Amidst the battle against the coronavirus pandemic, on May 7 came the shocking news of a gas leak from a polymer factory located in a densely populated area of Vishakhapatnam, resulting in 12 deaths and several hundred being hospitalised. The factory is owned by LG, the South Korean conglomerate. The factory uses styrene, a hazardous chemical that needs to be stored at the right temperature. A possible failure in maintaining the temperature might have led to the gas leak.
The factory was under lockdown, which might have caused pressure to build up within the gas chamber followed by a valve failure leading to the leak, speculated media reports. The unit did not have the requisite essential environmental clearance to operate for a substantial period, between 1997 and 2019. Already facing stressful conditions under the lockdown, people were alarmed by these developments, rekindling fears ingrained with bitter memories of the Bhopal Gas Disaster of 1984.
The next day, on May 8, the National Green Tribunal (NGT), invoking its mandate to provide relief and compensation to victims of “environmental damage” and reimbursement for damaged property and environment, asked the factory to deposit Rs 50 crore as an initial amount. This suo moto order under Section 14 and 15 of the NGT Act was based prima facie on material assessed by the tribunal regarding the “extent of damage to life, public health and environment”. It observed that “leakage of hazardous gas at such a scale adversely affecting public health and environment, clearly attracts the principle of ‘Strict Liability’ against the enterprise engaged in hazardous or inherently dangerous industry”.
Anxious common people might have felt somewhat relieved by the NGT’s ‘prompt and strict’ action, but it came as a surprise to people conversant with the law of liability. In view of the history of the company flouting the requirement of an environment clearance for more than two decades and its alleged negligence in dealing with a hazardous substance that took 12 lives, it is important to ponder whether a meagre amount of Rs 50 crore will be compensation enough for the offence.
It is equally astounding that the company is not charged under a rule that is prevalent today in India and many other countries – absolute liability, which allows no concessions. Instead, the NGT has preferred to resort to an obsolete rule of strict liability that prevailed before 1986 under which the defending business can claim benefits of certain exceptions to absolve itself of the burden to compensate the victims. This might allow the defendant/s to plead different excuses as lawful defences.
The rule of Strict Liability, which first came up in the case of Rylands v. Fletcher (1868), held that people must pay compensation for damages even if they are not at fault. However, in this case the Court of Exchequer Chamber prescribed certain exceptions that were recognised by some later cases too. If the escape or leakage was a result of what is called “an act of God” like earthquake or flood, or if it was caused by an “act of a stranger” who is not answerable to the defendant (‘not my servant!’), it absolved the defendant from ‘strict’ liability. Similarly, the defendant can claim that it was the plaintiff’s own default or the plaintiff’s own consent to accumulation of dangerous substance, which would provide him a shield. These exceptions not only diluted and reduced the scope of the rule but nurtured the expansion of hazardous chemical based industries in India by absolving their burden to pay damages in case of leaks.
In 1984, the Union Carbide Corporation took advantage of these loopholes in the rule and got away with its burden, leaving hundreds and thousands of victims to their own fate with intergenerational disabilities and minimal compensation to deal with it. However, the Bhopal gas disaster proved that the Strict Liability rule was not ‘strict’ enough to regulate hazardous enterprises like Union Carbide. A dire need was felt to replace rule of ‘Strict Liability’ with ‘Absolute Liability’ to ensure that such enterprises bear the burden ‘Absolutely’ of damage caused by the escape of hazardous substances.
In 1986, a case similar to the Bhopal gas disaster occurred in Delhi. In the Oleum Gas Leak Case, the Supreme Court rejected the application of Strict Liability in situations involving hazardous industries. Discussing the difference between Strict Liability and Absolute Liability, Justice PN Bhagwati stated that “where an enterprise is engaged in a hazardous or inherently dangerous activity and harm results to anyone on account of an accident in the operation of such hazardous or inherently dangerous activity resulting in escape of the toxic gas, the enterprise is strictly and absolutely liable to compensate all those who are affected by the accident and such liability is not subject to any of the exceptions which operate vis a vis the tortious principle of Strict Liability under the rule of Rylands v. Fletcher”.
This rule became the law of the land and was applied in all similar cases that followed. The question is when the jurisprudence has gone a step ahead to make the perpetrators wholly liable for their misdeeds under the rule of Absolute Liability, what compelled our principal green court to take a step back and resort to a rule laid out in 1868? Hope this will not allow conditions for other Andersons to escape!
Sumedha Marathe is an advocate and environmental laws researcher. She can be reached at advsmarathe@gmail.com. Views expressed are the author’s own.