Damages For A Deadly Cloud

No industrial accident in history compares with the devastation caused on a December night in 1984, when 45 tons of poison gas leaked from a Union Carbide pesticide plant in Bhopal, India. The deadly methyl isocyanate, a pesticide ingredient, killed more than 3,400 people and injured 200,000. The Indian government charged the company with negligence, brought murder charges against its chief executive, Warren Anderson, and demanded $3.3 billion to settle claims by victims and their families.

Last week India's Supreme Court unexpectedly announced a settlement of all claims against the chemical company at a price that surprised and angered many Indians. Union Carbide has agreed to pay the Indian government a lump sum of $470 million by March 23. The money will be distributed by a special commission. In exchange, India will drop all criminal charges against the company as well as against Anderson, who retired in 1986. "It's a fair and adequate settlement for the victims," said Michael Ciresi, an attorney who represented India in its suit against the firm.

But at one demonstration in Bhopal, some 200 women carried placards reading THE GOVERNMENT HAS BETRAYED US. Others called for the hanging of those responsible for the Bhopal leak. The main opposition party in the Indian legislature branded the settlement "a total sellout by the government."

Sources close to the case said India was willing to settle for a lesser amount than previously demanded because Union Carbide agreed to write the whole check right away. Last November the two sides had come close to agreeing on a settlement of $500 million, but that amount would have been paid out over ten years. Union Carbide, which has insisted that the leak was an act of sabotage by a disgruntled worker, will have no trouble raising the cash. The company had already set aside $200 million for the purpose, and its insurance will cover another $250 million. But the case may not be fully closed, liability experts say, because dissatisfied Bhopal survivors may decide to file claims in the U.S. as well.