Case Study Action Plan: Union Carbide Bhopal Accident

Case Study Action Plan: Union Carbide Bhopal accident Learning Team A: Michael Proffitt, Amanda Garrity, Sean Riedel, Cippy Seidler & La Shonta Fuller University of Phoenix PHL 323/Ethics in Management History: Controversy Union Carbide In December of 1984 controversy surrounded Union Carbide, a chemical and polymer company founded in 1917, when the company had a poisonous gas leak from their pesticide plant in Bhopal, India. (Union Carbide Corporation, 2011) This incident killed thousands of people, and injured many more.

The company reacted with genuine concern but the incident became a public relations and financial nightmare for Union Carbide.

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This disaster raised some very serious ethical issues as well such as careless controls, a sub-standard facility and safety measures, reduced staff, and suppressed information. Numerous lawsuits followed including civil and criminal cases that are still pending. This essay includes a description and analysis of the facts surrounding this incident and an assessment of potential alternatives that the company could have taken to minimize the damage that was inflicted.

It incorporates the selection of the most viable alternative and makes future recommendations for Union Carbide related to a code of ethics and conduct. Start of the crisis Union Carbide’s leak of gas in Bhopal began with a list of internal safety violations and safety breakdowns. One of the chemicals that were manufactured in the plant was Methyl Isocyanate (M. I. C. ), which is highly toxic and unstable. Specific safety precautions that were in place were ignored or failed. For example, when the initial leak was discovered, employees ignored it because they had previous leaks in the past. Browning, 1993) According to Jackson Browning, the former Vice-President of Health, Safety and Environmental Programs for Union Carbide Corporation, the shift supervisor was notified but he did not respond since it was his tea time. (1993) A domino effect ensued. The relief tank gave way and a large volume of toxic gas covered the adjoining shantytowns and beyond. There were safety measures in place for controlling a major leak. All were tried and all failed because of mechanical problems, procedural errors or general incompetence.

There were well-known safety concerns in the plant that were ignored or cut due to economic reasons. The safety precations in place in Union Carbide’s USA plants were not in place in Bhopal. Union Carbide disputes the cause of the event and states that leak was caused by a sabatuer. (Bhopal, 2011). Regardless of where it started, the disaster was allowed to happen because of safety breakdowns. Root causes and ethical issues: Lack of oversight & safety issues The ethical issues involved in this disaster were numerous.

Most were ethical issues were decisions based on financial benefit over the safety of the human population and the environment. As key players in this disaster, the Americans ignored what could happen, the Indians allowed it to happen and the employees were left in the middle to fend for themselves. The three main root causes of this incident are lack of oversight (including the American-Indian relationships), lack of safety measures and the ignorance of the surrounding community. The lack of oversight by the American Union Carbide with respect to the running of the plant played a large role in this challenge. Union Carbide India Limited (UCIL) owned, operated and managed {the Bhopal plant} on a daily basis. UCIL was an Indian company in which Union Carbide Corporation (UCC) held just over half the stock. The other stockholders included Indian financial institutions and thousands of private investors in India” (Bhopal, 2011). Because the area was one of the poorest areas in the country, the Indian government had a financial interest in keeping this plant running regardless of the known dangers. Rules are often bent or altered to attract foreign investments” (Browning, 1993). UCIL took good care to keep the establishment happy and satisfied. “They offered lucrative employment to several high officials after retirement, which included a former Inspector General of Police, as also their offspring and close relatives. In the eyes of the government, the company could do no wrong” (Browning, 1993). As in many ethical challenges in business, the lack of oversight or lack of enforcement of policies contribute to the dilemma. Union Carbide is able to continue operating the Bhopal Plant — despite its deterioration — due to the state of Madhya Pradesh and the Indian government not enforcing safety and environmental laws and regulations” (Murphy-Medley, 2001). There was almost a collusive relationship between Union Carbide and the Indian authorities. (Browning, 2003). “The flouting of industrial safety provisions {was} winked at, accidents, even fatalities, are improperly investigated and an unholy alliance allowed to develop between the high government functionaries and the… management at the cost of plant safety” (Browning, 2003).

Safety issues were virtually ignored at the Bhopal plant. There were significant precautions taken at the US plant in West Virginia that were not in place in Bhopal. .There was a safety visit made there by the Americans in 1982 but no procedures or changes were put in place based on their recommendations. Even minimal safety standards that the plant had devised were pushed aside to provide more financial benefit. Refrigeration and cooling systems were off-line. This chemical must be stored at a proper temperature or it is much more volatile.

There were defective gauges and other measuring devices. Staffing standards were compromised to increase profit. The plant continued to deteriorate and the Indian officials continued to approve the procedures as is. Ignorance “The pesticide factory was built in the midst of densely populated settlements. UCIL chose to store and produce MIC, one of the most deadly chemicals…in an area where nearly 120,000 people lived” (ICMR, 2010). Most of the people living in the shantytowns surrounding the plant were unaware of the dangerous chemicals being produced.

During the crisis, the public alarm for the surrounding areas was not sounded until after 2:30a when the leak actually occurred at around 12:30a. The first alarm that sounded made the community think there was actually a fire at the plant and they rushed to help, compounding the health risk, not realizing the danger of this gas leak. The company did nothing to educate the citizens. “Local newspaper articles…tried to warn the people … of the potential hazards involved with being in such close proximity to the plant, but many residents are either illiterate or could not conceive of the dangers” (Murphy-Medley, 2001). Alternatives:

Planning When determining what alternatives to consider in the Union Carbide Bhopal tragedy, first we must look at what type of planning Union Carbide had, as well as the way they communicated the issue. According to the IBS Center for Management Research, “No alarm ever sounded a warning and no evacuation plan was prepared. When victims arrived at hospitals breathless and blind, doctors did not know how to treat them, as UCIL had not provided emergency information” (2011). Union Carbide should have had a crisis response plan which could have been implemented during this emergency with such a potential safety risk.

Union Carbide had the resources and skills available to them in order to put this plan in place. This could have prevented the overall death toll of 10,000 people. Planning and practicing the implementation of the crisis plan is crucial for any business when there are potential safety issues, especially one as big as what happened in Bhopal. Furthermore, management should have played a larger role in the planning of emergencies, in addition to the training and implementation of the plan. Communications

Lack of effective ethical communication was a central component in the Bhopal challenge. The focus was not on putting in place an industrial plant that was focused on the neighboring community and environment but on financial needs. After the disaster, “Union Carbide… settled out of court for $470 million, thereby denying any legal liability” (Murphy-Medley, 2001). Morally this is a travesty since Union Carbide had many opportunities to step in and eliminate this disaster from happening in the first place.

One alternative for Union Carbide is to take the ethical message about how they do business and be sure it is part of the enduring message in their foreign markets. “An effective communication campaign that continuously puts forth the ethics message is critical to establishing an ethical culture and fostering ethical decision-making” (Hunt, 2010). Furthermore, considering that Union Carbide had knowledge that if there was a reaction to the deadly gas MIC, which was being produced at the plant, would have had such an normous effect on the 120,000 people who lived in the surrounding area, they could have communicated the risks to the population near the plant. Something as simple as a warning from Union Carbide, could have grabbed the attention of a local or more who could have possibly fought for a crisis response plan to go into effect. Recommendations: Crisis response teams The recommendation for Union Carbide for future disaster management is to make up a crisis response team to rapidly deploy to the area for an assessment of the situation.

This crisis response team should include the Chief Executive Officer, legal teams, technical support, environmental specialists, medical personnel, clean up specialists and a few members of the media. The CEO and legal teams are crucial to handle all financial and legal aspects of the disaster and to monitor the day to day progress. The environmental specialists will run tests on air quality, soil contamination and to assess the risk of other contamination by the toxic gas cloud.

They will work hand in hand with the cleanup crew to make absolutely sure the contaminated area is clean and habitable once again. Technical support will set up emergency communications with the company in the United States to India. The media will work with the legal departments to report on the progress so the American people with financial interests in the company have an idea what is going on. They will also help distribute information to the citizens in India. Once the crisis response team has had eyes on the contaminated area, the moral and ethical duties are the primary concern.

Follow up relief can be sent in the form of additional supplies, medical personnel and additional cleanup crew. Lack of trained medical personnel was an issue in Bhopal. After the threat of additional contamination is assessed, Union Carbide and the managers of the plant need to decide who is taking responsibility for what areas of the clean-up. The finger pointing over who’s at fault needs to be saved until the plant is clean, the residents are medically sound and the town has returned to normal life. The key to a successful clean up is communication.

Communication between the Indian officials, plant employees, Union Carbide, the EPA and Washington should take place. Union Carbide will be directly responsible for the clean up, which did not happen in Bhopal. Once the investigation into the initial malfunction is complete, all Union Carbide plants will be shut down to ensure there is not a similar mishap on U. S. Soil. The development of a crisis response team should allow Union Carbide to much better manage any catastrophe in the future. Ethical responsibility From the beginning, the story of Bhopal involved issues of planning… chemical risk, labor relations, management competence, the Indian subsidiary’s relationship with its US parent and decision-making process, cost-cutting, lack of maintenance and a near-complete and well-documented disregard for safety” (ICJB, 2011). Union Carbide reacted to the disaster swiftly and with great kindness but lacked an initial awareness of their foreign operations. The Indian government, that was designed to protect its people, vanished in this case.

Union Carbide had a moral and ethical responsibility to ensure that a sub-standard facility is not in operation. “It’s clear that at the turn of the twenty-first century, businesspeople are at a crossroads. We need to decide what kind of professionals we are going to be” (Trevino & Nelson, 2007). References Bhopal. (2011), Bhopal Information Center, Retrieved January 30, 2011 from Union Carbide website, http://www. bhopal. com/ ICJB (2011), A quarter of a century of entangled issues, Retrieved January 30, 2011 from International Campaign for Justice in Bhopal, http://bhopal. et/bhopalnet/ ICMR (2011), The Bhopal Gas Tragedy, Retrieved January 30, 2011 from the IBS Center for Management Research website, http://www. icmrindia. org/casestudies/catalogue/Business%20Ethics/The%20Bhopal%20Gas%20Tragedy. htm Hunt E. (Aug, 2010), Corporate Compliance Training: Business Ethics Education Leads to Sustained Success, Retrieved January 30, 2011 from http://www. corporatecomplianceinsights. com/2010/corporate-compliance-training-business-ethics-education/ Murphy-Medley, D, (2001) Exportation of Risk: The Case of Bhopal, Retrieved January 30, 2011 from Online Ethics Center,

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