Bhopal Plant History and Ownership

Bhopal Plant
Union Carbide India Limited's (UCIL) Bhopal plant was a vast chemical complex containing miles of complicated piping and hundreds of specialized reactors, pressure vessels, heat exchangers and other equipment and employed more than 1,000 workers.  The plant began operations in the late 1960s on a site leased from the Madhya Pradesh State Government (MPSG), which selected the location.

At the time, the area surrounding the site was removed from the city and very lightly populated. However, in the ensuing the years, the authorities encouraged thousands of people to settle near the plant and distributed “pattas” granting land rights to the hutment dwellers around the factory.

At the time of the gas release, the plant site contained about 55 acres, and an additional, non-contiguous 35-acre site, also leased from MPSG, was utilized for solar evaporation ponds (SEPs). On July 7, 1998, the MPSG terminated the leases of the plant site and SEPs. Click here to view the MPSG press release.

Design and Construction of the Plant
The design, engineering and construction of the Bhopal plant was a UCIL project from beginning to end and took eight years to complete (1972-1980). The project involved hundreds of Indian engineers and designers from UCIL and major Indian engineering firms, dozens of Indian subcontractors and thousands of Indian construction workers.

Contrary to allegations made by certain parties, Union Carbide Corporation (UCC) did not design, construct or operate the Bhopal plant. And, most importantly, all of the decisions with respect to the plant and its design, construction, and operation were either made by UCIL or mandated by Government of Indian (GOI) policies and directives. (See 1987 Court of Appeals Ruling below.)  At the insistence of the GOI, UCC’s role in the project was very narrow and contractually defined.

Pursuant to an arm’s-length contract with UCIL, which required GOI approval, UCC provided process design packages for the phosgene, methylisocyanate (MIC) and Sevin units (although UCIL decided not to use UCC’s Sevin process). The process design packages that UCC provided were nothing more than design starting points; they provided only general parameters -- such as the composition and flows of chemicals, temperatures, working pressures, certain information on materials of construction and the like. A plant cannot be constructed from process design packages.  

In the years after UCIL’s receipt of UCC’s process designs, UCIL made a vast number of choices, trade-offs and changes during the detail design, engineering and construction of the plant, and UCC’s process designs were changed in innumerable ways to suit UCIL’s operating philosophy and local conditions.  UCC had no further design role. Much of the technology for the Bhopal plant was developed by UCIL itself (the naphthol process and Sevin process) or acquired from Stauffer Chemical Corporation (the carbon monoxide process).  Furthermore, UCIL decided not to use UCC’s Sevin process and developed its own.

1987 U.S. Court of Appeals for the 2nd Circuit Rules
UCC Did Not Design, Construct or Operate Bhopal Plant


In a 1984 case, plaintiffs sought to prove that the Bhopal accident was caused by negligence on the part of UCC in originally contributing to the design of the plant and its provision for storage of excessive amounts of the gas at the plant. The U.S. Court of Appeals for the Second Circuit in 1987 upheld a lower court's ruling that "UCC’s participation was limited and its involvement in plant operations terminated long before the accident.

"Under 1973 agreements negotiated at arm’s-length with UCIL, UCC did provide a summary 'process design package' for construction of the plant and the services of some of its technicians to monitor the progress of UCIL in detailing the design and erecting the plant. However, the UOI [Union of India] controlled the terms of the agreements and precluded UCC from exercising any authority to 'detail design, erect and commission the plant,' which was done independently over the period from 1972 to 1980 by UCIL process design engineers who supervised, among many others, some 55 to 60 Indian engineers employed by the Bombay engineering firm of Humphreys and Glasgow.

"The preliminary process design information furnished by UCC could not have been used to construct the plant. Construction required the detailed process design and engineering data prepared by hundreds of Indian engineers, process designers and sub-contractors. During the 10 years spent constructing the plant, its design and configuration underwent many changes." Click here to view the Court of Appeals decision -- Union Carbide Corporation Gas Plant Disaster at Bhopal, India.

Back-integration 
The plant began operations in 1969 as a formulations plant; that is, UCIL imported the chemical carbaryl from UCC, formulated it into the insecticide brand products (such as Sevin and Temik) and sold the formulated products to distributors in India. The formulation process did not involve the manufacture of any chemicals, such as MIC, by UCIL in India.  Rather, the imported carbaryl was combined with other materials to make various end products.

That arrangement benefited UCIL because it was able to sell the formulated insecticide to a growing agricultural market in India without having to make the large capital investment necessary to build a major chemical plant. However, from the time UCIL first began to import carbaryl from UCC's plant in Institute, WVA, the GOI pressured UCIL to “back-integrate;” that is, to build a chemical plant capable of manufacturing carbaryl from indigenous raw material, in order to save the foreign exchange paid for those imports. The mechanism to enforce back-integration was the GOI’s control over import licenses. To import carbaryl into India, the GOI required UCIL to obtain annually a license that included a condition that UCIL develop and implement plans to build a fully back-integrated chemical plant in India, which included the manufacture of MIC. UCIL’s choice: either back-integrate or abandon the sizable market it had developed for insecticides in India.

In 1977, UCIL started the Sevin unit and ceased importation of carbaryl. From 1977-1980, carbaryl was produced in the Sevin unit from MIC and naphthol imported from Institute in 55-gallon drums.  The MIC unit started in February 1980 and importation of MIC ceased. From 1980-1984, the only material imported into the plant from the U.S. was naphthol. (UCIL completed a naphthol unit in 1977, but all attempts to operate it were unsuccessful, so the importation continued from the U.S.)

The Government of India’s (GOI) Role
Laws, regulations and policies generated by the GOI and MPSG permeated every aspect of the Bhopal facility from its inception. No action of any significance was taken without the approval of the GOI or MPSG.

The GOI required UCIL to maximize Indian involvement in the design, procurement, construction and operation of the plant and to minimize foreign involvement of any kind. The GOI restricted the use of imported materials and foreign consultants, and, as the U.S. Court of Appeals for the Second Circuit confirmed in 1987, "precluded UCC from exercising any authority to ‘detail design, erect and commission the plant."

The GOI closely monitored the progress of the plant, required detailed periodic reports and approved plans and drawings, including the MIC manufacturing facility and storage tanks, as well as the UCIL-designed waste disposal systems for the treatment and disposal of wastes, which also were approved by the MPSG authorities. The thrust of numerous GOI policies was to completely “Indianize” the project.

In short:

  • The plant had been constructed and managed by Indians in India.
  • No Americans were employed at the plant at the time of the accident. From 1980-84, more than 1,000 Indians were employed at the plant -- but only one American was employed there and he left in 1982.
  • No Americans visited the plant for more than one year prior to the incident.  And,
  • During the 5-year period before, communications between the plant and the U.S. were almost non-existent.

U.S. Court of Appeals for the 2nd Circuit Rules in 2013 Decision
That UCC Not Responsible for Any Environmental Pollutions at Bhopal Site

In 2013, the U.S. Court of Appeals for the Second Circuit reached a similar conclusion that UCC was not the entity responsible for any environmental pollution resulting from operation of the UCIL plant prior to the disaster. UCIL designed the waste disposal system for the treatment and disposal of wastes, which was approved by the Madhya Pradesh State Government authorities. The Second Circuit concluded "...[M]any others living near the Bhopal plant may well have suffered terrible and lasting injuries from a wholly preventable disaster for which someone is responsible. After nine years of contentious litigation and discovery, however, all that the evidence in this case demonstrates is that UCC is not that entity". Click here to view the entire ruling by the Second Circuit Court of Appeals.

 

Frequently Asked Questions About UCIL Ownership of the Bhopal Plant


1. Who owned the Bhopal plant at the time of the incident and who owns it now?
A. The Bhopal plant was owned and operated by UCIL, an Indian company in which UCC held just over half of the stock. Indian financial institutions and thousands of private investors in India held the rest of the stock. In 1994, UCC sold its entire interest in UCIL to Mcleod Russel India Limited, which renamed the company Eveready Industries India, Limited (EIIL). In 1998, the MPSG, which owns and had been leasing the property to EIIL, canceled the lease; took over the facility; and assumed all accountability for the site, including the completion of any additional remediation. 

2. Did UCIL abandon the Bhopal plant after the gas leak?
A. No. UCIL, an Indian company, managed and operated the Bhopal plant at the time of the gas leak. After the incident, UCIL completed one of the most single important remediation activities.  Known as "Operation Faith", the initiative transformed and removed of tens of thousands of pounds of methylisocyanate (MIC) from the plant. Click here to see page 7 in the Jackson Browning Report. In the years following the tragedy, the Indian government severely restricted access to the site. UCIL was only able to undertake clean-up work in the years just prior to the sale, and spent some $2 million on that effort, which included beginning construction of a secure landfill to hold the wastes from two solar evaporation ponds on site. The central and state government authorities in India approved, monitored and directed every step of the clean-up work.

We understand that, after the sale of UCIL stock in 1994, EIIL continued the clean-up work and completed the construction of the secure landfill on site.  In 1998, the MPSG, which owns and had been leasing the property to Eveready, canceled the lease; took over the facility; and assumed all accountability for the site, including the completion of any additional remediation.

3. How does UCC respond to the allegations made in court cases through the years that it was responsible for the design of the technologies employed at the Bhopal plant that led to the tragedy and resulting on-site and off-site pollution?
A. Contrary to allegations made by certain parties in various lawsuits, UCC did not design, construct or operate the Bhopal plant. And, most importantly, all of the decisions with respect to the plant and its design, construction, and operation were either made by UCIL or mandated by GOI policies and directives.

At the insistence of the GOI, UCC’s role in the project was very narrow and contractually defined. Pursuant to an arm’s-length contract with UCIL, which required GOI approval, UCC provided process design packages for several units, but the design packages were nothing more than design starting points.  They provided only general parameters -- such as the composition and flows of chemicals, temperatures, working pressures, certain information on materials of construction and the like. A plant cannot be constructed from process design packages.  In the years after UCIL’s receipt of UCC’s process designs, UCIL made a vast number of choices, trade-offs and changes during the detail design, engineering and construction of the plant, and UCC’s process designs were changed in innumerable ways to suit UCIL’s operating philosophy and local conditions.  

In 1987, the U.S. Court of Appeals upheld a lower court's ruling that "UCC’s participation was limited and its involvement in plant operations terminated long before the accident....the UOI [Union of India] controlled the terms of the agreements and precluded UCC from exercising any authority to 'detail design, erect and commission the plant,' which was done independently over the period from 1972 to 1980 by UCIL process design engineers....The preliminary process design information furnished by UCC could not have been used to construct the plant. Construction required the detailed process design and engineering data prepared by hundreds of Indian engineers, process designers and sub-contractors..." Click here to view the Court of Appeals decision -- Union Carbide Corporation Gas Plant Disaster at Bhopal, India.

Subsequently, in 2013, the U.S. Court of Appeals for the Second Circuit upheld U.S. District Court Judge John F. Keenan’s comprehensive decision of June 2012 in the Sahu vs. Union Carbide Corporation case.  Judge Keenan had unambiguously concluded that UCC is not liable for any environmental remediation or pollution-related claims made by residents near the Bhopal plant site in India; dismissed all claims against UCC and former Chairman Warren Anderson; and ruled that UCC had no liability related to the plant site. The Second Circuit concluded "...[M]any others living near the Bhopal plant may well have suffered terrible and lasting injuries from a wholly preventable disaster for which someone is responsible. After nine years of contentious litigation and discovery, however, all that the evidence in this case demonstrates is that UCC is not that entity". Click here to view complete 2013 court decision.