Can a building have moral opinions? Can a building have social responsibility? If a building can’t have responsibility, what does it mean to say that a corporation can? A corporation is simply an artificial legal structure. . . It is neither moral, nor immoral.”— Economist Milton Friedman.
On Wednesday, Hindustan Unilever Limited announced a settlement with nearly 600 former workers who were exposed to toxic mercury vapour at its now-closed thermometer factory in Kodaikanal, Tamil Nadu. The welcome announcement came exactly seven months after the Nicki Minaj-inspired Kodaikanal Won’t video by Chennai rapper Sofia Ashraf put the global spotlight on Unilever’s mercury legacy in the South Indian hill town.
The former workers, many of whom are sick owing to the occupational exposure to mercury, are elated. The settlement amounts will help repay old debts, meet medical expenses and rebuild broken lives.
Predictably, the Indian subsidiary of the Anglo-Dutch consumer giant Unilever has referred to the settlement as a humanitarian gesture, pointing to it as proof of its responsibility and commitment to the welfare of its employees. The agreement is historic. But that is not because it showcases responsible behaviour by a multinational corporation. Rather, it demonstrates that a tenacious struggle aided by innovative campaigning and global solidarity can bring a corporation the size of Unilever to engage respectfully even with workers in the global south.
From Chesebrough-Pond’s Inc, which shut shop and moved its mercury thermometer plant from Watertown, New York, to Kodaikanal in the mid-1980s, to HUL which was operating it when it was shut down in 2001, the story of the factory is one of corporate irresponsibility, toxic trade and environmental racism. It is also a story of how workers and citizens, victimised by corporate crime, are left to fend for themselves. Victories like this are a rarity, and are won not with the government’s intervention but despite it.
If anything, the belated settlement and what it took to get here proves that the phrase “responsible corporations” is an oxymoron. Over the years, corporations have laid claim to personhood, and framed themselves as imbued with human traits such as morality, care for the environment, compassion and responsibility. Unilever CEO Paul Polman talks about business as a force of social good. But is there such a thing as a “good” or “bad” corporation? Can a corporation be expected to behave responsibly, morally, humanely when it also has a statutory obligation to maximise returns for shareholders, and a fiduciary compulsion to do so by penny-pinching?
Truly responsible behaviour emanates voluntarily. It should not need to be enforced. But if Unilever is the gold standard in responsible corporate behaviour, the Kodaikanal experience shows that responsibility, and even the long-delayed “humanitarian gesture”, had to be fought for every step of the way.
Wherever it was not enforced, bad things happened. Between 1984 and 2001, under the unseeing eyes of the Tamil Nadu Pollution Control Board, more than a tonne of mercury was discharged into the protected forests along the factory’s southern fence line. Between 1992 and 1999, more than 43 tonnes of mercury waste containing nearly half a tonne (440 kg) of mercury was sent to unauthorised recyclers and scrap merchants.
Mercury is a potent neurotoxin. It builds up in the food chain and can return to harm human health by damaging the brain, kidney and teeth. An alert citizenry brought the matter to light and forced the company’s closure in 2001.
Since then, ex-workers and citizen groups have fought for remediation of the contaminated environment and compensation for exposed workers. In 2011, a Government of India committee confirmed that many workers were suffering from mercury-induced health effects. A responsible entity may have admitted guilt and made amends, or at least made amends without admitting guilt. Unilever did neither.
It took a rap video and the magic of social media to get the company to begin engaging seriously to resolve the issue. At last count, more than 3.6 million people from 190 countries had viewed the video; 250,000 people had taken action by tweeting or signing petitions to Unilever CEO Polman. Within a week of the video going viral, Polman tweeted about his commitment to resolve the Kodaikanal issue.
Damage to the environment
Even now, only one of two key issues has been resolved. The settlement resolves all health-related claims of ex-workers, but the question of environmental remediation remains.
If Kodaikanal were in the United Kingdom, where Unilever is headquartered, the clean-up would have to leave no more than 1 milligram of mercury in a kilo of soil – or a soil mercury standard of 1 mg/kg. Even this is meant as a standard that will leave the site safe for future residential use. The factory is surrounded by the Kodaikanal Wildlife Sanctuary and the biodiverse evergreen woods of Pambar and Bombay Shola Reserved Forests. If the company had volunteered in 2001 to clean up to at least 1 mg/kg, it could with some legitimacy lay claim to responsible behaviour.
Instead, it first proposed a standard of 10 mg/kg in 2001. By 2007, even that inadequate offer was gone, and HUL began insisting on 25 mg/kg – 25 times weaker than UK standards. “The benefits likely to accrue out of stricter norms are to be compared against the additional cost that may be incurred while undertaking such projects,” it argued.
Unilever’s case for sacrificing the benefits that would accrue to society and future generations from a better clean-up in order to save costs supports my earlier suggestion that fiduciary compulsions prevent corporations from behaving responsibly.
The cost of clean-up or of settling with workers is not likely to make a material dent in the $50 billion giant’s balance sheet. Fifteen years of campaigning may have resulted in a settlement, but there is still no admission of guilt.
Claims to legal personhood, notwithstanding, it is this inherent inability to admit guilt or pay up without first trying not to that sets corporations apart from natural persons – humans – that can do both if they wished to.
Nityanand Jayaraman is a writer and social activist from Chennai who has been involved in the campaign to hold Hindustan Unilever Limited accountable for mercury pollution in Kodaikanal.