The Union Carbide Corporations Social Responsibility

NB: We do not resell your papers. Upon ordering, we do an original paper exclusively for you.

NB: All your data is kept safe from the public.

Table of Contents

Introduction
Company Background
Problem Definition
Relationships with Government
How They Overcame the Situation
What They Are Doing for the Future
Conclusion
Works Cited

Introduction

The Union Carbide Corporation is a very famous chemical company, and it has its base in the United States of America. This company harmed its reputation in 1984 when it got involved in the Bhopal disaster in India. This disaster involved the leakage of hazardous gases which led to the immediate death of 30,000 people and then subsequent deaths totaled to 20,000. The Indian Government and UCC both owned the Indian subsidy which operated the Bhopal plant. But when this disaster struck, many cases were filed just against the UCC, forcing them to pay huge amounts of compensations in funds and otherwise. The company even had to sell its shares in India and leave the vicinity. The company did a lot for the suffering after the disaster struck and has long-term plans for the future as well in the shape of a Responsible Care System.

Company Background

Union Carbide Corporation is also known as Union Carbide at times, is proficient at manufacturing chemicals and polymers. It is the United States-based and one of the oldest there, having a human resource base of almost 3800. The company was very well known in the United States and generated sufficient revenue to be labeled a successful company. (Matten, 2008).

The company came into being in the 1920s when its researchers hit onto something very unique and economical. They came up with the economical way to make ethylene from natural gas, which was actually the initiation of the modern petrochemicals industry which is seen nowadays. Over time, Union Carbide has heavily invested in its research and development and today it stands in a very competitive edge over other similar companies in the industry. Just stating one instance of such a competitive edge, Union Carbide is the proud owner of some of the industrys most advanced, modern, and state of the art processes as well as technologies that support these processes. Even the catalyst technologies, which are the important components in speeding up this process, are under Union Carbide. Moreover, it also deals with economies of scale whenever it is doing any sort of production, thereby bringing its manufacturing to the large scale and low-cost production zone. The company went through divestiture and thus had to sell off major products that it owned, namely Eveready and Energizer Batteries, Glad bags and wraps, Simoniz car wax, and Prestone antifreeze. These products, especially Eveready and Energizer Batteries, show the caliber that Union Carbide had in the chemical industry. It can also be regarded as one of the very famous in the world because it was a major company in the top-most economies of the world that is the United States. (Driesen, 2003).

On February 6, 2001, Union Carbide became a subsidiary of the renowned company The Dow Chemical Company (TDCC) and which is also wholly owned, and thus, this brought a major change in the customer base of Union Carbide. The company now sells the majority of its products to the TDCC.

Union Carbide deals with the manufacture of those products which are semi-processed, that is, they are converted twice or thrice before they reach the end consumer. Some are produced in larger bulk because they are in a lot of demand by various customers, thus they are known as high-volume commodities. Other products that are manufactured are just done in small volumes because they are produced to serve small market niches. The ultimate products to which Union Carbide contributes through its manufacturing are the paints and coatings, automotive industry, oil and gas, household products, and personal care. Thus, this shows a wide range of products over which Union Carbide has its foot. (Hancock, 2004).

Problem Definition

Union Carbide is spread not just in the United States of America, but in other parts of the world too. And thus, it had its wings in India as well. In 1984, a major industrial accident gave a bad reputation to the otherwise well-known company. In this accident, the Union Carbide plant which is situated in Bhopal, Madhya Pradesh, India released 40 tonnes of MIC, aka methyl isocyanate. The location in which the plant was situated was the heart of the city of Bhopal. This release of dangerous chemicals resulted in the immediate deaths of many people. There are many sources which state the figure as to the number of deaths that took place. The Indian Supreme Court states that more than 3000 people died in this accident while the BBC states that 3000 died as an immediate reaction to this release whereas the subsequent deaths were immense too, amounting to a figure of at least 15000, conveying the harmful repercussions of this release. Another source is Greenpeace, which is an international NGO (non-governmental organization) that aims to work for the betterment of the environment, and it states the total number of deaths to be as high as 20,000. Another channel of information is the Bhopal Medical Appeal, the exposure to the tables, which were leaking hazardous chemicals, was so high and extended to around half a million people. If the number of deaths is counted to date, then it can be very effectively said that roughly one person has died daily because of this release since the day it occurred, bringing the value to 20,000. (Krarup, 2003).

The actual leak was caused because of the way the plant had been designed. Moreover, there was a lot of economic pressure on the company to reduce the number of expenses that they incurred in designing, repairing, and maintaining the plant. What enhanced the problem was the fact that the plant was situated in a very densely populated area. Usually, such plants are situated in isolated areas, and thus when such accidental leakages take place, their repercussions are very less. Moreover, other factors contributed to the worsening of the problem namely that there was absolutely no existence of any plans for a catastrophe of this kind. India is a poor country and thus it also lacked the resources to provide quick and timely health care for all the victims of the leakage, which were very large in number. Even socio-economic rehabilitation was a loophole that further contributed to this problem. (Banerjee, 2007).

Another factor which many sources cite is the fact that the company was not being very proper in following the laws when it came to safety and maintenance. That is, the company was not maintaining the plant well after production processes had been closed in the early 1980s. The low maintenance which was kept also led to a major problem that is the failure of the safety systems to work when this leak was taking place. The company was also storing chemicals in large tanks, which is considered a bad practice. The company should have stored them in many small tanks. Furthermore, the material which was existent in the pipelines was corroding and the company was making use of more hazardous chemicals than the less hazardous ones. (Smith, 2001).

Relationships with Government

Union Carbide Corporation was not the sole owner of the plant which was in operation in Bhopal. Rather, the Indian authorities, that is the Indian government was also the second owner of the plant. UCC owned 51% of the plant, whereas the Indian Government-owned 49% of the plant. Even though the Indian Government-owned 49% of the plant and its revenues, the responsibility for all the techniques and the design totally lied with the UCC, because they had the expertise in this domain. (Polonsky, 2005).

After the leakage took place, investigations were held in the plant, which revealed that the two parties which were responsible for the contribution to this disaster and for the large magnitude of the disasters were none others but the owners of the plant, is Union Carbide Corporate and the Indian Government. To some extent, the Government of Madhya Pradesh was also held responsible but that was on a very limited scale. (Charter, 2001).

One of the aftermaths of the plant leakage was that 49% of owners of the corporation, that is, the Indian Government had closed the plant to outsiders, even to the second owner that is Union Carbide Corporation. This was strange and thus contributed further to the confusion. UCC has still not done any public release of their own personal research on the leakage that took place. (Madu, 2001).

The above-stated facts show that the relations between the Indian Government and UCC were very strong and closely knitted, as they both had their stakes in the well-being of the plant and thus they had to work with collaboration and coordination for the betterment of the plant. Even so that the design of the Bhopal plant of UCC was Indianized by the UCIL engineers so that the user is made of the products and materials which are natural and made in India only. This would save the expenses of both parties. Moreover, the Indian Government had even restricted the use of any kind of sophisticated technology and processes in the Indian plant. The UCC was famous for these sophisticated techniques only and they had to restrain from using them in their Indian plant. Moreover, India was deprived of many electronic parts and thus to save themselves from the time and energy of importing electronic parts when repair had to take place, the UCC engineers preferred to use pneumatic instruments. (Rainey, 2006).

The Indian Government immediately passed the Bhopal Gas Leak Disaster Act that gave the government the right to represent all the victims of this gas leakage, whether within India or outside it.

The Union Carbide Corporation offered a whopping US$ 350 million, which was the sum of the insurance. Moreover, the Indian Government demanded US$ 350 billion from the UCC, which is a very big sum of money (Crane, 2001). A civil and criminal liability case was filed against the Union Carbide Corporation India.

How They Overcame the Situation

To this date, UCC denies the allegations that were thrown on the company after the gas leakage. The company says in its defense that the gas leak was the result of sabotage and not because of any sort of non-activation of the safety systems. They claim that the safety systems were active and worked as well. Moreover, the company also says that it did all it could to relieve the people that had suffered from this gas leakage.

In 1989, after a period of 5 years, Union Carbide Corporation and the government did a settlement where UCC paid US$ 470 million, which was the insurance sum plus the interest that had accrued over it for the past 5 years. This was considered the full and final settlement of the case that was filed against UCC. The Indian Supreme Court even ordered the UCC to give finances so that a hospital could be set, all dedicated to the survivors and the victims of the Bhopal Gas Leak only. UCC abided by the Court and financed a hospital that contained 500 beds. The name of the hospital was Bhopal Memorial Hospital and Research Centre (BMHRC) and it was started in 1998. After the set up of this hospital only, the company UCC was able to sell its shares in the UCIL. This led to the sale of 50.9% of the interest that UCC had in April 1992. The sale of the shares of UCC led to a gain of $90 million, the whole of which was given to the making of the hospital. (Lascu, 2004).

On December 4^th, 1984, which was the immediate next day following the leak, the company also sent various kinds of aid to the medical centers in Bhopal. Moreover, they also made sure that medical experts from international places reached India as soon as possible to assist in these medical facilities that were ailing the victims.

UCC even donated around $ 2 million to the relief fund which was made by the then Indian Prime Minister on 11^th December 1984. The corporation even made efforts to establish an Employees Bhopal Relief Fund, which ultimately generated more than $5 million. This was very important in providing immediate relief to the suffering. (Depoe, 2006).

What They Are Doing for the Future

Union Carbide Corporation sold its Indian subsidiary to Eveready Industries India Limited. This Indian subsidiary was the very one that had operated the Bhopal plant and this sell-out took place in 1994. In 2001, UCC was purchased by The Dow Chemical Company for $10.3 billion, whether its equity or debt. Thus, the Dow Chemical Company was free of any liability to fulfill the expenses on behalf of Carbide that had resulted because of the Bhopal Gas Leakage. (Kolk, 2007).

The UCC has done many things for the future betterment of Bhopal. Firstly, it has collaborated with the Arizona State University and given it around $2.2 million so that it would use its expertise and set up a vocational-technical center in Bhopal. This center was constructed by the Arizona State authorities and was even opened but then the Government later closed it down, due to reasons unknown.

The Indian Red Cross also received a donation of $5 million from the Union Carbide Corporation. Apart from this, the most major contribution that the company has made to the future is the development of the Responsible Care system. This was done in coordination and collaboration with all the other chemical companies in the chemical industry. This was totally in response to the Bhopal crisis and this project was the initiative of the Union Carbide Corporation only. This project will ensure that such accidents do not take place in the future and the work through which this will be ensured will be very vast and will touch various disciplines. Firstly, community awareness will be increased so that people around the plant know any measures that they should take if they are residing in such an area. Secondly, the project entails the teaching of emergency preparedness which would teach the people of the vicinity that if a leakage takes place, what should be the first thing that they should do. And thirdly, it would set up process safety standards, which would be important to counteract any sort of leakage and harm that could be done to the employees of the plants as well as locales. (Green, 2001).

The above mentioned were the initiatives which were taken by the Union Carbide Corporation to ensure betterment and prevention for the future.

Conclusion

In conclusion, it can be said that it was the fault of both the Union Carbide Corporation as well as the Indian Government in the gas leakage which took place. The Union Carbide Corporation should not have let go of its sophisticated methods, processes, and machines. They should not have given to the decision of the Indian Government to Indianize the processes. This was even harming the corporate identity that UCC carried and then ultimately when the gas leakage did take place, further harm was brought to its name.

The Indian Government should also have had done some relief provided to the victims of the Bhopal disaster. All they did was put the blame on UCC and tried to collect funds from them. All the Government did was passed an Act through which it represented all the Bhopal disaster victims.

Such accidents can be very well curbed through the usage of environmental safety measures as well as awareness among the people, whether it is the public sector or the Government, or the corporate sector.

Works Cited

Banerjee, S. Corporate Social Responsibility: The Good, the Bad and the Ugly. Edward Elgar Publishing. (2007).

Cary, J. Green Marketing and EMS. RIRDC. (2004).

Charter, M. Sustainable Solutions: Developing Products and Services for the Future. Greenleaf Publishing. (2001).

Crane, A. Marketing, Morality and the Natural Environment. Routledge. (2001).

Depoe, S. The Environmental Communication Yearbook. Routledge. (2006).

Driesen, D. The Economic Dynamics of Environmental Law. The MIT Press. (2003).

Graham, J. International Marketing. Irwin McGraw Hill. (2002).

Green, K. Ahead of the Curve: Cases of Innovation in Environmental Management. Springer. (2001).

Matten, D. The A to Z of Corporate Social Responsibility. John Wiley and Sons. (2008).

Hancock, J. Investing in Corporate Social Responsibility. Kogan Page Publishers. (2004).

Kolk, A. Multinationals Political Activities on Climate Change Sage Journals Online. 2008. Web.

Krarup, S. Environment, Information and Consumer Behaviour. Edward Elgar Publishing. (2003).

Lascu, D. Marketing Frontiers: Concepts and Tools. Atomic Dog Pub. (2004).

Madu, C. Handbook of Environmentally Conscious Manufacturing. Springer. (2001).

Polonsky, J. Environmental Marketing: Strategies, Practice, Theory, and Research. Haworth Press (2005).

Rainey, D. Sustainable Business Development : Inventing the Future Through Strategy. Cambridge University Press. (2006).

Smith, T. The Myth of Green Marketing: Tending Our Goats at the Edge of Apocalypse. University of Toronto Press. (2001).

Click Here To Order Now!