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Recovery of the government

Political management of the crisis
Learning by government institutions

Political management of the crisis

The Bhopal crisis presented a major political problem for the Madhya Pradesh state government and the central government of India, both of which were controlled by the Congress Party. The accident occurred three weeks before national parliamentary elections, and the Congress Party stood to lose heavily if its partners in the state government were seen to be implicated, or did not deal firmly with Union Carbide.

Initially, the state government tried to place all the blame squarely on Union Carbide Corporation. It sued UCC for damages on behalf of victims. In a largely symbolic gesture against the company, WCC's Chief Executive, Warren Anderson, was arrested on his arrival in Bhopal. The government thwarted several efforts by UCC to provide relief to victims, in an attempt to prevent the company from earning goodwill among the public. This early political management was very effective. In nationwide elections that took place four weeks after the accident, the Congress Party won both the state legislative assembly and the national parliament seats from Madhya Pradesh by wide margins (table 5.3).

The combination of a successful political containment strategy and an ongoing legal case shifted political attention from Bhopal, and the issue did not receive high priority for four years. It resurfaced in 1989 at the time of the next elections and a few months after the Congress-dominated government of Rajiv Gandhi reached an out-of-court settlement on compensation with UCC.

Key political events related to Bhopal are shown in table 5.3. The Congress Party lost the 1989 elections and were replaced by a National Front coalition government, led by Mr. V.P. Singh of the Janata Dal Party and supported by several minority parties (Bharatiya Janata Party [BJP] and Communist parties). Singh had campaigned on a social justice platform that appealed to the weakest economic segments and lowest castes in society (which included Bhopal gas victims). His government decided to appeal the compensation settlement reached by the previous government. It reinstated civil and criminal cases against Union Carbide and supported victim activist lawyers who had challenged the Bhopal Ordinance.

Table 5.3 Political changes during the Bhopal crisis

Date Event
December 1984 National and state parliamentary elections held. Congress Party wins both at the centre and in Madhya Pradesh (M.P.) state
1985-1988 Government provides relief to victims, and fights legal case
January 1989 Rajiv Gandhi's Congress Party government settles compensation suit with UCC
May 1989 National and local parliamentary elections held. Congress Party loses. V.P. Singh of Janata Dal becomes Prime Minister of a coalition government. M.P. state government controlled by Bharatiya Janata Party
December 1989 V.P. Singh declares interim relief and supports victims' demand for reconsidering the compensation settlement
May 1990-1991 V.P. Singh government replaced by another coalition government. Political turmoil and constitutional crisis lead to midterm elections
March 1991 Interim relief payments started in 37 wards of the city
May 1991 Rajiv Gandhi assassinated. Congress Party wins mid-term elections
October 1991 Suprement Court upholds the settlement partially, and ratifies the Bhopal Ordinance
December 1991 The government constitutes a committee to oversee compensation distribution
1992-1993 Religous strife and riots dominate politics. Gas victims sufferriot losses

In a populist move, V.P. Singh announced that interim compensation of Rs 200 per month would be paid to all victims from government funds (not from UCC settlement money). A total of US$260 million was to be used for these payments, which were to be deducted from the final compensation settlement. Owing to the lack of good medico-legal documentation, it was impossible to decide exactly who should receive the compensation. Therefore, the government chose 37 wards of the city as "gas affected areas." Everyone within these wards was eligible for compensation. The population of Bhopal had virtually doubled over the seven years since the disaster. Therefore, many people who applied for, and got, interim compensation (starting in March 1991) were not victims of the accident.

Interim compensation provided much-needed economic help to some genuine victims. However, it was also a clever political ploy by the V.P. Singh government (which was not expected to last long). By gaining the sympathies of victims, the government hoped to pick up votes in the coming mid-term elections. Local politicians extended the ploy by arguing that a larger area of the city should be declared "gas affected." This action made real victims irrelevant, and completely politicized the definition of "victims." As a result, the nature of the Bhopal crisis was profoundly changed. Victims were no longer defined by scientific standards or medicolegal documentation, but by political considerations. They became an economically advantaged category, instead of aggrieved and injured individuals. Everyone wanted to be counted as a gas victim, so that they could collect money from the interim relief programme. By the end of 1991, several local leaders and ministers of the state government were agitating to have their own wards and constituents declared as "gas affected."

Singh's National Front government eventually fell from power and new elections for the National Parliament took place in May 1991. The Congress Party returned to power in New Delhi under the leadership of Prime Minister P.V. Narasimha Rao. In Madhya Pradesh, the previous BJP government retained power, thereby diminishing the political significance of Bhopal for central government leaders.

In October 1991, India's Supreme Court upheld the compensation settlement but cancelled Union Carbide's immunity from criminal prosecution. The Court instructed the government to distribute the available $470 million compensation money to victims immediately. This ruling also allowed further prosecution of criminal cases against key Union Carbide executives (including WCC's former Chief Executive Officer, Warren Anderson). In March 1992, the Bhopal District Court asked for extradition of Warren Anderson to stand trial in this case.

Learning by government institutions

Although the Bhopal compensation case dominated the Indian government's attention, actions were also taken to prevent similar accidents in the future. A variety of legislative, legal, and administrative changes were aimed at improving institutional risk-management capacity. Three key acts that dealt with industrial hazards were amended, i.e. the Factories Act (1948), the Water Act (1974 and 1977), and the Air Act (1981). The Environmental Protection Act of 1986 was also enacted. This comprehensive new law vastly improved regulatory coverage of hazardous technologies and substances. It empowered government inspectors to enter, inspect, and test any equipment at plants. Inspectors can now conduct searches, seize equipment, and shut down high-risk operations. Citizens and public interest groups can approach the government or the courts directly to seek redress against violations of these laws. Top management of companies are also now liable for of fences under the act. Cumulatively, the regulatory changes have considerably strengthened statutory control over all aspects of industrial risks: these include safety standards, worker health standards, maintenance standards, emission standards, factory inspection procedures, emergency planning, liability for damages, early warning systems, citizen rights to information, and penalties for violation (Bowonder, Kasperson, and Kasperson 1994).

The spirit of the regulatory changes was reinforced by the judiciary in several landmark cases. In December 1985, the Supreme Court of India established the principle of "strict and absolute liability" in the Shriram Food and Fertilizer Industries oleum leak case. This means that owners of hazardous plants are strictly and absolutely liable for damage originating from their activities, regardless of who is at fault. The Supreme Court also established the principle of "vicarious liability" in another important case involving Modi Industries. According to this principle, top executives are responsible for implementing the provisions of the Water Act, unless violations were committed without their knowledge. In a tannery pollution case, the Supreme Court ruled that lack of financial capacity cannot be used by smaller companies as an excuse for not treating polluting effluents.

Besides creating these new legal principles and doctrines, the Supreme Court began taking public interest litigation for environmental protection very seriously. Specific judges encouraged such litigation and took an activist stand in many cases. The overall effect of these actions was positive. The judiciary that historically was unresponsive, bureaucratic, and inefficient began to be viewed as an ally in environmental protection.

The government also initiated several administrative changes that put teeth into the laws. Inspection and enforcement efforts were intensified. New administrative units were set up at the state level to monitor compliance of laws. New multidisciplinary task forces were created to analyse existing hazardous facilities, to review emergency plans, and to improve safety practices. A national Disaster Training College was also set up in Bhopal. Factory inspection procedures were revised in accordance with a new hazard priority classification system that focused inspection efforts on high-risk facilities.

Despite these seemingly extensive changes, the institutional capacity to identify hazards and deal with emergency incidents has not changed much. In two major incidents that took place since Bhopal, emergency planning and systematic evacuation were still deficient. Failure is partly due to inadequate implementation of new policies. There are severe shortages of resources, toxicological information, and skilled personnel, and the poor quality of the industrial infrastructure makes it all but impossible to bring about real changes (Bowonder, Kasperson, and Kasperson 1994).

Implications for long-term disaster recovery

Crisis morphology
The permanence of victims
Revising stage models of disasters
Policy implications

The Bhopal crisis was a landmark event. It was the worst-ever industrial disaster, as measured by the number of direct immediate fatalities. Its impacts were international in scope and extended in time. It raised many issues for disaster recovery theory and practice, including the burgeoning hazardousness of third world cities. For these and other reasons, Bhopal opened a new discourse on industrial crises, crisis management, technology-environment relationships, and technology-society relationships. It set into motion new research studies and new curricular programmes in crisis prevention and management (Shrivastava 1993; Jasanoff 1992). Here I want to examine only a few of the main theoretical issues raised by Bhopal and to suggest propositions about future disasters whose empirical verification must await the test of time.

Crisis morphology

Industrial crises do not end. They simply change form and content.

In existing theory, crises and disasters are typically viewed as events or processes that are clearly delineated in time and space. Every crisis has an end that is usually treated as a return to some form of normality (Morin 1993; Perrow 1984). But the Bhopal crisis has lingered on for nine years. Criminal lawsuits are still pending in courts, and victims still face economic disaster. Certainly, the form, content, and focus of the crisis have shifted: it was once mainly a medical and ecological crisis; then it became primarily a legal and corporate crisis; now it has become predominantly an economic and political crisis. Moreover, with each change in form, the spatial reach of the crisis also extended: at first it was a local crisis confined to Bhopal; then it became an international social crisis and an industry-wide financial crisis. Drawing on US examples, Edelstein (1988) came to similar conclusions about the continuous spreading of crises. He remarked that the changing forms of crisis often go unnoticed because impacts are unevenly distributed and mixed in with impacts attributable to other economic, social, and political processes.

The morphology of crises is poorly understood. We do not know how or why one type of crisis evolves into another. If recovery is to be improved it will be necessary to undertake studies that trace and analyse such changes.

The permanence of victims

Victims are permanently victimized because of their socially structured position of disadvantage.

The sorry history of Bhopal's victims leads me to question why victims are unable to fare better in industrial crises. In the struggle for redress, victims of major crises possess some important advantages: these include publicity, the sympathy of interested publics, and the presumption of innocence. World media attention is focused on them. They have the sympathy of important people and organizations. But, though widely deemed to be innocent, they are still not able to get the justice they deserve. Typically, appropriate compensation for damages is denied or delayed. Even when compensation money is made available, it is often misused or misdirected to the wrong people. Why is this so?

In poor developing countries, most victims are themselves drawn from the poorest socio-economic groups. Their structural position in a society puts them at special disadvantage. They do not have access to instruments of justice or to political power. They usually lack sufficient information to establish a strong legal claim for the restitution of loss. In any event, they cannot afford to hire high-powered lawyers. As they pursue damage claims with meagre resources they must continue a daily struggle for survival. Delays and denial of just compensation are a frequent result (Couch and Kroll-Smith 1991; Reich 1991).

Proposition two opens up a host of empirical questions. What part does social structure play in recovery? How, for example, do socially advantaged victims, such as those involved in airplane accidents, fare in comparison to victims of industrial accidents? If the salience of social structure is borne out empirically, it would have important implications for long-term recovery. Recovery efforts would need to be sensitive to the socio-economic class characteristics of victims (Kreps 1989).

Revising stage models of disasters

The seeds of crisis are sowed many years prior to a triggering event. Study of antecedent conditions may hold the key to crisis prevention.

Stage models of disasters are in need of modification (Turner 1978). According to conventional wisdom, a disaster is initiated by an event that triggers an impact and then gives rise to a series of stages that include emergency response, post-disaster recovery, and return to normality. Although the pre-disaster period is crucial for improving crisis prevention, what happens before the disaster occurs is generally not well understood.

Many of the factors that cause crises become embedded in organizational and societal systems many years before the crisis emerges. They weaken such systems and make them more prone to crises. Organizations prone to crises have been found to go through a cycle of expansion, contraction, and uncertainty (boom, bust, and chaos). This cycle can occur over several years. During expansion, they recklessly overbuild capacity; during contraction they cut back expenditure. Many of the cut-backs (such as in personnel, maintenance schedules, and inventories) have deleterious effects on safety (Shrivastava, Miller, and Miglani 1991).

Policy implications

Crises are double-edged phenomena: they wreak havoc but they also provide opportunities for change. Change becomes feasible, even desirable, because crises unfreeze past behaviour patterns, question past assumptions, and present a clear impetus for change.

Bhopal provided a stimulus for major changes around the world. It helped to usher in new regulations for chemical industries and other hazardous industries. It changed the structure of the overseas liability insurance industry. Chemical companies made voluntary organizational improvements and new investments to avoid Bhopal-type disasters. Communities in many parts of the world changed their perceptions of local technological and industrial risks. They initiated programmes of risk assessment, risk communication, and emergency preparedness (Shrivastava 1992).

The three propositions stated above in italics underline both the importance and the potential of crisis-prevention strategies. Numerous and frequent early warnings are emitted from hazard systems. Unfortunately, industrial managers tend to focus heavily on technological early warning signals that come from safety and monitoring equipment. All too often, they ignore more subtle, if ambiguous, organizational clues that could signal impending disasters. For example, among the organizational behaviours that may indicate systemic problems are the following: lax security of operations, indiscriminate cost cutting, lapsed maintenance, frequent minor incidents, and increases in routine repairs or equipment down time. If these problems are analysed quickly they can point to the potential for deeperseated failures that may cause system breakdown. Policy makers and corporate managers need to expand their notion of "early warnings" to include both technological and organizational sources of error.

Bhopal also teaches several important lessons about disaster management in a developing-country context. First is the importance of good medical information that can be used in legal actions. The lack of adequate medicolegal documentation is a major hindrance to assessment of health consequences and development of appropriate medical treatments. It also complicates conflict resolution over compensation. Lack of accurate assessment of losses precludes identification of real victims. With the passage of time, there is often no way of distinguishing real victims from economically motivated fake victims. The victim compensation system can be abused severely, with injustice to the needy. Disaster management can benefit from development of baseline health data and medical surveillance infrastructure to document health effects of disasters.

Another disaster-management lesson involves the need to empower victims and encourage their independence. Industrial disasters often involve many poor victims. Charitable and social institutions help victims with material support. They also represent victims in their struggle for just compensation. Despite the good intentions underlying such representational arrangements, victims lose their voices as the struggle unfolds. Victims' representatives (such as government, lawyers, public leaders, voluntary groups) inadvertently usurp the right of victims to control the terms of debate. In Bhopal, the Government of India did this through the Bhopal Ordinance.

From the victims' perspective, it is important to maintain the identity and independence of their representatives. They should also be allowed to participate directly in any conflict-resolution processes. This can be done in several ways: victims may be permitted to pursue private avenues of redress that complement the work of formal representational groups; advisory structures, consisting of victims, can be created to give substantive inputs to representative groups.

For corporate managers, the challenge of Bhopal is the challenge of grappling with fundamental systemic sources of industrial disasters. Corporations can minimize the likelihood of failures by directing strategic attention and resources to issues of safety, environmental protection, and public health. They can minimize their company's vulnerability to disasters by changing the technologies that they use. It is both possible and wise to forego inherently hazardous technologies and to replace them with technologies that are environment friendly and safe.

Risk cannot be completely eliminated from industrial operations. Therefore, companies need to be prepared for crisis management. They should develop crisis-management teams and emergency plans, and should educate customers and the public about product safety and environment-protection measures. Finally, companies operating in developing countries cannot count on existing infrastructure and public services. It may be necessary for companies to supplement local infrastructure by investing in electric power, water supply, sewage treatment, waste disposal, and communications services. Risk can also be reduced by locating industrial plants away from population centres. In developing countries, special attention must be paid to keeping people away from hazardous facilities after they have been established.

The lingering nature of industrial crises requires government and corporations to be engaged in disaster recovery over an extended period. The Bhopal crisis has lasted for 10 years and continues; the Minamata crisis has evolved over 40 years and still remains partially unresolved. These long time frames suggest that ad hoc and temporary organization of disaster recovery is not adequate. As a society, we need more carefully thought-out strategies and permanent institutions in charge of the recovery from industrial crises.


1. Use of the terms "disaster" and "crisis" partly reflects the development of specialized language in two different research traditions. Students of disaster have focused on natural or technological events that overwhelm human coping capabilities (e.g. earthquakes, industrial explosions). Students of business management have concentrated on economic shocks to firms and public institutions (e.g. market failures, hostile take-overs). When a combination of physical events and economic shocks occurs simultaneously, a complex concatenation of impacts may follow. It is the latter process that is addressed in this chapter.


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