This document provides references for a journal article about analyzing the Bhopal disaster. It references 6 other sources that discuss various aspects of the Bhopal disaster, including its public health implications, Union Carbide's response, how it was a second tragedy for the city of Bhopal, and reflections on the disaster. It also references the journal article it is citing, which provides an updated analysis of problems with sensemaking during the Bhopal disaster.
ReferencesKunreuther, H., & Bowman, E. H. (1997). A dynamic mo.docx
1. References
Kunreuther, H., & Bowman, E. H. (1997). A dynamic model of
organizational decision making:
Chemco revisited six years after bhopal. Organization Science,
8(4), 404-413.
Levenstein, C., Ozonoff, D., Boden, L., Eisen, E., Freudenberg,
N., Greaves, I., & ... Tuminaro,
D. (1987). The public health implications of the bhopal disaster.
American Journal Of
Public Health, 77(2), 230-236.
Michael J., F. (1996). Union carbide's bhopal incident: A
retrospective. Journal of Risk &
Uncertainty, 12(2/3), 257-269.
Moore, M. (1994). The second disaster in bhopal. Business &
Society Review (00453609), (88),
26.
Trotter, R. C., Day, S. G., & Love, A. E. (1989). Bhopal, india
and union carbide: The second
tragedy. Journal of Business Ethics, 8(6), 439-454.
Weick, K. E. (2010). Reflections on enacted sensemaking in the
bhopal disaster. Journal of
Management Studies, 47(3), 537-550. doi:10.1111/j.1467-
6486.2010.00900.x
Reflections on Enacted Sensemaking in the
Bhopal Disasterjoms_900 537..550
Karl E. Weick
University of Michigan
2. abstract An updated analysis of the Bhopal disaster suggests
that problems of abduction,
awareness, reliability, and certainty were more serious than was
first thought. Expanded
analysis shows that the tight coupling between cognition and
action, normally associated with
enacted sensemaking, broke down at Bhopal. The breakdowns
included a low standard of
plausibility, minimal doubt, infrequent updating of both mental
models and current hunches,
and mindless action. The modest enactment that did occur
prolonged rather than shortened
the crisis.
INTRODUCTION
Looking back from the year 2002 to the year 1984, Lapierre and
Moro (2002) described
the Bhopal methyl isocyanate (MIC) plant this way:
An atmosphere of extreme depression prevailed for some time
over the metal struc-
tures of the factory. Ever since the departure of the men who
had given it its soul –
Woomer, Dutta, Pareek, Ballal – morale had plummeted,
discipline had lapsed, and
worst of all, the safety culture had gone out the window. It was
rare now for those
handling toxic substances to wear their helmets, goggles, masks,
boots, and gloves. It
was even rarer for anyone to go spontaneously in the middle of
the night to check the
welding on the pipework. Eventually, and insidiously, the most
dangerous of ideas had
crept in, namely that nothing serious could happen in a factory
4. new problems (e.g. mentioned on p. 309 of Weick, 1988,
hereinafter abbreviated as W88)
can be recast in terms of the more general notion that cognition
lies in the path of the
action (W88, p. 307). An even more inclusive frame is one
proposed by Hernes (2008)
when he describes ‘the mind grappling with complexity, then
becoming part of that
complexity. The mind establishes labels in order to understand
what is going on, but then
the labels become part of what is going on’ ( p. 149).
Traditionally, sensemaking and
categorization are seen as means to simplify rather than
complicate. But, there are also
times when, despite or because of that simplification, situations
become less comprehen-
sible, more interactively complex, and harder to control
(Perrow, 1984). Bhopal seemed
like just such a case and that’s why I studied it 20 years ago.
More recently, when the
editor asked me to restudy that analysis and update my
understanding of it,[1] the new
experience was much like that described by T. S. Eliot:
We shall not cease from exploration,
And the end of all our exploring,
Will be to arrive where we started,
And know the place for the first time.
(T. S. Eliot, ‘Little Gidding’, No. 4 of ‘Four Quartets’)
When I arrived back at the Bhopal article I didn’t so much
‘know the place’ for the first
time as I knew the knower and what guided his knowing for the
first time. And that
knowing was informed by explorations of sensemaking since
1988. When all of these
5. strands came together they triggered reflections such as those
that follow.
A CLOSER LOOK AT SENSEMAKING ON THE NIGHT OF
2–3 DECEMBER 1984
The control room at the MIC plant in Bhopal was something of
a nightmare for
sensemaking. The control board had 75 dials, many of which
were not working. This
meant that the operator had to go out and get information on
site or do without the
information (Lapierre and Moro, 2002, p. 277). ‘Broken gauges
made it hard for MIC
operators to understand what was happening. In particular, the
gauges that show
pressure, temperature, and level for the MIC storage tanks had
been malfunctioning for
more than a year’ (Hanna et al., 2005, p. 32). There were
corroded lines, malfunction-
ing valves, faulty indicators, and missing control instruments
(Chouhan, 2004, p. 21).
Operators were trained to implement a model that was later
modified without further
training (Chouhan, 2004, p. 14). In short, ‘anything could
happen in this plant’
(Chouhan, 2004, p. 6). If the plant condition is deteriorating,
then there should be a
greater likelihood that any apparent problem could be one of
Barry Turner’s ‘decoy
problems’ (Turner and Pigeon, 1997, p. 42) that draws attention
away from more
serious problems elsewhere.
One way to conceptualize this combination of missing and
misleading cues is to argue
7. being monitored by
a new shift supervisor who had recently been given additional
maintenance responsi-
bilities (Hanna et al., 2005, p. 26). Before this change of
responsibilities a maintenance
supervisor would have instructed and supervised the operator
who cleared the pipe.
However, this maintenance position had been eliminated from
Shifts 2 and 3 just a
week before the accident. These maintenance responsibilities
were added to those of
the production supervisor of Shift 2. This person had been an
MIC supervisor for only
one month, having been transferred to the MIC unit from the
battery production unit.
He was not yet completely familiar with maintenance and
operating procedures
(Hanna et al., 2005, p. 32). Furthermore, when he was briefed
by the production
supervisor of Shift 1, there was no mention of the need to insert
solid metal discs at
end of each pipe before flushing to prevent water backup
(Lapierre and Moro, 2002,
p. 273).
As the flushing operation unfolded on Shift 2, some of the water
was clearly backing
up somewhere because it was coming out of only 3 of the 4
open drain cocks. At 10:30
PM, close to the end of Shift 2, the operator who started the
flushing operation asked the
supervisor if he should leave the water running. The supervisor
said ‘yes, the night shift
will turn it off ’. A note about ongoing flushing was made in the
control room logbook.
The water was eventually turned off by the 3rd shift at 12:15
9. Moro, 2002, p. 280). One half hour later, however, people
conceded that Varma was
right because their eyes began to water and they too smelled the
distinctive MIC odour
that resembles boiled cabbage (Lapierre and Moro, 2002, p.
284).
During the tea break which started at 11:40 PM, operator Suman
Dey came into the
canteen from the control room and said, ‘The pressure needle
has shot up from 2 to 30
psig’. Hearing this, Supervisor Qureshi said, ‘Suman, you’re
getting in a sweat about
nothing! It is your dial that has gone mad’ and continued with
the tea break (Lapierre
and Moro, 2002, p. 286).
After the tea break, two operators walked out to Tank 610 in
order to compare the
pressure reading at the tank with the unusually high reading in
the control room. Both
gauges gave the same high readings. Furthermore, the operators
felt the throbbing that
occurs when a liquid is boiling and turning into a gas. ‘There’s
a lot of movement going
on in there’ (Lapierre and Moro, 2002, p. 291). The two spotted
a leak 8 yards off the
ground at a draincock where they also saw ‘a bubble of
brownish water surmounted by
a small cloud’ (Lapierre and Moro, 2002, p. 285). They reported
all of this back to the
shift supervisor.
When the supervisor heard this he ran out to the tank and saw
10. an erupting column of
gas. In what can only be described as a cosmology episode
(Weick, 1993), he murmured,
‘It’s not true’ (Lapierre and Moro, 2002, p. 292). What was ‘not
true’ was that ‘a
terrifying, uncontrollable, cataclysmic exothermic reaction of
methyl isocyanate’ had
exploded in an MIC production facility that had been shut down
6 weeks earlier. Since
there were no operations and only inert storage, it was
inconceivable that anything
significant could be happening (Lapierre and Moro, 2002, p.
293).
ENACTED SENSEMAKING: THE BASIC ARGUMENT (IN
RETROSPECT)
‘Crisis’ is the very first word in the Bhopal article: ‘Crises are
characterized by low
probability/high consequence events that threaten the most
fundamental goals of an
organization’ (W88, p. 305). I go on to say that ‘actions devoted
to sensemaking play
a central role in the genesis of crises and therefore need to be
understood if we are to
manage and prevent crises’ (W88, p. 308). Thus, my focus is on
‘the adequacy of the
sensemaking process directed at a crisis’ (W88, p. 305) and how
context affects that
adequacy. Maitlis (2005) importantly focuses on sensemaking
under non-crisis
conditions.
Organizational factors such as loose coupling, diverse goals,
and distributed cognition
can impede efforts to make credible sense of the unexpected.
12. dependent on the structures that have been developed before
chaos arrives. The event
can in some ways be considered as an abrupt and brutal audit: at
a moment’s notice,
everything that was left unprepared becomes a complex
problem, and every weakness
comes rushing to the forefront.’
Brutal audits are a harsh reminder that safe functioning is not
bankable (Schulman,
1993). For example, the MIC plant bought its own fire truck to
deal with emergency
situations. However, when a dangerous fire broke out and
audited the plant’s emergency
response, the truck was up on jacks and the rear wheels had
been removed (Chouhan,
2004, p. 17). Just because operators held the operations together
yesterday does not
mean that they will be able to hold them together today.
Coordination, communication,
and trust need to be rebuilt every day.
The basic argument in the Bhopal paper was framed at the
micro-level of analysis
where individual agency, social psychology, and dyadic
interaction constrain the argu-
ment. For example, although I mention crews and teams in the
preceding paragraph I
do not always walk that talk. On page 306 (W88) I start a
sentence this way: ‘Imagine that
the control room operator faces a gas leak’ (emphasis added).
The sentence does not say
‘imagine that the operating “team” faces a leak’. There is an
ambivalent stance in some
of my work regarding the costs and benefits of interpersonal
sensemaking. That ambiva-
13. lence is summarized in one of Robert Irwin’s favourite maxims:
‘seeing is forgetting the
name of the thing seen’ (Weschler, 1982, p. 180). The naming
that transforms originary
seeing into consensual seeing is done to introduce order into
social life. For example, the
eye irritation and faint odour experienced at 11:30 PM was
labelled as Flytox odour and
consensually dismissed using a category that was familiar to
everyone (i.e. common spray
for mosquito control used in plant). That category accomplished
consensual order but
came to mean something independent of its origins. It is this
potential for meanings to
become divorced from their origins that predisposes to failures
of inference and escala-
tion of crises.
Baron and Misovich (1999) argue that sensemaking ‘starts’ with
knowledge by
acquaintance that is acquired through active exploration. Active
exploration involves
bottoms-up, stimulus-driven, on-line cognitive processing
through action. Labelling
those perceptions plays a secondary role. But if people want to
share their cognitive
structures, those structures have to take on a particular form. As
social complexity
increases, people shift from perceptually-based knowing to
categorically-based knowing
in the interest of coordination (see also Maitlis and Sonenshein,
2010). Now they develop
knowledge by description rather than knowledge by
acquaintance, their cognitive pro-
cessing becomes schema-driven (i.e. concept-driven) rather than
stimulus-driven, and
15. disaster but deflects much more of it. The selection of the pipe
flushing as a reflection of
the Bhopal disaster, and its description using the vocabulary of
enacted sensemaking, is
an attempt to tie a representative time period in the disaster to
six concepts: self-fulfilling
prophecy, social information processing, retrospective
sensemaking, commitment,
capacity, and expectations (W88, p. 307).
A similar argument about language that ties data to concepts is
found in Kurt Lewin’s
style of theorizing. ‘Any description should be two-faced,
looking simultaneously to the
world of data and to that of concepts’ (Cartwright, 1959, p. 13).
Adequate description
represents. But, depending on how well that representation links
to a system of concepts,
the description also explains. Three items are involved:
conceptual system, description of
observation, data. The relationship among these three is often
imbalanced in one of two
directions. ‘Mere description’ can occur when the language
refers mainly to data but not
to a system of concepts. Mere abstractions have the reverse
problem, too much abstrac-
tion, too little data.
The title of the 1988 paper, ‘Enacted sensemaking in crisis
situations’, suggests that
it is both a crisis paper and a sensemaking paper. As a crisis
becomes more severe,
sensemaking intensifies, which normally lessens the crisis
severity, which then reduces
the sensemaking. Phrased in that form, crisis sensemaking at
Bhopal is not all that
17. of the disorder, confusion,
and insecurity which are outstanding traits of our social life’
(McDermott, 1981, p. 397).
Notwithstanding the relevance of Dewey’s comment for the
current economic context in
2009, this observation also has relevance for the topics of
enacted sensemaking, crises,
and Bhopal. To think about disorder, confusion, and insecurity
is to engage in the early
stages of sensemaking. Trouble is an occasion for thinking,
whether it be thinking by a
control room operator or by scholars analysing how operators
cope with trouble. The
troubled thinker ‘observes, discriminates, generalizes,
classifies, looks for causes, traces
analogies and makes hypotheses’ ( James, 1996, p. 15). Thus, a
vocabulary of sensemak-
ing might start with these basics:
Disorder + confusion + insecurity = trouble.
Trouble + thinking = sensemaking.
Probing for plausible stories that explain trouble = enacted
sensemaking.
CRISIS SENSEMAKING IS AHISTORICAL
One of the objections to the use of crises as representative
anecdotes of sensemaking
(e.g. Grenada invasion, Tenerife airport disaster, Mann Gulch
wildfire blowup, Moira
mine disaster, Bristol Royal Infirmary, Columbia space shuttle)
is that when one
‘focuses on limited settings in timespace, he can concentrate his
analysis on relatively
few factors that he can observe have a bearing on organization
in that limited time
18. space’ (Hernes, 2008, p. 124). In other words, if you watch a
compact, specific, short
event then you can grasp most of it with relatively few factors.
Under the assumptions
that most organizational events are overdetermined and
complex, organizational sen-
semaking during crises is not representative. This issue is
important and investigators
need to make their peace with it. One way to achieve that peace
is by Kurt Lewin’s
concept of ‘contemporaneous causation’.
The concept of ‘contemporaneous causation’ (also known as
ahistorical or systematic
causation) states that ‘neither past nor future psychological
facts but only the present
situation can influence present events. This thesis is a direct
consequence of the principle
that only what exists concretely can have effects. Since neither
the past nor the future
exists at the present moment it cannot have effects at the
present’ (Lewin, 1936, pp.
34–6). Dorwin Cartwright’s (1959, pp. 10–21) summary of
Lewin’s thinking sheds
additional light on the concept:
An individual’s behavior is oriented to both the future and the
past as they exist for him
at any given time. He remembers, for example, that he failed at
some undertaking in the
past and expects to succeed when he tries the next time. The
principle of contempo-
raneity asserts that both the ‘expectation’ and the ‘memory’
exist at the moment they
exert their influence on behavior and that the exertion of such
an influence demon-
20. is developed and applied in order to see whether it is useful
(Reich, 2008). Useful here
means whether it preserves a representative abridgement of the
event and connects that
representative selection to explanatory concepts.
In the Bhopal paper enacted sensemaking is treated as a link
between the events in the
disaster and the concepts of self-fulfilling prophecies,
retrospective sensemaking, com-
mitment, and social information processing (W88, p. 306). What
is noteworthy is that
retrospective sensemaking is just one part of the conceptual
system of enactment in 1988,
whereas in 1995 (Weick, 1995) it seems more central in the
descriptive language. In
1995, enactment is now just one of seven properties of
sensemaking, the other six being
social context, identity, retrospect, reliance on cues, ongoing
experience, and updated
plausibility (summarized by the acronym SIR COPE). These
seven now serve a different
purpose, namely, they represent the situation that is present at
moments of sensemaking.
When operators at Bhopal flush corroded pipes, spot a leak,
experience eye irritation,
talk to their supervisor, tap gauges, and flee for their lives, their
realities at those moments
of sensemaking are mixtures of SIR COPE. That language
converts the data into a
description that links those data back to conceptual systems that
are built around belief
and action (Weick, 1995, pp. 133–68). A description that uses
the language of SIR
COPE allows the analyst to retain part of the psychological
reality of working at 11:30
22. effective depending on the
heedfulness with which people envisioned their work as
contributions to a system and
subordinated their interests to those of the system they
envisioned. The Bhopal analysis,
which is focused on such things as triggering events and missed
signals, seems to be a
clear instance of a struggle that was lost. However, a problem in
both analyses is that
alertness is sometimes treated as synonymous with awareness.
That conceptual con-
founding blurs two different contributors to sensemaking and
the crisis.
‘Alertness’ is an effort to notice something that is out of place,
unusual, or unexpected.
‘Awareness’ is an effort to generate conjectures about what that
anomaly might mean. In
the terminology of Baron and Misovich alertness is stimulus-
driven, awareness is
schema-driven. Alertness and awareness are instances of the
more general categories of
perception and conception and the relations between them (
James, 1996, ch. 4–6). One
way to depict this more general relationship is by means of
Kant’s observation that
‘Perception without conception is blind; conception without
perception is empty’
(Blumer, 1969, p. 168). Crisis sensemaking can make the crisis
worse either when
significant cues go unnoticed because there are no concepts to
select them ( problem of
blindness) or when the concepts that people deploy have no
connection with particulars
( problem of emptiness). Empty concepts are a problem when
designer logic steeped in
23. abstractions dominates (Perin, 2005). Blind perceptions are a
problem when logics of
practice steeped in details dominate. Crises worsen because of
senseless details or mean-
ingless conjectures. While operators at Bhopal lost alertness,
they did so because their
repertoire of responses, including analytic concepts, was too
small, too tentative, and too
ungrounded to select and explain their perceptions (e.g. nothing
happens in a plant that
is shut down). The problem was twofold. Inadequate concepts
based on limited training
and experience produced meaningless conjectures. And
undifferentiated perception
without any figureground structure to suggest significance was
blind and essentially no
perception at all.
If we re-examine alertness at Bhopal from the standpoint of
more recent work, we see
an expanded set of phenomena. For example, a newer
interpretation of crisis sensemak-
ing at Bhopal would highlight the morale, emotional tone, and
energy associated with
plant operations (e.g. Barsade and Gibson, 2007; Mills, 2003;
Maitlis and Sonenshein,
2010). My discussion of Bhopal in 1988 was basically cool and
cognitive. The only affect
mentioned was that of the shift superintendent who arrived at
the scene on his bike and
‘panic’d’ (W88, p. 312). This imbalance between cognition and
affect in my explanation
gives too little weight to an ongoing mood of pessimism. ‘The
plant didn’t seem to have
a future and a lot of skilled people became depressed and left as
a result’ (W88, p. 313).
25. Nevertheless, operators have some sense of what is expected in
a flawed system. Depar-
tures from those expectations need to be given prompt, close
attention, not put on hold
until after a tea break. Reluctance to simplify is absent because
of cost-cutting, loss of
experience, and simplified instructions to newer crew members.
Sensitivity to operations is at
the centre of the Bhopal story as illustrated by the pipe flushing
operation. Sensitivity ‘to
detect and correct anomalies’ ( p. 313) is achieved when more
people are in constant
touch with the system. Commitment to resilience is somewhat of
a puzzle at Bhopal. It is
amazing that this system continued to function at all given its
environment of dust,
humidity, unpredictable fluctuations in voltage, and inoperative
gauges. Continued
functioning is a testament that operators were able to make do
and recover from modest
setbacks. But these efforts at recovery represent less of a
‘commitment’ than a necessity.
Commitment to resilience would be more evident had there been
more attention to
learning, training, and varied experience, all of which increase
resilience. Finally, deference
to expertise is low at Bhopal and is replaced by deference to
authority (e.g. see Ayres and
Rohatgi, 1987, p. 30). At the lower levels of the hierarchy,
where people know the
technology and where their eyes begin to burn from the
escaping gas, there is not much
latitude to take action. And no one higher up pays much
attention to their symptoms and
observations. This fills out the model mentioned earlier wherein
practices of organizing
26. affect the credibility of sensemaking which affects containment
of and recovery from the
unexpected.
To update the Bhopal article is to shift away from a singular
focus on alertness towards
a broader focus on awareness, concepts, and prototypes as
crucial inputs for sensemak-
ing. Kathleen Sutcliffe and I, following the work of Ellen
Langer (1989), highlighted
awareness in our description of mindfulness as ‘a rich
awareness of discriminatory detail.
By that we mean that when people act, they are aware of
context, of ways in which details
differ (in other words they discriminate among details), and of
deviations from their
expectations’ (Weick and Sutcliffe, 2007, p. 32). Deviations
from expectations are issues
of alertness. The sense people are able to make of these
deviations depends on their
awareness of context, actions, and perceived differences among
details.
COGNITION AND ACTION ARE INSEPARABLE
If trouble compels one to think as well as act, then the phrase
‘enacted sensemaking’
preserves that interplay. This interplay is evident in two
assumptions associated with
American pragmatism:
(1) ‘The world people inhabit is one they had a hand in making.
And it, in turn shapes
their behavior. They then remake it.’
(2) ‘Meaning and consciousness emerge from behavior. An
28. action is preserved if we say that people think while acting (e.g.
W88, p. 307). Hernes
(2008) puts it this way: ‘We notice things as we act, and the
sense made of what was
noticed forms a basis for what is done next’ ( p. 131).
When action is inherent in sensemaking, the context of that
action can shape thinking.
Any context that makes an action public, irrevocable, and
volitional also makes that
action hard to undo and shapes thinking towards interpretations
that justify the act (e.g.
Weick and Sutcliffe, 2003). Diane Vaughan (1999) makes a
related point when she says,
‘individuals make the problematic nonproblematic by
formulating a definition of the
situation that makes sense of it in cultural terms, so that in their
view their action is
acceptable and non-deviant prior to an act’ ( pp. 280–1). For
example, the sense made of
actions at Bhopal (e.g. we keep things secret because we do not
want to alarm people)
justifies past actions and guides future actions (e.g. the siren
that warned citizens of a gas
escape was turned off after 5 minutes even though gas continued
to escape; W88, pp.
310–11).
The general point is that whenever activity is salient, it may
become frozen by
attributions and justifications, and therefore become a
constraint on sensemaking. To
understand enacted sensemaking, an investigator needs to assess
at least two things: (1)
the malleability of the setting (how readily can actions change
it); and (2) the extent to
30. rhetoric, evolution, and sensemaking, to understand the often
senseless world of Dutch
armed forces assigned to peacekeeping operations in the former
Yugoslavia. These units
faced the problem of not understanding the conflicts well
beforehand (no one did) and
the problem of not knowing what they would encounter on
patrols (e.g. shootings, mines,
aggressive local population, road blocks, witnessed atrocities,
deplorable living condi-
tions, everyday accidents, people who did not seem to be in
need at all). Two assumptions
lie at the core of Kramer’s analysis:
(1) ‘If the environment is dynamically complex it is impossible
to know and under-
stand everything in advance, therefore you need to be able to
doubt your existing
insights.’ ( p. 17)
(2) ‘If the ability to doubt is of crucial importance for
organizations dealing with
dynamic complexity, organizations need to organize their
ability to doubt . . . (A)
spirit of contradiction should be organized.’ ( pp. 17–18)
To organize doubt is to engage in meaningful argumentation.
Matters of controversy
are deliberately sought and discussed (Kramer, 2007, p. 134).
Kramer shows that doubt
becomes organized when sense-discrediting occurs alongside
sensemaking. Discrediting is
tough because the real problem in most systems is that they are
not open to the unknown.
‘Real openness implies that a system is open to information that
it has never thought of
31. before. For this reason, action is an important informer for
systems . . . If presented with
the unknown, systems can be confronted with circumstances in
which they need to act
before they think. New experiences are therefore the source for
discrediting’ (Kramer,
2007, pp. 74–5).
A final issue that has become clearer since the Bhopal paper is
that enactments are
seldom as clear as I presume. John Law (2004), for example,
argues that the best we can
do is ‘situated enactments and partial connections’ ( p. 155). In
other words, enactments
tend to be vague and indefinite ( p. 14). My presumption has
been that thinking and
sensemaking are muddled until action resolves the muddle.
That’s too simple. If enact-
ment is hesitant, fumbling, or transient, that can misdirect sense
or render everything
inexplicable (Goffman, 1974, p. 30).
CONCLUSION
If we wanted a single image to describe the complexities and
uncertainties at Bhopal, we
could borrow from Pat Lagadec and call Bhopal either a
kaleidoscope or a situation of
‘un-ness’. The situation at Bhopal resembles a kaleidoscope in
the sense that ‘if you touch
the smallest element in it, the entire structure is altered.
Consequently, the crisis resists
attempts to simplify it. It requires strategic judgment more than
predefined tactical
responses’ (Lagadec, 1993, p. xxvii). The situation at Bhopal is
also one of ‘un-ness’, a
33. for the meaning of the
smell of boiled cabbage, plausibly label it as the odour of
mosquito spray, and move on
to drink tea. This represents sensemaking with a low bar for
plausibility put in place by
crude concepts, coarse-grained perception, and experience
within a deteriorating plant.
A deteriorating production facility blunts sensemaking tools and
encourages simple
explanations which mask accumulating problems. Bhopal
teaches us that each step in
this chain can raise the low probability of a high consequence
event to tragic levels.
NOTE
[1] These comments are not intended as a review of the
literatures on sensemaking, crises, or Bhopal.
Instead, they are personal reflections on an earlier piece of
work.
REFERENCES
Ayres, R. U. and Rohatgi, P. K. (1987). ‘Bhopal: lessons for
technological decision-makers’. Technology in
Society, 9, 19–45.
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Bhopal, India and Union Carbide:
The Second Tragedy
R. Clayton Trotter
Stisan G. Day
Amy E. Love
ABSTRACT. The paper examines the legal, ethical, and
puhlic policy issues involved in the Union Carbide gas leak
in India which caused the deaths of over 3000 people and
injury to thousands of people. The paper hegins with a
historical petspective on the operating environment in
Bhopal, the events surrounding the accident, then discusses
an international situation audit examining internal strengths
Clayton Trotter is a graduate of the University of Texas School
of
Law and College of Business Administration. Currently, he
teaches in both the College of Business and the School of Law
at
Texas Tech University; and was formerly Associate Professor of
Law at the Cobum School of Law in Virginia Beach, Virginia.
He has taught courses in Real Estate Law, Corporations, Inter-
national Business Transactions, and Business Law.
40. Mr. Trotter has been attorney of record in a number of contested
civil
cases and has appeared in the Fifth and Seventh United States
Circuit Court of Appeals on such cases. He is licensed in Texas,
Florida and the Supreme Court of the United States.
He has authored a number of articles on business related legal
matters.
Susan G. Day is a Texas Real Estate Broker, Escrow Agent, and
Insurance Agent. She graduated from Texas Tech University
with a major in Business Administration with an emphasis on
Management.. She currently attends Texas Tech University
pursuing a graduate degree in Education.
Susan is Past President of the Toastmasters International group
at
Texas Tech University giving speeches and lectures on real
estate
and law. In addition, Susan is a member of the following as-
sociations at Texas Tech University: Society for Advancement
of
Management, Marketing Association, Tech Management Asso-
ciation, Lubbock Legal Secretaries Association, National Asso-
ciation for Female Executives and the Ex-Students Association.
Amy E. Love graduated Magna Cum Laude in December, 1988
with a Bachelor of Business Administration degree in Manage-
ment from Texas Tech University. Her long range goals include
graduate school where she would like to emphasize finance.
Amy
is a member of the Society for Advancement of Management,
Golden Key National Honor Society, Gamma Sigma Honor
Society, and Phi Beta Kappa Honor Society.
41. and weaknesses, and external opportunities and threats faced
by Union Carbide at the time of the accident There is a
discussion of management of the various interests involved
in intetnadonal public relations and ethical issues. A review
of the financial ratio analysis of the company prior and
subsequent to the accident follows, then an examination of
the second tragedy of Bhopal — the tragic failure of the
international legal system to adequately and timely com-
pensate victims of the accident
The paper concludes with recommendations towards
public policy, as well as a call for congressional action
regarding international safety of U.S. based multinational
operations.
Introduction — The worst industrial
accident and the largest civil lawsuit in
history
In the late 1920s, Union Carbide Corporation began
operations in India. At the time, India was still a
vassal state of the British Empire, Mahatma Gandhi
was pushing for Indian statehood, and Winston
Churchill's view on India's independence was quoted
as: "I am quite satisfied with my views on India, and I
don't want them disturbed by any bloody Indians".'
Many people today might not want their views on
Bhopal disturbed, and with all due respect to Mr.
Churchill, in light of the fact that a number of
articles have been written on the matter,^ one might
say that there is no need to re-examine four years
after the occurrence of the deaths of over 3000
people and the injury to hundreds of thousands, the
Union Carbide methyl isocyanate gas leak in Bhopal,
India. When one begins discussing the disaster, and
international legal relationships of a tragedy of this
43. In 1969, Union Carbide India, Ltd. (UCEL) and
Union Carbide Corporation agreed with the govern-
ment of India to build a pesticide manufacturing
plant in Bhopal.' Originally, this plant was designed
to combine and package intermediate chemicals
thereby producing the end pesticide, Sevin.̂ The
constituents of the mildly toxic pesticide Sevin,
alpha-naphthol and methyl isocyanate (MIC) were
to be combined, diluted with non-toxic powder, and
packaged at the Bhopal plant.* In India, where
pesticides are viewed as a miraclp,' Union Carbide
' demonstrated both sophisticated technology and
export potential to the government of India, there-
fore, the Union Carbide Corporation was permitted
to own 50.9 percent of Union Carbide India, Ltd.
which owned the Bhopal plant, and the remaining
49.1 percent was distributed among Indian share-
holders.'" Fifty and nine-tenths percent of its stock is
owned by Union Carbide Corporation, 22% is
owned or controlled by the govemtnent of India,
and the balance is held by approximately 23 500
Indian citizens." Union Carbide Corporation is a
corporation incorporated under the laws of the State
ofNewYork.'^
To maintain its operating license in India, Union
Carbide was forced to begin building a second plant
in Bhopal during 1977. Before construction was
finalized in 1979, substantial problems appeared,
resulting in construction modifiations during 1978.
By 1980, the plant was considered operational.'^
Though designed to produce 5 000 tons of Sevin per
year, die plant never operated at capacity.'*
44. In 1982, ten safety deficiencies were discovered.
Through 1984, various stages of shutdown and
partial operation were evidenced; yet two of the
deficiencies remained uncorrected. The two remain-
ing faulty safety devices had gone unrepaired for a
two year period of time and apparently management
did not consider the problem to be of primary con-
cern. The refrigeration unit designed to cool MIC
continued to malfunction. However, in June 1984,
the headquarters of Union Carbide was told that
most of the equipment and safety deficiencies un-
covered at Bhopal in 1982 had been "rectified".'^ On
the date of the accident, a pressure gauge was
missing on Tank 610, evidently making it possible
for water to enter the tank, mix exothermically,'*
and form a toxic gas.
Early in 1984, Warren Anderson, the Chair of the
Board'' of Union Carbide Corporation, and top
management endorsed a plan to sell the plant due to
its underutilization.'* In October, 1984, Carbide
executives announced its expanding investments in
other lines of business — petrochemicals, industrial
gases, metal and carbon products, consumer pro-
ducts, and technological services and specialty pro-
ducts." Just as a new year was starting widi two
strong quarters for Union Carbide, the Bhopal dis-
aster occurred.^"
On the evening of December 3, 1984, the plant
was operating far below capacity and was partially
shutdown for maintenance.^' An operator noticed
that the pressure in one of the "MIC storage tanks
read ten pounds per square inch — four times nor-
mal".̂ ^ The operator was unconcerned as he assumed
the tank had been "pressurized with nitrogen" by
45. personnel on the "previous shift" and around mid-
night several workers noticed their eyes had begun
to "water and sting", a signal indicating a chemical
leaL^^ The stnall leak was soon found; however,
there was little concern as minor leaks at this plant
were common, and "it was time for tea and the crew
retired to the company canteen, resolving to correct
the problem afterwards".̂ *
Bhopal, India and Union Carbide 441
Finally, the pressure in the MIC tank forced a
relief valve open and poisonous gas could be seen
escaping one hundred twenty feet into the air.̂ ^
Apparently because the accident occurred after dusk
and during winter, and because the chemical com-
ponents of MIC were heavier than air, the gas drifted
down to the neighboring villages. Gas leaked for
forty minutes from an underground tank and
covered a twenty-five square mile area.̂ *
As the gas spread, weak and elderly people died
within moments. Incoming trains were diverted,
halting the most effective means of escape. The
affluent fled in their cars.^' Approximately half of
the 1 000 000 inhabitants of Bhopal fled on foot,̂ ^
victims of the worst industrial accident in history.
The Mayor of Bhopal was quoted as saying:
I can say that I have seen chemical warfare. Everything so
quiet. Goats, cats, whole families — father, mother,
childten — all lying silent and still. And every structure
totally intact. I hope never again to see it.̂ *
46. Indira Gandhi's assassination occurred in October
1984, and the month-old government headed by her
son, Rajiv Gandhi was faced with a devastating
crisis.̂ " Decisions were made which would affect the
victims of the Bhopal gas leak who received per-
manent injuries such as burned lungs, charred eyes,
or damaged nervous systems. Doctors predicted the
population would experience "sterility, kidney and
liver infections, tuberculosis, vision problems and
brain damage", in the short run, while the potential
for birth defects and other long-term effects were
yet to be known.-" While subject to dispute, there
were reports that stillbirths were beginning to occur
and fetuses were being aborted.̂ ^
Three days after the accident, the city began to
move toward stability. The plant in Bhopal was
closed and locked," and remains closed at this time.
The Indian Minister of Chemical and Fertilizers
accused Union Carbide Corporation of failing to
provide the safety standards of United States plants
to the Indian plant^* Nearly everythit^ that could
have gone wrong did.-'' To date, at least 2 998 people
have been killed as a result of the gas, and over
300 000 have received injuries.̂ *
By comparison, had this accident occurred in San
Antonio, Texas, a city of approximately one million
people, the dead would be roughly equal to the
population of a large high school, and approximately
one-third of the city's inhabitants would have some
debilitating injury.
The Indian government cancelled the operating
license issued to the Bhopal plant immediately after
47. the accident.^' The accident gives rise to a new
definition of the potential risks of operations of
multinational companies in foreign countries. Their
operations "will never be the same" and their costs of
overseas operations could increase due to accidents
of this magnitude.'*
"The Attorney General of India . . . vowed to sue
Union Carbide in an American cour t . . . " ' ' because
Indian courts are a less viable alternative to the
plaintiffs. Indian laws require the plaintiff to pay a
very high filing fee to begin the legal process,*" and
to date, there has yet to be a -wrongfUl death judg-
ment in India of more than $40000.*' Because
punitive damages apparently do not exist in Indian
lawsuits. Union Carbide would clearly benefit from
a trial held in an Indian court even though economic
damages could be the same.*^ Wrongful death judg-
ments often amount to a few rupees.*' Accordir^ to
the Minister of India, two years after the accident
the Indian government apparently made temporary
benefit payments for a "measly" $766 per farnily of
those who died in the disaster, and $115 per family
of those injured.**
In an attempt to protect its interest, the Govern-
ment of India found it necessary to secure the best
representation they could find*^ by a firm specializ-
ing in product liability cases** and mass disaster
cases.*̂ "Culpable homicide not amounting to mur-
der, causing death by negligence, mischief, and
mischief by kilUng or maiming cattle, negligent
conduct with respect to poisonous substances, and
criminal conspiracy" charges were filed against ex-
ecutives of the Union Carbide Corporation.** Union
Carbide was faced with lawsuits, accordii^ to some
48. estimates, in amounts exceeding $35 billion dollars,
far in excess of its corporate net wortL*'
International situation audit
During the examination of Union Carbide's internal
and external environments, the following internal
strengths and weaknesses, and external opportun-
ities and threats seem to be strategically important in
the analysis and interpretation of die company's
442 Clayton Trotter et al.
international legal predicament with respect to the
accident.
Internal strengths
Two of Union Carbide's strengths relevant to this
tragedy include its admirable safety record in the
pesticides industry,^" and its tremendous financial
stability.^'
Union Carbide's credibility is derived fi-om its
reputation for safety concerns. Third world coun-
tries account for approximately one-half of the
known poisoning cases, and three-fourths of the
known deaths.*^ According to company publications.
Union Carbide Corporation is well kno-wn for its
adherence to safety standards'-^ on a worldwide level
and maintenance of an accident record substantially
below the industry average. In 1983, the chemical
industry as a whole had a safety record which
showed 5.2 reported occupational injuries per 100
49. full-time workers. The reported average for all
manufacturing firms, in general, was 9.7 reported
occupational injuries per 100 workers.̂ *
At the time of the accident. Union Carbide Cor-
poration was the third largest chemical producer in
the United States, following DuPont and Dow
Chemical.
The Bhopal plant represented less than three
percent (3%) of Union Carbide's world-wide profit,
and less than two percent (2%) of the corporation's
net income. The plant was not critically important
to Union Carbide's overall operations and any loss of
income from the plant would not affect the com-
pany's financial status.'^ At the time of the accident.
Union Carbide's financial strength was $10.5 billion
in assets,'* and approximately 98000 people were
employed by the firm.^' This figure has since been
reduced as Union Carbide spent $4.3 billion on a
special dividend and stock buy-backs, and has sold
$3.5 billion worth of assets in an attempt to prevent a
hostile takeover bid from GAF Corporation.'* The
profit making divisions of Eveready Batteries, Glad
Bags and Prestone Anti-freeze were sold, losing
annual revenues of $6.9 billion, one-third of its 1981
peak. Debt is now twice its former level, and stands
at 63% of capital. The number of employees has been
reduced to 43 000."
Internal weakness
Union Carbide's apparent weakness was poor man-
agement of the Bhopal plant, which may have arisen
from a strategic management decision to sell the
plant.
50. In an effort to decrease expenses, management
allowed the plant and equipment to deteriorate,
allowing attrition among qualified employees and
lowered entrance standards resulting in a lack of
qualified applicants,*" which seems to have led to the
greater potential for accidents.
In what appears to be efforts to forestall economic
failure, extensive cost-cutting efforts were imple-
mented by management,*' causing a significant de-
cline in standards. Most important among these
efforts was the substantial reduction in qualified
workers. The original twelve operators assigned per
shift was decreased to six and the work force
dropped from a high of 1 500 to 950 people,*^ yet
still remaining a major provider of job.*^ American
senior managers and junior executives, licensed to
remain in India otJy for fixed periods of time,
perhaps resenting the company's falling standards,
left the plant prior to 1982.** Job entrance require-
ments were lowered and several training programs
were eliminated.*' Jobs which previously required
college degrees were reduced in classification and
filled by high school graduates with little or no
previous work-related experience.**
A lack of qualified personnel and poor tnanage-
ment may have led to the potential for employee
sabotage. Management of the Bhopal plant claims an
employee may have deliberately tried to "spoil a
batch of the chemical" inside Tank 610.*^ The
Trainii^ Manual for Operators clearly emphasizes:
" 'KEEP WATER AWAY FROM M I C "*» Union
Carbide further claims "a water connection to the
tank was found and concealed by operators and
51. supervisors on the third shift".*' A sketch of the tank
layout on the back of the supervisor's daily notes
suggests the possibility of sabotage.̂ " Union Carbide
contends log data and a pressure gauge were missing
following die accident. Management claims water
entered Tank 610, -widi at least "21 tons of MIC"
inside, reacted exothermically, and "generated carbon
dioxide", which increased pressure in the tank caus-
ing the gas to escape. '̂ Union Carbide concludes that
several employees attempted to cover-up significant
Bhopal, India and Union Carbide 443
knowledge of the accident.̂ ^ Evidently, those cost
cutting efforts by Union Carbide contributed to
causing unsafe conditions or created the potential for
sabotage.
External opportunities
The pertinent opportunities for Union Carbide
which attracted the company to India in the first
place, and which still exist today include: the need
for pesticides in India,'^ the transportation system
located near the plant,'* the host country's demand
for their goods and services, and the attractive labor
market available in the Third World country.
The enormous Indian population creates a great
demand for Union Carbide's pesticides, and has
caused India's pesticide industry to become the
second largest in Asia, following Japan.'' Previous
estimations state that pesticides save 10% of the
annual food crop in India, which equates to eradi-
52. cating hunger for over 70 million people.'* Three-
quarters of the Indian population depend solely on
agriculture for their livelihood," thus many Indian
farmers are dependent upon pesticides'* such an
Sevin produced by Union Carbide. This continuing
demand for Union Carbide's products gives some
leverage to the company in handling the interna-
tional legal predicament. However, that leverage
does not solve the problem, but gives an incentive to
seeking an equitable solution.
Union Carbide's greatest opportunity in prevent-
ii^ the disaster from destroying the company was
the fact that the tragedy occurred in India, a Third
World country," had the accident occurred in the
United States in a city of comparable size (i.e. San
Antonio, Texas) the company would probably have
been destroyed by litigation. Exemplary and punitive
damages are rarely allowed in Indian lawsuits,'"
therefore. Union Carbide could benefit greatly from
legal proceedings held by a court in India, rather
than by a court in the United States. Nevertheless,
unless settled, the Bhopal litigation will consume
resources for many years to come before final resor-
lution of the matter.*'
External threats
Many of Union Carbide's significant external threats
include lax enforcement of safety standards, a lack of
environmental protection, as well as a lack of quali-
fied personnel, and the lack of literacy in the Indian
population.
Union Carbide was forced to agree to strict
53. licensing requirements prior to obtaining an operat-
ing license in India,*^ however, environmental con-
trol agencies are small, underfinanced, and meagerly
represented by citizens.*' "Even more damaging is
the reluctance of local officials to enforce the laws.
Without the political -will to enforce the laws, no
amount of legislation can improve India's environ-
mental situation".**
Due to a lack of land use control tneasures, a
colony or "shantyto-wn"*' of Indian citizens were
allowed to develop around the plant site. Apparendy,
when the plant was sanctioned, its location was out-
side the limits of the city, but by the time production
began, a large colony had developed, making a large
number of individuals vulnerable to emittents from
the production of pesticides in industries.**
An additional threat was the lack of qualified
individuals operating the plant and equipment be-
cause they were "expected to leave the country as
soon as they were no longer needed".*' The last
United States technician left in 1982 after his tour as
Plant Manager ended.** From the renewal of its
license in 1982, through the date the plant was
closed, December 6, 1984, the Indian government
allowed no American technicians or engineers to
work within the plant.*' Prior to 1982, American
engineers were licensed by the Indian government
for short perods of time.'" While working in India,
Americans were expected to train Indian replace-
ments."
Information via mass comtnunication is difficult
to distribute to the Indian population because the
majority of Indians are poor farmers.'^ Educating the
54. Indian people is an arduous task as they do not view
education as a priority." These problems proved to
be sigtiificant in the strategic management plan of
action for the Union Carbide subsidiary.
In essence, the operating environment in India,
for various reasons, was woefully inadequate in
terms of safety, land use, and environmental controls
to prevent the disaster four years ago. Apparently
nodiing has not changed since the disaster. In the
United States, we are accustomed to rules and
regulations regarding safety and en-vironmental con-
444 Clayton Trotter et al.
trol which are more strictly enforced and, in the
opinion of some, overzealously enforced, even to the
degree of being totally cost prohibitive. Government
agencies like the EPA, OSHA, FDA, HEW, and a
panoply of other regulatory structures designed to
protect the public which Congress in its wisdom has
brought into being, and which Americans take for
granted, all the while complaining about their exist-
ence, simply do not exist in any effective form in
many Third World Countries.
In weighing all strengths, weaknesses, opportun-
ities and threats of the Union Carbide — Bhopal
tragedy, it is evident that the external threats, and
internal weaknesses far outweighed the company's
strengths and opportunities. Therefore, in hindsight,
these difficulties obviously contributed significantly
to the Bhopal tragedy. However, even more signifi-
cant is the fact diat the situation audit would be
55. almost the same today because nothing has changed
as a consequence of the Bhopal tragedy. Further-
more, the legal complications appear to be a disaster
of equal or greater proportions.
Evidendy, Union Carbide has emerged unscathed
from the tragedy, except for the lingering dilemma
of unresolved lawsuits. The "New Union Carbide" is
slowly rebuilding its organization.'* The current
CEO, Robert Ketuiedy, is attempting to grow from
within and become the catalyst needed for a come-
back.'̂ Mr. Kennedy has revamped his organization
in an attempt to cut fat, eliminate a stifling bureau-
cracy, and improve efficiency, not necessarily "boost
profits".'* Ketmedy is attempting a "new spirit" at
Carbide, despite the financial strains of the Bhopal
accident."
Union Carbide is still a major international cor-
poration with considerable financial strength, largely
unaffected by this disaster. "With $200 million
worth of insurance for Bhopal and about $200
million in reserves set aside. Carbide no longer fears
a big earnings hit. But the ultimate size of the
liability remains in doubt".'* India is still India — a
country -with a remarkably rich heritage from the
past, burdened with staggering problems in the
present" Regulations are still lax and courts are
still unwilling to recognize serious crimes invol-ving
-violations of en-viromental regulations.'"" Lawyers
are still considered vultures following ambulances.""
The citizens of Bhopal still suffer.'"^ And, similar
accidents may be waiting to happetL
International public relations managing
interests
56. "If it works, don't fix it" is a management maxim
commonly held and Union Carbide's continued
existence is evidence that they have successfully
managed their international interests to their benefit
at least enough to remain in existence.
A complex environment
Finding solutions consistent with the value systems
and public attitudes of India and the United States
was, and is, the "crux of Union Carbide's dilemma".'"^
Union Carbide is involved with many local and
foreign laws, regulations, and court jurisdictions in
the aftermath of the tragedy.'"* The company's
continued success depends on its ability to cope with
this network of interrelated government policies.'"^
Clearly, Union Carbide needed a "thorough fam-
iliarity with political currents and key politicians" in
Bhopal, in India, and in the United States if it was to
weather the storm produced by the chemical leak.'"*
Multinational companies must consider their host
governments as influential institutions to be reckoned
with. "A host government has the power to influ-
ence, control, or completely take over the operations
ofa company operating on its soil".""
The complex web international companies must
operate within is extremely problematic. "The busi-
ness-government-society relationship applies indi-
vidually to each subsidiary . . ." located in every
foreign country, as well as the parent corporation.
"Each multinational firm must develop appropriate
strategies and policies for -workiiig -with these com-
plexities".'"* Investment beyond die home jurisdic-
57. tion is much "more than a step across a geographic
line";'"' it is a quantum leap across dififerent cultural
milieus. A company ignores this cultural reality at its
peril. The company must act within the laws of the
nation, and its behavior must be considered accept-
able and safe by groups in the affected society.
Where religious, social, or political systems of two
nations vary -widely, as occurs between the United
States and India, managers of local subsidiaries of
multinational enterprises may be faced with a choice
between loyalty to the parent company or maintain-
ing cultural values.""
Bhopal, India and Union Carbide 445
The company's interests
Aside from the financial ramifications. Union Car-
bide's management expressed a desire, aloi^ wth
many observers, that a "quick and fair settlement of
the legal claims of the victims would serve the
company's [Union Carbide's] needs far better than
prolonged and expensive litigation",'" and the au-
thors believe this should be considered a public
relations necessity. Several issues were raised that
affect the public policy relationship for the chemical
industry worldwide."^ Procedures regarding foreign
investment and operations in a foreign country are
necessary and should be in place prior to a tragedy of
this magnitude.
The public's interests
"The public wants business to find a workable
58. balance between industrial production and nature's
limits", to act "quickly and openly to prevent or
alleviate human suffering".'" The complexity and
seriousness of social structures limits the ability,
skills, and effectiveness of any single organization
to operate effectively. The American public, the
authors believe, have an interest in American com-
panies maintaitiing workable international relations
with other nations. Like it or not. Union Carbide is a
representative, an ambassador, of the United States
to the rest of the world, and accordingly the manner
in which this matter is governed will affect the
public relations image of the United States as a
whole, either positively or negatively. Union Car-
bide, being international ambassadors for the United
States, at present, are portraying the image of the
"Ugly American" rather than a responsible ambas-
sador.
India's interests
As a whole, India and its society have experienced
major difficulties in coping -with the problems posed
by modem international business . . . and nowhere
can that be seen more than in Bhopal, where the
tragedy of the "world's worst industrial accident""*
lingers today. Many inhabitants, possibly 10 000—
20 000 experienced eye injuries, including ulcers on
their corneas, and their eyes remain sensitive to
light. "^ Victims must walk a mile or more, and stand
in line for hours, for the privilege of seeing a less
than competent doctor.'"" Medical services promised
have not materialized. The poor are now poorer than
ever.
59. The Indian government has taken an active role
in attempting to resolve the issues, even though they
may be partially responsible for the accident.'" The
Indian government failed in its efforts to have the
cases handled in the United States, and is now faced
with the administration of justice in India concern-
ing the claims of the injured parties. The amount of
recovery is substantially reduced in value because of
cultural differences regarding the value of life and
iryuries.
The distinction in damage a-wards, therefote, should be
explained in tetms of the cultural and social standards of
the two countries and not in terms of [legal] doctrinal
differences. The Indian -victims can fairly and justly be
compensated in their own country according to the
cultural standards that ordinarily affect their everyday
lives. India has standards of li-ving, wealth, values, and
beliefs that are vastly different from those in the United
States.""
Multinational interests
The leak of MIC gas generated concern worldwide
about a variety of long-term issues. Union Carbide
called for an immediate worldwide ban on the
production and shipment of poisonous material."'
At the Woodbine, Georgia plant. Union Carbide
continues to make Temik, using MIC shipments
that were turned away from ports in Brazil and
France.'̂ "
The Brazilian state governments of Rio de Janeiro
and Sao Paulo banned shipment, storage, and pro-
duction of MIC after the Bhopal accident'^' Several
companies, including the French subsidiary to Union
60. Carbide, are investigating ways of producing pesti-
cides vdthout using MIC.'̂ ^ Any further manufac-
ture of MIC by Union Carbide was halted, both at
Bhopal, and its sister plant in Institute, West Vir-
ginia.'" Union Carbide's chemical plant in West
Germany was bombed by terrorists three days after
the Bhopal accident.'̂ * Throughout these interna-
tional incidents, the company claimed it was a victim
446 Clayton Trotter et al.
of circumstances and sabotage.'̂ ^ In 1985, Union
Carbide made the formal atmouncement that due to
a decline in profitability of its subsidiaries, it was
planning retrenchment.'^*
Despite all the immediate furor over the accident,
there do not appear to be any major multinational
treaties arisii^ for long term resolution of these
issues.
Financial ratio analysis
"The conclusion is inescapable"'" . . . just as the
gas was. International business strategies need to
include not only business but also social goals.
"Corporate strategic planning has a greater chance of
success",'̂ * and the public tends to accept the
corporation, when business executives are aware of
the "broad social environment"'^' in vyhich they
operate. "Corporate social responsiveness is the abil-
ity to positively interact and impact with the sur-
rounding environment".'•*" Environmental analysis is
an indispensable tool of strategic management. Cen-
61. tral management should "strike a balance between
the competing demands of stakeholders and the
firm's profit-seeking goals"'^' although one of the
authors questions whether any efforts to strike a
balance ever occurs.
Until the Bhopal accident, Sevin was considered
the # 1 selling insecticide.'^^ The worldwide insecti-
cide market was sluggish'̂ ^ and Union Carbide
predicted a decline in profits for 1984.
Union Carbide was successful in restoring its
stockholders' confidence by responding to their
concerns regarding the disaster.
The following Financial Ratio Analysis is impor-
tant to distinguish financial changes made by the
company from 1984 to 1986.
In the aftermath of the disaster. Union Carbide's
stock price fell.'̂ ^ During 1985, the company was
forced to repurchase stock to prevent a hostile
takeover by the GAF Corporation.'^* In 1985, Union
Carbide suffered a $581 million loss, restructured
their assets, and increased debt. The majority of
company debts became long-term. However, by
1986, the corporation recorded its largest net income
ever and seems to have weathered the crisis.'•'̂
TABLE I
Financial ratio analysis
Liquidity
Current ratio
62. Quick rado
Activity
Inventory turnover
Aver, collection
period
Fixed asset turnover
Total asset turnover
Accounts receivable
turnover
Leverage
Debt rario
Debt-to-equity
Profitability
Gross profit margin
Net profit margin
Return on invest-
ment
Return on equity
1986
1.28 Times
0.89 Times
8.50 Times
61.58 Days
1.45 Days
64. 1984
1.88 Times
1.00 Times
6.15 Times
57.25 Days
1.49 Times
0.90 Times
6.29 Times
53.00%
114.00%
29.50%
3.40%
3.10%
6.60%
* Increase due to purchase of Treasury Stock in the amount
of$2.222 million. (134)
International legal and management
strategies
The reactive strategy of Union Carbide after dis-
covering the accident was to call an immediate halt
to worldwide production and shipment of poisonous
chemicals. This measure was taken to ensure safety
processes were fully operational at their plants
worldwide but while disclosing to the public that the
chemical was not essential to the production of the
65. main product of the plant.'^* In the wake of fear
following the disaster,'^' the company's public rela-
tions strategy stressed the industry's excellent safety
record and efficient safety procedures in an attempt
to overcome the poor publicity the company was
receiving from the tragic acccident.
While neither Union Carbide Corporation in the
United States, nor Union Carbide India, Ltd. will
admit "legal" guilt. Union Carbide India, Ltd. had
admitted "moral" guilt.'*" For this reason, the com-
Bhopal, India and Union Carbide 447
pany decided a quick response to the accident was
necessary and should be done in three phases:
* Immediate responses,
* Intermediate responses, and
* Long-term relief efForts.
Union Carbide's immediate relief efforts included
trips to Bhopal, sending medical relief teams, offer-
ing contributions to the Bhopal Relief Fund, and
supplying medicine and equipment.
Following these steps, tie intermediate needs
were handled through the firm's Employee Relief
Fund, a Bhopal Eye Center and additional medical
supplies. The company contributed $1 millio|f;to the
Victims'Relief Fund.'*'
The long-term relief efforts were aimed toward
meeting health and welfare needs of the survivors.
66. Union Carbide offered to build dwellings, job train-
ing centers, and schools. The company began to plan
to correct the safety deficiencies.
After seventeen years without a reported incident.
Union Carbide officials were forced to admit to
several other similar incidents occurring at its plant
in Institute, West Virginia.'*^ The company admitted
to twenty-eight "relatively harmless" incidents at its
various plants.'*^ These accidents, forced the com-
pany to "concede carelessness" in its domestic opera-
tions.'**
Union Carbide attempted to generate a level of
public respect in the days immediately following the
disaster by implementing a "reactive" crisis manage-
ment plan that portrayed genuine company concern
for the victims. "Warren Anderson fiew to India
within hours of the accident" and "made himself
available to hundreds of reporters".'*^ He stated, "this
is a responsible company and we want to do the
right thing for the people of Bhopal, our share-
holders and our employees".'**
Lack of reliable information and communication
networks hampered Union Carbide's management
in its attempt to effectively manage the crisis; vital
information was missing or withheld.'*^ "Because the
accident occurred so far from company headquarters
in Connecticut and because communication was
very difficult due in part to the chaos and confusion
caused by the accident, the company tended to be
overly cautious in its relations with the media. An
impression was created that the company was not
being forthright about the accident's cause or the
67. company's accountability".'**
In this thin information atmosphere, unlike that
found in the industrially advanced United States, the
company encountered great difficulty in managing
the crisis. With vital information missing. Union
Carbide found itself wilnerable to public criticism.'*'
Officials of Union Carbide refused to speak to
members of the media and became overly cautious
about discussing the accident outside the realm of
the company. In the days immediately following the
crisis. Warren Anderson lost credibility with the
media, and subsequently the public.'^" Union Car-
bide was viewed as failing to disclose valuable infor-
mation, instead of attempting to handle a crisis with
dignity.'*'
The company fought for its life. Claims were
stonewalled in court. In addition, the company
refused to accept responsibility for its action, appar-
ently under the guidance of its insurance carrier. The
victims' cases went unsuccessfully all the way to the
Supreme Court of the United States."^
Legal responsibility — the second tragedy
Union Carbide Corporation won its greatest victory
when the United States Supreme Court held that the
claims of the victims would not be heard in United
States Courts on the grounds oi forum non-conve-
niens}^^ Forum non-conveniens refers to the dis-
cretionary power of a court to decline jurisdiction
if, in the interest of justice, and the convenience of
the parties, the court considers that the case should
proceed in another court or jurisdiction.'** In this
case, almost all of the witnesses, the injured parties,
68. the physical evidence, and the social impact of the
accident were all in India, therefore, applying the
doctrine of forum non-conveniens the court held
the case should be tried in India. This is such a
victory for Union Carbide because compared to the
compensation for injuries which could have been
obtained in the United States, the compensation for
injuries which might be obtained in India will be a
mere pittance.'** "There has not been a wrongful
death judgment in India of more than $40 000" '**
Lawyers for the victims argue that bigger — and
448 Clayton Trotter etal.
swifter — awards are given in American courts, as
juries are experienced in judging mass-disaster
cases.'*' The cases were, in effect, sent back to India
for trial.
Concerning the Indian proceedings, an original
interim order was entered by Judge M. K. Deo in
Bhopal, India in 1987 awarding $270 million for
interim relief, but this was reduced to $192 million
in April 1988, in accordance with an Appellate
Order entered by Judge S. K. Seth of the Madhya
Pradesh state appellate court'** Surprisingly, Judge
Seth apparently removed Judge Deo from the case
after affirming Judge Deo's decision.'*' The removal
of Judge Deo which occurred in the middle of
Octoher, 1988, is another victory for the Union
Carbide Corporation "hut it was not known . . . if
Deo's removal will affect the interim relief".'*" So,
apparently, four years after the accident, there is still
no certainty of financial relief accorded the victims
69. of the disaster. Judge Deo believes Union Carbide
Corporation liable for the accident, or he would not
have granted interim damages.
The plaintiff. Union of India, on behalf of the
victims, in its pleadings stated:
The enterprise owed an absolute and non-delegatable
duty to the community to assure that no harm was
caused to anyone on account of the hazardous and
inherently dangerous nature of the activity it had under-
taken.""
The Appellate Court 0udge Seth) cited, with ap-
proval, the decision of the Supreme court of India in
M. C. Mehta's Case involving a "much less dangerous
chemical substance namely oleum gas", while the
"Bhopal suit involved escape of an ultra-hazardous
chemical substance namely Methyl-Isocyanate".'*^
English law is the basis for American law, as well
as the basis of Indian law. At the common law, the
theory upon which the Indian court apparently tried
to allow recovery would be termed strict liability in
tort.
163
The early English common law apparendy applied
a strict liability type rule "undoubtedly supported by
the feeling in law that he who breaks must pay".'**
While a strong move later appeared in the law to
never impose any liability v^athout fault or neglig-
ence, the doctrine of strict liability is still very much
a part of our jurisprudence.
70. The doctrine has been long applied to cases
involving domestic or wild animals. The owner is
held liable if the animal, be it bear or bull, escapes
and does personal injury or property damage. The
history of the doctrine of strict liability for abnor-
mally dangerous things and activities or ultra-hazar-
dous activities seems to begin with what is known as
the rule in Rylands v. Fletcher.^^^
In the Rylands case, the defendant constructed a
water reservoir on their land which was situated in a
coal mining region. The water escaped through an
abandoned mine shaft to an active mine which was
flooded causing great loss. The defendant land
owner was held hable. The case appeared to settle
the doctrine that a non-natural, abnormal, extra-
ordinary or ultra-hazardous activity would create a
situation, if injury occurred, where the ovrâ er of the
land would be held strictly liable for damages.'**
Apparently, in at least three American jurisdictions,
the doctrine has been applied to situations involving
the emission of smoke or toxic gases by a factory
located within a populated area.'*'
More recently, Prosser and Keeton point out that
the Restatement of Torts 2nd applies strict liability
in tort to: "ultrahazardous activity undertaken by a
defendant: such activity is one which necessarily
involves a 'risk of serious harm' which 'cannot be
eliminated by the exercise of the utmost care' ".'**
The basic legal concept cited by the Indian Judges
is quite similar to that found in American law. Strict
liability in tort is used most often in situations where
injuries result from an ultra-hazardous activity en-
71. gaged in by a party (i.e. blastii^ with dynamite or the
keeping of dangerous animals), or in situations
where an unreasonably dangerous product is placed
on the market by a manufacturer and someone is
injured through the use of the product. Since the
party to be held strictly liable has exclusive and
absolute control of the production process or the
activity, the party injured by the product does
not need to prove negligence, but merely that the
defendant placed on the market an unreasonably
dangerous product or that the activity was ultra-
hazardous in nature and that the plaintiff suffered
damages as a result.'*'
Strict liability in tort would probably permit
recovery even in the event that there was a "dis-
gruntled" employee that committed "sabotage".
There have been cases where a dog was entrusted by
a defendant owner to an employee to walk, and
Bhopal, India and Union Carbide 449
during the walk, the employee intentionally released
the dog to attack the plaintiff. The intervention of
the intentional act of the employee did not preclude
recovery against the owner of the dog.''" The party
that has exclusive control over hiring and staffing of
an ultra-hazardous activity is responsible, and if an
innocent third party was injured, the party is liable —
not because of fault or negligence, but due to the
ultra-hazardous nature of the activity.
Union Carbide Corporation could be held directly
liable to one of the injured third parties if the court
72. holds that the Indian corporation was a sham or
alter-ego of the parent (i.e. it had no independent
existence or authority.) Apparently, this has been
held by the Indian courts, and will ultimately make
Union Carbide directly liable for whatever verdicts
are awarded.'^'
Union Carbide and the Indian government may
also have been negligent for allovnng people to
concentrate near the plant. No responsible corpora-
rion or government should allow any group of
people to coi^regate on the private property of the
corporation. Each plant should have a "vacant zone",
whereby a designated number of miles between the
plant and the nearest village exists."^
What has been termed "The Iron Law of Respon-
sibility" states that in the long run, "those who do
not use power in ways that society considers respon-
sible, will tend to lose it"."^ While not a legal
doctrine it seems to apply in this case. Apparently,
the Iron Law of Responsibility has been avoided
by Union Carbide, but perhaps not by certain em-
ployees.
On November 16, 1988, the magistrate of Bhopal,
India issued a warrant for the arrest of the former
Chair of the Board, Warren Anderson, and two
company officials and the manslaughter and other
charges mentioned previously were increased to
felony murder charges.'̂ *
Union Carbide Corporation claims the Indian
magistrate has no jurisdiction over Warren Anderson,
or die Union Carbide Corporation.'"
