This case study basically deals with the Bhopal gas leak. The age of mass torts arrived with Bhopal Gas Tragedy unveiling the environmental disasters with toxic invasions, and unfortunately, it continues.
The multinationals, which entered the ‘developing world’ as harbingers of profit and gain were in fact, brought the death demon, the Union Carbide which authored the tragedy thought it could wash off its hands by selling the abandoned Bhopal plant to Dow Chemicals, even as it emanate the poisonous gases and continue to cause enormous damage to the environment. It is not known with great certainty the figure of casualties and injured persons it is not possible to measure up the real damage to the environment which appear as on today as eternal.
It is shocking that the Dow Chemicals claimed the remainder of the Relief Fund carved out of the settlement between the Government of India and Union Carbide for cleaning up the environmentally hazardous pollution emanating from the abandoned unit of the factory at Bhopal. The balance of the hitherto undistributed compensation has accumulated interest and grown to Rs. 1,505 crores. (some $327 million).
Very appropriately, the Supreme Court on 19 July, 2004 ordered the Government of India to distribute the balance of compensation remaining from Union Carbide’s settlement among the 566,876 Bhopal survivors whose claims have been successfully settled.
Survivors whose claims may have been wrongly dismissed or who were underpaid were directed by the court to file a separate application, and seek compensation from the Government of India. The average payout will still only amount to $570 per person which, despite Dow-Carbide’s now famous dictum that “$500 is plenty good for an Indian”, comes nowhere near meeting the costs of medical treatment that survivors have already had to fund for themselves, much less compensating for two decades of illness, loss of livelihood and fear for what new horrors may emerge in their bodies.
It is a further setback for the Dow-Carbide corporation and its political accomplices in India, who are on record as demanding that this money, meant for the relief of the survivors, should be used to clean up the company’s abandoned and polluted factory in Bhopal. Last month, the Government of India threw its weight behind a court action to force Dow-Carbide to bear the full costs of cleaning the plant.
The Government of India has decided to convey the “No Objection” to the US Court of Appeals to consider environmental contamination claims unrelated to the Bhopal Gas Leak Disaster as defined in section 2(a) of the Bhopal Gas Leak Disaster (Processing of Claims) Act 1985.
The issue pertains to a civil proceeding instituted in 1999 by some of the Bhopal based NGOs including that of Hasina Bi”s claims and affected persons in the US District Court for the Southern District of New York seeking relief under the Alien Tort Claims Act of New York against Union Carbide Corporation and Mr. Warren Anderson for causing personal injury as well as damage to the property. The suit was dismissed by the District Court on August 28, 2000 on the grounds that the plaintiff lacked standing to bring the action and that their claims were barred by 1989 settlement in the Supreme Court of India. Being aggrieved by the dismissal of their suit, the plaintiff filed an appeal before the Second Circuit Court of Appeals. The Court of Appeals heard parties in detail and after taking into account all the relevant facts, remanded the case by its order dated 17.3.04 to the District Court to consider certain aspects afresh.
As is clear from the order of the Court of Appeal the claim for site remediation can be taken up by the District Court to which the case stands remanded only if the Indian Government or the State of Madhya Pradesh seeks to intervene in the action or otherwise urges the Court to order such relief.
The views of Madhya Pradesh Government have also been obtained and who have also conveyed their “No Objection” in the matter with certain conditions. The “No Objection” given by the Government of India gives its consent to the US Court to direct the Union Carbide Corporation to clean up the mess it left behind in its plant in Bhopal, as the plant, which was operated by Union Carbide India Limited (UCIL) a wholly owned subsidiary of the multinational Union Carbide Corporation (UCC), closed down in December 1984 following the leak of tonnes of methyl isocyanate that led to the death of thousands of people.
The union of India made it clear that neither the Madhya Pradesh State Government or its instrumentalities nor the Union of India has any objection to any relief for environmental remediation of the former Union Carbide plant premises in Bhopal being ordered or directed by a competent court or tribunal of the United States, as pleaded by the representatives of the victims of the tragedy. The Union of India made such a submission to the Court in US. Further, the Union of India and the Madhya Pradesh State Government and their respective instrumentalities, expressed their will to cooperate with any such relief as and when issued by the United States District Court. The Union of India will monitor and supervise such environmental remediation including decommissioning of plant and machinery, remediation / disposal of contaminated soil and appropriate disposal of toxic chemicals and wastes on the plant site by Union Carbide in order to ensure that it is undertaken in compliance with the norms parameters laid down by a specific organization of the Government of India, the Central Pollution Control Board, for that purpose.
However the Union of India was categorical in its commitment that the Union Carbide will also be held responsible for any loss/damages caused to life or property in the process of remediation and disposal. Pursuant to the “polluter pays” principle recognized by both the United States and India, Union Carbide should bear all of the financial burden and cost for the purpose of environmental clean up and remediation. The Union of India and the State Government of Madhya Pradesh, the submission stated, shall not bear any financial burden for this purpose.
Criminal Liability and the Dow Chemicals
Presently, Union Carbide is charged with culpable homicide and India is trying to extradite former Union Carbide CEO Warren Anderson to stand trial. The company, which owned 50.9 percent of UCIL, severed its relationship with UCIL in 1994 and has argued that it has no legal obligation to conduct or finance the clean-up. However, under Indian law Dow not only bought the assets, but also the liabilities, of Union Carbide and can therefore be held to account.
The Chief Judicial Magistrate’s court in Bhopal, India, may very soon decide whether it will force Dow Chemical to send former Union Carbide officials to India to stand trial for the 1984 gas leak that has killed and injured over 60,000 people .
Dow is currently under pressure to set aside assets to settle potentially crippling liabilities from risks associated with its production and use of asbestos, Agent Orange, and dioxin contamination in rivers in Michigan. In December 2002, Dow disclosed that the long-term costs associated with Union Carbide’s asbestos liability could be $2.2 billion, and it took an immediate charge of $828 million to its accounts. At the end of 2003, Dow had accrued obligations of $381 million for environmental remediation and restoration costs.
The Dow Chemicals has denied that it has any further liability for the disaster, and considers the matter closed, arguing that a settlement for claims was reached in accordance with Indian law 15 years ago. However, since 1992, Union Carbide has been lambasted as an absconder from justice because India’s criminal proceedings into the tragedy have effectively been crippled by the continued non-attendance of the key accused – Union Carbide Corporation, Union Carbide Eastern and Warren Anderson, the parent company’s chairman.
Bhoposhima: the Disaster Exported to India
While third world countries expected that foreign investments would bring them avenues of employment, they brought unending misery and pollution. Veiled threats reached the government, the media and the legal institutions that imposing severe penalties on the MNC would deter other multinational players from entering the Indian Market, a possibility that was projected as dire. If the transferring MNC was to be let off lightly, it would send out signals that life was cheap in the developing world, and that profits could be essayed at the risk of death and disaster. UCC tried to shift blame saying it was local negligence and not design defect.
There can be no other live example of death demon than one created by MNCs of developed nations is the Bhopal massacre caused by UCC. The death, disaster and dreadful conspiracy to exploit human labour in India and to unhesitatingly pollute the environment can be seen from the pathetic tragedy in Bhopal.
Bhopal Gas Tragedy is described as another Hiroshima of the Chemical Industry” one of the worst commercial industrial disasters in history, while Krishna Iyer preferred to call it Bhoposhima, a major disaster killing thousands of people as a consequence of corporate delinquency.
The tragedy was described in different terms such as: accident, disaster, catastrophe, crisis and also as sabotage, conspiracy, massacre, and experiment, whichever best suited the arguments that would help to pin the ‘blame’ on somebody. In his book titled ‘The Bhopal Tragedy: Language, Logic and Politics in the Production of a Hazard’, the author William Bogard “Each of these descriptions, in its own way, minimizes the problem of human agency and intention, and thus refuses to address directly the issue of responsibility. ” Bogard goes on to point out that the best way to describe this incidence would be a tragedy because, “In calling Bhopal a tragedy, we are still permitted to say that intention and agency were involved in how the event unfolded and that responsibility must ultimately rest with someone or some group. But unlike saying that Bhopal was the deliberate result of sabotage, a conspiracy, or some diabolical experiment involving human guinea pigs- charges that are virtually impossible to prove in any case- a tragedy, in contrast, emerges out of a complex of confused and misguided intentions, many of which may be honorable in themselves but when forged to the actual chain of events produce the worst possible outcome. ”
The facts and figures of the accident are as follows:
The Day: After 2nd December midnight, 3rd of December, 1984
The Time: Around 1 a.m. on Monday
The Place: Bhopal, a densely populated region in the city of Bhopal,
The Poisonous Gas: A poisonous vapor, a highly toxic cloud of methyl isocyanate, burst from the tall stacks.
The Corporate Villain: The Union Carbide pesticide plant.
Immediate deaths: 2000
Injured people: 3,00,000
Injured animals: 7000, of which 1000 killed.
On the night of December 2-3, 1984 a gas leak at a small pesticide plant in Central India owned by a subsidiary of Union Carbide Corporation devastated a whole city Over 90% of the worst affected people were the poor living in the close vicinity of Bhopal’s industrial area. The job of the police who went to lower class localities was clearly defined: Open doors to one-room tenants; and pull out bodies five, six, seven. Anees Chisti, a journalist who witnessed the tragedy first hand states, “after a while we began to devalue the meaning of death. On seeing another dead body, all one felt was a twinge of sadness, rather like what one feels when an Indian batsman walks back to the pavilion”.
“A series of studies made five years later showed that many of the survivors were still suffering from one or several of the following ailments: partial or complete blindness, gastrointestinal disorders, impaired immune systems, post traumatic stress disorders, and menstrual problems in women. A rise in spontaneous abortions, stillbirths, and offspring with genetic defects was also noted.” (The Bhopal Disaster)
Pratima Ungarala referred a document, titled Union Carbide: Disaster at Bhopal , was authored by the retired Vice President of Health, Safety and Environmental Programs in Union Carbide Corporation, and several other papers to rhetorically analyze and also and to explore the various image restoration strategies that Union Carbide Corporation used through the course of the crisis.
About 300,000 more would suffer agonising injuries from the disastrous effects of the massive poisoning while none could say if future generations would be affected. Forty tons of toxic gases were released from Carbide’s Bhopal plant and spread throughout the city. The cause was the contamination of Methyl Isocyanate (MIC) storage tank No. 610 with water carrying catalytic material. The result was a nightmare that still has no end. Residents awoke to clouds of suffocating gas and began a desperate flight through the dark streets. No alarm ever sounded a warning and no evacuation plan was prepared. When victims arrived at hospitals breathless and blind, do doctors did not know how to treat them since Carbide had not provided emergency information. But it was only when the sun rose the next morning that the magnitude of the devastation was clear. Dead bodies of humans and animals blocked the streets, leaves turned black, the smell of burning chilli peppers lingered in the air. Responsible estimates suggest that as many as 10,000 may have died immediately. The precise number of deaths still remains a mystery. 2,000,00 were injured and 30,000 to 50,000 were too ill to ever return to their jobs. This is the Hiroshima of chemical industry.
Invasion of Death Demon:
The demon of death silently invaded millions of hearts and lungs without knocking the doors during the midnight of 2nd and 3rd December 1984, in Bhopal. It is not only future generation being deprived of the healthy nature but an MNC leaked poisonous gas was decimating the natural life of the present and future. Over 16000 children, men and women were laid dead and more than five lakhs were maimed. During maintenance operations in the Methyl-Iso-Cyanide MIC plant a large quantity of water entered one of the storage tanks containing 60 tons of MIC, triggering off a runaway reaction. A deadly cocktail of MIC and other chemicals such as Hydrogen Cyanide and Phosgene was carried by the northerly wind to the neighboring communities. People woke up with invisible clouds of poison gas, stinging eyes and burning throats. The suffocating gas invaded lungs and created enormous fluids inundating the lives with their own body fluids. Running here and there for life did not save their lives, as the killer gas was all pervading.
A small leak at 11.00 pm occurred from MIC storage tank 610. Workers noticed it but thought to be a normal and small leak, source of which could not be located. The sting of MIC was getting stronger and the temperature and pressure were rapidly rising in tank. At around 12.30 a gigantic hiss came out, a runaway chemical chain reaction, triggered by the entrance of water, and created a tremendous heat and pressure. Forty tons of deadly gases burst past the rupture disc, overwhelmed the plant’s safety systems, and shot into the atmosphere. Most of the workers fled in panic. Larry Everest narrated (at page 12 of his book) “Throughout the slums and shanty settlements that surround the Union Carbide plant on three sides, thousands were awakened by the suffocating, burning effects of the gas, the cries of neighbours, the clamor of running, stumbling feet, or by the howls of animals in their death throes. Mothers did not know their children had died. Children didn’t know their mothers had died. Men did not know their whole families had died. Anyone who was left alive ran away blindly.” The toxic cloud was so dense and searing that people were reduced to near blindness in their rush through narrow, ill-lit alleys. Some who managed to hand onto life panicked, leaving loved ones behind. Families who tried to stay together were often separated momentarily in the blinding gas and then unable to regroup. Soon there was a massive exodus away from the Union Carbide Factory, now a fount of death, a stream of humanity of tens of thousands strong-walking, running, clinging to taxis, trucks, three wheeled autorickshaws or any other means of escape they could find. Bhopal looked like a battle zone in a chemical war. It was littered with the dead-lying in alleys, ditches, roadways, or still trapped in their huts, in the contorted positions of sudden death. They lay intermingled with the goats, cows, sheep, and other animals that had also perished. The gas cloud had devastated everything living in its path, even killing plants and turning leaves black. People were just lying on the road like dogs and cats. The survivors wandered among the carnage desperately seeking family and loved ones they had lost in the chaotic night. The total number of died may never be known. People continue to die from the effects of the gassing. Estimates of the number severely debilitated run as high as 60,000. And one can only speculate on what the long-term effects of such a massive exposure to toxins will be. There were mounting incidents of spontaneous abortions and stillbirths. Thousands could not work. All in all it was the worst industrial disaster in history.
Disaster for the Environment
The Bhopal disaster which killed several thousand people and injured another two lakhs in the space of a few hours, constitutes a watershed in the history of the chemical industry.
The first of the autopsies revealed that the human blood had turned purple red, the lungs had become ash colour and filled with their own secretions. The tracheas were so dry that the mucous flaked off on touch. Sometimes the blood was so thick that if you dipped your finger in it and lifted it, it would come off like a wire.
The gas leak saw thousands blinded, breathless and giddy, flooding the hospitals, carrying those who had collapsed along the way. In cases of acute exposure, victims had suffered extensive damage to their lungs. Those who did not succumb to their injuries fell victims to secondary infections of the lungs and respiratory tracts. The psychological trauma caused by the accident is just beginning to be acknowledged and goes far beyond those physically affected by the gas. Victims suffered depression, anxiety, impotence, loss of appetite, nightmares etc.
For one whole week the government failed to assure the citizens of Bhopal on whether the air they were breathing, the water they were drinking , and the food they were consuming were safe or not.
When health department personnel were spraying DDT some residents began to flee in panic as they imagined it was another noxious substance. On December 6 the Chief Minister declared that the air was totally safe, but tests conducted at the initiative of a group of science students indicated the presence of MIC.
Not very much is yet known about the environmental impacts of the gas leak from the Bhopal plant. The Indian Council of Agricultural Research (ICAR) had issued a preliminary report on damage to crops, vegetables, animals and fish from the accident, but the investigation reported there were mostly in their early stages with few conclusive findings.
The ICAR Report did indicate that the impact of whatever toxic substances emerge from the plant were highly lethal on exposed animals. Many were reported to have died within three minutes of such exposure. Large numbers of cattle (estimates range as high as 4000), as well as dogs and cats and birds were killed.
Plant life was also severely damaged by exposure to the gas. Vegetable crops such as spinach, cauliflower and tomatoes grown by small farmers on the outskirts of the city were destroyed. There was also widespread defoliation of trees, especially in low lying areas.
It was criticised that in the name of economic development Third World countries are thus becoming dumping grounds for hazardous technologies from the industrially advanced countries. The strong environmental awareness and environmental movements in the industrially advanced countries have enforced strict legislative safeguards that have made the operation of hazardous technology economically unviable. Many pesticides that are being pushed in Third World countries by multinationals are already banned in industrially advanced countries. DDT is a typical example which is being freely overused in India. To expect strict enforcement of environmental safeguards is to forget the basic economic fact that it is that relocation is taking place to avoid such enforcements that relocation is taking place. Statistics state that every year approximately 22,000 people die in the developing countries from the use of pesticides no longer manufactured in the West.
The present generation has an obligation to protect their future generations. A man has no right to exploit the ecology to the detriment of to be born. The International Community recognized this responsibility and drafted several instruments reminding the mankind to be kind to the natural world. After the loss of millions of human beings the UN Charter expressed a deep concern for the people yet to be born .
The Stockholm conference in 1972 explained the imperative goal for mankind as to defend and improve the human environment for present and future generations. Besides war, peace and Development the International Law made a beginning in regulating the environmental issues. Man has both a right to healthy world around and a solemn responsibility to protect and improve the environs for the next generation.
The United Nations General Assembly adopted World Charter for Nature in 1982 , which explicitly states that the Governments have a duty to pass on their natural heritage to future generations.
The World Commission on Environment and Development WCED headed by Giro Harlen Bruntland proposed a set of legal principles for sustainable development and suggested for a global convention for this purpose. (World Commission on Environment and Development, Our Common Future, 1987) For this purpose and for arresting further degradation of the environment and to repair damage already done, the Rio Earth Summit was convened by the UNGA. Maintenance of ecological balance, prevention and control of environmental pollution, preservation of our natural resources, disaster mitigation and sustainable development are the basic factors of the “Earth Charter”, which is also called the “Rio Declaration”.
Regulation of MNCs
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.
The 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.
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.
Union Carbide holds controls:
Union Carbide India Limited UCIL was the entity running the Bhopal plant. Union Carbide Corporation is a dominant shareholder holding 50.9% shares in UCIL. Its share was reduced from earlier holding of 60% shares. As a multinational with full control over the UCIL, the UCC navigated the subsidiary in hazardous directions resulting in danger to lives of hundreds of thousands of Bhopal people. India contended that UCC was the parent and UCIL-the subsidiary. The Union Carbide’s control in critical areas of safety and technology was only on aspect of Union Carbide’s broader exercise of control over the strategic management direction of UCIL’s agricultural products division, which included the Bhopal plant. This strategic direction was in accordance with Union Carbide’s fundamental management strategy of coordinating its subsidiary product lines to accomplish the multinational’s worldwide plans. India was right in trying to create unprecedented standard by lifting the corporate veil. If succeeded, no multinational corporation operating hazardous industry in India would be able to deploy its subsidiary as a shield. If the Indian court delivered a final judgement enforceable in US Court upholding India’s contention, its impact at least initially on US based multinational specialising in the export of hazard to the third world societies would have been massive. Perhaps, in fundamentals, at least the internal economy of Multinational Corporation community would have to undergo a profound peristroika. It stood to reason that if India enacted for herself a parens patriae role for the Bhopal victims, the Union Carbide has to ensure that it assumed a similar role for the global community of MNCs. The February settlement marked the triumph of the fiduciary role of the UCC for the world multinational community over the parental role of the Indian State for the Bhopal victims, observed Mr. N. R. Madhava Menon .
Parens Patriae without Effective Jurisdiction
No assertion of the parens patriae role makes any sense in the absence of any effective jurisdiction over a multinational enterprise in a mass disaster toxic tort. India’s suing the UCC in America courts was an essential precondition for the acquisition of this jurisdiction. Justice to the victims of Bhopal, whatever it may entail, this required the assurance of the UCC being amenable to the discipline of the law, either in America or India.
MNC: Liability for Environmental Damage
The MNCs are not doing any favour in investing in Developing countries. Instead, they are proved to be environmental hazards for the people working in and living around. In view of the size, huge capital, and the distance from which it operates, an MNC is not amenable to be controlled by a country which awaits investment for generating some sort of employment for its people. Industrial accidents are ever increasing in developing countries due to mishandling and negligent operations of MNCs playing with lives of human beings. Instead of riches and resources MNCs brought miseries and tragedies to the people and the governments in third world countries. They have less or no regard for civil and political rights of individuals by engaging in activity harmful to the health and welfare of the individuals. Bhopal Gas Tragedy is an example. Krishna Iyer has rightly named it as Bhoposhima. “What with MNCs with unlimited exploitative appetites, infra-national industrialists with initiative, tactics and money power at various levels wooing political power and while collar, we have the unconscionable ecocides who seduce politicians, among the vision of governments, lubricate the wheels of bureaucracy and progandise pollution as a necessary evil for the salvation of a Nation” These are the words in which Krishna Iyer explained the apprehensions of the third world countries.
‘Hazardous Multinational’: New Term in Globalization
Bhopal incident created a new expression called ‘hazardous multinational’ which has to be separated from other ordinary MNCs. For the application of the principle of Absolute Liability and multinational enterprise liability, certain characteristics are to be there for classifying an enterprise as ‘Hazardous Multinational’. They are rightly explained by Upendra Baxi and Amitha Dhanda:
a. the global structure, organisation, technology, finances and resources of multinationals enables them to take catastrophic decisions- that is decisions and actions which lead to mass disasters;
b. the power of multinationals, especially over their ‘key management personnel’ is neither ‘restricted by national boundaries’ nor effectively controlled by international law’;
c. this is because of the complex corporate structure of multinationals with ‘networks of subsidiaries and decisions which make it ‘exceedingly difficult or even impossible to pinpoint responsibility for the damage caused by the enterprise’
d. the ‘monolithic multinational’ operates through
i) a neatly designed network of interlocking directors’
ii) a ‘common operating system’
iii) global distribution and marketing systems’
iv) design development and technology worldwide
v) financial and other controls
vi) highly sophisticated and technologically capable machines and working staff;
vii) victims of such daily actions are unable to identify which unit of the enterprise caused the harm.
Even a manifest fault by a local subsidiary would be put at the doorstep of a multinational. This principle is based on the premise that power and knowledge create a legal duty. And this duty, which has an ‘absolute and non-delegable character emanates from the ‘unity of power and knowledge. This duty is two folds. It is the duty of the multinational to itself ‘to keep informed and know’. Such a duty cannot be, by definition delegable. Second, it is a duty of the same nature to employ ‘normal care and prudence’ to know about the possibility of emergence of likely ‘hazards and dangers”. This duty too is non-delegable. The consequential duties arise from these two fundamental duties- (i) ‘a duty to provide that all ultra-hazardous and dangerous activities be conducted with the required standards of safety and, ii) to provide all necessary safeguards, information and warnings concerning the activity involved.’
Mehta Principle and Toxic Torts
With Bhopal Gas Tragedy, the age of mass torts began. The real environmental hazard to multiple masses of third world countries was realised. The sleepy Indian Government and similar developing countries shocked to know the direct and serious impact of MNCs in era of Globalization. The craving for foreign investments and transfer of technology from west with politically motivated vested interest has resulted in savage death to thousands of unknown masses. The Indian Jurisprudential principle of Absolute Liability was naturally not liked by the MNCs.
The UCC wanted to assail the Mehta principle as unknown to the world jurisprudence. It is not impossible to justify the Indian assertion. It is either strict liability or absolute liability or compound of product of liability, negligence, public and private nuisance in general regime of tort liability or of some specific regimes or of specific regimes still emergent of toxic torts . UCC’s claim that it was a domestic American Corporation not doing any business abroad but merely holding capital stock for book keeping purposes was fictional. The claim that its foreign subsidiaries were independent and that the UCC was not a multinational entity are equally controversial.
Absolute Liability Ascertained
Again the Supreme Court came to the rescue of this newly evolved and much needed principle of tortious liability in mass torts leading to environmental death trap. Justice Seth did not agree with several contentions raised by UCC and answered them emphatically. He stated: ” It is futile for the UCC to deny existence of any relationship with UCIL. It held majority of equity share capital at all material times, controlled more than half of the total voting power of the Indian company, controlled the composition of the Board of Directors and its management. Even if it chose to keep at arm length from Indian Company it could not absolve it from subsidiaries liability. The material on record established the fact that UCC had full authority to act for UCIL, which was totally dependent on technical know how and running of the Bhopal plant”. It is beyond doubt that the UCC had the real control over the hazardous Bhopal plant operations.
International Code for Trans National Companies
Bhopal gas tragedy and consequent litigation has also revealed the need for evolving over all controls over the activities of MNCs especially when they are engaged in hazardous operations. Such a need was felt all over the world and the Secretary-General has rightly responded to it by evolving some methods in his report. The first step he suggested was risk assessment and involvement of factory employees and the community in the development of methods to identify the hazards and second step was about evolving strategies to plan and reduce the consequences of accidents and to settle the claims of liability. But the question as to the extent of liability of the parent company for the environmental harm caused by its affiliate was left open for further discussion. Had Bhopal tragedy was covered by industrial insurance, the victims would have received the necessary relief without much delay. It took four years to reach settlement and the distribution of relief is still going on in Bhopal. Speedy trial and early disposition of claims is as important as the fundamental right to life. All the theories of liability- the effect theory and enterprise theory pinpoint the liability on the parent American company UCC which controlled the Indian Company UCIL in its establishment and functioning besides playing a significant role in decision making. UCC not only owes a duty of care towards Indians but people in general. It is the basis of human rights jurisprudence and MNCs are subjected to the international human rights obligation. Similarly the Government of Madhya Pradesh and Government of India also are liable when the MNCs permitted by them are violating the international human and environment rights.
Since then various codes of conduct were developed. United Nations General Assembly, the International Labour Organisation ILO, The Food and Agricultural Organisation FAO and the Organisation for Economic Cooperation and Development OECD have incorporated the environmental aspects and the relations between the MNC and the host country.
The UN Code of Conduct:
The UN Draft Code for Transnational Corporations (TNCs) contain several specific obligations addressed directly to the MNCs. They include:
1. The obligation to respect the national sovereignty of the countries in which they operate and the right of each state to exercise its full sovereignty over its natural resources within its territory.
2. The obligation to be subject to the laws of the host country and the explicit duty to carry on their activities in conformity with the developmental policies, objectives and priorities of the respective governments.
3. In the light of the new interpretation given to development including the safeguarding of the environment, it should implicitly mean an obligation not to unreasonably alter the ecological balance of the host country through their activities .
Whenever an enterprise starts a hazardous activity in the territory of a state, there is an inherent duty in the nature of the agreement itself, an understanding that it will not cause any serious adverse effects on the health of the people or environment of the country. If an accident like Bhopal tragedy results from the activity of the MNC it might amount to delinquent conduct or a wrongful breach of duty.
The code also imposes an obligation on the MNCs to respect the human rights and fundamental freedoms in the host countries. Right to clean environment is a significant aspect of new human rights jurisprudence. It is a duty of MNC to protect and preserve that environment. However strong the code may be, its binding nature is a questionable aspect. The states have to enforce the code, which is addressed to the MNCs. Developed nations may not agree to enforce the code.
Organisation for Economic Cooperation and Development issued a Declaration on International Investment and MNEs in the Annex of which guidelines are embodied. The MNEs are accordingly under an obligation to give due consideration to the host countries aims and priorities with regard to economic and social progress, including industrial and regional development and the protection of environment. These guidelines are only advisory and not mandatory. They are not legally enforceable. But it reflects the agreement of international community to the aspect of duty of MNCs to abide by the laws, controls and regulations of the state in which the MNC operates like any other domestic corporation.
MNCs and their activities brought very complex legal problems to the fore. The principles of tortious liability, Human rights jurisprudence, Environmental law and International relations are intertwined and with rights of the nations and persons as victims. Environmental Law and International Corporate law is yet to develop into a full-fledged law. Till then it is difficult for developing nations to control the hazardous activities of MNCs. The MNCs are not primary subjects of International Law. They are neither states nor public international organizations. It is the duty and obligation of the states to exercise their sovereignty and impose liabilities over the multinational enterprises without minding their international character and affiliations. Life and environment are the primary concerns of any state or organisation. It is everybody’s responsibility to protect the natural rights and the nature, so that the major tragedies like Bhoposhima are not recurred.
MNCs and Third World Countries:
A firm with several centers of operation in different countries is a multinational enterprise. Black’s Dictionary explained a MNC as: “In a strict sense this term is descriptive of a firm which has centres in many countries in contrast to an ‘international’ firm, which does business in many countries but is based in only one country, though the terms are often used interchangeably.” Chambers defined it as “a large business company which has production or distribution operations in several countries via subsidiaries, holding companies etc”.
Third world countries became play fields for MNCs to make more profit because of cheap human labour and less stringent environmental regulations besides ready availability of raw materials. MNCs preferred third world countries rather than the industrialized first world nations with capital intensive technologies, expensive human resources and more expensive environmental restrictions. It is clear that MNCs had no special interest in developing the advancing countries. They have no concern for the environs of a developing nation and do not hesitate to exploit cheap human resources to convert their billions into trillions.
Domestic Law: Amendment to Factories Act
In response to the Bhopal disaster and its consequences, and influenced by the creation of Absolute Liability principle in Oleum Gas Leak case, questions of safety and liability were addressed. The Factories Act 1948 was amended in 1987 and a whole new chapter IVA was added. It deals with hazardous processes.
There are provisions for a Site Appraisal Committee to certify where a factory may be located.
There are also provisions for compulsory disclosure of information about the dangers, including health hazards, that could arise from exposure to the materials in the factory or handling the materials during manufacture, transportation, storage or other processes. The compulsory disclosure of information is not only to the inspector under the Act, but also to the local authority and to the ‘general public in the vicinity’ of the factory, which is an acknowledgement of the nearness of people at large to the risk of disaster.
Disaster Management Plan:
A Disaster Management Plan is to be drawn up even before a factory may commence activity. For the first time, workers are statutorily accorded the right to be principal participants in safety management.
Liability of the Occupier: Under the amended Act, the person held accountable is the ‘occupier’. Before 1987 amendment, it was common to appoint a relatively lowly employee as the occupier who would take the rap if infractions were detected in the factory. After 1987, in the case of a company, the occupier has to be a director of the company- a statutory prescription that has been quite categorically endorsed by the Supreme Court in 1996.
Relief to Manufacturer and Designer:
There is a very dangerous provision that was inserted in the Act as Section 7B(5). This section spells virtual absolution for the manufacturer, designer, importer or supplier of plant and machinery. Where the user of such plant or machinery gives a written undertaking ‘to take the steps specified in such undertaking to ensure, so far as it reasonably practicable, that the article will be safe without risks to the health of the workers when property used, it shall have the effect of relieving” the designer, manufacturer et al from what is otherwise prescribed as a duty to care for the safety and health of the workers.
The Dangerous Provision:
That is, a transfer of technology agreement could now relieve the Union Carbides, the Du ponts and other chemical giangs of anwerability for the effects of the technology they transfer into India. In the unequal world of transferred technologies, this provision only serves to place the company controlling the technology beyond the reach of the law. This definitely makes the MNC a supranational power. If this provision is not repealed, another such disastermay find a transnational offender disappearing through this provision to impunity.
Is there any conclusion to this endless trauma?
Around twenty years after the world’s worst disaster the story has not yet ended, Thousands who survived are today suffering multiple health complications and those living closest to the plant continue to be poisoned. Thousands drink water poisoned by the chemicals that remain in the abandoned Union Carbide plant. Neither the Government nor the Dow Chemicals, which bought Union Carbide is willing to take responsibility for cleaning up. The victims are still running from court to court seeking justice, while the rest of the country does not know anything about their plight. It is rightly described as the tragic story of Bhopal how corporate indifference, government apathy and uninformed people’s disinterest made the life and death of victims miserable for some more decades. It is unending continuation of perpetuation of tragedy.
It is reported that the company dug the bottom soil from three large solar evaporation ponds in Atal Ayub Nagar adjoining UCIL’s factory in Bhopal, spread over more than 20 acres, which were used to dump waste by UCIL. It was dug to bury the sludge under three meters of farm soil. People bathe, swim and even drink this water. Cattle die after drinking water from these ponds. The adjoining tube wells give water unfit for drinking. The yield from crops from nearby fields was drastically reduced. At least one person a day still dies from gas exposure related diseases and 1.5 lakh are in urgent need of medical attention. Breathlessness, loss of appetite, pain, menstrual irregularities, recurrent fever persistent cough, neurological disorders, fatigue weakness, anxiety and depression are among the most common symptoms. Research findings on chromosomal aberrations suggest that the future generations of the survivors will possibly carry the leftovers of the industrial toxins.
The land around the factory is now occupied and every inch of it was built upon. The abandoned factory us being used as a public toilet by adjacent slums. Two large cylindrical tanks, which contained MIC including the one responsible for the gas leak on that fateful night are still lying there in the factory emanating the poisonous fumes. Sacks of decaying chemicals, blackened chemical bags, pools of stagnant water, rusted metal boxes labeled Sevin and Nitrate residues are still pose a danger to the vicinity there. As the groundwater is totally contaminated the people living around were promised to be supplied with the alternative piped water. The amount of Rs 3 crore sanctioned for this purpose was spent elsewhere .
Who is legally responsible for this toxic wastes left behind by UCIL? In the absence of industrial activity the lease of the land to factory was cancelled by the Government of Madhya Pradesh. The land measuring 87.62 acres has been transferred to the Gas Relief and Rehabilitation department of the Madhya Pradesh Government. But as polluter, the UCIL must be fully responsible for wastes. It agreed to surrender the land in usable and habitable condition, as per lease terms. The Madhya Pradesh Pollution Control Board had directed UCIL to carry out environment investigation of dumpsite and remediation thereafter. Yet site was surrendered without complying with those directions in the same conditions not fit for habitation. All those provisions in Environment (Protection) Act 1986 and the Water (Prevention and control of Pollution) Act 1974, which contain heavy penalties are yet to be used against them. It is continuation of crime of pollution, the MPPCB does not use its power to prosecute the culprit company.
Cost of clean up was estimated to be Rs 2.5 Crores sometime back. Now the estimates have gone up to even Rs. 100 crores while Greenpeace activists put it at Rs 500 crores. Who will pay? It remains a moot question even today. Bhopal is the symbol of a disastrous ‘side’ effect of so called Globalization and stands out as a living, say dying, example of inadequacy of domestic law to regulate, prevent or penalize the pollute TNCs and their agents.
As the environment problems are going to be there for all generations to come, it is the duty of every person and every nation to evolve a equitable principle of making Trans National Companies liable for its transfer of hazardous technology to developing countries if that resulted in damage to human life or environment, without leaving any scope for escape after passing the buck on to the subsidiary or agent in different mask.
International law based on conventions and protocols read with UN documents and reports of the UN Commissions, a new law to tackle the TNC hazards and imposing absolute liability should emerge. The environment protection is a universal and inter-generational equitable obligation of entire humanity irrespective of being developed, developing or underdeveloped nations in the international comity of nations. If not, the environment and human life will never be safe. Environmental safety cannot be achieved by creating new fundamental rights in favour of citizens, when they are not effectively enforced. Disaster may not be frequently repeated.
But after experiencing the trauma of disaster, disastrous litigation and corrupt consequences without imposing any criminal liability on the culprits, nothing tangible is left as a system with which we could prevent such disasters. As mentioned even now the abandoned Union Carbide factory is spreading the poisonous gas, and the State did not prevent the spread of residential colonies around the deserted place of disaster, containing the contaminating chemicals. What system do the third world countries have to tackle the present and continuous disaster and to prevent some more?