Dirty business

There is déjà vu about the report that the government is preparing to remove the hurdles to the entry of Dow Chemical, which has bought Union Carbide into India in a big way. Victims of the world’s worst industrial accident in Bhopal in 1984 have filed a case in the Jabalpur High Court asking for more compensation. The Chemical & Fertilisers Ministry has also filed an affidavit in the case, seeking Rs 100 crore as initial compensation for Union Carbide India’s liability for cleaning up the contamination at the factory site. But, the Industries Department wants an out-of-court settlement and a withdrawal of this affidavit.

Rajiv Gandhi had similarly compromised on an out-of-court settlement with Carbide for $ 470 million 20 years ago, dashing the hopes of the survivors of some 2,500 victims who died in the accident overnight and many thousands subsequently, as well as those who continue to suffer from respiratory and eye ailments, not to mention the severe trauma of losing loved ones to an invisible gas. The Law Ministry has taken the view that Dow has not inherited the liabilities of Carbide, which is what Dow has been claiming all along.

There is a consensus in the highest echelons of the Congress that it is India’s best interests for the US chemical multinational to invest in the country by getting rid of the obstacle that is Bhopal. This was the view of the then Cabinet Secretary in April, which is obviously echoing the position of the high command. Dow has promised to make major investments in India. No stranger an interlocutor than Ratan Tata himself had intervened with the Finance Ministry and Planning Commission, advocating an out-of-court settlement.

There are several issues which this denouement raises. The first is the moral and legal liability for causing the deaths of and damage to thousands of people. In the much earlier protracted debate over where to try the parent Union Carbide company, Nani Palkhivala, the legal luminary, and other eminent experts had felt that India’s laws regarding such damages were more than sufficient to hold the trial in this country. They turned a blind eye to the lack of precedents here regarding punitive damages for industrial accidents. The Environment (Protection) Act itself was only introduced in 1986, obviously as a knee-jerk reaction to Bhopal.

During the trial, Carbide’s lawyers had argued, shockingly, that an American life was worth more than an Indian life. They estimated the annual earnings of most of the victims, poor shanty dwellers who lived cheek by jowl with the pesticide plant, and came up with a multiple of this sum which was risible, to say the least. Contrast this with Karen Silkwood
— subject of a Hollywood film — a chemical technician in a plutonium fuels plant in Oklahoma who was exposed to radiation and died mysteriously while exposing the negligence of the company. One US court awarded her family $ 10.5 million for personal injury and punitive damages, which was reversed and later settled out of court for $ 1.5 million. Depending on how many are estimated to have died in Bhopal subsequently — activists put the number at 20,000, ten times the immediate number, and 120,000 suffering from ill-health — the compensation works out to a few US cents a head per day in the 23 years since the accident.

There is a complex legal issue, about whether Dow is liable for damages which occurred when the Indian subsidiary of Union Carbide leaked a deadly gas. It concerns the agreement which Carbide entered into with Dow six years ago to sell its assets without its liabilities. The $ 470 million settlement package did not include funds to clean up the contaminated site, nor did it include compensation for the tens of thousands of “second-generation victims” who were born after the disaster but suffer from severe birth defects and other developmental and psychological problems caused by exposure to the gas. Whatever the legalities, there is a moral question: of compensating innocent people who were harmed due to the criminal negligence of the company. During the trial, the parent company tried to distance itself from the culpability of its Indian subsidiary, but the fact that it held the majority of the shares speaks for itself.

It is not as if Dow Chemical has an impeccable record when it comes to manufacturing lethal chemicals. It was the sole supplier of the highly inflammable chemical, napalm, which the US used in Vietnam. For some years, despite widespread protests in the US and elsewhere against the use of this deadly weapon, Dow continued production of this profitable product, arguing that the US Department of Defence had to take responsibility for its deployment.

As controversially, it (and Monsanto) produced Agent Orange — the toxic defoliant which was dropped widely over Vietnam to flush out the Viet Cong. It derived its name from the orange-striped barrels in which it was shipped out and is a cocktail of different herbicides. When it degrades, it produces dioxin, one of the most toxic substances ever known. In 1976, a chemical plant in Seveso, Italy, suffered a leak and a few kilograms of dioxin were released. The town has gone down in environmental history as one of the worst cases of accidents, along with the Sandoz chemical plant warehouse fire in Basel, Switzerland, the Three Mile nuclear incident in the US and Chernobyl in the Soviet Union.

US Vietnam war veterans, who were exposed to Agent Orange, have received as much as $ 180 million as interim out-of-court compensation — without admission of liability by the chemical companies. In 2004, the Vietnam Association for Victims of Agent Orange/Dioxin (VAVA), filed a lawsuit in a US court against several US companies for liability in causing personal injury by developing the chemical. The case was thrown out of court. Vietnam has established ‘Peace villages’, which each host between 50 to 100 victims of Agent Orange, giving them medical help. US veterans and individuals have also supported these programmes in Vietnam.

In a curious twist to the US veterans’ case against Dow and others, a judge dismissed the suit in 2005, ruling that there was no legal basis for the plaintiffs’ claims. The judge concluded that Agent Orange was not considered a poison under international law at the time of its use by the US; that the US was not prohibited from using it as a herbicide; and that the companies which produced the substance were not liable for the method of its use by the government. The US government is not a party in the lawsuit, claiming sovereign immunity.

In Bhopal, the Tata group has suggested setting up a “remediation” fund to clean up 8,000 tonnes of toxic material, which is still lying at the site. US senators and Dow executives have been lobbying with the Prime Minister too, which explains the current rapprochement. It will be a tragedy if, in the attempt to be pragmatic in seeking a massive US investment, the government caves in and lets Dow off the hook. If Rajiv Gandhi’s earlier act was seen as a capitulation, this will be seen as another, under the aegis of his wife who heads the Congress.

Darryl D’Monte is Chairman, Forum of Environmental Journalists of India.