The Bhopal Gas Tragedy - Essay Example

?The Bhopal Gas Tragedy: A malicious event in terms of Corporate Social Responsibility Introduction: The present era might be termed as the era of Globalization. As an eminent impact of that trade and investment across the geographical borders of the nations are on a rise and these are eventually unleashing a range of opportunities. The corporate houses or rather the global corporate houses might be considered as the flag bearer of this immense potential of trade and investment. However with great power come greater responsibilities and the corporate are no exception to this golden rule. This has brought forth the term Corporate Social Responsibility (CSR) implying the moral and social welfare promoting aspects that a modern day corporate must posses besides its financial or profit making goals. In a single sentence Corporate Social Responsibility is the culmination of the duties towards the stakeholders that encompasses promotion of social welfare, moral development and sustainable environmental safety. Brief analysis of Bhopal Gas Disaster: The majority of the Indian population lies under the poverty line and are technologically backward. 26 years earlier when the disaster took place the situation was even worse. Furthermore the concerned state Madhya Pradesh was regarded as one of the least developed states of India where the labourers were equipped with little technical expertise. This background does not confer the mentioned state as an ideal place to establish a plant that would eventually be handling a substance as toxic as Methyl Isocyanides. The concerned company Union Carbide ignored these technical issues and made a grave mistake in terms of the strategic management and planning. However, the mistakes made that way become the outcome of greedy business steps when the availability of cheap labours that were hired in the process is taken into account. Ignoring technological impediments regarding the poor standards of the knowledge base of the labourers along with the ignorance of environmental standard those were needed to set a plant of such a complex technology at that place in search of financial gain is the brief but ultimate verdict of the Bhopal disaster. Ans 1 An issue dependent and logical reasoning of blaming Mr. Warren Anderson Once the dreadful early December (December 2 and 3) of 1984 was passed claiming thousands of lives, the famous or infamous chairman of Union Carbide Mr. Warren Anderson was immediately taken into custody in charge of sheer negligence of corporate responsibility. Ironically the person who was responsible for thousands of death soon got a personal bail of only USD3000 and came out of custody. Anderson then carried out some sort of investigation that came out with dubious results. On one instance Anderson blamed the entire management team of the company for their negligence that brought the catastrophe and on another instance he gave a much narrowed version while blaming the local plant operation manager alone. (Camino, 1989, p 3; Peterson, 1985, pp. 196-197) Whatever doubtful is the explanation of Mr. Anderson; owing to a political-corporate nexus that is like any other country is operative in India as well; Mr. Anderson was protected and managed to get back to his country USA. Questions had been raised against the then Prime Minister of India Mr. Rajiv Gandhi for protecting and eventually helping him to get back to his country. 26 years later of that event, Mr. Arjun Singh the Chief Minister of Madhya Pradesh though turned down all these allegations against the late Prime Minister Mr. Rajiv Gandhi; yet pleaded against the heinous acts of Anderson and raised his voice for the immediate arrest of him. Mr. Singh requested the present Prime Minister Mr. Manmohan Singh to initiate a talk with the USA President Mr. Barrack Obama regarding the extradition of Anderson to India where he can be prosecuted for killing of thousands of Indians in front of an Indian court. (Arjun Singh breaks silence on Bhopal gas tragedy, Aug 11, 2010) Owing to the growing agitation regarding Bhopal accident amidst all the spheres of he society, recently fresh investigation on the case has been initiated. However it is worth taking note off that for the last 26 years Mr. Anderson has been a subject of open cases in Indian courts yet producing any results. He has even made his way to the CBI charge sheet filed in Bhopal Disaster, but how one can be punished unless the law gets hold of that person? As mentioned earlier that some new movements to this case have been witnessed in recent times. The chairman of the Indian wing of Union Carbide Mr. Keshub Mahindra along with six others received a recent conviction of 2 years imprisonment. (Bhopal gas tragedy: ‘Case against Anderson not closed’, Jan 8, 2010) The Bhopal catastrophe that has been discussed so far resulted in an immediate claim of 20000 lives and that ignoring the after effects of the events and the effect that the future generations suffered as a chain reaction. All of that happened owing to the failure of strategic planning and corporate governance. Such an ambitious corporate venture that might expose the people living at that place to grave danger should have come with much more safety measures and at a place that is far more advanced than the economically and scientifically backward Madhya Pradesh. Weighing the gain that the company might receive in terms of cheap labour; Anderson never took account of these aspects and that resulted in one of the gravest environmental catastrophe out of the failure of corporate social responsibility in modern times. He had also initiated an out of the court settlement with the affected parties but the volume of compensation offered was so meager that it might classify Mr. Anderson as a convict. The ruthless character of Mr. Anderson that got revealed after the disaster, the arrogance that he showed while leaving those behind who were affected for his misdeeds and his no caring attitude towards the stakeholders portrays him as one of the biggest convict of corporate social responsibility of modern times who deserves to be called liable for the unfortunate event that took place in Bhopal in early December 1984. Ans 2 Corporate Citizenship and Stakeholders’ theory in relation with Bhopal Disaster Experts always excavated fresh evidence of Bhopal disaster that has re-emphasised the failure of corporate social responsibility. The design of the plant as mentioned in 2002 by Debora revealed the fact that the plant from the very beginning suffered from major faults and that were generated for the downward adjustment of the investment beyond the level where it can support the creation of a healthy and safe plant. (Debora, 2002) Debora has clearly revealed the fact that indeed cost adjustments were made that led to various non welcoming engineering adjustments to the Bhopal Plant that might be responsible for the ultimate catastrophe. In simple terms the design of the Bhopal plant was compromised for the sake of cost cutting and a bunch of multicoloured papers, known as currency notes were highly valued against indispensable human lives. A quote from Debora might well help to understand this cost cutting at the expense of human lives before a detailed analysis of events that led to the disaster is analysed “Under a policy of forcing foreign companies to invest, the Indian government had asked Carbide to make insecticides such as Sevin in India instead of importing them. It also insisted that the company raise at least a quarter of the investment from local shareholders. But a 1972 memo says that if Carbide issued enough shares to raise the $28 million estimated cost, the company's stake in its Indian subsidiary would drop below 53 per cent. To prevent this it would have to “reduce the amount of investment… to $20.6 million”, with the cuts “mainly on the Sevin project. This meant using what another memo admitted were unproven technologies, mostly on systems not directly involved in the accident. However, the Sevin production system involved in the accident had had “only a limited trial run”, the memo states” (Debora, 2002, p. 6) Around 8000 people had succumbed to the Bhopal disaster with immediate effect and other 150000 were left with injuries that were nothing short of a medical emergency. To address this situation and as a step towards restoring the accident to normalcy; the company Union Carbide paid a compensation worth of USD470 million to a trust with a hope that it will be used for the suffering population. This payment followed after 5 years of the original disaster and considered as nominal in the context of the grave disaster. Survivors also claim that each has received a meagre USD500 and the clean up efforts that followed the disaster were far short of what was expected. In a recent scientific investigation the chain of events that led to the disaster on that day at Bhopal are identified. New Scientist led the investigation. It all started with a valve that usually kept the water for cleaning pipes separated from the toxic methyl isocyanate (MIC) tank. But on that particular day, owing to the presence of a faulty valve huge amount of water that was estimated at nothing short of a ton made its entrance to the MIC tank holding 40 tonnes of toxic substance. MIC is an intermediate in the production of Sevin. The coalition of water and MIC produced a chemical reaction and yielded smoke of highly toxic gas. The designer flaw of the tank that has been previously mentioned came into play at that point. Usually another tank (Knock–down tank) accompanies the MIC tank almost adjointly where the boiled out chemicals could have settled. Presence of a Knock-down tank would have only left the gases out that might then well be either burnt by the flare towers or might be moved through the scrubber that would have acted like a filter. But the only flare that the Bhopal plant was equipped with was out of order on the very night of the accident. Unlike its US counter part it never had a back up. One problem followed another and even the only scrubber of the Bhopal plant mal functioned, failing to keep up pace with the poisonous liquid and gas boiling together at a rate many times higher than the scrubber can survive. Soon it succumbed to the huge pressure and the massive accident took place. This clearly portrays the fact that the plant that was set at Bhopal for such a crucial operation was subject to inherent designing flaws and that was the direct result of corporate social responsibility displayed by the concerned authority “Union Carbide”. Again the lack of safety measures in Bhopal plant as mentioned comparing to what is well known and established in USA corporate culture points towards sheer biasness of the authorities. This biasness coming out of discrimination among people with different geographical origin gets well reflected if the daily operation of the Bhopal plant is considered. The short run effects and incidents that followed the accident have been discussed many times so far. However new scientific researches have revealed another possibility that might well had happened even before any accident took place at Bhopal plant. This possibility might have resulted in slow poisoning of the area and went unnoticed acting as a silent assassin. The waste products out of the Bhopal plant were thrown directly into the rivers and water bodies; these direct disposals have resulted in high concentration of mercury and other form of toxic materials into the water. It can be well grasped that this had resulted in high level of contamination of water and such contamination often lasts generations. Ironically series of analysis by Indian research agencies failed to find any trace of contamination. Though it is well known from the Union Carbide’s company memos that the officials were suspicious about the possibilities of contamination, yet they kept mum for their own benefit. (Debora, 2002) The concerned company would have never done so while operating in USA and this raises another significant question of treating the people of third world country as inferior to their own race. The older evidences that have been displayed so far have questioned the reasons behind the Bhopal disaster, poor consideration of adaptability of the concerned place to such a technologically intensive operation and also lack of safety measures that accompanied the settlement of the plant. But as new horizons are explored through new researches and newer evidences are coming into the attention of the common people; a major question even concerning the daily operation of the Bhopal plant is emerging. The Bhopal disaster aside those daily operational flaws were nothing short of severe marks of corporate fallacies, undermining corporate social responsibilities in each moment. Some experts like Saxon (1986) extend a possible case of sabotage as an explanation to Bhopal Disaster. Saxon opined that it might be that an employee annoyed on the management might have initiated the process through deliberately pouring water into MIC tank that later turned into a much greater disaster than imagined. John Musser had supported this claim of a possible sabotage. However proper proof of such act is yet to be found and the claim thus lacks real grounds to be proven. The impact of the disaster was havoc and affected the area even in the long run as explored by Charlene (2004), Eckerman (2005) and Dinham and Sarangi (2002). After the disaster throughout the remaining part of the 80s a culmination of scientific researches showed altogether chromosome alterations. Apart from that defective birth of offspring with paralysed fingers and pigeon chest might be considered as another ill effect of the Bhopal disaster. This reflects that the disaster had also affected the future generation as well. Miscarriages among the Bhopal gas disaster sufferers and people living there after the initial effects of disaster were long gone were most common. The ICMR report has also revealed higher risk of cancer for the population living there. The presence of carcinogenic material at a high level together with other toxic substance is mainly found responsible for the long run exposure of the Bhopal people to cancer. Till date not much proper cleaning effort of those poisonous substances have been directed towards the people of Bhopal and contamination of water, air and soil at the affected area still does pose immense threat to the population living there. (Charlene, March 2004, pp.1670-1671; Eckerman , 2005, pp.118-126; Dinham & Sarangi, 2002, p.89) Corporate Social responsibility and the Stakeholders’ theory: The existence of a company and its proliferation is subject to the existence of the society. This concept has paved the way for Corporate Social responsibility where a corporate governs its strategies and decisions regarding its business activities, around certain moral and ethical issues. Such consideration results in socially optimum outcome and might even be considered as a solution for commons and society alike. It has been rightly realized by the corporate bodies around the world that practicing CSR would eventually be profitable for them in the long run and would provide them sustainable success. 1) Corporate Social Responsibility comprises of two perspectives – firstly, absolute profit making dimension and secondly, constrained profit making. The pure profit making perspective takes into account mainly morally unethical business standards, which may be termed as “business bluffing”. This considers certain features like misrepresentations of fact, concealing very relevant and important facts and misstatements. For a business to look for only profits without considering its stakeholders all these issues discussed are highly important which are considered morally deceptive for the organization and the company should be guided by certain ethical set of rules. On the other hand the “constrained profit-making” proponents mainly stress on honesty to be maintained by the organization and should be far from any sort of deception and fraudulent activities. The business should operate in a morally healthy ambience provided it maintains the ethical standard and look into its stakeholders’ interest. From the case of the Bhopal disaster it is evident that Union Carbide performed with pure profit making intention. The ‘ shareholders’ value’ will be maximized in the long run provided the organization does not neglect the concerns of each and every stakeholder of the business and make a clear tradeoff amongst its stakeholders and adjusts them accordingly. Classification in another way reveals two types of stakeholders, namely the primary stakeholders and the secondary stakeholders. Some problems associated with stakeholders include the ‘mute stakeholders’ comprising the environment and the nature and the ‘absent stakeholders’ comprising the future generation and mainly the major victims. The Union Carbide Company’s negligence and fallacy proved harmful to these mute stakeholders as they polluted the environment with great chance of harming the future generation. (Branco & Rodrigues, 2007, pp.1-3; Mullerat, 2009, p.20; Banerjee, 2007, pp.26-30) Freeman, Harrison, Wicks, Parmar, & Colle (2010) observe that the primary motive for any business to succeed and grow is to enhance its shareholders’ value as well as stakeholders’ value. Increasing the shareholders’ value primarily helps in the growth of the business with generation of more revenue and this in turn contributes to the growth of the firm. The stakeholders of a company comprise all the participants who are directly involved with the growth of the company. The stakeholders primarily include the customers who are the most important part of any organization, the suppliers of raw materials, the creditors, the employees, the community, the government and even the environment who are directly affected by the business activities. (Freeman, Harrison, Wicks, Parmar, & Colle, 2010, pp.128-131) With respect to the case studied here, the company, Union Carbide has failed to enhance stakeholders’ value since the employees and the potential customers were received the blow form the disaster. Moreover the suspected guilty person has not yet been arrested. If the company were socially responsible the management would have provided a public apology along with strict actions against the person directly involved in the disaster. In the course of following a pure profit perspective, the management spoiled everything including the chance of optimising shareholders’ value after the disaster. Utting (2007) observes that reforms pertaining to the institutions are mainly attached with neo-liberalism and adherence to strict guidelines of good corporate governance. The author mainly talks about equality and proper equity subject to minimizing the deprivation and balance of opportunity, equal disbursal of wealth and power and social justice. The primary job of promoting equality rests with multilateral organizations incorporating the CSR agenda with more emphasis on societal development, removing unhealthy working conditions, support from community and strict adherence to humanity and morality of labour rights. Mainly four vertical components are considered “social protection”, “rights”, “empowerment” and “redistribution”. Most CSR activities consider protection of the society at large. However analysis of CSR mainly shows discrete aspects of management of the environment, labour and working conditions and labour rights. More recent focus of CSR to reduce poverty considers mainly the micro and macro effects of the different individual firms and the multinational organizations. The social protection factor of the CSR agenda mainly takes into account improvement of working conditions, helping and addressing the concerns of different communities with which the company is attached, and supporting different relief based program. (Utting 2007, pp.697-712) The corporate mockery that the chairman of the esteemed organization Union Carbide, Mr. Anderson undertook and used as a cloak over his hidden agenda gets well illustrated through the chain of actions initiated by the concerned person immediately following the disaster. Union Carbide is a company of repute as far as the financial variables of the company have referred over the years; allotting a fund as meagre as $1 million towards relief works immediately following the accident cannot be classified as anything except a matter of ridicule. This sarcastic and sinful action was also followed by a so called attention of the medical team to those people who immediately fell prey to the tragedy. Apparently this action reveals the character of a thoughtful person who has his concerns for his fellow human beings apart form the daily financial variables which affect the share price of Union Carbide in American stock market, but a careful investigation into this fact will reveal that this medical attention was not only extremely limited in its scope, also it came when 8000 people already lost their lives and another 1.5 lakhs were reeling under sheer pain. (Browning, 1993). Crowther& Capaldi (2008); Idowu & Filho (2009) and Werther, Jr & Chandler (2010) observe that the changing scenario in the 21st century also includes change in the methods and ways the organizations and the employees operate. With globalization and advancement in technology taking place these days with complex thoughts and ideas and complex working style being generated along with different government rules and regulations gripping each and every organization, there has been increase in working hours and even the holidays are getting shorter. Increased outsourcing activities are taking place in modern times. At the same time with increasing organizational drift and with multiculturalism in the organization and restructuring activities, the new technologies are hastening the pace of quick demand and response and employees find it difficult to balance both the work life and the family life. The increased pressure, and working hours are causing stress, and illness, thus challenging the CSR management. However CSR is vastly committed to improve the work culture, the social and financial development of employees and their families and also local community and society to improve the quality of life. The devastation of the employees of the Bhopal plant along with the people living around the plant owing to the disaster arising from poor planning, immense lack of strategic management, technical know-how and operational slackness reveal the sheer negligence of corporate social responsibility on part of the Union Carbide Company. 1) Camino, E. (1989), Bhopal Tragedy: The key Events, New York Times, Available at http://web.ebscohost.com/ehost/detail?sid=0223955e-2db3-42a2-8fa7-9cb2328483b5%40sessionmgr15&vid=3&hid=8&bdata=JnNpdGU9ZWhvc3QtbGl2ZQ%3d%3d#db=aph&AN=31040327 ( Accessed on May 6, 2011) 2) Peterson, I (1985), After Bhopal: Tracing Causes and Effects, Science News, Vol. 127, Issue 13,pp. 196-197, Available at http://web.ebscohost.com/ehost/detail?sid=f11dc164-6dc5-440f-aa28-ab6882949e57%40sessionmgr11&vid=1&hid=8&bdata=JnNpdGU9ZWhvc3QtbGl2ZQ%3d%3d#db=aph&AN=8813241 (Accessed on May 6,2011) 3) Charlene, C (2004), Revisiting the Bhopal Tragedy, Science, Vol.306, Issue 5702, pp.1670-1671, Available at: http://web.ebscohost.com/ehost/detail?sid=3776d3c5-23be-40fa-81b7-4e2e263555e5%40sessionmgr12&vid=1&hid=8&bdata=JnNpdGU9ZWhvc3QtbGl2ZQ%3d%3d#db=aph&AN=15331249 (Accessed on May 6, 2011) 4) Debora, M. 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