Environment and Technological Harm

Constitution of India, article 21, protects life, and has been construed to include a right to a wholesome environment. Article 48A directs the State to protect and improve the environment and to safeguard the forests and wild life, and article 51A(g) makes it a fundamental duty of every citizen to protect and improve the natural environment and to have compassion for living creatures. These are worked in [The Environment in the Constitution].

The rule: absolute liability

M.C. Mehta v. Union of India, AIR 1987 SC 1086, (1987) 1 SCC 395, decided on 20 December 1986 by five judges, judgment by Bhagwati CJ.

Facts. The petitioners sought, by a writ petition under article 32, the closure of the units of Shriram Foods and Fertiliser Industries on the ground that they were hazardous to the community. While the petition was pending, oleum gas escaped from one of the units. The Delhi Legal Aid and Advice Board and the Delhi Bar Association applied for compensation for those harmed. A Bench of three judges, permitting Shriram to restart on conditions, referred the compensation applications to five judges because questions of great constitutional importance arose, including the scope of the Court's jurisdiction under article 32.

Held, the new rule. The Court refused to be confined to the rule in Rylands v. Fletcher as developed in England, saying that India no longer needed the crutches of a foreign legal order and could evolve a new principle to meet the situations thrown up by hazardous industry. It held that an enterprise engaged in a hazardous or inherently dangerous industry which poses a potential threat to the health and safety of those working in the factory and residing in the surrounding areas owes an absolute and non-delegable duty to the community to ensure that no harm results from the hazardous nature of the activity. The activity must be conducted with the highest standards of safety, and if harm results the enterprise is absolutely liable to compensate; it is no answer that it took all reasonable care and that the harm occurred without negligence.

Held, why the enterprise must bear it. Permission to carry on such an activity for private profit is to be treated as conditional on the enterprise absorbing the cost of accidents as an item of its overheads, and the activity can be tolerated only on condition that the enterprise indemnifies all who suffer, whether it is carried on carefully or not, since the enterprise alone has the resources to discover and guard against the hazard. The liability is not subject to the exceptions that qualify strict liability under Rylands v. Fletcher. The Court added that compensation must be correlated to the magnitude and capacity of the enterprise, so that it has a deterrent effect: the larger and more prosperous the enterprise, the greater the compensation payable.

Why it matters here. It is the point at which Indian law accepted that a technology's characteristic harm cannot be handled by a rule designed for careless individuals. Three moves in it are worth learning separately: fault is removed; the exceptions are removed; and the measure of compensation is tied to the size of the defendant rather than only to the loss of the plaintiff, which converts a compensatory rule into a deterrent one.

The failure: Bhopal

Union Carbide Corporation v. Union of India, AIR 1992 SC 248, (1991) 4 SCC 584, decided on 3 October 1991 by five judges.

Facts. Proceedings arising out of the Bhopal gas leak of December 1984. The Union of India sued Union Carbide Corporation in the United States District Court for the Southern District of New York; those proceedings ended when the company's plea of forum non conveniens, that another court was the more appropriate forum, was upheld. The Union of India then sued in the District Court at Bhopal, and the claim was settled by orders of the Supreme Court of 14 and 15 February 1989. The settlement was challenged by review and by writ petitions, on grounds including that no fairness hearing had been afforded to the victims, that there was no re-opener clause if the fund proved inadequate, that the medical documentation and categorisation of injuries were unreliable, and that the quashing of pending criminal proceedings as part of the settlement was beyond the Court's power and opposed to public policy.

Held. The Court examined the absence of a fairness hearing and of a re-opener clause, the adequacy of the fund and the position should it prove insufficient, and whether the mere possibility that medical documentation and categorisation were faulty could justify setting the settlement aside. On its own powers it held that the inherent jurisdiction under articles 136 and 142 to withdraw, transfer and finally dispose of the suits and the pending criminal proceedings was not taken away by article 139A, and it construed the words "cause or matter" in article 142. It restored the criminal proceedings that the settlement had quashed. It also stated that an award of compensation is to be proportionate to the economic superiority of the offender.

Why it matters here. It is the case in which the system met the largest industrial disaster of the technological age and found its own machinery unequal to it. Note what the substantive rule could not do. M.C. Mehta had been decided two years before the settlement and states a rule of absolute liability with compensation geared to the size of the enterprise. What defeated the victims was not the absence of a rule. It was forum, which moved the claim between two legal systems and cost years; representation, since the persons whose claims were settled were not heard before the settlement; proof, since the categorisation of injury on which every individual award depended was contested; and time. A candidate who can say that the failure was procedural rather than doctrinal has understood the pair of cases.

Worked example

A chemical plant on the edge of a town has an emission that damages crops on adjoining land over several years, and is later associated with a raised incidence of a respiratory illness among residents. The company shows that it operated within the limits of its consent to operate and that its equipment was maintained to the manufacturer's specification.

Does the compliance defence work? No, on M.C. Mehta. Absolute liability is not displaced by proof of reasonable care, and operating within a licence is a form of that proof. Compliance is relevant to prosecution and to the regulator; it does not answer a claim in absolute liability.

Who may sue and for what? The crop damage is a straightforward loss and is provable. The illness is where the difficulty lies: latency, multiple causes, and a population that is exposed rather than a claimant who is injured. This is the point at which the substantive rule is intact and the evidence is not, which is precisely the Bhopal problem in miniature.

What does the measure of compensation depend on? Under M.C. Mehta, on the magnitude and capacity of the enterprise as well as the harm, so that the award deters. That is a rule most students can state and few apply, and applying it is what makes an answer look like law rather than recitation.

Which rights are engaged beyond tort? Article 21 for the residents; article 7(b) for those working inside; article 12(2)(b) for the State's duty as to environmental and industrial hygiene; and paragraph 8 of the 1975 Declaration for the State's duty to take legislative measures rather than to wait for litigation. The precautionary principle in [The Precautionary Principle] governs what should have happened before the plant was permitted at all.

What it does NOT mean

Absolute liability is not strict liability. They are routinely confused and the difference is the whole point of M.C. Mehta: strict liability under Rylands v. Fletcher comes with exceptions, and the Court held that its rule is not subject to them.

It does not apply to every industry. The rule is framed for an enterprise engaged in a hazardous or inherently dangerous activity, and that characterisation is the first thing an answer must establish rather than assume.

A liability rule is not a safety system. It operates after the harm. Article 12(2)(b) and paragraph 8 of the 1975 Declaration are about prevention, and the practical protection of a population comes from the consent conditions, the inspection and the siting decision, not from the prospect of a suit.

And compensation is not restoration. Bhopal is the standing demonstration. A fund, however calculated, does not undo an exposure, and the framework's preference for prevention follows from that.

Distinctions

Quick revision

• ICESCR article 12(2)(b): steps for the improvement of all aspects of environmental and industrial hygiene. Article 7(b): safe and healthy working conditions. 1975 Declaration, paragraphs 6 and 8: protect from harmful effects of misuse; effective measures, including legislative measures.
• Constitution: article 21, article 48A (State to protect and improve the environment), article 51A(g) (fundamental duty of the citizen).
• M.C. Mehta (1986), five judges, Bhagwati CJ: a hazardous or inherently dangerous enterprise owes an absolute and non-delegable duty to the community; absolutely liable for resulting harm; no answer that all reasonable care was taken; not subject to the Rylands exceptions; compensation correlated to the magnitude and capacity of the enterprise to deter.
• Union Carbide (1991): the Bhopal settlement reviewed; fairness hearing and re-opener clause considered; articles 136 and 142 not taken away by article 139A; criminal proceedings restored; compensation proportionate to the economic superiority of the offender.
• The pair teaches the lesson: the substantive rule was strong and the outcome was still poor, because the failures were forum, representation, proof and time. Doctrine is worth what the procedure can deliver.

Test yourself

1. State the rule in M.C. Mehta and identify the three ways it departs from Rylands v. Fletcher. An enterprise engaged in a hazardous or inherently dangerous industry which poses a potential threat to the health and safety of those working in the factory and residing in the surrounding areas owes an absolute and non-delegable duty to the community to ensure that no harm results; it must conduct the activity with the highest standards of safety; and if harm results it is absolutely liable to compensate, it being no answer that all reasonable care was taken and that the harm occurred without negligence. It departs from Rylands v. Fletcher in that the liability is not subject to any of the exceptions that qualify strict liability; in that its basis is engagement in a hazardous activity rather than a non-natural user of land and the escape of a dangerous thing; and in that the measure of compensation is correlated to the magnitude and capacity of the enterprise so as to have a deterrent effect, rather than being confined to the loss suffered.

2. Why does a fault-based rule fail the victim of an industrial escape? Because both of its requirements are unattainable for that victim. It requires proof of want of care, and the knowledge of the process, the maintenance and the training lies entirely inside the enterprise, so the person harmed cannot identify what failed. And it excuses the defendant where care was taken, which leaves the loss with people who live nearby and had no part in choosing the hazard, even though a hazardous process remains hazardous when properly run. The Court's answer in M.C. Mehta was to change the rule rather than to try to improve the plaintiff's evidence, reasoning that the enterprise alone has the resources to discover and guard against the hazard and that the cost of accidents should be an item of its overheads.

3. What was decided in Union Carbide, and why is it said that the failure there was procedural rather than doctrinal? The Court reviewed the settlement of the Bhopal claims recorded by its orders of 14 and 15 February 1989, considering the absence of a fairness hearing and of a re-opener clause, the adequacy of the fund, and whether the possibility of faulty medical documentation and categorisation could justify setting the settlement aside; it held that its inherent powers under articles 136 and 142 were not taken away by article 139A, construed 'cause or matter' in article 142, restored the criminal proceedings that had been quashed, and stated that compensation should be proportionate to the economic superiority of the offender. The failure is called procedural because the substantive rule was already available: M.C. Mehta had been decided in December 1986, two years before the settlement, and states absolute liability with a deterrent measure of compensation. What defeated the victims was the forum contest that moved the claim between two legal systems, the settlement of their claims without their being heard, the contested categorisation of injury on which each individual award depended, and the passage of time.

4. A company shows it operated within the terms of its consent to operate and maintained its plant to specification. Is that a defence to a claim in absolute liability? No. Absolute liability is not displaced by proof that reasonable care was taken, and compliance with a licence and with a maintenance specification is a form of that proof. M.C. Mehta states in terms that it should be no answer to the enterprise to say that it had taken all reasonable care and that the harm occurred without any negligence on its part, and that the liability is not subject to the exceptions applicable under Rylands v. Fletcher, among which statutory authority is one. Compliance remains relevant to a prosecution and to the regulator's decisions, but it does not answer the civil claim.

5. Why does the framework prefer prevention to compensation in this area, and which provisions carry that preference? Because the characteristic harms of industrial technology cannot be undone: an exposure cannot be reversed, latency means the injury may appear years later, and the harm is spread across a population in increments too small to litigate individually, so that even a generous fund reaches some people late and others not at all. Bhopal is the standing demonstration. The preference is carried by article 12(2)(b) of the Covenant, which requires steps for the improvement of all aspects of environmental and industrial hygiene; by article 7(b), which requires safe and healthy working conditions; and by paragraph 8 of the 1975 Declaration, which requires effective measures including legislative measures to prevent and preclude the use of scientific and technological achievements to the detriment of human rights, prevention being the operative word in each.