A Tale of Two Disasters

Jun 21, 2010 Editorial

The BP (formerly British Petroleum) oil spill, from its “Deepwater Horizon” rig in the Gulf of Mexico continues to dominate the news. On April 20, an explosion on the offshore rig leased by BP killed 11 workers and ruptured the deep-sea well. The ensuing spill has fouled 120 miles of U.S. coastline, imperilled multibillion-dollar fishing and tourism industries and killed birds, sea turtles and dolphins.

As the tar balls washed up on the shores of an ever-increasing number of countries –but most importantly of US states as far away as Florida – President Obama was forced to demand “justice” from the oil giant.

Accusations of government regulators closing their eyes to safety lapses, lax responses and general corporate greed gone wild, are flying fast and furious. Hauled before Congress last week, the CEO of BP, Tony Hayward contritely offered a mea culpa after his battering. He apologised to the American people.

But most importantly, after meeting with Obama, he announced the establishment of a US$20 billion fund to deal with claims for damages emanating from the spill. This was on top of over $100 million that BP had already paid out on individual claims and a $500 million funding of research at three Gulf Research Institutions that will look into dealing with the consequences of the spill.

President Obama took pains to explain that the $20 billion fund did not cap BP’s total liabilities. “We will fight this spill with everything we’ve got for as long it takes. We will make BP (BP.N) pay for the damage their company has caused,” he promised sternly.

Workers idled by the six-months moratorium on deep-sea drilling imposed by the Obama administration would also be compensated to the tune of $100 million. BP Chairman Carl-Henric Svanberg said. “I hear comments sometimes that large oil companies are greedy companies who don’t care. But that is not the case in BP. We care about the small people.”

By a strange irony of fate, the week before BP offered its tearful apologies and opening its deep pockets to the victims of the oil spill, the final verdict was announced in what is certifiably the largest industrial disaster in the history of the planet – the gas leak at Bhopal, India.

Twenty five years ago, on December 3rd, 1984, tons of toxic gases leaked from a storage facility of a Union Carbide plant located in the middle of a densely populated urban setting.

Over three thousands persons perished immediately, and an additional 15 thousand were to perish in the following decade from the effects of inhaling the gas. An estimated 500,000 persons in total were affected – all to suffer from one type of malady or another.

Even though Union Carbide was a US company and owned the majority of shares in the Indian subsidiary, its Chairman Warren Anderson took the position that culpability was with the local company and refused to accept the jurisdiction of the Indian court.

Ironically, the Supreme Court of the US affirmed the judgement of the lower court that it was correct in ruling that proper jurisdiction for the case lay in the Indian courts. The US refused to execute extradition requests from India. Back in 1989, Union Carbide agreed simply to the payment of the insurance amount of $470 million as compensation for the victims of the disaster.

The Government of India, which took responsibility for representing the victims, went along with shielding the US corporation – to the extent of spiriting away to the US Anderson, who had been arrested when he came to India to view the carnage his company had wrought. On June 7th, 2010 three executives from the Indian subsidiary received two year jail sentence.

As a lawyer for the victims said, “Is it not hypocritical that the U.S., which claims to be the sole human rights protector and is promising its people that maximum compensation will be extracted from British Petroleum for spilling its oil into the Gulf of Mexico, is doing exactly the opposite when it comes to a Third World country like India? Look at the toll of lives in the oil spill there, and here. It is a difference of hell and heaven.”

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