BOOK REVIEW [in Stanford Environmental Law Journal, Volume 13, No. 1, 1994]
THE UNCERTAIN PROMISE OF LAW: LESSONS FROM BHOPAL, Jamie Cassels, Toronto: University of Toronto Press, 1993. Pp. 364. $19.95
While the press is quick to report environmental accidents, its follow-up of such events is often inadequate. Bold headlines often introduce environmental disasters to the public, but the resolution of these disasters is frequently left unreported or relegated to the back pages. It is often difficult, then, to gauge the causes of and lessons from environmental disasters.
For that reason alone, Jamie Cassels' book, The Uncertain Promise of Law: Lessons From Bhopal, is a welcome addition to the literature on environmental disasters. His book is not just a faithful record of a tragic event, but also a careful documentary that reminds us of the gravity of the Bhopal tragedy and attempts to answer the often unasked question: What has the tragedy taught us? Cassels' answer, unfortunately, is sometimes less than satisfying. His analysis of the Bhopal story demonstrates that "the uncertain promise of law" also means the uncertain hope that another Bhopal will not happen again.
Cassels approaches the Bhopal accident in objective, but strong terms. He dissects the political and economic events leading up to the chemical explosion of December 2, 1984. After a discussion of the legal and regulatory impediments to bringing toxic tort actions in common law countries like India and the United States, Cassels presents the legal history of the case, following it from the initial responses by American lawyers and the Indian government to the Indian Supreme Court's final decision upholding the $450 million settlement between India and Union Carbide. Underlying his analysis are three important questions: (1) Where should causes of action be brought?; (2) How should liability be determined?; and (3) How should victims be compensated? In the background is the main unanswered question both in the book and the Bhopal trial: what happened on December 2, 1984?
While much controversy exists over the actual events of that day, the factual circumstances of the Bhopal accident matter less than the placing of blame. The Bhopal litigation, as Cassels reports, became largely a corporate and political hot potato as Union Carbide tried to shift liability to its Indian subsidiary. The technical issues of plant design and the economic issues of why a tragedy of such magnitude occurred in the first place were subordinated to the legal concerns of placing blame and finding relief. This transformation is handled nicely in the book as Cassels deftly moves from a pellucid discussion of tort law principles to a chapter entitled "Legalizing a Disaster."
The chapter begins with a disturbing picture of what Cassels calls "ambulance chasing lawyers" who descended on Bhopal to represent the 30,000 plus victims. Among the cast of characters are Melvin Belli and a Washington, D.C., lawyer named John Coale who circumvented India's prohibition on contingency fees by negotiating for "compensation in accordance with United States customs in personal injury cases." In the months after the disaster the lawyers claimed to have over 500,000 claimants comprising 186,000 filed actions against Union Carbide in the United States. Cassel's prognosis of these private causes of action:
While the involvement of U.S. lawyers in the Bhopal case may have 'broken the pattern of legal resignation' in India, it probably also reduced the prospect of a quick, non-traditional solution. . . . More legal energy was spent on attempting to obtain control of the Bhopal cases than in pursuing them. Settlement negotiations were begun by one group and rejected by another. Confusion reigned.
The response by the Indian government simply frustrated the goals of compensating victims and finding fault. In March, 1985, the Indian government passed the Bhopal Gas Leak Disaster Act ("Bhopal Act") making the Indian government "the exclusive representative of the victims in legal proceedings for compensation whether inside or outside of India." The Act was retroactive, applying to actions "already initiated by individual victims, although it preserved their right to retain counsel." More importantly, the Act established a claims scheme for redressing the victims, appointing a claims commissioner in charge of administering the litigation process and "registering, recording, and processing individual claims." Under the aegis of this act, the Indian government in April, 1985, joined the U.S. litigation, which in January had been consolidated and brought in front of Judge John F. Keenan of the Southern District Court of New York.
The Bhopal Act was one factor that facilitated Judge Keenan's decision on May 12, 1986 to return the Bhopal trials to India. He dismissed the action from the U.S. on the grounds that India would be the more convenient forum. In reaching this decision, Judge Keenan pointed to the innovativeness and efficacy of Indian law as evidenced by the Bhopal Act and to "Union Carbide's evidence of India's control over (the) Bhopal operation; to the fact that it was licensed and regulated by Indian law, subject to Indian environmental and safety laws and monitored by Indian agencies." Ironically, these factors suggest, according to Cassels, that Judge Keenan may have already decided the case on the merits. Keenan's reasoning reflected "a normative position that the [parent] company should not be held responsible. . . . His emphasis of the degree of Indian control over the operation reflects and reinforces a presumption of multinational non-responsibility." In fact, Cassels points out that Judge Keenan adopted a strange assumption of risk argument: "As [Keenan] said, 'India no doubt valued its need for a pesticide plant against the risks inherent in such development.' This may be true, but the exclusive focus on Indian sovereignty tends to reinforce the notion that developed countries have no responsibility in the developing world."
Cassels suggests that Judge Keenan's opinion offers several lessons to developed countries and multinationals:
The conclusion drawn by the lawyer is that legal responsibility can be avoided by emphasizing local government regulation and delegating to the subsidiary 'as much autonomy as possible concerning operating matters.' The advice to multinationals, then, is to maintain strategic control from afar, but to leave operations in the hands of local managers and safety in the hands of the host country.
In the last third of the book, Cassels follows the Bhopal litigation back to India where the battle is played out between Union Carbide and the District Court in Bhopal. Union Carbide, in an effort to escape liability, attempted to take advantage of the innovativeness of the Indian legal system. First, using the provisions of India's Fatal Accident Act of 1855, Union Carbide demanded that all the claimants provide the full details of the nature and quantum of injury, which served to further delay the litigation. Moreover, Union Carbide tried further distancing itself from its subsidiary, 49.1% of which was owned by Indian public institutions. Finally, Union Carbide alleged that both the governments of India and Madhya Pradesh, of which Bhopal is the capital,
had knowledge of the toxic properties of MIC but failed to take adequate precautions. They argued that, notwithstanding the knowledge of the risks, the state government had allowed the growth of slum areas in close proximity to the plant and that it was the responsibility of the government to design adequate warning systems, evacuating procedures, and other emergency and medical facilities in case of an accident.
Union Carbide argued that it should be absolved of any liability because of the state's involvement in maintaining the subsidiary. Furthermore, Union Carbide argued that under a negligence theory the Indian government still had to demonstrate that the accident was a result of Union Carbide's fault rather than the acts of a saboteur.
The Indian government won a major victory, however, on the issue of interim compensation. On December 17, 1987, Judge Mahadeo Wamanrao Deo of the District Court of Bhopal, responding to pressures from a judge hearing the numerous interim petitions for relief from a Bhopal victim, ordered Union Carbide to pay $270 million into a fund to be administered by the claims commissioner, the disbursement of $15,385 to the next of kin of each victim and $7,690 to the permanently disabled.
The order of interim compensation marks the watershed in the Bhopal story. On appeal, Judge S.K. Seth concluded that the award of interim compensation was consistent with "a provision of English law that permits a court, in a situation where one party will eventually be held responsible to pay damages, to award interim damages." Most crucial to the decision was the finding that the Bhopal victims had a prima facie case against Union Carbide.
Judge Seth's decision, though appealed to the Supreme Court, was the catalyst for eventual settlement between the Indian government and Union Carbide. On February 14, 1989, the Chief Justice, Rajinder S. Pathak, ordered a final settlement between Union Carbide and the Indian government of $470 million dollars in exchange for a waiver of all future criminal or civil liability by Union Carbide. According to Cassels, victims and social activists were astounded. The final amount was a trifle compared to the government's claim of $3.3 billion and much smaller than previous offers Union Carbide was rumored to have made.
According to Cassels' analysis of the judgement,
The Court felt that this figure would provide reasonable compensation based on the estimated number of deaths (2,660) and injuries (30-40,000) accepted in the High Court....[T]he Court recognized that the opportunity to address important social, technological, and legal issues had been lost. But, it concluded, 'in the present case, the compulsions of the need for immediate relief to tens of thousands of suffering victims could not, in our opinion, wait till these questions, vital though they be, are resolved...The tremendous suffering of thousands of persons compelled us to move into the direction of immediate relief which, we thought,should not be subordinated to the uncertain promises of law.
Cassels' description of the steps leading up to settlement suggests that the Bhopal crisis was resolved as a result of its own weight. A tragedy of such proportions could not have ended without Union Carbide compensating the victims even if the company did not accept blame. Furthermore, settlement could not have been reached without the innovative legal thinking of the Indian judges involved in the case. From that perspective, the Bhopal trial demonstrates the promises of law despite the uncertainties of litigation. The "uncertain promise" that the Indian Supreme Court and Cassels refer to is not the availability of compensation but the promise that Bhopal does not repeat itself and that those compensated are compensated justly. The rule of law cannot promise either of these objectives.
As Cassels points out in his "Afterword," as of January 10, 1993, "not one of the victims of the gas leak has received final (as opposed to interim) compensation." Furthermore,
hazard management practices (in India), both public and private, remain depressingly ineffective. A National Security Council survey of the previous year documented a reported 27 deaths and 256 injuries as a result of chemical leaks. Many other such incidents go unreported. An ILO report identified 6,000 hazardous installations that had to be covered by a mere 903 inspectors. Industrial fatalities in India continue to occur at four times the rate documented for North America and the United Kingdom.
In response to these failures, Cassels offers several substantive remedies for the current legal regime on transnational toxic hazards. His focus on litigation, however, distracts him from the potential regulatory solutions to transnational toxic torts. Cassels' solutions to the tragedy of Bhopal are largely changes in the litigation process; he strongly supports increasing the responsibility of multi-national corporations to host countries. Specifically, he suggests that courts adopt the presumption of multi-national liability unless a corporation can show "that it was prevented by the host country from exercising control over the subsidiary, that the hazardous practices were mandated by the policies of the host country, or that its liability or responsibility has been expressly waived or limited in agreement negotiated with the . . . host country."
Undoubtedly, increasing multi-national responsibility is an important policy goal, but Cassels' analysis ignores some of the economic incentives that may keep multi-nationals from bearing liability even with heightened judicial scrutiny. A developing country desperate for industry may sacrifice some of its population for the prospects of industrial expansion. In fact, even with heightened judicial scrutiny for multi-nationals, placement of industrial facilities like the one in Bhopal is still subject to the economic pressures of environmental racism: the highest risks are placed in impoverished areas having the most to gain from industry. Cassels hints at this problem in the early portions of his book, but he fails to address it in his discussion of solutions. Cassels' remedy, while possibly alleviating the litigation difficulties arising from another Bhopal, probably will not resolve the underlying causes of such a tragedy.
While Cassels does mention some regulatory solutions, such as environmental legislation passed by India, he does not consider command and control solutions such as direct regulation of the international manufacture and sale of toxic substances by an international regulatory body. Cassels notes that the EPA recently banned Temick, the chemical that was being produced by Union Carbide in Bhopal, yet he fails to suggest that more vigilant regulation of chemicals buttressed by international enforcement may be the most effective way to prevent future Bhopals.
In the end, Cassels' insights into the unpredictability of litigation make him somewhat skeptical of regulatory solutions His detailed documentary of the Bhopal litigation and subsequent responses, however, may lead many readers to conclude that what he calls the "uncertain promise of law" is really only the "uncertain promise of politics."