Author Archives: Jawad Chaudhrey

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About Jawad Chaudhrey

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How did Union Carbide assist people after the disaster?

Immediately following the gas release, Union Carbide Corporation began providing aid to the victims and established a process to resolve their claims. Among the many efforts Union Carbide took to address the situation were:

  • Organizing a team of top medical experts to help identify the best treatment options and work with the local medical community;
  • Providing substantial amounts of medical equipment, supplies and expertise to the victims;
  • Openly sharing all its information on methylisocyanate (MIC) with the Government of India, including all published and unpublished toxicity studies available at the time;
  • Dispatching a team of technical MIC experts to Bhopal on the day after the tragedy, which carried MIC studies that were widely shared with medical and scientific personnel in Bhopal;
  • Establishing a $100 million charitable trust fund to build a hospital for victims, and
  • Offering a $2.2 million grant to establish a vocational-technical center in Bhopal to provide local jobs.

In 1989, Union Carbide and UCIL entered into a $470 million legal settlement with the Indian Government that settled all claims arising from the incident. The Indian Supreme Court affirmed the settlement and described it as “just, equitable and reasonable.” Union Carbide and UCIL promptly paid the money to the Government of India. (Please see “The Incident, Response and Settlement” section of this website for additional information on UCC’s efforts and contributions.)

An India media report in September 2006 stated that the “registrar in the office of Welfare Commissioner… said all cases of initial compensation claims by victims of the 1984 Bhopal gas tragedy have been cleared… With the clearance of initial compensation claims and revision petitions, no case is pending…”

 

Browning, Jackson. “UNION CARBIDE: DISASTER AT BHOPAL.” Union Carbide. N.p., 1993. Web. 25 Apr. 2013.
<http://www.bhopal.com/~/media/Files/Bhopal/browning.pdf>

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Short Term Effects after the disaster

Immediately after the disaster, UCC began attempts to dissociate itself from responsibility for the gas leak. Its principal tactic was to shift culpability to UCIL, stating the plant was wholly built and operated by the Indian subsidiary. It also fabricated scenarios involving sabotage by previously unknown Sikh extremist groups and disgruntled employees but this theory was impugned by numerous independent sources [1].

The toxic plume had barely cleared when, on December 7, the first multi-billion dollar lawsuit was filed by an American attorney in a U.S. court. This was the beginning of years of legal machinations in which the ethical implications of the tragedy and its affect on Bhopal’s people were largely ignored. In March 1985, the Indian government enacted the Bhopal Gas Leak Disaster Act as a way of ensuring that claims arising from the accident would be dealt with speedily and equitably. The Act made the government the sole representative of the victims in legal proceedings both within and outside India. Eventually all cases were taken out of the U.S. legal system under the ruling of the presiding American judge and placed entirely under Indian jurisdiction much to the detriment of the injured parties.

In a settlement mediated by the Indian Supreme Court, UCC accepted moral responsibility and agreed to pay $470 million to the Indian government to be distributed to claimants as a full and final settlement. The figure was partly based on the disputed claim that only 3000 people died and 102,000 suffered permanent disabilities [9]. Upon announcing this settlement, shares of UCC rose $2 per share or 7% in value [1]. Had compensation in Bhopal been paid at the same rate that asbestosis victims where being awarded in US courts by defendant including UCC – which mined asbestos from 1963 to 1985 – the liability would have been greater than the $10 billion the company was worth and insured for in 1984 [10]. By the end of October 2003, according to the Bhopal Gas Tragedy Relief and Rehabilitation Department, compensation had been awarded to 554,895 people for injuries received and 15,310 survivors of those killed. The average amount to families of the dead was $2,200

At every turn, UCC has attempted to manipulate, obfuscate and withhold scientific data to the detriment of victims. Even to this date, the company has not stated exactly what was in the toxic cloud that enveloped the city on that December night [8]. When MIC is exposed to 200° heat, it forms degraded MIC that contains the more deadly hydrogen cyanide (HCN). There was clear evidence that the storage tank temperature did reach this level in the disaster. The cherry-red color of blood and viscera of some victims were characteristic of acute cyanide poisoning [11]. Moreover, many responded well to administration of sodium thiosulfate, an effective therapy for cyanide poisoning but not MIC exposure [11]. UCC initially recommended use of sodium thiosulfate but withdrew the statement later prompting suggestions that it attempted to cover up evidence of HCN in the gas leak. The presence of HCN was vigorously denied by UCC and was a point of conjecture among researchers

As further insult, UCC discontinued operation at its Bhopal plant following the disaster but failed to clean up the industrial site completely. The plant continues to leak several toxic chemicals and heavy metals that have found their way into local aquifers. Dangerously contaminated water has now been added to the legacy left by the company for the people of Bhopal

Broughton, Edward. “The Bhopal Disaster and Its Aftermath: A Review.” Environmental Health. EHJournal.com, 10 May 2005. Web. 26 Apr. 2013

 

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$50 Million Debentures

Even though this is not recent news, I think this shows one of the few techniques they used in 1967 to succeed internationally.

*I can’t copy and paste the text in the link so click on the link to read the article, it is very short.

 

http://search.proquest.com.remote.baruch.cuny.edu/docview/133197447/fulltextPDF?accountid=8500

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Union Carbide and India

In 1984, Union Carbide reported sales of $9.5 billion, reflecting its position as one of the largest industrial companies in the United States and the world. International operations represented nearly 30 percent of total sales that year. India was one of three dozen countries where the company had affiliates and business interests.

Divided by industry segments, sales encompassed petrochemicals (28 percent); technology, services, and specialty products (26 percent); consumer products such as batteries, automotive supplies, and plastic wraps and bags (20 percent); industrial gases (16 percent); and metals and carbon products (10 percent).

Financially, 1984 was a good year for Union Carbide. The company was pursuing ambitious commercial plans in the People’s Republic of China. Twelve promising new high- performance specialty products were being marketed. A joint venture with Shell Chemical Company was moving forward. Union Carbide was keeping pace as the U.S. economy recovered from the persistent recession that had begun in 1981.

In 1984, Union Carbide India Limited was celebrating its 50th anniversary. UCIL had sales of about $200 million annually. It operated 14 plants, and was organized into five operating divisions with 9,000 employees. It was a diversified manufacturing concern. The shares of the Indian company, publicly traded on the Calcutta Stock Exchange, were held by more than 23, 000 shareholders. About 24 percent of the shares were owned by government-run insurance companies. Union Carbide Corporation held 50.9 percent of the stock as part of a corporate global business strategy that evolved in the post World War II era. By investing in companies abroad, Union Carbide expected to contribute to — and benefit from — growing national economies around the world.The massive disaster at Union Carbide’s pesticide plant in Bhopal, India, in December 1984 struck the corporation just as it was beginning to make lasting strides toward profitability.

Ironically, the plant at Bhopal had its origin in a humane goal: supplying pesticides to protect Indian agricultural production. The pesticides made at Bhopal were for the Indian market and contributed to the nation’s ability to transform its agricultural sector into a modern activity capable of feeding one of the world’s most heavily populated regions.

In the late 1960’s, operations at Bhopal packaged the pesticide Sevin, then considered an environmentally-preferred alternative to DDT, an insecticide now restricted by the U.S. Environmental Protection Agency.

Later, the Bhopal plant started handling methyl isocyanate shipped from the United States. The process, which reacted methyl isocyanate with another compound, was considered the leading technology for producing Sevin and another pesticide, Temik. The development was part of an active Indian government effort to achieve industrial self- sufficiency.

Ultimately, in the late 1970s those government objectives led to the construction of a plant for manufacturing methyl isocyanate at Bhopal. The plant was located on the outskirts of Bhopal on land leased to UCIL by the Indian state government of Madhya Pradesh.

 

Source (copied article from link):
http://www.bhopal.com/~/media/Files/Bhopal/browning.pdf

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Union Carbide: How does it which new markets to enter?

I thought this would be useful to see how it decided how to enter certain markets:

 

A New Business Development Department was formed in 1970 to coordinate the three areas outside of chemicals and plastics that Wilson didn’t sell: Biomedical Systems, Marine Foods, and Agricultural Systems. Another key organizational change was the disbanding of the Consumer & Related Products Division, which had contributed 22 percent of UCC’s annual revenues. The Eveready business was split off into a Battery Products Division, while Glad and Prestone were coordinated in a division with the production of their raw materials. Despite the fragmentation of the Consumer Products Division, Wilson said that he hoped that consumer products would contribute 50 percent of UCC’s revenues in the future. He recognized that these relatively stable, high-margin product lines sustained Union Carbide through economic downturns.

For a few years, it looked as if the new strategy was working. From 1973 to 1981, earnings per share rose 100 percent. UCC increased productivity dramatically during the late 1960s and early 1970s to keep its corporate head above water. From 1967 to 1973, physical output of chemicals and plastics rose 60 percent, while per-pound production costs were cut by one-third. William S. Sneath continued these trends when he became chairman and CEO in 1977. Still, the company found itself increasingly strapped for cash. Steadily rising expenses in Europe resulted in a $32 million loss in 1978, which forced Carbide to divest virtually all of its European petrochemicals and plastics operations. That same year, UCC was forced by its creditors to retire $292 million in long-term debt, which forced it to borrow another $300 million in 1979. That year, Carbide’s Standard & Poor’s credit rating fell from AA to A+, and its stock fell as low as 42 percent below its $61 book value.

Chairman Sneath embarked on another round of cost-cutting in 1980, pruning the executive staff by 1,000 and divesting a total of 39 businesses. Sneath retained six primary businesses: graphite electrodes, batteries, agricultural products, polyethylene, and industrial gases. By 1980, Carbide had 116,000 employees at over 500 plants, mines, and laboratories in 130 countries, bringing in over $9 billion in annual sales. Sneath embarked on a plan to invest profits into high-margin consumer goods and specialty chemicals.

UCC had established battery plants in India as early as the mid-1920s, and had seven plants with 5,000 employees there by 1967. India’s chronic food shortages precipitated a government-sponsored “Green Revolution” in the 1960s, with the country’s socialist government eager to join Union Carbide in establishing pesticide and fertilizer plants. In 1975 the Indian government granted Union Carbide a license to manufacture pesticides, and a plant was built on the sparsely populated outskirts of the regional capital of Bhopal. The plant drew more than 900,000 people to Bhopal by 1984. Union Carbide officials estimated that at least five tons of methyl isocyanate (MIC) seeped out of the plant in just 30 minutes one day in December 1984. The accident killed over 2,300 people and permanently injured another 10,000. Newsweekmagazine called the incident “the worst industrial accident in history.”

 

Source – http://www.fundinguniverse.com/company-histories/union-carbide-corporation-history/

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Interesting Link

“The tragedy of Bhopal continues to be a warning sign at once ignored and heeded. Bhopal and its aftermath were a warning that the path to industrialization, for developing countries in general and India in particular, is fraught with human, environmental and economic perils. Some moves by the Indian government, including the formation of the MoEF, have served to offer some protection of the public’s health from the harmful practices of local and multinational heavy industry and grassroots organizations that have also played a part in opposing rampant development. The Indian economy is growing at a tremendous rate but at significant cost in environmental health and public safety as large and small companies throughout the subcontinent continue to pollute. Far more remains to be done for public health in the context of industrialization to show that the lessons of the countless thousands dead in Bhopal have truly been heeded.”

 

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

A link we should all look over, a lot of useful information.

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