History of the Bhopal Case

In May of 1982, Union Carbide inspected its pesticide plant in Bhopal, India, and found 10 major deficiencies (Lueck, 1984; Ashford, 1984). The facility had been losing money for two years already and in the four years before the accident it lost a total of $4.5 million and the company was looking to sell it (Lueck, 1984; Ashford, 1984).

Charges in the pending criminal litigation assert that Union Carbide was guilty of "culpable homicide not amounting to murder." Many issues of fault have been alleged, some of which place blame with the parent corporation rather than its Indian subsidiary. It is alleged that dangers found in safety audits of the Bhopal plant were not remedied, even though remedial measures for similar dangers were undertaken at Union Carbide's MIC plant in West Virginia.47 According to allegations made in various arenas regarding the events of December 2, 1984, water (that was being used for washing the lines) entered the tank containing MIC through leaking valves. The refrigeration unit, which should have kept the MIC close to zero degrees centigrade, was shut off by company officials to save on electricity bills.48 The entrance of water to the tank, full of MIC at ambient temperature, triggered off

46Bhopal People's Health and Documentation clinic for the Sambhavana Trust; The Bhopal Gas Tragedy: 1984; New Dehli, India: Bhopal People's Health and Documentation Clinic for the Sambhavana Trust, 1998 November.

47The Wall Street Journal reported that several weeks before the Bhopal disaster, Union Carbide changed procedures at its Institute West VA plant, on which the Bhopal plant design was based, to prevent a similar incident. Rep. Henry Waxman (D. CA.) disclosed that a Union Carbide safety team in September had warned of a potential "runaway reaction" of methyl isocyanate at Institute and the EPA had reported that there were 28 small leaks of the chemical in 1980 at the facility (Winslow, 1985).

48The New York Times (January 27, 1985) conducted an extensive investigation involving more than 100 interviews in India and the United States about the gas leak. Its findings indicated that the plant design was from Union Carbide in the United States and that many of the safety features of the plant were inoperable at the time of the accident, in some cases to save on costs ("Design Flaws Contribute to Gas Leaks").

an exothermic runaway reaction and consequently the release of the lethal gas mixture. The safety systems, which, in any event were not designed adequately to control such a runaway situation, were awaiting repair. To avoid having the community be unduly alarmed due to occasional leaks, the siren in the factory had been switched off (Morehouse and Subramaniam, 1986; Everest, 1985).

In addition, there are allegations that the parent company had underinvested in the technologies at the plant. According to representatives of Bhopal survivors, documents obtained through discovery in cases filed against Union Carbide show that in the early 1970s, in response to the Indian government's efforts to promote import substitution through the dilution of foreign equity (The Foreign Exchange Regulatory Act - FERA), the company reduced its investment in the Bhopal plant from $28 million to $20.6 million. Despite reducing the total cost of investment in line with FERA, the company retained its 51 percent share in the UCIL subsidiary by back-integrating the equity formulation for the plant. Under FERA, this reformulation required the transfer of additional technology not currently available in India.49 In order to prevent the dilution of its ownership, Union Carbide transferred substandard technology, which had only a limited test run because it lowered costs in addition to meeting, on paper at least, the requirements of FERA.

According to Himanshu Rajan Sharma - the attorney representing the Bhopal plaintiffs against Dow in the District Court for the Southern District of New York - these documents also show that the pesticide production system at Bhopal had only a trial run and that Warren Anderson, then CEO, and the management committee of the Union Carbide Corporation made the key decision to transfer inferior technology to Bhopal. This would be especially significant as FERA stipulated that the technology transfer had to involve "state-of-the-art" technology. Comparisons of the Bhopal plant design and a plant owned by Union Carbide in West Virginia producing the same "Sevin" pesticide at the time allegedly show design differences between the plants.

In short, faced with losing majority ownership under FERA, it has been alleged that Union Carbide made the overall plant cheaper to build by importing inferior technology, thus putting Bhopal at risk from the plant's inception.

Both civil and criminal cases were brought against Union Carbide and other parties, including its Indian subsidiary, Union Carbide India Ltd. The civil case filed by the Indian government on behalf of the survivors was settled for $470 million in 1989. While by the terms of the Indian Bhopal Gas Disaster Relief Act the settlement resolves all claims of survivors for injuries resulting from the disaster, according to survivors' organizations today, the amount of the settlement was based on estimations that have proved far too low, whether quantifying the dead, the injured, or the property lost. It also never accounted for future medical claims. As a result,

49Foreign Exchange Regulation Act, 1973. Details from an interview with a U.S.-based attorney who has brought the New York litigation against Union Carbide regarding Bhopal in "Proof from Carbide Itself ": Interview with Himanshu Rajan Sharma, U.S.-based Attorney, in Frontline Magazine, 19(26), December 21, 2002-January 3, 2003 (published in India, The Hindu Group).

say the survivors' organizations, the $470 million dollars has proved to be inadequate even to satisfy the claims of the acknowledged victims of the disaster. The balance of the amount (approx. $340 million50) remaining in the fund is committed to compensation of victims, and cannot be used for the many other needs of the community - not the public health and economic devastation resulting from the disaster, and not for remediation of the contamination left behind by Union Carbide.

In November 1994, Union Carbide sold its interest in Union Carbide India Limited (renamed Eveready Industries India Ltd, or EIIL) to MacLeod Russell (India) Ltd. of Calcutta. As a consequence of that sale, Union Carbide asserted that it retained no interest in or liability for the Bhopal site.51 However, the Chief Judicial Magistrate for Bhopal has held that Union Carbide Corp.'s transfer of shares was not bona fide because it was done to evade potential liabilities arising out of the ongoing criminal case in Bhopal. As a result, $74 million in Union Carbide assets were attached pending appearance of Union Carbide in the criminal case.52

Union Carbide has never filed an appearance in the criminal case, and asserts that the courts of India lack jurisdiction to make the company appear as a defendant.

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