ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Fixing Corporate Liability


For over 15 years they have run from pillar to post seekins relief and recompense, even in some small measure. And returned empty handed and disappointed. For the victims of the Bhopal disaster the recent reversal of hope in the dismissal of the class action suit in the US courts cannot have come as a surprise. But in fact it is a requiem of sorts to all efforts not only to ensure that Union Carbide accepts its full liability for the devastation it caused in Bhopal due to gross negligence, but to set legal precedents for compelling multinationals to take cognisance of their international liabilities for damages they may cause, to enable victims of industrial disasters to seek redressal according to the laws of the land in which the MNC resides, and to put the onus of ensuring the safety of an industrial plant on the MNC regardless of the location of the plant and the laws of that land. In sum, even after two major industrial disasters in the last century, Seveso and Bhopal, little has changed in the realm of legal protection offered to MNCs by the courts of the countries of their origin against international liabilities.

In November last the victims of the Bhopal disaster of 1984 and the relatives of the survivors filed a class action suit against Union Carbide in a Manhattan federal court alleging "depraved indifference to human life" and naming chairman Warren Anderson as a defendant. Apart from seeking unspecified damages, a central issue was that the defendants had violated Indian, US and international laws by not keeping the terms of the ruling of the US courts during the 1986 civil suit filed by the Indian government. That suit was transferred to Indian courts at the request of Union Carbide which agreed to accept the jurisdiction of Indian courts. In a review petition and several writ petitions, in 1991, the Supreme Court of India affirmed the settlement figure of $ 470 million reached in 1989 but held that this would not come in the way of criminal proceedings against UC. Since 1992, after the criminal cases were revived, Union Carbide and Warren Anderson have repeatedly failed to comply with the orders of the chief magistrate (CJM) of Bhopal to appear in the case. UC has been served summons through the US Department of Justice and the Interpol. The Indian government has also been ordered by the CJM to seek extradition of Anderson. The Bhopal court has subsequently ruled Anderson and UC as "proclaimed absconders and fugitives under Indian law". None of this has had any effect on UC or its chairman.

In fact UC is currently going ahead with a merger with Dow Chemicals, the chemicals major (and manufacturer of the infamous Agent Orange). A class action suit has been filed by concerned parties against the move pointing out that UC's liabilities will also be transferred to Dow. And there are other citizens' actions to make public UC's liabilities so that the merger does not mean that they are erased permanently and to prevent the company's liabilities from "melting into corporate anonymity".

However, the dismissal of the class action in the Manhattan court essentially means that legally UC's record is whistle clean. The death of over 2,000 immediately after the disaster, mounting to a conservative estimate of 16,000 by now, as a result of the company's negligence has, as far as UC is concerned and lately the Indian government as well, been paid for. And the accumulated evidence showing that the safety regulations and operating procedures of the Bhopal plant fell below those of UC's pesticide plants in the US is to be of no legal consequence. The multinational with plants all over the world is not required to own legal responsibility for its gross negligence.

Another issue the suit has chosen to highlight is that the effects of the accident that had not in 1984 been established are now evident. The contamination of the water supply and of the land around the plant is continuing to adversely affect the health of the injured surviving population. If the US courts took cognisance of this there would be sufficient reason for recalling the matter from the Indian courts and compelling UC to respond to these charges. Sadly the Indian government and the Madhya Pradesh government have made no attempt to acknowledge this fact nor initiate a process of decontamination and detoxification of the land. It is a measure of the incompetence of the scientific community and the government that the seriousness of this situation is only now being recognised. The issue should in fact have been taken up by the government which had after all accepted the responsibility of acting on behalf of the victims in the aftermath of the disaster.

Quite apart from the fact that the dismissal of the US suit has dashed the hopes of the Bhopal disaster survivors and their relatives, it raises larger questions which call for reflection. Inarguably it is the responsibility of country governments to ensure that industrial units, whatever their ownership pattern, adhere to stringent of safety norms. Unfortunately, given the lags in technology between countries and across processes, this cannot be ensured, especially since legislative regulations in these matters are greatly influenced by the accessible knowledge base. Ever increasing corporate secrecy shrouding processes and technologies makes it impossible for regulators to ensure that the best safety precautions are indeed in place. And the situation gets progressively worse for countries which are resource and technology poor but which require new industries and investments. Throughout the last century not a single transnational corporation – from the one that caused the thalidomide disaster or the DES tragedy to the chemical giants responsible for the devastation of Minamata or Seveso or Bhopal – has willingly acknowledged its liability for causing harm and breach of trust of its workers, governments and people. While compensations have been paid, there has never been an acknowledgement of corporate negligence. Nor has commitment to safety of processes, operations and products been translated into a corporate principle. In the context of globalising economies this is a serious concern and needs to be tackled at the level of country governments as well as in international forums.

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