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Bhopal Case Study

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On December 3, 1984, one of the worst industrial disasters of all time occurred in Bhopal, India. During the early hours of the morning a poisonous gas, methyl isocyanate (MIC), used in producing the pesticide, Sevin, leaked from a Union Carbide plant. When the gas dissipated it had killed at least 2,000 people and injured over 200,000 others. Under Indian law both a corporation and its officers can be held criminally liable. The Indian Government arrested the plant manager on charges of "culpable homicide through negligence." When Warren Anderson, Chairman of the Board of Union Carbide arrived in India from the United States, he was charged with "negligence and criminal corporate liability" and "criminal conspiracy."

The pesticide, Sevin, which Union Carbide made at Bhopal, was distributed in India. It is used on corn, soybeans, cotton, alfalfa, and other crops. Its use in India resulted in crop yields of about 10 percent higher than before the pesticide was used. This meant food for about 70,000,000 Indians who would otherwise have faced starvation or severe malnutrition. Union Carbide did not build the plant in Bhopal to increase profits. It could have supplied India with Sevin made in the United States more cheaply than it was able to produce it in India. In 1984, the Bhopal plant operated at a loss. It was underutilized, producing only one-third of its capacity. It was reducing costs through manpower reductions, and it was up for sale. The plant was entirely run by Indian managers who operated the company as a separate entity.

There were five safety devices installed to prevent what happened on December 3, 1984: a vent gas scrubber, a flare tower, a water curtain, a refrigeration system, and a spare tank. All of these devices were under repair, or failed to operate. On December 3 the MIC operator found that the pressure in the tank had risen to 55 pounds. The temperature of the liquid MIC rose to a range of 59-68 degrees Fahrenheit, instead of the proper 32-41 degrees. At 2:30 a.m. on December 4, the liquid MIC turned to gas. The Soviet Union lost no time in casting moral stones at Union Carbide, a capitalist multinational, for exporting hazardous industries to underdeveloped countries, for using less safe equipment in India than that used in the United States, and for taking too few precautions with the lives of people in the Third World. Many people made similar moral judgments.

The case is a dramatic, interesting, and complicated one. In order to answer the question of what the responsibility of Union Carbide was in this incident, we should first get clear what sorts of responsibilities corporations have in general. People often speak of "corporate responsibility" and the "social" responsibility of corporations. They do not usually speak of corporate moral responsibility. There are actually four different types of responsibilities that corporations have; corporate, moral, social, and legal. They are related and often overlap. But unless we take the time and trouble to distinguish them we, and corporations, cannot know how to weigh and meet them. Purely corporate responsibilities stem from the goals of a corporation and the interests of those who own or work for it. Making a profit is a corporate demand of shareholders and the Board of Directors of any corporation. Thus, management has the corporate responsibility to make a profit. Unless it does so, the Board may replace the present managers with others who can do better. However, the responsibility to make a profit is not a moral, social, or legal responsibility. If, in a bad year, Union Carbide fails to make a profit, its shareholders may be unhappy. Failure to make a profit is not immoral or illegal, in itself, but since Union Carbide, India was running at a loss, and since it had been laying people off, those running the company



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