What About Compensation for Bhopal?

Moral outrage is seldom a pretty sight. When BP's chief executive Tony Hayward appeared before a Congressional investigation into the oil spill in the Gulf of Mexico, there was little he could say to placate angry members of the energy sub-committee. Most of the committee members had turned up to take part in a ritual denunciation, a modern version of putting someone in the stocks, and Hayward remained for the most part impassive as the rancid eggs rained down.

I don't say this in defence of BP. When his inquisitors broke off from telling Hayward how personally affronted they felt by the oil disaster which followed the explosion on the Deepwater Horizon rig, they had telling charges to make against the company. Peter Welch, a Democrat Congressman from Vermont, listed a catalogue of safety failings at the company long before the Deepwater Horizon blast killed 11 people. The committee heard that BP's record was significantly worse than that of other oil companies; it has been accused of 760 safety violations in the US in the past five years, compared with eight at ConocoPhilips and six at ExxonMobil.

This is not a record that's easy to defend and the committee could hardly have been more damning, even if its members didn't go quite as far as the oil-smeared demonstrator who shouted that Hayward should go to jail. BP's defenders in this country should stop complaining about falls in the company's share price and the temporary suspension of dividends, even if it hurts British pension funds; denials of responsibility on this side of the Atlantic are as unedifying as the crude attacks on "British Petroleum" - the company has been known as BP for more than a decade - on the other. The timing of yesterday's intervention by its US partner Anadarko - which described BP's behaviour in the run-up to the disaster as "reckless" - looks opportunist, to say the least.

Indeed the most telling moment in last week's theatre of outrage starring BP as the villain came when Bart Stupak, Democrat chairman of the oversights and investigations sub-committee, made a quintessentially American statement: "We are not small people". He was referring to a gaffe earlier in the week by BP's chairman, Carl-Henric Svanberg, who had made the cardinal error of describing Gulf residents in that manner; you would be hard to put to find any Americans who regard themselves as "small" in any way, shape or form. There is a positive aspect to this sense of national self-esteem; a nation which invented itself with a declaration enshrining the right to "life, liberty and the pursuit of happiness" has never been shy when it feels slighted or injured. BP is just the latest entity to feel the heat and last week gave in to White House demands to set up a $20bn (PS13.5bn) fund to compensate victims of oil pollution.

The problem is that this American sense of entitlement tends also to be a form of exceptionalism, and it generally stops short of demanding the same high standards for people who don't live in the US. Ghastly as the Gulf oil spill is, it is dwarfed in scale and consequences by what remains the world's worst industrial accident, a leak of cyanide gas in the city of Bhopal in central India in December 1984. The disaster happened at a pesticide plant run by the Indian subsidiary of US chemical company, Union Carbide, in the state of Madhya Pradesh; according to the Indian government, 3,500 people were killed outright: subsequent deaths raised the toll to 15,000. Union Carbide abandoned the plant after the disaster but it has been accused of failing to clean up the site, exposing local people to a water supply allegedly contaminated with toxic chemicals.

What was the American reaction to this unprecedented catastrophe? Were there Congressional hearings to hold Union Carbide publicly accountable? Was the company told to apologise to "all Indians"? One Congressman, the California Democrat Henry Waxman, was quick to act: only 11 days after the Bhopal disaster, he held a field hearing near Union Carbide's US plant in West Virginia. "We wanted to make sure we never had a similar incident here," he explained in a speech last year. At that time Union Carbide, which later became part of Dow Chemical, stood accused of cutting jobs, decreasing safety training and cutting maintenance costs at the Indian plant; the most damning claim of all was that the company had used technology at Bhopal which was far inferior to that in West Virginia. But the main result of Waxman's field hearing was legislation in 1990 to protect the American public from accidental releases of toxic chemicals. In 2004, the US government blocked India's request to extradite Warren Anderson, former chief executive of Union Carbide, to face criminal charges. It took 17 years for the Indian government to obtain $470m compensation on behalf of the victims - a paltry sum compared to the fund set up by BP.

Last Thursday, Waxman chaired the hearing into the oil spill and accused Hayward of not paying attention to the risks BP was taking with the Deepwater Horizon rig. "BP's corporate complacency is astonishing," he declared. To be fair, Waxman met two survivors of the Bhopal disaster last year and listened to their complaints that Union Carbide has repeatedly refused to appear before the Bhopal district court to answer criminal charges. Earlier this month, several Indian managers at the Bhopal plant received two-year prison sentences, prompting an outcry in India over the failure to get Union Carbide into court. A Democrat Congressman, Frank Pallone from New Jersey, described the verdict as "outrageous" and called for Anderson, now 89, to be sent to India to stand trial.

The moral of all this is simple: the US has the right to demand that BP should do everything in its power to stop the oil spill in the Gulf of Mexico, repair environmental damage and compensate victims. But if Barack Obama's new politics are to mean anything, US companies must be under exactly the same set of obligations, no matter where their operations take place in the world.