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DUDINC 55 ETHICS CANES 19 ASSIGNMENT Dor #6 Financial Compensation for the Victims of Bhopal On December 3. 1984. some 2.000 people were killed and 200.000 were injured when a doud of poisonous metty hate gas was accidentally released from the Union Carbide Com- puny plant in Hhopal, India. The methylisocyanate was used to manufacture Sevin, a plant pesticide that was distributed widely throughout India for use on that country's corn, rice, soybean, cotton, and allalla crops. It was said that the use of Sevinin creased the harvest of the food crops by over 10 percent, enough to feed 70 million people. The accident apparently occurred when between 10 and 2010 gallons of water were introduced into a tank containing 90,000 pounds of methylisocyanate. The tank also contained approx- imately 3.000 pounds of chloroform, which is used as a solvent in the manulacture of methylisocyanate; the two chemicals should have been separated before storage, but that had not been done for some time in the operating process at Bhopal The water reacted exothermically producing heat) with the chicroform, S crating chlorine ions, which led to corrosion of the tank walls, and the iron oxide from the corrosion in tur re- acled exothermically with the methylisocyanate. The increase in heat and pressure was rapid but unnoticed because the pressure Biuge on the tank had been inoperable for four months and the operators in the control room, monitoring a remote temperature gauge, were accustomed to higher than-spectiedicat levels (25 rather than the OC in the operating instructions due to the continual presence of the chloroform and some water vapor in the tank. The refrigeration unit built to cool the storage tank had been disconnected six months previously. The "scrubber," a safety device to neutralize the methylisocyanate with caustic soda, had been under repair since June. An operator, alarmed by the suddenly increasing temperature, attempted to cool the tank by spraying it with water, but by then the reaction was unstoppable, at a probable 200'C. The rupture disc (a steel plate in the line to prevent accidental operation of the safety valve) broke, the safety valve opened just before, it is assumed, the tank would have burr ower half the 15 tons of mechinganate in Morage were discharged into the air. Following the accident, Union Carbide officials in the United States denied strongly that their firm was responsible for the edy. They made the following three statements in support of that position: 1. The Bhopal plant was 50.9 percent owned by the Ameri- can firm, but the parent corporation had been able to exercise very little control All managerial and technical personnel were citizens of India at the insistence of the Indian government. No Americans were permanently employed at the plant Safety wart- ings from visiting American inspectors about the Sevin manufac- turing process had been ignored. 2. Five automatic safety devices that had originally been in- stalled as part of the Sevin manufacturing process had, by the time of the accident, been either replaced by manual safety methods to increase employment, sunt down for repairs, or dis- connected as part of a cost reduction program. The automatic temperature and pressure warning signals had been removed soon after construction. The repairs on the automatic scrubber unit had extended over six months. The refrigeration unit bad never been used to cool the tank and had been inoperable for Over a year. 3. The Bhopal plant had been built in partnership with the Indian government to IMCA employment in that country. Union Carbide would have preferred to make Sevin in the United States and ship it to India for distribution and sale, because the insec ticide could be made less expensively in the United States due to substantial economies of scale in the manufacturing process. Warren Anderson, chairman of Union Carbide, stated that while he believed that the American company was not legally lia- ble for the tragedy due to the three points above, it was still mor- ally responsible, and he suggested that the firm should pay prompt financial compensation to those killed and injured in the accident. Q1 Class Assignment. Assume that the question of legal liability for the accident at Bhopal never will be settled, due to differences in the law between the two countries and the difficulties of Note 1. Seven engineers and scientists from the Union Carbide Corporation were sent to Bhopal to assist in the safe disposal of the remaining methylisocyanate at that site and to investigate the reasons for the accident. They were not per mitted to interview operators of the Sevis process or to inspect the methyliso- cyanate storage tank and related piping. They were permitted to obtain samples of the residues from the nearly ruptured tank; through experimenta- tion they were able to replicate reactions that led to residues with the same chemical properties in the same proportions. The account, therefore, is a hy- pothesis for the tragedy, not a proven series of events. NB For Wt, pay attention to the underlined sentence Q #2 Do a stakeholder Analysis, specifying to Wherent or to what degree the stakeholders should be held responsible for the accident. Assume that this accident can be attributo to an "Act of God" or "force Majeure", rather than human error, why should Union Carbide still be held accountable for the accident and be made to compensate the victims if this accident was due to an Act of God? M R S . Doch - Union Carbide Article.doc - Compatibility Mode - Saved Ullah, Bashir UB Design Layout References Mailings Review View Help Search Share Comments accident. temperature, attempted to cool the tank by ter, but by then the reaction was unstoppable, . The rupture disc (a steel plate in the line to operation of the safety valve) broke, the safety before, it is assumed, the tank would have Q1 Class Assignment. Assume that the question of legal liability for the accident at Bhopal never will be settled, due to differences in the law between the two countries and the difficulties of 60 CHAPTER MANAGERIAL ETHICS AND MICROECONOMIC THEORY establishing jurisdiction. Assume, however, that the American company is morally responsible for the tragedy, as admitted by the chairman, because it was the majority owner and yet did not insist that the unsafe process be shut down. What factors would you consider in setting just financial compensation for each of the victims? Note 1. Seven engineers and scientists from the Union Carbide Corporation were sent to Bhopal to assist in the sale disposal of the remaining methylisocyanate at that site and to estimate the e ns for the accident. They were not per mitted to interview operators or the ser process or to inspect the methyl- cyanate storage tank and related peping. They were permitted to in Samples of the residues from the nearly ruptured tank: chrotrich experimenta- 12 AM DUDINC 55 ETHICS CANES 19 ASSIGNMENT Dor #6 Financial Compensation for the Victims of Bhopal On December 3. 1984. some 2.000 people were killed and 200.000 were injured when a doud of poisonous metty hate gas was accidentally released from the Union Carbide Com- puny plant in Hhopal, India. The methylisocyanate was used to manufacture Sevin, a plant pesticide that was distributed widely throughout India for use on that country's corn, rice, soybean, cotton, and allalla crops. It was said that the use of Sevinin creased the harvest of the food crops by over 10 percent, enough to feed 70 million people. The accident apparently occurred when between 10 and 2010 gallons of water were introduced into a tank containing 90,000 pounds of methylisocyanate. The tank also contained approx- imately 3.000 pounds of chloroform, which is used as a solvent in the manulacture of methylisocyanate; the two chemicals should have been separated before storage, but that had not been done for some time in the operating process at Bhopal The water reacted exothermically producing heat) with the chicroform, S crating chlorine ions, which led to corrosion of the tank walls, and the iron oxide from the corrosion in tur re- acled exothermically with the methylisocyanate. The increase in heat and pressure was rapid but unnoticed because the pressure Biuge on the tank had been inoperable for four months and the operators in the control room, monitoring a remote temperature gauge, were accustomed to higher than-spectiedicat levels (25 rather than the OC in the operating instructions due to the continual presence of the chloroform and some water vapor in the tank. The refrigeration unit built to cool the storage tank had been disconnected six months previously. The "scrubber," a safety device to neutralize the methylisocyanate with caustic soda, had been under repair since June. An operator, alarmed by the suddenly increasing temperature, attempted to cool the tank by spraying it with water, but by then the reaction was unstoppable, at a probable 200'C. The rupture disc (a steel plate in the line to prevent accidental operation of the safety valve) broke, the safety valve opened just before, it is assumed, the tank would have burr ower half the 15 tons of mechinganate in Morage were discharged into the air. Following the accident, Union Carbide officials in the United States denied strongly that their firm was responsible for the edy. They made the following three statements in support of that position: 1. The Bhopal plant was 50.9 percent owned by the Ameri- can firm, but the parent corporation had been able to exercise very little control All managerial and technical personnel were citizens of India at the insistence of the Indian government. No Americans were permanently employed at the plant Safety wart- ings from visiting American inspectors about the Sevin manufac- turing process had been ignored. 2. Five automatic safety devices that had originally been in- stalled as part of the Sevin manufacturing process had, by the time of the accident, been either replaced by manual safety methods to increase employment, sunt down for repairs, or dis- connected as part of a cost reduction program. The automatic temperature and pressure warning signals had been removed soon after construction. The repairs on the automatic scrubber unit had extended over six months. The refrigeration unit bad never been used to cool the tank and had been inoperable for Over a year. 3. The Bhopal plant had been built in partnership with the Indian government to IMCA employment in that country. Union Carbide would have preferred to make Sevin in the United States and ship it to India for distribution and sale, because the insec ticide could be made less expensively in the United States due to substantial economies of scale in the manufacturing process. Warren Anderson, chairman of Union Carbide, stated that while he believed that the American company was not legally lia- ble for the tragedy due to the three points above, it was still mor- ally responsible, and he suggested that the firm should pay prompt financial compensation to those killed and injured in the accident. Q1 Class Assignment. Assume that the question of legal liability for the accident at Bhopal never will be settled, due to differences in the law between the two countries and the difficulties of Note 1. Seven engineers and scientists from the Union Carbide Corporation were sent to Bhopal to assist in the safe disposal of the remaining methylisocyanate at that site and to investigate the reasons for the accident. They were not per mitted to interview operators of the Sevis process or to inspect the methyliso- cyanate storage tank and related piping. They were permitted to obtain samples of the residues from the nearly ruptured tank; through experimenta- tion they were able to replicate reactions that led to residues with the same chemical properties in the same proportions. The account, therefore, is a hy- pothesis for the tragedy, not a proven series of events. NB For Wt, pay attention to the underlined sentence Q #2 Do a stakeholder Analysis, specifying to Wherent or to what degree the stakeholders should be held responsible for the accident. Assume that this accident can be attributo to an "Act of God" or "force Majeure", rather than human error, why should Union Carbide still be held accountable for the accident and be made to compensate the victims if this accident was due to an Act of God? M R S . Doch - Union Carbide Article.doc - Compatibility Mode - Saved Ullah, Bashir UB Design Layout References Mailings Review View Help Search Share Comments accident. temperature, attempted to cool the tank by ter, but by then the reaction was unstoppable, . The rupture disc (a steel plate in the line to operation of the safety valve) broke, the safety before, it is assumed, the tank would have Q1 Class Assignment. Assume that the question of legal liability for the accident at Bhopal never will be settled, due to differences in the law between the two countries and the difficulties of 60 CHAPTER MANAGERIAL ETHICS AND MICROECONOMIC THEORY establishing jurisdiction. Assume, however, that the American company is morally responsible for the tragedy, as admitted by the chairman, because it was the majority owner and yet did not insist that the unsafe process be shut down. What factors would you consider in setting just financial compensation for each of the victims? Note 1. Seven engineers and scientists from the Union Carbide Corporation were sent to Bhopal to assist in the sale disposal of the remaining methylisocyanate at that site and to estimate the e ns for the accident. They were not per mitted to interview operators or the ser process or to inspect the methyl- cyanate storage tank and related peping. They were permitted to in Samples of the residues from the nearly ruptured tank: chrotrich experimenta- 12 AM