Hazardous Substances and Chemical Accidents: The MSIHC Rules, 1989, the Chemical Accidents Rules, 1996, Crisis Groups and the Bhopal Gas Disaster

On the night of 2 and 3 December 1984, about forty tonnes of methyl isocyanate escaped from the Union Carbide pesticide plant in Bhopal. Thousands died within days and hundreds of thousands suffered lasting injury. The disaster revealed that India had no law requiring hazardous industries to identify risks, prepare emergency plans, inform neighbours or compensate victims quickly. The legal response came in layers: the Bhopal Gas Leak Disaster (Processing of Claims) Act, 1985; the Environment (Protection) Act, 1986; Chapter IVA of the Factories Act; the Manufacture, Storage and Import of Hazardous Chemical Rules, 1989; the Public Liability Insurance Act, 1991; and the Chemical Accidents (Emergency Planning, Preparedness and Response) Rules, 1996. This note covers the regulatory and emergency response framework.

1. Hazardous Substances Regulation: The Framework

The Environment (Protection) Act, 1986 is the parent law. Section 2(e) defines a hazardous substance as 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, plants, micro-organisms, property or the environment. Section 3(2)(vi) and (vii) empower the Centre to lay down procedures and safeguards for the prevention of accidents and for the handling of hazardous substances. Section 8 requires every person handling a hazardous substance to comply with those procedures and safeguards, and Section 9 requires information about any accidental discharge to be furnished to the authorities. The two principal sets of rules made under these provisions are the MSIHC Rules, 1989 and the Chemical Accidents Rules, 1996.

Other laws on hazardous substances operate alongside:

• Factories Act, 1948, Chapter IVA (inserted in 1987 after Bhopal): site appraisal committees, compulsory disclosure of information, emergency standards, and the right of workers to warn of imminent danger; its safety provisions are now carried forward in the Occupational Safety, Health and Working Conditions Code, 2020, brought into force in November 2025;
• Public Liability Insurance Act, 1991: compulsory insurance and no-fault relief (Topic 37);
• Insecticides Act, 1968, Explosives Act, 1884, Petroleum Act, 1934 and the Gas Cylinders Rules: sector-specific controls;
• Central Motor Vehicles Rules, 1989: transport of hazardous goods by road;
• Hazardous and Other Wastes Rules, 2016: hazardous waste as distinct from hazardous chemicals in use; and
• Disaster Management Act, 2005 and the NDMA Guidelines on Chemical Disasters (2007).

2. The Manufacture, Storage and Import of Hazardous Chemical Rules, 1989

The MSIHC Rules, notified on 27 November 1989 under Sections 6, 8 and 25 of the EPA, apply to industrial activities (including isolated storage and pipelines) involving hazardous chemicals and to the import of hazardous chemicals. They have been amended in 1994 and 2000 to expand the list of chemicals and tighten duties.

2.1 Meaning of hazardous chemical

A hazardous chemical is a chemical that satisfies the criteria in Part I of Schedule 1 (toxicity, flammability and explosivity) and is listed in Part II of Schedule 1, or is listed in Schedule 2 (isolated storage) or Schedule 3 (industrial installations). Schedule 1 now lists several hundred chemicals. Schedules 2 and 3 fix threshold quantities; activities involving quantities at or above the thresholds attract the heavier duties.

A major accident means an incident involving loss of life inside or outside the installation, or ten or more injuries inside, or one or more injuries outside, or the release of a toxic chemical, an explosion, fire or spillage of a hazardous chemical resulting in an on-site or off-site emergency, damage to equipment leading to stoppage of the process, or adverse effects on the environment.

2.2 Major accident hazard installations

An installation that handles hazardous chemicals at or above the Schedule 2 or 3 threshold quantities is known as a major accident hazard (MAH) installation. Its occupier must: identify major accident hazards; take adequate steps to prevent major accidents and limit their consequences; provide information, training and equipment (including antidotes) to persons working on site; notify the concerned authority of any major accident within forty-eight hours; obtain approval and notify the site before commencing activity; prepare a safety report and conduct safety audits; prepare an on-site emergency plan; assist in preparing the off-site emergency plan; inform persons outside the site who are likely to be affected; and maintain material safety data sheets and label containers.

2.3 Safety reports

The occupier of an MAH installation must prepare a safety report containing the information in Schedule 8 (the nature of the activity, the chemicals and quantities, the hazards, the safety systems, and the emergency arrangements) and submit it to the concerned authority at least ninety days before commencing a new activity. The report must be updated on any modification. The occupier must also carry out an independent safety audit with the help of an expert not associated with the activity, annually, and send the report with its comments to the authority.

2.4 On-site emergency plans

The on-site emergency plan is prepared by the occupier before commencing the activity. It sets out how a major accident inside the installation will be dealt with: alarms, key personnel and their duties, shutdown procedures, firefighting, evacuation, medical treatment and communication with outside agencies. The occupier must conduct mock drills every six months and report them to the authority.

2.5 Off-site emergency plans

The off-site emergency plan is prepared by the District Collector or the district emergency authority identified in the Rules, in consultation with the occupier. It deals with the effect of a major accident outside the installation: warning the public, evacuation routes, shelters, hospitals and antidotes, traffic control, and coordination of the police, fire, health and pollution control agencies. The occupier must supply the information required to prepare it, and the plan must be rehearsed periodically.

2.6 Import of hazardous chemicals

An importer of hazardous chemicals must furnish complete product safety information to the concerned authority before import, and the authority may prohibit or regulate import if the chemical is likely to cause a major accident. The importer must also inform the authority of the quantities imported and the users to whom they are supplied, so that downstream MAH installations can be tracked.

3. The Chemical Accidents (Emergency Planning, Preparedness and Response) Rules, 1996

The MSIHC Rules place duties on individual occupiers. The Chemical Accidents Rules, notified on 1 August 1996 under the EPA, create a four-tier institutional structure of crisis groups to plan for and respond to chemical accidents, and a crisis alert system.

Each group includes officials from the relevant departments (industry, labour and factories, health, police, fire, pollution control), representatives of industry and experts. The Local Crisis Group is also responsible for public awareness: people living near hazardous plants must know the warning signals and what to do. The Rules require public information to be given about the nature of the hazard, and the Central Crisis Group maintains a crisis alert system and a list of experts and emergency resources.

4. Industrial Chemical Accidents and Hazardous Substance Handling

Industrial chemical accidents include toxic releases (Bhopal, Visakhapatnam), fires and explosions (refinery and fireworks fires), and spills into rivers and soil. Most arise from a combination of poor design, deferred maintenance, disabled safety systems, untrained staff, and siting close to dense populations. Safe hazardous substance handling therefore rests on: inventory control and threshold limits; hazard identification and risk assessment; engineering controls (scrubbers, flares, refrigeration, interlocks); labelling and safety data sheets; worker training and personal protective equipment; emergency planning and drills; safe transport; and information to the public.

5. Emergency Response and Environmental Law

Environmental law's approach to emergencies combines prevention (siting, licensing, safety reports, audits), preparedness (on-site and off-site plans, crisis groups, mock drills, public information), response (warning, evacuation, medical care, containment), and recovery and liability (interim relief, compensation, restoration). The absolute liability rule in M.C. Mehta v. Union of India (Oleum gas leak), (1987) 1 SCC 395, the no-fault relief under the Public Liability Insurance Act, and Section 17(3) of the National Green Tribunal Act, 2010 (no-fault liability for accidents) ensure that the cost of an accident falls on the enterprise. The Disaster Management Act, 2005 adds district and State disaster management authorities and plans, which must integrate the chemical off-site plans. The precautionary principle justifies strict siting and zoning of hazardous industries away from residential areas.

6. The Bhopal Gas Disaster

Union Carbide India Limited (UCIL), a subsidiary of the American Union Carbide Corporation (UCC), manufactured the pesticide Sevin at Bhopal using methyl isocyanate (MIC). On the night of 2 and 3 December 1984, water entered tank E-610, triggering a runaway reaction; the refrigeration unit was switched off, the scrubber and flare were inadequate or out of service, and the gas spread over sleeping neighbourhoods. The official immediate death toll was about 3,800, and later estimates run far higher, with over five lakh people registered as affected.

The legal history is a study in the limits of the law at the time:

1. 1985: Parliament enacted the Bhopal Gas Leak Disaster (Processing of Claims) Act, and the Union of India sued UCC in New York. In 1986 the US court dismissed the suit on the ground of forum non conveniens, sending it to India.
2. 1989: The Supreme Court recorded a settlement of US $470 million in full and final settlement of all civil and criminal claims.
3. 1990: In Charan Lal Sahu v. Union of India, (1990) 1 SCC 613, the Supreme Court upheld the Act.
4. 1991: In Union Carbide Corporation v. Union of India, (1991) 4 SCC 584, the Court upheld the settlement but revived the criminal proceedings, holding that the quashing of criminal cases could not be part of a civil settlement.
5. 1996: In Keshub Mahindra v. State of M.P., (1996) 6 SCC 129, the charges were reduced to causing death by negligence (Section 304A IPC); the accused Indian officials were convicted in 2010 and sentenced to two years' imprisonment, prompting national outrage. A curative petition to restore the graver charges was dismissed in 2011.
6. 2023: On 14 March 2023, a Constitution Bench dismissed the Union's curative petition seeking additional compensation from UCC's successors, holding that a settlement could not be reopened after two decades and that any shortfall was the Union's responsibility to make good.
7. 2025: About 337 tonnes of toxic waste lying at the plant site were moved to a facility at Pithampur and incinerated by June 2025, under the supervision of the Madhya Pradesh High Court, amid local protests. Contaminated soil and groundwater around the site remain a concern.

Bhopal's legacy for environmental law is profound: it produced the EPA, Chapter IVA of the Factories Act, the MSIHC and Chemical Accidents Rules, the Public Liability Insurance Act and, through the Oleum gas case decided in its shadow, the rule of absolute liability.

7. The Bhopal Gas Leak Disaster (Processing of Claims) Act, 1985

The Act, enacted on 29 March 1985, aimed to ensure that claims arising out of the disaster were dealt with speedily, effectively and equitably. Its key features are:

• Section 3: the Central Government has the exclusive right to represent and act in place of every claimant, whether within or outside India, in all proceedings relating to the claims, including the power to enter into a compromise;
• the Central Government acts as parens patriae, on the reasoning that victims, many of them poor and illiterate, could not effectively sue a multinational corporation themselves;
• claimants may be represented by counsel of their choice and the Government must have due regard to their views;
• the Central Government frames a scheme for registration and processing of claims, under which Welfare Commissioners and Claims Commissioners adjudicate and disburse compensation; and
• the Act has overriding effect over other laws.

8. Critical Appraisal

The post-Bhopal regime is comprehensive on paper: thresholds, safety reports, audits, emergency plans at every level and crisis groups from the Centre to the locality. Implementation is uneven. Many district and local crisis groups meet irregularly; off-site plans are often outdated and unknown to the public; MAH installations are sometimes surrounded by unplanned housing; inspection capacity is thin; and accidents such as Visakhapatnam show that basic duties are still ignored. The MSIHC Rules have not been comprehensively revised since 2000, and a comprehensive chemicals management law has long been discussed. The Bhopal litigation, with its modest settlement and diluted criminal charges, remains a warning that liability law must be decisive and quick.

9. Related Topics and Provisions