Union Carbide India, Limited

The Union Carbide India Limited (UCIL) is a pesticide plant in Bhopal, India, gained world-wide attention as a result of the tragic chemical disaster in December 1984. The Bhopal Disaster involving a massive release of methyl isocyanate (MIC) gas, resulted in the death or injury of thousands of people in the surrounding residential areas.

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At the time of the disaster UCIL was ranked twenty-first in size among companies operating in India. It had revenues of Rs 2 billion (then equivalent to US$170 million). 50.9% of UCIL was owned by Union Carbide Corporation(UCC); remaining shares were held by 24,000 stockholders. Ten thousand people were employed in five operating divisions that manufactured batteries, carbon products, welding equipment, plastics, industrial chemicals, pesticides, and marine products.

On January 14, 1987 , the U.S. Second Circuit Court of Appeals in Manhattan upheld a decision by the U.S. District Court to send the legal case against Union Carbide to India and reaffirmed that UCIL, which operated the Bhopal plant, was a separate and independent legal entity that was managed and staffed by Indian citizens.

In February 1989, the Supreme Court of India directed UCC and UCIL to pay a total of $470 million in full settlement of all claims arising from the tragedy. The government, UCC and UCIL agreed and the two companies paid in full on February 24.

In November 1994, UCC completed the sale of its 50.9 % interest in UCIL to McLeod Russel Ltd. of Calcutta. Indian government financial institutions owned 26 % of the shares and some 24,000 Indian private citizens owned the balance. Following the tragedy, the Government of India ceased production at the plant and took complete control of the property. In the years that followed and under very close supervision by the Government, UCIL undertook significant effort to remediate the site. This work was not completed prior to the time in 1994 when Union Carbide sold its shares in UCIL to McLeod Russell, a part of the Williamson Magor Group. UCIL was subsequently renamed Eveready Industries India Ltd. (EIIL). As part of this transaction, EIIL became the leaser of the property and assumed full responsibility for the environmental clean up of the site. In the years that followed, EIIL continued to remediate the site under close supervision by the Government of India.

In 1998, the Government of Madhya Pradesh (state government where Bhopal is located) revoked EIIL's lease on the property and took responsibility for the property "as is" stating, "The State Government (Madhya Pradesh) will ensure the safe disposal of the residual Sevin tar and Nepthol tar from the factory.”

Union Carbide India Ltd. maintained a low profile in the post-Bhopal period. The Chairman, Keshub Mahindra, and the Bhopal Factory Manager, J. Mukund, moved on to new positions. Most of the Bhopal plant managers left the company after the plant closed. The company steered clear of lawsuits between the parent company and the Government of India, and concentrated on managing other businesses in India. UCIL closed the pesticide plant and reduced the Research and Development Center in Bhopal to a skeleton staff. Top management personnel from the Bhopal plant moved to other parts of the company. Apart from the fact that UCIL was denied permits that would have permitted expansion, it remained largely unaffected by the Bhopal accident.