News

Bhopal 25 years on



3 December 2009

It has been 25 years since the worst corporate calamity of modern times, writes Professor David Kinley.

Around midnight on 2-3 December 1984, a dense cloud of 40 tons of highly poisonous methyl isocyanate (MIC) gas drenched the Indian city of Bhopal, after a catastrophic chemical reaction occurred in a holding tank at the nearby pesticide plant operated by the Indian subsidiary of the US firm Union Carbide.
More than 3,000 people died in the immediate aftermath, according to official figures (though many civil society organisations put the figure at almost three times that number), and more than 50,000 people were permanently disabled.
In the following weeks a further 15,000 died as a direct consequence of the leak, and it has been estimated that since then approximately the same number have died for reasons that included exposure to the gas, drinking contaminated water or consuming produce from contaminated soil.
Recent reports on the medical consequences of the disaster show a intergenerational impact with clear evidence of birth and developmental abnormalities that correlate to those who, though exposed to the gas, survived, and have since had children.
Allegations as to the company's negligence regarding safety procedures, and its responsibilities under civil and criminal law constituted the basis of various actions pursued in both the American and Indian courts.
The case was eventually settled out of court in 1989 when UCC agreed to pay $470 million in compensation to the victims, though there have been continuing problems in the distribution of the monies by the Indian Government which controls the compensation fund.
The gas plant at Bhopal was abandoned after the disaster and the Indian subsidiary sold to another chemical manufacturer in 1994. The site itself and adjoining lands are yet to be properly cleaned up by Dow Chemical Company which took over UCC in 2001.
In addition to legal headaches, the Bhopal disaster had implications for the financial wellbeing of UCC. Within a week of the leak, the company's stock price fell by almost 30 per cent translating to almost $1 billion in losses.
Ramifications also reverberated throughout the industry as a whole with one additional study of 47 chemical firms revealing substantial drops in the stock price of nearly all of them in the months following the incident.
Since its acquisition of UCC in 2001, Bhopal has also been the source of public-relations headaches for the Dow Chemical Company. Shareholder resolutions calling for action have been passed and letters to the US Securities and Exchange Commission questioning the company's liabilities pertaining to Bhopal have been sent.
A number of members of US Congress have also publically criticised Dow Chemical and encouraged the Indian Government to pursue UCC and Dow Chemical.
The scale of the Bhopal incident together with its legal and non-legal ramifications represent a watershed in the history of business's relations with the community on two fronts.
First, the episode graphically exposed the nature of a corporate culture that permitted such horrific consequences and that spurred subsequent efforts to avoid being held responsible.
And second, it revealed the inadequacies of the legal regimes that governed the corporation both before and after the disaster; that is, in regulating against its occurrence, and in the provision of remedies for the loss and suffering it caused.
These two factors are emblematic of the key concerns that occupy the field of corporate social responsibility in the global economy as a whole, and the question of human rights responsibilities of corporations in particular.
Law in this field, including human rights law, is mediated through the political and economic forces that dictate the attitudes and actions of international and domestic governance institutions.
Kings are sustained by King-makers. And through their considerable economic and political clout, corporate lobbies are among the most powerful of the King-makers.
The content and reach of human rights laws in any jurisdiction are of course determined by a host of factors, but where such laws directly impact trade and commercial enterprise, then the agents of trade and commerce will have their say. And appropriately so.
However, what is notable about the dynamics of such political power today is the spectre that risk casts over corporate enterprise. That is risk of all kinds - financial, environmental, security, social and reputational.
Corporations may indeed have "no soul to be damned, no body to be kicked", but some of them most certainly have reputations to be ruined and custom to lose.
In the post-GFC world of supposedly chastened laissez-faire capitalism, awareness of consequences posed by these interconnected risks is playing a part in the design of new regulatory apparatus.
Human rights standards are endemic in all of these risk categories and as such the nature of their interrelationship with the global economy is critical.
In this regard, perspective is everything. Thus, it is fundamentally important to recognise that human rights represent more ends than means. With the economy, it is the other way around.
At their barest minimum human rights are the features of an individual's life lived with irreducible levels of safety, comfort, freedom, dignity and respect. And beyond the individual, collectively, they constitute integral components of the health, order and good governance of whole national and international communities.
The various goals of the global economy on the other hand are not pursued for their own ends, but rather as means - almost invariably, essential means - to achieve broad social and personal ends, including such self-actualising ends as human rights prescribe.
Importantly, beyond just human rights advocates, this is a view that is getting traction with economists and key players in the global economy.
The deepening and widening of the global economy are not ends in themselves; rather they are activities that serve other, broader ends. The provision of economic aid, the expansion of global trade and establishment and the development of commercially robust economies are mechanisms for stimulating chain reactions that increase individual and aggregate wealth, alleviate poverty, promote opportunities and freedoms, and strengthen governance. Thereby the objectives of human rights are served.
That said, it is vital in this debate to chasten the extremes.
On the one hand, too much must not be demanded of the economy. The human rights lobby must not over-reach itself in terms both of what human rights can legitimately claim and what the global economy can sustainably deliver. The quest is to civilise the economy, not obliterate it.
On the other hand, human rights can and do usefully aid economic ends. Nobel prize winning economist Amartya Sen's seminal work on the two-way relationship between (economic) development and (political) freedom eloquently and convincingly argues the case for just such instrumentalism.
Effective management of this circular interdependency of human rights and the global economy relies on the exercise of earnest political will in both domestic and international forums.
Of course the mediation of public power by government authorities is subject to all sorts of private influences and vested interests. Regarding the economy, trade liberalists, corporations, and states themselves have many views, as to which levers to pull, how, when and why. But whatever these opinions might be, no appeal can be legitimately made to the need to prefer the economy over human rights.
The protection and promotion of human rights are not optional extras in the political economy. Such tasks constitute the very fabric of what legitimises government and provides meaning and object for the nourishment of robust economic relations.
Not economic myopia, nor political expediency, nor moral cowardice can ever excuse, let alone justify, treating human rights in any way less than as the principles upon which human beings are together bound, and individually respected.
Since the dawn of the modern globalised age of human rights after the Second World War, not only has the presence and stature of human rights grown tremendously in the laws and relations within and between states, but their integration into the operations and even design of global economic intercourse has been made increasingly relevant and apparent.
Despite differences of opinion as to levels of responsibility what is certain is that global economic relations cannot be somehow quarantined from apparently non-economic concerns like human rights standards.
The task before us is how to reconcile differences and create consensus, without undermining the principle that respect for human rights is the ultimate foundation upon which rests the legitimacy of the actions of our governments, our international institutions, our corporations and business enterprises, our organs of civil society, and ourselves.
This essay comprises edited extracts from David Kinley's recent book - Civilising Globalisation: Human Rights and the Global Economy- and was published on ABC's Unleashed.


Contact: Greg Sherington

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