In March 1985, through the Bhopal Gas Leak Disaster (Processing of Claims) Act, the Indian Government arrogated to itself the sole powers to represent the victims in the civil litigation against Union Carbide. It then filed a $3 billion compensation suit on behalf of the victims in US federal court, but the case was sent to Indian courts in May 1986 on grounds of forum non-convenience, under the condition that Union Carbide would submit to the jurisdiction of Indian courts.
Carbide’s lawyers devised a plan to delay all legal proceedings in order to squeeze the Indian government into accepting a low settlement. It contested the legitimacy of courts it had asked to be tried before. It pleaded to have ‘illiterate’ victims’ claims denied. It threatened to summon every individual survivor and appeal all Indian decisions in US courts. It denied it was a multinational. It claimed the gas was not ultra-hazardous. It blamed an unnamed saboteur. It appealed court orders for humanitarian relief, while professing its concern for the victims. Their first settlement offer was a paltry $100 million dollars, less than half the company’s liability insurance cover. By 1989, Carbide had spent at least $50 million on legal fees alone. How much they spent on PR companies such as Burson Marsteller, who they hired from Dec. 20 1984, has not been disclosed.
It wasn’t until 1989 that a settlement was reached between Carbide and the Indian Government - one made without the consultation or - consent of the survivors themselves. The victims were awarded an average of $500 in compensation, falling far below international compensation standards.
It awarded the victims, an average of 7 cents a day – the cost of a cup of tea – for a lifetime of unimaginable suffering. It paid only $300-$500 (or 43 cents a share) or about five years’ worth of medical expenses, out of its own money to settle the world’s largest peacetime massacre. In fact its annual report described 1989, the year of the settlement, as its ‘best financial year on record’. Today, those who were awarded compensation are hardly better off than those who weren’t.
The Indian Supreme court directed Carbide to build a 500 bed hospital from its own money. Instead, Carbide put £1000 into a trust in London and tried to transfer into this its shares in UCIL that had been seized by the Bhopal court due to Carbide’s non-appearance to face manslaughter charges. In 1994 it succeeded, thus evading the Bhopal court where the judge declared the transfer ‘malafide’. The 350 bed hospital took nearly ten years to build and within a year of opening was found to be profiteering with private patients, despite being bound to treat gas victims for eight years ‘in the first instance’.
In 1991, the local government in Bhopal charged Warren Anderson, Union Carbide’s CEO at the time of the disaster, with manslaughter. If tried in India and convicted, he faces a maximum of ten years in prison. However Mr. Anderson has never stood trial before an Indian court; he has, instead, evaded an international arrest warrant and a summons to appear before a US court. For years Mr. Anderson’s whereabouts were unknown, and it wasn’t until August of 2002 that Greenpeace found him, living a life of luxury in the Hamptons. Neither the American nor the Indian government seem interested in disturbing him with an extradition, despite the recent scandals over corporate crime.
The Union Carbide Corporation itself was charged with culpable homicide, a criminal charge whose penalty has no upper limit. These charges have never been resolved, as Union Carbide, like its former CEO, has refused to appear before an Indian court. Union Carbide also remains liable for the environmental devastation its operations have caused. Environmental damages were never addressed in the 1989 settlement, and the contamination that Union Carbide left behind continues to spread. These liabilities became the property of the Dow Corporation, following its 2001 purchase of Union Carbide.
The deal was completed much to the chagrin of a number of Dow stockholders, who filed suit in a desperate attempt to stop it. These stockholders were surely aware that a corporation assumes both the assets and the liabilities of any company it purchases, according to established corporate law. Indeed, Dow was quick to pay off an outstanding claim against Union Carbide soon after it acquired the company, setting aside $2.2 billion to pay off former Union Carbide asbestos workers in Texas.
Despite the settlement, two court cases remain pending: one civil, heard in the Southern District federal court in New York; the other criminal, heard before the Chief Judicial Magistrate’s court in Bhopal.
The civil case - which is unrelated to the disaster - was filed in United States federal court in 1999 by Bhopal residents against Union Carbide. When it fled India after Bhopal, Carbide left tons of chemical wastes behind, and these have poisoned the groundwater and thousands of Bhopal residents. The civil case seeks a comprehensive cleanup of the contaminated site and the properties around the factory, and compensation and medical monitoring for those poisoned by Carbide’s chemical waste. The lawsuit, Bano v. Union Carbide, has survived four motions to dismiss, and has been reinstated twice by the 2nd Circuit Court of Appeals. The case is currently in the discovery process, and will soon proceed to trial.
The criminal case - which is related to the 1984 Bhopal disaster – was originally filed in 1987, and reinstated in 1991. Both Warren Anderson, the former CEO of Union Carbide, and the Union Carbide Corporation itself face criminal charges in India of “culpable homicide” (or manslaughter). Both Anderson and Carbide have repeatedly ignored summons to appear in India for trial, and are officially considered “absconders” (fugitives from justice) by the Indian Government. While Anderson, if extradited and convicted, would face ten years in prison, Carbide faces a fine, which has no upper limit.