Amoral corporations, 25 years on.

The New York Times has an excellent write-up on the current situation in Bhopal India, where, 25 years ago there was a disastrous chemical spill at the Union Carbide plant killing thousands immediately and affecting hundreds of thousands more as time went on with poor cleanup.

The Bhopal-Union Carbide story is probably the #1 CSR story about what should not be done. It’s the case that probably every business student has gone through.

The saddest part is that 25 years later…. it’s still disastrous. Corporations are dodging responsibility. Governments are stalling, lying, and ineffective.

5 years after the disaster in 1989 – Union Carbide washed its hands clean of the cleanup by giving a meager half billion or so and pushing the responsibility to the local Government…. right.. the 2nd largest chemical company at the time (was sold for over 9 billion in 1999) hands over responsibility to a REGIONAL GOVERNMENT of a DEVELOPING COUNTRY.

Unsurprisingly, the government has failed at cleanup, failed at getting the money distributed (of which there wasn’t enough money allocated in the first place) and have failed at informing people about the true medical hazards still present on the site.

The controversial buyout of Union Carbide by The Dow Chemical Company in ’99 now pushes the responsibility further and further away from the problem.

In the NYT article, the company’s response:

Dow, based in Michigan, says it bears no responsibility to clean up a mess it did not make. “As there was never any ownership, there is no responsibility and no liability — for the Bhopal tragedy or its aftermath,” Scot Wheeler, a company spokesman, said in an e-mail message.

Ownership. Yep, that tricky area of business that is not as easily understood… But how then, when Dow bought Union Carbide, did it not buy its liabilities? (I actually don’t know the legal implications of all this but it seems like buying=owning=responsibility=liabilities, no?)

At the end of the day, as the article so aptly puts it – the corporation is being left alone (at least by the gov’t) because it pretty much threatened the government with pulling out investments (which is so badly wanted in a fast growing country like India) – the CEO stated “in your efforts to ensure that we have the appropriate investment climate.” What a simple statement; what a big implication.

Some more background on The Dow Chemical Company:

  • was the sole supplier of Agent Orange (that horrific chemical weapon used during the Vietnam war)
  • responsible for 96 of the United States’ worst Superfund toxic waste

And something I found interesting while wikipedia-ing this company… their vision statement:

“To be the largest, most profitable, and most respected chemical company in the world“.

Right… you may get the first two, but you most definitely should never achieve the that last one.

Corporations can be amoral and this is a case in point. Here’s hoping that we, as society, don’t let atrocities like this occur again.

Advertisements
Tagged , ,

6 thoughts on “Amoral corporations, 25 years on.

  1. Jay Godse says:

    Bhopal was a classic case of distributed liability (and therefore no liability). From an amoral point of view, what they did was brilliant. First they screwed up and killed a lot of people. Then they settled for a pittance and handed over control of rebuilding to a local government. Once the graft is complete, the actual poor people will end up with almost nothing. By doing this, they effectively washed their hands of the matter in a socially acceptable way. The local government was probably happy too because of the wonderful opportunities for graft.

    With the liability gone, they still had a tarnished brand, so the next thing to do was to sell to Dow, with no liabilities on the sheet. Everybody comes up smelling like roses. The poor people who lost family or were injured….who cares? At the end of the day, how much money do they contribute to political campaigns?

    The local Indian government is as much to blame. The terms of the settlement should not have been based on the transfer of money, but on successful rebuilding milestones. But, given the amount of graft over there, that was probably too much to expect.

    This is no difference from North American waste management companies sending toxic waste to Guinea-Bissau or other West African countries. The local poor people get poisoned, but you can bet your bottom dollar that local governments and government officials get a lucrative cut.

    Even in North America we have had disasters such as Love Canal, where the pressure on an amoral school board to procure some land could only be met by purchasing questionable land from a chemical company. One condition of the sale was that the seller (Hooker Chemical) would not be held liable for any damage caused from using the land.

    At the end of the day, amoral corporation (e.g. Hooker) plus corrupt or negligent local government (e.g. school board) equals screwed over poor people. That is a story that repeats over and over throughout the world. Point is…it is not just the amoral corporations. You also need corrupt and/or negligent governments.

  2. JX says:

    I’m not aware of a company named The Dow Jones Chemical Company. Perhaps you ought to conduct further research into the actual name of the company you are writing about.

  3. janeporter says:

    JX,

    Right… that would be The Dow Chemical Company. No worries, the research was done – i.e. it was written correctly the first time with a link to it. But thanks for noticing the slip – guess my morning coffee hadn’t hit yet;)

  4. janeporter says:

    Jay,

    Very very true, the fault also goes to the local gov’t and other players too. Nevertheless, we know that corruption can run rampant in some of these developing countries because there’s poor enforcement of the law, or no laws about it in the first place.
    As for the western players – we’re knee deep in regulations and strict enforcements and so we should – should be more accountable. But that’s it – the folks with the money know what strings to pull to get out of these situations. At the end of the day, from both sides, it all comes down to accountability , transparency and governance… and people caring.

  5. Jay Godse says:

    People are moral or immoral. Corporations are amoral. If your actions in Canada combined with a corrupt official in West Africa causes a West African to be poisoned, you and the official have done an evil deed. The corporation is neither moral or immoral.

    Western players are accountable, but only to their own jurisdictions. The only exceptions are when there is enough local western outrage over such activities (e.g. Nike sweatshops, unfairly traded coffee, etc) that a company must do the right thing overseas in order to protect their western cash flow. Even in this case though, their prime motivation is not fair trade or non-exploitation. It is protecting their cash-flow, because that is what corporations do.

    The problems you and I described are often caused at jurisdictional boundaries. But there is simply no carrot or stick to cause people to do the right thing. Very sad.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: