Corporate liability caps need rethinking

Large corporations must be held accountable for industrial disasters that cause environmental damage and loss of life, says director of the campaigning organisation the Centre for Science and Development in India, Sunita Narain.

In the same week that US president Barack Obama said he would not let BP ‘nickel and dime’ his people in the ongoing deepwater oil spill in the Gulf of Mexico, an Indian court did exactly that to the victims of a poisonous gas leak from a pesticide plant in Bhopal more than 25 years ago, says Narain.

In the criminal case against US company Union Carbide and its Indian subsidiary, seven officials from Union Carbide India were found guilty on diluted charges of accidental injury (equivalent to a traffic accident), while all of the accused from the parent company were "let off", she explains.

The amount settled for the thousands of human lives lost and maimed in Bhopal — US$470 million in 1991 — was "piddly", says Narain. It represents less than half the amount given for the environmental damage caused by the Exxon Valdez oil spill that hit the Alaskan coast in 1989.

In the Bhopal case, says Narain, "the question of liability was hushed up, largely because it involved a US company [and] nobody wanted to mess around with this corporate powerhouse".

Now the Indian government will be presented with a Civil Liability for Nuclear Damages Bill that caps operators’ liability at 5 billion rupees (about US$107 million), with additional damages of around 23 billion rupees (US$495 million) to be made good by the government. "This amount is a joke when it comes to a nuclear accident", says Narain.

In the United States, the US$75 million cap on corporate liability for oil spills — passed by US Congress in 1990 — has now become a point of friction in the fight to claim damages for Gulf of Mexico oil spill.

India must rethink the nuclear damages bill — corporate liability should not be capped, but based on full costs, concludes Narain.