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The role of Neo-Liberalism in developing countries

Discuss about the Bhopal Disaster and the Global Impact .

The role of globalisation and the neo-liberal policies has left great impact on the social and economic condition of the developing countries. The basic principle of Neo-liberalism can be identified as the less monitoring and control of the government in the business orientation of the private organisation and makes reforms of the tax laws in order to maximize profit from the global companies (Giroux 2018). In other words, the Neo-Liberal policies foster a sense of free trade and privatization that redeems the government control and expenditure (Peck and Theodore 2015).  During the 1980s onwards, the Indian government also followed the same line as other developing countries to taste the benefits of globalisation. However, in course of her way towards capitalism the Indian state faced one of the biggest industrial disasters in its history as the Bhopal disaster. The Bhopal gas leak had a great deal of impact on the local inhabitants of Bhopal and the local people still carry out the adverse impact of the tragedy on their health condition. The Union Carbide Chemical Company was responsible for this emphatic disaster but due to their political connections and global domination the CEO got the chance to run away (Izarali 2013). At that time the nascent Indian government did not share such power to influence the world politics into its own fold and as a result of that the entire investigation conducted by the Indian government became futile. As a matter of fact, the developed countries alleged India that the country did not have any environmental protection act or other safeguards of environmental sustainability that instigated the UCL Company to neglect such protective measures (Okoh and Haugen 2013). However, the ethical consideration for the Company was supposed to be another factor in the event that the global platform overlooked. In this context, the present essay is going to understand the role of Neo-Liberalism as a tool to affect developing countries. Moreover, the activities of the global corporate and Multinational companies are also incorporated into the discussion. For the discussion, the essay chooses the topic of the Bhopal Tragedy as a theme and carries forward the discussion further by making a relation between the theory of Neo-Liberalism, its impact on the developing countries like India, the role of the political institutions and the responses of the Western countries.

The Bhopal gas tragedy and its impact on local inhabitants

Since its independence, the Indian State was dealing with financial crisis and political instability inside and in the global platform. The first five year plan was established in order to boost the economic condition of the country. However, at that time India followed a protectionist policy in order to protect the indigenous business organisations (Labib 2015). In 1960s, India transformed its economic policy drastically and as a result of that an essence of liberal approach had been maintained by the then Indian government (Paul and Baxi 2015). Despite of that the Indian economy was based on the agricultural industries and there was no space for the heavy and big industries. From the mid 1970s the rise of the industrialisation started to dominate the economy of India and paved the way for the foreign investments that boosted up the economic condition of the country. With the growing opportunities in the Indian market the Union Carbide and Carbon Corporation (UCC) started to invest in India. The Company was mainly manufactured chemicals for agricultural purposes. The Company had its foundation from the pre-independence times, specifically from 1934 (Odysseos 2015). The company was entitled to produce batteries, carbon products, welding equipments, plastics, in fact, 50.9 percent share of the Union Carbide India Limited was owned by the parent company UCC and 49.1 percent was shared between the Government of India and other ancillary companies in India (Ishizaka, A. and Labib 2014).

The Union Carbide of India Limited was set up in the year 1969 as a manufacturer of pesticide Sevin. In this regards, it can be identified that the production of Sevin requires methyl isocyanate (MIC) as an intermediate. Hence, an MIC production plant was added to the UCIL sites in 1979 (Banerjee 2013). In fact, the Union Carbide India Limited was located in the densely populate Bhopal in Madhya Pradesh district. As a matter of fact, the risk factors were also there to affect the local inhabitants. Despite of knowing the fact the UICL Company did not take any concerned steps towards it. In this regards, it was significant to acknowledge that in the period of 1980s the demand of the MIC became decreased but still the Union Carbide India Limited continued its production.

It is important to know that the tragedy of 1984 was not the single time that the UCIL Company had faced leakage issues. In fact, in the 1976 two local trade unions complained against the pollution of the plants. Furthermore, in 1981 there was an incident inside the plant where a worker was died because of inhaling toxic phosgene gas and passed away within 72 hours (Pariyadath and Shadaan 2014). The very next year around 24 workers were admitted to hospital because of the same case. It can be argued that the Company also did not have safety measures and safety and hazards mechanism for the benefits of its employees.

The Union Carbide Chemical Company's role in the disaster

In the post midnight on 3rd December, 1984 toxic methyl isocyanate (MIC) was leaked from the Bhopal factory of Union Carbide and killed thousands of people (Rajkumar 2017). This tragic incident is infamously known as the Bhopal disaster. The official record articulated that the disaster took more than three thousand lives and the Madhya Pradesh government calculated the death toll of two thousand two hundred and fifty nine innocent lives in Bhopal. During the initial investigation it was figured out that the gas leak had taken place after the midnight. The location of the incident was placed at the plant number C of the Union Carbide factory in Bhopal. Within the morning there were more than three thousand people died due to the toxic gas leak. It was estimated that about forty tonnes of methyl isocyanate (MIC) gas and other chemicals leaked from the factory and killed the inhabitants in a second. The official investigation argued that the reason behind this fatal accident could be identified due to the mix of MIC and the water that used in cooling the plant. As a result of that it increased the pressure in the Tank Number 610 and made a leak in the tank. As a matter of fact, the tank was not in a shape to be used. There was no such maintenance facility inside the Company to check the safety of the machines and tools. Approximately 5 lakh people were exposed to the leakage of methyl isocyanate (Jones 2015).

The impact of the leakage was very disturbing and devastating. Coughing and itching in eyes and skins are the primary impression of the toxic gas. In course of time, it becomes acute and severe for the people to breath and used internal haemorrhage, pneumonia and ultimately death. The death is not very swift rather it causes pain and agony that only the victim can feel. The villages and the slums near the factory were the worst affected areas. As a matter of fact, the alarm system of the company did not set off during the leakage and as a result of that people did not understand what was going on. In the morning of the 3rd December the hospitals got complaints regarding the health issues of the local people (Satgunam and Chindelevitch 2017). The two government hospitals were not prepared enough to accommodate and started treatment of half of the population of Bhopal. Dizziness, breathing problems, skin irritation and blindness were the frequent results of the incident. There were around 50 thousand patients admitted within the first two days. The government announced the gas would be effective only for 8 hours but people still found it difficult to breath even 33 hours later.

The global community's response to the disaster

A Union Carbide Corporation team arrived within the days of the incident. However, they did not get the permission from the Indian government to visit and investigate the location. At that time, on behalf of the government the CBI had taken full responsibility of the investigation and the UCC team had got the permission only to take samples and residue in the leakage location. In fact, the CBI and the UCC team came into the same conclusion that due to excessive water pressure inside the tank, it made a reaction with methyl isocyanate and turned into a toxic gas. Despite of that investigation further investigation had expressed that there was no flow of water in the tank 610 during the five years the plant had been in operation (Satgunam and Chindelevitch 2017).

In an obvious manner the legal proceedings had been started involving the Union Carbide Corporation, the US government and the Government of India. The local Bhopal authorities were also became a part of the legal proceedings. As a quick response to the Bhopal disaster the Indian government passed the Bhopal Gas Leak Act in March 1985. As a result of that the Indian Government got the privilege to take legal steps against the UCC management. In fact, the initial lawsuit of the disaster was sued in United States federal court system. The Federal District Court judge John F. Keenan advocated that the Union Carbide had to aid $5 million and $ 10 million for the immediate help to the victims (Mukherjee 2016). With reluctance the Union Carbide management agreed to pay a financial aid that was turned down by the Indian government. Throughout 1990s the Supreme Court of India was fight against the settlement proposed by the US District Court. The Local Bhopal Authorities alleged Anderson, the then CEO of Union Carbide for slaughtering and gave a verdict of ten years imprisonment for homicide. In fact, the Government of India also appealed to the United States for extradition of Anderson but the US government did not intend to hand him over. The death of Warren Anderson in 2014 left the case unsolved and failed to provide justice for the Bhopal victims.

The Bhopal gas tragedy is believed to be one of the most tragic incidents in the history of India. The neo liberalism policies taken by the governments will be discussed in this section. Neo-liberalism or the neoliberal studies have been in great discussion over the years now (Duggan 2012). In this section, it can be said that when the economic balance is shifted from the public sector to the private sector, that can be tagged as the neo-liberalism. When the government of any country or state makes limits in the subsidies, or rolls in various tax reforms or that kind, it sets up the new policies to be implemented as a part of the neo-liberalism. This is when the government decides to implement the free trade policies for the giant organizations all over the world (Duggan 2012). The developing countries have suffered the ill effects of the neo liberal policies in many cases. Bhopal has been a victim of this policy as well. It has been noticed in the political scenario that the governments in some developing countries give the free trade license to the big organization to increase their revenues. This has laid a very negative impact on the social sustainability of the countries (Mirowski 2013).

Developing countries and the impact of global corporate activities

It has been seen that the developing countries have been looking at these issues with not much attention. It is because these nations do not have such strict rules for maintaining the ethical and environmental sustainability (Mirowski 2013). The various Latin American and African countries have really suffered the ill impacts of the neo liberal policies. The main aim of the countries remains the earning of the foreign money. There are certain challenges in this issues that have to be overcome as well (Lipman 2013). When the giant companies expand into these developing countries, they do not follow any rules or regulations as they know there are not much strict punishment to be practiced by the particular government (Giroux 2015).

This is why the organizations try to implement the things that are only important for their profit. They overlook the main important things related to the neo liberal policies indeed. The attitude of these companies to the long-term benefits or growth of the country cannot be appreciated at all (Joseph 2013). This is why the governments face many problems in this regard particularly. The internal infrastructure of the countries is not so prominent so the organizations try to take the advantage of that only. The impacts of the climate change are overlooked in this matter as well. This has been the case in the scenario of the Bhopal gas tragedy.  In these types of cases, the organizations do not take the responsibility of the massacres that take place. This is where the neo liberal policies face the problems (Joseph 2013).

The giant organizations do not think about the well being of the countries which is of course one of their biggest responsibilities indeed. In the Bhopal gas tragedy, many people had died and this simply happened because of the absence of the strict laws by the government. If the government had been a bit stricter, the things could have been better in terms of the outcomes of the neo liberal approach. The political gains are given the priority where the lives of the common people are ignored completely (Mittal 2016). These are the reasons as to why the organizations should be forced to obey some rules and regulations made by the government. These disadvantages of the neo liberalism should be looked with much caution when the organizations make their strategies to be implemented in the various countries.

The Bhopal gas tragedy has been a learning lesson for the governments of many nations. This is why the governments will like to implement some strategies by which they could avoid these kinds of disasters. Some of the important global level political organizations are World Bank, International Monetary Fund and World Trade Organization. These political institutions always keep a vigil on all the things that keep happening throughout the world. It is a very interesting fact to be understood that the effects of neo-liberalism have not been to the extent that it was thought to be (Saheb, Seshaiah and Viswanath 2012).

The history of the Union Carbide Chemical Company

The International Monetary Fund is constantly of the opinion that the economic neo-liberalism has completely failed because of many reasons. It is also assumed that they have not supported this thing throughout as well. Many people were badly hurt physically and mentally they were devastated as well. It has been found that the company based in United States that run the plant there did not provide the proper compensation to the victims of the tragedy. The international organizations like IMF had been very vocal in this case indeed. The company that was involved did not meet the ethical and environmental guidelines so the massacre took place in the worst ways indeed (Qi et al. 2012). The neo-liberal approach has been rejected by the international political institutions. This has affected the condition as well. The work ethics are not maintained so the political institutions like World Trade Organization have protested against this neo liberal approach.

The toxic gases that came out had killed around 2500 people. This is why it is said that the environmental issues have not been looked after properly. The organization had completely ignored the situation on an overall basis (Qi et al. 2012). The global political institution focusing on the global economy is strictly against the neo liberal approach of the countries. It is just because the neo liberal approach will be very fatal for the well being of the countries. The developing countries approve the neo liberal approach to allow the free trade policies (Odysseos 2015). They ignore the safety of their common people of the country. When such tragedy like Bhopal occurs they are left with no options. These kinds of tragedies should be prevented and the countries should be able to put some strict laws and regulations into practice. The union government should always make some strategies or laws that should disable the foreign organizations to implement some plans that will be harmful for the people of the country. The environmental balance should always be kept at the forefront by the organizations before implementing any kind of strategy (Izarali 2013).

The environmental safety of the country is very strongly connected with the maintenance of public health. If the organizations do not give priority to these things, it would have long term effect. The political gains should be overlooked in this matter as well, As the public servants, the government officials should always focus on the implementation of the environmental safety strategies for the countries (Izarali 2013). The economic aspects should be looked with much priority but the government can make up for the losses at later time by tax reforms or the restructuring of the tax laws. These are the ways in which the organizations would be able to gain the economic advantages as per the global institutions like World Trade Organization, International Monetary Fund and others. The business deals between the expanding companies and the government should always be made by keeping in mind the public health issues.

Reforms in tax laws to maximize profit from global companies

In the year 1984, the Bhopal Gas Tragedy has brought the drastic impact on the Indian economy. It has been identified that near about 50000 people were exposed due to the gas tragedy (Mac Sheoin, 2015). After the incident, the victim of this disaster was penalised for 10years in prison. After the order passed by the Indian government, the US supreme court reused for hearing the appeal of that decision taken by the lower federal court in the year 1993. Therefore, this can be said that at that time the Bhopal gas tragedy became the global issue. The US government helped to the Indian government in order to collect the sufficient evidence against the victim of Bhopal disaster named Anderson. The US government took the drastic steps against the victim of the Bhopal gas tragedy (Rajkumar 2017). By supporting this Washington has also refused a request of Anderson in this matter.  It has been identified that in the future court processing the Union cabinet decided to bring the financial help to the victims. After the Bhopal incident, BP had agreed to clean up the accident site that was poisoning the entire water supply practices. In that situation, the water supply in the local areas were very important for providing little help to the local people.

In this study, it has been identified that Britain refused for surrendering to the US court the BP executives. It has been identified that the agreement between the Dow Chemical and Indian government was done, in which the compensation of the amount of $470 million was paid (Mishraet al. 2015). On the other hand, it has been identified that the Union Carbide Corporation had taken the strong step for providing the facilities to the people, who were suffering from the Bhopal disaster. The UCC provided the relief fund. The medical experts from the different countries have played their effective role in order to provide the medical help. Near about $100 million amount was collected from the western charities (Odysseos2015). After this incident, the Canada Government has introduced various safety, environmental and health management programs to the Indian government in order to deal with the situation.

Another way, it has been discussed in this study that in the case of US, Dow was compensated for the UCC victims, however, in the case of India it had not taken such initiatives. The treatment protocol for the victims was very poor.

Free trade and privatization policies

 Due to the politically unstable situation, at that time the victims also started bargaining regarding the compensation. The major issue was that after the Bhopal incident Anderson left India in this situation the entire and took shelter in the US. It has also been determined that the Indian government has helped to Anderson in the case of escaping from the country. After this incident, the UCC has entered into the investigation process. As per the investigation report, it was identified by then that due to the excessive water storage and leakage the chemical explosion had brought about the disaster. However, by the investigation of CBI, it was identified that from the last few years the little drop of water has not passed from that pipe. Therefore, this can be said that it was the brainwash of the Indian people. On the other hand, the Indian government repeatedly applied to the US government to hand over Anderson to the Indian police. However, the US government refused to do so. They had not taken any drastic step against Anderson. Therefore this can be said that here the domination of developed country on the developing country has been clearly shown.

It can be concluded that the developed countries did not take any positive initiatives to make the free trade practice as environment friendly. As a result of that exploitation and political domination by the corporate giants still exists in present days.  The essay tries to depict a clear picture of the adverse effect of Neo-Liberalism on developing countries and at the same time highlights the role of the major global organisations and the western countries in this regards.


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