The Historical, Political and Economic Context: An Introduction

The tragedy at Union Carbide’s plant in Bhopal, India, late in 1984 raises a host of difficult legal, economic and policy issues. The headlines were filled with news of the disaster and of the filing of lawsuits by plaintiffs’ lawyers, including ‘King of Torts’ Melvin Belli, for billions of dollars. Yet most of the attention merely reacted to the events and missed fundamental questions: Why was the plant built? Why did a foreign company have working control? What interests were served by the fact that Indian nationals owned a majority of the equity stock in the subsidiary and that the plant managers were Indians? Should countries accept foreign economic presence only in the form of financial capital, or management or both? Management is often sought because of the need to use foreign managers to train indigenous ones (this process was thought to have been completed at Bhopal). Should such issues affect how investments are regulated in terms of the environment, safety, and other interests?