The Bhopal Gas Tragedy

Union Carbide takes the Offensive Contd...

However analysts felt that contrary to what was said in UCC's document, UCC did not have any kind of emergency plans in place at its Indian subsidiary. So much so, that when the accident occurred and people started pouring into the hospitals in Bhopal complaining about the various ailments, the hospital staff had no idea of what had happened or what to do.

UCC tried to defend its position by saying that it had only a 50.9% stake in UCIL. The company also said that all the employees in the company were Indians and that "...the last American employee at the site had left two years before." UCC maintained that it did not have any hold over its Indian affiliate. UCC further argued that the day-to-day working of UCIL was independent of the parent company and therefore it could not to be held responsible for the gas leak. However investigations revealed that this was not really true. In spite of denials, it appeared that UCC had substantial authority over its affiliate. Many of the day to day details, such as staffing and maintenance, were left to Indian officials, but every major decision, such as the annual budget, had to be cleared with the parent company.

The Settlement

Within months after the disaster, the GoI issued an ordinance appointing itself as the sole representative of the victims for any legal dealings with UCC as regards compensation. The ordinance was later replaced by the Bhopal Gas Leak (Processing of Claims) Act, 1985.

Armed with this power, the GoI filed its suit for compensation and damages against UCC in the United States District Court for the Southern District of New York.

Besides filing the suit, one of its prime responsibilities was to register the claims of each and every gas victim in Bhopal. Analysts felt that this job was never done, or rather, not with any seriousness for the next ten years.

The government set up various inquiry commissions to investigate the causes of the disaster; they remained half-hearted initiatives at best. UCC, on the other hand, moved more quickly with its 'investigations': it announced by March 1985 that the disaster was due to 'an act of sabotage' by a Sikh terrorist.

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Case Details

Case Code : BECG009
Themes: Ethics in Business
Case Length : 09 Pages
Period : 1980-2001
Organization : Union Carbide India Limited
Pub Date : 2002
Teaching Note : Available
Countries : India
Industry : Chemicals

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