Author Archives: fathia.bentahar

Economic recovery

“Economic losses from the accident included loss of jobs, loss of earning capacity of victims, business disruptions, cost of compensation and rehabilitation, and legal costs. The UCIL plant, a $25 million investment, was shut down immediately after the accident, and 650 permanent jobs were lost. A few months later the Union Carbide Research and Development Center, located in another part of Bhopal, was also cut back to a skeleton staff. Local businesses and state government offices were shut down for three weeks, losing business and tax revenues. The two mass evacuations disrupted commercial activities for several weeks, with resulting business losses of $8-65 million. Loss of work in government offices was not included in these estimates (Morehouse and Subramaniam 1988; Shrivastava 1992).In the year after the accident, the government took many well-intentioned steps to provide economic relief to victims. Compensation of about $800 per fatality was paid to relatives of dead persons. Smaller cash compensation awards (less than $100) were distributed to 20,000 victims and 3,000 more victims were provided with part-time employment. New schools were also opened in the affected neighbourhoods. Unfortunately, in proportion to the tremendous relief needs these early (1985-1987) efforts were miniscule. Government relief failed to alleviate the misery of victims; it was simply too small in scale and limited in scope. But, given the many competing demands for government support, this was all that the government could manage at the time.Beginning in March 1991, new interim relief payments were made to victims. Sums of Rs 200 (about $8) per month were paid to all victims who lived in 37 of the city’s 54 wards that were officially classified as “gas affected.” A total of $260 million was disbursed, but the money was given to all people who lived in the affected wards, not just the victims. In fact, many of the people who lived in these 37 wards were not victims at all: they had moved in after the accident. As cash relief payments flowed into the city, the local inflation rate jumped to between 15 and 20 per cent per annum. Most people pinned their hopes of long-term recovery on anticipated compensation from Union Carbide.”

Source:- Shrivastava, Paul. N.p.. Web. 25 Apr 2013. <http://archive.unu.edu/unupress/unupbooks/uu21le/uu21le0d.htm>.

Souce: http://www.bbc.co.uk/news/10354583

This an overview of how the different stakeholders were affected by union carbide crisis.

This is a nice study take a look at it this can help us

“A multiple-perspectives understanding of crises

This chapter employs a multiple-perspectives analysis of Bhopal (Shrivastava 1992). This approach seeks to understand the crisis from the perspectives of all key stakeholders. Stakeholders are individuals and organizations that influence, or are influenced by, the crisis. The key stakeholders in the Bhopal crisis included victims (i.e. the community in Bhopal), Union Carbide Corporation, and the Government of India.

A multiple-perspectives approach also acknowledges the complexity of causes and the importance of contextual factors. It interprets causes in systemic terms (Mitchell, Devine, and Jagger 1989). Technological, organizational, and societal systems are susceptible to multiple, simultaneous, and interacting failures. A main limitation of the traditional systems view of causation is that it does not indicate which causes are more or less important, and from whose point of view. The multiple-perspectives approach addresses this limitation and accepts the impossibility of unambiguously fixing blame for industrial crises. Attempts to affix blame are reductionist: they merely divert analysts from proper understanding of the events. Finally, the multipleperspectives approach regards controversies and conflicts as an integral part of crises. Such conflicts cannot be denied or brushed away: they are the central defining features of crises.

The most controversial elements of crises are their impacts or consequences. Consequences are difficult to ascertain because they are many, diverse, and difficult to measure. Some consequences are indirect, some are unknown, some are trans-generational, and some extend in space to unforeseeable areas. In the Bhopal case, victims saw the crisis largely in terms of personal losses: they lost their lives or faculties, their health, their sources of income, and their sense of community. An army of lawyers, government officials, activists, reporters, and researchers invaded Bhopal. The lives of residents have already been disrupted for months and years, and will continue to be disrupted for a long time to come. In these circumstances, recovery has involved efforts to rebound from multifaceted losses.

Officials at Union Carbide viewed this crisis as an unfortunate technological “incident.” Because of its long history in the chemical industry, the company was familiar with the types of losses such incidents generate. These include legal liability for damages, financial losses, and bad reputation. Union Carbide’s main concern was to protect its financial assets and reputation. It embarked on an elaborate strategy of legal defence, financial restructuring, and public relations (Union Carbide Corporation 1985).

For the Government of India, the crisis was a socio-economic and political disaster. As the institution responsible for safeguarding public safety, the government had failed abysmally. It needed to redeem itself in the eyes of the public, by deflecting responsibility for its role in the disaster. It was also saddled with the far more difficult task of managing recovery and rehabilitation of victims.”

Source : http://archive.unu.edu/unupress/unupbooks/uu21le/uu21le0c.htm#a%20multiple%20perspectives%20understanding%20of%20crises

Which activities are standardized across markets? Which activities are localized to meet market demands and tastes? Why? Evaluate and compare the cost gains from standardization and the market gains from localization.

The choices made by Union Carbide were driven by the outgrowing pesticide market in India. ” The events in Bhopal revealed that expanding industrialization in developing countries without concurrent evolution in safety regulations could have catastrophic consequences “. The disaster is a proof that local problems of industrial hazards and toxic contamination are closely related to global market dynamics. Nothing was made to go around environmental regulations in the U.S., in fact the plant  was built in Madhya Pradesh to exploit the large and growing Indian pesticide market.

Lesson Learned ?

Governments should not allow industrial facilities to be located within urban areas. In case of such accidents municipalities and local authorities should make sure that they have the adequate medical facilities to assist a large number of employees in case of mass casualty emergency. Yet, “Public health infrastructure was very weak in Bhopal in 1984.” example: poor quality tap water only available  for only a few hours a day,  no functioning sewage system, untreated human waste.

No matter how profitable the market looks like, there is a need to take into account existing public health infrastructure  when hazardous industries choose to localize their manufacturing plants.  Advanced planning should done before any disaster occurs. Locations ” that do not possess infrastructure and technical expertise to respond adequately to such industrial accidents should not be chosen as sites for hazardous industry”.

“National governments and international agencies should focus on widely applicable techniques for corporate responsibility and accident prevention as much in the developing world context as in advanced industrial nations . Specifically, prevention should include risk reduction in plant location and design and safety legislation ”

Source :http://www.ncbi.nlm.nih.gov/pmc/articles/PMC1142333/