By:Vijay Rao
Contributing Writer

 

Abstract

This paper aims to answer the fundamental question regarding the litigation that took place after the Bhopal gas leak: was justice served? After first reviewing the events of the evening of the gas leak, citing relevant facts and figures, I go on to establish a jurisprudential basis on which we can analyze the court rulings. After doing this, we can compare historical payouts in judicially similar cases with the Bhopal case and establish the clear injustice that was served to the Bhopal victims. Then we look back to what could have been done, or what may still be done.

 

Introduction

The 21^st century brought with it the undeniable trend towards globalization and a nexus of international interaction. Central to this growing trend are the economic powerhouses of multinational corporations (MNC’s), corporations that that are incorporated in one country but conduct business or provide services in multiple other countries. It would be nothing short of foolish to downplay the significant role MNC’s have played in shaping our modern world, adding seemingly unquantifiable amounts of value to economies worldwide. The economic benefits that MNC’s have provided are quite clear; in the U.S. alone, MNC’s have employed over 31 million people and have generated over $8.5 trillion in sales in 2007. Taking those people out of the workforce or removing that money from the economic cycle is sure to have disastrous effects on not only the U.S. economy, but also the global one as well. This benefit doesn’t come without its price, though, and there is a growing body of work focusing on the various social and economic costs that MNC’s incur on the global community.

Any cursory search of the Internet will uncover the countless crimes and questionable activities MNC’s have been associated with, from oil spills off the Alaskan coast ² to selling blood diamonds out of Africa³, and even rigging the election of a nation⁴. As Harry Glasbeek, professor emeritus at Osgoode Law School in Toronto, Canada, discusses in his article The Invisible Friend, the legal architecture constructed around corporations and the corporate entity incentives, and in many cases ensure, that the corporation will go on to commit crimes in the name of high profits5. When a company chooses to incorporate itself, it is essentially become a separate legal entity, which makes the corporate an entirely different legal person from its shareholders6. This inherently limits the liabilities of the shareholders, even though it is the majority shareholder that exercises the most control over this legal person. For example, if a corporation were to go bankrupt or become insolvent, then the shareholder would lose only the value of their stock in the corporation and not be liable for any outstanding corporate debt. This style of protection extends to criminal liability in many situations. If a corporation is charged with a criminal offense, it is that separate legal entity that must face the charge and not the CEO or board of directors of that corporation. Seeing as a corporation is not a physical entity in any capacity, we can immediately see the difficulty inherent in holding a corporation criminally liable for anything. Add in the further complications inherent in international law (which is indeed a quagmire), and the monumental task of bringing a multinational corporation to justice under any competent court system is immediately apparent.

The lack of efficient legal avenues for holding MNC’s responsible for crimes they commit abroad has stymied the spread of justice throughout the world, particularly in developing nations, and it is clear that either domestic systems must improve to better facilitate the prosecution of MNC’s for crimes committed abroad or some international standards and regulations must be put in place to protect those most harmed by the malicious activities of MNC’s. This essay aims to analyze the idea of corporate liability through the example of the Bhopal gas leak tragedy that struck India in 1984, at the hands of Union Carbide Corporation (UCC). First we will examine in detail the events of that night as well as the myriad of litigation that ensued, all the way to the full and final settlement reached between UCC and the government of India. This will naturally lead us to the question, “was justice served?” and after answering this we will theoretically analyze what should have been done to better facilitate justice, as well as a brief discussion on what justice could be served today.

 

Chapter 1: Summary of events

The Union Carbide India Limited (UCIL) plant was located in the northern area of the city of Bhopal, in the state of Madhya Pradesh in India. The area immediately surrounding the plant consists mostly of shantytowns, where the poorest citizens of the city live. Shortly after midnight between December 2^nd and 3^rd in 1984, a large amount of water entered tank 610 at the UCIL plant7, and the resulting reaction with the methyl isocyanate (MIC) held in the tank pushed temperatures to above 200°C and pressures past what the tank could contain8. This resulted in the release of 42 tons of MIC into the surrounding neighborhoods in the middle of the night. Within the first 72 hours, between 8,000-10,000 people died from the immediate exposure, and to this day at least 15,000 more have died from resulting injuries. It is estimated that 200,000 people have been permanently injured and disabled form their exposure to the gas.  After the leak, the stillbirth rate in Bhopal increased by 300 per cent, and the neonatal mortality rate increased by 200 per cent. Furthermore, approximately 24.2 per cent of pregnant women in Bhopal experienced spontaneous abortions after the leak9.

The Bhopal disaster is known as the largest industrial accident on record and accordingly spawned the largest accident liability action in history. On December 7^th of 1984, the first of over 145 U.S. cases was filed in the Southern District of West Virginia. Seeing as it would be inefficient and detrimental to the service of justice, on February 6^th, 1985, all of the cases spawned from the Bhopal disaster were consolidated in the Southern District of New York, since that was the district where Union Carbide Corporation was incorporated, and held expertise in commercial litigation. All this was further complicated, however, when the Union of India filed their own suit in U.S. courts, passed the Bhopal Gas Leak Disaster Act, and began discussion with Union Carbide Corporation about an out of court settlement. The Bhopal Gas Leak Disaster Act (Bhopal Act) gave the government of India (with respect to the Bhopal disaster), “the exclusive right to represent, and act in place of (whether within or outside of India) every person who has made, or is entitled to make, a claim for all purposes connected with such claim in the same manner and to the same effect as such person.” This act caused many problems within India, as the constitutionality of it was highly questioned, particularly with regard to the rights to liberty, equality, and property guaranteed by the Indian constitution. Furthermore, this act was to be applied to cases that had been filed before the Act was enacted, which would make the law ex post facto.10

The most pressing issue was that of jurisdiction, but the judge presiding over the case, Judge John F. Keenan, didn’t have to decide that unless an out of court settlement failed. UCC offered the Union of India a $350 million settlement, to be invested in a fund and eventually produce between $500 and $600 million for the victims. This was called “inadequate” and “totally unacceptable” by the Indian government, therefore Judge Keenan was forced to decide jurisdiction. The Indian government had three main arguments for keeping the trial within U.S. courts: 1) Indian law wasn’t developed enough to handle litigation of this complexity and the Indian system in general would have been unable to serve justice, 2) the location of all relevant evidence and witnesses were within the U.S., since UCC headquarters was there and 3) there was an American public interest in keeping the case in the U.S., so as to make sure a similar industrial disaster doesn’t occur again.11

Union Carbide patently rejected these arguments, and accused the Indian government of forum shopping, a pretty typical issue when dealing with forum non conveniens. This is when the plaintiff in a case chooses a court that is not an appropriate forum, simply to find the best outcome based on the laws and precedent that would govern the case. There is an obvious benefit to trying a case of this nature within the U.S., as UCC would be held to the strict liability standards and U.S. courts will be sure to award much greater damages than an Indian court. The reader should keep in mind that in deciding an issue of forum non conveniens, a judge must look at the location of relevant witnesses and evidence, whether any undo and disproportionate hardship is placed upon the defendant with the choice of forum, the availability of other forums, and the differences in law between the forums. Only if the plaintiffs’ access to justice is hindered, there is excessive cost or inconvenience born by the defendant, the logistical issues of a forum are too great, or if the remedy provided by an alternative forum is so below accepted standards that it provides no remedy at all will a forum be changed.12

Judge Keenan rejected the Union of India’s first argument, that the Indian judicial system would be unable to handle the litigation. He agrees with the statement put out by Union Carbide, that, “India is a civilized country operating under democratic principles with a common law legal system adopted, like our own, form the British legal system.” Furthermore, Judge Keenan cited the judicial creativity inherent in the creation of the Bhopal Act as further evidence that the Indian judicial system would be an adequate and more appropriate alternative forum for litigation.13

The second argument brought up by the plaintiff poses many interesting questions, and inherently brings up the idea of liability. The Indian government is operating under the principle of “enterprise liability”, stating that there was a direct relationship between the parent company, UCC, and their subsidiary, UCIL, such that the parent company would be held liable for the actions (or inaction) of the subsidiary. If this were the case, then the required evidence and records for the case would be held within the U.S. headquarters of UCC. The basic problem, though, is that in deciding forum non conveniens, the judge isn’t supposed to consider the theories of liability. Since it was discovered that no American employees worked at the plant since 1982, and that the design and construction of the plant, as well as day to day operations, were monitored and regulated by the Government of India, along with the fact that the transportation of key witnesses from India to the U.S. would be much more costly and greater hassle than bringing witnesses from the U.S. to India, Judge Keenan rejected the plaintiffs second argument.14

Plaintiffs’ third argument rested on the idea that the U.S. had a moral obligation to set clear standards for liability regarding American corporations that conduct harmful business around the world. By preferring U.S. courts to Indian courts, the Union of India was inherently stating that justice could only be served through a U.S. trial. Once again, UCC pointed to the role that the Indian government had in regulating the Bhopal plant. This link was undeniable; therefore Judge Keenan felt that before the Union of India could claim the need for precedent regarding liability on American firms operating abroad, it needed to accept the Indian domestic liability. After rejecting the three arguments for keeping the forum of litigation within the U.S., Judge Keenan ordered that the litigation be moved to Indian courts on the grounds of forum non conveniens on May 12, 1986. This decision would later be reaffirmed by the U.S. Court of Appeals (2^nd Circuit) on January 14^th, 1987.

Now that the case was moved squarely within Indian jurisdiction, the Indian courts had to decide the extent of Union Carbide’s liability, and consequently the damages that must be paid. The most immediate and beneficial aspect of holding the hearings in India was that it allowed the Indian courts to order an interim payment of Rs. 3.5 billion (around $270 million at the time). The Indian Civil Procedural Code (CPC), section 94(e), states,

“In order to prevent the ends of justice from being defeated, the Court may, if it is so prescribed… (e) make other interlocutory orders as may appear to the Court to be just and convenient.”

Section 151 further states,

“Nothing in this Code shall be deemed to limit or otherwise affect the inherent power of the Court to make such orders as may be necessary for the ends of justice or to prevent abuse of the process of the Court.”

Judge M.W. Deo read these two articles together as providing the court with the authority to order the interim payment for immediate relief to the Bhopal victims. UCC, predictably enough, disagreed with this statement and they quickly filed a civil revision petition with the Madhya Pradesh High Court. In April of 1988, Judge Sheth of the High Court upheld the original jurisdictional finding of the previous court, but lowered the interim payment to Rs. 2.5 billion (around $195 million at the time). What is important with both of these judgments was the standard of liability held by UCC in relation to UCIL. Both Judge M.W. Deo and Judge Sheth found that owning the majority share in UCIL stock as well as the design transfer agreements and technical service provided by UCC to UCIL was enough to show that UCC had the power to exercise effective control over UCIL. Unfortunately, though, this theory of enterprise liability was never fully tested by the Indian courts.

On the 14^th and 15^th of February, 1989, the Supreme Court of India ordered the agreed upon settlement of $470 million to be paid by UCC to the Union of India. Specifically, this amount would cover, “all litigations, claims, rights and liabilities related to and arising out of the [Bhopal} Disaster…” All civil proceedings regarding the disaster were pronounced concluded and quashed wherever pending, according to this settlement, and the Union of India was further bound to defend and dismiss any further cases brought against UCC. These points are important to remember when we do a theoretical analysis of this settlement later on. This settlement also required the Union of India to purchase a group medical insurance policy for 100,000 people out of the settlement funds, and ordered UCC to build a 500 bed hospital for all of the victims in Bhopal out of the money made by selling shares of UCIL.15

 

Chapter 2: Was Justice Served?

Now that we have a narrative of the events that occurred at Bhopal, details of the litigation that ensued, and the terms of the final settlement that was agreed upon, we can now progress to the question that every court and legal scholar should consider in every matter: was justice served? Did the full and final settlement that was agreed upon between UCC and the Union of India qualify as effective remedy to the victims of the Bhopal gas leak? The answer to this question is an unequivocal “no”.

The reasons for this are based on the inadequacy of the settlement that was agreed upon, the lack of criminal prosecution for the issue, and the failures of the Indian government to properly handle both the litigation and the distribution of relief aid.  For the purposes of this essay, the term “justice” will be evaluated 1) based on the standard of life experienced by the victims after the tragedy compared to the standard of life experienced by an individual not involved in the tragedy and 2) previous precedent both within and outside of India.

Though much research and effort was put towards developing a fair standard by which to evaluate the quality of life for the average resident of Bhopal before the gas leak, no clear account or record, both in the form of statistical economic indicators and first hand reports from the ground, has been found. Instead, we will evaluate the standard of life experienced by an individual not involved in the gas leak based on an abstraction of the standard of life experienced by the “average Indian” whose means are equivalent to the Union of Indian recognized poverty line.

The World Bank has pegged the poverty line globally to be at $1.25, which equals around Rs. 56 at today’s exchange rate16. The Union of India, however, has put out their own indexed poverty line, which presumably takes into account the purchasing power parity between the U.S. dollar and the Indian Rupee. The Indian government has pegged this line at around Rs.10 a day (roughly $0.22 a day)17. The UCIL plant was located in an area surrounded by shantytowns and slums, and we know that the individuals in Bhopal most affected by this disaster were the poorest citizens of the city. For this reason, our abstraction will have earned Rs. 10 a day before the accident.

According to the Bhopal Gas Tragedy Relief and Rehabilitation Department of the Government of Madhya Pradesh, as of March of 2009 Rs. 15.48 billion has been paid out in various forms of rehabilitation. This amount was awarded over a total 574,366 cases that were brought to the department. If we do some simple math, we can see that this amounts to Rs. 26,951.45 per case (roughly $595.35). If we can imagine a similar accident occurring in the U.S., and victims being compensated a little less than $600, then we can see how inadequate these amounts are. The argument is bound to arise, though, that the purchasing power of a dollar in India is much greater than it is in the U.S., and since the poverty line is pegged at only Rs. 10 per day, the sum of Rs. 26, 951.45 may not seem too outrageous. Indeed, if we take this number at face value, an individual can live at the poverty line for over 7 years (for the moment, we shall ignore the fact that living at the poverty line is nothing to aspire to and is in fact a very low standard for effective remedy).

Of the Rs. 15.48 billion that was awarded, though, only Rs. 270.6 million of it went to economic rehabilitation. The majority of it was spent on medical rehabilitation (building new hospitals, bringing in enough doctors to cope, covering all eligible residents under the settlement) with smaller amounts being spent on social and environmental rehabilitation. Given this fact, we can see that an individual who has been permanently maimed and thereby has been unable to work was only compensated Rs. 470 (around $10.37). This injustice however, as outrageous as it may be, is in this author’s opinion less troublesome than the medical and environmental conditions that plague Bhopal. As stated before, the majority of the damages awarded have been towards medical rehabilitation, which is a sum totaling Rs. 3.66 billion (around $80.8 million). So the average claim was given Rs. 6,372.2 (around $140.76) to cover all of their out of pocket medical expenses18.

If we look back to the interim payment ordered by the courts on behalf of UCC, we can find an even greater injustice within this pit of failure. The interim payments ordered by the courts read as follows: Rs. 100,000 for every death or total permanent disability claimed, Rs. 50,000 for every partial permanent disability claimed and Rs. 25,000 for every partial temporary disability claimed19. What has happened here is a failure that seems unprecedented by any nation, court, or company before or since. Even by the grossly inadequate standard of the settlements ordered by the Indian courts, the payments received by victims have managed to be still more inadequate. The Indian bureaucracy has been fraught with allegations of corruption and scandal, and while it is well beyond the scope of this essay to fully assess these claims, numerous reports have surfaced of government officials using settlement money for their own personal gain.

As far as environmental degradation is concerned, very little has been done to clean up or alleviate the suffering of those living in Bhopal. To this day, the old UCIL facility has never been fully cleaned up or processed. To this day, around 8,000 tons of carcinogenic chemicals are still stored at the now defunct UCIL plant20. These storage containers have not been cared for and no maintenance has been undertaken. The clean up of the site has been under constant litigation; the government of Madhya Pradesh now owns the land, but it is claiming that Dow Chemical (current owner of UCC) is responsible for paying the $25 million clean up costs (same article). While the courts have been deliberating on the legal issues regarding the clean up of the chemicals left behind, monsoon rains have visited the city every year, washing the array of deadly chemicals into the water supply. An internal memo from UCC showed that when the company tested the water back in 1989, it was poisonous enough to kill fish instantly.

In 1999, Greenpeace tested soil and water around the factory and found that the samples they took contained carbon tetrachloride at 682 the limit allowed by the Environmental Protection Agency (EPA) in the U.S. These samples were taken from a hand pump, where residents still collect all their drinking water. In 2009, Greenpeace retested water from the same hand pump and found that it contained carbon tetrachloride at 4,880 times EPA allowed levels21. This level of contamination is manifesting itself through the abnormally high infant mortality rates and incidences of birth defects. One survey found that out over 5,000 births, over 200 were born with congenital birth defects, or more than a 4% incidence of severe birth defects (this includes twisted limbs and mental health issues).

The state of Madhya Pradesh also has an infant mortality rate of around 7%, the highest in the country22 These numbers should be compared to the same statistics in Mumbai, India, where the incidents of major birth defects is 1.6% and infant mortality is at 1.8%. 23 The insurance policy that the Indian government was required to buy for 100,000 people out of the settlement has proven ineffective in giving the victims access to healthcare, as most people on the ground are still left with nothing.

With this, I have established the first part of my theory of non-justice; that the claims that the settlement ordered by the courts were “just, equitable, and reasonable” is patently wrong. Any semblance of remedy only arrived five years after the tragedy occurred, and this remedy was wholly inadequate. Furthermore, corruption and an inefficient bureaucracy mired the distribution of this remedy. Next, we move on to the second part of my theory of non-justice; that compared to the precedent that already exists regarding instances of wrongful death or injury, the damages awarded are appalling.

On June 13^th, 1997, at the Uphaar Cinema in Delhi, a fire broke out during the premier of a Hindi movie. A combination of shoddy electric work, overcrowding in the theatre, lack of governmental safety inspections, illegal structure additions, and lack of an effective fire control mechanism led to the death of 59 people and the serious injury of 103 more. In the litigation that followed, the courts determined that the combined negligence of the theatre owners, the electric company, and the government regulation agencies amounted to liability for the deaths and injuries that resulted, and awarded the victims a landmark settlement of Rs. 170 million (around $3.75 million). This amounts to a little over Rs. 1 million for each person killed or injured by the fire (around $22,000).

This case involves the same principles of gross negligence by multiple parties resulting in an avoidable accident that killed and injured many people. The only differences in principle between this case and the Bhopal case are that a multinational corporation wasn’t involved and the scale of the accident was much smaller in Delhi. It is difficult to see, though, how these differences amount to a less than Rs. 27,000 settlement for each Bhopal victims (remembering that this figure includes health, environmental, economic, and social rehabilitation) versus the over Rs. 1 million settlement for fire victims. Arguably, the long term effects of MIC exposure are much more debilitating than the burns or smoke inhalation. Perhaps if the Bhopal settlements were paid out in a similar fashion, some semblance of justice could be recognized24^,25.

To further put the Bhopal settlement to shame, we look towards the compensation paid out by the state owned Indian Railways. Codified in their compensation guidelines, Indian Railways clearly states that any case of wrongful death by the hands of the company will be compensated with Rs. 400,000 and cases of personal injury will range from Rs. 32,000-360,000. Even the state owned Railway Company could guarantee a better payout for any victims of injury or death caused by their negligence26.

If we analyze the settlement in terms of American notions of effective remedy for tort cases, we arrive at even more startling conclusions. Had the compensation in Bhopal been paid out according to the damages awarded to claimants involved in the asbestos cases (which also involved UCC, but in U.S. courts), then the total damages awarded would have been greater than $10 billion. This is more than the entire value of UCC plus the insurance coverage on UCC27. While this is not to say that the two situations are perfectly analogous and appropriate for a direct comparison, this point serves its purpose of showing the gross inadequacy of the settlement in Bhopal.

With this, I have now completed my theory of non-justice. First, the payment that was awarded to victims was nothing short of inadequate and insulting to the institution of human dignity. The fact that more than 25 years after the initial accident, those born after 1989 can still be considered victims of the gas leak, and little, if anything, has been done to clean up the environment further shows that justice has not been done upon the residents of Bhopal. This fact, viewed against the fact that there are multiple examples of lesser accidents being awarded greater damages, proves that the victims of the Bhopal gas leak have not seen justice.

 

Chapter 3: What could have been done?

With this chapter, we arrive at a proverbial fork in the road. I will now proceed to argue two seemingly contradictory points. First, I will reexamine Judge Keenan’s decision to move litigation to Indian courts. I will show that India was an inappropriate forum for the trials, and that it should have remained in U.S. courts. If this had happened, the agreed upon outcome is that UCC would have been forced to settled for a much greater amount, and hopefully this would have resulted in justice. Then I will come back to take the second fork in my argument and show that simply because Judge Keenan transferred litigation to India, the Indian legal system is such that it could have still theoretically served justice to the victims.

As discussed before, the biggest issue with regard to U.S. courts was the doctrine of forum non-conveniens. Judge Keenan ruled that it would too inconvenient to hold the Bhopal trials in the U.S., that the logistical challenges of holding such a trial would prove entirely too inconvenient for the defendant and would have borne undue and unnecessary costs upon them. He also ruled that since the accident happened in India, the trial would ideally be held in India, and that the Indian judicial system was sufficient sophisticated to handle such litigation.

In my theoretical analysis,however, I will show that both of these notions are not correct and that Judge Keenan’s decision to move the case out of U.S. courts worked against the principles of justice. When filing the case in U.S. courts and when responding to the claim of forum non conveniens put forth by UCC, the Union of India agreed to take all the necessary steps to pursue litigation in the U.S28. This would have included transporting relevant witnesses and translating the necessary records to facility the U.S. trial. The Union of India further argued that since their case was based upon the enterprise liability of UCC, a majority of the relevant documents would have been found at UCC’s U.S. headquarters, in New York.

The Union of India claimed that, in setting up UCIL, UCC was “aware of the ultra hazardous nature of M.I.C. production, but had designed an ineffective emergency relief system at Bhopal, and that Union Carbide, through its safety audits and monitoring of the plant, was aware of the danger and had ample opportunity to take corrective action” Since the Indian government had already guaranteed the facilitation of a U.S. trial, and since the relevant documents that the plaintiff would use in the case mostly resided within the U.S., the claim that a U.S. trial would have borne undue cost and inconveniences upon the defendants simply doesn’t hold.

To address whether or not India’s legal system was sophisticated enough to properly handle this type of litigation, I must employ a more nuanced method. It would be factually erroneous for me to say that the Indian judicial system is entirely inept, as the fact that India is a developing country with a working infrastructure is both impressive and undeniable. In what respect, then, can we say that the Indian judicial system is unable to handle the Bhopal litigation? India’s deficiency lies not in its legal or judicial sophistication, but in the inefficiency of its bureaucracy and the allegations of corruptions in its judiciary and government.

A survey published by the Times of India in 2009 has ranked the Indian bureaucracy as the worst in Asia, describing the bureaucracy as “suffocating” and working with Indian civil services as a “slow and painful” process29. The structure of the current bureaucracy is a remnant of colonial India, a time where the British government wanted to place as many regulatory hurdles in place to make sure that Indian workers weren’t stealing from the system (the irony of this point should become clear when we discuss current corruption in India). Since independence, though, this same system remains in place and as a result has given the Indian government the reputation (not unfairly) of being incredibly mired by red tape. Because of the inefficient bureaucracy, in Mumbai it takes 30 days to start a business (OECD average: 13 days), 44 days to register a property (OECD average: 25 days), and a whopping 1,420 days to enforce a commercial contract (OECD average: 462.4 days)30. This last statistic is perhaps most important, as it relates directly to the courts and how slow they are to enforce a written contract. This level of inefficiency has proven to be a main cause of the incredible levels of corruption that plague India.

In 2005, the NGO Transparency International put together a survey to gauge the level of corruption in various sectors of the Indian government. The results of this survey were published on the online business journal Live Mint, a partner with the Wall Street Journal. The first report discussed corruption in the Public Distribution System, the system by which food rations are given to those individuals in India who live at or below the poverty line. It found that users often do not get the rations that they are entitled to, and that the ration shop operators (who are usually given licenses based on political patronage or bribery) often sold this unaccounted for food on the open market for a profit.

The rations that do make it to their intended market are often overcharged and undersupplied. Again, this is done to divert more resources to be sold on the open market for a greater profit. The very process of getting a ration card with which the impoverished can receive their rations is full of corruption. Often time’s individuals must bribe officials to receive cards, and officials will often create counterfeit cards to sell. 61% of all people using the Public Distribution System say that they have witness rampant corruption in its operation, and this corruption has been calculated to cost the system Rs. 3.58 billion annually (around $79 million)31. Many reports have come out show that this corruption has hindered the distribution of damages to Bhopal victims as well. NGO’s have alleged that corrupt bureaucrats in Bhopal used money that was allocated to buy needed medical equipment was spent on unneeded construction and useless equipment, just so that the bureaucrats could make a commission off of the sale32. A separate report claims that as much as Rs. 1.5 billion (around $33.1 million) has been misallocated by corrupt officials33.

The Indian judiciary doesn’t fare too well in the honesty department either. Bribes are commonplace in this system, and can be used for securing a favorable judgment (only in lower courts), speeding up the process of a trial, obtaining bail for a defendant, or manipulating witnesses in a trial. Simply accessing the system can be difficult for the common man, and often bribes are needed just to get ones foot in the door. Judges are also often accused of misusing power and issuing arrest warrants to anyone for the right price. The report included an example of a judge issuing an arrest warrant for the President of India at the time for Rs. 40,000. Other judges have been caught giving out judicial favors in return for sexual favors. The way the system is currently designed, this corruption has no means of exit form the judiciary. Anyone who alleges corruption for a sitting judge can be charged with contempt of the court and punished accordingly. No criminal investigation can be initiated against a sitting judge without an order from the Chief Justice of the Supreme Court. Impeachment of a judge cannot be commenced unless both houses in the Indian Parliament agree it upon, but judges often have so much political sway among politicians that this never happens. In one instance when Parliament tried to impeach a judge, the process was stymied when all members of a political party abstained form voting34.

Clearly, given level of inefficiencies and corruption in both the Public Distribution System (which has served as a good indicator of the corruption and inefficiency seen in the Bhopal damages distribution and rehabilitation funds) and the Indian judicial system (which, in 2007, had around 26 million pending cases), India was not the most appropriate forum for this litigation. It has been shown that the plaintiff’s access to justice has been incredibly hampered by the realities of the Indian courts and the remedy provided through this forum has proven “so far below accepted standards as to provide no remedy at all.” The U.S. courts were clearly the more appropriate option.

The fact that Judge Keenan didn’t view the situation in a similar manner and decided to transfer litigation to Indian courts, however, is not an excuse for the lack of justice. Judge Keenan stated earlier that he felt India was a sophisticated legal system, evidenced by the fact that they had the judicial creativity to come up with the Bhopal Gas Leak Disaster Act. While his decision to transfer litigation may have been in error, his observation wasn’t entirely incorrect, as the Indian laws and codes have the potential for incredibly creativity and flexibility, if used by the right individuals.

The case of M.C. Mehta vs. The Union of India deals with a similar situation as Bhopal; that is a gas leak occurred in an industrial plant that resulted in the death of one person. This case occurred in 1986, but seemed to provide more useful judicial precedent than the Bhopal case. It should be noted that at the time this case was settled, the Bhopal litigation was still ongoing, so all precedent established by M.C. Mehta could have been used in Bhopal. Specifically, M.C. Mehta established a legal right to be protected from industrial hazards and environmental pollution. It ruled that injuries to workers caused by industrial activity are part of the social cost of development, and therefore should not be borne by the victims but born by a third party.

This case also established a new idea of strict liability. It reaffirmed the standard of strict liability given from Rylands vs. Fletcher, the same standard of strict liability used in the U.S., but the courts also went one step further, and denied the applicability of all the exceptions to this form of liability that have been derived through common law. Various other cases have also established a legal right to human dignity (precedent for this dates back to 1981)35. Article 21 of the Constitution of India states that, “No person shall be deprived of his life or personal liberty except according to procedure established by law.” I mention these to reinforce the fact that there already existed rights in India that had been clearly violated by the Bhopal gas leak, and as we have seen these violations of fundamental laws has never been appropriately addressed. These are rights that are legally enforceable, and should have been enforced by law.

To further strengthen the Indian legal code, we can look back to the case of Bandhua Mukti Morcha v. Union of India in 1984 (so it is still applicable to the original Bhopal litigation) and examine how the courts read Article 32 of the Indian constitution, the article that deals with the right to constitutional remedies. The courts said,

“It may now be taken as well settle that Article 32 does not merely confer power on this Court to issue a direction, order or writ for enforcement of fundamental rights of the people and for that purpose this court has all incidental and ancillary power including the power to forge new remedies and fashion new strategies designed to enforce the fundamental rights.”

This reading gave the courts a broad swath of power through which they could create unconventional and unorthodox legal avenues in the pursuit of justice. In a case as significant as Bhopal, these powers are indeed powerful and far-reaching, granting the court the abilities to do what is necessary to ensure justice. Those that are concerned that this grants the court too much power and can potentially deny a defendant the right to a fair trial or due process, these powers would not be granted to the courts in the case of a criminal trial though. This is a civil case seeking damages for injuries sustained. The fact that it was the MIC that leaked from the UCIL plant in Bhopal that caused all of the injuries is undisputed, and that UCC had liability from the fact that they owned the majority of shares in UCIL. The issue at hand, then, is simply the extent to which UCC is liable.

Seeing as the Indian courts had available to them an incredible array of judicial tools which they could have used to pursue an equitable settlement between UCC and the Union of India that followed with the principles of justice, we can arrive at one unequivocal conclusion: that the victims of Bhopal had on their side a legal code that should have delivered to them a settlement grounded in the principles of justice. There is no reason why the men, women and children should have suffered at all, and the fact that their suffering was exacerbated exponentially because the courts failed them is inexcusable. While I must abide by the principles of academic integrity and admit that I have not proved this beyond a reasonable doubt, this author is comfortable in saying that in his opinion the only reason why the Bhopal settlement, as it stands today, is so grievously inadequate is due to the corruption that is so pervasive within the Indian judiciary and bureaucracy.

In this chapter we have seen that the decisive factors governing a forum non-conveniens decision were entirely misjudged by Judge Keenan. He overestimated the efficacy and veracity of the Indian judicial and bureaucratic systems in his determination that India was a more appropriate forum for litigation. The pervasive corruption and inefficiencies effectively stymied the pursuit of justice. On the other hand, we have also seen that the Indian legal code, in and of itself, is in fact quite well equipped to handle this sort of litigation. It allows the courts to be incredibly creative in their judgments and could have been used to secure a much better settlement for the Bhopal victims. Unfortunately, though, this well designed domestic framework was entirely negated by either a lack of competence by the judges in the court or the corruption that permeates the system.

Over 25 years later, though, it seems that it is entirely too late for justice to be done upon those suffering at Bhopal. Any action taken now can hardly be called “justice”, but can only be referred to as our shameful duty, our obligation left over from the failure of two separate legal systems to do their jobs and deliver justice.

 

Conclusion

Bhopal stands as a reminder of the tragedies that can result from our failure to fulfill the human obligations we are all born with. We cannot possibly shun all multinational corporations on the basis of their existence alone. Indeed, they have played an instrumental role in the growth of the world economy and provided us with many great benefits. What Bhopal shows us, though is that the expansion of these multinationals cannot be based in heartless economics, but in human calculations as to what is best both for the company and the people affected by it (and I’m not referring to shareholders). It shows us that governments need to vigilantly fight corruption within their most sacred institutions, and that courts must pursue justice with an unmatched ferocity.

More than a letdown of the U.S. courts to try the case in the first place, Bhopal was a failure of the Indian government to effectively handle the situation. It was the Indian government that favored economic growth over human development when they chose to actively encourage the production of dangerous chemicals in Bhopal, and it was the Indian government that failed to adequately regulate the production of these chemicals. It was this same government that ignored the explicit warnings of individuals who noticed the lax levels of safety at the plant before the explosion occurred, and it was this same government that so horrible handled the rehabilitation of Bhopal after the accident. India demonstrates that beyond any legal reform that must occur to bring MNC’s to justice, governmental reform is of priority.