Introduction
The Bhopal disaster is considered to be the deadliest event in the corporate history of the world. Due to the leakage of lethal gases out of the factory, there were around 4000 deaths within 72 hours, while the number surged to around 15,000 within few weeks. It has been estimated by that 200,000 people became permanently disabled due to this incident. This incident is a pure case of intense corporate negligence. This case caused a major foreign investment dispute between government of India and Union Carbide Corporation. This dispute arose from the notion that some companies have strong quality assurance mechanism in their countries of origin, but when it comes to operating in a developing country, they hardly follow these regulations. Due to the massive number of deaths and a global pressure, the company ceased its operations in India and did an out of court settlement. This incident has significantly influenced the government of India to enact laws that requires the organizations to ensure the safety and security of its workers and people in the community. Although, there was sheer media hype and the government machinery was also active but even as of today, the lethal chemicals on the sites have not been removed (Fortun, 2001).
Major Events and Fundamental Issues of Cultural Differences,
Corporate Responsibility, and Ethics
According to different reports, it has been revealed that Union Carbide Company already had a history of corporate negligence. While the incident of 1984 was beyond expectation, but accidents on smaller scale were frequent there. Rather than cultural differences, it was more related to corporate responsibility and ethics. Union Carbide was known for wrong expense cutting strategies. They used to control budget through restricting investment on quality assurance, maintenance, and staff training. The plants, pipes, and different serious mechanisms were not up to the international standards, which are required by many companies of the same nature. The culture of halting promotions was common that used to discourage workers to work with full efficiency. Timely promotions or salary increment are some of the most important things that matters to the production staff. Not doing so reflects the notion that the company does not care about the workers. If the company does not care about the workers, it is common that the employees will not take interest in initiatives that are beneficial for the organization (Aziz, 2012; MacKenzie, 2002).
It was also observed that the company required the employees to use training manual in English language, while majority of the employees could not understand it. This attitude reflect a major cultural different that the organization failed to understand. This example clearly depicts a major gap that existed between the leadership and the production workers. The management failed to understand that many staff member were not highly educated, so they had little or no knowledge of English. Having the manual in a language that people cannot understand means that the workers were not aware about any safety standards. If workers are not aware about any sort of safety standard in a company with poisonous gases reflect the intense negligence by the organization. Conducting safety audits are required at least every year by international standards and even this practice was rare for this organization.
Union Carbide used to conduct safety audits after every two years and even the shortcomings were not implemented in the true spirit. Based on the audit report of 1982, there were 61 hazards noted by the organization. A list of action plans were sent by the head office that was never applied by Union Carbide in India. Due to this massive disaster, Government of India became the representative of the affected population and filed a case against the company. After much struggle, the government finally received $470 as out of court settlement. This amount is extremely small in comparison to the losses people faced. Many families were devastated and the compensation they received hardly did any cure. This incident reflects the need of government to enact strong laws that can proactively control such incidences. Apart from the role of government, there is also a high onus on companies to protect their employees, communities, and the overall environment (Shrivastava, 1987a).
Aftermath of Bhopal Incident
The aftermath of the incident were serious, thousands of people were affected with chronic illness. To date, people who were affected with the gas leakage suffering from different mild and chronic diseases. The immediate response from the factory management was to disassociate them from the responsibility of gas leakage. The management started to fabricate stories in the different direction and tried to made this incident as the result of sabotage by the extremists Sikhs or disgruntled employees. numerous stories had been fabricated but sooner all were subsided by the bitter reality of management’s neglience that caused the catastrophe. After settling the issue in the court, UCC accepted their moral responsibility and paid 470 million dollars to the Indian Government. The amount was nothing in comparison to the huge catastrophe caused by the factory management’s neglience.
The factory operations were seized by the time of final settlement, once the settlement was done, the share price rose to $2 per share which was around 7% of the value. However, due to government pressure and failure to implement completely the international environment law in india, it stopped its operations in Bhopal plant. Dow chemical acquired the company on certain terms and conditions. According to that, management is not responsible to clean up the site, to disclose gas leak composition and compensate victims (Aziz, 2012; MacKenzie, 2002).
Similarities and Differences
The multinational corporations are following double standards while they operate in the developing countries. Indian government in order to augment the foreign investment roll in in the country compromises on the safety rules and regulations. The government neglience towards the safety of its people was clearly visible. There was no check and balance on the quality standards of the UCC operations. The plant site was given to them near to the common people houses. There were lack of fresh water facility available to the people, improper sewage system and weak infrastructure of the city. All the existing loopholes and company’s management neglience caused this catastrophe (Fortun, 2001). Even after the incident, the rules and regulations have been strengthen in India. In 1986, the enviornment protection act was passed which actuated indian government to strengthen its commiment towards environmental safety. Since after Bhopal incident, India has gone through tremendous economic growth.
Conclusion
Bhopal incident is the world’s most serious industrial catastrophe. People are facing the serious aftermaths of this incidents till date. Many people are still suffering from chronic illness. The indian government in order to boostup the economy encourages foreign investment to roll in. Since after the bhopal incident, government formulated different environmental protection rules and regulations. However, it does not successful make foreign as well as local companies to strictly follow those rules & regulations. Indian people health are still at high risk due to augmentation of environmental population and weak infrastructure. After the bhopal incident, the government settled down the foreign investment dispute with UCC by taking some million dollars. However, government allowed to acquire UCC by Dow Chemicals and resume operations on their set conditions, irrespective of the fact that people there are still exposed to serious and lifethreatening risks.
References
Fortun K. (2001) Advocacy after Bhopal. Chicago , University of Chicago Press; p. 259.
Shrivastava P.(1987a) Managing Industrial Crisis. New Delhi , Vision Books; p. 196.
Shrivastava P. (1987b) Bhopal: Anatomy of a Crisis. Cambridge, MA , Ballinger Publishing;. p. 184.
MacKenzie D. (2002) Fresh evidence on Bhopal disaster. New Scientist.p.19
Aziz, D. (2012, July). Global public-private partnerships in international law.
