it contend that the compensation claim had been already settled by UCC much before it had acquired the company, but it also continued to lobby the Indian government to resolve the issue once and for all in its favor. The Indian government too came in for criticism as it was viewed as siding with the rich multinationals, more concerned about a backlash from foreign investors who had become more important players in the Indian economy following liberalization.

A quarter of a century later, toxic chemicals lay in the vicinity and children who played near the site and livestock grazing on the ground were fully exposed to it. In addition to the surroundings, the walls of the plant and the roof remained covered with toxic materials which far exceeded safety standards. Moreover, sacks of chemicals and pesticides lay scattered around the abandoned factory in a state of decomposition. The survivors residing near the plant continued to depend on groundwater sources that were highly contaminated as the heavy metals and solvents had seeped into the ground after rainfall. Survivors and their next generation continued to suffer from a number of ailments and cancers. Children were still being born with birth defects and there was an unusually high incidence of mental handicap and other ailments.

Critics felt that the situation in Bhopal only went to show how multinational corporations had amassed disproportionate power and influence in the global stage and showed contemporary capitalism at its worst. The fact that UCC and then Dow had been able to evade the real costs of compensation and clean-up, was viewed by critics as an example of the power and impunity enjoyed by multinational corporations. The victims' struggle against UCC, and then Dow, were recognized as the world's longest running struggle against corporate excesses. Experts felt that the outcome of this struggle would have huge implications for globalization. And as such, the incident at Bhopal was not just an industrial disaster from the past century, but a very important issue of the new millennium of people's right, government responsibility, and corporate accountability.

Issues:

Analyze and understand the world's worst industrial disaster, its reasons, and consequences (both short-term and long-term), and why it is relevant even today.

Discuss and debate the stance taken by the multinational corporation, host government, and other stakeholders following the disaster.

Understand why this tragedy and the outcome reflect the dark side of contemporary capitalism.

Understand the transnational aspects of the ethical debate and how multinational corporations can be held accountable for its malpractices in a country other than its origin.

Contents:

  Page No.
25 Years On... New Victims are Born Everyday 1
Background Note 3
Negligent Management Practices at UCIL 4
That Fateful Night 5
UCC's Take on the Tragedy 6
The Sabotage Theory 8
Settlement Made by UCC 9
The Tragedy Continues 10
Longest-Running Struggle against Corporate Crime 13
Two Decades and a Half Later... 16
The Road Ahead 19
Exhibits 21

Keywords:

Business ethics, Corporate accountability, Transnational aspects of the ethical debate, Multinational corporations in transnational accountability, Mechanisms of transnational accountability, Stakeholder tension, Strategic communication, Public Relations, Image restoration theory, Bhopal Gas Tragedy, Dark side, Worst industrial disaster, Industrial crisis, Union Carbide, Dow

25 Years on...New Victims are Born Everyday - Next Page>>


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