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The law 20 years after: Significant absences

By Usha Ramanathan

Bhopal brought to attention the absences in the law on industrial disasters. There was no way to extract vital information from the industry, no provision for interim relief, and no clarity on how to deal with an offending corporation. Since 1984, statutory law has moved, grudgingly, some distance, but it is in the courts that the law has been largely played out. Are the wrongs inflicted on victims by the system finally gaining recognition?

 India’s unpreparedness for mass disaster was stark in the immediate aftermath of December 2/3, 1984, when MIC gas poured out of the Union Carbide plant into the neighbourhood, reaching well into the township that housed the working classes of Bhopal . At the time there was no evidence that anybody recognised the magnitude of the havoc and destruction that could be caused offsite by the substances and processes employed in making the pesticide within the plant. Despite earlier episodes of worker injury and death in Union Carbide, there was, in 1984, no mechanism in place to acknowledge workplace accidents as portents of disaster. In 1984, workers, who were the closest observers of safety conditions, risk and harm in a factory, were not entitled by law even to an informed engagement with the safety aspects of their workplace; nor was there any legislated scope for them to participate in safety management.

This exclusion from information regarding safety and potential risk was even more pronounced where it concerned people living in the vicinity of a plant; so too the local authority, which would inevitably find the onus of responsiveness to disaster foisted on them, as happened in Bhopal in December 1984. The managers of industry were shielded from the need to disclose the harmful nature of their raw material, products or processes, even as industrial secrecy stood rooted in the law.

As risk precipitated into disaster on the night of December 2/3, 1984, the absences in the law regarding industrial disasters became striking. The industry was unresponsive to repeated, emergent enquiries about the nature of the substance that was killing people in droves, and there was no means of extracting the information from them. There was no provision in the law for recognising a community of victims: it was the individual who was felled by the disaster, even where there were thousands of victims. There was no provision for interim relief while the survivors of a disaster battled a large and elusive corporation. The criminal law was opaque on how to deal with an offending corporation. A calculation of losses and damage sustained in a disaster could not be readily reckoned, as the demands of the traditional law of torts -- which is the law for determining compensation where it is not already set out in a statute -- for an individuated determination could not cope with mass disaster.

Safety

Matters of safety flew back onto the canvas of concern when oleum gas leaked into Delhi ’s environment from the Shriram Foods and Fertilisers factory on December 4, 1985 . The gas spread across Delhi , resulting in the death of an advocate in the Tis Hazari courts, and causing temporary damage to many more. More than the extent of harm caused by the gas, it was the memory it evoked of the Bhopal gas disaster that spurred the Supreme Court, especially, into action. In a litigation launched in the public interest that was then pending in the court, where questions of safety in the plant had been raised, the court enunciated principles to enhance safety and provide a framework of deterrence. In 1987, a part of this was introduced by amendment into the Factories Act 1948. These included:

  • the acknowledgement that the impact of accidents and disasters was increasingly likely to spill beyond the boundaries of factories, affecting “the general public in the vicinity” of the factory
  • information regarding potential disasters should be communicated to the local authority and those in the vicinity of the factory; this should include information on what may be done to mitigate harm in the event of a disaster.
  • a Site Appraisal Committee be established to decide on matters of safety and hazard every time a new factory is set up, or an old one expanded
  • workers’ right to participate in safety management, including the right
    • to obtain information from the “occupier” relating to workers’ health and safety at work;
    • to get trained in matters relating to workers’ health and safety at work;
    • to represent to the inspector of factories or their representative when there is inadequate provision for protection of health and safety in the factory.

In an effort to tilt the balance in favour of safety, and away from the degree of pragmatism that industry had evidently practised in both the Bhopal and the oleum gas leak episode, the definition of “occupier” was amended. An “occupier”, under the Factories Act 1948, is a person who “has ultimate control over the affairs of the factory”. Prior to 1987, the factory management would designate a person as the occupier who would be the front person with whom the Inspector of Factories would deal when any law relating to factories was breached. The Bhopal gas disaster and the oleum gas leak showed the importance of not letting the buck stop at the lower rungs of the corporate hierarchy where the occupier would be a fall guy, while the real decision-makers got away.

So, in 1987, the definition of “occupier” was amended to read that “in the case of a company, any one of the directors shall be deemed to be the occupier”. [S.2 Proviso (ii)]

Interestingly, violations of the Factories Act are indeed offences in the eyes of the law, but they are not offences as understood in the penal law of crime/ punishment. They are instead what the Supreme Court in 1996 called “absolute offences”. Whereas in criminal law, the guilt of an individual would have to be established, with the knowledge and intention of the accused persons as a central theme while furnishing proof, absolute offences are different. These are recognised as inhabiting the region of the law which deals with regulations, where established norms are to be respected and, as in the Factories Act, where ignoring the norms could mean threat to the health, welfare and safety of a workforce. It is instead to be a measure of protection against callousness in operation as also of exploitation of a working class population.

Absolute offences are unlike offences in criminal law, where it is the guilt or innocence of an accused that is on trial and the inability to prove guilt beyond reasonable doubt is a prerequisite to pinning blame and prescribing punishment. For absolute offences, responsibility has to be fixed or pinned. Where the occupier is charged with an offence under the Factories Act, “he shall be entitled….to have any other person whom he charges as the actual offender” tried, and if “after the commission of the offence has been proved,..(he) proves to the satisfaction of the court

  1. that he has used due diligence to enforce the execution of this Act,
  2. that the other said person committed the offence in question without his knowledge, consent or connivance, and
  3. that other person shall be convicted of the offence….” (S.101, Factories Act)

In an “absolute offence”, then, someone is always responsible. This is not a development that followed on the heels of the Bhopal gas diasaster; it has been in the law for decades. What Bhopal has changed in the law is the level of command that will be called in to answer charges under the Act. The change in the definition of “occupier” now calls to account not merely someone designated by the company to take the rap, but someone at a stage in the hierarchy who can call the shots.

Criminal conduct

The law governing criminal conduct, of omission and commission, by corporations and corporate directors and managers, has not evolved significantly. There has, in fact, been a certain regression that set in with the decision of the Supreme Court in Keshub Mahindra v State of Madhya Pradesh (1996), where the court reduced the charges in connection with the Bhopal gas disaster from “culpable homicide” to “rash and negligent” conduct. The knowledge of the harm likely to be caused by their conduct as corporate managers, and their intention, was watered down even before it could be judicially established whether the decisions made by them, and the practices they adopted in operating and maintaining the plant, could be considered to constitute criminal conduct. Given the number of people dead, disabled and harmed by the disaster, and the allegations of design defect, malfunctioning, reduced allocation of resources in matters of safety, and disinformation that followed on the heels of the disaster, the assumptions that underlie this change in the law are not easy to explain. The reluctance of Parliament to engage with enacting a law on corporate criminality, and the silence that the Law Commission adopted as its policy when revisiting the domain of criminal law in its 154 th Report on the Criminal Procedure Code, are further evidence of the unwillingness of the Indian State to run the risk of corporate displeasure.

These significant absences continue to inform the law.

Yet, even as the Union of India was arguing in court for UCC to be held responsible for design defects and non-use of the information that the UCC had on matters of safety of the plant, Parliament amended the Factories Act, 1948. In 1987, without any public debate, Parliament legislated to absolve the designer, manufacturer, importer or seller of plant and machinery after the user to whom the plant and machinery were handed over gave an undertaking that, “if properly used”, no harm would ensue. Seen in the context of Bhopal , had this amendment been in place before the disaster, Union Carbide Corporation could not have been held liable for the disaster. Rather, Union Carbide India Ltd would be solely responsible.

This was a strange provision introduced into the law, providing a pre-judgment of culpability. And this, in a law that had nothing to do with contracts and liability, but with standards being maintained at the workplace.

Industrial secrecy

The law has, for some time now, been protective of the right against disclosure in matters connected with industry. In the Factories Act 1948 (S.91), an Inspector of Factories is authorised to take samples of any substances used, or intended to be used, in the factory, where there is reason to believe that it is being used in contravention of the Act, or if “in the opinion of the inspector (it is) likely to cause bodily injury to, or injury to the health of, workers in the factory”. Once tested, and found to constitute evidence that an offence under the Factories Act has been committed, a prosecution may be launched. But disclosing the results of the analysis otherwise would be a wrong, punishable with imprisonment for a term extending up to six months or with fine upto Rs 10,000 or both. It is interesting that even as disclosure of information was prescribed in Chapter IV A of the Factories Act in 1987 as being a necessary aspect of safety and preparedness for hazards, the punishment for disclosure of the results from analysing samples was actually increased from three to six months imprisonment, and fine from Rs 500 to Rs 10,000.

There is a further provision that has survived the Bhopal gas disaster which places restrictions on the disclosure of information. “No inspector shall,” S.118 reads, “while in service or after leaving the service, disclose otherwise than in connection or execution, or for the purposes of this Act, any information relating to any manufacturing or commercial business or any working process which may come to his knowledge in the course of his official duties,” unless it is with the written consent of the owner of the business, or it is for the purposes of legal proceedings. An inspector breaching this injunction may be punished with up to six months imprisonment, or with fine up to Rs 1,000 or both. It is the right against disclosure that informs the mood in this provision. It is striking that there is no provision that has been considered to make punishable the non-disclosure of all the information that is in the possession of the owner which may help in mitigating the effects of the disaster. The emphasis on industrial secrecy and the enforced silences rest uneasily with the dire need for disclosure and of information-sharing witnessed in the days, months and years following the Bhopal gas disaster.

Compensation

Among the multiple tragedies spawned by the Bhopal gas disaster was the issue of compensation. The District and High Courts directed that interim compensation be paid by UCC since they were prima facie liable. This was taken to the Supreme Court in appeal by UCC. The Supreme Court endorsed a settlement that was made in the name of the victims although the identities of the victims were nowhere near being conclusively established just yet. Despite the settlement, it was the problem of making interim provision to victims of industrial disasters that occupied the legislative mind. In 1991, the Public Liability Insurance Act (PLIA) was enacted to provide for interim compensation on a no-fault basis -- that is, the person suffering harm or injury would only have to demonstrate that they had been affected by the disaster, but not have to be burdened by needing to prove that it had been due to the fault or negligence of the enterprise. In 1992 this was amended because insurance companies were unwilling to insure hazardous companies for a sum without an overall ceiling. This, although the PLIA already prescribed limits on the amounts to be paid to each affected person where death, serious injury, loss of work, or damage to property occurs.

The PLIA was an attempt to use insurance as a risk-spreading exercise, which would enable the immediate payment of minimal amounts as an interim measure. This would cover not only Bhopal-like incidents but the multitude of mini-Bhopals that are a regular occurrence. There is little evidence, however, that this account under the PLIA is being drawn upon.

In 1995 the National Environment Tribunal Act was enacted to set up tribunals to deal exclusively with the determination and disbursement of compensation. Nine years have passed since Parliament voted the law in, but it remains in the statute books. It has not been brought into force yet, and the word doing the rounds is that there are moves afoot to merge the idea of the environment tribunal (which, incidentally, has little to do with the environment and directly addresses compensation issues arising out of what are termed ‘accidents’) with that of the Environment Appellate Authority (EAA). The latter was set up by a 1997 law to “hear appeals with respect to restriction of areas in which any industry’s operations or processes … shall not be carried out…” The merger is being mooted because of under-utilisation of both fora, which ought to seem strange in this era of many accidents involving hazardous substances.

In the 20 years that have passed since Bhopal , statutory law has moved, grudgingly, some distance; but it is in the courts that the law has been largely played out. The Supreme Court’s direction that the over Rs 1,503 crore that was being held by the State be given to its rightful receivers -- the victims -- is one of the few redeeming episodes in the litigation that emerged around Bhopal . The setting up of an independent medical commission to monitor the health effects of the affected population endorsed by the Supreme Court, has been another. And the possibilities offered by the US Appeals Court that the soil and water contamination caused by UCC be cleaned by the polluter is a third. Maybe the tide is turning, and the wrongs inflicted on the victims by the system are gaining recognition. The victims have worked hard not to let public memory fade. Work on constructing a legal and judicial regime which can provide enhanced safety, rehabilitative care and deterrence is clearly overdue and needs an immediate beginning.

(Usha Ramanathan writes and speaks about law and its interaction with poverty, power and justice. Her work moves through the justice system, mass disasters, risk and safety, mass displacement, labour law and environmental law. She is based in New Delhi)

InfoChange News & Features, December 2004