While Bhopal Waits, Union Carbide Cuts Its Losses

THREE YEARS AND three months after the worst industrial accident in history killed thousands in Bhopal, India, the 200,000 surviving victims of the Union Carbide gas disaster remain mute and suffering witnesses to the legal maneuvering by the Union Carbide Corporation to limit its liability.

According to a study by the Indian Council of Medical Research, 19 percent of those exposed to the gas will suffer long-term lung, brain, liver and kidney damage. A majority of the victims have corneal opacity or blurred vision. While others have respiratory problems, gastro-intestinal disturbances, lesions in the central nervous system, psychological trauma and behavioral disturbances. Almost a fourth of the exposed population suffers from mental disorders. By July 1986, there had been four times the national average of still births, 91 infant had died and about 355 spontaneous abortions had occurred. In only three years, 25 percent of the surviving victims have shown signs of mutagenesis. And there are major abnormalities in the immunological response systems of those living in the gas affected areas.

Unfortunately the carnage has not sparked action. The battle to establish Union Carbide's legal responsibility for the disaster, the first step in gaining adequate compensation, was seriously delayed by U.S. District Court Judge John Keenan. And in the three years since the disaster, Union Carbide has made only feeble attempts to settle the case out of court. In November, 1987 rumors surfaced that an out-of-court settlement was at hand, but the settlement--purported to be $500 million over a 10 year period--caused outrage. It was far short of the $3.3 billion the Indian government had originally estimated would be required for adequate relief. If only $500 million is paid, Union Carbide would be paying each victim roughly $250 per year.

Union Carbide is in a much better position to deflect a large settlement today than it was three years ago. Union Carbide has run its equity down from $5 billion at the time of the disaster to $1 billion in 1987 by liquidating substantial assets and making large payouts to its shareholders. This means Carbide theoretically would have to pay substantially less in damages if it loses the civil suit against the Indian government. Ironically, Carbide's shareholders have profited from the disaster. Union Carbide bought back shares at an historic high, doubling the money of some early investors. Shareholders who remained with the company received a $33 dollar special dividend after the disaster and watched their shares top $75--yielding about a 50 percent gain over Union Carbide's historic high, and more than tripling the value of a share bought just after the disaster.

Political activists and lawyers are concerned that this type of financial positioning will set a precedent for firms attempting to avoid financial liability and that a relatively small settlement forced on the victims now will lead to less stringent safety controls among other multinational corporations.

"India could set an important precedent in its handling of this case both with respect to assuring compensation to victims of multinational corporate wrongdoing, and also providing a measure of economic punishment, if deserved, to deter the deliberate elevation of corporate profit over human life," said Consumer advocate Ralph Nader. But a quick, $500 million settlement would be a disaster, he added.

According to Washington D.C. public interest lawyer Rob Hager, such a settlement would represent "no element of punishment whatsoever and therefore would provide no measure of retribution and no deterrent to another Bhopal."

The International Coalition for Justice in Bhopal (ICJIB), a year old coalition formed in response to Union Carbide's defensive maneuvering argues that the proposed settlement reflects a persistent effort to sidestep a real settlement. The ICJIB says it follows a long line of Union Carbide and Indian government delays and omissions in the Bhopal case. Indeed, since the accident Union Carbide's main legal tactic has been delay. The company's original contention was that a suit against Bhopal was not maintainable in Bhopal. But suits were filed in the New York courts in 1984, Union Carbide claimed that the U.S. courts were an inconvenient forum and that the Indian courts provided a satisfactory alternative. When the case was dismissed, Union Carbide lawyers and the individual plaintiffs lawyers unsuccessfully requested the judge to alter his ruling. After that, Union Carbide appealed one of the conditions in the dismissal to the U.S. Court of Appeals. In the meantime, the case had been moved to the Bhopal District Court. Union Carbide did not file its response to the Indian Government within the stipulated time. Six weeks later, in November, they filed a response, and in June 1987, they sought to adjourn the proceedings until October.

And the Indian government, for the most part, has allowed Union Carbide to stall. Seemingly to maintain good relations with the United States and with U.S. corporate interests, the government has been unwilling to take the offensive.

The rumored settlement for $500 million, however, has caused such outrage that the government may finally be spurred into taking action. Within a month, the Indian government moved to file homicide charges against the former chairman of Union Carbide Corporation Warren M. Anderson and eight Indians. Filed only two days before the third anniversary of the disaster, the charges accused Anderson and the others of causing the people of Bhopal grievous injuries, simple injuries and maiming and killing animals.

Although a Union Carbide spokesperson said the charges were "completely unfounded," he admitted that they were being "used as a tactic to deflect public opinion." Union Carbide maintains that a disgruntled employee was responsible for the disaster.

Ward Morehouse of the Bhopal Action Resource Center said that although the government may only be angling for a better position in the negotiations on the settlement talks, the charges may turn out to be more than a bargaining chip since a "serious offense [known as a non-compoundable offense in India] is not susceptible to plea bargaining" and non-compoundable offense charges cannot be dropped without the consent of the judge.

Hager, too, was optimistic about the Indian government's attempts, to bring Union Carbide officials to court. The charges "define a whole new relationship between multinationals and the Third World," Hager said. But, added Hager, "an extradition request will be the only proof of the government's sincerity."

As time passes, however, the victims continue to suffer and Union Carbide continues to reduce its equity and assets. The chance of recovery for many of the victims is further reduced by the lack of evidence. There are only death certificates for 1,700 victims. Although U.S. newspapers cite a conservative figure of about 2,200 dead, voluntary organizations working in the area have put the figure between 3,000-10,000. Circumstantial evidence--funeral shrouds sold, cremation wood used, and missing person estimates--indicates that around 10,000 people died.

To date, the only real hope for immediate relief came on December 17, 1987 when District Judge M.W. Deo in Bhopal ordered Union Carbide to pay some $270 million in interim relief within two months. Although Union Carbide has appealed the decision and insists it has already given interim relief to the victims, Bhopal victims' rights groups feel it may be a turning point in the case.

Jim Donahue/Joyeeta Gupta

A Seedy Business

AS CORPORATE CONTROL over the burgeoning biotechnology industry grows, there is increasing concern that, like the Green Revolution before it, it will bring more Third World dependence on First World products.

The new science, says Canadian economics professor Patrick Mooney, will find countless ways to penetrate Third World markets.

In the Green Revolution, high-yield seed varieties with homogenous characteristics boosted crop production through the use of heavy does of fertilizers, herbicides and abundant irrigation. Both the seed producers and the chemical companies made a fortune from Third World farmers. But where the Green Revolution of the 1960s affected primarily three crops--rice, wheat and maize, the genetics revolution may involve any combination of plants, animals or micro-organisms.

Today, much of the impetus behind genetics research is from agrochemical companies anxious to make pesticide-resistant plants. Hen Hobbelink, seeds campaign coordinator for the International Coalition for Development Action based in Brussels and author of a new study on biotechnology and seed patentability, says such companies are investing heavily in biotechnology.

For the agrochemical companies it will be a profitable venture. The market for pesticide-resistant varieties of plants and seeds will probably reach several billion dollars per year by the mid-199Os.

If Ciba-Geigy succeeds in creating an Atrazine-resistant variety of seed, Atrazine sales will grow by more than $125 million. If Monsanto develops a crop that endures Gliphosate, its market will swell by $150 million. And if Hoechst develops plants for Basta, this agrochemical will sell an additional $200 million yearly.

The cycle begun by the Green Revolution continues. The result, of course, will be farmers dependent on a limited choice of seeds which require greater and greater amounts of pesticides.

The transnational agrochemical companies dominate both private and public institutions--mainly through corporate donations. "Transnationals like Hoffmann-LaRoche, Schering-Ploegh, and Eli Lilly each spend over US$60 million a year on biotechnology R&D, while the chemical giants Monsanto and DuPont each spend a staggering US$190 million and US$200 million a year respectively," reports Hobbelink in his book, New Hope or False Promise? Biotechnology and Third World Agriculture.

Through their generous dollars they dictate the direction the research is taking. In an "RAFI/ICDA document no less than 41 such research programmes are listed, and even this list is far from complete. In fact, virtually all large pesticide producers have major research programmes on herbicide resistance...Herbicide-resistant crops are expected to be massively marketed by the end of the decade.

" What does this mean for the Third World? Companies are fast replacing crops such as sugar, cocoa and plant oils with substitutes genetically produced in the factory. For countries like the Sudan, the Philippines, Madagascar, the Caribbean Island nations and Malaysia, whose economies are dependent on these export crops the impact is enormous.

In October 1986, as Sudanese farmers were preparing to harvest their gum arabic, a New York company announced the discovery of a new industrial process for the production of natural gum. The third largest Sudanese export item lost its market overnight. The 70,000 vanilla farmers in Madagascar also lost their main source of income when natural vanilla beans went into production in the laboratories of a Texas firm.

The industrialized world already has the potential to replace some $14 billion worth of the commodities it imports from the Third World with genetically engineered products.

But perhaps more significant for the Third World are the implications that gene patents will have, says Hobbelink. "The industry is very actively seeking product patents on genes and on seeds. The patentee of a gene can, at least in theory, control all varieties in which his gene is incorporated. Or even worse: he can prevent anyone else using the gene and incorporate it exclusively in his own varieties."

-Marcy Burstiner/
Third World Features