Corporate responsibility for industrial incidents
Corporate responsibility for industrial incidents

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Corporate responsibility for industrial incidents

5.8 Legal accountability for the Bhopal gas leak

Earlier in this course you considered the nature and development of civil and criminal liability for industrial accidents. The issues arising from the imposition of legal liability on multinationals operating in the developing world are brought into sharp relief by the repercussions of the events in Bhopal in December 1984.

Activity 10

Both criminal and civil actions against UCC, UCIL and some of UCIL’s officers and employees were commenced soon after the gas leak. Using the links provided and your own independent research, answer the following question:

‘Has legal action been successful in ensuring that those responsible for the Bhopal tragedy are held accountable and that victims are adequately compensated? If not, why not?’

Research links for Activity 10

Amnesty International report (2004) Clouds of Injustice: Bhopal Disaster 20 Years On [Tip: hold Ctrl and click a link to open it in a new tab. (Hide tip)] .

Website of the Union Carbide Bhopal Information Center.

Union Carbide Bhopal Information Center, Chronology (last updated 2011).

M.J. Peterson (2009) ‘Bhopal Plant Disaster, Appendix A: Chronology’, International Dimensions of Ethics Education in Science and Engineering Case Study series.

S. Biswas (2010) ‘Bhopal gas leak convictions not enough, say campaigners’, BBC News online.

R. Stringer and P. Johnston, Greenpeace Research Laboratories (2002) Technical Guidelines for Cleanup at the Union Carbide India Ltd (UCIL) Site in Bhopal, Madya Pradesh, India.

India’s Supreme Court rejects harsher Bhopal charges’ (2011) BBC News online, 11 May.

M. Kaushik (2011) ‘Bhopal gas tragedy case: past horrific, present tense’, Business Today. 17 April.

Comment

Your research will have confirmed that both criminal and civil actions were brought in the wake of the Bhopal gas leak. However, there has been limited success in holding those responsible legally accountable and in ensuring that those harmed were adequately recompensed.

In terms of the civil claims for compensation: four years after the incident, in February 1989, UCC achieved a settlement with the Indian government for $470 million in full settlement of all claims, rights and liabilities arising from the Bhopal gas leak. This sum was substantially less than first claimed; however, the Indian Government argued that continuing with litigation was not in the victims’ best long-term interests and this settlement would ensure that the victims were compensated promptly. You are likely to have spotted that there were various issues with this settlement. The victims were not consulted or made aware of this settlement being made on their behalf. The Indian government had the requisite authority to negotiate on behalf of the victims by virtue of the Bhopal Disaster (Processing of Claims) Act 1985, under which it became the sole/exclusive legal representative for all the victims of the Bhopal gas leak. As a consequence, it took over all litigation in India and the USA. Ostensibly, the purpose of the Act was to ensure that the claims were dealt with speedily and equitably. It would protect vulnerable victims being taken advantage of by ‘ambulance chasers’ – unscrupulous solicitors or lawyers who exploit victims of accidents by offering to win damages for them, which they then take a large share of for themselves in fees – and avoid the substantial ‘up front’ court fees payable in Indian courts.

The 1985 Act placed the Indian government in a conflict of interest, as the government was implicated in the incident itself by its failure to enforce health and safety regulations at the plant, and also by virtue of the fact that publicly funded institutions were the minority shareholders of UCIL. In effect, the Act provided the Indian government with legal immunity as it made it impossible for victims to sue the Indian government. A challenge in the Indian Supreme Court to the legitimacy of the Bhopal Disaster Act failed.

The incentive for the Indian government to settle the claims was made more acute by the fact that from the outset UCC vigorously defended any legal claims made against it both in India and the USA. Without a settlement, the outstanding litigation was likely to take several more years to be heard, to cost vast sums of money and to delay the payment of compensation to the victims for some considerable time. UCC objected at every stage of the process; for instance, during the course of the hearings in the USA, lawyers for UCC contested the legitimacy of the US courts to hear the case, and then once the move to India was likely, they then questioned the appropriateness of the move to the Indian courts. They resisted the attempts of the US courts to arrange an interim payment to the victims. They attempted to avoid liability by arguing that UCC was an American-based enterprise and so not responsible for the operation of its subsidiary outside the US. In contrast, you may have found that the UCC website provides a positive version of its response to the gas leak and its subsequent actions.

The 1989 settlement provided both civil and criminal immunity from future actions for UCC and UCIL. Criminal immunity was subsequently set aside by the Indian Supreme Court in 1991. Attempts to overturn the 1989 settlement have not been successful either in India or the USA. A class action by victims brought in Texas in 1999 on the basis that the Indian government had failed to represent the victims adequately due to its conflict of interest was ultimately rejected by the US Supreme Court on the grounds that court decisions of other countries should be respected.

Under the 1989 settlement the Indian government was to be responsible for handling the allocation of compensation to the victims through a claims tribunal. Processing claims was bureaucratic and long-winded. It took until 2005 to distribute this money to the victims, and the Indian Supreme Court required that the interest earned on the sum also be distributed to the victims. In 1991 the Supreme Court upheld the legitimacy of the 1989 settlement but added the stipulation that UCC should fund the building of a hospital and research centre to treat the surviving victims. This was financed by the sale of its UCIL shareholding.

The 1989 settlement has proved inadequate to cope with the numbers who have claimed to be affected by the leak and the amounts of award are small, the average award for injury being $545. Victims’ hopes of doubling the 1989 settlement were raised when in 2010 a government minister set up a committee to review the compensation paid. In December 2010 a petition was filed in the Supreme Court by the Indian Attorney General, arguing that the 1989 settlement was based on inaccurate assumptions of the number of victims and extent of harm caused. In particular, it was argued that the settlement did not address the environmental issues which subsequently arose. You may wish to check on the progress of this application.

The issue of UCC’s liability for the Bhopal gas leak was further complicated by the fact that Dow Chemical signed a merger agreement with UCC in 2001, the result of which was that UCC became a wholly owned subsidiary of Dow. As the separate legal status of UCC is maintained, Dow has continued to insist that it did not inherit the liabilities of UCC and that as the 1989 settlement recompensed the victims of the gas leak it is not Dow’s concern.

With regard to criminal liability for Bhopal, the only successful convictions occurred in June 2010 when seven executives of UCIL were found guilty of criminal negligence. The individuals were all Indian and included the former chairman and managing director of UCIL, who were both sentenced to two years’ imprisonment and a fine of $2,175. All seven were released on bail pending appeal of their conviction. A subsequent petition by the CBI requesting that the Supreme Court reinstate the more serious charge of culpable homicide was rejected in May 2011 on the basis that it came 14 years too late. However, at the time of writing it is subject to appeal.

Warren Anderson, Chairman of UCC at the time of the Bhopal gas leak, has not returned to India to face trial. In 1991 he was declared an absconder from justice. Various as yet unsuccessful attempts have been made by the Indian government to seek his extradition from the USA, the latest at the time of writing being in March 2011.

Success in holding those responsible legally accountable has been limited and adequate financial compensation for the victims not been achieved. It must be small consolation to the victims that any hopes that UCC may have harboured that the 1989 settlement would limit Bhopal litigation must have been dashed a long time ago. A constant series of court cases throughout the years, both in India and the USA, has ensured that what happened at Bhopal remains in the public’s attention across the world. The abdication of responsibility for the victims both by UCC and the Indian authorities has resulted in Bhopal becoming a cause célèbre for both human rights and environmental activists.

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