Case
Teaching Notes
Supplementary Resources
Abstract
This case compares the BP oil spill in the Gulf of Mexico to a past disaster in India, a gas leak in Bhopal, which exposed more than 500,000 people to Methyl isocyanate and other highly toxic chemical gases. The case compares the events of the two incidents: the way Bhopal Gas Leak was handled by the Indian government and how the Indian judicial system was portrayed; and the way the US government dealt with the BP oil spill. The case offers ample opportunity for students to analyze and associate the different negotiation strategies implemented by the Indian government in the Bhopal case and the US government in the BP oil spill case. Finally, the case sheds light on what role the media played as an intermediate, including the loopholes of Indian media in case of Bhopal Leak when compared to media in the US, which presented quite a satisfying coverage during the BP oil spill. Students here can analyze and suggest how this can, over time, be improved further in case of such disasters.
This case was prepared for inclusion in Sage Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.
2024 Sage Publications, Inc. All Rights Reserved
Resources
Table 1: Expenditure Incurred up to March 2009 by the State Government of Madhya Pradesh According to the First Action Plan for Rehabilitation in Bhopal after the Gas Leak Tragedy
Sr. No | Type of Rehabilitation | Sanctioned Amount (INR in millions) | Expenditure up to March 2009 (INR in millions) |
1 | Medical | 1503.6 | 3661.5 |
2 | Economic | 211.8 | 270.6 |
3 | Social | 497.1 | 456.9 |
4 | Environmental | 237.6 | 293.8 |
5 | Miscellaneous | 52.9 | 86.6 |
6 | Judicial & Administrative | 77 | 351.5 |
Total: | 2580 | 5120.9 |
Source: Web Portal of Bhopal Gas Tragedy Relief and Rehabilitation Department, Bhopal, Government of Madhya Pradesh. Retrieved from http://www.bgtrrdmp.mp.gov.in.
Table 2: Timeline of Legal Actions Taken for Compensation and its Disbursal among the Victims of the Bhopal Gas Tragedy
December 3,1984 | Gas leak from MIC tank in UCIL plant, Bhopal |
February 1985 | GoI files claim for USD 3.3 billion from Union Carbide in a US court. |
March 1985 | Bhopal Gas Leak Disaster Act passed to enable GoI to act as the legal representative of the victims in claims arising of or related to the Bhopal disaster. |
April 1985 | UCC offers $5 million in relief for victims before the US District Court. GoI rejects the offers. |
August 1985 | GoI files a suit for compensation in the US District Court. |
November 1985 | The Office of the Welfare Commission, Bhopal Gas Victim, Bhopal established under Bhopal Gas Leak Disaster Act with the aim to adjudicate the claims and disburse the compensation to the victims of the disaster. |
March 1986 | UCC proposes USD 350 million as settlement for victims and families |
May 1986 | Suit filed by GoI in the US District Court dismissed on grounds of not being suitable forum for judgement |
September 1986 | GoI files a civil suit in District Court, Bhopal, which passes an Interim Compensation Order of 3.05 billion INR. The amount was reduced to 2.5 billion INR by the High Court. |
February 1989 | GoI and UCC reach at an out-of-court final compensation settlement of USD 470 million. The SC directs the amount to be paid by March 31, 1989. UCC pays $420 million; UCIL pays the rupee equivalent of $50 million (including $5 million of interim relief previously paid). |
May 1989 | SC justifies the compensation amount. |
December 1989 | SC upholds the validity of the Bhopal Gas Leak Disaster Act of 1985. |
November 1990 | The State Government of Madhya Pradesh submits to SC the completed categorization of 618,659 claims of the victims. |
October 1991 | SC confirms the settlement and closes legal proceedings. The Court directed UCC to fund the capital and operating costs of a hospital in Bhopal. |
February 1992 | The Office of the Welfare Commission begins adjudication of claims of victims of the disaster. |
November 1994 | UCC completes the sale of its 50.9 % stake in UCIL to McLeod Russel India Ltd of Calcutta. The amount is transferred to charitable trust for building the hospital in Bhopal. |
2001 | The Bhopal Memorial Hospital and Research Centre opens to the public. |
June 2004 | SC orders the Central Bank of India to release more than 15 billion INR, part of the USD 470 million kept in account since 1992. |
October 2004 | SC sets a deadline of November 15, 2004 to pay out the rest of the compensation amount. |
November 2004 | Disbursement of pro-rata compensation commenced. |
April 2005 | SC extends deadline for release of settlement funds to April 30, 2006. The process of disbursement still continues. |
Source: ‘Bhopal Gas Tragedy: Timeline’, The Indian Express, March 23, 2011; ‘Bhopal Gas Tragedy: A Chronology of Events’, The Hindu, June 7, 2010
Table 3: Timeline of Legal Proceedings Undertaken Against the Accused in the Bhopal Gas Tragedy
December 3, 1984 | Gas leak from MIC tank in UCIL plant, Bhopal |
December 3,1984 | Bhopal Police registers FIR after observing that people were dying around the factory and arrests several UCIL employees |
December 6,1984 | Case transferred by state government to CBI |
December 7, 1984 | Police arrests Warren M Anderson, Chairman of UCC, Keshub Mahindra, Chairman of UCIL, and Vijay Prabhakar Gokhle, Managing Director of UCIL. |
December 7, 1984 | Anderson released on bail of $ 2,000, upon a promise to return. |
December 9,1984 | CBI takes over the case and starts investigation. |
December 14, 1984 | Anderson testifies before Congress, promising to take actions to ensure that a similar incident “cannot happen again” |
March 1, 1985 | GOI enacts the Bhopal Gas Leak Disaster Act that enables it to act as legal representative of the victims in claims arising of or related to the Bhopal disaster. |
June 8, 1985 | US District Court judge transfers all Bhopal litigations to India. |
July 7, 1987 | CJM, Bhopal issues fresh summons against Anderson |
November 30, 1987 | CBI files charge sheet in the court of Chief Judicial Magistrate (CJM), Bhopal, charging the accused under section 304 (culpable homicide not amounting to murder)/326 (voluntarily causing grievous hurt by dangerous weapons or means), 324 (voluntarily causing hurt by dangerous weapons or means) and 429 (mischief by injury to works of irrigation or by wrongfully diverting water) read with section 35 of IPC. |
December 1, 1987 | CJM, Bhopal issues summons against Anderson |
June 10, 1988 | Throughout 1988, arguments and appeals take place before the Indian Courts regarding compensation for the victims. In November, SC asks the Government of India and UCC to reach a settlement, and tells both sides to “start with a clean slate.” |
May 1, 1988 | Independent investigation by the engineering and consulting firm Arthur D. Little, Inc., concludes that the gas leak could only have been caused by sabotage; someone intentionally connected a water hose to the gas storage tank and caused a massive chemical reaction. |
September 20, 1988 | Letter received from Embassy of India at Washington that summons had been served on Anderson. |
November 15, 1988 | CJM, Bhopal issues bailable warrants against Anderson. |
February 1, 1989 | SC directs a final settlement of all Bhopal litigation in the amount of $470 million, to be paid by March 31, 1989. Both GoI and UCC accept the court’s direction. UCC pays $420 million; UCIL pays the rupee equivalent of $50 million (including $5 million of interim relief previously paid). |
December 1, 1989 | The SC upholds the validity of the “Bhopal Gas Leak Disaster Act of 1985” that authorized the Government of India to act on behalf of the Bhopal gas leak victims. |
October 1, 1991 | SC upholds the civil settlement of $470 million in its entirety and sets aside portion of settlement that quashed criminal prosecutions that were pending at the time of settlement. |
June 14, 1991 | CJM, Bhopal declares Anderson as Proclaimed Offender after he jumped bail. |
January 1, 1992 | Proclamation against Anderson issued by CJM, Bhopal, publishes in the ‘Washington Post’ newspaper. |
February 1, 1992 | Anderson declared fugitive by law for ignoring court summons. |
April 10, 1992 | CJM, Bhopal issues non-bailable warrant of arrest against Anderson for arranging extradition proceedings against him. |
May 25, 1992 | CJM, Bhopal separates the trial of Anderson, Union Carbide Corporation (USA) and Union Carbide Eastern Inc. (Hong Kong) from rest of the other accused persons. |
June 22, 1992 | CJM, Bhopal commits the case to the sessions court against rest of the nine accused persons. |
April 1, 1994 | SC allows UCC to sell all its shares in UCIL so that assets can be used to build Bhopal hospital. |
November 1, 1994 | UCC completes the sale of its 50.9% interest in UCIL to McLeod Russel India Limited of Calcutta. |
September 13, 1996 | After the accused moved SC, it diluted the charges framed against them by the trial court which was earlier upheld by Madhya Pradesh High Court. |
September 13, 1996 | A Bench comprising the then Chief Justice of India A M Ahmadi and Justice S B Majumdar said the accused will be tried under section 304 (A) (causing death by negligence), 336 (act endangering life or personal safety of others), 337 (causing hurt by act endangering life or personal safety of others), and other sections of IPC. |
November 1, 1999 | International environment watchdog Greenpeace tests soil, groundwater, and wells in and around the derelict Union Carbide factory and finds 12 volatile organic chemicals and mercury in quantities up to 6 million times higher than expected. |
November 1, 1999 | Several victims and survivors’ organisations file an action suit against Union Carbide and its former CEO, Warren Anderson, in federal court of New York, charging Carbide with violating international human rights law, environmental law, and international criminal law. |
February 1, 2001 | Union Carbide refuses to take responsibility for UCIL’s liabilities in India. |
August 1, 2002 | Charges of culpable homicide are maintained against Anderson by Indian court, which demands his extradition to stand trial. Meanwhile, a British newspaper reports that Anderson is in New York after US authorities say they are unable to locate him. |
October 11, 2002 | CJM, Bhopal issued fresh arrest warrant under section 304, 324, and 429 read with section 35 of IPC. The arrest warrant was not executed by the US authorities and returned. |
May 1, 2003 | The Indian government formally conveys its request for extradition of Anderson to the US. |
March 1, 2004 | A US court says it could order Dow Chemicals to clean soil and ground water in the abandoned factory site if the Indian government provides a no objection certificate. The Indian government forwards the certificate to the US. |
June 1, 2004 | The US rejects India’s request for extradition of Anderson saying the request does not “meet requirements of certain provisions” of the bilateral extradition treaty. |
June 22, 2009 | CJM, Bhopal issued fresh NBW against Anderson to appear before the court. |
June 7, 2010 | After more than 25 years, Bhopal Chief Judicial Magistrate Mohan P Tiwari held guilty all the eight accused persons and sentenced them to two years of jail term along with fine. However, all the eight convicts were granted bail. |
August 31, 2010 | CBI filed a curative petition before SC to re-examine its own September 1996 judgement, which had ruled in favour of the trial of various Bhopal gas leak tragedy accused on charges of causing death due to negligence rather than the harsher penal provision of culpable homicide not amounting to murder. |
February 28, 2011 | A five-judge bench of SC headed by Chief Justice S H Kapadia also said it will hear on day-to-day basis from April 13 the Centre’s plea for restoration of the stringent charge of culpable homicide not amounting to murder against the accused and enhancement of compensation for the victims. |
May 22, 2011 | CBI moves Delhi court to obtain a letter rotatory to extradite Anderson from the US to face trial in India. |
May 23, 2011 | Delhi court allows CBI plea seeking to extradite Anderson from the US. |
Sources: “Bhopal Gas Tragedy: Timeline,” The Indian Express, March 23, 2011; “Bhopal Gas Tragedy: A Chronology of Events,” The Hindu, June 7, 2010.
Table 4: Timeline of Restoration Activities Carried out Since the Oil Spill in the Gulf of Mexico
April 20, 2010 | An explosion and fire on the BP-operated drilling rig Deepwater Horizon kills 11 workers. |
April 22, 2010 | Deepwater Horizon sinks to the bottom of the Gulf after burning for 36 hours. |
April 26, 2010 | Official warning of environmental disaster due to leakage at initial estimated rate of 1,000 barrels of oil per day. BP begins efforts to activate the blowout preventer. |
April 28, 2010 | The US Coast Guard warns the oil leak could become the worst oil spill in US history. |
April 29, 2010 | President Barack Obama makes his first public statement about the oil spill and promises complete assistance in restoration. |
April 29, 2010 | The US Coast Guard sets fire to patches of spilled oil in an effort to prevent the slick from reaching the vulnerable Louisiana coastal wetlands. |
May 8, 2010 | As BP continues efforts to stop oil flow, official estimate of the leakage rate rises to 5,000 barrels per day. |
May 14, 2010 | Researchers estimate significantly higher leakage rate of about 70,000 barrels of oil on the basis of underwater video of leak site. |
May 29, 2010 | BP’s “top kill” efforts to plug the oil well with drilling mud fails. |
May 30, 2010 | Carol Browner, President Barack Obama’s adviser on energy policy, says the spill is the worst environmental disaster in US history. |
June 4, 2010 | BP places a temporary cap atop the leaking wellhead. |
June 8, 2010 | Adm Thad Allen, the commander of the US response, says clean-up of the oil-stricken Gulf could take years. |
June 10, 2010 | The US Geological Survey estimates the oil flow at as many as 40,000 barrels per day before a cap was put on the well. |
July 10, 2010 | BP tries to place a tighter-fitting cap atop the leaking wellhead. |
July 15, 2010 | After 85 days, BP manages to stanch the leak with a massive cap for the time-being. |
August 3, 2010 | The US government says the oil spill is officially the biggest leak ever, with 4.9 million barrels of oil leaked before the well was capped last month. |
September 19, 2010 | Federal officials announce the well has been finally sealed for good after workers drill a relief well into the damaged one and insert a permanent cement plug. |
Table 5: Timeline of Legal Proceedings Undertaken After the BP Oil Spill in the Gulf of Mexico
April 20, 2010 | An explosion and fire on the BP-operated drilling rig Deepwater Horizon kills 11 workers. The rig sinks after two days, raising environmental concerns. |
April 30, 2010 | President Barack Obama’s administration bans oil drilling in new areas off the US coast pending investigations into the cause of the spill. |
May 10, 2010 | BP reveals the oil spill has cost the company $350m (£233m) so far. |
May 11, 2010 | At a series of congressional hearings, BP, Transocean and Halliburton blame each other for the disaster. |
June 2, 2010 | The US announces a criminal inquiry into the BP oil spill. |
June 15, 2010 | President Obama addresses the nation from the Oval Office, vowing, “We will make BP pay for the damage their company has caused.” |
June 16, 2010 | BP agrees to put $20 billion into an escrow fund to settle economic injury claims by fishermen and various Gulf industries. |
June 17, 2010 | BP announces it will place $20bn in a fund to compensate victims of the oil spill and says it will not pay a shareholder dividend this year. |
June 22, 2010 | A federal judge strikes down the Obama administration’s six-month ban on deep water drilling in the Gulf, saying the government rashly concluded that other rigs could be in immediate danger. |
July 5, 2010 | BP says the oil spill response has cost the company $3.12bn (£2bn), including the cost of containing the spill and cleaning up the oil, and the cost of drilling relief wells. The figure also includes $147m paid out in compensation to some of those affected by the spill. |
July 26, 2010 | BP announces that chief executive Tony Hayward will step down on Oct. 1 and be succeeded by American Robert Dudley. |
August 9, 2010 | BP announces that the total cost to it of the oil spill so far has reached $6.1bn (£3.8bn). The total includes the cost of the spill response, containment, relief well drilling, cementing up of the damaged well, and grants to the Gulf states and compensation to some of those affected by the spill. |
August 16, 2010 | The US announces that future applications for deep-water offshore drilling will require an environmental assessment. |
September 3, 2010 | The cost of the oil spill has risen to $8bn (£5.2bn), a rise of some $2bn in the past month alone. |
September 8, 2010 | In an internal report BP accepts responsibility in part for the disaster, but also blames other companies working on the well. |
October 12, 2010 | Obama’s administration lifts the six-month moratorium on deep water oil drilling in the Gulf. Interior Secretary Ken Salazar says new rules imposed after the BP spill, have strengthened safety measures. |
December 15, 2010 | The Justice Department files suit against BP and eight other companies over the accident, asking they be held liable for restoration costs and damages caused by the explosion and spill. |
January 12, 2011 | The 380-page report from government-appointed National Oil Spill Commission finds that time- and money-saving decisions created an unreasonable amount of risk that triggered the Deepwater Horizon explosion. |
March 2, 2012 | A few days before the trial was to begin, BP and lawyers for the plaintiffs in a trial over the 2010 oil spill, reach a settlement for compensation to be paid from a fund being managed by Ken Feinberg and the Gulf Coast Claims Facility. |
November 15, 2012 | BP agrees to pay $4.5 billion in a settlement with the US government and plead guilty to felony counts related to the deaths of 11 workers and lying to Congress. |
This case was prepared for inclusion in Sage Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.
2024 Sage Publications, Inc. All Rights Reserved