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BHOPAL 2.0 (A Case Study of Liability of Global operation?)

Group 13

Argoud FlorianDebasish DasLefresne Antoine

Sevestre Benjamin

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2

* Data collected from a govt. published report

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December 2/3, 19843

How events on the night of December 2/3 unfolded, as

explained by Puna Bai:

... All of a sudden [my husband] started coughing and

in the meantime he heard screams coming from outside.

As soon as my husband opened the door all we could see

was smoke entering our house. Then everyone in my

family started coughing and my kids started complaining

of their eyes burning. Then we heard someone saying

that we should all run because some gas pipe has

exploded in the Union Carbide factory. We all started

running and eventually I got separated from my family. I

just remember not being able to locate my family and

then after that I had lost consciousness.

From Clouds of Injustice: Bhopal Disaster 20 years on,

Amnesty International

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At around 11:30 p.m. a worker smells a gas leak At 12:20 a.m. a supervisor notifies the plant superintendent

12:45 a.m. operations suspended

1 a.m., a plant operator turns on toxic gas alarm

1:20 a.m., police control room notified that large number of

people fleeing area around factory

Additional District Magistrate of Bhopal contacts plant manager

at his home, claims he is unaware of any leak and suggests

washing eyes with water

Contd..

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5

By morning, 500,000 people have been exposed

Hospitals are full

Dead bodies are piling up on roadsides

In Danbury, Connecticut, Union Carbide

officials learn of the disaster:

By 6:00 a.m. in the U.S., executives were

gathering as casualty estimates quickly

climbed, the matter was soon recognized as a

massive industrial disaster.

From Union Carbide: Disaster at Bhopal, UCC

By December 4, still no information has been

released about the toxicity of methyl

isocyanate, nor about its known antidotes

Contd..

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3800 people killed within days20,000 died slowly

120,000 still suffering (15-20 die each month)

1000 animals killed and 7000 injured

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What Caused the BhopalDisaster?

Water leaking into a tank of MIC

Worker error Market demand miscalculations

Plant design decisions

Carbides Cost-cutting strategies

Reductions in numbers of employees

Hiring of less skilled workers

Poor maintenance of safety equipment

Absence of emergency response plan

India's need for higher agricultural yields

The Green Revolution Inappropriate technology in a developing

country

Globalization

Due to operation

Due to Country

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* Data collected from a govt. published report

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The Bhopal Movement, 1989-1999 February 1989 GOI and Union Carbide strike a settlement. The

compensation amount is brought down to $470 million from $3.3 billion. UCCscriminal charges dropped reinstated in 1991.

April 1992 After ignoring four court summonses, Anderson declared a

fugitive from law. November 1994 Supreme Court of India allows Union Carbide to sell off its

encumbered assets to fund a hospital.

August 1999 Union Carbide announces forthcoming merger withDowChemical Company.

November 1999 Greenpeace reports on tests of soil, groundwater and wells in andaround the Union Carbide factory. 12 volatile organic chemicals and mercury inquantities up to six million times higher than expected are found.

9

* Data collected from a govt. published report

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The B

hopal Movement, 2000-2006 November 1999 Several victims of Bhopal disaster file class action suit against

Union Carbide and its former CEO, Warren Anderson, in federal court in New York,charging Carbide with violating internationalhuman rights law, environmental law, andinternational criminal law.

February 2001 Merger occurs.Dow inherits assets and liabilities of Union Carbide.

2001 International Coalition for Justice in Bhopal becomes International Campaignfor Justice in Bhopal (ICJB)

July 19, 2002 Launch of 28-dayhunger strike in Delhi by representatives of survivorsorganization and global relayhunger strike due to proposal to lower charges againstWarren Anderson.

August 27, 2002 The world tour of Exposure begins at the World Summit forSustainable Development (WSSD) in Johannesburg before moving on to Zurich,Switzerland, Venice and Kassel, Germany. It is also scheduled to be shown in

Argentina, Israel, China, Philippines, New Zealand, the Netherlands and the UnitedStates.

10

* Data collected from a govt. published report

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* Data collected from a govt. published report

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* Data collected from a govt. published report

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The Asymmetry

Country:- Need for industrialization

- Political pressure

- Economy improvement

- Relationship maintenance

Law:- Highly dis-integrated

- Time taking

- Difference in judgment

- Biasness for local group

People:

- Very low power- The sufferer are the poor

-A very small group

Company:

- Location of decision makers- The corporate policy

- Pressure from shareholders

Globalization

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Lose-Lose Situation for Government

Government

Citizen:

-Unable to compensate

the sufferer

- Failed to give justice

- Failed to remediate the

site completely

- Failed to install a strong

medication base

Economy growth:

-Slower

industrialization

- Bad terms with other

country

- Increasing supplydemand gap

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Stakeholder analysis

Stake holder Facts and motivations Status

UCC

(Union CarbideCorporation)

-Settlement of $470 million payed in 1989 to the victims. Deflect and then agree to follow

Investor - Bad for the reputation of the company Resist

Dow chemicalcompany

- Never owned or operated the Bhopal plant site- Never inherit any liabilities ofUnion Carbide-DOW bears no responsibility for a mess it did not make-Would affect DOWs profitability

Deny & resist

Indian state of MadhyaPradesh

-Assumed all responsibility for completing any furtherremediation

Agree to follow

India SupremeCourt

-Affirmed the $470 million settlement is just, equitableand reasonable.

Resist

Activistorganizations -want a justice

Agree to follow

population -Anger of the population

- IITs refuse to allow DOW to recruit on their campus

Agree to follow

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Risk Management for

Type of risk What is it?How canDOW mitigate

it?

Financial

-$22 million deposit requested byIndias Ministry ofChemicals &fertilizers to cover the cleanup pending

in the area.

- Try to find other solutions& do some intensive

diplomacy efforts.

Reputation-Create a bad image-All the population against DOW.

-Solve this BHOPAL issueas early as possible.- Clean up BHOPAL

Futuredevelopment

- Could affect DOWs management &future growth in India (India has ahuge market potential , so investmentcould be affected)

- Comforting this investors.

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Strategic options for and consequences

Either stay

Or leave

And clean up

And does notclean up

And clean up

And does notclean up

Population Financial ReputationFuture

developement

+++ -- ++ ++

--- + --- +

+++ --- ++ --

--- - -- --

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Managing the crisis : 6 steps

Avoiding the crisis Fail

Preparing to managethe crisis

Fail

Recognizing the crisis Fail

Containing the crisis Actual step

Resolving the crisis Opportunity

Profiting from thecrisis

Opportunity

They are not aware of thecrisisPolitic of blind eyes Bhopal incident closed bythe 1st settlement

They are wondering aboutthe issues and the

consequences

They still have anopportunity to solve thisproblem and developtheir activities in Indiawhich has a hugepotential

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Who is to compensate?

Government DOWUCC

-The real owner

of the site- Inherent

responsibility for

citizens

- Inadequate

decision of

supreme court

-Compensated as

ordered

- Did all that it can

do

- No longer exist

now

- Non- availability

of decision makers

-Current owner of

the company

- No liability during

acquisition

- Limitedly liable

- 12 bn : a small

amount for the

company

Law: 1.Polluter will pay2. Current owner has obligation 3. Non existence ofUNnorm for business 4. Final judgment already declared by the supreme court

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26 Years After: The Agenda Today

SIX DEMANDS

The setting up of a National Commission on Bhopalto oversee medical and social rehabilitation

Supply of safe water to communities currentlydrinking poisoned water

Speedy prosecution of the accused, including UnionCarbide Corporation and its former chairman

Environmental remediation

Curbing Dow and Carbide's business in India; and Memorializing the disaster by including it in school

and college curricula and building a BhopalMemorial in consultation with survivors.

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26 Years After: Reflections

The agenda has never really changed

The make-up and strategies of the movement are whathave changed

The movementhas a global reach yet the agenda is determined at the local

level Domestic strategy targeting state and Union governments and courts U.S. strategy targeting Dow in criminal lawsuits

International strategy connecting Bhopal to cases of toxic injustices resulting fromoperations of multinational corporations (Bhopal: The Real Face of Globalization)

Funding from international sources

Strong involvement and commitment at the local level

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THANK YOU