The 1989 Settlement

In March 1985 the Indian Government assumed the sole power to represent the victims in the civil litigation against Union Carbide. It then filed a $3 billion compensation suit on behalf of the victims in US federal court. After four years they “settled” for an amount that was 15% of the original. However, neither side had involved the Bhopal survivors, who eventually reopened the case and part of the decision was reversed.

May 1986: The case was sent to Indian courts on the grounds that a US court is inappropriate, and under the condition that Carbide submits to the jurisdiction of Indian courts.

Carbide’s lawyers decided to delay all legal proceedings in order to squeeze the Indian government into accepting a low settlement. They:

• contested the legitimacy of the courts before which they were now required to appear
• pleaded to have ‘illiterate’ victims’ claims denied
• threatened to summon every individual survivor (rather than allow a class action suit)
• threatened to appeal all Indian decisions in US courts
• denied UCC was a multinational
• claimed the gas was not ultra-hazardous
• blamed an unnamed saboteur
• appealed court orders for humanitarian relief, while professing its concern for the victims

1989: Carbide and the Government of India reached a settlement of $470 million. It was made without consulting the survivors themselves. Survivors were awarded an average of $500 each in compensation, far below international compensation standards (and the standards set by Indian Railways for accidents). In exchange:

• Carbide was to be absolved of all civil liabilities.
• Criminal cases against the company and its officials were to be canceled.
• The Indian government was to defend the corporation in the event of future suits.

Many survivors found the settlement insulting. It awarded them an average of 7 cents a day for a lifetime of unimaginable suffering. At Union Carbide, by contrast, restructuring efforts landed its stakeholders a huge windfall – Carbide paid roughly 43 cents a share of its own money to settle the world’s largest industrial disaster.

April 1989: Union Carbide shareholders voted against increasing compensation to the victims. 1990-91: The Bhopal victims filed suit to overturn the settlement. The case went all the way to the Indian Supreme Court. Citing inaccurate statistics for the number of dead and injured victims, in 1991 the court ruled that the settlement amount would stand, however at the same time the court reinstates the criminal cases against Carbide, its CEO Warren Anderson, and other officials.

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