Monday, July 12, 2010

Bhopal to BP: A Stark Contrast

“When the people fear their government, there is tyranny; when the government fears the people, there is liberty.”
Thomas Jefferson

People in America are seething with discontent about their President’s handling of the immediate aftermath of the BP rig explosion and oil spill. They feel he has not done all he could and that the Federal government has dragged its feet, not putting the full weight of their resources behind fixing the problem. Many Republicans even believe the government should have taken over the cleanup effort, even though the government does not have the necessary equipment, expertise or means to cap a deep water oil well break. Obama’s popularity has taken a huge beating as a result of this discontent around the country. There has also been growing resentment to his constantly cool and calm demeanor. That he never shows emotion and certainly never seems to fume or display any indignation or rage. Ironically, it was this same trait that catapulted him into a lead in many minds over John McCain during the financial crisis in 2008. However you feel about his personal handling of the response, what cannot be debated is that from the outset he has held British Petroleum fully accountable for the entire disaster and for all the ensuing damage, stretching even the most generous legal definitions of liability for foreign companies operating on US soil. He has made them liable, not only for all costs incurred by the Federal government for the cleanup operation, but also for lost wages of fisherman, riggers and small business owners in affected town. Somehow he even got BP to pony up $25 million for the State of Florida to invest in advertising to re-assure tourists that Florida beaches remain unaffected, open and safe. All this in addition to coaxing BP into putting a down payment of $20 billion into an account administered by a government-appointed third party, which will enable them to process and pay claims in a more expedient manner. And during all of this he managed to help the BP board see the wisdom in not issuing any further dividends to shareholders for the remainder of 2010. Whether you are satisfied with his administration’s sense of urgency and speed of response or not, I think it is fair to say that he has been single-mindedly focused on protecting his citizen’s well-being and livelihoods by ensuring that the blame and liability rests firmly with this foreign company and that taxpayers will not be the ones to bear the burden of this catastrophe.

Now contrast this with the Indian government’s response to the greatest industrial disaster the world has ever seen by an American company called Union Carbide India Limited (UCIL) which operated a majority owned chemical plant in the city of Bhopal, India. One fateful night in December 1984 the plant leaked toxic gas engulfing the city of Bhopal and its environs, exposing some 500,000 people to lethal and poisonous gas. Government estimates indicate that 8,000 people died within the first week. Another 8,000 people died since from gas related causes. Some 5,000 women were widowed. The gas exposure is also blamed for birth defects ranging from minor to very severe disabilities for the next two generations and is still causing unusually high clusters of cancer and other diseases in the families of the exposed. Today, 390 tons of toxic chemicals abandoned at the plant, never cleaned up by UCIL or the Indian government is said to continue to leak and pollute the groundwater in the region and affect thousands of Bhopal residents who depend on it. In 1985 the Indian government filed a suit in US court for damages worth $3.3 billion. In February 1989 the Indian government, led by then Prime Minister Rajiv Gandhi, agreed to an out of court settlement with Union Carbide for a paltry $470 million - approximately 14% of their original claim. To add insult to injury, the then Chief Executive of Union Carbide, Warren Anderson, was arrested in 1985 and released on bail on a visit to India. He fled the country, and while still considered an absconder, has since retired and lives a lavish life in the exclusive Hamptons community on New York’s Long Island. “Greenpeace asserts that as the Union Carbide CEO, Anderson knew about a 1982 safety audit of the Bhopal plant, which identified 30 major hazards and that they were not fixed in Bhopal but were fixed at the company's identical plant in the US” (Wikipedia).

Twenty-six years after the tragedy India’s Supreme Court delivered its ruling in the world’s greatest industrial disaster. The Supreme Court is punishing the 7 of the 8 living Union Carbide board members with a 2 year prison sentence, which can be appealed. The culpable homicide charge was effectively reduced to a charge usually used for reckless driving cases. After a wait of a quarter century this is the justice the tens of thousands of victims of Bhopal received. This is the only justice the President, Prime Minister and government has been able to deliver to their citizens. And it seems the perpetrators will continue to go unpunished even as the people of Bhopal continue to suffer the consequences of their negligence. Dow Chemicals, the company which acquired UCIL, has repeatedly stated it accepts no responsibility for this “tragic accident” and recently also retracted a 2002 statement by DOW’s PR Head saying the US$500 compensation per victim was "plenty good for an Indian.” Curiously though, Times of India found Securities and Exchange Commission (SEC) filings from February 2010, where DOW has disclosed that it has taken on all liability for Carbide lawsuits in the US dating back to 1977 (Bhopal happened in 1984), and expects to pay a further $839 million in the coming years to settle these. Carbide became a subsidiary of Dow through a merger in 2001 (‘Bhopal gas tragedy: Dow's double standards exposed’ – Times of India).

Based on a unanimous public outcry the Indian government is now pushing through new measures that include increased compensation for victims, and a renewed effort to extradite the 90 year old Warren Anderson  (an extradition request by India in 2003 was turned down by the US government) along with a pledge to clean up the abandoned UCIL factory. While Dow’s poorly worded statement above says it all, there is another and bigger issue at stake here that goes beyond corporate responsibility and companies doing the right thing in such extreme and tragic situations. It has to do with the weak response and seeming lack of muscle of the Indian government. As India continues to pride its steady advance onto the global stage as an economic and military powerhouse, the government continues to show its impotence when it comes to protecting its own citizens. Victims groups claim that the Indian government did not want to create a hostile climate for foreign companies and foreign direct investment and thus cushioned much of its actions against Union Carbide and DOW Chemicals. I hope this is not true because a government, who does not use every means possible to first and foremost protect its own people, has no business playing on the global stage or calling itself a Superpower.

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