Carbide Evaluation  in India

Carbide Evaluation  in India

Instructions/Descriptions

Evaluation of Carbide in India Assignment

Please read “Content” word file and write paper meeting following requirements.

Consider the concerns as described in this case and prepare a memorandum that addresses the concerns described below. Your memo should be completed in narrative form (you may use headings if you choose to do so for organizational purposes, but do not list your responses in bullet form). Maximum page length: 10 pages (double spaced).

Identify all of the potential ethical issues you see (if any). Describe and analyze the implications of each issue, including who or what were affected by the company’s response. In identifying issues and addressing their implications, your discussion should be as comprehensive as possible—you should consider any economic, social, or ecological implications.

Additionally, your analysis should thoroughly identify and discuss at least two potential courses of action that the company could have taken with respect to each issue you have discussed. Clearly demonstrate your reasoning process—identify and explain any ethical principles or arguments you are relying on; do not simply state unsupported conclusions.

If you apply any approaches to ethical reasoning that you learned about in this course, clearly state what they are and how you are applying them to this case. Of the possible solutions you identified, which would you recommend that the company should have adopted as a resolution? Again, fully explain and justify your recommendations. Finally, explain how you would implement each solution you have recommended.

Please use format for the paper using “Trevino framework” word file

Please just read Content and use that framework for paper format

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All requirements I have listed above

Union Carbide Corporation and Bhopal

On December 3, 1984, tragedy unfolded at the Union Carbide pesticide plant in Bhopal, India. Water entered a large tank where a volatile chemical was stored, starting a violent reaction. Rapidly, a sequence of safety procedures and devices failed.

Fugitive vapors sailed over plant boundaries, forming a lethal cloud that moved with the south wind, enveloping slum dwellings, searing lungs and eyes, asphyxiating fated souls, scarring the unlucky.

Bhopal is the worst sudden industrial accident ever in terms of human life lost. Death and injury estimates vary widely. The official death toll set forth by the Indian government for that night is 5,295, with an additional 527,894 serious injuries. Greenpeace has put the death toll at 16,000.

The incredible event galvanized industry critics. “Like Auschwitz and Hiroshima,” wrote one, “the catastrophe at Bhopal is a manifestation of something fundamentally wrong in our stewardship of the earth.” Union Carbide was debilitated and slowly declined as a company after the incident. The government of India earned mixed reviews for its response.

The chemical industry changed, but according to some, not enough. And the gas victims endure a continuing struggle to get compensation and medical care.

Union Carbide in India

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Union Carbide established an Indian subsidiary named Union Carbide India Ltd. (UCIL) in 1934. At first the company owned a 60 percent majority interest, but over the years this was reduced to 50.9 percent. Shares in the ownership of the other 49.1 percent traded on the Bombay Stock Exchange.

This ownership scheme was significant because although UCIL operated with a great deal of autonomy, it gave the appearance that Union Carbide was in control of its operations. By itself, UCIL was one of India’s largest firms. In 1984, the year of the incident, it had 14 plants and 9,000 employees, including 500 at Bhopal. Most of its revenues came from selling Eveready batteries.

Union Carbide decided to build a pesticide plant at Bhopal in 1969. The plant formulated pesticides from chemical ingredients imported to the site. At that time, there was a growing demand in India and throughout Asia for pesticides because of the “green revolution,” a type of planned agriculture that requires intensive use of pesticides and fertilizers on special strains of food crops such as wheat, rice, and corn.

Although pesticides may be misused and pose some risk, they also have great social value. Without pesticides, damage to crops, losses in food storage, and toxic mold growth in food supplies would cause much loss of life from starvation and food poisoning, especially in countries such as India.

The Bhopal plant would supply these pesticides and serve a market anticipated to expand rapidly. The plant’s location in Bhopal was encouraged by tax incentives from the city and the surrounding state of Madhya Pradesh. After a few years, however, the Indian government pressured UCIL to stop importing chemical ingredients.

The company then proposed to manufacture methyl isocyanate (MIC) at the plant rather than ship it in from Carbide facilities outside the country. This was a fateful decision.

Methyl isocyanate, CH3NCO, is a colorless, odorless liquid. Its presence can be detected by tearing and the burning sensation it causes in the eyes and noses of exposed individuals.

At the Bhopal plant it was used as an intermediate chemical in pesticide manufacture. It was not the final product; rather, MIC molecules were created, then pumped into a vessel where they reacted with other chemicals. The reaction created unique molecules with qualities that disrupted insect nervous systems, causing convulsions and death. The plant turned out two similar pesticides marketed under the names Sevin and Temik.

In 1975 UCIL received a permit from the Ministry of Industry in New Delhi to build an MIC production unit at the Bhopal plant. Two months before the issuance of this permit, the city of Bhopal had enacted a development plan requiring dangerous industries to relocate in an industrial zone 15 miles away.

Pursuant to the plan, M. N. Buch, the Bhopal city administrator, tried to move the UCIL pesticide plant and convert the site to housing and light commercial use. For reasons that are unclear, his effort failed, and Buch was soon transferred to forestry duties elsewhere.

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The MIC unit was based on a process design provided by Union Carbide’s engineers in the United States and elaborated by engineers in India. The design required storage of MIC in big tanks. An alternative used at most other pesticide plants would have been to produce small amounts of MIC only as they were consumed in pesticide production.

The decision to use large storage tanks was based on an optimistic projection that pesticide sales would grow dramatically. Since an Indian law, the Foreign Exchange Regulation Act of 1973, requires foreign multinationals to share technology and use Indian resources, detailed design work was done by an Indian subsidiary of a British firm. Local labor using Indian equipment and materials built the unit.

In 1980 the MIC unit began operation under UCIL’s management. During the five years of design and construction, densely populated shantytowns sprang up nearby, inhabited mainly by impoverished, unemployed people who had left rural areas seeking their fortunes in the city. A childlike faith that the facility was a benevolent presence turning out miraculous substances to make plants grow was widespread among them.

In fact, when the MIC unit came online the plant began to pose higher risk to its neighbors; it now made the basic chemicals used in pesticides rather than using shipped-in ingredients. One step in the manufacture of MIC, for example, creates phosgene, the lethal “mustard gas” used in World War I. The benighted crowd by the plant abided unaware.

In 1981 a phosgene leak killed one worker, and a crusading Indian journalist wrote articles about dangers to the population. No one acted. A year later, a second phosgene leak forced temporary evacuation of some surrounding neighborhoods. Worker safety and environmental inspections of the plant were done by the state Department of Labour, an agency with only 15 factory inspectors to cover 8,000 plants and a record of lax enforcement. Oversight was not vigorous.

Meanwhile, the Indian economy had turned down, and stiff competition from other pesticide firms marketing new, less expensive products reduced demand for Sevin and Temik. As revenues fell, so did the plant’s budget, and it was necessary to defer some maintenance, lessen the rigor of training, and lay off workers. By the time of the incident, the MIC unit operated with six workers per shift, half the number anticipated by its designers.

Union Carbide’s Relationship with the Bhopal Plant

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What was the organizational relationship of Union Carbide Corporation in the United States to its subsidiary, Union Carbide India Ltd., and ultimately to the Bhopal plant? How much direction and control did the corporate parent half a world away in Danbury, Connecticut, exercise over the facility?

Although Carbide employees from the United States managed the plant in its early years, in 1982, under pressure from the government, it was turned over to Indian managers. The experience of colonial rule in India created a strong political need for leaders to put on shows of strength with foreign investors.

Indians felt a burning desire to avoid any appearance of subjugation and demanded self-sufficiency. This is what had led to passage of the law requiring foreign investors to use Indian firms and workers in certain ways—and to put pressure on Union Carbide to turn the plant completely over to its Indian subsidiary.

The Bhopal plant was but one of 500 facilities in 34 countries in the Union Carbide Corporation universe. There was no regular or direct reporting relationship between it and Union Carbide’s headquarters in Connecticut. At the request of UCIL, employees of Union Carbide had gone to India twice to perform safety inspections on the plant.

Other than those occasions, managers in the United States had received information or reporting about the plant only infrequently and irregularly when major changes or capital expenditures were requested. Thus, the Bhopal plant was run with near total independence from the American corporation. In litigation to determine where victims’ lawsuits should be tried, a U.S. court described its autonomy in these words:

[Union Carbide Corporation’s] participation [in the design and construction of the plant] was limited and its involvement in plant operations terminated long before the accident . . . [It] was constructed and managed by Indians in India. No Americans were employed at the plant at the time of the accident.

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In the five years from 1980 to 1984, although more than 1,000 Indians were employed at the plant, only one American was employed there, and he left in 1982. No Americans visited the plant for more than one year prior to the accident, and during the 5-year period before the accident the communications between the plant and the United States were almost nonexistent.

Thus, the Bhopal plant was run by UCIL with near total independence from the American corporation. Despite this, shortly after the gas leak Chairman Warren M. Anderson said that Carbide accepted “moral responsibility” for the tragedy.

THE GAS LEAK

On the eve of the disaster, tank 610, one of three storage tanks in the MIC unit, sat filled with 11,290 gallons of MIC. The tank, having a capacity of 15,000 gallons, was a partly buried, stainless-steel, pressurized vessel. Its purpose was to take in MIC made elsewhere in the plant and hold it for some time until it was sent to the pesticide production area through a transfer pipe, there to be converted into Sevin or Temik.

At about 9:30 p.m. a supervisor ordered an operator, R. Khan, to unclog four filter valves near the MIC production area by washing them out with water. Khan connected a water hose to the piping above the clogged valves but neglected to insert a slip blind, a device that seals lines to prevent water leaks into adjacent pipes. Khan’s omission, if it occurred, would have violated established procedure.

Because of either this careless washing method or the introduction of water elsewhere, 120 to 240 gallons of water entered tank 610, starting a powerful exothermic (heat building) reaction. At first, operators were unaware of the danger, and for two hours pressure in the tank rose unnoticed. At 10:20 p.m. they logged tank pressure at 2 pounds per square inch (ppsi).

At 11:30 p.m. a new operator in the MIC control room noticed that the pressure was 10 ppsi, but he was unconcerned because this was within tolerable limits, gauges were often wrong, and he had not read the log to learn that the pressure was now five times what it had been an hour earlier.

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Unfortunately, refrigeration units that cooled the tanks had been shut down for five months to save electricity costs. Had they been running, as the MIC processing manual required, the heat rise from reaction with the water might have taken place over days instead of hours.

As pressure built, leaks developed. Soon workers sensed the presence of MIC. Their eyes watered. At 11:45 p.m. someone spotted a small, yellowish drip from overhead piping. The supervisor suggested fixing the leak after the regular 12:15 a.m. tea break. At 12:40 the tea break ended. By now the control room gauge showed the pressure in tank 610 was 40 ppsi.

In a short time, it rose to 55 ppsi, the top of the scale. A glance at the tank temperature gauge brought more bad news. The MIC was 77 degrees Fahrenheit, 36 degrees higher than the specified safety limit and hot enough to vaporize. Startled by readings on the gauges, the control room operator ran out to tank 610.

He felt radiating heat and heard its concrete cover cracking. Within seconds, a pressure-release valve opened and a white cloud of deadly MIC vapor shot into the atmosphere with a high-decibel screech.

Back in the control room, operators turned a switch to activate the vent gas scrubber, a safety device designed to neutralize escaping toxic gases by circulating them through caustic soda. It was down for maintenance and inoperable. Even if it had been on line, it was too small to handle the explosive volume of MIC shooting from the tank.

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A flare tower built to burn off toxic gases before they reached the atmosphere was also off line; it had been dismantled for maintenance and an elbow joint was missing. Another emergency measure, transferring MIC from tank 610 to one of the other storage tanks, was foreclosed because both were too full. This situation also violated the processing manual, which called for leaving one tank empty as a safeguard.

At about 1:00 a.m. an operator triggered an alarm to warn workers of danger. The plant superintendent, entering the control room, ordered a water spraying device be directed on the venting gas, but this last-resort measure had little effect. Now most workers ran in panic, ignoring four emergency buses they were supposed to drive through the surrounding area to evacuate residents.

Two intrepid operators stayed at the control panel, sharing the only available oxygen mask when the room filled with MIC vapor. Finally, at 2:30, the pressure in tank 610 dropped, the leaking safety valve resealed, and the venting ceased. Roughly 10,000 gallons of MIC, about 90 percent of the tank’s contents, was now settling over the city.

That night the wind was calm, the temperature about 60°, and the dense chemical mist lingered just above the ground. Animals died. The gas attacked people in the streets and seeped into their bedrooms. Those who panicked and ran into the night air suffered higher exposures.

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As the poisonous cloud enveloped victims, MIC reacted with water in their eyes. This reaction, like the reaction in tank 610, created heat that burned corneal cells, rendering them opaque. Residents with cloudy, burning eyes staggered about. Many suffered shortness of breath, coughing fits, inflammation of the respiratory tract, and chemical pneumonia.

In the lungs, MIC molecules reacted with moisture, causing chemical burns. Fluid oozed from seared tissue and pooled, a condition called pulmonary edema, and its victims literally drowned in their own secretions. Burned lung tissue eventually healed, creating scarred areas that diminished breathing capacity.

Because MIC is so reactive with water, simply breathing through a wet cloth would have saved many lives. However, people lacked this simple knowledge.

UNION CARBIDE REACTS

Awakened early in the morning, CEO Warren M. Anderson rushed to Carbide’s Danbury, Connecticut, headquarters and learned of the rising death toll. When the extent of the disaster was evident, a senior management committee held an urgent meeting. It decided to send emergency medical supplies, respirators, oxygen (all Carbide products), and an American doctor with knowledge of MIC to Bhopal.

The next day, Tuesday, December 5, Carbide dispatched a team of technical experts to examine the plant. On Thursday, Anderson himself left for India. However, after arriving in Bhopal, he was charged with criminal negligence, placed under house arrest, and then asked to leave the country.

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With worldwide attention focused on Bhopal, Carbide held daily press conferences. Christmas parties were canceled. Flags at Carbide facilities flew at half-staff. All of its nearly 100,000 employees observed a moment of silence for the victims. It gave $1 million to an emergency relief fund and offered to turn its guesthouse in Bhopal into an orphanage.

Months later, the company offered another $5 million, but the money was refused because Indian politicians trembled in fear that they would be seen cooperating with the company. The Indian public reviled anything associated with Carbide. Later, when the state government learned that Carbide had set up a training school for the unemployed in Bhopal, it flattened the facility with bulldozers.

CARBIDE FIGHTS LAWSUITS AND A TAKEOVER BID

No sooner had the mists cleared than American attorneys arrived in Bhopal seeking litigants for damage claims. They walked the streets signing up plaintiffs. Just four days after the gas leak, the first suit was filed in a U.S. court; soon cases seeking $40 billion in damages for 200,000 Indians were filed against Carbide.

However, the Indian Parliament passed a law giving the Indian government an exclusive right to represent victims. Then India sued in the United States. Union Carbide offered $350 million to settle existing claims (an offer rejected by the Indian government) and brought a motion to have the cases heard in India.

Both Indian and American lawyers claiming to represent victims opposed the motion, knowing that wrongful death awards in India were small compared with those in the United States. However, in 1986 a federal court ruled that the cases should be heard in India, noting that “to retain the litigation in [the United States] . . . would be yet another example

of imperialism, another situation in which an established sovereign inflicted its rules, its standards and values on a developing nation.” This was a victory for Carbide and a defeat for American lawyers, who could not carry their cases to India in defiance of the government.

In late 1986 the Indian government filed a $3.3 billion civil suit against Carbide in an Indian court. The suit alleged that Union Carbide Corporation, in addition to being majority shareholder in Union Carbide India Ltd., had exercised policy control over the establishment and design of the Bhopal plant.

The Bhopal plant was defective in design because its safety standards were lower than similar Carbide plants in the United States. Carbide had consciously permitted inadequate safety standards to exist. The suit also alleged that Carbide was conducting an “ultrahazardous activity” at the Bhopal plant and had strict and absolute liability for compensating victims regardless of whether the plant was operating carefully or not.

Carbide countered with the defense that it had a holding company relationship with UCIL and never exercised direct control over the Bhopal plant; it was prohibited from doing so by Indian laws requiring management by Indian nationals. In addition to the civil suit, Carbide’s chairman, Warren Anderson, and several UCIL executives were charged with homicide in a Bhopal court. This apparently was a pressure tactic, since no attempt to arrest them was made.

On top of its legal battle, Carbide had to fight for its independence. In December 1985, GAF Corporation, which had been accumulating Carbide’s shares, made a takeover bid. After a suspenseful monthlong battle, Carbide fought off GAF, but only at the cost of taking on enormous new debt to buy back 55 percent of its outstanding shares.

This huge debt had to be reduced because interest payments were crippling. So, in 1986 Carbide sold $3.5 billion of assets, including its most popular consumer brands—Eveready batteries, Glad bags, and Prestone antifreeze. It had sacrificed stable sources of revenue and was now a smaller, weaker company more exposed to cyclical economic trends.

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Investigating the Cause of the Mic Leak

In the days following the gas leak, there was worldwide interest in pinning down its precise cause. A team of reporters from The New York Times interviewed plant workers in Bhopal. Their six-week investigation concluded that a large volume of water entered tank 610, causing the accident.

The Times reporters thought that water had entered when R. Khan failed to use a slip blind as he washed out piping. Water from his hose simply backed up and eventually flowed about 400 feet into the tank. Their account was widely circulated and this theory, called the “water washing theory,” gained currency. However, it was not to be the only theory of the accident’s cause.

Immediately after the disaster, Union Carbide also rushed a team of investigators to Bhopal. But the team got little cooperation from Indian authorities operating in a climate of anti-Carbide popular protest. It was denied access to plant records and workers. Yet the investigators got to look at tank 610 and took core samples from its bottom residue.

These samples went back to the United States, where more than 500 experimental chemical reactions were undertaken to explain their chemical composition. In March 1985 Carbide finally released its report. It stated that entry of water into the tank caused the gas release, but it rejected the water washing theory.

Instead, Carbide scientists felt the only way that an amount of water sufficient to cause the observed reaction could have entered the tank was through accidental or deliberate connection of a water hose to piping that led directly into the tank.

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This was possible because outlets for compressed air, nitrogen, steam, and water were stationed throughout the plant. The investigators rejected the water washing hypothesis for several reasons.

The piping system was designed to prevent water contamination even without a slip blind. Valves between the piping being washed and tank 610 were found closed after the accident. And the volume of water required to create the reaction—1,000 to 2,000 pounds—was far too much to be explained by valve leakage.

The Carbide report gave a plausible alternative to the water washing theory, but within months an investigation by the Indian government rejected it. This study, made by Indian scientists and engineers, confirmed that the entry of water into the MIC tank caused the reaction but concluded that the improper washing procedure was to blame.

There matters stood until late 1985, when the Indian government allowed Carbide more access to plant records and employees. Carbide investigators sought out the plant’s employees. More than 70 interviews and careful examination of plant records and physical evidence led them to conclude that the cause of the gas leak was sabotage by a disgruntled employee who intentionally hooked a water hose to the tank.

Here is the sequence of events on the night of December 2–3 that Carbide set forth. At 10:20 p.m. the pressure gauge on tank 610 read 2 ppsi. This meant that no water had yet entered the tank and no reaction had begun. At 10:45 the regular shift change occurred. Shift changes take half an hour, and the MIC storage area would have been deserted.

At this time, an operator who had been angry for days about his failure to get a promotion stole into the area. He unscrewed the local pressure indicator gauge on tank 610, hooked up a rubber water hose, and turned the water on. Five minutes would have sufficed to do this.

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Carbide claimed to know the name of this person, but it has never been made public. Its investigative team speculated that his intention was simply to ruin the MIC batch in the tank; it is doubtful that this worker realized all that might happen. The interviews revealed that the workers thought of MIC chiefly as a lacrimator, a chemical that causes tearing; they did not regard it as a lethal hazard.

Now the plot thickens. A few minutes after midnight, MIC operators noted the fast pressure rise in tank 610. Walking to the tank, they found the water hose connected and removed it, then informed their supervisors. The supervisors tried to prevent a catastrophic pressure rise by draining water from tank 610.

Between 12:15 and 12:30 a.m., just minutes before the explosive release, they transferred about 1 metric ton of the contents from tank 610 to a holding tank. Water is heavier than MIC, and the transfer was made through a drain in the tank’s bottom; thus, the supervisors hoped to remove the water. They failed, and within 15 minutes the relief valve blew.

The investigators had physical evidence to support this scenario. After the accident, the local pressure gauge hole on tank 610 was still open and no plug had been inserted, as would have been normal for routine maintenance.

When the MIC unit was examined, a crude drawing of the hose connection was found on the back of one page from that night’s logbook. Also, operators outside the MIC unit told the investigation team that MIC operators had told them about the hose connection that night. In addition, log entries had been falsified, revealing a crude cover-up effort. The major falsification was an attempt to hide the transfer of contents from tank 610.

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A Settlement is Reached

The theory of deliberate sabotage became the centerpiece of Carbide’s legal defense. However, the case never came to trial. In 1989 a settlement was reached in which Carbide agreed to pay $470 million to the Indian government, which would distribute the money to victims. In return, India agreed to stop all legal action against Carbide, UCIL, and their executives.

India agreed to this settlement, which was far less than the $3.3 billion it was asking for, because a trial and subsequent appeals in the Indian court system would likely have taken 20 years. Carbide paid the settlement using $200 million in insurance and taking a charge of $0.43 per share against 1988 net earnings of $5.31 per share.

Victims’ groups were upset because they thought the settlement too small, and they challenged it. In 1992 the Indian Supreme Court rejected these appeals but permitted reinstatement of criminal proceedings against Warren Anderson and eight UCIL managers.

In 1993 India issued an arrest warrant for Anderson on charges of “culpable homicide not amounting to murder,” but it has never been served. At the trial of the remaining UCIL defendant’s Indian prosecutors argued the managers were criminally negligent because they knew of lax operating procedures but failed to improve them to avoid costs.

After 18 years, 186 witnesses, and various delaying motions, the court convicted seven managers (one had died) of a reduced charge, “causing death by negligence.” They were sentenced to two years in prison, and fined the equivalent of $2,100. All appealed and were released on bail. Victims and the Indian public found the punishment outrageously modest.

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Meanwhile, the Indian government was slow and inefficient in distributing settlement funds to gas victims. In 1993, 40 special courts began processing claims, but the activity was riddled with corruption.

Healthy people bribed physicians for false medical records with which they could get compensation. Twelve court officials were fired for soliciting bribes from gas victims seeking payments. All told, 574,366 claims were paid, including 14,824 death claims, with average compensation about $1,280. Ninety percent of all claims were settled for $550, the minimum allowed.

Because the claims process moved at a glacial pace for years, the settlement money accrued interest and, after all claims were paid, $325 million remained. The government wanted to use the interest to clean up soil contamination at the plant. But in 2004 the Indian Supreme Court ordered it distributed to the victims and families of the dead in amounts proportionate to claims already paid.

Aftermath

In the wake of Bhopal, Congress passed legislation requiring chemical companies to disclose the presence of dangerous chemicals to people living near their plants and to create evacuation plans. The chemical industry’s trade association adopted a program of more rigorous safety standards that all major firms now follow.

In 1994 Union Carbide sold its 50.9 percent equity in UCIL to the Indian subsidiary of a British company for $90 million. It gave all of this money to the Indian government for a hospital and clinics in Bhopal. After the sale, the company had no presence or current legal obligations in India. Nevertheless, Bhopal had destroyed it.

As it exited India, it was a smaller, less resilient company. Forced to sell or spin off its most lucrative businesses, it grew progressively weaker. In 1984, the year of the gas leak, Carbide had 98,400 employees and sales of $9.5 billion; by 2000 it had only 11,000 employees and $5.9 billion in sales. The end came when it merged with Dow Chemical Co. in 2001 and its workforce suffered the bulk of cost-reduction layoffs.

The pesticide plant never reopened. According to a recent visitor, “The old factory grounds, frozen in time, are an overgrown 11-acre forest of corroded tanks and pipes buzzing with cicadas, where cattle graze and women forage for twigs to cook their evening meal.” 15 Chemical waste at the site has contaminated the groundwater.

In 1998 the state government took over the plant and made cleanup plans, but never carried them out.

In 2004 the United States again denied a request by the Indian government to extradite Warren Anderson. Anderson, who is now 91, has dropped from public view. In the unlikely event of extradition, he would face a long trial. Recently, his wife told a reporter that he had been “haunted for many years” by the accident.

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The struggle of gas victims for compensation spawned an activist movement that lives on after more than 25 years. The lead organization is the International Campaign for Justice in Bhopal, a coalition of gas victim groups and charities.

Survivors complain of chronic medical conditions including headaches, joint pain, shortness of breath, and psychiatric problems. They believe that gas exposure and toxic wastes from the plant have caused birth defects.

New Target: Dow Chemical

After Dow Chemical absorbed Union Carbide it became the victims’ bull’s-eye. Both victims and the Indian government now demand that Dow pay for cleaning up the contaminated plant site and further compensate injured survivors.

In 2010 the Indian government filed a petition with the Indian Supreme Court seeking to overturn its 1989 settlement “to cure a miscarriage of justice.” The petition, still pending, seeks to force Dow Chemical to pay another $1.1 billion to the victims. This is justified, argues the government, because the full extent of the disaster was unknown in 1989.

Members of the victim’s movement have repeatedly sued in U.S. courts seeking to overturn the $470 million settlement, accusing Union Carbide of human rights violations, and trying to hold it responsible for cleaning up groundwater pollution at the plant site. All their efforts have so far failed, although one case still drags on.

Victims otherwise harass the company. They have joined with progressive religious orders and pension funds in the United States to picket its shareholder’s meetings while inside, friendly shareholders introduce resolutions asking Dow to acknowledge its responsibilities. All such resolutions have been defeated, garnering only single-digit percentages of the vote.

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Activists tried to embarrass Dow with a brand of bottled water named B’eau Pal containing groundwater from near the old plant. Children of gas victims once went on a 22-city U.S. tour to promote congressional hearings on Dow’s responsibilities. No hearings were held.

Dow never wavers in denying any obligation. “While we have sympathy for this situation,” said a company representative recently, “it is not Dow’s responsibility, accountability or liability to bear.” But the activists are resolute. “I will fight until my last breath against Dow,” says one gas survivor. “I will not give up.” The fight also has ideological meaning.

One movement leader believes that “unless those responsible are punished in an exemplary matter, the message that goes out to the corporate world is that you can kill and maim people and carry on with business as usual.

Postscript

Despite the passage of time, Bhopal does not fade away. The library bookshelf on it keeps growing. It has been the subject of at least seven films, including a drama that was a box office hit in India.

A tendentious book of reality fiction based on Bhopal became a best seller in Europe. Told as a tragedy, the story stirs basic emotions. A Canadian critic reviewing a play on Bhopal found it badly written and acted,

but nevertheless “a touching tale of human suffering” raising “such imposing themes as the relative worth of a human life and the intersection of greed and development in the Third World.” Doubtless these themes will keep the story alive

Eight Steps to Sound Ethical Decision Making in Business

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STEP 1: Gather the facts.

• How did the situation occur?
• Are there historical facts that I should know?
• Are there facts concerning the current situation that I should know?

STEP 2: Define the ethical issues.

• Don’t jump to a solution. Think through the ethical issues. Recognize that multiple ethical issues may exist.

STEP 3: Identify the affected parties (the stakeholders).

• You may have to think beyond the facts of the case to identify all stakeholders.

STEP 4: Identify the consequences.

• After identifying the stakeholders, consider the potential consequences for each party that have a relatively high probability of occurring.
• What are the long-term and the short-term consequences?
• What are the symbolic consequences?
• What are the consequences of secrecy?

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STEP 5: Identify the obligations.

• Identify the obligations involved and the reasons for each one.

STEP 6: Consider your character and integrity.

• Think about yourself as a person of integrity. Ask yourself what a person of integrity would do in this situation.
• New York Times Test

STEP 7: Think creatively about potential actions.

• Be sure that you haven’t unnecessarily forced yourself into a corner. Are you assuming that you only have two choices, either A or B? Look for creative alternatives. Perhaps there’s another answer: C.

STEP 8: Check your gut.

• We are all hardwired to be empathetic and to desire fairness. If your gut is sending up red flags, give the situation more thought.

Source: Trevino, L.K, & Nelson, K.A. (2014). Managing business ethics: Straight talk about how to do it right (6th ed). Hoboken, NJ: John Wiley & Sons.

Evaluation of Carbide in India Assignment

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