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Victims of Industrial Accidents: The Poor State of Relief Safeguards for Them

Disaster struck on May 7 when a gas leak of a toxic and hazardous compound styrene from a factory in Visakhapatnam resulted in at least 12 deaths, including 2 children. Hundreds were hospitalized with officials suspecting survivors to have lasting impact due to the exposure, reminding us of the Bhopal Gas Tragedy. It was found that the factory, owned by LG Polymers- the Indian arm of a South Korean multinational LG Chem, had been operating since 2017 without the necessary environmental clearance, and without functional emergency sirens despite the issue being raised by the employees. LG Polymers since have been accused of negligence and have been demanded liability for the loss of life and public health, with the National Green Tribunal (NGT) slapping an interim penalty of Rs. 50 crore on the company.

This is not a unique case of industrial disaster since the Bhopal Gas Tragedy. According to the data from The International Disaster Database (Centre for Research on Epidemiology of Disasters, Belgium), India has experienced on an average of at least 55 deaths annually from around 40 industrial accidents just between 2001 and 2019. In the early days of June of 2020 yet another case of factory accident resulted in the death of at least 5 workers with multiple injured victims because of a fire at a chemical factory in Gujarat

With every other such incident brief public uproar is observed demanding accountability from the factory owners and heavy penalties for the accused, and even stricter laws to be imposed on factory operations. Our continuous reliance on civil society’s pressure in seeking justice exposes the systemic failure of the state in ensuring the protection of our blue-collared workers. Preventive laws are despicably enforced, and just like Warren Anderson being flown out of the country a few days after the gas leak in his Union Carbide Plant at Bhopal, the accused often face little or no consequences.

Even so, where does that leave the victims? The government usually announces some financial compensation, as was in the case of Vizag gas leak with the state government announcing Rs. 1 crore to the families of those who died, and eventually the victims are all but forgotten. To be content with and rely on the monetary compensations announced by the governments, regardless of how high the value, is problematic on multiple levels.

Need for Legislative Safeguards for the Victims

The reparations owed to the victims are their rights, and not a courtesy. The compensation announcement made by the governments is at the behest of their generosity while subjecting the victims’ rights to the benevolence of the government. What if tomorrow the government is not sympathetic to the victims, either due to their politics or because of general indifference? It is therefore essential to have legislative protection of the victims, one that puts the burden of compensation on the owners of the industry.

If the responsibility of compensating the victims lies completely on the government and none on the employers, the employers are even less accountable to their employees. The daily wagers in the factories work mostly without any social security, without minimum wage, and in extremely dangerous and hostile work environments where the danger of losing one’s life is a risk that workers are forced to take so as to earn 2-square meals a day. This is an accepted operational reality. The owners of the industries do not feel responsible for the safety of their workers to begin with, and although putting the onus of compensating the victims do not convert them into the champions of worker rights, some level of accountability is better than none.

The Public Liability Insurance Act and Environmental Relief Fund

To this end, in the aftermath of the Bhopal Gas Tragedy, the Central Government passed the Public Liability Insurance Act (PLIA) in 1991 to ensure reparations for the victims, and their families, of industrial accidents.  

The Act states that it intends “to provide for public liability insurance for the purpose of providing immediate relief to the persons affected by accident occurring while handling any hazardous substance and for matters connected therewith or incidental thereto”. The Act enables the victims to seek reparations without having to prove culpability of the owner of the industry and imposes complete liability on the latter in case of an accident. According to the Act, the owners of industries dealing will hazardous substances need to take out one or more insurance policies in order to be insured against the liability of injury, death or damage as a result of an accident. For this purpose, PLIA allows for the Central Government to set up an Environmental Relief Fund (ERF). The owners are supposed to credit the insurance premium to the ERF, from where the payments for relief are supposed to be made to the victims.

Limitations of PLIA and ERF

ERF, intending to provide immediate relief to the victims, was established in 2008, ironically 17 years post its conception. Moreover, in a report by Vidhi Centre for Legal Policy, author Debadityo Sinha finds that there had been no expenditures from the fund at least up until September 2015 despite multiple documented factory accidents between 2008 and 2015, as can be found by a quick web search. In 2012, the town of Sivakasi in Tamil Nadu experienced one of its worst disasters where at least 54 people were burnt to death when a fireworks factory was engulfed into flames. Sivakasi, known as the country’s cracker manufacturing hub, has faced many such disasters over the years. In 2015, at least 5 people lost their lives and over 100 people were hospitalized near Ludhiana after inhaling hazardous fumes in an ammonia gas tanker leak. In both cases the victims could have benefitted from the ERF. 

Sinha notes that there is not enough information on either the claims made or about the non-compliance of the industries, even though the Ministry of Environment, Forest and Climate Change (MoEFCC) acknowledged in a 2015 Press Release that many owners had ignored to comply with PLIA. In a subsequent RTI it was revealed that no penal action had been taken against the non-compliance.

In addition to the weak implementation of PLIA, the Act itself has its own limitations, the most jarring one being the prescribed relief amount. The Act sets a relief of Rs 25,000 in case of fatal accidents or permanent disability, and a maximum reimbursement of Rs 12,500 in case of medical expenses. While no value can be attached to the loss and damages to human life, the quantum of relief set by the Act is almost comical in 2020. 

The other major limitation of the Act is its ambiguous definition of “hazardous substances”, and its unclear scope. According to the Act, the term “hazardous substances” is derived from Environment (Protection) Act, 1986 wherein it means “any substance or preparation which, by reason of its chemical or physico-chemical properties or handling, is liable to cause harm to human beings, other living creatures, plant, micro-organism, property or the environment”. Would that include oil and petroleum products as well, since their storage creates the risk of explosions that would potentially cause harm to all living creatures and the environment? Not having to prove culpability to claiming relief is a strong feature of PLIA. 

To restrict the Act for industries handling “hazardous substances” (however defined), excludes a large group of workers who work in unsafe environments, and are often victims of negligence? In an early morning in December 2019, a fire broke out in a factory in New Delhi resulting in deaths of at least 43 people. The factory made school bags, toys and stationery goods, none of which would probably be included under the ambit of “hazardous substances”, therefore wouldn’t have benefitted from the Act even in utopic circumstances.

The Way Forward

Clearly, the Act and the Fund are in a dire need of revision, along with stricter monitoring and implementation apparatus. The amendment should begin by expanding its scope to provide relief to victims of all industrial accidents, with or without “hazardous substances” involved. Moreover, the quantum of relief should be modified to a much higher value. Debadityo Sinha notes how the Indian Railway provides insurance at Re. 1 with relief amounts Rs. 10,00,000 in case of death or permanent total disability, Rs. 7,50,000 for permanent partial disability, and Rs. 2,00,000 for hospitalization expenses for injuries. Given PLIA hasn’t been revised since its introduction, the update can follow Indian Railways’ suit, which may require changes in indemnity limits as well. 

Despite the weakness of the Act, the Fund had managed to collect an amount of Rs 810 crore as of March 2019, finds Sinha. And although ensuring stronger implementation is an uphill battle that by itself warrants an extensive independent discussion, an increase in transparency would be a no small feat. Sinha notes in his study that despite having a web-based ‘Public Liability Insurance Policy Management System’ (PLIMPS) which intends to provide information about the industries that come under the PLIA along with their policies and contributions to the ERF, could not be accessed easily. PLIMPS should be made available in the public domain so as to increase the transparency, accountability, and compliance of PLIA.

Even with their flaws, PLIA and ERF have been a step towards the right direction, however, without actual impact, their influence has been insignificant. The Act requires urgent changes, and an even imperative structural change to ensure that benefits reach the victims. 

Rishita Sankrit has recently graduated with a Master’s degree in Economics from Ashoka University.


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