Bhopal tragedy resounds for other multinationals
The deadly accident at a Union Carbide plant in Bhopal, India, has long-range implications not only for Union Carbide, but for other multinational corporations running plants overseas.
''What happened on Sunday is an issue that's worldwide, that goes far beyond what we did at Bhopal,'' Union Carbide chairman Warren Anderson said at a press conference Monday in Danbury, where the chemical company is headquartered. He had just returned from India.
''It's the issue of how you cope with new product, new plant . . . the health and safety of individuals.''
More than 2,000 people were killed and tens of thousands injured when toxic gas leaked from a facility operated by a Union Carbide subsidiary. The company, with help from Union Carbide India Ltd., of which Union Carbide owns 50.9 percent, offered nearly $2 million in short-term aid. But the offer was rebuffed as a ''token gesture'' by the chief minister of Madhya Pradesh state, Arjun Singh, according to United News of India. A $15 billion class-action suit has been filed against Union Carbide.
Union Carbide officials confirm that safety problems were detected at the Bhopal plant in 1982. But it was not clear whether the problems were rectified before the accident. Indian officials, meanwhile, contend that poor safety measures were responsible for the leak of the methyl isocyanate gas.
The tragedy has renewed questions about whether American multinational corporations might be employing one set of environmental and safety standards in the United States and another set abroad.
''There have been a lot of assertions in the press that secondhand, less-than-reliable, obsolete facilities are shipped overseas,'' Mr. Anderson says. ''Anybody that's in the business world knows that this is not a viable way of operating. We're in a worldwide, competitive community, and you can't put secondhand facilities someplace outside the United States and expect to have a viable business.''
Industry analysts have little idea how much corner-cutting American companies in general do overseas.
James Golden, a Washington consultant to multinationals, says the safety record of multinationals overall is good, but where companies tend to be lax, he says, is in pollution control.
''In countries which don't require some horribly expensive (control methods), and if the competition doesn't have it, it's an awfully big temptation'' to economize.
On paper, a chemical company's standards may be uniform around the globe, but enforcement of those standards varies from manager to manager, says John Holtzman, spokesman for the Chemical Manufacturers Association in Washington. He also points to what he calls the differences in ''safety culture'' between the US and other countries.
''We have a certain sense of safety. You see it in campaigns like 'buckle up.' It's not necessarily the same elsewhere. It's difficult to enforce our culture on another country,'' Mr. Holtzman says, especially when the other country seems willing to take risks in exchange for speedy technological advance.
For seven years the UN transnational center has been pushing acceptance of an international code of standards for multinational corporations.
The Organization for Economic Cooperation and Development is also considering a conduct code that would require companies to tell their host countries about potential hazards, including environmental ones, and to detail evacuation plans.
(Union Carbide chairman Anderson said the Bhopal evacuation didn't work because the accident happened at night, instead of during the day.)
The National Safety Council ranks the chemical industry No. 1 in worker safety of 42 major US industries; an industry spokesman says that translates into high public safety as well. Anderson, however, says safety awareness will be heightened industrywide: ''No one will do anything from here on out without thinking of Bhopal.''
Opinions are mixed on whether the Bhopal tragedy will be a disincentive to global industrial expansion.
''Environmentalists will have more ammunition to push for the kind of legislation they want,'' which could be expensive for the industry, says Garo Armen, an industry analyst at the E. F. Hutton securities firm. Meanwhile, he says, ''we are probably going to see some third-world countries rethinking'' their regulatory policies. A Brazilian state government has recently refused to unload or transport shipments of methyl isocyanate.
Mr. Golden notes that the accident may cause problems for multinational companies but expects only brief hesitancy by companies about overseas expansion. Executives may see Bhopal as a once-in-a-lifetime tragedy.
But the impact on Union Carbide is great. Lawsuits are claiming huge damages; the corporation's image has been tarnished; Union Carbide stock has plummeted. The ''stigma'' of the Bhopal tragedy, Anderson says, ''is going to stick with this company for a long, long time.''