Business Law and Ethics: Case Study of Union Carbide

This report discusses the case of Union Carbide and the Bhopal Gas Tragedy, focusing on the ethical issues and legal actions. It explores the causes of the disaster, the code of ethical conduct, and the ethical position of the parent company. The report also highlights the importance of business law and ethics in organizations.

Business Law and
Ethics
(Individual Report)

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK (Part 2)..................................................................................................................................3
Ethical issues at Union Carbide..................................................................................................3
Case study ..................................................................................................................................3
Introduction to case.....................................................................................................................3
Causes of disaster .......................................................................................................................3
Legal action.................................................................................................................................4
Code of ethical conduct ..............................................................................................................5
Ethical position of the parent US Union Carbide company........................................................6
CONCUSION .................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Business law can be considered or determined as a range of legal standards which are
specifically being undertaken by organisations (sole proprietorships, partnership, private limited
and so on). Away with this, there are a range of ethical issues that an organisation goes through if
all the standards are not being met by them in rightful manner (Burra and Vamsi, 2017). Under
this report, the particular case which has been taken into consideration is of Union Carbide
(Bhopal Gas Tragedy). On the other side, this report will also be disaster in relation to the ethical
position of the parent US Union Carbide company.
TASK (Part 2)
Ethical issues at Union Carbide.
Case study
Introduction to case
There are a range of industrial disasters took place in past where, the Bhopal disaster was the
one which become the reason of ample number of deaths and still it’s impact can be seen among
individuals who came in direct contact with the dangerous gas. Basically, this gas leak event
took place in the night time of December 2 & 3 in the year of 1984 at Union Carbide India
Limited (UCIL). This pesticide plant was one of the biggest ones in Madhya Pradesh, India and
also said to be one of the biggest industrial disaster as well that took place in the past. More than
500000 individuals came in the contact of Methyl Isocyanate Gas, which is said to be a highly
toxicity gas. The spread of this gas took place in all the nearby villages that were connecting to
the plant site (Carter and et. al., 2017).
Even after the two weeks of gas leak disaster, around eight thousand individuals died. In
order to take control there was a commission that was developed and it was named as
International Medical Commission in 1993. Away with this, it was found that this particular
commission was developed to focus among different aspects like looking at different range of
impacts that was done by Methyl Isocyanate Gas in Bhopal, Madhya Pradesh.
Causes of disaster
Just when gas disaster took place in Bhopal, there were a range of causes that were
observed after the gas release. In order to identify the different causes, UCC launched a number

of strategies in order to gain the in-depth knowledge (Cumming, Hou and Lee, 2016). Based on
the research, it was found that UCC has clearly showed there was a large volume of water was
used where it was mixed in MIC tank. This raised ample number of questions on the
management level of Union Carbide India Limited (UCIL), because the action caused chemical
reaction and it also forced pressure valve which got open lately and this allowed gas leak.
Including this, some of the other causes that came in front after 2 and a 1/2 year of
tragedy were undeniably sabotage. On the other hand, UCC’s investigation also has given a
range of proofs that that chemical reaction was the specific reason behind the leak of gas. The
entry of water within the Tank 610 took place because of a hose, which was specifically
connected to tank. Including this, 30 tonnes of methyl isocyanate gas killed more than fifteen
thousand individuals and impacted on health conditions of more than 600,000 employees and
considered as one of the hugely affected industrial disaster (Karpavithra and Karvittal, 2017).
Legal action
In the year of 1985, it was found that there were a range of legal actions taken by Indian
Government against Union Carbide Corporation in U.S Court. The case was filed with an
amount of $3.3 Billions. However, in the year of 1986 it was found that all the litigations were
specifically transferred to Indian court (forum non conveniences). Within the time frame, it was
found that this particular case was transferred for a particular reason only and it was for smooth
running of the case in much effective and in efficient manner. Apart from this, in 1987 the legal
action which was taken within Bhopal District Court was that of interim compensation in the
amount of $4,80,59,375.00. However, later on the Indian High Court the decision was made that
the compensation amount was reduced to $3,43,30,425.00. Particularly, money that was
considered and distributed while focusing on various approaches of International Red Cross.
Including this, UCC have also looking forward to offer financial support as future settlement
within $5. Million but the offer was rejected by Indian government (Sambashivarao, 2017).
In the month of March of 1986, UCC also presented settlement figures to plaintiffs,
however, it was found that original loss was assessed between $500–600 million more than 20
years. At that point case moved from United States Federal court to India Supreme Court from
the authorization of U.S. Region Court Ruling. Following allure over choice U.S Court of
advances made the exchange in the year 1987. UCIL is a different element.

The Supreme Court made judgement in the wake of re-evaluating the case on fresh start.
This made continuing beginning newly on the month of November 1988 and court settlement
was started on February 1989. It was started following the request passed by Supreme Court of
India. In 1990, Indian Supreme Court began to perform the full settlement in context with the
chosen element. Away with this, it was observed that the court has made a request to Indian
government to start the buy as protection strategy which covers 100000 people. For store
settlement UCC was mentioned by court for making auxiliary over Voluntary assets to treat
casualties of the particular disaster that took place. For the same, it was found that that company
settled the same with an amount of $17 million (Stewart and Evans III, 2017).
Code of ethical conduct
Ethical code of conduct are said to be those principals that has been shaped to check
polished methodology kept up in reasonable way. The code of conducts implies composed
proclamation that is according to esteem and mission inside a business association streamed in
proper way. This methodology is made through expert improvement inside business association.
This also expands estimation of conduct by expanding control and request while playing out an
assignment in an association. Further code of conduct are identified with conduct of worker in an
association and makes measure improved inside an association. Some significant things of
morals has been clarified as follows:
Such standards and guidelines causes an association to get ready moral structure to make
proficient lead in more compelling way. It is been done based on decency trust and
trustworthiness. Individuals inside an association ought to follow codes which make
infringement over specific terms and condition to be confined. In the event of infringement
exacting activity of end ought to be taken. In certain ventures different sorts of office is
incorporated inside morals like banking and account, explicit laws that makes business done in
more successful manner. This is wilful by an association to be followed:
This can be defining as this principle which are related to managing process in business
firm in order to achieve business objectives in effective way (Vetterlein and Hansen-Magnusson,
2020). This help in meeting needs and perform task according to needs and requirement. This
helps in meeting needs and performing task according to needs where it helps in solving issues
discrimination, environmental issues, bribery and insider trading. This helps in meeting standards
and which makes leadership developed in positive way.

Ethical position of the parent US Union Carbide company
This can be analysed for the above that there are number of function which are used in
business function. This is most deadly disaster taken place within the history of world. Under
this case study, there are number of function which are played by firm where the ethics are not
followed. This can be evaluated form the Above that it is not a natural disaster where there are
number of issues which are faced by local individuals. This is clear case of carelessness from the
side of business firm. This make it clear that form is liable to pay for casualties and discomfort
suffering by local residence (Karpavithra and Karvittal, 2017). Here, all ethical functions are
violated by firm. This shows that Only when case was transferred to Supreme Court both side
were analysed and order of $470 million compensation imposed upon UCC.
CONCUSION
It can be concluded from the above information that there are number of business laws
and ethics which has to be followed by business fir in order to meet needs. This start that
business firm can use these in order to perform task in effective way and manage roles according
to it. Also in this file a case study in relation to ethics has been covered with position of
organization. In the end CSR and ethics is been covered in relation to ethical issues.

REFERENCES
Books and Journals
Burra, M. and Vamsi, V., 2017. Relationship between doctor and patient-a law, business or
ethics.
Carter, S.M and et. al., 2017. A code of ethics for social marketing? Bridging procedural ethics
and ethics-in-practice. Journal of nonprofit & public sector marketing. 29(1). pp.20-38.\
Cumming, D., Hou, W. and Lee, E., 2016. Business ethics and finance in greater China:
Synthesis and future directions in sustainability, CSR, and fraud. Journal of Business
Ethics. 138(4). pp.601-626.
Karpavithra, S. and Karvittal, S., 2017. The Role of Indian Ethics and Values. International
Journal of Engineering and Management Research (IJEMR). 7(2). pp.560-569.
Sambashivarao, M., 2017. Corporate Governance and Business Ethics-A Study. Splint
International Journal of Professionals. 4(2). p.42.
Stewart, C.E. and Evans III, R., 2017. Ethics Corner: Inadvertent Disclosure—Traps Await the
Unwary. Business Law Today. pp.1-3.
Vetterlein, A. and Hansen-Magnusson, H., 2020. Responsibility and Virtue Ethics: How to
Tackle Ethical Dilemmas in World Politics?. In The Rise of Responsibility in World
Politics (pp. 233-238). Cambridge University Press.