A chance to fight

The Supreme Court's order to disburse among the Bhopal gas victims the unspent compensation amount remaining with the RBI presents an opportunity to reopen and correct the distortions in the 1989 settlement reached between Union Carbide Corporation and the Government of India.

in New Delhi

ON July 19, the victims and survivors of the Bhopal gas disaster had reason to celebrate: the Supreme Court directed the Centre to disburse to them Rs.1,505.46 crores lying with the Reserve Bank of India (RBI) in an account holding the compensation amount paid by Union Carbide Corporation (UCC) as part of the settlement with the Government of India in 1989. What made the celebration doubly sweet is the fact that the court order lent legitimacy to the argument of the disaster-survivors and objective observers that the 1989 settlement was arrived at unjustly and the compensation amount agreed upon was grossly disproportionate to the magnitude of the disaster.

In fact, for most of the claimants, the court order, which directs that the money be distributed on a pro rata basis among the more than 5,66,000 claimants who had been paid compensation, does not signify a windfall. As the petitioners (representing 36 affected municipal wards in Bhopal) in Abdul Samad Khan and Others vs Union of India have revealed, in just one community in Jaiprakash Nagar, which was the most severely affected, 91 per cent of the claimants had received only Rs.25,000 as compensation.

The amount became so low because there were more claimants than what was anticipated at the time of the settlement in 1989. The settlement was based on an illogical estimate that there were 3,000 death claims and 1,02,000 injury claims. In other words, the Supreme Court in 1989 considered the $470 million paid by UCC as part of the final settlement towards compensation as adequate for settling the claims.

According to the 2003 Annual Report of the Bhopal Gas Tragedy Relief and Rehabilitation Department, as on October 31, 2003, compensation had been awarded to the kin of 15,310 dead and to 5,54,895 for injuries. The total compensation disbursed under both the categories until then was around Rs.1,530 crores.

The petitioners thus argued that only slightly over half of the $470 million (Rs.710 crores at the then prevailing exchange rate of approximately Rs.15 to $1) had been utilised to settle five times more claims than those estimated in 1989. The Supreme Court order of May 4, 1989, directed that 84 per cent of the amount be disbursed as compensation in 3,000 cases of death and 1,02,000 cases under four different categories of injuries, ranging from simple ones to those of utmost severity, and 16 per cent be set aside to compensate those who had lost property and livestock.

On October 16, 1992, the Supreme Court, in response to an application filed by the Bhopal Gas Peedith Mahila Udyog Sanghathan, an organisation representing disaster-survivors, gave a clear direction that the compensation amount lying in the Settlement Fund should not be used for any purpose other than compensating the victims.

The latest directive of the Bench consisting of Justices Shivaraj V. Patil and B.N. Srikrishna to disburse the compensation amount remaining with the RBI among those whose claims had been settled and in similar proportion to what they had received earlier, tacitly acknowledges the inconsistency in the Supreme Court's 1989 order facilitating the settlement. For the first time, the court has recognised that the magnitude of the gas disaster was five times more than what was estimated in 1989. The court, in other words, has given its stamp of approval to the figures of death and injuries as determined by the claims courts. It is this message implicit in the July 19 decision that pleased the disaster-survivors more than the court's clearance of another round of a protracted measly-claims disbursement process.

Adjudication of claims began in 1992 and several claims are still to be settled. According to one estimate, it would take eight years to settle the remaining 16,000 claims by the present claims courts. That was one reason why the Centre was hesitant to disburse the unspent amount in the Settlement Fund before all the original claims were settled.

Meanwhile, however, the compensation amount, which was retained in a dollar account, not only accrued interest but also appreciated in value with the rising exchange rate of the dollar vis-a-vis the rupee. In 1992, the exchange rate was approximately Rs.30 to $1, and in 2000 it was Rs.45 to $1. By 2003, when the present petition seeking disbursal of the unspent amount with interest was filed in the Supreme Court, the balance in the Settlement Fund almost equalled the Rs.1,520 crores that had been spent so far. Disbursing this amount on a pro rata basis did not appear to hurt anyone's interest since the Supreme Court allowed placing of the management of the Settlement Fund in the hands of the Welfare Commissioner, Bhopal, only on the condition that it would not be utilised for any purpose other than compensating the victims.

Indira Jaising, Senior Supreme Court counsel representing two organisations working among the disaster-survivors, said: "If, indeed, about 5,70,000 claimants had been paid compensation as per the terms of the settlement, more than five times the settlement amount would have been required to compensate all of them." The court has permitted the organisations BJPMUS and the Bhopal Gas Peedith Sangharsh Sahayog Samiti, Delhi, to file an application before it in this regard. In 1991, the Supreme Court had agreed that if the number of victims was more than what was estimated then, it would be open to the victims to come back to the court requesting it to reopen the settlement and review its adequacy to render justice to them.

In 1991, the Supreme Court did not expect the number of claimants to rise five times, and asked the Centre rather than UCC to meet the shortfall in the compensation amount, if any. However, the genetic damage caused by the disaster meant that the children of victims and their descendants also medically suffered the impact of the tragedy in one way or the other, and would add to the number of claimants substantially. The court's July 19 direction to the Centre, therefore, has provided an opportunity to the court as well as the Centre to correct the distortions in the 1989 settlement and even seek legally UCC's accountability in filling the huge gap in the compensation amount that is legitimately due to the victims.