Business Law and Ethics: The Bhopal Gas Tragedy and Ethical Position of US Union Carbide Company

This report discusses the Bhopal gas tragedy and its ethical implications for US Union Carbide company. It covers the background of the disaster, factors that led to the incident, the method of manufacturing, and the devastation caused. The report also explores the legal proceedings and ethical issues surrounding the incident.

Business Law and
Ethics

Table of Contents
INTRODUCTION ..........................................................................................................................3
MAIN BODY ..................................................................................................................................3
CONCLUSION ...............................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Business law is subdivision of the civil legislation which works with both the subjects of
the public law and the private law. It governs the contract, manufacture or sale of the consumer
goods, hiring practices and many other. The main purpose served by it is to maintain the order
among the businesses, companies and brands. On other side, business ethics is a study of the
appropriate business practices and policies relating to the potential subjects like corporate
governance, discrimination, etc. (Thompson, 2017). These are important as they help in
maintaining the reputation so that significant financial harm can be prevented and ultimately the
benefit can be obtained by every person involved in it. This report shall cover the Bhopal gas
tragedy in relation to ethical position of US Union Carbide company.
MAIN BODY
Background of the disaster
This was the worst incident of gas leak on 2-3 December of 1984 at night. The event took
place at Union Carbide India Limited (UCIL). Approximately, 5,00,000 lives were affected to
the gas of (MIC) Methyl isocyanate. Thousands of people died and lacs of people suffered severe
health effects. Approximately 30 tonnes of the MIC gas were leaked which affected 6,00,000
people.
Alarm before the disaster
In the year 1969, the company UCIL was engaged in producing the Sevin, a kind of
pesticide which uses methyl isocyanate as its intermediate. Then in 1976, the trade union also
complained of the pollution which comes out of the plant. Then after few years, one of the
worker accidently inhaled the toxic phosgene gas in large amount which resulted in its death
after couple of hours. All these events were observed by the journalist which began its
investigation and published the findings in the local paper of the Bhopal which stated wake up
Bhopal people, we are at the edge of the volcano. Then before the incident took place around two
years back, 45 workers were exposed to the phosgene gas and were admitted to hospital. Then
around 1983 and 1984, three leak incident took place were phosgene gas, carbon tetrachloride,
mono methylamine and methyl isocyanate (Roessing and El-Jourbagy, 2018).
How Bhopal disaster took place

The union Carbide India have the 68000 litre Mic tank storage, namely E619, E619 and
E611. Before the incident, around couple of months ago the production of MIC gas was going on
and tanks were getting filled by the gas. Not a single tank was permissible get filled beyond the
capacity of 50% and it pressurised with the inert nitrogen gas. Then E610 lost its capacity to take
the pressure and hence the liquid MIC would not be pumped out of it. The laws stated that only
30 tonnes of liquid mix can be poured in the tank but this tank have 42 tonnes of MIC gas.
This failure pushed the UCIL to stop the MIC product and factory was closed for the
maintenance. Then an effort was taken to function the defective tank on 1 Dec but it failed and
also maximum safety systems resulted in malfunctioning and water entered into the
malfunctioning tank that resulted in runaway of the chemical reaction. The pressure then
increased five times at that day. Over midnight, effects of methyl isocyanate were felt by
workers but to address the leak, its decision was taken after few minutes but by then the chemical
reaction reached the critical state and about 30 tonnes of the MIC spread into the atmosphere
within 1 hour. The MIC drifted to the densely populated neighbourhood and killed thousands of
people immediately and created the state of panic as people attempted to flee from Bhopal
(Clarkson and Miller, 2020).
Factors which resulted in disaster
There are many causes which led to this Bhopal gas incident, some of which are
discussed below-
Human errors
 The workers failed to close the isolation valve before the pipes due to which the water
flushed into the tanks and caused fatal pressurisation of the tank which contained MIC
gas. The flare used to flame the neutralisation which helps in escaping the gas was also shut
down by the workers.
Safety equipments
 The sprayer for the water neutralisation was not in reach due to which the gas escaped the
tank and spread into the atmosphere. The manager of the plant was aware of this
deficiency but still not action was taken.
 The flare system was inadequate due to which it lacked the capacity for the major leak of
gas.

 Many of the safety system was switched off in orderto save money which included MIC
tank refrigeration system. It could mitigate the disaster severity.
The safety devices incorporated in the plant was undersized which were not able to prevent the
gas leak. Also the plant was dependent upon the manual operations and not on machines
(MCLAUGHLIN, 2018).
Method of manufacturing
 The company used the most dangerous method of manufacturing the pesticide, called the
ROUTE in which similar type of raw materials joined in dissimilar order of
manufacturing. In this, the phosgene gas is first reacted with other gas in order to create
the chloroformate ester which is later reacted with the other.
Devastation
Death rates
Due to this incident, the immediate official death toll reached to 2259 and the Madhya
Pradesh government confirmed the death ODF total 3787 people due to gas leak. Then after two
weeks, around 8000 people died and after few days, another 8000 people died from the diseases
which resulted from gas leak.
Heath effects
Short term effects
The initial effects of the gas leak included vomiting, coughing, feeling of suffocation and
severe irritation in eye. The people also experienced the burning in respiratory tract, stomach
pains and breathlessness (Beatty, Samuelson and Abril, 2018).
Long term effects
From the Bhopal gas disaster, it was estimated that around 2 Lacs lives has faced injuries
which were permanent in nature whose symptoms included immune and the neurological
disorder, eye problems, respiratory difficulties, cardiac failure, female reproductive difficulty and
many other. Birth defects also prevailed among the children which were born from the women
who were affected by the incident of gas leak.
Aftermath of Bhopal gas tragedy
After the disaster took place, several criminal and civil cases were filed in District court.
Legal proceedings started between India and USA. The government passed the legislation,
namely, Bhopal gas leak Disaster Act, 1985 where central government was allowed to act as

legal representative of the victims. UCC initially opened an offer of $350 million of
compensation but then the government of India refused and claimed $3.3 Billion. Likewise,
proceedings were going on and finally when the case reached Supreme Court of India, a
settlement was made where UCC decided to pay $470 million as final settlement of its civil
liability and criminal proceedings.
Ethical issues
Looking from the view point of UCC, an internal report of the company showed that
there were malfunctions and defects in the manufacturing of MIC gas in the plant. But this report
was not forwarded by the UCC to the Bhopal plant. Also the corporation have under invested in
the safety system but they showed that they have sufficiently invested in safety procedures which
were also operative at the time of disaster in order to prevent the intrusion of the water (Sartor,
2020).
The company failed to provide requisite training to its supervisor as they were not trained
according to the system of American. Moreover, the supervisor was also not ready to take up the
responsibility of the disaster as there was lack of diversified training which may invoke the
personal responsibility.

CONCLUSION
It is concluded from the above report that Bhopal gas incident is one of the worst
industrial disaster in the past of India. The gas leak tragedy has shaken the city of Bhopal and
caused death of several people. It also resulted in severe health effects to the people due to the
inhalation of the gas which cause short and long term health effects to the people of Bhopal. The
company was negligent in operating the plant and also there was lack of safety system which
could not prevent the disaster from happening. The company did not inform the Bhopal plant
regarding its malfunction and defects in the system which resulted in such disaster and also the
supervisor and other workers were not given adequate training to take up the responsibility of the
gas leak.

REFERENCES
Books and Journals
Thompson, D.B., 2017. Teaching the business law and ethics of arbitration after
concepcion. Journal of Legal Studies Education, 34(1), pp.63-88.
Roessing, M. and El-Jourbagy, J., 2018. Toward a More Perfect Pedagogy: Developing
Constitution Week Activities to Support a Business Law and Ethics Curriculum. J. Legal
Stud. Educ., 35, p.255.]
Clarkson, K.W. and Miller, R.L., 2020. Business law: Text and cases. Cengage Learning.
MCLAUGHLIN, J., 2018. LAW, BUSINESS & ETHICS.
Beatty, J.F., Samuelson, S.S. and Abril, P., 2018. Business law and the legal environment.
Cengage Learning.
Sartor, G., 2020. Artificial intelligence and human rights: Between law and ethics. Maastricht
Journal of European and Comparative Law, p.1023263X20981566.
Halbert, T. and Ingulli, E., 2020. Law and ethics in the business environment. Cengage Learning.