Question

thought we'd give the store away. [Now) we're in litigation mode. I'm not going to roll Following the accident, Union Carbide's stock fell sixteen points and it became, in the go-go 1980s, a takeover target. When GAF Corporation made an offer, Union Carbide over. Through 1992, Union Carbide remained in a defensive mode as it coped with liti gation, takeover attempts, and the actions of the Indian government in seeking to charge US lawyers brought suit in the United States against Union Carbide on behalf of Ein onal i Six 408 over and play dead incurred $3U billion in debe in order to buy 56 percent of its own stock to avert a take. hundreds of Bhopal victims, but the case was dismissed because the court lacked juris- diction over the victims as well as the plant. Union Carbide did settle the case with the Indian govermment for a payment of $470 million. There were 592,635 claims filed by Bhopal victims. The victims received, on average, about $1,000 each. The ordinary pay ment from the Indian government, as when a government bus harms an individual, is $130 to $700, depending upon the level of the injury. Individual awards were based on carning capacity, so, for example, widows of the Bhopal accident received $7.000 The Indian government also pursued criminal charges, including against Mr. Anderson. Lawyers for the company and Mr. Anderson continued to fight the charges, largely on the basis that the court had no jurisdiction over Mr. Anderson. However, to be on the safe side, Mr. Anderson did not return to India because of his fear of an arrest, In May 1992, the Indian government seized the plant and its assets and announced the sale of its 50 percent interest in the plant. When the sale occurred and Union Carbide received its share of the proceeds, it contributed $17 million to the Indian gov- ernment for purposes of constructing a hospital near Bhopal. The plant now makes dry. officers, including Anderson, with crimes. cell batteries Following the accident, Union Carbide reduced its workforce by 90 percent. Because of the share purchase, Union Carbide had a debt-to-equity ratio of 80 percent. In addition. the Union Carbide brand was affected by the accident, and the company could not seem to gain traction. Dow Chemical would acquire the company in 1999 for $11.6 billion. In 2008, a study revealed that pesticide residues in the water supply for the area sur- rounding the plant were at levels above permissible ones. There are about 425 tons of waste buried near the former plant. Advocates continue to appear at Dow sharehol- der meetings in order to demand cleanup. Dow's response is, "As there was never any ownership, there is no responsibility and no liability-for the Bhopal tragedy or its aftermath 3 Discussion Questions 1. Should the Bhopal plant have been operated using US. safety and environmental standards? What would the U.S. policy be on the shantytowns? 2 Should the case have been moved to the United States for recover? 3. List all of the costs of the accident to Union 4. Evaluate Dows position on the cleanup. 5 Later studies seem to indicate that the cause of the accident was sabotage. How does this affect your analysis? Carbide Lesie Helm et al 1985, p. 96 "Bhopel, A Year L atos 11

Answer 1

1. Should the Bhopal plant have been operated using U.S. safety and environmental standards? What would be the U.S. Policy on Shantytown?

From the case, it was well Understood that the;

• MIC stored tank reacted with water due to improper maintenance.
• The backup safety system failed to work due to improper maintenance.
• The safety valves were not functioning well.
• Approximately 425 tons of waste were buried near the plant.

The above lines in the case clearly illustrate the company doesn’t any of the safety and proper disposal standards. If the company have adopted the safety standards as illustrated in general or as per the U.S. safety standards the accident could have avoided.

U.S. Policy on Shantytown: As the company is the joint venture of the private and government, the government would have provided Medication, Necessary compensation, and penalty to the company for not adopting the safety standards.

2. Should the case have been moved to the United States to recover?

No, because Union Carbide is a privately owned company and it had joint ventured with the Indian government to serve Indian agriculturalist and to provide job opportunity local individuals in the Bhopal Are. Hereby, nowhere the U.S. government plays a role. Therefore the Indian government has the obligation to resolve the case. To some extent, it can request the U.S. to provide compensation for the damages caused by the company run by the country citizen.

3. List all the costs of the accident to Union carbide.

• Indian government to Public for food and health care = $40 million
• Union Carbide settling the case with Indian government = $470 million
• Indian government for the construction of hospital = $17 million

4. Evaluate Dow’s position on the cleanup.

Despite, the Dow’s Chemical owned the company for $11.6 million from the Indian government who is not the rightful owner. The Dow’s demand for cleanup to the government is refused as there is no responsibility and no liability. Thereby 425 tons of waste was forced to be cleaned by Dow’s.

5. Later studies seem to indicate that the cause of the accident was sabotage. How does this affect your analysis?

To me it does not sabotage but;

• MIC stored tank reacted with water due to improper maintenance.
• The backup safety system failed to work due to improper maintenance.
• The safety valves were not functioning well.
• Approximately 425 tons of waste were buried near the plant.

The above factor indicates the company haven’t adopted any of the safety standards, also haven’t taken any preventive measures to resolve when the problem arose.