Analysis of Unilever's Mercury Scandal: CSR and Ethical Considerations

This report provides a comprehensive analysis of the Unilever Mercury Scandal in Kodaikanal, India. It examines Unilever's compliance with international guidelines for multinational enterprises prior to 2010, focusing on factors that influenced the company's actions and its approach to corporate social responsibility (CSR). The report details Unilever's response to the mercury pollution, including the company's arguments against thorough cleanup measures. It also highlights the ethical considerations and the environmental impact of the scandal, including the illegal disposal of mercury waste and its effects on the local ecosystem. The report concludes with feasible recommendations for Unilever to improve its response to such crises, emphasizing the need for effective remediation practices, public consultation, and adherence to stricter environmental standards. The analysis covers various aspects of the scandal, including legal proceedings, the role of regulatory bodies, and the impact on workers and the community.

Running head: UNILEVER MERCURY SCANDAL
Unilever Mercury Pollution in Kodaikanal India
Name of the student:
Name of the university:
Author note:

1UNILEVER MERCURY SCANDAL
Table of Contents
Q1: Showing the extent to which Unilever could manage prior to 2010 with the international
guidelines for Multinational Enterprises....................................................................................2
Q2: Factors that helped these actions and the company’s approach to CSR prior to scandal. . .3
Q3: Unilever’s response to dealing with the mercury pollution................................................5
Q4: Feasible recommendations..................................................................................................7
References..................................................................................................................................9
Appendices...............................................................................................................................11
Appendix 1: Unilever claimed it did not dump any mercury in Kodaikanal and said that the
residuals of mercury are not threatening to the ecosystem of the forest..............................11
Appendix 2: Unilever claimed applying more stringent clean-up measures will harm the
fragile local economy...........................................................................................................11
Appendix 3: Unilever claimed a more stringent clean-up process will disturb 3-4 times
more trees.............................................................................................................................12
Appendix 4: Unilever claimed it did not propose any clean-up measures rather Tamil Nadu
Pollution Control Board (TNPCB) did it.............................................................................12

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Q1: Showing extent to which Unilever could manage prior to 2010 with the
international guidelines for Multinational Enterprises
The significance of CSR in the growth of a company is constantly rising. The growing
significance of CSR practices is due to its benefits on the society and environment that the
governments in different countries and other related stakeholders have realised. Common
people across the globe are growing in their awareness of how companies are impactful with
their CSR policies and practices. Social media channels along with existing channels of
media, in particular, have been revelations in letting people know such things on a faster and
a much-informed way (Tench & Jones, 2015). This section is purposefully aimed at
explaining the extent to which and how Unilever was compliant prior to 2010 Mercury
Scandal with the International Guidelines for Multinational Enterprises (Dbei.gov.ie, 2019).
Studies suggest that Unilever since the year 2009 has constantly been into criticisms
for various reasons. These criticisms brought both a loss of reputation and money to Unilever.
Polman’s leadership was largely blamed for all this. Polman had a good appreciation for feel-
good policies and practices; however, failed to implement these practices due to the lack of
effective management decisions (Epstein, 2018). Unilever faced a lawsuit filed against them
in 2006 for using highly toxic substances (Indiatoday.in, 2019). In India, Unilever had to
close its thermometer plant following a mercury scandal. Unilever had to settle with
approximately 600 workers on being alleged to this scandal. The issue gained International
recognition (Indiatoday.in, 2019).
In 2007, an allegation was imposed on Unilever for forcing employees to renounce
their Hindustan Lever Workers Union (PPF) membership. Instead, employees were forced to
join the Hindustan Unilever Democratic Workers Union established by the management in
2007 (Oecd.org, 2019). The allegation claimed that the management at Unilever denied any

3UNILEVER MERCURY SCANDAL
representation of employee rights by trade unions. As claimed, they did not either allow a
negotiation to employees as described in the OECD guidelines (Dbei.gov.ie, 2019). The
management claimed that the employees only founded the Hindustan Unilever Democratic
Workers Union (Oecd.org, 2019). The case was suspended and progressed back in 2010 by
the High Court in India. The outcomes of the progress are as mentioned below (Oecd.org,
2019):
 The discussion that lasted till 29 September 2010 finally lead to a public agreement.
The agreement ensured that employees can also become members of a trade union.
They can hold voting procedures under a specified secret ballot. They can now access
to the verification process. They are also eligible to obtain any deduction of
membership dues under the agreement.
 A follow-up process to this agreement was initiated following a follow-up statement
from the UK NCP in February 2013. The follow-up process aimed at identifying
implementation issues stemming from the agreement being made earlier. Finally,
there was an agreement from both the parties on a fact that the outstanding issues
have been resolved. Moreover, a confirmation was made that the agreements have
been implemented.
Q2: Factors that helped these actions and the company’s approach to CSR prior to
scandal
It was necessary to avoid the solution from becoming a ‘one-off’ solution to either of
the parties. It was necessary also to identify employee relations in an international context.
This resulted in a necessity to know relevant international instruments that also includes the
ILO Conventions and the OECD Guidelines (Dbei.gov.ie, 2019). Besides, there was a

4UNILEVER MERCURY SCANDAL
necessity to understand the challenges and information gaps faced by both parties (Oecd.org,
2019). All these helped to reach common agreements. The outcomes can be attributed to
many factors such as those listed below (Oecd.org, 2019):
 NCPs for supporting a complementary process
NCPS was being used as a complementary process. NCP run in parallel with formal
proceedings. Indeed, this was a good move. Considering the labour cases, NCP was a much
cheaper proceeding than a formal proceeding. NCP was good from both the perspectives of
the parties and so of labours.
 The role of conciliator
It was crucial to bring both parties together. It had required someone possessing huge
experience in sorting cases of such kinds. The conciliator was the one who emerged as
helpful in settling things between two parties. The conciliator ever since its inception in the
case made it clear that the real objective of their participation in the case is to resolve it while
also ensuring that the proceeding is consistent with the OECD Guidelines (Dbei.gov.ie,
2019). The scope of the conciliator was not just restricted to create healthy dialogues between
the parties but also to facilitate the sharing of information between them. The sharing of
information was facilitated also between the parties at the national and international level.
 Identifying and utilising the right people
It is of significant important to involve and support people from either of the parties to strike
a balance in the case resolving process. Hence, people from trade unions and Unilever needed
to be involved and supported to reach positive outcomes of the issue. Specialists dealing with
employee relations were hugely responsible for an agreement between trade unions and
Unilever. These specialists brought about experienced people from both parties and
encouraged to focus on a different perspective of the issue. For example, dispute resolution

5UNILEVER MERCURY SCANDAL
was given much of emphasis over liability, public relations and CSR. These specialists
promoted the importance of industrial relations in an international context. As a result of this,
the series of discussion between the people of trade unions and Unilever turned into healthy
dialogues’ and resulted in an ongoing relationship.
Q3: Unilever’s response to dealing with the mercury pollution
In 2001, a mercury thermometer factory owned by a Unilever subsidiary Hindustan
Unilever Ltd. was shut down following a mercury scandal. Unilever according to reports
allegedly disposed the scraps of mercury at a local scrapyard. Mercury poisoning did affect
more than 1000 former workers (Theguardian.com, 2019). The issue became one of the major
scandals Unilever had ever faced as it drew significant attention of international officials.
Despite so much of criticism, Unilever adopted a lax residential standard for cleaning-up the
place of mercury disposal. Unilever argued that a thorough clean-up process will weaken the
ecologically fragile forests (Unilever.com, 2019). However, this argument is puzzling more
because it came from Unilever, the manufacturer of so many brands like Dove, Lifebuoy,
Omo, Wisk, Surf Excel, Domex and Persil. All these brands were aligned to cleaning-up
characteristics. Unilever spends billions of money on advertising products that fight with
every stain to bring about much-needed cleaning. The statement is surprising because
Unilever with the kinds of brands listed as above talks about different technology, chemicals,
enzymes and polymers to remove stains from the clothes. However, when being asked on
taking the responsibility of the mercury scandal and to clean-up the residuals Unilever
reacted differently than their actual intent to cleaning. Instead, Unilever, as found in few
reports, denied a thorough clean-up process and said that Unilever does not alone hold the
responsibility to clean-up the Kodaikanal’s forests (Indiatoday.in, 2019).

6UNILEVER MERCURY SCANDAL
What is more surprising is a fact that Unilever denies any responsibility for mercury
disposal in Kodaikanal. The situation got even worse when Unilever confirmed that the
residuals do not pose any risk of contamination to a very sensitive ecologically fragile region
near and surrounding the factory site (Lin, 2001). Studies suggest that the factory discharged
not less than 1.3 tonnes of mercury into the Pambar Shola Reserved Forest (Lin, 2001). The
forest is now a part of the Kodaikanal Wildlife Sanctuary. Studies further claim that Unilever
illegally and unethically sold more than 43 tonnes of mercury wastes to scrap merchants (Lin,
2001). This included approximately 5.3 tonnes of mercury wastes that were dumped in a
scrapyard in 2001 in a much-crowded part of the Kodaikanal town (Lin, 2001). It was for this
offence the factory was shut down by the state environmental regulator team (Unilever.com,
2019). Reportedly, the residuals of mercury, which was approximately about 1.3 tonnes could
not be recovered or removed from the forest. Understandably, such huge residuals of mercury
will harm the ecosystem by circulating within the forest ecosystem and harming the lives for
animals, and creating unfavourable factors for the construction of food chains (Lister &
Garcia, 2018). Unilever, which claims to invest hugely in its CSR projects, tried somehow to
escape the scandal unethically. They did it by partially taking the responsibility of the
mercury scandal while in some instances that had even denied any such involvement of theirs
in the scandal (Camilleri, 2017).
Unilever claimed that much stringent clean-up measures will harm a fragile
ecosystem in the forest. However, environmental specialists claim that from ecologically
sensitive forests such as the Kodaikanal Forest harmful residuals should be quickly removed
to make these forests liveable to their living creatures. The team of environmental specialists
claims that harmful residuals continue to wash-out the erosion-prone slopes. Instead of
inaction, such situations demand urgent actions. Moreover, situations like this demand a
tightening of clean-up measures instead of laxity as adopted by Unilever in response to the

7UNILEVER MERCURY SCANDAL
Kodaikanal Mercury Scandal (Kodaimercury.org, 2019). TNPCB had to independently
conduct studies on the mercury scandal. However, according to studies, TNPCB for $52,000
as consultancy fees unethically avoided a public consultation (Kodaimercury.org, 2019).
Later on, based on the findings of the studies of TNPCB, Unilever proposed a diluted clean-
up standard. Unilever did it based on techno-commercial aspects. Unilever argued that the
benefits to accrue out of stricter norms will be low as compared to the projects conducted on
a diluted clean-up basis. Unilever in collaboration with TNPCB prevented many things to
come to the common people. Unilever, its team of consultants and TNPCB finally arrived at a
lax residential standard instead of a much stringent ecological standard (Kodaimercury.org,
2019).
Q4: Feasible recommendations
Unilever could have responded more accurately as contingent with the International
Guidelines for Multinational Enterprises. The company had the status of being a responsible
employer as it invests so much on sustainable practices. It was surprising to many that
Unilever was largely unethical and irresponsible in reacting to mercury scandal in the
Kodaikanal Forest. The list of recommendations listed as below could have helped to respond
to the scandal more effectively than they ended with:
1. Unilever gave lame excuses as found in this study to avoid going for tightening clean-
up measures and rather adopted laxity. It is hugely recommended to Unilever for
scandals as such to find technologies and practices, which is effectively helpful in
remediation and rehabilitation practices. In situations as such, there should be
effective management measures to ensure that the environment is not at harm.

8UNILEVER MERCURY SCANDAL
2. Public consultation of the case was intentionally avoided by Unilever. Unilever did it
by paying a huge sum of money as consultation fees to TNPCB. Due to being able to
avoid a public consultation Unilever could successfully avoid things coming into the
public. As a result of all these unethical practices, Unilever continued with an
ineffective lax residential standard for the clean-up process. Instead, it is strongly
recommended to appoint a public consultation to study such scandal cases. This
would help in conducting a much-detailed and transparent analysis of the scandal
case. Hence, this will lead to a solution, which is as per the International Guidelines
such as the UN Sustainable Development Goals. Moreover, a much-improved
solution could then be attained, which will be best for the environment, the ecosystem
and its residents.
3. It is recommended to deploy a team of experts in toxicology, ecology and biology to
conduct an ecological toxicity assessment of the case. It was due to mismanagement
in selecting the panel of experts, which resulted in an ineffective assessment of the
ecological toxicity of the forest. Unilever reportedly appointed a civil engineering
department with no relevant expertise in toxicology and ecology. As a result, Unilever
reached to less accurate site-specific target levels (SSTLs) of the ecosystem in the
Kodaikanal forest. Hence, the process to remove the residuals from the forest of
Kodaikanal received criticisms from the State Environmental Specialists in
Kodaikanal and International Organisations Groups such as UN, OECD, ILO, etc.

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References
Camilleri, M. A. (2017). Case study 4: corporate sustainability and responsibility: creating
value in business and education. In Corporate Sustainability, Social Responsibility
and Environmental Management (pp. 161-173). Springer, Cham.
Dbei.gov.ie. (2019). CSR Guidelines and Principles - DBEI. Retrieved 30 August 2019, from
https://dbei.gov.ie/en/What-We-Do/Business-Sectoral-Initiatives/Corporate-Social-
Responsibility/Guidelines-and-Principles/
Epstein, M. J. (2018). Making sustainability work: Best practices in managing and
measuring corporate social, environmental and economic impacts. Routledge.
Indiatoday.in. (2019). Kodaikanal mercury contamination: Why Unilever is paying settlement
to its 591 workers. Retrieved 30 August 2019, from
https://www.indiatoday.in/fyi/story/kodaikanal-mercury-contamination-unilever-pays-
settlement-workers-312550-2016-03-09
Kodaimercury.org. (2019). Unilever's Mercury Pollution in Kodaikanal, India - Claims vs
Reality - KodaiMercury. Retrieved 30 August 2019, from
http://kodaimercury.org/unilevers-mercury-pollution-in-kodaikanal-india/
Lin, H. O. Mercury Pollution in Kodaikanal Caused by a Thermometer Factory Spill in 2001.
Lister, B. C., & Garcia, A. (2018). Climate-driven declines in arthropod abundance
restructure a rainforest food web. Proceedings of the National Academy of
Sciences, 115(44), E10397-E10406.
Oecd.org. (2019). Retrieved 30 August 2019, from
https://www.oecd.org/investment/mne/Facilitating-social-dialogue-under-the-OECD-
Guidelines-for-MNEs.pdf

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Tench, R., & Jones, B. (2015). Social media: the Wild West of CSR communications. Social
Responsibility Journal, 11(2), 290-305.
Theguardian.com. (2019). Indian rapper 'overwhelmed' by success of protest song against
Unilever. Retrieved 30 August 2019, from
https://www.theguardian.com/world/2015/aug/07/indian-rapper-sofia-ashraf-success-
protest-song-unilever
Unilever.com. (2019). Retrieved 30 August 2019, from
https://www.unilever.com/Images/soil-remediation-note-update-on-7-april-
2016_tcm244-479921_en.pdf

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Appendices
Appendix 1: Unilever claimed it did not dump any mercury in Kodaikanal and said that
the residuals of mercury are not threatening to the ecosystem of the forest.
A study conducted by URS Dames & Moore, HUL’s consultant, found this claims as
less genuine. Reportedly, Unilever disposed more than 1.3 tonnes of mercury into the Pambar
Shola Reserved Forest. The forest is now a part of the Kodaikanal Wildlife Sanctuary. The
study further confirmed that HUL illegally sold not less than 43 tonnes of mercury wastes to
some scrap merchants. The residuals sold to scrap merchants also had 5.3 tonnes of mercury
wastes that were illegally disposed of in the Kodaikanal forest (Kodaimercury.org, 2019).
Mercury that remained in the Kodaikanal forest was found harmful for living
creatures in the forest. Unilever’s factory close to the Pambar Shola Reserved Forest
continues to leak mercury-laden silt. A study conducted by Unilever in 2015 had found three
out of five samples having high levels of mercury in the Pambar Shola Reserved Forests
(Kodaimercury.org, 2019).
Appendix 2: Unilever claimed applying more stringent clean-up measures will harm the
fragile local economy.
Studies suggest that a more stringent clean-up measure is more effective than laxity.
Unilever is being recommended to use appropriate technologies, and management strategies
to conduct and implement effective residuals’ clean-up process.