30/4/2014

International Business Policy

lex Sol Santiso

Seminar 3

The CEO of Dow Chemical asks you whether he should consider that Dow Chemical has
responsibility with regards to the Bhopal tragedy. Thinking of the Legal Limited Responsibility
proper to such a corporation and the Corporate Social Responsibility, what is your analysis,
what do you propose and why?

Even if Dow has no legal responsibility it does not imply that they dont have any social
responsibility.
The concept of legal limited responsibility is necessary for economy since provides the
necessary warranties for the companies and its owners to create firms. Nevertheless, no
legal responsibility should not imply no responsibility. Firms, as agents participating in the
system are responsible of their effects on them and this becomes crystal clear in the
dramatic case of Bhopal. The dynamics of chemical industry (selling life dangerous products
as pesticides since it is more profitable, keeping opened a plant without the required safety
systems just because it wasnt profitable) makes somehow all the firms in this industry (not
only Dow, I dont really think that Dows responsibility exceeds other chemical companies)
morally responsible of the effects of the benefit maximization on Bhopal. For me, they all
have the obligation of compensating properly the victims (if we consider that the
compensation has been insufficient) and more important, taking convincing measures so as
to avoid future disasters, even if that means sacrificing part of their profits. Dow could
compensate the victims but for me the most important is to avoid the facts happening again.
Since this problem wouldnt be solved if just Dow started to act properly, Dow could try to
collaborate with associations as ICCA (International Council of Chemical Associations), that
are crucial to establish new rules of the game. In these rules is important to understand that
when dealing with so dangerous products as the chemical ones, safety (not profits) must be
the first firms preoccupation, a human life is far more valuable than some additional millions
of dollars. So as to ensure this, is important to get the compromise of the major firms in this
market, the compromise of fulfilling strict safety requirements and detailed information of all
their products consequences and, for example give a certificate to the companies achieving
those requirements (90% of chemical revenues belong to chemical firms that belong to
ICCA, thats why this institution could be useful for that issue).
How do you make sure firms dont try to cheat? What if the incentive of getting a certificate
is not enough for companies? Keeping apart the fact that the incentive of not risking peoples
life should be enough for everybody, there may be companies that dont agree and dont care
about anything but profits.
The ideal scenario would be the one where international
governments (or an international court with real power) make sure that the minimum
standards are accomplished and build a solid legal environment supporting the standards and
punishing (with real punishments and non-derisory fines as in many cases happens) firms
when they are not respected.
Summing up, the best way for Dow to apply CSR is put all of their effort in changing the
industry in a way that gives real guarantees that tragedies as the Bhopal one are never
happening again.