Unin Carbide and Bhopal: Dairy of a Disaster

Introduction
In 1969 UCC (Union Carbide Corporation) choose Bhopal as manufacturing site for new pesticide plant Agreed to transfer the technology New plant operated by subsidiary UCIL Site on northern city limits Railway and Bus station located at about 1 mile and half mile away respectively

Q1. Where did Union Carbide go wrong?

Pesticide Market in India
1. Agricultural market peaked in 1979 2. Economic recession and drought in 198283 lead to falling demand 3. Farmers welcomed cheaper alternatives 4. UCIL faced a loss of $4 million in 1984 5. Cost cutting program started

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Technical Issues:
1. Worlds largest (alpha-napthol) plant in Bhopal 2. Blocked pipelines and wrong sized pumps 3. Three, 15000 gallons tanks for buffer stock of MIC (Methyl Isocyanite) 4. Other companies manufacture it when it was needed

Cont.
5. Refrigeration plant to keep MIC tanks at 0-5C was shut down 6. Alarms adjusted to sound at 20C 7. Filled 2 tanks more than 50-60% of capacity 8. Excessive equipment failure & maintenance problem (UCC audit report) 9. Inadequate safety valves (UCC audit report, 1982)

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Workforce issues:
1. UCC expected to train and staff the UCIL plant with Indian employees 2. No Americans working by end of 1982 3. Recruitment standard dropped 4. Training shortened 5. High turnover of plant personal, especially in operations

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6. Maintenance supervisors eliminated from 2nd and 3rd shift 7. Shift staffed trimmed from 12 to 6 8. No proper coordination between shift employees (pressure change from 2 to 10 psi not reported to next shift) 9. Many staffs unfamiliar with emergency procedure, flee in panic

Q2. Was there any way that adequate compensation could have been paid to close the matter?
1. UCIL handled all operational matters 2. UCC had financial & technical control 3. UCIL developed close ties with local government 4. Many officials worked in senior positions

Cont
UCC didnt take responsibility Opened up possible charge of sabotage Indian government acted very late Confusion over where should case be tried 9. $150 billion, total values of claim 10.Indian government agreed to interim relief of $5 million 5. 6. 7. 8.

Conclusion
All finances were controlled by UCC and they didnt take responsibility of the disaster Bhopal plant was managed by UCIL Indian government unable to decide on compensation amount Hence it was not possible to close the matter without a long court battle

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