5.6 Corporate responsibility for the Bhopal plant
In order to analyse the nature and extent of liability for the gas leak at Bhopal and its consequences, you should consider who designed, owned and managed the plant. As you know, UCIL leased and operated the plant at the time of the 1984 gas leak and you will also be aware of UCC’s involvement as the majority shareholder in UCIL. At this point it would be helpful to understand more about the nature of the relationship between these organisations.
Using the links provided and your own independent research, find out more about the identity of UCIL. Who were its shareholders and investors and how did it operate? In particular, investigate the nature of its links with UCC.
Research links for Activity 8
Amnesty International report (2004).
Website of the Union Carbide Bhopal Information Center.
Your research should have revealed that UCIL was an Indian-registered public company. It manufactured products such as batteries, carbon products, plastics, industrial chemicals and pesticides. At the time of the Bhopal incident, UCIL was ranked twenty-first in size among companies operating in India. It had revenues of 2 billion rupees (then equivalent to US$170 million).
It started life as a wholly owned subsidiary of UCC, an American-registered company, but in order to continue to operate in India, UCC had been required to reduce its shareholding and so at the time of the Bhopal gas leak it owned 50.99% of the shares in UCIL. In owning more than a 40% shareholding, UCC had negotiated a privileged position on the basis of the type and level of technology it could offer that was not available domestically.
With regard to the identity of the other shareholders of UCIL, the UCC website states that: ‘The other stockholders included Indian financial institutions and thousands of private investors in India. Union Carbide India Limited designed, built and managed the plant using Indian consultants and workers.’
Your research may have revealed the identity of the Indian financial institutions as organisations such as the Unit Trust of India, Industrial Development Bank of India, Life Insurance Company of India, Industrial Finance Corporation of India and Industrial Credit Investment Corporation of India. At the time all of these organisations were large government-controlled institutions.