THE BLOG

From Tragedy to Responsibility: The Lessons of Bhopal

11/27/2014 06:18 EST | Updated 01/27/2015 05:59 EST

In the black of night, the gas cloud was almost invisible as it engulfed the sleeping shantytowns. It curled through open windows and gaps in ramshackle walls. By sunrise, thousands had suffered a slow, choking death.

That toxic gas leak at a chemical factory in Bhopal, India, on December 3, 1984, killed at least 3,700 and affected the lives of half a million people. It remains the worst industrial disaster in history. Jamie Cassels, a law scholar and president of the University of Victoria, literally wrote the book on the tragedy when he penned The Uncertain Promise of Law: Lessons from Bhopal (University of Toronto Press, 1993.) With the 30th anniversary of Bhopal approaching, we spoke to Cassels about how the disaster made the world question corporate responsibility. With a growing number of developing communities complaining about Canadian companies abroad, that question is more relevant than ever for Canada.

With the massive cost of clean-up and caring for survivors in Bhopal, the Indian government and affected communities wanted compensation. But who to get money from? "The core of the problem in Bhopal was finding someone to hold accountable," Cassels says. The answer was not easy as it appears.

The Bhopal factory was owned by a subsidiary of the U.S.-based Union Carbide Corporation (UCC). Believing the parent company should take responsibility, India filed a lawsuit in a U.S. court. But Cassels says the case ran into two critical unresolved questions in international corporate law. Can a corporation be brought to court in one country for actions in another? And can a parent company be held accountable for the actions of a subsidiary?

On the first question, the U.S. judge ruled "no." The disaster happened in India, and the factory was governed by Indian regulations, the judge said, so India was the most "convenient forum" to try the case. He tossed the case from American courts.

But in a precedent-setting move back in Bhopal, an Indian court ordered UCC to pay interim compensation of $270 million. Cassels says it was the first time a court had so fully pierced the "corporate veil" between parent company and subsidiary. UCC appealed to the Indian Supreme Court, which ultimately forced a final settlement of $470 million.

Despite the precedent, the questions raised in Bhopal still fester 30 years later. "There continues to be too much uncertainty in terms of responsibility of the parent company for the subsidiary," Cassel told us.

Over the past year, Canada has begun to confront that uncertainty.

In a Canadian legal first, courts granted foreigners the right to sue Canadian companies in Canadian courts. Today, HudBay Minerals faces several lawsuits from indigenous Guatemalans who allege that a HudBay subsidiary committed human rights abuses, including rape and murder, in that country. And a community in Ecuador is suing oil giant Chevron Canada to gain compensation for alleged pollution caused by Chevron affiliate Texaco.

Just last week, the Government of Canada fired its own warning shot while unveiling a national corporate social responsibility strategy. The government told Canadian businesses if they fail to act as good citizens in the overseas communities where they operate, they will lose financial support from agencies like Export Development Canada.

Cassels believes international business has come a long way since Bhopal in addressing corporate citizenship. Still, more must be done to protect communities overseas. Without prejudging facts, he says courts must seize opportunities like the HudBay and Chevron cases to fill the legal void on corporate responsibility. More governments must step forward, as Canada did, with measures to hold corporations accountable. And, Cassels adds, the global community must work together to create standards and an international body to handle complaints from communities against multinationals.

For the people of Bhopal, the disaster never ended. They still suffer from water contamination, respiratory illnesses, and higher rates of infant mortality and birth defects. They've waged one court fight after another for more compensation.

Thirty years ago the world failed to protect Bhopal. We owe it to them, and all developing communities, to enshrine corporate responsibility in national and international law.

Brothers Craig and Marc Kielburger founded a platform for social change that includes the international charity, Free The Children, the social enterprise, Me to We, and the youth empowerment movement, We Day.