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Lessons from Bhopal disaster

Lessons from Bhopal disaster
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First Published: Mon, Jun 07 2010. 10 13 PM IST
Updated: Mon, Jun 07 2010. 10 13 PM IST
Twenty-six years is a long time to wait for justice. Yet all that has been delivered in the name of justice in the Bhopal gas disaster of 1984 is a two-year sentence for the eight accused and some paltry fines. And as far as the accused go, this conviction may not be final: they can appeal all the way to the apex court.
More than Monday’s conviction, however, the case illustrates how the victims of India’s worst industrial disaster were let down by the government and systemic weaknesses that afflict India’s legal system. Earlier, the Union government arrogated to itself the power to negotiate and press claims against Union Carbide Corp., owner of the Bhopal plant from where a deadly gaseous chemical leaked on the night of 2-3 December 1984. The results were disappointing: The company paid a paltry $470 million against a claim of $3.3 billion. That was in 1999.
Now, 11 years later, the question to be asked is: Has India done anything to improve its legal framework in a manner that will enable it to cope with such disasters? Apparently no. The law of torts/tortious liability continues to be underdeveloped in India. Unless this aspect of the law, one that enables levying compensation on those responsible for injuries that result in such accidents, is developed, we will get nowhere. One can have laws that have compensation and fines built into them, but that is very different from having a body of law that can cope with a diversity of situations. There is no movement in that direction.
This has consequences for India’s growth. In any successful market economy, freedom from government intervention is not the only ingredient. A suitable legal infrastructure that clearly spells out rights and obligations and clearly enforceable penalties is important for the smooth running of the system.
Bhopal showed that India lacks this framework. This distorts incentives and also affects investment. On the part of industrial investors, this leads to cutting corners on investing in safety equipment. This is a double-edged sword: If the government of the day is pliable, the company in question can get away with outrageously low compensation (as Union Carbide did). But with a strong government, chances are this could lead to companies being subjected to threats and demands for money/bribes. This can hit investment. A transparent legal code is the way out. Developing law of torts is the first step in that direction.
Did the government fail the victims of Bhopal? Tell us at views@livemint.com
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First Published: Mon, Jun 07 2010. 10 13 PM IST