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Op-Ed

The Lessons of Bhopal and BP

Justin Frewen, September 5, 2010

Indians light candles 25 years after the Bhopal disaster.

Almost 26 years ago, on the night of December 3, 1984, a poisonous cloud of methyl isocyanate poured forth from the Union Carbide plant in Bhopal, India. That night alone 4,000 people lost their lives and a further 300,000 of Bhopal's inhabitants were injured. People of Bhopal received no warning of their impending fate, as the plant's safety systems failed and no alarm was sounded. Many of the victims died directly from the poisonous fumes while others were trampled in the streets trapped in the tidal panic that enveloped them as they fled the invisible gasses.

This disaster had a devastating legacy on Bhopal. In addition to the immediate deaths and destruction of the environment, the surrounding soil and waters remain contaminated by Union Carbide's chemical waste. This has given rise to genetic deformities, cancer and congenital health problems, as well as many painful premature fatalities. An Amnesty International report estimated that by 2004 the total death toll had risen to 22,000.

Worse, the people of Bhopal still await adequate compensation and assistance in cleaning up the chemical wastes. Those primarily responsible have never been brought to account. Although seven local company officials have recently been convicted of their role in the Bhopal disaster, they received a mere two-year prison sentence and $2,100 fine each—approximately the same as one might expect for having caused a car accident in India. The more culpable U.S. executives have so far completely evaded legal censure.

In fact, the U.S. executives have never been seriously pursued. When Warren Anderson, CEO of Union Carbide at the time, visited India after the Bhopal disaster, he was spirited out of the country lest any "overzealous" Indian officials might see fit to try and detain him. Since then, Anderson has been protected by the U.S. political and business community who have helped ensure that he has not had to return to India to face investigation into his role in the Bhopal catastrophe. Today, in his early 90s, Anderson is free to enjoy a comfortable and carefree retirement in Florida. One can only hope his twilight years have not been too incommoded by the BP Deepwater Horizon disaster.

Fast-forward 25 years

Coming just over a quarter of a century after the Bhopal disaster, the recent BP Deepwater Horizon environmental disaster is but the latest in a long line of industrial accidents since then. The BP explosion resulted in 11 fatalities and 17 injuries. The ensuing spill—of an estimated 53,000 barrels of oil—has caused untold damage to the marine and wildlife habitat as well as the local fishing and tourist industries.

In both instances, Union Carbide and BP had received numerous warnings regarding the safety of their operations in Bhopal and Deepwater Horizon respectively. More than 10 years before Bhopal, Warren Anderson himself signed a Union Carbide report that highlighted the unproven nature of Bhopal's technology. A safety review by Union Carbide's own experts in 1982 further emphasised the serious risk of substantial leaks of "toxic materials" at the Bhopal plant. BP too received ample warning of potential problems, as several internal investigations alerted senior BP managers of the regular contravening of safety and environmental rules at Deepwater Horizon.

In the immediate aftermath of both disasters, BP and Union Carbide tried to downplay the consequences. BP's chief executive Tony Hayward attempted to pacify a justifiably anxious public by claiming the oil leak would have relatively insignificant consequences and cause no serious or long-lasting damage to the environment. Similarly, following the release of methyl isocyanate following the Bhopal accident, Union Carbide's public relations people assured the world that the chemical was not really poisonous but actually resembled nothing more than a strong tear gas.

However, there has been one major difference in these two cases. BP has generally experienced a far rougher ride over Deepwater Horizon than Union Carbide over Bhopal. The same U.S. political-business community that protected Anderson has proved all too willing to line up to declaim the role of BP and particularly Hayward in the Deepwater Horizon industrial accident. President Obama has even been at the forefront, openly declaring his desire to find a BP ass he could kick as well as his intention to keep his "boot on BP's throat."

While the indignation of the U.S. public, particularly those communities directly affected, can well be understood, one can only wonder what the reaction would have been if the Indian government and business leaders had reacted similarly to Bhopal. Let us not forget that for every human life lost at BP Deepwater Horizon, 2,000 Indians lost theirs as a result of Bhopal.

As author Chetan Bhagat said, "It looks like Indian children's lives are cheaper than [those of] fish. Obama should bang his fist on the table. If he can do that for fish, how about our kids? Or are they only Indians?"

Union Carbide's current owner, Dow Chemicals, maintains that the 1989 settlement of $470 million paid to the Indian government settled the Bhopal compensation issue. This claim is open to dispute. The award was based on a discredited under-estimation of 3,000 fatalities at Bhopal. Given the current estimated 574,367 victims since the Bhopal disaster, including dead and injured, the average compensation amount would come in at just over $800 per person. This sum would also have to help cover the cost of cleaning up the lands and waters around Bhopal. Moreover, the Indian government negotiated and accepted this settlement without involving the people of Bhopal.

On the other hand, the Obama administration obliged BP to establish a $20 billion compensation fund. However, even in this case, the BP escrow fund, as it is currently proposed, would be taken from revenue in BP's oil and gas revenues in the Gulf, therefore indirectly making the U.S. government a partner in Gulf oil production. Surely this creates a conflict of interest and inhibits the government's ability to put that boot down.

What can be done?

If large-scale corporations believe they can get away lightly with respect to disasters they have caused, there is a risk that they may decide to (continue to) cut corners on safety procedures to enhance their bottom line. For this reason, the recent efforts on the part of the Indian government to attract foreign investment in its growing nuclear energy market is a serious concern. By attempting to pass a bill limiting the maximum liability of nuclear plant operators at $111 million, they are giving the wrong signal. As Indian senior lawyer Prashant Bhushan pointed out, we appear to have learned nothing from Bhopal. 25 years on and the "drive to attract foreign investment [overwhelms] all other considerations."

In this respect, the Bhopal and BP disasters highlight a valuable lesson. Corporate wrongdoers should be held fully accountable, both in terms of financial responsibility and for the actions of their executives. Nothing less than a transparent and easily enforceable framework of international sanctions and penalties will suffice to ensure that corporations are made accountable in the future, irrespective of their provenance or the location of industrial accidents.

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