Steps on the road to recovery: decisions relating to the Bhopal gas tragedy.
- Union Carbide Corporation v. Union of India (1989)
- Parens Patriae and the Bhopal Gas Leak Disaster Act, 1985
- Proceedings before the Keenan Court
- Back in India, the Meagre Settlement
- Criminal Charges Revived
- Oleum Gas Leak Case
- Criminal Proceedings against the UCC and UCIL Officers
- Give to the Rich and Rob from the Poor?
- Bhopal and BP
- Have We Learnt Our Lessons from Bhopal?
- Looking Ahead
IN 1934, UNION Carbide India Ltd (UCIL) was incorporated in India to manufacture batteries, chemicals, pesticides and other industrial products. The American enterprise, Union Carbide Corporation (UCC) owned a majority stake in UCIL. In 1970, UCIL erected a pesticide plant in a densely populated area of Bhopal, Madhya Pradesh.
At the inception stage, UCC’s Argentine agronomic engineer expressed concerns over the plant’s safety, but his superiors disregarded them, saying that the plant would be ‘as inoffensive as a chocolate factory’.
With approval from the Government of India, UCIL manufactured the pesticides Sevin and Temik in its Bhopal plant. On the night of 2–3 December 1984, water seeped into a tank containing over forty tonnes of the highly poisonous methyl isocyanate (MIC), a gas used in the production of Sevin and Temik.
This caused an exothermic reaction because of which the MIC escaped into the atmosphere—and when the northwesterlies blew this gas over the hutments adjacent to the plant and into the very densely populated parts of Bhopal, the city was transformed into a ‘gas chamber’.
As many as 2600 people died in the immediate wake of the leak, and the death toll rose to 8000 within a fortnight, while hundreds of thousands were impacted. Bhopal had found a place on the world map for all the wrong reasons.
The ghosts of December 1984 haunted several generations of Bhopal’s inhabitants. Over the next twenty-five years, although no official death count was undertaken, estimates indicate that the number of fatalities rose to a whopping 20,000 while 6,00,000 people suffered irreparable physical damage.
Many who were not even born at the time of the disaster but were still in the womb of their mothers endured its catastrophic consequences. Even today, residents of Bhopal suffer from genetic defects such as damaged reproductive systems, lung problems and vision impairments due to the gas leak that occurred almost three decades ago.
The Bhopal gas tragedy remains unparalleled in the history of industrial disasters anywhere in the world.
What followed the accident was as regrettable as the incident itself. The Indian polity, judiciary, legal fraternity and the media squandered numerous opportunities to lay down a stern deterrent for those who believed that they could wantonly evade punishment for crimes committed in developing nations. In the years that followed, in their struggle for justice, the victims of the disaster were re-victimized.
There was a series of debates and decisions on several issues—ranging from the compensation payable to the victims, the criminal negligence of UCIL the piercing of the corporate veil,9 the criminal liability of directors of UCIL and UCC, and the appropriate choice of forum10—in India as well as the United States of America, but little good trickled down to the victims of this catastrophe.
At the time of the disaster, UCIL’s ownership structure was such that UCC owned 51 per cent of the company, Life Insurance Corporation of India/Unit Trust of India owned 22 per cent and the Indian public owned 27 per cent.
Soon after the leak, hundreds of tort lawyers from the United States of America and their Indian counterparts descended on Bhopal, seeking exemplary damages for those affected by the tragedy (and retaining some of those damages for themselves).
The Government of India was quick to derail their hopes. It promulgated the Bhopal Gas Leak Disaster (Processing of Claims) Ordinance, 1985, which was replaced by the Bhopal Gas Leak Disaster (Processing of Claims) Act, 1985 (the Bhopal Act) on 29 March 1985.
The Bhopal Act gave the Central government the exclusive right to represent and act (in India or overseas) in place of the persons entitled to make claims in relation to the Bhopal gas leak.
It authorized the Central government to represent the interests of those affected by the gas leak as ‘parens patriae’—this tool, which originated in the United Kingdom and evolved in the United States of America, allows the state to protect the wellbeing of its citizens in a representative capacity.
The Bhopal Act evoked sharp criticism, as the wrongdoer (UCIL) was partly owned by state corporations and the government could have been held partially liable for the tragedy. By invoking parens patriae, the government began to represent the very victims who could have initiated action against it.
The government’s action has therefore been criticized as a device meant to protect itself from culpability for the Bhopal gas leak rather than protect its victims. The constitutional validity of the Bhopal Act was also challenged before the Supreme Court.
Justifying the application of the parens patriae principle, the court held:
The government is within its duty to protect and to control persons under disability. Conceptually, the parens patriae theory is the obligation of the state to protect and take into custody the rights and the privileges of its citizens for discharging its obligations.
Our Constitution makes it imperative for the state to secure to all its citizens the rights guaranteed by the Constitution and where the citizens are not in a position to assert and secure their rights, the state must come into picture and protect and fight for the rights of the citizens.16 Even though it was tenuous, parens patriae could have been an effective mechanism to obtain a speedy remedy only if the government had pursued it with conviction and while bearing in mind the interest of the victims.
However, the government did not match its power with ‘results or responsibility’. The outcome was that the victims were double-crossed by the state—they were left with little compensation and also deprived of their right to act in their individual capacities.
Exercising its powers under the Bhopal Act, on 8 April 1985, the Central government filed a complaint against UCC before the Southern District Court in New York, United States of America. By then, 144 proceedings were already under way in federal courts across the United States in respect of the Bhopal gas leak.
All these proceedings were consolidated and assigned to the court of Judge John Keenan. The arguments projected a strange situation—the Union of India argued that Indian courts could not handle the matter efficaciously while a United States corporation asserted that they could. India ‘biopsied’ its own legal system while an American corporation celebrated it!
Acting on behalf of the victims, the Indian government stated the following:
1. India’s legal system was ill-equipped to handle the complex litigation that the case would entail.
2. The endemic delays in India’s legal system and the substantial backlog of cases would impede the effective disposal of the case.
3. Indian lawyers could not provide proper representation due to a lack of expertise in the area of tort claims.
4. Tort law in India was not developed enough to deal with a case of such gigantic proportions.
5. Procedural law in India would hinder the path of justice for the victims.
The court extensively discussed whether Indian courts were competent to grapple with the Bhopal disaster case. Judge Keenan concluded that the arguments were untenable and dismissed the claim on the ground of forum non conveniens—a doctrine based on which a court can refuse jurisdiction over a case where a more appropriate/convenient forum is available. The court held that most of the documentary evidence concerning the plant’s design, safety and setup was in India, as were the vast majority of witnesses who had to be examined.
Moreover, the Indian government had an ‘extensive and deep interest’ in ensuring compliance with safety standards. Judge Keenan believed that India’s interest in developing minimum standards of care was superior to the United States’s interest in deterring multinationals from exporting dangerous technology to other nations.
Strikingly, Judge Keenan made certain politically flavoured (and, to an extent, patronizing) observations on the potential of Indian courts to dispense justice:
To retain the litigation in this forum . . . would be yet another example of imperialism, another situation in which an established sovereign inflicted its rules, its standards and values on a developing nation.
This court declines to play such a role. The Union of India is a world power in 1986, and its courts have the proven capacity to mete out fair and equal justice. To deprive the Indian judiciary of this opportunity to stand tall before the world and to pass judgement on behalf of its own people would be to revive a history of subservience and subjugation from which India has emerged. India and its people can and must vindicate their claims before the independent and legitimate judiciary created there since the Independence of 1947.
The dismissal of the Union of India’s case was subject to three conditions:
1. UCC would have to consent to submit to the jurisdiction of Indian courts and continue to waive defences founded on the statute of limitations.
2. UCC would have to abide by any judgement rendered by an Indian court as long as it complied with ‘minimal’ due process25 requirements.
3. After an appropriate demand by the Union of India, UCC was to be subject to discovery under the model of the United States’s Federal Rules of Civil Procedure. Judge Keenan’s decision was ironic—the great opportunity that he believed India’s legal system faced was (as we will examine later in this chapter) squandered by the bar and the bench.
So, in September 1986, the Union of India instituted proceedings against UCC in a district court in Bhopal, which ordered UCC to deposit an interim compensation of 350 crore (3.5 billion) rupees. On appeal, the Madhya Pradesh High Court reduced the figure to 250 crore (2.5 billion) rupees.
UCC appealed to the Supreme Court of India against the high court’s decision. Although, under Indian law, a judgement debtor is supposed to deposit the contested amount before moving an appellate court, UCC did not do so. Aiming to dispense speedy justice to the victims, the court ordered UCC to pay 470 million dollars (approximately 750 crore [7.5 billion] rupees then) ‘in full settlement of all claims, rights and liabilities related to and arising out of the Bhopal gas disaster’.
The compensation amount was a mean between UCC’s offer of 426 million dollars and the Union of India’s demand for 500 million dollars. In terms of the settlement, all civil proceedings were concluded and criminal proceedings quashed in relation to the Bhopal gas leak.
Although the five-judge Constitution Bench of the Supreme Court passed this order on Valentine’s Day in 1989, the victims had no great affection for the order, since the Central government had earlier kindled their hopes of obtaining compensation amounting to 3 billion dollars—more than six times the final settlement amount. Several NGOs also expressed widespread dissatisfaction over the settlement.
A few months later, the Supreme Court issued a reasoned decision for its order granting compensation to the victims. One of the unfortunate effects of the settlement was that the court did not adjudicate on the critical issues raised by the Bhopal incident, though it stated its observations on the need to protect national interests from being exploited by foreign corporations and develop criteria to deal with potentially hazardous technology.
The Supreme Court reiterated that the compensation was adequate and that it actually exceeded personal injury claims at the time. It clearly failed to appreciate the extent of the damage caused by the Bhopal gas leak and its crippling long-term effects. (To put things into perspective, if we take a conservative estimate that 1,70,000 people were killed or injured in the disaster, each victim/kin would get less than 50,000 rupees as compensation.)
Indian law does not value life as much as it is valued in other nations, such as the United States of America. Is it because we have so many people that each one doesn’t mean as much?
The settlement sanctioned by the Supreme Court was widely condemned. A few years after its 1989 settlement order, the Supreme Court clubbed several petitions filed against the order and formed a five-judge Constitution Bench to hear arguments challenging the basis of the settlement. (In exceptional cases, the Supreme Court has the power to review its own judgements, under Article 137 of the Constitution.)
However, before the judgement could be pronounced, the then Chief Justice of India, Justice Sabyasachi Mukherjee, passed away. This necessitated a rehearing, which caused further delays. In its judgement dated 3 October 1991, the court finally recognized the legal sanctity of the order recording the settlement between UCC and the Union of India.
It wasted the opportunity of revising the 470-million-dollar compensation to a more realistic figure. The court also emphasized the need to grant speedy justice to the victims—by its own calculation, the full adjudication of the suits relating to the Bhopal disaster would have taken till 2010.
The judgement did have two positive consequences.
First, it catalysed the condemnation of the quashing of the criminal process against the UCC officers and revival of criminal proceedings against them. Second, the court held that if the settlement amount fell short, the Union of India was bound to make good the shortfall.
Remarkably, Justice Aziz Mushabber Ahmadi, who went on to become the Chief Justice of India in 1994, dissented on this point, questioning why the Indian taxpayer should be liable when the Union of India was neither held liable in tort for the disaster nor was shown to have acted negligently while entering into the settlement.
Almost exactly a year after the Bhopal gas leak, there were two instances of leakage of oleum gas from a unit of Shriram Foods and Fertilizer Industries (Shriram) in Delhi. A handful of people were affected and one person even died as a result. However, with the Bhopal incident fresh in their minds, Delhi’s citizens were understandably in a state of panic.
The District Magistrate of Delhi responded by passing an order telling Shriram to stop manufacturing and processing toxic chemicals and gases. M.C. Mehta filed a writ petition in the Supreme Court concerning the norms that should be used to determine the liability of organizations engaged in manufacturing and selling hazardous materials.
The first question before the court, however, was whether Shriram’s caustic chlorine plant should have been allowed to restart operations simply because it employed over 4000 people. A three-judge bench permitted the plant to restart subject to eleven prescribed conditions.
The other questions raised involved issues of constitutional significance and were referred to a five-judge bench of the court. Until M.C. Mehta v. Union of India, the English principle of strict liability laid down in Rylands v. Fletcher was the law governing industrial accidents in India. According to this principle, a person who introduces anything hazardous—likely to harm people and property should it escape—to his land, must do so at his own peril.
He would be prima facie answerable for all damage caused by the natural consequences of such escape of hazardous material. Over the years, this rule was diluted by several exceptions—including a natural calamity, an act of sabotage and consent of the plaintiff— carved out by English courts.
A five-judge bench of the Supreme Court increased the threshold of tortious liability when it held that an enterprise engaging in any harmful or inherently dangerous activity had an absolute and ‘non-delegable’ duty to ensure that no one was harmed, and if anyone was harmed, they were to be compensated.
In asserting this duty, the Supreme Court did not accept the exceptions which had evolved in English jurisprudence. This ruling was significant in that the Supreme Court coupled Indian seasoning with English principles to regulate an environment in which industrial growth was not matched with necessary legal reform.
After the criminal proceedings against the directors and officers of UCC and UCIL recommenced, many criminal cases did the rounds in courts across India. Initially, charges were framed against the accused under Section 304 of the Indian Penal Code (the IPC) for culpable homicide not amounting to murder—an offence punishable by imprisonment for a maximum of ten years.
Responding to an appeal, the Supreme Court diluted the charge to ‘causing death by negligence’ under Section 304A of the IPC (which provided for punishment by imprisonment up to two years only) on the ground that the evidence was not sufficient to charge the accused with culpable homicide.
The trial proceeded in the Chief Judicial Magistrate’s court, and on 7 June 2010, seven people were convicted for two years each in connection with the Bhopal gas leak. Warren Anderson, Chairman of UCC at the time of the leak, did not appear in court and was declared an absconder. Though the court slapped the maximum punishment it could, it was sharply criticized for treating the disaster like a ‘minor traffic accident.
The Bhopal gas leak was cited by many as a paradigm of how influential multinationals exploit developing countries;—developing countries import hazardous technology in spite of a conspicuous absence of an environmental law framework and legal infrastructure to handle its potentially disastrous consequences.
The most ironic aspect of globalization in the 1980s and ’90s was that in their quest for economic development, developing nations sacrificed the human rights of the lowest rungs of their societies. Foreign companies were accused of committing some of the most heinous crimes—from homicide and rape to forced labour.
Bhopal was undoubtedly the darkest reflection of globalization. It forced citizens to seriously weigh the costs of globalization against its benefits, particularly when modern technology was imported into an archaic legal set-up, as was the case with India.
In 2010, an oil spill of unprecedented magnitude occurred in the Gulf of Mexico when a mobile offshore drilling unit, which was drilling an exploratory well, exploded and leaked out close to 5 million barrels of crude oil. Within weeks of the incident, BP—the corporation held responsible for the spill—created a 20 billion-dollar fund to deal with the accident.
Within two years and four days of the incident, federal investigators in the United States of America made their first arrest in the matter.
The incidents in the Gulf of Mexico and Bhopal were acutely distinct: the former wreaked massive environmental destruction, the latter decimated thousands of humans and deprived thousands more of the basic quality of life. The former also took place at a time when environmental law was more equipped to handle mass disasters.
At the same time, one cannot help but notice the differential treatment of the two incidents. Had the accident occurred in Indian waters, would BP have paid even half the compensation it eventually did?
The Bhopal gas disaster jolted lackadaisical politicians and policymakers.
Before 1984, India only had specific legislation pertinent to air and water pollution. After the Bhopal tragedy, however, India enacted the Environment Protection Act (1986), a statute that seeks to address pressing concerns involving sustainable development.
This was followed up by the enactment of the Public Liability Insurance Act, 1991 and the National Environment Tribunal Act, 1995. The Environmental Impact Assessment Notification, which formulated an approval mechanism for industrial projects, was also passed on 27 January 1994 (and subsequently amended from time to time).
All this worked to raise the environ-consciousness of Indian citizens by several notches. However, despite all the environmental legislation, there is still a definite lacuna in the Indian legal structure.
On 6 July 2011, the UN General Assembly adopted the ‘Guiding Principles on Business and Human Rights: Implementing the United Nations “Protect, Respect and Remedy” Framework’ (the UN Framework), a report by Harvard Law School professor and United Nations Special Representative John Ruggie.
As per the UN Framework, governments must clearly spell out their policies to protect human rights and communicate these to business organizations. Further, businesses must undertake regular human rights impact assessment (HRIA) and due diligence, and create internal policies to ensure compliance with human rights norms.
However, despite the UN Framework, Indian law does not yet clearly spell out any such requirements for corporations. The National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Businesses do enjoin companies to ‘respect and promote human rights’ and to ‘respect, promote and make efforts to restore the environment’, but these guidelines are non-binding.
All they entail are filing requirements, and that too, only for the top 100 companies in terms of market capitalization. So, despite the government’s steps in the aftermath of Bhopal, there is still room for a substantial number of measures to be still undertaken.
In the realm of corporate law, the (Indian) Companies Act, 1956 could be amended to reflect the UN Framework. While the new Companies Act introduced the concept of corporate social responsibility, it would be more effective to introduce a clause to escalate an HRIA and stakeholder consultation to the level of directorial duties.
This would give victims an enforceable remedy, going beyond the ‘name and shame’ approach. Further, as a matter of policy, the government could also consider ‘buying social justice’ by incorporating due diligence and HRIA obligations into government contracts awarded to private entities.
Finally, the Protection of Human Rights Act, 1993, which governs human rights commissions in India, should be broadened to cover violations even by non-state actors. The recent Civil Liability for Nuclear Damage Bill, 2010 (passed by both houses of Parliament) caps the liability of nuclear plant operators for nuclear accidents to 1500 crore (15 billion) rupees (roughly 325 million dollars).
This amount is lower than the 470-million-dollar compensation awarded in the Bhopal case, which in itself was grossly insufficient. The proposed framework of nuclear liability law has created a dangerous cocktail for another Bhopal. It reinforces the fact that justice in India is still administered reactively, not proactively.
It seems that the Bhopal debacle was not enough of a wake-up call for lawyers, judges, politicians, activists and the media. In fact, they appeared to have pressed the snooze button and gone on to repeat mistakes of the past.
Bureaucracy and power dynamics worked together to cause unparalleled mental agony to the victims seeking justice. Some proceedings in respect of the Bhopal gas disaster are still pending in courts in the United States of America.
Three decades on, neither the pursuit of criminal proceedings nor the enhancement of the compensation figures will vindicate the suffering of the Bhopal victims and their families. Yet, additional compensation packages can be the balm to soothe the wounds of the thousands who still suffer physically, emotionally and financially—as a consequence of that fateful December night.
The 1265 crore-rupee (12.65-billion-rupee) aid package cleared by the Union Cabinet for the Bhopal victims in 2010 is a step in the right direction. The curative petition moved by the Central government before the Supreme Court, seeking an additional compensation of 7844 crore (78.44 billion) rupees, is a more realistic and appropriate amount with which to compensate the victims, being closer to the monetary figure of the actual and total damage.
How much of the promised amount will actually reach those for whom it is intended still remains to be seen. The Achilles’ heel of Indian policy is exposed.