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Bhopal — when Foreign Direct Investment goes wrong
Miguel Loureiro
December 31, 2004 - Bhopal has areas today where groundwater contamination levels are 500 times above the maximum limits recommended by the World Health Organisation, 500,000 disabled citizens (who have been dying at a rate of 10 a month), abortion rates five times above the normal, tonnes of toxic waste, and the unfortunate distinction of being the Hiroshima of Foreign Direct Investment
In the ‘60s, the Indian government decided to start tapping into Foreign Direct Investment (FDI). This created a tug-of-war between states to see which could get more FDI. In 1969, Union Carbide started its operations in Bhopal with a pesticide plant. In 1979, it decided to expand, both in terms of production and space. The committee for urban planning in Bhopal told Union Carbide that this was not such a good idea, as the factory would encroach on residential areas. In 1981, the chief minister allowed for this encroachment. Meanwhile, Union Carbide started producing chemical components, never revealing neither formulas nor processes. The Indian government didn’t know therefore what questions to ask. Besides they were happy with all this FDI coming into the country.
Union Carbide, it is worth mentioning, is also famous for the deaths of nearly 2,000 workers due to silicosis while building a tunnel in West Virginia in 1930, was involved in the Manhattan Project (remember Hiroshima?) in the ‘40s and made napalm for the US forces to use in Vietnam in the ‘60s. More than half of its workers suffered mercury poisoning in its Cimanggis plant in Indonesia in the ‘70s...
In poor nations, industries tend to use outdated (and therefore cheaper) plants, equipment and processes, which are banned in richer countries due to their health and environmental risks. Despite the absence of infrastructure to protect health and environment, international financial institutions (e.g. World Bank, ADB, IMF) tend to back governments to launch programmes to attract FDI in the chemical sector.
An example: the maximum allowed storage for methylisocyanate (MIC) in Europe is half a tonne — in Bhopal on December 2, 1984, 67 tonnes of MIC were stored in two tanks. These tanks have to be at a constant temperature of 5°C; if the temperature increases, a water sprinkler is activated; if the sprinkler doesn’t work, a chemical “scrubber” cleans the MIC; and if all else fails, a flare ignites. On December 2, 1984, at about 11pm nothing worked.
Why? First of all, as cost-cutting measures, the management had switched off the refrigeration unit to save about $50 a day, reduced the workforce by half from 1980 to 1984, and reduced the period of safety training from 6 months to 15 days. Second, while experts recommended fortnightly inspections and replacements every 6 months, inspections were rare and replacements were not made for up to 2 years. At this time, Union Carbide was the third largest chemicals company in the US and the seventh largest in the world.
So what happened that night? Gases started leaking from the factory into the nearby settlements covering an area of 40 square kilometres. Within 15 minutes 4,000 died. It is estimated that until today more than 10,000 people have died and 500,000 have been suffering due to exposure-related diseases. Union Carbide never said what the antidote was. In fact, when hospitals started phoning the plant, they replied “Just wash with water”.
In the immediate aftermath, Warren Anderson, the CEO for Union Carbide in India, was arrested on charges of culpable homicide, criminal conspiracy and other serious offences. On the same day, with an annual salary of Rs 10 million, he was released on a bail of Rs 20,000. In March 1992 the chief judicial magistrate issued a non-bailable arrest warrant against him. He continues to escape criminal justice.
Initially the victims filed a suit claiming damages up to $15 billion. In 1986, the Indian government (without consultation) filed a suit for $3 billion, stating that it represented all the victims. In 1989 (and again without consulting the victims) the government settled for a sum of $470 million, and used part of the money to start cleaning the area. Recently, ruling on a dispute between the BJP, the Madhya Pradesh government, and the Union Carbide Memorial Hospital Trust over sharing this money, the Indian Supreme Court said that the unpaid $343 million belong to the survivors only.
In 2001, Dow Chemicals bought Union Carbide (knowing the whole story) and has since then continued to ignore pleas to a) clean the location (there are still tonnes of MIC and other chemicals in the area); b) acknowledge Union Carbide’s responsibility and; c) pay proper compensation (a press release for Dow said that $500 “is plenty good for an Indian”).
So who has won what?
Well, Union Carbide managed to pay $70 million for the worst industrial disaster in humankind (taking into consideration that $200 million were paid by their insurance company, and $200 million had already been put aside). Not bad for a corporation that has an annual revenue of $8 billion.
Warren Anderson is living in Florida (and believe me, not under a bridge).
The Indian government has now an Environmental Protection Act, a Pollution Act, and industrial secrecy is gone, but then again the implementation of these laws is another kettle of fish.
Bhopal has areas today where groundwater contamination levels are 500 times above the maximum limits recommended by the World Health Organisation, 500,000 disabled citizens (who have been dying at a rate of 10 a month), abortion rates five times above the normal, tonnes of toxic waste, and the unfortunate distinction of being the Hiroshima of Foreign Direct Investment.
What can you do? First of all, you can sign a petition for justice to be done (http://www.petitiononline.com/bhopal/). Second, you can stop buying Union Carbide and Dow Chemical products. Third, you can make sure this does not happen in your neighbourhood. And on Friday at midnight, remember Bhopal...
Miguel Loureiro is a lecturer in development studies at the Lahore University of Management Sciences.
Coal no boon to Colombian city
DUST COATS TOWN, POLLUTES WATER AND CHASES OFF TOURISTS
By Chris Kraul
Los Angeles Times
Jun. 02, 2006 - SANTA MARTA, Colombia - This historic port city was once touted by the Colombian government as the next Acapulco, with its scenic bay, white sand beaches, colonial history and the ecotourism potential of the Sierra Nevada de Santa Marta, home to one of the largest and oldest pre-Columbian settlements in the Americas.
Then came the coal dust.
"It covers the plants, the furniture, enters into the reception area and even the rooms,'' said Leonor Gómez González, owner of the beachfront Park Hotel. "It's a permanent condition. Nothing stays clean.''
Officials say tourism is down significantly and that only one new hotel has been built in three years -- ever since coal shipments began to increase dramatically.
Riding high on the global commodities boom, Colombia is reaping an enormous windfall from exports of its high-quality coal, and millions of tons of it are being shipped a year from this sweltering, desert-like coastal area to the far corners of the earth.
But in Santa Marta, officials and residents complain that the only dividend they're getting is an unwanted one: the fine layer of coal dust spread over much of the town each morning after La Loca, or the Crazy One, blows. That's what locals call the gusts that scatter the black dust through much of the city -- from the poor barrio of San Martín to the wealthy beach enclave of Bella Vista -- hurting tourism, fishing and possibly the health of the residents.
The mining industry now overshadows tourism here in Colombia's first city, which was founded in 1524. Its deep-water port has made it a leading embarkation point for coal mined in La Guajira and César states, and the dust and residue from thousands of loads of coal passing through or near here daily on trucks and trains have smudged the city's image and cooled visitors' ardor.
At the same time, construction in the rest of Colombia is booming, as is tourism in selected areas.
Mayor Francisco Zuniga said in an interview last week that the growing presence of coal had robbed Santa Marta of jobs and economic growth.
Contamination of the Santa Marta Bay by coal dust and by at least two major spills from coal-laden barges since 2001 has severely damaged the marine ecosystem and reduced the once-rich fishing grounds, experts say.
"Right there, that's hunger,'' fisherman Humberto Grande, 20, said as he contemplated the measly load of sardines that he and his nine companions had harvested from the sea after 12 hours of backbreaking work, setting and then hauling in their quarter-mile-long net. The catch was worth about $2 each to them.
Residents worry that the coal, well known for causing severe pulmonary problems such as black-lung disease and silicosis in miners, could be a public-health time bomb.
"Many children have come down with respiratory and skin problems,'' said Héctor Ortiz, community leader of the poor San Martín barrio. ``It's because of the coal dust that the air current brings here.''
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