Jun 20, 2010

Corporate Psychopath and Carlton Towers

An oft repeated narrative after the Carlton Towers fire is the government’s lethargy in addressing the concerns of the victims and the lack of institutional mechanisms to avert similar events. But in the humdrum of the diatribe against the state, there is a class which conveniently chooses to be blind-eyed about its responsibilities – the Corporates. The Carlton tower tragedy is a definitive case of corporate negligence and culpability as much as it is a case of state antipathy.

Risk assessment, mandated in western countries including the U.K and USA where many of the finance companies affected at Carlton Towers are headquartered is a thing of the past. Circumstantial evidence at Carlton Towers shows how little attention corporates paid to this important requirement. One of the companies had converted the fire exits into office space locking all the exit doors – a key piece which significantly delayed the response of the rescue team. . A private equity fund had senior personnel from Philippines to fire audit the companies it had invested in, but did not think it important enough to do a similar audit for its own office. A lot of these holier-than-thou companies would have gone bust if a similar event had happened in their headquarters. The Corporate Manslaughter and Homicide Act 2007 in UK sets out to heavily penalize an organization where a failure in the way activities were managed or organized results in a person’s death.

The same sloppiness extends to their dad-to-day operations. Fire drills are passé. Most employees didn’t even know the location of the fire exits. A global major which provides real estate consultancy and advises clients on safety issues didn’t even have a smoke alarm which could have averted death and other injuries in their office.

But their conduct post tragedy has showed their real cold bloodedness. The best settlement done by the real estate major mentioned above was peanuts compared to what the company might have had to shell out in case they had to make a similar settlement elsewhere. A private equity fund made some verbal promises but has not done anything for the families of three employees who passed away. The relatives already beaten by the emotional trauma are in no mood to fight. And even if they want to put up a fight these companies would hide behind the legalize denying even the paltry sum they have committed in some cases. For the families it is a case of beggars can’t be choosers.

The treatment meted out to the injured is no better. A private equity firm promised to foot hospital expenses so that their injured employee could be shifted to a private room from the ICU as the government reimbursement covered only ICU+general ward expenses or none at all. As the hospitalization got extended and costs increased, the firm changed its stance citing that their head office in London would not approve of it. The affected had to go to the general ward where she was repeatedly struck with infections and is still far from recovery. An employee who was the point man for the company commented cryptically “Let us accept that she is poor and can’t go to a private room,” like the seven figure salaried MD of his company.

The plight of contract employees is better not said. The family of a deceased office boy who was the sole bread winner of the family has not received any compensation from his company and calls to the company head honchos by his family remain unanswered. A badly injured housekeeping lady contracted from a leading housekeeping service provider in Bangalore has not received her salary from March nor any reimbursement of her medical expenses. This is when her monthly salary is a paltry three thousand rupees. The dichotomy here is that these companies could have been sued for millions of dollars in their home countries for similar behavior. Unfortunately in India, corporate laws on workplace accidents are not well defined.

Where is the corporate social responsibility that head honchos of these companies profess from all possible pulpits. The companies in this case showed all symptoms of a corporate psychopath as expounded by the cult documentary “The Corporation” - Callous disregard for the feelings of other people, reckless contempt for the safety of others, and the failure to conform to social norms and respect for the law. With the focus on the responsibility of the Carlton Towers owners association and the state authorities in the tragedy, it has become easy for corporates to conceal their own involvement in and responsibility for the crime. It is high time that we stop them from preying and exploiting others without regard for legal rules or moral limits.