Bhopal Gas Tragedy

The Economic and Legal Aspects

Union Carbide's operations in India go back to the beginning of this century when it began marketing its products there. In 1924, an assembly plant for batteries was opened in Calcutta. By 1983 Carbide had 14 plants in India manufacturing chemicals pesticides, batteries and other products. Union Carbide's operations in India were conducted through a subsidiary , Union Carbide India, Ltd. (UCIL). The parent US Company (UCC) held 50.9 % of UCIL stock. The balance of 49.1% was owned by various Indian investors. Normally foreign investors are limited to 40% ownership of equity in Indian companies, but the Indian government waived this requirement in the case of Union Carbide because of the sophistication of its technology and the company's potential for export.

Should India throw out the multinationals? Keeping in mind the pros and cons one may say that multinationals operating in frivolous areas should be given second priority as compared to the much needed technology for key sectors of Indian industry. What is vital is that the multinational should not be allowed to function except under a strict regime of environmental controls and health and safety regulations. Unfortunately the negligence of the authorities in India match the avariciousness of the multinationals. The negligence shown by the Madhya Pradesh Government in the context of the Bhopal tragedy is representative of the situation in the rest of the country.

The Bhopal plant was licensed to manufacture 5250 tons of MIC based pesticides per year. However, peak production was only 2704 tons in 1981, falling to 1657 tons in 1983. Thus the quantity of pesticides manufactured in 1983 was only 31.37% of its licensed capacity. Was the Bhopal plant used for experiments in processes for which the UCIL was not authorised? Or was the capacity of the plant being under-utilised to maintain a monopolistic hold over prices?

In the first ten months of 1984, losses amounted to Rs.  5, 03,39,000. Union Carbide India Limited (UCIL), was thus deducted by Union Carbide Corporation (UCC) to close the plant and prepare it for sale. When no buyer was available in India, plans were made to dismantle the factory and ship it to another country. Negotiations toward this shutdown were completed by the end of November 1984. Financial losses and plans to dismantle the plant exacerbated Carbide's already negligent management practices leading to

executive decisions that directly caused the contamination of the MIC storage tank that leaked its contents over Bhopal. While saving money for both Union Carbide Corporation (UCC) and UCIL, negligent maintenance and substantial reductions of trained personnel culminated in the horrors of December 3, 1984.

By the first anniversary, on December 3, 1985, it was more than apparent to the Indian Government that Bhopal was a major problem on its hands with which it was steadily failing to cope. The victims witnessed neither speed nor selflessness not competence nor compassion from those appointed to manage and alleviate their condition. One of the most important reasons for this paralysis of action in Bhopal was the fact that the majority of the victims were poor and, in addition, from the minority community. Not all the relatives of those officially declared dead had been compensated- even if only with the nominal Rs. 10,000 set aside for the purpose. A large proportion of the victims whose monthly income was less than Rs. 500 were promised spot cash relief of Rs. 1500, but since there was already widespread corruption the scheme was discontinued.

Within months after the disaster, the Government of India issued an ordinance appointing itself as the sole representative of the victims for any legal dealings with Union Carbide as regards compensation. The ordinance was later replaced by the Bhopal Gas Leak (Processing of Claims) Act, 1985. Armed with this power, the Government of India filed its expected suit for compensation and damages against Union Carbide in the United States District Court for the Southern District of New York. Besides filing the suit, one of its prime responsibilities was to register the claims of each and every gas victim in Bhopal. This job was never done, or rather, not with any seriousness for the next ten years. The government set up various inquiry commissions to investigate the causes of the disaster: they remained half-hearted initiatives at best. Union Carbide, on the other hand, moved more quickly with its ‘investigations’: it announced by March 1985 itself, that the disaster was due to ‘an act of sabotage’ by a Sikh terrorist. Then they shifted blame to a disgruntled worker. Its Indian subsidiary, Union Carbide India Ltd.(UCIL), used the excuse of the closure of the plant to reach a settlement on December 3, 1985 with its 627 retrenched workers for a final amount of US $1.8 million.

The second year after the disaster was also a turbulent year for Union Carbide since it had to defend itself against a take-over bid by a smaller company called GAF. Was there any connection between GAF and Union Carbide in the take-over drama? Was the take-over battle a put-on for public consumption? As a result of the battle, not only was Union Carbide able to divest itself assets

sufficiently to file a bankruptcy claim under US laws, thus effectively blocking any order of compensation from Bhopal, if and when the suit was decreed, but GAF walked off with $ 81 million even though the take-over failed.

In addition, Union Carbide shareholders emerged richer with dividends worth more than what they had before the gas leak disaster! The gas victims figured nowhere in this scenario. To make things worse, on May 12, 1986, Judge J.F. Keenan ruled that India and not the US was the appropriate forum for the Bhopal compensation litigation. In the first pre trial hearing in the consolidated Bhopal litigation in US federal courts, John F Keenan, asked Carbide as ‘a matter of fundamental human decency’ to provide an interim relief payment of $5 - 10 million. Although contending that, according to Government of India reports, considerable relief had already been extended to the victims (some $8 million in ex-gratia payments to affected persons plus another $4 million allocated to the MP state Government to cover some of its extraordinary expenses), Carbide agreed to provide $5 million for this purpose, provided a satisfactory plan of distribution and accounting of the funds was devised. For 8 months, this sensitive initiative by Judge Keenan came to nought as various principals in the litigation, including Union Carbide and the Government of India, haggled over terms of reference and conditions for using the $5 million interim relief. Finally in November 1985, agreement was reached that the money would be channelled through the American Red Cross to the Indian Red Cross. In Bhopal itself, on the first anniversary of the disaster, no one - not even the official of the MP Government in charge of relief for the victims - had any idea just what the Red Cross would do with the money - and certainly, none of the money had yet benefited any victims.

On December 17, 1987, Judge Deo passed a significant order directing Union Carbide to pay Rs. 350 crores as interim relief. The order was unprecedented and decidedly controversial. Being an interim order, it could not be decreed. And without a decree UC could - and did - refuse to pay it.

Union Carbide soon challenged this order of the District Judge before the MP high court at Jabalpur on the grounds that the trial judge was not authorised to pass the order under any provisions of the Indian Civil Penal Code. On April 4, Justice S. K. Seth of the High Court upheld the liability of Union Carbide for the Bhopal disaster but reduced the interim compensation to Rs. 250 crores and it was that order against which Union Carbide had come in appeal to the Supreme Court. For centuries before the English came here, the common law in India held a person who had injured another to pay damages, not according to the status of the victim but according to the status of the wrongdoer. That is the

role of the Indian law. This law, has never been repealed. This rule of the ancient common law of India, enforced by many rulers in the last thousand years and more, is still the law of India. And it must be enforced by our courts, under the principles of justice, equity and good conscience. Then, in a shocking judgement on February 14, 1989 the Supreme Court directed Union Carbide to pay up US $ 470 million in "full and final settlement" of all claims, rights, and liabilities arising out of the disaster in 1984. Union Carbide was the first to describe the court’s decision as fair and reasonable and the Company’s stock soared in the London market immediately after. But the country as a whole, particularly the victim groups reacted in a rage and with bitterness. The Bhopal Gas disaster, which left thousands of people dead and 6,00,000 injured, was settled for a mere US $ 470 million - which works out to around Rs. 10,000 per victim if it had been divided equally amongst all. In the same year, an article in the Times of India stated that approximately US $ 40,000 was spent on the rehabilitation of every sea otter affected by the Alaska oil spill. Each sea otter was thus given rations of lobsters costing US $ 500 per day. Thus the life of an Indian citizen in Bhopal was clearly much cheaper than that of a sea otter in America.

The nation was feeling disturbed at the outcome of the case. The government which had a special responsibility in the matter had not formalised a list of the dead and injured or even got a complete compendium of the specific injuries that people had suffered. So obviously it was premature to reach a final decision on the amount of compensation.

On September 9 1993, Union Carbide successfully sold its entire 50.9% shares in UCIL to the Calcutta based Mc Leod Russell India Ltd., a company of the B M Khaitan Group. The shares fetched a price of Rs. 175 each, netting the Bhopal Trust a total sum of Rs. 290.23 crores. Once the hospital's total cost of Rs. 65 crores was set aside, the rest of the money would be made available to increase the settlement fund to pay compensation to the victims. Some of the money would also be used for setting up three rehabilitation centres in Bhopal.

However even after nearly 10 years, the administration had not come to terms with the elementary fact that the money being disbursed to the gas victims was their due and not some bonus that was being doled out to them as a goodwill gesture on the part of the Government. The Claims Commissioners continued to make procedures as difficult as possible for the victims. Corruption became so rampant until in desperation once again the victims' organisations had to return to the Supreme Court.

UC soon challenged this order of the District Judge before the MP high court at Jabalpur on the grounds that the trial judge was not authorised to pass the order under any provisions of the Indian Civil PC. On Apr. 4, Justice S. K. Seth of the HC upheld the liability of UC for the Bhopal disaster but reduced the interim compensation to Rs. 250 cr. and it was that order against which Union Carbide had come in appeal to the Supreme Court. For centuries before the English came here, the common law in India held a person who had injured another to pay damages, not according to the status of the victim but according to the status of the wrongdoer. That is the role of the Indian law. This law, has never been repealed. This rule of the ancient common law of India, enforced by many rulers in the last thousand years and more, is still the law of India. And it must be enforced by our courts, under the principles of justice, equity and good conscience. Then, in a shocking judgement on Feb. 14, 1989 the SC directed UC to pay up US $ 470 million in " full and final settlement" of all claims, rights, and liabilities arising out of the disaster in 1984. UC was the first to describe the court's decision as fair and reasonable and the Cos. stock soared in the London market immediately after. But the country as a whole, particularly the victim groups reacted in a rage and with bitterness. The Bhopal Gas disaster , which left approx. 3500 dead and 6,00,000 injured, was settled for a mere US $ 470 million - which works out to around Rs. 10,000 per victim if it had been divided equally amongst all. In the same year, an article in the Times of India stated that approx. US $ 40,000 was spent on the rehabilitation of every sea otter affected by the Alaska oil spill. Each sea otter was thus given rations of lobsters costing $500 per day. Thus the life of an Indian citizen in Bhopal was clearly much cheaper than that of a sea otter in America.

The Bhopal scenario, even as late as 1993, presented a sordid picture. In terms of relief, the record remains disgraceful. For the most part, all that the victims received so far is the pathetic sum of Rs. 200 per month as interim relief. The Claims Courts had decided just 5% of all claims. The total compensation paid so far worked out to less than the interest earned by the Government. on the US $ 470 million that UCC deposited under the controversial settlement of 1989 to secure its release from all civil litigation. If Bhopal retained all its squalor despite the Rs  216 crores. that had been spent there it was because the money had been neatly and efficiently recycled out of the pockets of the poor. The Bhopal victims have become a mere footnote to a sordid story of transfer of money from one group of vested interest - Carbide or the Government - to another : doctors, lawyers, and drug companies, many of them multinationals.

 

BHOPAL GAS TRAGEDY – A SOCIAL, ECONOMIC, LEGAL ANDENVIRONMENTAL ANALYSISIntroductionThe industrial catastrophe that occurred on the midnight of December 2,1984 at Union Carbide India Limited pesticide plant in Bhopal, India was the worstindustrial accident in the world. The official count was around 3000 deaths, butunofficial estimates are around 8000 – 10000 deaths (Bogart, 1989). Since then, a reportin NY Times indicates the death toll has reached a high of 14,410 due to the chronicdiseases caused by the gas leakage (NYT, 08/02/2002). This is a complex case,involving critics from all sides accusing the Government of India, U.S. Government, andUnion Carbide and the workers that handle the case. The purpose of examining this casefor this class, about Environmental Law is due to the fact that this involves a large-scaleenvironmental pollution accident and the legal difficulties in international prosecutionlaws, extradition treaties and non-uniform regulations across countries which could beexploited by companies. This paper, as the title suggests examines the social,environmental, legal and economic aspects of this evolving tragedy.History of the AccidentHowever tragic the circumstances turned out to be, the opening of the pesticide plant in Bhopal was well meant. The period was before Green Revolution. India was plagued with periodic droughts which resulted in famine. After centuries of British ruleand mismanaged kingdoms before that, India was reduced to poverty level subsistenceexistence for 75% of its citizens. After partition there were two droughts and subsequentfamines in the Northeastern part of India. This brought the world’s attention to thisregion. Several research projects later, drought resistant varieties of wheat originallyfrom the Sonora region of Mexico was developed to adapt to Indian conditions Thiswheat variety had bigger inflorescence, were resistant to rain and wind. This

however required higher fertilizer application and had higher pesticide requirement. TheGovernment of India began approving pesticide factories all over India, and thus the pesticide factory in India was opened in Bhopal, Madhya Pradesh in 1969 (Morehouse3 and Subramaniam, 1986). This plant produced the pesticide carbaryl, also called as Sevin(Kurzman, 1987). The first intermediate product in this process was phosgene, whichwas produced from the reaction of carbon monoxide with chlorine. Phosgene in turnreacted with monomethylamine to produce methyl iscyanate (MIC), the deadly gas thatwas reason for the Bhopal tragedy. MIC was reacted with alpha-naphthol to producecarbaryl. MIC is highly combustible therefore it was kept under a blanket of nitrogen intwo storage tanks in the Bhopal plant. This storage location on site of the factory was ill-advised since the factory was located among densely populated areas (Morehouse andSubramaniam, 1986). This location was rejected by the municipality authorities of Bhopal, but then the Central Government gave approval. By the malfunctioning of thevalve, on the night of December 2nd, 1984, water got into the storage tanks, and reactedwith nitrogen and thus the blanket gone, MIC leaked out. Within 2 hours the storage tank was empty.The reaction was catastrophic. The gas leaked over the city, carried by thewind into the shantytowns where squatters were living, into residential areas whereworking people and wealthy were living, to the railway station, where at least 200 peoplewere found dead lying on the platforms. The wind carried the cloud to a vast area of almost 40 sq km. The next morning, several thousands were discovered lying dead onthe streets of Bhopal, with post mortems revealing highly necroses lungs, and filled withfluid and in some cases holes appeared in the lungs due to the reaction with MIC(Morehouse and Subramaniam, 1986). The side effects continue even today

(GreenpeaceInternational, 2002). To date, they claim 20,000 have died and 150,000 are chronically illand clean up efforts are not up to date. “….Communities around Bhopal drinking water isstill contaminated. Women are having gynecological problems and are giving birth to babies that have birth defects. Eighteen years later, the plant location, which wassubsequently abandoned, still has stockpiles of hazardous wastes and obsoletechemicals.” India Today, in its February 15th, 1985 issue writes, “….the dead may nothave been so unlucky after all. Their end came horribly; it is true, choking on air that hadsuddenly gone vile. But at least the nightmare was brief. And then it was over. For those who survived the poisonous methyl isocyanite leak from the Union Carbide plant,release will not come so quickly. Thousands of seriously affected survivors have4 suffered such extensive lung damage, that they no longer can apply themselves physically. Their vision often gets blurred, spells of dizziness overtake them and walking briskly even for a few minutes sends them gasping to their knees, their chests aching.There are women who have peculiar gynecological problems. And there are others—  particularly children—who keep reliving those hours over and over again.”In the few years preceding the tragedy, the Union Carbide India Limited (UCIL)was losing money. During that period, safety and maintenance were given lowest priority in an effort to turn the plant around. In October 1982, there was an incident inwhich a mixture of MIC, chloroform and hydrochloric acid escaped from the plant(www.geocities.com/Athens/Forum/8266/Bhopal-2.htm), but in spite of the insistence of carbide officials for safety precautions, none were taken. Between one third of engineersand trained specialists who were at the plant since its inception, left for better jobselsewhere before the accident.The issue of danger and relocation of the plant when posed in the MadhyaPradesh State Government assembly in December 1982 was dismissed by an

official as“…. A sum of Rs. 25 crore has been invested in this unit. The factory is not a smallstone, which can be shifted elsewhere. There is no danger to Bhopal, nor will there ever  be.” Also on the night of the tragedy, when Bhopal police was desperately hunting downan official, was thus answered by Mr. J. Mukund, carbide’s work manager, “The gas leak cannot be from my plant, the plant is shut down for repairs. Our technology just can’t gowrong.”Several factors were identified by Lloyd-Jones, Shah and Chawla (1996) as thecontributors to the disaster. They were:•Gradual erosion of good and regular maintenance operations.•Depletion of adequately trained professionals, especially in supervisory posts•Declining inventories of vital spare parts•Staff exodus and demoralization•Under-manning of important workstations in the plantThese factors and the problems mentioned above combined together to create thecatastrophe on five past midnight on December 2nd, 1984

 

Legal Aspects of the Tragedy

The legal aspects of this tragedy make the bulk of my research. This caseinvolves complex proceedings and legal toss rounds between India and US.In the months following the tragedy, the Government of India appointed itself assole representative of the victims for any legal dealings with Union Carbide Corporation(UCC) for processing of compensation by the Bhopal

Gas Leak Act of 1985 (Lloyd-Jones, Shah and Chawla, 1996). With this consolidation of power, the Government of India filed a claim suit against Union Carbide for compensation and damages in theUnited States District Court in the Southern District of New York. The decision to bringthe case in US was due to the fact that Indian Courts did not have jurisdiction over UCC,the parent company, which is a defendant in this case. UCC appealed on basis of  forumnon conveniens(forum not convenient), basis on the plaintiff’s lack of standing to bringthe suit in United States and the purported lack of authority of the lawyers employed bythem to represent them (The Union of India v. Union Carbide Corporation, US Court of Appeals for the Second Circuit, January 14th, 1987). The Judge John F. Keenandismissed their actions on basis of  forum non conveniensbased on certain conditions.The conditions were that UCC:1.consent to jurisdiction to the Courts of India and continue to waive defenses basedon statute of limitations2.agree to satisfy any judgment rendered by an Indian court against it and upheld onappeal, provided the judgment and affirmance “comport with the minimalrequirements of due process,”3.Be subject to discovery under the Federal Rule of Civil Procedure of the UnitedStates.Judge Keenan, on delivering the judgment states, “… The Indian judiciary wasfound by the court to be a developed, independent and progressive one, which hasdemonstrated its capability in circumventing long delays by devising specialexpediting procedures in extraordinary cases such as by directing its High Courtto hear them in a daily basis, appointing special tribunals to handle them, andassigning daily hearing duties to a single judge.” However one factor Judge8 

Keenan found was that according to the Indian legal system parties were alloweddiscovery, however it is limited to what is admissible in trial. This he thoughtmight limit the victim’s access to the sources of proof. Therefore he orderedUnion Carbide should consent to discovery of it in accordance with the federalrules of civil procedure after the cases were transferred to India. He added,“While the court feels that it would be fair to bind the plaintiffs to Americandiscovery rules, it has no authority to do so.”Both Union of India and UCC appealed. This appeal was heard in theUnited States Court of Appeals for the Second Circuit and Judge Mansfield whileaffirming the dismissal on basis of  forum non convenienssaid that Indian courtswere in a superior position to construe and apply the Indian Laws and standardsthan would the courts of United States, witnesses and sources were almostentirely located in India and all the records were kept in India.In India, Union of India filed suit against Union Carbide in the SupremeCourt of India and in a judgment delivered on February 15th1989, approved asettlement of $470 million dollars, upon which all litigations, claims, rights andliabilities related to and arising out of Bhopal disaster was also considered settled.Subsequent suits files in Texas courts and New York courts by individual plaintiffs, particularly a Sajida Bano, accuse Indian Government of agreeing tothe settlement without informing the plaintiffs, of unacceptable conflict of interestas part owner (40% shareholding), of inadequate representation because theycould not opt out of settlement. These lawsuits were subsequently dismissed.Supreme Court of India in 1990 revised its standing that criminal proceedings were not applicable in case of UCC, but the defendants did not showfor the proceedings, and later (2001) a US court (Court of Appeals for the SecondCircuit ) affirmed that there was nothing in the settlement agreed to by UnionCarbide Corporation that it was willing to face criminal proceedings. Another charge by the plaintiffs was that

hospital which was promised by Union Carbideto be built was never built, but it never went through. Again, the court reaffirmedthe judgment that the hospital was not a part of the settlement, hence the courtcould not force Union Carbide to build it.9 Criminal charges proceedings against Mr. Warren Andersen, the chairmanand CEO of UCC at the time of the disaster, were filed in Bhopal district court,and Bhopal district court ordered Mr. Warren Andersen to stand trail. In a suddendevelopment, in May 24th, 2002, Central Bureau of Investigation (India’sequivalent to FBI) appealed that charges be reduced from “culpable homicide”(legal equivalent of manslaughter) to negligent act, but the Bhopal courtdismissed the appeal and ordered extradition proceedings against Mr. Andersen.Mr. Soli Sorabjee, (www.bhopal.com/opinion.htm) Attorney General for India claimed that this will not stand against the Indo-American extradition treatydue to lack of certain evidences for proof of “probable cause” required by U.S.law. The links were:1.The actual cause of gas  leak is yet unproven2.Mr. Andersen lacked knowledge of the gas leak prior to the accident3.The limited extend of Mr. Andersen’s’ decision-making control over Union Carbide India Limited4.Mr. Andersen did not refuse to correct the hazard5.State Department would find policy reasons not to surrender Mr. Andersendue toa.him being 81 years old and state of  health  b.17 years had elapsed between the tragedy and Government of India’sdecision to make a formal request for extradition.As of the latest (March 5th, 2000) according to New York Times, Mr. Andersen has gonein hiding and is still classified as “absconding” by the Indian Government

Economic Aspects of the Tragedy

According to various value-event studies published after the tragedy (Salinger,1992; Marcus et. al., 1991), the abnormal return of the Union Carbide stock increasedafter the lag of just a month. This lag might not have contributed by the catastrophe, but previous events prior to the tragedy such as profits for the corporation dropping andseveral takeover bids (Salinger, 1992), for example a failed takeover bid by GAF. Theincrease in the stock prices was explained as a result of restructuring and recapitalizationof the company before the sell-off.According to a study published in Journal of Management Science (Marcus et. al.1991), stock prices respond positively to defensive activities by the management, rather than accommodative moves by managers towards the victims. This explains howmanagers while trying to deflect lawsuits suppress their personal human reactionstowards tragedy and try to deny all responsibility (Marcus et. al., 1991). This may serveto answer the question where the Union Carbide officials accused sabotage by adisgruntled employee or attack by a “Sikh terrorist”. By accommodative signals, as thesettlement of 470$ million, the shareholders see this action as an acceptance of responsibility to the tragedy and the acceptance of problems within the company and thestock reacts in a negative way (Marcus et. al. 1991), but they could not reject their nullhypothesis (H0: When a company is involved in an accident, its investors will react more positively to defensive signals than to accommodative signals).The Dow chemical company successfully took over Union Carbide in February 6th

2001, after that Union Carbide became a wholly-owned subsidiary. Dow owned all thestock of Union Carbide, but UC remained a separate entity. Thereafter Dow claimed thatthe stockholders and the Union Carbide did not have any responsibility in the tragedy(www.bhopal.com/position.htm). The details about this statement are explained in thenext section in depth.

Results and Conclusions

This paper was primarily written by me as a means to understand the legalramifications of increased global co-operation and trade in the world. Being anIndian, I wanted to know what the story was behind the tragedy and subsequent processes. The first reaction that was provoked in me was extreme sympathy for thevictims and corporate wrongdoing against powerless third-world victim. But thedetailed examination of the cases provided in the analysis brings me to the conclusionthat it was Government of India’s responsibility to make sure that there was nomistake committed and in its fast-paced track to become developed country, not to bypass safety precautions required for approval of projects. Also the point which14 struck me was the approval of the settlement of 470 million dollars withoutconsideration with the victims first. This shows a lack of communication andinfrastructure facilities impeding the processes. Then there are the endless politicianstaking advantage of the tragedy for vote gains. This is illustrated by the arrest of Mr.Warren Andersen when he appeared in India as a spokesperson for the tragedy on the basis of negligent homicide. This was done by Madhya Pradesh (state where Bhopalis situated) Chief Minister of that time Mr. Arjun Singh for gains in the forthcomingelections. Even though Mr. Andersen was

released on the advice of CentralGovernment, it created an aversion in the officials of Union Carbide to appear intrials in India. The US courts could not do anything to accelerate their appearance.The only thing of fault I find with the US authorities in charge of this case is that thecould not locate Mr. Andersen and he is still reported as “absconding”. The lesson learnt from this for the safety culture is that while operating indeveloping countries with suspect regulation and infrastructure problems, the planning should incorporate several mechanisms usually not undertaken. Thecompanies should include the monitoring facilities1.The training of the supervisors should be even more diversified into the field of  personal responsibility.2.Supervisors, even though from the home country should be trained in Americanvalue system. This is important because if ever we are faced with such acatastrophe again, it is important that these issues when brought before American judge/jury will find the response lacking in ethics, even though these actionsmight be common place in the country where it occurred. This will expose thecompany to liability.3.The company should be adept in dealing with the political climate of the system.In case of Bhopal Gas Tragedy, successive governments used the tragedy as a political pawn in overthrowing incumbent governments. This created high levelof instability in the response undertaken by the State and Central Governments inIndia. Some of the lack of response was blamed upon Union Carbide. This will be the case in several developing countries. Political instability is a risk that is15 that should be studied in greater detail when planning such ambitious projects inthe developing nations.4.Outreach programs are important in the case of Companies. This should be donein the center of the tragedy. Several outreach programs started by Union Carbidehave not been completed. In this day of strong environmental movement, thiswill be duly noted by the environmental

groups. The outreach programs should be concurrent with the start of a project.5.Supervisors should not shy away from personal responsibility.6. Supervisors should have multidivisionary authority to impose punishments andhave authority to suspend activity when necessary.

Abstract

On December 3 1984, more than 40 tons of methyl isocyanate gas leaked from a pesticide plant in Bhopal, India, immediately killing at least 3,800 people and causing significant morbidity and premature death for many thousands more. The company involved in what became the worst industrial accident in history immediately tried to dissociate itself from legal responsibility. Eventually it reached a settlement with the Indian Government through mediation of that country's Supreme Court and accepted moral responsibility. It paid $470 million in compensation, a relatively small amount of based on significant underestimations of the long-term health consequences of exposure and the number of people exposed. The disaster indicated a need for enforceable international standards for environmental safety, preventative strategies to avoid similar accidents and industrial disaster preparedness.

Since the disaster, India has experienced rapid industrialization. While some positive changes in government policy and behavior of a few industries have taken place, major threats to the environment from rapid and poorly regulated industrial growth remain. Widespread environmental degradation with significant adverse human health consequences continues to occur throughout India.

December 2004 marked the twentieth anniversary of the massive toxic gas leak from Union Carbide Corporation's chemical plant in Bhopal in the state of Madhya Pradesh, India that killed more than 3,800 people. This review examines the health effects of exposure to the disaster, the legal response, the lessons learned and whether or not these are put into practice in India in terms of industrial development, environmental management and public health.

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History

In the 1970s, the Indian government initiated policies to encourage foreign companies to invest in local industry. Union Carbide Corporation (UCC) was asked to build a plant for the manufacture of Sevin, a pesticide commonly used throughout Asia. As part of the deal, India's government insisted that a significant percentage of the investment come from local shareholders. The government itself had a 22% stake in the company's subsidiary, Union Carbide India Limited (UCIL) [1]. The company built the plant in Bhopal because of its central location and access to transport infrastructure. The specific site within the city was zoned for light industrial and commercial use, not for hazardous industry. The plant was initially approved only for formulation of pesticides from component chemicals, such as MIC imported from the parent company, in relatively small quantities. However, pressure from competition in the chemical industry led UCIL to implement "backward integration" – the manufacture of raw materials and intermediate products for formulation of the final product within one facility. This was inherently a more sophisticated and hazardous process [2].

In 1984, the plant was manufacturing Sevin at one quarter of its production capacity due to decreased demand for pesticides. Widespread crop failures and famine on the subcontinent in the 1980s led to increased indebtedness and decreased capital for farmers to invest in pesticides. Local managers were directed to close the plant and prepare it for sale in July 1984 due to decreased profitability [3]. When no ready buyer was found, UCIL made plans to dismantle key production units of the facility for shipment to another developing country. In the meantime, the facility continued to operate with safety equipment and procedures far below the standards found in its sister plant in Institute, West Virginia. The local government was aware of safety problems but was reticent to place heavy industrial safety and pollution control burdens on the struggling industry because it feared the economic effects of the loss of such a large employer [3].

At 11.00 PM on December 2 1984, while most of the one million residents of Bhopal slept, an operator at the plant noticed a small leak of methyl isocyanate (MIC) gas and increasing pressure inside a storage tank. The vent-gas scrubber, a safety device designer to neutralize toxic discharge from the MIC system, had been turned off three weeks prior [3]. Apparently a faulty valve had allowed one ton of water for cleaning internal pipes to mix with forty tons of MIC [1]. A 30 ton refrigeration unit that normally served as a safety component to cool the MIC storage tank had been drained of its coolant for use in another part of the plant [3]. Pressure and heat from the vigorous exothermic reaction in the tank continued to build. The gas flare safety system was out of action and had

been for three months. At around 1.00 AM, December 3, loud rumbling reverberated around the plant as a safety valve gave way sending a plume of MIC gas into the early morning air [4]. Within hours, the streets of Bhopal were littered with human corpses and the carcasses of buffaloes, cows, dogs and birds. An estimated 3,800 people died immediately, mostly in the poor slum colony adjacent to the UCC plant [1,5]. Local hospitals were soon overwhelmed with the injured, a crisis further compounded by a lack of knowledge of exactly what gas was involved and what its effects were [1]. It became one of the worst chemical disasters in history and the name Bhopal became synonymous with industrial catastrophe [5].

Estimates of the number of people killed in the first few days by the plume from the UCC plant run as high as 10,000, with 15,000 to 20,000 premature deaths reportedly occurring in the subsequent two decades [6]. The Indian government reported that more than half a million people were exposed to the gas [7]. Several epidemiological studies conducted soon after the accident showed significant morbidity and increased mortality in the exposed population. Table Table1. 1 . summarizes early and late effects on health. These data are likely to under-represent the true extent of adverse health effects because many exposed individuals left Bhopal immediately following the disaster never to return and were therefore lost to follow-up [8].

Table 1Health effects of the Bhopal methyl isocyanate gas leak exposure [8, 30-32].

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Aftermath

Immediately after the disaster, UCC began attempts to dissociate itself from responsibility for the gas leak. Its principal tactic was to shift culpability to UCIL, stating the plant was wholly built and operated by the Indian subsidiary. It also fabricated scenarios involving sabotage by previously unknown Sikh

extremist groups and disgruntled employees but this theory was impugned by numerous independent sources [1].

The toxic plume had barely cleared when, on December 7, the first multi-billion dollar lawsuit was filed by an American attorney in a U.S. court. This was the beginning of years of legal machinations in which the ethical implications of the tragedy and its affect on Bhopal's people were largely ignored. In March 1985, the Indian government enacted the Bhopal Gas Leak Disaster Act as a way of ensuring that claims arising from the accident would be dealt with speedily and equitably. The Act made the government the sole representative of the victims in legal proceedings both within and outside India. Eventually all cases were taken out of the U.S. legal system under the ruling of the presiding American judge and placed entirely under Indian jurisdiction much to the detriment of the injured parties.

In a settlement mediated by the Indian Supreme Court, UCC accepted moral responsibility and agreed to pay $470 million to the Indian government to be distributed to claimants as a full and final settlement. The figure was partly based on the disputed claim that only 3000 people died and 102,000 suffered permanent disabilities [9]. Upon announcing this settlement, shares of UCC rose $2 per share or 7% in value [1]. Had compensation in Bhopal been paid at the same rate that asbestosis victims where being awarded in US courts by defendant including UCC – which mined asbestos from 1963 to 1985 – the liability would have been greater than the $10 billion the company was worth and insured for in 1984 [10]. By the end of October 2003, according to the Bhopal Gas Tragedy Relief and Rehabilitation Department, compensation had been awarded to 554,895 people for injuries received and 15,310 survivors of those killed. The average amount to families of the dead was $2,200 [9].

At every turn, UCC has attempted to manipulate, obfuscate and withhold scientific data to the detriment of victims. Even to this date, the company has not stated exactly what was in the toxic cloud that enveloped the city on that December night [8]. When MIC is exposed to 200° heat, it forms degraded MIC that contains the more deadly hydrogen cyanide (HCN). There was clear evidence that the storage tank temperature did reach this level in the disaster. The cherry-red color of blood and viscera of some victims were characteristic of acute cyanide poisoning [11]. Moreover, many responded well to administration of sodium thiosulfate, an effective therapy for cyanide poisoning but not MIC exposure [11]. UCC initially recommended use of sodium thiosulfate but withdrew the statement later prompting suggestions that it attempted to cover up evidence of HCN in the gas leak. The presence of HCN

was vigorously denied by UCC and was a point of conjecture among researchers [8,11-13].

As further insult, UCC discontinued operation at its Bhopal plant following the disaster but failed to clean up the industrial site completely. The plant continues to leak several toxic chemicals and heavy metals that have found their way into local aquifers. Dangerously contaminated water has now been added to the legacy left by the company for the people of Bhopal [1,14].

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Lessons learned

The events in Bhopal revealed that expanding industrialization in developing countries without concurrent evolution in safety regulations could have catastrophic consequences [4]. The disaster demonstrated that seemingly local problems of industrial hazards and toxic contamination are often tied to global market dynamics. UCC's Sevin production plant was built in Madhya Pradesh not to avoid environmental regulations in the U.S. but to exploit the large and growing Indian pesticide market. However the manner in which the project was executed suggests the existence of a double standard for multinational corporations operating in developing countries [1]. Enforceable uniform international operating regulations for hazardous industries would have provided a mechanism for significantly improved in safety in Bhopal. Even without enforcement, international standards could provide norms for measuring performance of individual companies engaged in hazardous activities such as the manufacture of pesticides and other toxic chemicals in India [15]. National governments and international agencies should focus on widely applicable techniques for corporate responsibility and accident prevention as much in the developing world context as in advanced industrial nations [16]. Specifically, prevention should include risk reduction in plant location and design and safety legislation [17].

Local governments clearly cannot allow industrial facilities to be situated within urban areas, regardless of the evolution of land use over time. Industry and government need to bring proper financial support to local communities so they can provide medical and other necessary services to reduce morbidity, mortality and material loss in the case of industrial accidents.

Public health infrastructure was very weak in Bhopal in 1984. Tap water was available for only a few hours a day and was of very poor quality. With no

functioning sewage system, untreated human waste was dumped into two nearby lakes, one a source of drinking water. The city had four major hospitals but there was a shortage of physicians and hospital beds. There was also no mass casualty emergency response system in place in the city [3]. Existing public health infrastructure needs to be taken into account when hazardous industries choose sites for manufacturing plants. Future management of industrial development requires that appropriate resources be devoted to advance planning before any disaster occurs [18]. Communities that do not possess infrastructure and technical expertise to respond adequately to such industrial accidents should not be chosen as sites for hazardous industry.

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Since 1984

Following the events of December 3 1984 environmental awareness and activism in India increased significantly. The Environment Protection Act was passed in 1986, creating the Ministry of Environment and Forests (MoEF) and strengthening India's commitment to the environment. Under the new act, the MoEF was given overall responsibility for administering and enforcing environmental laws and policies. It established the importance of integrating environmental strategies into all industrial development plans for the country. However, despite greater government commitment to protect public health, forests, and wildlife, policies geared to developing the country's economy have taken precedence in the last 20 years [19].

India has undergone tremendous economic growth in the two decades since the Bhopal disaster. Gross domestic product (GDP) per capita has increased from $1,000 in 1984 to $2,900 in 2004 and it continues to grow at a rate of over 8% per year [20]. Rapid industrial development has contributed greatly to economic growth but there has been significant cost in environmental degradation and increased public health risks. Since abatement efforts consume a large portion of India's GDP, MoEF faces an uphill battle as it tries to fulfill its mandate of reducing industrial pollution [19]. Heavy reliance on coal-fired power plants and poor enforcement of vehicle emission laws have result from economic concerns taking precedence over environmental protection [19].

With the industrial growth since 1984, there has been an increase in small scale industries (SSIs) that are clustered about major urban areas in India. There are generally less stringent rules for the treatment of waste produced by SSIs due to less waste generation within each individual industry. This has allowed SSIs to

dispose of untreated wastewater into drainage systems that flow directly into rivers. New Delhi's Yamuna River is illustrative. Dangerously high levels of heavy metals such as lead, cobalt, cadmium, chrome, nickel and zinc have been detected in this river which is a major supply of potable water to India's capital thus posing a potential health risk to the people living there and areas downstream [21].

Land pollution due to uncontrolled disposal of industrial solid and hazardous waste is also a problem throughout India. With rapid industrialization, the generation of industrial solid and hazardous waste has increased appreciably and the environmental impact is significant [22].

India relaxed its controls on foreign investment in order to accede to WTO rules and thereby attract an increasing flow of capital. In the process, a number of environmental regulations are being rolled back as growing foreign investments continue to roll in. The Indian experience is comparable to that of a number of developing countries that are experiencing the environmental impacts of structural adjustment. Exploitation and export of natural resources has accelerated on the subcontinent. Prohibitions against locating industrial facilities in ecologically sensitive zones have been eliminated while conservation zones are being stripped of their status so that pesticide, cement and bauxite mines can be built [23]. Heavy reliance on coal-fired power plants and poor enforcement of vehicle emission laws are other consequences of economic concerns taking precedence over environmental protection [19].

In March 2001, residents of Kodaikanal in southern India caught the Anglo-Dutch company, Unilever, red-handed when they discovered a dumpsite with toxic mercury laced waste from a thermometer factory run by the company's Indian subsidiary, Hindustan Lever. The 7.4 ton stockpile of mercury-laden glass was found in torn stacks spilling onto the ground in a scrap metal yard located near a school. In the fall of 2001, steel from the ruins of the World Trade Center was exported to India apparently without first being tested for contamination from asbestos and heavy metals present in the twin tower debris. Other examples of poor environmental stewardship and economic considerations taking precedence over public health concerns abound [24].

The Bhopal disaster could have changed the nature of the chemical industry and caused a reexamination of the necessity to produce such potentially harmful products in the first place. However the lessons of acute and chronic effects of exposure to pesticides and their precursors in Bhopal has not changed agricultural practice patterns. An estimated 3 million people per year suffer the consequences of pesticide poisoning with most exposure occurring in the

agricultural developing world. It is reported to be the cause of at least 22,000 deaths in India each year. In the state of Kerala, significant mortality and morbidity have been reported following exposure to Endosulfan, a toxic pesticide whose use continued for 15 years after the events of Bhopal [25].

Aggressive marketing of asbestos continues in developing countries as a result of restrictions being placed on its use in developed nations due to the well-established link between asbestos products and respiratory diseases. India has become a major consumer, using around 100,000 tons of asbestos per year, 80% of which is imported with Canada being the largest overseas supplier. Mining, production and use of asbestos in India is very loosely regulated despite the health hazards. Reports have shown morbidity and mortality from asbestos related disease will continue in India without enforcement of a ban or significantly tighter controls [26,27].

UCC has shrunk to one sixth of its size since the Bhopal disaster in an effort to restructure and divest itself. By doing so, the company avoided a hostile takeover, placed a significant portion of UCC's assets out of legal reach of the victims and gave its shareholder and top executives bountiful profits [1]. The company still operates under the ownership of Dow Chemicals and still states on its website that the Bhopal disaster was "cause by deliberate sabotage". [28].

Some positive changes were seen following the Bhopal disaster. The British chemical company, ICI, whose Indian subsidiary manufactured pesticides, increased attention to health, safety and environmental issues following the events of December 1984. The subsidiary now spends 30–40% of their capital expenditures on environmental-related projects. However, they still do not adhere to standards as strict as their parent company in the UK. [24].

The US chemical giant DuPont learned its lesson of Bhopal in a different way. The company attempted for a decade to export a nylon plant from Richmond, VA to Goa, India. In its early negotiations with the Indian government, DuPont had sought and won a remarkable clause in its investment agreement that absolved it from all liabilities in case of an accident. But the people of Goa were not willing to acquiesce while an important ecological site was cleared for a heavy polluting industry. After nearly a decade of protesting by Goa's residents, DuPont was forced to scuttle plans there. Chennai was the next proposed site for the plastics plant. The state government there made significantly greater demand on DuPont for concessions on public health and environmental protection. Eventually, these plans were also aborted due to what the company called "financial concerns". [29].

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Conclusion

The tragedy of Bhopal continues to be a warning sign at once ignored and heeded. Bhopal and its aftermath were a warning that the path to industrialization, for developing countries in general and India in particular, is fraught with human, environmental and economic perils. Some moves by the Indian government, including the formation of the MoEF, have served to offer some protection of the public's health from the harmful practices of local and multinational heavy industry and grassroots organizations that have also played a part in opposing rampant development. The Indian economy is growing at a tremendous rate but at significant cost in environmental health and public safety as large and small companies throughout the subcontinent continue to pollute. Far more remains to be done for public health in the context of industrialization to show that the lessons of the countless thousands dead in Bhopal have truly been heeded.

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Competing interests

The author(s) declare that they have no competing interests.

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Acknowledgements

J. Barab, B. Castleman, R Dhara and U Misra reviewed the manuscript and provided useful suggestions.

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