The Disaster at Bhopal: Lessons for Corporate Law?

Abstract

Prepared for a conference at New England Law School marking the upcoming twenty-fifth anniversary of the disaster at Bhopal, this essay asks whether we have anything still to learn from what occurred in the early morning hours in Bhopal on December 3, 1984, and in the hours, days, and weeks that followed. Is there reason to believe, for example, that corporations have a tendency to create the context in which such disasters are more likely? More recent corporate behavior poses the same question, whether it pertains to environmental destruction, injuries to consumers, collusion with illegal governmental activities, or financial malfeasance. This essay suggests that while it is possible that corporations are part of the cause of many problems, it is also possible that corporations, and corporate law, could be part of their solution. One way to achieve this goal is to fold into the very decision making of the firm the interests of all those who contribute to its success. I believe that such adjustment would allow corporations to build wealth for all concerned, and not merely to transfer it from one party to another. But absent such change or other meaningful regulatory limitation, we should not be surprised when corporations fail to accurately balance the social harm that arises from their behavior, causing disasters such as Bhopal.