Corporate Ethics - Gross Negligence & Moral Turpitude

If there is one incident that epitomizes an utter disrespect for moral values in corporate world, I would pick the Bhopal Union Carbide gas leak of India. I was a 7  year old kid back then and remember seeing gory pictures of desperate people on a black and white television set . At that time, I did not comprehend the consequences of the incident nor did I have a clue of how it transpired. I just knew that it was bad and lead to a lot of suffering. It wasn’t until a few  days back that I actually looked into the details behind the story and what I found completely threw me off. Not only did the management at Union Carbide failed to take the necessary safety precautions that ultimately resulted in a disastrous gas leak, but also made the Bhopal plant a scape goat by testing new technologies just because it is cost effective and the laws permitted them do so – There is an absolute lack of moral regard for the society and people both before and after the incident. 

Even today, 29 years after the accident – people are still suffering from leaked chemicals and polluted environment. And despite more than 20,000 deaths and 100,000 life altering injuries, not a single person is convicted or held accountable. The magnitude of this incident and the moral turpitude of Union Carbide’s management is only surpassed by the way the local and federal governments have handled the incident. 

To be frank, I don’t know what I would have done had I been in their situation. But anything different would have been better than the status quo. To make my point, I want to talk briefly about Warren Anderson, the then CEO of Union Carbide who fled India to evade punishment and is currently retired in US. I can’t honestly blame Anderson for fleeing India back in 1984, as the alternative is to face the prospect of doing time in an Indian prison. And I don’t begrudge his expensive lifestyle when thousands of people are still dying. But I am angry at his silence and compete lack of social responsibility – To me, it is a loud  symbol of moral failure, more than 29 years after the disaster. Anderson’s silence and his lack of guilt and remorse sets a terrible example for the future stewards of corporate America. I hope that this remains a lesson that we can learn from and pursue a career that is beneficial to our society. I am glad to see the social commitment of some of the recent American startups, most notable being SalesForce.com.  

Following is a snippet from an article that walks through the details of the disaster and the different perspectives offered for the accident

Source: http://www.lenntech.com/environmental-disasters.htm

December 3, 1984 has become a memorable day for the city of Bhopal in Madya Pradesh county, India. Shortly after midnight, a poisonous gas cloud escaped from the Union Carbide India Limited (UCIL) pesticide factory. The cloud contained 15 metric tons of methyl isocyanate (MIC), covering an area of more than 30 square miles. The gas leak killed at least 4.000 local residents instantly and caused health problems such as oedema for at least 50.000 to perhaps 500.000 people. These health problems killed around 15.000 more victims in the years that followed. Approximately 100.000 people still suffer from chronic disease consequential to gas exposure, today. Research conducted by the BBC in 2004 pointed out that this pollution still causes people to fall ill, and ten more die every year. This event is now known as the worst industrial environmental disaster to ever have occurred.

(Note that the numbers of victims are not absolute, as they are different for every organization that describes the accident in books or on their websites. Particularly the Union Carbide company states a much lower total number of victims.)
The cause of the accident has been researched after the disaster. Apparently water ended up in MIC storage tanks, causing an exothermal reaction that released an amount of poisonous gas large enough to open the safety valves. Normally scrubbers would intercept escaping gas, but these were temporarily out of order for repair.
Research showed that factory personnel neglected a number of safety procedures. There were no valves to prevent water from entering the storage tanks. The cooling installation of the tanks and the flaring installation that might have flared the gas that was released were out of order (fig. 1).
Safety was very low in this factory of Union Carbide, compared to its other locations. The safety procedures were neglected because of budget cuts.

Figure 1: overview of events that led to the Bhopal disaster (Bhopal Medical Appeal, 2002)

Union Carbide was accused of deliberate evasion of regular safety procedures. During lawsuits where victims demanded compensation, documents were revealed which proved that Union Carbide regularly used untested technology in the Bhopal factory. When the gas leak occurred doctors were not informed of the nature of the gas. This caused the correct treatment and emergency measures to be held off.
The manager of Union Carbide, Warren Anderson, was accused of culpable homicide. However, he did not occur in court and both the Indian and American government did not take adequate measures to make sure this man was tried. This led to a series of protests organized by environmental organizations, such as Greenpeace.
Union Carbide denied responsibility for the accident on their website, stating that: “The Bhopal plant was owned and operated by Union Carbide India, Limited (UCIL), an Indian company in which Union Carbide Corporation held just over half the stock. The other stockholders included Indian financial institutions and thousands of private investors in India. The plant was designed, built, and managed by UCIL using Indian consultants and workers.”
About the cause of the accident, they claimed that: “A thorough investigation was conducted by the engineering consulting firm Arthur D. Little. Its conclusion: the gas leak could only have been caused by deliberate sabotage. Someone purposely put water in the gas storage tank, causing a massive chemical reaction. Process safety systems had been put in place that would have kept the water from entering into the tank by accident.”
After a long procedure in February 1989 eventually a settlement was achieved. Union Carbide promised to pay 470 million dollars compensation. Only a very small part of this compensation was paid to survivors of the environmental disaster. Union Carbide states on its website that it paid the full settlement to the Indian government within 10 days time. In 2004 the Supreme Court forced the Indian government to pay the remaining 330 million dollars compensation to the victims and their families.
Union Carbide sold the Indian factory to a battery producer. In 2001 Dow Chemical Company took control of Union Carbide. These take-overs led to a discussion on responsibility for cleaning up the tons of poisonous waste that are still present in the environment consequential to the 1984 disaster. Environmental activists are trying to convince Dow Chemical Company to clean up this potential minefield of toxic chemicals. These could cause nervous system failure, liver and kidney disease and possibly cancer for many years to come.
Today, the location is still polluted with thousands of tons of toxic chemicals, such as hexachlorobenzene and mercury. These chemicals are stored in open barrels. Rainfall causes rinsing out of pollution to local drinking water sources. According to BBC research, some wells even contain up to 500 times the legal limit of these toxins. Local residents still suffer from a number of diseases, which appear to be very uncommon among people that do not live in the disaster area.