Union Carbide’s Bhopal Settlement Is a Disaster in Itself


Union Carbide has called the $470-million settlement of damages arising out of its Dec. 3, 1984, gas disaster in Bhopal, India, “a fair resolution of all issues.” It would be more accurate to describe this settlement, reached with the government of India, as the latest chapter in the horror that Union Carbide (and to a lesser extent the Indian government) has visited on the people of Bhopal. It is not a “resolution” of the issues; instead, the settlement is woven from the same fabric as the disaster itself.

Union Carbide’s systematic neglect of community health and safety in the interests of profitability paved the way for catastrophe. Against the advice of some of its own executives, Carbide decided to store large amounts of deadly methyl isocyanate (MIC) at its Bhopal plant because it was more “efficient” than storing it in smaller but safer quantities. Safety systems were underdesigned and able to handle only small, routine leaks. And, shortly before disaster struck, even these systems were shut down to cut operating costs.

The settlement is clearly geared to the financial health of Union Carbide--not to the health of its victims in Bhopal. Carbide’s liability insurance will cover about $200 million of the settlement, and $250 million more will come from a company reserve fund. Thus analysts estimate that the settlement will cost Carbide only $20 million of its record 1988 profits of $720 million. No wonder news of the settlment pushed Carbide stock up $2 a share.


But $470 million does not even fully “provide for the care and rehabilitation of the victims,” as Carbide contends, let alone provide a just overall settlement. Between 200,000 and 300,000 people breathed the toxic fumes, and an estimated 86,000 are permanently afflicted. Of these, 40,000 to 60,000 were severely injured. These victims continue to suffer from a complex variety of illnesses, including genetic damage, an increased rate of spontaneous abortions, psychological trauma and damage to the nervous system and vital organs.

Because of the enormity and severity of this medical catastrophe, the long-term character of the victims’ ailments and the complexity of the medical issues that are involved, the Bhopal Action Resource Center estimates the cost of adequate medical care alone at $600 million. Including adequate compensation for the 3,330 who were killed (according to official figures) and the estimated 1,700 who will die from the disaster over the next seven years, job rehabilitation, property damage, medical research and damages for suffering and distress would bring the total to $4.1 billion, according to the resource center. The Bhopal settlement is based on the chauvinist premise that Third World life is less precious than American life. Compare, for instance, the $470 million received by 500,000 claimants in Bhopal to the $2.5 billion received by 60,000 claimants in the Johns Mansville asbestos suit or the $2.9 billion received by 195,000 victims of A. H. Robbins’ Dalkon shield. Meanwhile, using past Bhopal negotiations as a guide, a Bhopal resident whose wife was killed, whose lungs are permanently scarred and is unable to work and whose children still suffer from psychological trauma may end up with $20,000.

In its legal briefs Union Carbide explicitly embraced this and based its settlement calculations on the abysmally low standard of living in India. It is the height of hypocrisy for a company to exploit that poverty (for instance, by paying its Bhopal workers $3.75 a day) and then use it as an excuse for getting off cheaply.

A similar attitude also indicated the way Carbide ran its Bhopal plant. The corporation was charged with ensuring safety at all of its locations--it owned 50.9% of its Indian subsidiary--yet safety systems in Bhopal were even less adequate than at Carbide’s similar, and also dangerous, facility in Institute, W.Va. A September, 1984, corporate study warned of the danger of water triggering a “runaway reaction in the MIC unit storage tanks.” This is precisely what occurred in Bhopal, but this report was never passed along to India.

And finally the settlement, like the disaster itself, is a product of the unequal relationship between industrialized exporters of capital and technology, like the United States, and the developing countries. This is perhaps the least understood, certainly the least discussed, but one of the most important lessons of Bhopal.

It is often argued that the export of Western capital and technology benefits the developing countries. In fact, such exports are dictated by interests of the industrialized world and produce distorted patterns of development and increased dependence on foreign investment and technology in the Third World. Such patterns of dependence and distorted development were a central element in the Bhopal disaster.


For instance, the U.S.-sponsored Green Revolution--a 1960s program designed to introduce modern farming methods--encouraged India to import and rely on foreign fertilizer, agricultural equipment and pesticide technology like Union Carbide’s Bhopal facility. This dependence was one factor in the Indian government’s unwillingness and inability, lacking both technology and political will, to strictly monitor safety at Bhopal.

The Green Revolution was also pivotal to the economic failure of the Bhopal plant. The revolution’s benefits were restricted to a few farmers, and agricultural productivity has stagnated in India. Thus the vast market that Union Carbide anticipated never materialized. Bhopal’s economic slide prompted the huge safety and staffing cutbacks that led to catastrophe.

The current settlement is a re-enactment of these relationships of dependence and domination. The Indian government agreed to settle for a fraction of the $3.3 billion that it originally demanded partly because the Gandhi government wants to encourage more foreign investment--not poison the atmosphere, so to speak, for other multinationals.

On the other hand, the settlement is a triumph for Union Carbide’s imperious strategy of denying any responsibility for the disaster--blame was not affixed in this out-of-court agreement--and bullying the Indian government and the victims in Bhopal by threatening to drag out court proceedings indefinitely. And this settlement is a declaration that today Western corporations can operate in the developing world with relative impunity.