28 years of agony… Corporate Personhood in View of Bhopal Gas Tragedy

Fri, Nov 30, 2012

In Focus, Social Issues

This was night of 2nd - 3rd December, 1984 when poisonous gas leaks from Union Carbide India Ltd’s (UCIL) pesticide plant in Bhopal, Madhya Pradesh. As described in the words of Satinath Sarangi, famous Bhopal activist:

“It came without warning in the dead of the night. Most people drowned in their own body fluids… It was a total failure of all systems. The 5,74,000 people (as per government records) who survived, wish they were dead too. A whole generation born after the disaster is marked, damaged.”

Bhopal Gas Tragedy took lives and gave temporary as well as permanent injuries to the people lived and currently living in the Bhopal. This mishap left the local people to deal with the toxic waste. Even after the 27 years in 2012, toxic waste is still lying. Water is contaminated. People in that area have to drink that water and as a result, they become victim of dreaded diseases. The obvious question will be asked who is responsible for this tragedy. When disaster happened, Union Carbide Corporation (UCC) had a highest 50.9% stake in Union Carbide India Limited (UCIL). In 2001 UCC (USA) merged with Dow chemicals and UCC becomes the full 100% subsidiary of Dow Chemical. According to the law, Liabilities are with the Union Carbide then what will happen to liabilities?  What will happen to the principal of “successor liability” that requires the purchaser to gain the assets and liabilities of the target. Along with the wealth of assets acquired from Union Carbide, Dow should also be responsible for the environmental and health damage Union Carbide caused. How it is justifiable that parent company takes all the profits and not the upcoming loss? Then who will take the upcoming loss?  Company has just changed name from UCC (USA) to Dow chemical company. I am making the argument that in this case by just changing the name, company is able to take all profits and not to take liabilities of the subsidiary company. It is like saying that if somebody is taking money from other person, by simply just changing the name first person doesn’t need to pay to the other person because he is not the same named person when he took the money !!. Because of the loopholes in the law multinational companies like Dow chemicals are able to take the rights of the benefit but don’t have any responsibility. World’s richest companies become richer at the expense of its poor citizens[i]

It would be very contradictory to know what Dow Chemical Company’s mission says, “To passionately innovate what is essential to human progress by providing sustainable solutions to our customers.” May be they are up to something to come up with new technology so that they will capable of  cleaning the mess they have left for so long as owner of Union Carbide Company.

The definition of corporate personhood says “Corporate personhood is the legal concept that a corporation may sue and be sued in court in the same way as natural persons or unincorporated associations of persons. This doctrine in turn forms the basis for legal recognition that corporations, as groups of people, may hold and exercise certain rights under the common law. The doctrine does not hold that corporations are “people” in the most common usage of the word, nor does it grant to corporations all of the rights of citizens.”[ii]

If Corporation demand more and more rights, it should also be obvious that with right comes the responsibilities. Right does not come in isolation. Corporate should exhibit the responsibilities which needs to be fulfilled in time of a non crisis or crisis situation. Right should not only serve the purpose of filling their pockets it should be sincerely vented to all directions of business problems.

Corporate Social Responsibility (CSR) is the buzzword in all circles. It seems to crop up everywhere, academia, media, politics, conferences; there are awards for CSR  indexes or corporate scores on CSR, and so on. Simultaneously, there seems to be a universal view that corporations ought to be anything but ‘socially  responsible’! Significantly, some of the most talked about corporate names in recent times, including Enron, Lehman Brothers, or closer home, Satyam or Vedanta, have been honoured with CSR awards.[iii]

Our constitutional rights were intended for real persons, not artificial creations. The Framers knew about corporations but chose not to mention these contrived entities in the Constitution. For them, the document shielded living beings from arbitrary government and endowed them with the right to speak, assemble, and petition. This all has given more power to corporations.

Fig.1: Scrapbook of events and concerned entities for Bhopal Gas Tragedy

More and more examples like Bhopal Gas tragedy are coming up where government creates the situation favourable to the corporates but unfavourable to the society. Nuclear Liability Act is example of government helping corporates to create dreaded situations without taking any liability. In 2009 Hillary Clinton came to india and she urged to change laws that hinder investment from American corporates and make it difficult for them to compete against state-owned firms. This means she wants laws such that American suppliers do not have to bear any liability in case of disaster like Bhopal Gas tragedy happens. As we have seen in the past the nuclear disasters are worse than the disasters like Bhopal Gas. Given the fact that they have more impact on the society, how it is justifiable that suppliers don’t have the liability. Hillary Clinton stated against the terrorism “We are allies in the fight against violent extremist networks. And homeland security is a high priority and a source of increasing partnership,"[iv] Bhopal Gas Disasters and Nuclear disasters took huge amount of lives. On the one side she is saying that both countries have to fight very hard against the culprit of terrorism but on the other side she is saying that the culprit of disasters like nuclear one should not bear any liability. What a contradiction!!

As rightly pointed by Upton Sinclair -

“It is difficult to get a man to understand something when his salary depends upon not understanding it.”

Now a days Businessmen talk about the pursuit of B-interest. It can never be a happy situation for all if every company thinks about its own interest. A company can not remain in isolation. It has to deal or interact with its SPLE (Social, political, legal, environment) aspects. And it is moral responsibility (if they think it this way otherwise it may become an urgency to follow like in case of global warming etc.) to take care of its SPLE environment. So it should stop thinking itself to behave like thinking that market or government will take care if something big crisis happens.The attitude should change.

It is hard to summarise the solutions, as they have to evolve eventually through the process of initiatives. But what is directly visible which could work in the present scenario could be listed as (as understood through Prof. Rahul Varman's course):

  1. Making the Governments more representative
  2. Making corporations more accountable
  3. Making the markets fairer
  4. Bringing the finances (balance sheets) closer to the reality
  5. Going back to the public sector/ welfare state

A system should emerge where weaker section of society should be heard unlike what is happening right now. No body question a big giants companies like (which become supra- national) Satyam, GM, Lehman Brothers initially and very next moment everything just change before our sight. History repeats itself so we see so many scams, crisis now a days. Preparation should stop to make disaster more frequent like we see in case of nuclear bill liability issues in India. We hope that the disaster like Bhopal Gas tragedy will not repeat itself again for the common good.

Mayank Singh

MBA 2013, IIT Kanpur

References:


[i] http://www.bhopal.net/oldsite/rebuttal.html

[ii] http://en.wikipedia.org/wiki/Corporate_personhood

[iii] http://infochangeindia.org/corporate-responsibility/analysis/corporate-personhood-rights-without-responsibilities.html

[iv] http://www.thenational.ae/news/world/south-asia/hillary-clinton-talks-trade-terror-and-nuclear-power-in-india#ixzz2CJ9Yp2sm

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