India Ordered to Pay Out Bhopal Fund

India's supreme court has ordered the government to distribute money held in the bank to more than half a million victims of the Bhopal gas tragedy who have been waiting 20 years for compensation.

Legal wrangles have left destitute most of those who suffered injury in the world's worst industrial accident, but yesterday the court ruled that money held in the Bank of India since 1989, currently worth £174m, must be paid out.

In December 1984, tonnes of a toxic gas leaked from a pesticide plant owned by Union Carbide in the central Indian city of Bhopal, killing 3,800 people almost immediately. Since then, campaigners claim, more than 20,000 people have died from related illnesses and, of the approximately 520,000 people exposed to the poisonous methyl isocyanate gas, some 120,000 remain chronically ill.

Many victims still suffer shortness of breath and a burning sensation in their chest and throats.

The ruling follows a test case by 36 victims, one from each district affected by the tragedy, on behalf of the 566,876 Bhopal survivors and relatives whose claims have been successfully lodged.

Other survivors whose claims may have been wrongly dismissed or who were underpaid were directed by the court to file a separate application, and seek compensation from the Indian government.

Union Carbide, now owned by Dow Chemical, paid out £250m in compensation to residents in 1989, but only a part of that sum has been distributed. The remainder has since increased in value due to interest being added and currency fluctuations.

India's top court has ordered the government to pay out the current sum in the bank, about 15bn rupees, or £174m.

Although the rupee value of the compensation has risen significantly it still only amounts to just over £300 a person. But there was jubilation in the city last night with a large party to celebrate.

"It is a positive development as the victims' voices have been heard. It is a balm to the wounds, but there's always a gap between the court's orders and the way it is implemented so we shall keep our fingers crossed" said Srinivasan Muralidhar, a lawyer for the 36 gas victims.

Payment of the compensation in full had been delayed because of bureaucratic wrangling over how to categorise the victims. The court directed the money to be distributed on a pro-rata basis among the victims, who include the relatives of the dead and injured.

The Indian government continues to pursue criminal charges against the former Union Carbide chairman Warren Anderson, who has retired and lives in New York state.

The polluted site of the abandoned factory is still said to be poisoning the groundwater of local people.

Campaigners said Dow Chemical should pay to clean up the toxic mess.

Last month, the Indian government supported a court action to force the company to bear the full clean-up costs.

This followed a US court of appeal ruling on March 17 on a class action suit initiated by survivors and their organisations. It stipulated that Union Carbide may be directed to carry out the Bhopal plant-site clean-up "in the event that the Indian government or the state of Madhya Pradesh seeks to intervene in the action or otherwise urges the court to order such relief".

Dow Chemical said earlier this year that it had no involvement in the Bhopal tragedy and viewed the original settlement between Union Carbide and victims as final.