Analysis of Ethical Issues at Union Carbide: A Detailed Report

This report provides a comprehensive analysis of the ethical issues arising from the Union Carbide disaster in Bhopal, India. It begins with an introduction to ethics and ethical codes of conduct, setting the stage for a detailed case study of the Bhopal gas tragedy. The report examines the causes of the disaster, including the failure of safety measures and the release of toxic methyl isocyanate gas, resulting in widespread casualties. It also explores the legal actions taken, the involvement of the Indian and US governments, and the settlements made. The report delves into the ethical code of conduct, corporate social responsibility (CSR), and the ethical position of the parent company, US Union Carbide. It highlights the company's failures in upholding ethical standards and its lack of CSR, particularly in providing adequate relief to the victims. The conclusion emphasizes the importance of ethical conduct in business and the severe consequences of ethical breaches, drawing from the Bhopal disaster as a stark example. The report references several books and journals to support its analysis.

Report on Ethical Issues at
Union Carbide

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK ( Individual report)...............................................................................................................3
Case study ..............................................................................................................................3
Code of ethical conduct ..................................................................................................................5
Corporate Social Responsibility......................................................................................................5
Ethical position of the parent US Union Carbide company...................................................6
CONCLSUION................................................................................................................................6
REFRENCES ..................................................................................................................................7

INTRODUCTION
Ethics is considered to be those rule and regulations which helps in developing of
discipline with order in an organization. They holds responsibility over making an organization
improving business environment in society. Such kind of rules is covered under ethical code of
conduct. Ethics has wider scope to be covered as it deals over business environment of an
organization. Nature of ethical code of conduct is dynamic as it makes business to understand
about needs of its employees. In this report an case study is covered and questions in nraeltion to
this has to be answered.
TASK ( Individual report)
Case study
Introduction to case
The case is commonly known as Bhopal disaster or Bhopal gas tragedy and is related to
industrial accident. This was one of the most deadliest incident in history of world and took place
in Carbide subsidiary pesticide plant in the city of Bhopal , India. From 2-3 December 1984 palnt
released approximately 40 tonnes of toxic methyl isocyanate gas(MIC). Due to this around
500000 people were in connection of the toxic gas. The gas got spread at very fast rate and
covered whole city in no time which made panic to be caused within persons making them feel
burning sensation in the lungs. Further thousand person were dead on spot after the leak and
damage was high around 3,598 died in 1989. Also it is said that 8000 died two weeks after the
gas release. In order to deal with this International Medical Commission has established in 1993
responded over incident to long term health effects of disaster(Robinson, 2018).
Causes of disaster
Plant in which disaster took place were producers of Carbaryl' in 1997. Carbarlyl is been
used as an insecticide and its first production was 25000 tonnes per year. It was not a problem
for the plant as it holds capacity of making 5000 tonnes. In the beginning of 1980 sales of
insecticides were not going at good pace which resulted into cost cutting within the plant. The
disaster took place because of water entering within the tank used for storing the material that
was Methyl isocyanate. It made disaster happened due to chemical reaction by making of Carbon
dioxide mixed with other substances. Also temperature got increased and reached to 200
Celsius. Pressure in the container increased too much that even the stabilizers were not able to

control it. Piepes were also not in good condition and become rusty with faster reaction. All
contents from the tank got released within two hours and tank's condition were also not good.
These were some reason which resulted into causing of disaster (Rezaee, 2016).
Legal action
Legal proceeding is been involved within UCC that is formed with collaboration of
United States and Indian government also local Bhopal authorities were involved within it.
Indian government passed the act of Bhopal Gas Leak on march 1985 and made government of
India to be legal representative for victims of disaster. In this proceedings were making law suit
to be initiated within the federal court system of United States. On April 17th 1985, Federal
District court judge John F. Keenan said that fundamental human rights has been violated within
the disaster. Union carbide passed the order to immediately give $5 million and $10 million to
injured people that was being distributed with the help of International Red Cross. UCC gave the
money as future settlement of $5 million but the offer was rejected by Indian government.
Further on March 1986 UCC proposed settlement figures by making plaintiffs U.S attorneys of
$350 million which would have been made according to organization of an company.
This was concede to be unethical on part of the Bhopal victims and was between $500–
600 million over 20 years. Further the litigation was transferred from Unite States to Indian from
the permission of U.S. District Court Ruling. Following appeal over decision U.S Court of
appeals made the transfer in the year 1987. UCIL is an separate entity and managing Indian
citizens only.
Government of India is been refusing offer made by Union Carbide and asked to give
claim of US$3.3 billion. In this Supreme Court order for making the trial going again through
clean slate. So in November 1988 proceeding began again and also out court settlement was
initiated on February 1989. Then union Carbide agreed to did payment of US$470 million in
order to refund for Bhopal disaster. The refund was initiated immediately on the basis of order
passed by Supreme Court of India (Matilal and Adhikari, 2020).
In the year 1990 Indian Supreme Court is to make appeals in order to make settlement.
On October 1991 Supreme Court has made its stake clear that $470 million that has to be paid
and dismissal of petition. Court ordered that Indian government to do purchase of settlement
over funds through insurance policy which covers 100000 persons in order to deal over

symptoms caused. In order to make settlement of funds and UCC has been requested by court
for making subsidiary over Voluntary making funds generated for treating of victims of disaster
The amount was $17 million to which the organization agreed.
Code of ethical conduct
Ethical code of conduct is related to the principals formed for making of professional
conduct to be made through making honesty which sates integration to be formed. Code of ethics
is an written statement within which is related to mission and value in an business organization
possible. This is an professional approach used by making business organization developed.
According to ethical code of conduct through increasing values and ethics as per professionalism
to be maintained in an organization (Lou, Wagner and Cheng, 2016). These are known as ethical
code and is been related with business in order to make professionalism to be maintained into
various process in an organization. Further various important part of ethics has been explained as
follows:
 These rules and regulation has been making an organization from ethical framework that
makes professional conduct to be done. In this integrity, honesty and professionalism is
covered.
 Members in an organization is required to follow code of conduct through making
violations of rule which makes termination to be done.
 In some industries various other things are included within it that is banking and finance,
specific laws which helps in making governing of business to be conducted. Though code
of conduct is voluntary adoption.
Corporate Social Responsibility
This is the process by which an organization manages various processes in business in
order to created positive impact upon society. Under it sustainability, social impact and ethics
has been covered. Such kind of responsibility makes sure that an organization follows ethical
code of conduct within its working process.
Business ethics and CSR is applied within an organization with the helps of certain
theories that is legal responsibility theory within which an organization is required to make sure
laws in relation to ethics applied in effective manner. The comes ethical responsibility theory

which helps an organization in following rules and regulation in relation to ethical code of
conduct.
Ethical position of the parent US Union Carbide company
As per the analysation done over the case of Bhopal Disaster in which observation
showed that, it is one of the most deadly disaster happened in India and caused death with drastic
impact upon people life. In this case parent organization US Union Carbid had a substitute
company UCIL involve within disaster. The ethical code of conduct is not followed and money
was given by the organization as rehabilitation fund for disaster. Then Supreme Court has made
order passed stating that $470 million is to be given as compensation. So position hold by parent
organization is not ethical in nature (Kelly, 2017). CSR and Ethics is not been followed in proper
manner the major issue that raised was of corporate social responsibility within which Union
Carbid was only focused upon escaping the matter and not providing relief to victims. . So, they
violated the code of conduct by influencing the judgement of U.S Federal court. The tragedy
could have been avoided only when Union Carbid would have taken care of tanks by repairing
it timely manner. Also they could have used appropriate safety measures to control the gas leak.
CONCLSUION
From the above discussion it can be stated that ethical code of conduct is one of the most
important element required to be followed in an organization. In this ethics has been discussed
by explaining about case study and position of the organization involved within it. The case
study mainly deals with the most horrified disaster in history. Ethical issue has occurred while
dealing with the issues in relation to ethics.

REFRENCES
Books and journals
Kelly, P.T., 2017. Integrating leadership topics into an accounting ethics course–preparing
students for a challenging profession. In Advances in Accounting Education: Teaching
and Curriculum Innovations. Emerald Publishing Limited.
Lou, C., Wagner, C.B. and Cheng, H., 2016. Press nationalism emerges in pollution disaster
reporting. Newspaper Research Journal. 37(2). pp.124-137.
Matilal, S. and Adhikari, P., 2020. Accounting in Bhopal: Making catastrophe. Critical
Perspectives on Accounting. 72. p.102123.
Rezaee, Z., 2016. Business sustainability research: A theoretical and integrated
perspective. Journal of Accounting literature. 36. pp.48-64.
Robinson, S., 2018. The ethical environment: corporate responsibility. The Business
Environment: Themes and Issues in a Globalizing World. p.184.
Rodda, K.E and et. al., 2020. Tools and Incentives for Implementing Codes of Ethics to Help
Prevent the Reemergence of Chemical Weapons. Journal of Chemical Education.
Saxena, A., 2019. Science and Ethics—Merging the Boundaries. In Ethics in Science (pp. 1-16).
Springer, Singapore.
Singh, M.K. and Ahmad, T., 2016. Triple Bottom Line Approach to Environmental
Protection. IUP Law Review. 6(2).
Skorin-Kapov, J., 2019. Business, Environment, Society. In Professional and Business Ethics
Through Film (pp. 247-293). Palgrave Macmillan, Cham.