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The cost of free trade behind closed doors
December 2001: Repeated demonstrations at every meeting of the World Trade Organization, most recently held at Doha, have placed opposition to globalization squarely in the public's consciousness. Some Indian observers might question the motives of the protestors, and perceive them as uninformed. However, the protestors themselves point out the opposite - they are quite informed of the environmental and social costs that globalization is taking on India and other countries. The only way in which they are admittedly uninformed is about the opaque decision-making process that governs the investments regime. The curtain of secrecy behind which global institutions and corporations now promote their objectives and deny accountability to the Indian people, has become the sole measure by which free trade is truly "free".
This process did not begin in the last few years. Instead subversion of India's health and environmental standards has been ongoing for decades. To understand that, examine the experiences of the people of Bhopal whose experiences with the pitfalls of unregulated foreign investment long predates the current debate.
On the night of December 2nd-3rd 1984, a cocktail of gases consisting primarily of Methyl Isocyanate (MIC) began to leak from Union Carbide Corporation's pesticide factory in Bhopal. The safety sirens at the plant were turned off. Nearby residents, including many factory workers, came to know of the leak only once the gas had entered their homes. The impact of inhaling the gas was immediate and devastating. Eyes, mouths and lungs burned, and the victims tried to flee through the narrow streets of the city. Some were wracked with seizures, and fell under trampling feet. Many victims drowned in their own bodily fluids. The old, infirm and very young simply died in their sleep. As dawn broke over Bhopal, it was clear that the city was the site of a brutal massacre. In just a few hours, thousands of innocent people had been put to a gruesome death.
The scale of the devastation that followed, and continues to this day, is heart rendering. 7000 people were dead within days, and 13,000 more have perished since then. An estimated 120,000 people still need medical attention. Hundreds of thousands of others suffer from blindness, early age cataracts, menstrual irregularities, premature abortions, recurrent fever, neurological disorders, cancer, and tuberculosis.
What were some of the immediate causes of the disaster? The factory was in the middle of a cost cutting campaign. The number of operators for the MIC unit was cut in half from 1980 to 1984. On the night of the disaster, six safety measures designed to prevent a leak were either malfunctioning, shut down or otherwise inadequate. The refrigeration unit was turned off in order to save $40 a day. With safety norms being flouted, the leak was almost waiting to happen.
Indeed, Union Carbide had plenty of warning that such as disaster might take place. Phosgene leaks in 1981 and 1982 had killed a plant operator and severely injured 28 workers. MIC had escaped from a broken valve exposing four workers to the chemical. A safety audit conducted by a US team in May 1982 identified "61 hazards, 30 of them major and 11 in the dangerous phosgene/MIC units". Union Carbide ignored these warnings and continued with business as usual.
More than 17 years later, Union Carbide has yet to explain why it ignored the public health and safety norms so recklessly and completely.
Union Carbide's immediate reaction was prevent liabilities - their legal team arrived in Bhopal much before a medical team. The medical team emphasized that the leaked gases would not have any long-term health effects, and that the leaked gas was "nothing more than a potent tear gas". No reliable information on treatment or antidotes was offered, and to this day the company refuses to disclose medical information about the gases, claiming this information is a trade secret.
Union Carbide refused to pay the amount demanded by the survivors as compensation. After five years of legal wrangling the Indian Government agreed to an out of court settlement of US $470 million in February 1989. This shameful agreement was the complete and final settlement for all criminal and civil liabilities. Victims received less than $350 each for their injuries. The world's biggest industrial disaster cost Union Carbide just 48 cents a share.
So 17 years after the disaster, what happened to the culprits of Bhopal? Warren Anderson, the Union Carbide chairman at the time and a wanted man in India, is a fugitive. The company itself was sold to Dow Chemical, a larger company with perhaps an even more pathetic record of abuse around the world. The Indian government washes its hands off all responsibility, as the disaster fades from public memory.
After completing all the technical analysis, however, one sees that the residents of Bhopal suffered this enormous tragedy for one reason in addition to the ones discussed above - Indian regulations provided generous latitude to foreign corporations and did not hold them accountable for the consequences of their actions. With drastically lower environmental, labor and health standards than in the West, India presented UCC an opportunity to cut safety costs. In short, higher profits from operating in India were directly tied to lower worker and community safety.
In subsequent court battles, limitations of India's jurisdiction to deal with the culprits has been exposed, and the proposed trade regime seeks to instead further reduce sovereign rights in such international cases. MNCs are able to evade the laws of the country, and claim instead a lower standard of accountability that exists in other nations. The extension of this principle throughout the world in the name of "free-trade" runs counter to the public interest. Opposition to such expansion of unaccountability has been the hallmark of protests against free trade. The response to globalization protests has been appalling - heavy handed policing, moving meetings to Middle East dictatorships and the Canadian wilderness. Secrecy has been increased in the face of assurances that policies remain just and will work wonders for the Indian people.
Really? Let us hear them, and involve all concerned parties in open debate on the viability of these schemes. The free-traders' claims can surely withstand open and televised meetings? By labeling the protestors as uninformed, and uncivil in their methods of protest, the free trade bloc seeks to evade the real issue. Without accountability and scrutiny, free trade is little more than the sleight of hand by which hard-won rights of Indian workers and communities will be negated.
Tarun Jain, Ashwin Mahesh
December 2001
Editorial opinions by the authors have previousy been published through Knight-Ridder Tribune. This editorial was also previously published in India West.