Advantages of Establishing a Chemical Production Plant in Bhopal India - Assignment Example

 Introduction Expanding the business on a multinational level requires the company to have a more thorough study on the ethical and legal issues regarding the production of chemicals in a foreign land. After providing a brief background and discussing the advantages of establishing a chemical production plant in a developing country, the report will tackle the ethical and legal issues concerning the establishment of chemical production plant in Bhopal in India. Brief Background Each foreign country has its own statutory safety and environmental guidelines which could affect the success or failure of a manufacturing company. As an engineer who has been a successful corporate manager for a chemical production company, I have written this report to guide the management before establishing at least one production company in Indonesia within the next ten years. Based on the gathered ethical and legal issues in each target country, recommended solutions on how we could effectively decrease the risk of losing large sum of money due to the difference in business and cultural practices will be tackled in details. Advantages of Establishing a Chemical Production Plant in Bhopal India Expanding the business in Bhopal India could offer the business more competitive advantages as compared to its competitors. Aside from the relatively low cost of labor, other operational necessities such as raw materials, electricity, taxes, and transportation costs are also competitive.1 Basically, the cost savings that the company can get out of establishing a chemical plant in Bhopal or Kazakhstan will enable the company to sell the finish products at a more competitive price without the need to sacrifice its quality. Ethical Issues Associated with Establishing a Chemical Production Plant in Bhopal India As a chemical manufacturing plant, it is but ethical for plant managers to learn more and train employees regarding the socially and legally accepted staffing policy, health and safety management, the health and social consequences of establishing the chemical plant close to a densely populated geographic area, the toxicity of chemicals being manufactured at the chemical plant, and the proper way of handing and disposing the chemicals.2, 3, 4 Likewise, it is equally important for the plant managers to develop proper emergency response strategies and train employees on how to cut down the harmful effects of these chemicals in case of emergency.5, 6 All these are necessary in order to avoid unnecessary law suites which can be filed against the company. Legal Issues Associated with Establishing a Chemical Production Plant in Bhopal India The existing environmental laws and regulation in India is not enough to define the proper way of protecting the environment. Therefore, the public interests on environmental law are done through an open decision-making process between the public, the chemical manufacturing company, and the lawyers and judges7. In India, chemical manufacturers should be aware of the Environmental Protection Act (1986), the Insecticides Act (1968), the Explosives Act (1978), the Factories Act (1948), the Petroleum Act (1934), the Indian Penal Code (1960) and the Indian Boiler Act (1923) depending on which among these legislations that may or may not directly apply to chemical manufacturing companies10. The Indian Penal Code is commonly used in case there are evidences showing that the chemical manufacturing company has been negligent especially in case wherein the presence of hazardous chemicals has caused physical harm to a person or a group of person and damaging effects towards the environment and wildlife 10. In line with this, chemical manufacturing companies that will be proven guilty of violating the Indian Penal Code will be punished by imprisonment for a term of up to six months, a fine which could extend up to one thousand rupees (Rs 1,000), or both10. In terms of safety issues, the company should be familiar with the Indian Boiler Act and the Explosives Act. Specifically the Indian Boiler Act is all about the safety of handling hazardous chemicals. Since there is a risk for chemicals to explode, chemical manufacturing companies are obliged to learn more about the Explosives Act. Although there is no imprisonment for companies that violates the Act, those that will be caught guilty will have to pay a fine of three thousand rupees (Rs 3,000)14. The Insecticides Act is an Indian law concerning the need to regulate chemical manufacturers, importation, sale, transportation, distribution, and the use of insecticides. This is necessary to protect the people from the harmful effects of a long list of chemicals14. With regards to environmental pollution management and safety, the company should take note of the Water Act, Environmental Act, Air Act, and Factories Act14. As a common practice, manufacturers that produce hazardous chemicals are required to register and classify the chemicals under the International Program in Chemical Safety (IPCS) 8 by UNEP and the International Register of Potentially Toxic Chemicals (IRPTC) by WHO9. Aside from refraining from manufacturing hazardous chemicals that are banned in India or Kazakhstan, chemical manufacturers are also required by the law to observe proper packaging and storage of hazardous chemicals, labeling, retail distribution, informing the receiver of the products of chemical hazards, and proper disposal of obsolete stocks11, 12. With regards to the proper disposal of hazardous chemicals in India, the management should comply with the rules implemented by the Ministry of Environment and Forest which has been noted under the Environmental Act 1989, the Air Act (1981), the Water Act (1974), and the Factories Act of 1948 which was amended in 1987 for the legal management of hazardous industries12. Hazardous chemicals can be in the form of solids, liquids, and gasses. In line with this, the guidelines for hazardous waste related to wastewater and exhaust gases are stipulated under the Water Act (1974) and Air Act (1981)12. Specifically the Water Act (1974) will serve as a legal guideline in case the company accidentally spills some hazardous chemicals in water surroundings whereas the Air Act (1981) highlights the possible filling of lawsuits against exhausting harmful chemicals in the air. Recommended Solutions To avoid facing legal issues when expanding the business in Bhopal India, the top management should always comply with the environmental law on hazardous chemicals. In line with this, the company should be ready to show evidences that the business owner and employees recognizes the major accident hazards and were able to take adequate precautions in terms of managing and preventing accidents from happening13. In terms of handling the manufactured chemicals, the company is expected to practice proper labeling or tagging of chemicals together with the company’s name and address11, 12, 13. To minimize the risk of endangering the health of the local people, it is highly recommended for the company to establish the manufacturing chemical plant further away from where people are residing. This strategy is effective in terms of minimizing the risk that the company will have to face legal charges as a result of damaging the health of the Indians settlers who are living close to where the company is situated. As part of making the company ready and knowledgeable with the business ethics and law on pushing through the chemical manufacturing business in India, the top management should train its employees with regards to the legislations which may directly or indirectly apply to the business in the near future. Keeping the company employees knowledgeable with the ethics and law concerning this matter will narrow down the risk wherein the company will have to face legal problems in Bhopal India. References [1] D. Murphy-Medley, “Exportation of risk: The case of Bhopal,” Online Ethics Center for Engineering, National Academy of Engineering, April 7, 2006. [Online]. Available: http:www. onlineethics.org/CMS/enviro/EECS/Bhopal.aspx. [2] D.G. Wareham, Elefsiniotis, P. 1996. Environmental ethics in engineering education: A missing fundamental. Water Science and Technology. 34(12):197- 203. [3] J.R. Herkert, 1998. Sustainable development, engineering, and multinational corporations: Ethical and public policy implications. Science and Engineering Ethics. 4(3):333-346. [4] A. Grunwald, 2000. Against over-estimating the role of ethics in technology development. Science and Engineering Ethics. 6(2):181-196. [5] D.S. Viswanath et al. 2002. Role of Chemical Engineering in Counter Terrorism, Paper # 174, 9th APCChE Congress and CHEMECA 2002, 29 September-3 October 2002, Christchurch, NZ. [6] J. Henken, “Conclusions (Disaster Relief: Public Safety and Public Opinion after a Plant Emergency),” Online Ethics Center for Engineering, National Academy of Engineering, November 7, 2009. [Online]. Available: http://onlineethics.org/CMS/enviro/enviroessays/disrel/disrel-conc.aspx. [7] J. Razzaque, 2004. Public Interest Environmental Litigation in India, Pakistan, and Bangladesh. Kluwer Law International. p. 124. [8] UNEP Governing Council Decisions, Revised Objectives and Strategies of the International Register of Potentially Toxic Chemicals, UNEP/GC/DEC/15/28 (1989). in P. Sands. (2003) Principles of International Environmental Law. Cambridge University Press. p. 626 [9] WHO, Recommended Classification of Pesticides by Hazard: Guidelines to Classification (2000-2) in P. Sands. (2003) Principles of International Environmental Law. Cambridge University Press. p. 626. [10] D.S. Sengar. (2007) Environmental Law. Prentice Hall of India. p. 19. [11] P. Sands. (2003) Principles of International Environmental Law. Cambridge University Press. p. 626. [12] D.S. Sengar. (2007) Environmental Law. Prentice Hall of India. pp. 25 – 29. [13] Ibid. p. 25. [14] Ibid. p. 20. Read More