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 company’s
crushing problems and its uncertain future.
 “Right to know” programmes to head off public
sentiment for government regulations.
 Union Carbide’s 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 Minister’s 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
to establish 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 clean-
up 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.
 Thank
you