Union Carbide Corporation is a wholly owned subsidiary of DOW chemical company. Carbide is a great company that have followed the guidelines set by the OECD. However, the company was responsible for the Bhopal incident, which was one of the worst industrial accident in history. “The Bhopal incident caused by Union Carbide Corporation is the worst sudden industrial accident ever in terms of human life lost. 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” (Steiner pg. 384). After the incident, the chemistry industry had to come up with a better ways to manage volatile chemicals to control chemical’s violent reactions.
The Carbide Corporation located in India and was considered independent from the Company at the time because of the India’s colonial rule (India’s government wanted to hire only Indians and show political strength for foreign investors). But after the incident, India’s government went after Carbide and Dow to claim cost for the damage.
The first lesson learned in this story is to ensure that there are trained managers from home country residing in the foreign country of business generating proper reports. Carbide agreed to Indian government’s colonial rule by letting them only hire Indian managers and employees, which caused mismanagement and lack of accountability. Doing this can cause lack of control, falsified reports (People may generate fake reports, because that may be what the country is accustomed to due to culture difference), and improper training. The company need someone with authority in foreign country to report back to the headquarters in the USA to ensure quality assurance. Good example of this would be when carbide employees falsified report in India. “After multiple theories, Carbide investigators concluded that it was employees fault and that they tried to cover up by falsifying the log” (Steiner pg. 391). This theory became Carbide’s legal defense, but the case never came to trial. Indian government agreed with settlement of $470 million dollars instead of $3.3 billion dollars and agreed to stop all legal action. This is a big issue because the Indian government didn’t even let Carbide into the site after the incident to investigate at first. If proper reports were logged, identifying any bugs shouldn’t be of an issue. However, since employees including senior management can falsify report, it’s better to have someone you can trust from your own country to ensure accuracy.
“Congress passed legislation requiring chemical companies to disclose the presence of dangerous chemicals to people living near their plants and to create evacuation plans” (Steiner pg. 393). Companies should ensure that they have protocols for everything that can happen for storing and processing particular chemicals. Indian government have reported that Carbide has outdated equipment and ignored it (saying that having better equipment could have prevented it), but I don’t think it’s the fault of the equipment but the people using it. Even the state of the art equipment can bring destruction if not managed properly. Even now, we struggle to make everything automated, but it still needs the human touch. What I’ve learned was to ensure that there are automatic logging equipment for pressures and other necessary information, so that the machines can store and send the feedback for quality assurance to view and monitor.
Last one we can learn from this is the importance of safety systems. I would have still used MIC instead of less hazardous chemical, but wouldn’t have shut down the safety systems to save money. It was obvious the company was trying to make profit by shutting the safety system down to include MIC tank refrigeration system, which alone could have prevented the disaster.
Even now, the Indian governments and the survivors ask DOW for compensation. “This is justified, argues government, because the full extent of the disaster was unknown in 1989” (Steiner pg. 393). It’s a long battle for incidents like this when it’s hard to prove what caused the incident.
Please share your comments below.
Steiner, John (2016). Business, Government, and Society. McGraw Hill Education Private Limited