Bhopal Award Could Reach $600 Million - Union Carbide Plan Must Get Approval of Federal Judge

Victims of the 1984 poison gas leak from a Union Carbide Corp. plant in Bhopal, India, would receive $500 million to $600 million over a period of years if a federal judge approved a tentative legal settlement, the company said Sunday.

A spokesman for the chemical conglomerate said that lawyers representing the company and the estimated 2,000 Indians killed and 200,000 injured in the disaster agreed in principle last week to a plan that would require Union Carbide to pay a $350-million damage award.

Some of the money would go immediately to the victims while the rest would be put into an interest-bearing fund and would be disseminated gradually, according to Kurt Mazurosky, assistant manager of media relations for the firm.

Distribution Unclear

The $350 million, “paid over time, will produce a fund for the victims of between $500 million and $600 million,” Mazurosky said, reading a prepared statement. He said he could not provide details of how much money individual victims could expect to receive or how the funds would be distributed.

Mazurosky said that the agreement was worked out with a committee of American lawyers representing the Indian victims and not with lawyers for the New Delhi government, which reportedly has been seeking a much more lucrative settlement. It was unclear whether Indian officials would raise objections to the agreement, which must be approved by U.S. District Judge John Keenan in New York before it can go into effect.

The Indian government’s exclusion from the accord could create problems. The Indian government has filed its own suit against Union Carbide in U.S. District Court in New York, in which it claims sole representation for the victims. And in announcing the tentative pact, Union Carbide, based in Danbury, Conn., indicated that the agreement might fall through if New Delhi balked.

Comment Barred

In New Delhi, an official of the External Affairs Ministry said his government had understood that U.S. legal practice barred the parties from commenting on settlement procedures at this stage in their development, Times correspondent Rone Tempest reported.

Asking not to be identified by name, the official expressed irritation that proposed terms had been made public, initially in a leak from U.S. sources to the New York Times. He added that the New Delhi government may make a statement on the subject today.

Bruce Finzen of Robins, Zelle, Larson & Kaplan of Minneapolis, a law firm representing the Indian government, said that country “will have a full and complete response when the time is appropriate,” the Associated Press reported.

“It would not be appropriate to make any comment about the proposed settlement at this time,” Finzen said.

Reuters news agency reported from Bhopal that Dr. N. P. Mishra, who gave medical evidence to Judge Keenan at compensation hearings in New York, said, “The amount (of the reported settlement) is sufficient to change the face of this city.”

Dr. Ishwar Dass, a senior official heading rehabilitation programs in Madhya Pradesh state, of which Bhopal is the capital, had no comment on the proposed settlement, Reuters reported.

But Homi Daji, leader of the opposition Communist Party of India, said that the sum of $350 million was “a drop in the ocean.”

‘Resolved With Finality’

Union Carbide’s statement said that “before the settlement can be concluded, Union Carbide must be satisfied that the claims arising from the Bhopal incident can be resolved with finality.” Spokesman Mazurosky explained that “what we’re looking for, once we have a settlement, is that somebody doesn’t come back and sue us five days, five months or five years from now.”

The December, 1984, incident involved the release of deadly methyl isocyanate from a pesticide plant owned by Union Carbide’s Indian subsidiary in a heavily populated section of Bhopal. The plant was shut down after the gas leak.

Although the disaster ranks as the deadliest industrial accident in history, the proposed settlement pales in comparison to the largest American health damage settlement. That was reached last August, when the Manville Corp. agreed to pay $2.5 billion to settle an expected 60,000 claims arising from alleged asbestos poisoning.

The Union Carbide offer of $350 million is more than triple the firm’s original settlement offer, made shortly after the chemical leak occurred.

The firm, which has a reported $200 million in insurance to cover damages arising from the incident, already has distributed $6 million to victims through the Indian government and international relief agencies and has pledged an additional $14 million in assistance for housing and medical facilities in Bhopal. That money would reportedly be applied to the final settlement.