Zeev's Turnips Talk Politics (ZTTP)

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Bhopal, The World’s Worst Industrial Disaster
(Excerpted from Corporate Moral Responsibility: the Bhopal Incident by Richard T. de George)


On December 3, 1984, one of the worst industrial disasters of all time occurred in Bhopal, India. During the early hours of the morning a poisonous gas, methyl isocyanate (MIC), used in producing the pesticide, Sevin, leaked from a Union Carbide plant. The gas was borne by the wind and hovered for a while over the desperately poor, very overcrowded shanty town that had grown up around the plant. By the time the gas dissipated it had killed at least 2,000 people and injured over 200,000 others. The incident shocked the world. The Union Carbide plant was clearly causally responsible for the harm done. Under Indian law both a corporation and its officers can be held criminally liable. The Indian Government arrested the plant manager on charges of “culpable homicide through negligence.” When Warren Anderson, Chairman of the Board of Union Carbide arrived in India from the United States, he was charged with “negligence and criminal corporate liability” and “criminal conspiracy.”

The pesticide, Sevin, which Union Carbide made at Bhopal, was distributed in India. It is used on corn, soybeans, cotton, alfalfa, and other crops. Its use in India resulted in crop yields of about 10 percent higher than before the pesticide was used. This meant food for about 70,000,000 Indians who would otherwise have faced starvation or severe malnutrition. Union Carbide did not build the plant in Bhopal to increase profits. It could have supplied India with Sevin made in the United States more cheaply than it was able to produce it in India. In 1984, the Bhopal plant operated at a loss. It was underutilized, producing only one-third of its capacity. It was reducing costs through manpower reductions, and it was up for sale. The plant was entirely run by Indian managers who operated the company as a separate entity.

The case is a dramatic, interesting, and complicated one. In order to answer the question of what the responsibility of Union Carbide was in this incident, we should first get clear what sorts of responsibilities corporations have in general. People often speak of “corporate responsibility” and the “social” responsibility of corporations. They do not usually speak of corporate moral responsibility. There are actually four different types of responsibilities that corporations have. They are related and often overlap. But unless we take the time and trouble to distinguish them we, and corporations, cannot know how to weigh and meet them.

The four kinds of responsibility are corporate, moral, social, and legal. Purely corporate responsibilities stem from the goals of a corporation and the interests of those who own or work for it. Making a profit is a corporate demand of shareholders and the Board of Directors of any corporation. Thus, management has the corporate responsibility to make a profit. Unless it does so, the Board may replace the present managers with others who can do better. However, the responsibility to make a profit is not a moral, social, or legal responsibility. If, in a bad year, Union Carbide fails to make a profit, its shareholders may be unhappy. Failure to make a profit is not immoral, or illegal, in itself, but since Union Carbide, India, was running at a loss, and since it had been laying people off, those running the company understandably felt an obligation to cut other costs to the extent possible. One action lower management took was to shut down the expensive refrigeration equipment cooling the MIC storage tanks so they could use the freon elsewhere in the plant.

Moral responsibilities stem from the moral law. The obligation not to steal, not to cheat, not to lie are all examples. We must treat people as ends in themselves, not harm them, and see to it that the working conditions are safe. Such moral obligations remain, regardless of whether they are enacted into law, or whether they are socially mandated. Moral obligations, and the corresponding moral responsibilities, take precedence over corporate responsibilities. That is part of what it means to call them moral responsibilities. Shareholders have no right to ask that managers act immorally, and they have every right to expect that managers will act morally. If acting morally leads to a loss instead of a profit, shareholders have no right to claim that management should have acted immorally so as to meet their demands for a profit. Adequate protection of worker safety, and the safety of the public, are moral requirements. When companies do not adequately protect the safety of workers and the public, sometimes a social mandate develops in the form of newspaper campaigns or calls for tighter legislation. If firms react to such public demands, they can be said to accept a social responsibility.

In the Union Carbide case, if safety measures were not taken that should morally have been taken, then the desire to cut costs at the expense of safety cannot be justified. As a result of the incident, many people in the United States are discussing what laws to pass to more tightly control hazardous industries. Such laws may demand more than morality demands. In this case, the laws would form legal responsibility that goes beyond moral demands. This does not mean they would be immoral; simply that they would not be morally required. For example, not all OSHA regulations, or U.S. government mandated regulations, are morally required. The government may require more of companies than morality demands. These legal demands need not necessarily be adopted by foreign companies operating in countries other then the U.S. Morally mandatory demands, however, apply across national borders.

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References
Excerpted from Richard T. De George, "Corporate Moral Responsibility: The Bhopal incident", Archives of the Angelo State University Symposium on American Values, edited by Kenneth L. Stewart, Angelo State University, http://www.angelo.edu/events/university_symposium/