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The Role Economic Forces Played In Influencing Legal Developments After Bhopal Gas Leak

Posted on September 8, 2011 in Specials

By Shailza Sharma:

The Big Push theory in Economics proposes that the progress of an economy depends on the support of foreign investment in the domestic companies. The Indian Economy was characterized by protectionism, extensive regulation and public ownership from 1947 to 1991. In these years of India’s ‘inward looking’ economic policy the Bhopal tragedy took place in 1984. It now symbolizes the exposure of India and the unsuspecting Third world to the great and unknown dangers concealed in the modern technology brought to them by multinational corporations (1).

The emergence of the ‘global risk society’ as Ulrich Beck says and as further explained by Upendra Baxi in his paper, there is a struggle over the scale, degree and urgency of the risks involved. Thus, the looming question is whether the opening up of the Indian economy also opens up portals for events such as the Bhopal catastrophe? Is this risk justified in the name of development or modernization? The main aim of corporations like Union Carbide is to use the cheap labour and low safety standards in a developing country like India to expand profits.

Even today, when our country is free of colonizers; a new method of colonization which has emerged in this globalized age is the concept of post modern capitalism. This is evident in the importance given to the plight of the corporations as compared to getting justice for the victims of Bhopal. This is an emerging dimension of economic exploitation by the developed country. According to Marc Galanter, many countries do not have the capacity to develop such legal systems that can handle gigantic and complex lawsuits. Since the very beginning the focus of Bhopal activists was to get healthcare and economic needs of the victims satisfied which was never complied with.

In most societies there is pretence that government affords more protection than in fact it does (2). The Indian government proved this point openly when the first lawsuit filed against the UCC was in the US judicial system, although the same was rejected by Judge Keenan on the basis of forum non conveniens. Judge Keenan also pointed out that if the American government decided this case, then it would ‘revive a history of subservience and subjugation from which India has emerged’ (3). In the end the litigation was sent back to India, one of the reasons being that India was once a colonized nation and by allowing the US to try this would have meant the reiteration of the superiority of a developed nation economically and politically.

Marc Galanter points out that it is the ‘goodness’ of the legal system in which one operates that finally lets you achieve justice for its citizenry. One of the many contentions of UCC to avoid liability was that if any entity was responsible for the relevant acts or omissions it was UCIL, its Indian subsidiary. This led the Government of India to examine the principles of corporate law regarding the standards of protection applicable for owners of hazardous products. Further, the only way of escaping legal liability and moral responsibility known to the Northern corporate world is the way of merger and amalgamation and of divestiture of assets to successors-in-interest being The Dow Chemicals (4).

Thus, first the pinning of responsibility on the Indian subsidiary UCIL and then the shifting of hands of management in favour of Dow Chemicals very clearly marks play of economic forces which prevented the Indian judiciary to get justice for the Bhopal violated effectively.

It is important to take notice of the fact that economic growth, globalization and modernization are necessary to combat such disasters effectively. The economic power and control held by the Multinational Corporations gave the power to set up market in unsuspecting countries like India as opposed to their home countries with stricter safety standards and regulatory regimes. As an industrializing country we lacked the proper infrastructure to cope with an industrial accident like the one in Bhopal. As mentioned by Ulrich Beck there is an emergence of ‘global risk society’ which does not include countries like India due to their incapability or powerlessness of managing such risks.

The failure of the Indian government to hold the UCC liable and pierce the corporate veil goes to show that UOI was ready to industrialize the nation even at the cost of the Bhopal victims. This helps resurface the notion of ‘modernity’ that we believe in which has been borrowed from the West, was evident when the government aligned itself with the corporations in order to support economic growth.

Thus the enthusiasm of the developing nations to embrace industrialization through a transfer of technology from industrialized nations rendered the developing nations vulnerable to risks involved with the use of these technologies (5). All these economic factors led the UOI to supply a very weak legal response to the Bhopal victims which remain pending even to this date.


(1) Marc Galanter, When Legal Worlds Collide: Reflections on Bhopal, the Good Lawyer, and the American Law
School, Pg 292
(2) Marc Galanter, When Legal Worlds Collide: Reflections on Bhopal, the Good Lawyer, and the American Law
(3) Writing About Impunity, Upendra Baxi, Pg 28
(4) Writing About Impunity, Upendra Baxi, Pg 29
(5) Two Tragedies in Bhopal: A Case Example in the Context of Global Economy, Deborah Wood, May 12, 2001,
Pg 22