Law for Business 12th Edition by James Barnes,Terry Dworkin,Eric Richards

Exercise 8

After toxic fumes leaked from Union Carbide's pesticide plant in Bhopal, India, over 3,300 people were killed and another 30,000 injured. Two sources later indicated that Union Carbide had conducted feasibility studies on whether to build the plant in Bhopal. Both sources claimed there was concern inside the company whether such a complex facility could be safely maintained in India. A former Union Carbide engineer who worked on one of the studies claimed that the company was fully aware of the risk. In fact, the company's final liability-a $465 million settlement-was described as a bargain. This amounted to only a few thousand dollars apiece for families of the dead and injured. Had the disaster occurred in the United States, Union Carbide probably would have had to pay several billion dollars. Would it be ethical for Union Carbide to accept the greater risk of a disaster by locating the plant in India because such a risk would be more than offset by the lower damages it would have to pay there? Explain.