Oil and Bhopal.

One of the saddest images I’ve seen. Full slide-show on NYTimes.

BP Turtle

And in tonight’s report Colbert said “BP is a foreign company operating in our country. Which shed our blood, and destroyed our land and livelihood”. Then he discussed punishing British Petroleum. In other news US Assistant Secretary of State for South Asia Robert Blake said no further action will be taken against Union Carbide for the worst industrial disaster in the world which killed 20,000 people on the night of December 2nd 1984. Always have this in mind when we speak of foreign direct investment as the only road to paradise.

Update: Today’s Time magazine has an article on the same lines ,

Although environmental legislation was ramped up in the wake of the Bhopal disaster, companies continue to operate in India in ways that severely — if not as dramatically — pollute the environment and impact people’s health and livelihoods. Britain-based mining major Vedanta, for instance, has faced censure from Amnesty International for violating the human rights of communities in Orissa, where it operates bauxite mines. India continues to be the world’s e-waste dump. Of late, the government, keen to attract foreign investment to its nascent nuclear energy market, has been pushing a bill to limit the liability of a nuclear-plant operator to $111 million. “We’ve learned nothing from Bhopal,” says Supreme Court lawyer Prashant Bhushan. “There is a drive to attract foreign investment overwhelming all other considerations.” Opposition parties have already demanded a rethink of the proposed legislation in the face of the Bhopal outcome.
Read more: http://www.time.com/time/world/article/0,8599,1995029,00.html#ixzz0qOJKBire

Although environmental legislation was ramped up in the wake of the Bhopal disaster, companies continue to operate in India in ways that severely — if not as dramatically — pollute the environment and impact people’s health and livelihoods. Britain-based mining major Vedanta, for instance, has faced censure from Amnesty International for violating the human rights of communities in Orissa, where it operates bauxite mines. India continues to be the world’s e-waste dump. Of late, the government, keen to attract foreign investment to its nascent nuclear energy market, has been pushing a bill to limit the liability of a nuclear-plant operator to $111 million. “We’ve learned nothing from Bhopal,” says Supreme Court lawyer Prashant Bhushan. “There is a drive to attract foreign investment overwhelming all other considerations.” Opposition parties have already demanded a rethink of the proposed legislation in the face of the Bhopal outcome.

9 Responses to Oil and Bhopal.

  1. Deepak R. June 8, 2010 at 12:51 am #

    The nuclear liabilities bill also stands even more exposed now.

  2. bombaydosti June 8, 2010 at 2:12 am #

    In the wake of the Bhopal and the BP tragedies, your caution is relevant. However, some questions. What has happened in Bhopal is an industrial hazard, caused by the negligence of the authority as the court has rightly said. But why is the question of them being Indian or Foreign, that important. Considering that compliance of the law is an issue, with Indian firms also, should not our focus be on enforcing the law rather than on focusing our attention on MNCs?
    Also, exploitation of labour and corruption is often the way of working for even Indian firms. And its also common knowledge that most of the MNCs have a much more robust system for governance, be it for safety, law or environment. They have often taken the limelight because, of course, the impact of attacking the big players would have a faster response, from society

  3. Somebody June 8, 2010 at 6:38 pm #

    Hey BVN .. Colbert’s comment is so shallow and, surprisingly, so is the tone of this post. I am guessing that the couse of action should be the same whether it is BP or an American company. And as Bombay Dosti has rightly pointed out, so should be the case with Bhopal. I am not aware of which stupid politician has said that FDI is the “only” road to paradise – it is definitely not – but again, nothing in what you have posted establishes that it is detrimental to growth!

  4. bvn June 8, 2010 at 11:12 pm #

    @Deepak, good that the discussion in the national media is pinning on the Nuclear liability provisions. And the govt also seems to consider it.

    @Babusyed, thanks for the link. Good read.

    @BD, “enforcing law” is using the basic framework that if you break the law, you will be punished. Right now, the costs enforced by the oil leak is costing BP on 2 fronts. One, the markets have punished BP by driving its shares down almost 30%. Two, the direct costs of clean up and compensation. Where it leaves BP is in a noisy Wall Street where the weakened company can be taken over by its immediate competitors. My point is it hits hard when it hits close to home. American public anger is bringing a giant corporation down. Indian public anger cannot touch the perpetrators of Bhopal. Very simply, if the same disaster had happened off the coast of an African country, how do you think BP will be punished. Around the same point, BP will be more cautious about it operations in US and Western Europe (because that is the home market) compared to all other markets. See my point is not about enforcement, my point is about accountability. When the assets of a company are outside the nation, and the most important truth in today’s world that corporates care about – the listed stock market and the majority share holders are outside the nation, there is very little that the sovereign nation can do in times of a catastrophic. If Marlboro invests 2000 crore in India, and launches a cigarette which causes damages worth 10000 crore, and the US govt says they wont do anything like they’ve said now, there is very little leeway in a judicial process to punish the culprits. If ITC was the company in question, a mistake like that would be the end of that company. for Marlboro, it would be 3 days of bad press in NYTimes, and 7 days of bad press in BBC (which again american investors don’t watch) .This is the reason why Indian govt banned Chinese telecom manufacturers in India. I am not being a nationalistic xenophobe. All I am trying to say here is that I wish nations weren’t there, but they exist. And some pigs are more powerful than others, and when we deal with them, be it buying a Chevrolet car or a Canon camera – understand that they are foreign and they can leave in the next ship. If a german company wants to store a thousand tonnes of cyanide gas in Trivandrum, I will chose not to shut the fuck up even if I am called a old world anti-“development” buffoon.

    @Somebody, It was a 100 word snippet where the subject matter was chosen to be deliberately provocative, significant in implication, and relevant to the policy decisions of corporate competition. btw nice surname 🙂

  5. Somebody June 9, 2010 at 10:20 am #

    Well, agree that the attempt was to be provocative, I just could not see the implication.
    I do agree with you that international jurisdictions could be an issue and enforcement is a real challenge. I also agree that the incident definitely warrants more of a public response than it has gotten and i don’t support the decison. I do always wish that we, as a country, have more of a ‘wont take any damn s***’ attitude. However, i also dont agree with your conclusion and direction of thought.
    Would you say that Keshub Mahindra had no role at all to play in all of this? Why are you not pointing to him at all? And enforcement is an issue in India irrespective of the corporation being Indian or global, i am sure you and me can come up several instances where Indian corporates have gotten around with messing around big time. Why dont we try to fix that, ensure nobody gets away with screwing up and people are not taken for granted. I just disagree on what the real issue is – its not FDI its the attitute and the legal system, or rather, lack of it in a certain way!

  6. bombaydosti June 9, 2010 at 10:36 am #

    Thanks, for your comment. Today seems to be the day for long comments

    To begin with, America is not the home country to BP and still, BP seems to be paying heavily for their negligence. Even though, BP’s ownership lies outside the country, America is too huge a market for them to ignore. But you disagree with that model, don’t you? Your other example, ITC, was a foreign company to start with, and had got increasingly indianised. An example, maybe, we should remember!

    Your question is whether BP would have paid as heavily if the same had happened in Africa?

    My response is that, it is the wrong question to ask, specially because I don’t really buy your argument that an ITC, would have been asked to shut shop, if they manufactured cigarrettes which caused damages worth 10,000 Crs in India.

    But even before that, why do you need disasters, to lay down accountabilities?

    We talk about economic growth of our country to be at around 8-9% We can see malls, and phones and metros.We all know, work is happening but employment generation rate has decreased. Not because, people are working less, but because, the Industrialists have learnt the art of not including them in the formal labour system. This means that they do not receive the Social Security benefits like PF, ESI and even the minimum wages. Would you agree, that family owned businesses ( not the professionally run ones) are the biggest culprits in not complying with the law of the land? That even Govt projects are contracted and subcontracted to the unorganised sector.
    You don’t need disasters that happens once in twenty five years.
    There are disasters happening everyday, done by everyone, including Indian Companies. By your logic, how are they held accountable TODAY?

    If you remember, you would remember that Vapi in Gujarat was ranked to be the fourth most polluted city in the world in one of those lists. I used to drive past that highway between Vapi and Silvassa almost daily for an year and half. For that 15 mins, we were sure to raise our window glasses, because, it was obvious, that Vapi, was indeed truly polluted. I did not, see, how different the smoke from all those Indian companies could affect me differently. Maybe there was smoke and chemicals released from some MNCs also. Does it make a difference? I’d rather have accountabilities for any industry to have a healthy neighbourhood.

    Did you read about the Radiation Scams regarding mobile towers? Is there going to be a difference in the cancer caused by the radiation of Airtel and vodafone(if that was true)?

    What I mean is, it does not matter whether BP would pay the price in Africa(God Forbid) , because, another African company itself, would not pay the price. Therefore, ensuring BP does not enter Africa is not the solution. Its ensuring that the anyone drilling petrol there, would not be negligent.

    However, I understand when you say, about, how in case, they do show negligence, will they take the next ship home? Those are all issues of “how” FDI should be done, and regarding their liability. A debate of that order, would be one of a different kind, and one which is defenitly needed.

    However, when you talk about a Bhopal, I really hope, we ask the right questions, of how, Industries, in general take responsibility for their environment, safety and labour.

    You know, why I am writing this. Having worked in a MNC, for some time, I feel a little uncomfortable at the generalisations, you put forward. I know that there are a number of MNCs, whose code of ethics runs through the company. I am not saying that the Indian Companies vs MNCs is a Devil vs Saints game, but a number of MNCs invest a lot of money to ensure that they follow the law of the land, and keeping it clear that bribes are not the way of life. Having followed those governing mechanisms of safety, labour and environment, to the extent of fatigue, hearing these comments makes me say, “Ouch”.
    I also see, Indian companies have it their way, through the tunnels of corruption which the system offers.
    PS: please be sweet and spare my company from this discussion… 😉

    Maybe, it would be better, to focus our attentions, on how the Governance mechanisms can be made more transparent and with lesser possibilities of corruption. How can technology help in that? There are just too many possibilities.

    As regards your post, with a concluding statement like that, yes, its interestingly, provocative. The question is, are you saying that you would not raise your voice, if it was an Indian company storing Cyanide?

  7. Somebody June 9, 2010 at 10:44 pm #

    Hey BD, wishing there was a ‘like’ button here now! 🙂

  8. Somebody June 9, 2010 at 10:50 pm #

    And BVN, just wanted to point out that the supposedly “Britain-based” Vedanta group is actually led by Anil Agarwal, an Indian, and most of the group’s operations are really in India. Not really a typical FDI case in the sense of it, my friend. I am not sure if these are the enterprises you want to cite if you really want to discuss FDI and accountability of non-Indian corporations. Don’t know why you keep weakening your case!
    N yes, my name is still interesting!

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