Hindustan Liver Limited Case Analysis

8/12/2019 Hindustan Liver Limited Case Analysis

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INSTITUTE OF PROFESSIONAL EDUCATION ANDRESEARCH, BHOPAL

PGDM Trimester-VBatch 4 th (2012-2014)

Business EthicsCase Analysis

HLL

Submitted To: Submitted By:

Prof. Gazal Sharma Saijeeth Vasudevan


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Introduction to the Case:

The case talks about a MNC which was caught red handed doing unethical things. These

unethical things were affecting the environment nearby the plant and also affecting the

life of employees which were doing work in the factory. On March 2001, more than 400 residents of Kodaikanal, an idyllic hill station on the

Western Ghats in the South of India, caught red-handed the multinational Hindustan

Lever Ltd (HLL), when they found a dumpsite with toxic mercury-laced waste from the

companys thermometer factory located in the heart of the town. 7.4 ton of crushed

mercury containing glass was spilled in a busy scrap yard located near a school.

Such an exposure marked the beginning of an ongoing saga of dishonesty, by Unilevers

Indian subsidiary, Hindustan Lever Ltd. It was estimated around 32,000 people were affected, living in Kodaikanal. Ten workers

died in the factory while it was functioning, and Greenpeace, a global NGO committed to

environmental protection, claimed that the deaths were due to mercury poisoning.

Symptoms reported by ex-workers were fatigue, headaches, nausea, blurred vision,

respiratory disorders, central nervous system problems such as loss of memory, tremor

etc. The ex-workers claimed that they got these symptoms after they were employed at

the factory.

History of HLL:

The factory was originally located in New York but was shut down for environmental

reasons US- based Chesebrough Ponds relocated its aging mercury thermometer

factory from Watertown, New York to Kodaikanal in 1983. The factory was acquired

by Unilever & it bought Chesebrough Ponds owner of HLL, which is Unilevers 51

percent owned Indian subsidiary.

It was said to be the largest thermometer plant in the world Unilever, the Anglo-Dutch

FMCG giant, imported all the glass and mercury for the thermometers from the US

and exported all the finished thermometers to the US based Faichney Medical Co.

which in turn exported them to markets in the US,UK, Canada, and other countries.

Mercury is a toxic metal, which when converted into deadlier forms such as methyl

mercury and released into the environment could cause tremendous health problems

to people living nearby and even far away. It was found that after processing of

mercury, glass and recycling of glass scrap was done, the remaining scrap was sold to


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recyclers unlawfully and in breach of the companys operating policies. Investigations

proved that the factory buried glass scrap on the site after appropriate regulatory

approvals.

The slopes where the wastes are dumped are part of the Pambar Shola watershed,

draining water through the Pambar River. This small river eventually ends in the

plains leading up to the temple city of Madurai.

Damage to Workers and Environment:

It was reported that 600- 800 workers were exposed to mercury. 20 workers between

the age group 22-35 years have died to poisoning in the factory. Thousands of people

in the vicinity of the Factory suffered from Skin diseases, Headaches, Stomach pain

etc. Poisonous vapor carrying mercury travelled across the town.

Management Negligence played a key role Company discontinued occupational safety measures at the factory from 1985

i.e. in the 2 nd years of operation.

The only warning that was given to the workers by the management as wash

hands before eating.

The company didnt gave information to employees about the hazardous

nature of the work they were engaged in, thereby covertly endangering their

lives.

The above points prevented timely remedial measures that could had taken

place.

HLLs Response to Complaints :

Earlier the company was dismissing the complaints but after many denials & cover-

ups the company agreed that it shipped out 5.3 tons of mercury waste to scrap yard, but independent verification showed that 7.4 tons of mercury wastes were shipped to

scrap yard.

Though HLL was defensive at earlier stages, but then HLLs response to the

complaints was transparent and even aggressive. The persons responsible for breach

were identified & penalized & also a new manager, R. John was appointed to defend

the Factory administration.

Manufacturing operations were suspended on March 2001 & glass scrap yard wasshifted to a more secure place.


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An environmental audit was commissioned by HLL and for that it appointed URS

Dames & Moore of Aus to conduct a detailed environmental audit. The result showed

that 300 kg of mercury was disposed to the Pambar Sholas Forest and another 700 kg

of waste through air. Another notable International expert Dr P.N Vishwanath found

no evidence to risks caused due to mercury.

All the surveys and studies made both by HLL and activists offered conflicting views

about the exact nature and impact of the mercury waste on workers and the immediate

community of the Kodai thermometer factory.

HLL exit from Thermometer Production:

HLL said in a statement that it has decided to exit from the thermometer business in

January 2001 because it was not Core Company. The companys core business is the

manufacture and marketing of soap, detergents, skin care products, deodorants, food

and beverages etc.

The TNPCB ordered the factory to close down and clean up the toxic mess the

company had created, because of the order of TNPCB the company sent back at least

300 tons of the toxic material to the United States in 2006.

Role of NGOS in making HLL Redress Public Grievances:

The NGOs left no stones unturned to mobilize public opinion and to pressure TNPCB

and the TN government to compel HLL to make amends for its acts of commission

and omission in unlawful disposal of the hazardous toxic waste and in the exposure of

workers to potentially dangerous work environment.

It was NGOs that galvanized workers, concerned citizens and environmental activists

to force the factory to suspend operations in March 2001, after discovering that the

company had dumped the mercury-contaminated waste at several public locations. The NGOs were also responsible to form the TN alliance against mercury (TAAM),

which tried to identify and contain contaminated soil. The NGOs were also behind the

former workers approaching the supreme court of India in 2005, demanding

compensation from HLL for loss of their jobs and health hazards the suffered.

The most laudable part of NGOs role is the novel and dramatic manner in which the

kept they mercury waste spill issue alive throughout, by using a variegated set of

measures available to them.


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Where does the truth lie?

Two scientific studies, made after the closure of the Kodai factory in March 2001,

Amounts of mercury found along the hills surrounding Kodaikanal Lake and also high

levels of mercury was seen to as far as 20 kilometers from the Kodaikanal but HLL

denied these allegations.

Admitted to 5.3 tons of mercury containing glass wastes lying at the Munjikal scrap

yard came from HLL factory. HLL promised to track, retrieve and clear such other

waste. NGOs demanded justice from HLL for the damage.

Ultimate demand to Government:

Initiate legal action against HLL for lying to statutory body. Take serious action against the inspectorate of factory, who for 18 years failed in their

assigned duty to find any traces of mercury at the factory site or beyond.

The government should initiate long term studies to monitor the impact of mercury on

the whole system.

The government should order, at HLL expense, to make enquiry into the impact of

mercury on the health of people and give treatment.

The government should find means and ways to compensate the families of dead

workers.

Government should ensure that the mercury retrieved from HLLs wastes is

permanently destroyed.

Conclusion: HLL Plant had adversely effected the entire Kodaikanal environment. There are

evidence that can prove that mercury emitted from the plant had far larger impact than

revealed by the expert commissioned by HLL.

HLL yet to have submit the complete clean-up protocols to TNPCB. Mercury is still

prevalent in the atmosphere through the discarded factory scraps. The Environment is

badly affected. Hindustan Levers behavior violates the environmental principles of

the UN Global Compact.


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Questions & Answers

Q1. Trace the history of the establishment of Kodaikanal Thermometer factory and how it

came into the adverse view of the NGOs, the public and the TNPCB?

Ans1. Originally a New York based company which was shut down there due to

environmental reasons. It was then relocated from Watertown, New York to Kodaikanal,

Tamil Nadu in 1983. The factory was acquired by Unilever, after it bought Chesebourgh

Ponds owner of HLL, which is Unilevers owned Indian subsidiary.

Reason to come into the adverse view of the NGOs, the public and the TNPCB is that more

than 400 residents of Kodaikanal caught HLL red-handed dumping toxic mercury-laced

waste & also mercury is a toxic metal which can cause tremendous health problems to people

living nearby and even far away.

Q2. How did Hindustan Lever Ltd. Respond to the initial complaints of various stakeholders

that the company had adopted a callous attitude towards the disposal of Hazardous mercury-

laden waste? What type of strategy did the company adopt when it realized that the entire

fault lay in the c arelessness of the factorys administration?

Ans2. Initially HLL sought to dismiss the Complaints. Company responded that they were

characterized by denials, cover-ups and lack of transparency. The company said that the

records of any mercury waste leaving the factory were kept meticulously. They tried to hide

things and for this lied to the statutory bodies also.

Strategies adopted by the company after realizing the fault:

HLL duly informed TNPCB of the details of the mercury disposals. The persons involved in

the event were identified and penalized, the penalty depend on the severity of the offence

committed. A new factory manager, R. John George who knew the local language, Tamil was

appointed for factorys administration.

Q3. What was the role of NGOs in bringing to light HLLs dumping of mercury waste in

various parts of Kodaikanal locality? To what extent were they able to get justice to the

affected workers and the general public?


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Ans3. The NGOs left no stones unturned to mobilize public opinion and to pressure TNPCB

and the TN government to compel HLL to make amends for its acts of commission and

omission in unlawful disposal of the hazardous toxic waste and in the exposure of workers to

potentially dangerous work environment. It was NGOs that galvanized workers, concerned

citizens and environmental activists to force the factory to suspend operations in March 2001,

after discovering that the company had dumped the mercury-contaminated waste at several

public locations. The NGOs were also responsible to form the TN alliance against mercury

(TAAM), which tried to identify and contain contaminated soil.

The NGOs were also behind the former workers approaching the supreme court of India in

2005, demanding compensation from HLL for loss of their jobs and health hazards the

suffered. The most laudable part of NGOs role is the novel and dramatic manner in which thekept they mercury waste spill issue alive throughout, by using a variegated set of measures

available to them. The NGOs with their continuous demand and incessant ensured the

livelihoods of workers that are put to risk by HLL. As a result the damages caused to the

workers, the community and ecology of the Kodaikanal town was compensated adequately.

The NGOs kept the issue alive throughout.

Q4: Explain in your own words the HLL Kodaikanal mercury spill controversy. What is the

present status of the controversy?

Ans4. On March 2001, more than 400 residents of Kodaikanal, an idyllic hill station on the

Western Ghats in the South of India, caught red-handed the multinational Hindustan Lever

Ltd (HLL), when they found a dumpsite with toxic mercury- laced waste from the companys

thermometer factory located in the heart of the town. 7.4 ton of crushed mercury containing

glass was spilled in a busy scrap yard located near a school. Even after 5 years of being

caught the HLL has not submitted the complete clean up protocols to the TNPCB. It is also

noted that the mercury is still prevalent in the atmosphere because the discarded factory

scraps and contaminated vegetation re-emit absorbed mercury.

Q5. What kind of roles have NGOs such as Greenpeace India, played in bringing to the open

the issue of HLLs spill of toxic mercury waste in and around K odaikanal hills? Did it have

the desired impact in your view?

Ans5. They mobilized public opinions to pressurize the government for compelling HLL to

make amendments for its acts of commission and omission in the unlawful disposal of thetoxic waste. It galvanized workers, concerned citizens and environmental activist to force the


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factory to suspend its operations in March 2001. It also formed the TN alliance against

mercury which tried to find out contaminated soils. NGO had played a very vital role in this

issue because of NGO only HLL saw the reason and took some corrective measures. It helped

the former workers to approach the Supreme Court of India in 2005, demanding

compensation for the loss of job and health from HLL.

Q6. How would you reconcile diametrically opposite views held by HLL assigned scientists

and those appointed by the government and NGOs about the quantity and the toxic nature of

the spilled mercury waste and its impact on the failure ecology of Kodaikanal hills? Was

there any meeting point at all between these two viewpoints?

Ans6. An environmental audit was commissioned by HLL. The URS scientist admitted that

the discharge of mercury to the Pambar Shola forest was approximately 300 kg. HLL

appointed consultants who said that about 700 kg of mercury waste were released through

air-bone emissions. An expert, Dr. P.N. Vishwanathan of eco-toxicology of mercury was

appointed by HLL. He could not find any evidence to risks caused by mercury either to

human or to environment. The results were opposite when scientists of government and

NGOs. The scientists found that the concentrations of mercury up to 1.32 g/ m^3 which was

about thousand times higher than in the areas that were not contaminated.

It was very clear that the viewpoints of both the scientist one appointed by HLL and other by

the government was totally opposite to each other.

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Hindustan Liver Limited Case Analysis