Shriram Fertilizer Case

Shriram Fertilizer Case

Public Interest Litigation was filed requesting the courts to lay down the norms for

determining the liability of enterprises engaged in the manufacture and sale of hazardous

products and the closure of ‘Shriram’ on the ground that it was hazardous to the community.

On the 4th of December, 1985, a major leakage of Oleum gas took place from one of the

units within the plant, Two days later, on the 6th of December 1985, another leakage took

place although a minor one when Oleum gas leaked out again from the joints of a pipe in the

plant. Persons affected by the gas leak were nearly 2 lakh people within a three kilometer

radius. The court observed Shriram had been negligent in the operation and maintenance of

the caustic chlorine plant and did not take the necessary measures for improving the design

and quality of the plant.

In India, industrialization took place without due consideration of its impact on the

environment which was degrading day after day due to the non-implementation of

precautionary measures and proper management of disposal methods. Thus environmental

protection becomes mandatory for Organisation’s Ethical Practice. The slow contamination

of air due to environmental pollution amounts to a violation of the fundamental right of

right to life. In fact, the right to-life Guaranteed in Article 21 of the Constitution embraces

the protection and preservation of nature's gifts without which life cannot be enjoyed.

In cases of industry related environmental pollution by ways of gas leakage or by discharging

untreated industrial effluents into water bodies, the court has opined that “If an industry

is established without obtaining the requisite Permission and clearances and if the industry

continued to be run in blatant disregard of citizens living in the vicinity, this court has the

power to intervene and protect the fundamental right to life and liberty of the citizens of the

country.” The Bhopal Gas tragedy is a live example of the dangerous consequences of

industrial gas pollution. Nearly 40 tons of toxic methyl isocyanides (MIC) gas escaped into

the atmosphere on the night of December 3rd 1984 causing the death of nearly 3500 people

who lived in the vicinity and approximately 2lac people were affected by the disaster. The

Supreme Court held that the right to life and liberty included Pollution free environment

guaranteed under Article 21.The Fundamental Duties under Article 48A and 51A (g) were

also referred to in this decision. The court ordered the Union carbide corporation to pay

compensation amounting to us$ 470 million. A similar approach was adopted in the Shriram

food fertilizer (Oleum gas leak) case which occurred as if on cue exactly a year later on 4th

December 1985 when Oleum gas leaked out of its caustic chlorine plant.

The directive principles of state policy (DPSP) which act as guidelines for the state explicitly

mention the duty to protect the environment through article 48A and by means of

fundamental duties enshrined in article 51A (g). Article 48A proclaims that the state shall

endeavor to protect and improve the environment and to safeguard the forests and wild life

of the country.

Instead of showing the myriad ways that business, ethics, and environmentalism conflict and

lead to impossible choices, it is more useful to ask, “How is it possible to put these ideas

together?”In today’s world, all three issues require serious consideration. Organisations need

follow a proper Code of Ethics and must continue to create value for their financiers and

other stakeholders. Business leaders can no longer afford the ethical missteps that led to the

epidemic of scandals in the last decade. Most of the methods, concepts, ideas, theories, and

techniques used in business do not put business, ethics, and the environment together.

Neither ethics nor regard for natural systems is typically central to the way we think about

business. Business language often is oriented toward seeing a conflict between business and

ethics. Profits are routinely juxtaposed with doing the right thing, as if making an ethical

decision means profits must be reduced. Sometimes difficult choices which distribute harms

and benefits to communities and employees are qualified as “business decisions,” signaling

that business and ethics are not compatible.

References :

• M.C Mehta vs Union of India, AIR 1987 SC, 965 – Shriram Food Fertilizer Case.

• The Constitution of India.

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