A pesticide factory owned by the Union Carbide company experienced an explosion and leak in the 1980s, resulting in the death of thousands and severe illnesses and other health effects for countless more in India. The company ended up paying only $470 million to India as a result of a lawsuit. However, this did not address the full costs of cleaning up the area, taking care of the victims’ long-term healthcare, or compensating them for physical harm. Many of the chemicals used by the now-abandoned plant still remain. Union Carbide was purchased by Dow Chemical in 1999 for $9.3 billion in stock. In 2004, a man claiming to be a Dow representative stated on the BBC that the company agreed to fully clean up the site and compensate all victims, a total cost of $12 billion. Immediately afterwards, Dow Chemical’s stock fell 4.2% over 23 minutes, a loss of $2 billion in market value.

Why do you think investors responded so negatively to the BBC interview?

How do you think this disaster would have been handled differently if it took place in the U. S.? Why would it have been handled so differently?

Use the idea of a cost-benefit analysis to discuss why DOW chemical has been unwilling to pay any further money to clean up Bhopal, while spending millions on the “Human Element” advertising campaign.