When a dam burst in Morvi, India, in August 1979, killing an estimated 25,000 people, the Indian state government paid the equivalent of $250 to the families of the victims and provided $625 in loans to each of the homeless.
That compensation may seem triflingly small by U.S. standards. But research has been developed by Union Carbide's lawyers to justify the terms it has offered to settle upwards of 100,000 claims stemming from the Bhopal accident.
Although the company has refused to divulge specifics, sources say Carbide earlier has offered to place $100 million in a fund that, with accumulated interest, would pay out about $230 million over a 25-year period to the victims.
The question of what is appropriate restitution is the most wrenching and highly charged issue still unresolved. It is the subject of intense political debate in India, where left-wing critics have warned the government against "selling out" the victims to spare the stockholders of a U.S. multinational company.
American courts have built up an elaborate system for arriving at a value for a lost life. Juries here consider such things as lost earning power, loss of the "enjoyment of life," and pain and suffering.
But Carbide insists it is unfair and impractical to apply the justice meted out by U.S. juries to Bhopal. If in the state of Madhya Pradesh, where Bhopal is located, the per capita income is $127 per year, what does it take to compensate victims for lost earning power? In a Third World environment, what are appropriate standards for providing medical care or training the jobless?
"It's terrible, but you've got to put a dollar value on pain and injury . . . " said Warren Anderson, chairman of Union Carbide. He said the company has researched tragedies in India and devised a formula.
What the firm came up with, according to Anderson, is a settlement offer that would make Bhopal "a shining example of what can be done for a city and for a people as a result of a tragedy. . . . We've offered compensation the likes of which they've never seen before."
"What we have proposed would have put people living in grinding poverty into the Indian middle class," added Bud Holman, the New York lawyer who is heading Carbide's defense.
But given the publicity that has surrounded Bhopal, and what many view as its unique horror, Carbide's proposal is far from acceptable to the Indian government or U.S. lawyers suing the company.
Through the Minneapolis law firm it has hired to represent it, the Indian government has made a counteroffer for about $800 million, according to one source.
Meanwhile, the U.S. lawyers are taking an equally hard line. "They're offering nickels and dimes," said Stanley Chesley, a Cincinnati lawyer who serves on a plaintiffs' committee. "Why is pain and suffering worth any less in India just because the victims happen to be Indians? . . . What we want is full and fair compensation."