Case Study

Bhopal plant history

The Bhopal plant was owned and operated by Union Carbide India, Limited (UCIL), an Indian company in which Union Carbide Corporation held just over half the stock (50.9 %). The other stockholders included Indian financial institutions and thousands of private investors in India. Union Carbide India Limited designed, built and managed the plant using Indian consultants and workers. In 1994, Union Carbide sold its entire stake in UCIL to MacLeod Russell (India) Limited of Calcutta, and UCIL was renamed Eveready Industries India, Limited (Eveready Industries). From feb-2001 it was wholly owned by The Dow Chemical Company.

Bhopal Gas Tragedy key issues

Leakage of deadly methyl-isocyanate gas from the pesticide plant which resulted in the death of 2000 people and about 150000 people were hospitalized for respiratory and eye damage. Shortly after the gas release, Union Carbide launched an intensive effort to identify the cause. An initial investigation by Union Carbide experts and a committee of experts, working on behalf of the Indian government, conducted its own investigation and concluded that : Factors leading to this huge gas leak include:

The use of hazardous chemicals (MIC) instead of less dangerous ones Storing these chemicals in large tanks instead of over 200 steel drums. Possible corroding material in pipelines Poor maintenance after the plant ceased production in the early 1980s Failure of several safety systems (due to poor maintenance and regulations). Safety systems shut down to save money - including the MIC tank refrigeration system which alone would have prevented the disaster.

Key issues contd.

Lawsuits brought by American lawyers on behalf of the victims asked for billions of dollars in compensatory and punitive damages and threatened to send the company into bankruptcy. There were protests against Union Carbide in other parts of the world. Morale of the company was low, production at many plants dropped temporarily. Top management was worried with the companys crushing problems and its uncertain future. Right to know programmes to head off public sentiment for government regulations.

Union Carbides Response to the victims of Bhopal disaster

In the wake of the release, Union Carbide Corporation provided immediate and continuing aid to the victims and set up a process to release their claims. In the days, months and years following the disaster, Union Carbide took the following actions to provide continuing aid: Immediately provided approximately $2 million in aid to the Prime Ministers Relief Fund. Immediately and continuously provided medical equipment and supplies. Sent an international team of medical experts to Bhopal to provide expertise and assistance. Funded the attendance by Indian medical experts at special meetings on research and treatment for victims.

Response contd..

Provided a $2.2 million grant to Arizona State University toestablish a vocational-technical center in Bhopal, which was constructed and opened, but was later closed and leveled by the government Offered an initial $10 million to build a hospital in Bhopal; the offer was declined. Provided an additional $5 million to the Indian Red Cross. Established an independent charitable trust for a Bhopal hospital and provided initial funding of approximately $20 million, and Upon the sale of its interest in UCIL, and pursuant to a court order, provided approximately $90 million to the charitable trust for the hospital.

Long term effects of the disaster on union Carbide

Legal action against Union Carbide has dominated the aftermath of the disaster. However, other issues have also continued to develop. These include the problems of ongoing contamination, criticisms of the cleanup operation undertaken by Union Carbide. The Chairman and CEO of Union Carbide, Warren Anderson, had been arrested and released on bail by the Madhya Pradesh Police in Bhopal on December 7, 1984.Beginning in 1991, the local authorities from Bhopal charged Warren Anderson, a crime that carries a maximum penalty of 10 years in prison. However, the Indian Government passed the Bhopal Gas Leak Act in March 1985, allowing the Government of India to act as the legal representative for victims of the disaster. In February 1989, the Supreme Court of India directed a final settlement of all Bhopal litigation in the amount of $470 million.

Long Term Efforts Contd..

By November 1990, the Reserve Bank of India reported that the settlement fund, with interest, was approximately twice what was estimated to be needed to compensate the victims. By November 1990, the Reserve Bank of India reported that the settlement fund, with interest, was approximately twice what was estimated to be needed to compensate the victims. To resolve continuing legal disputes, the Supreme Court of India in 1991 affirmed the settlement; described it as just, equitable and reasonable, and dismissed all outstanding petitions seeking review of the settlement. In addition, the Court: Required the Government of India to purchase, out of the settlement fund, a group medical insurance policy to cover 100,000 persons who may later develop symptoms; and Required the Government of India to make up any shortfall, however unlikely, in the settlement fund. In September 2006, the Welfare Commission for Bhopal Gas Victims announced that all original compensation claims and revised petitions had been "cleared.

 Right to know Law

American legislators passed the Emergency Planning and Community "Right to Know Act" in 1986. Among other things, this law required industries to disclose the volume of certain chemicals released annually by them into the environment. The Community Right to Know Act's approach provides citizens with access to information. As the 1992 World Summit on Environment and Development held in Rio de Janeiro affirmed, for citizens to truly play a role in environmental governance, they must not only have access to environmental information but also be able to participate in the decision-making process and have public access to redress and remedy.

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