BHOPAL, India — Union Carbide Corp. has agreed to pay $500 million in compensation to survivors of the 1984 gas leak disaster in a tentative out-of-court settlement with the Indian government, sources said Monday.
The sources, who asked not to be identified, said the sum would be paid out over a 10-year period, but an announcement of the settlement will not be made until next month to give time for details to be worked out.
Indian officials could not be reached for immediate comment, and Union Carbide, based in Danbury, Conn., denied that a firm agreement had been reached.
"Talks are continuing, but we do not yet have a settlement agreement," spokesman Earl Slack said. "We are hopeful that a settlement will be reached, but we can't predict when that will happen."
Could Drag On
He would not comment on the status of negotiations or any other aspects of the case.
The Dec. 3, 1984, accident at the company's pesticide plant in Bhopal, 375 miles south of New Delhi, is blamed for 2,889 deaths and more than 270,000 injuries.
Methyl isocyanate gas escaped through a ruptured valve, killing area residents as they slept. Most of the dead were children and elderly people crowded into shanty towns around the plant.
The sources did not say when the agreement was reached, but the two sides were ordered last month to reach an out-of-court settlement by Nov. 18 or hearings in the case would resume. Legal experts had said the case could drag on for several years.
Lawyers for the two sides will ask Judge M. W. Deo at the Bhopal District Court for more time Wednesday, the deadline date, to work out the details of the tentative agreement.
Prime Minister Rajiv Gandhi's government is likely to face criticism over any out-of-court settlement, which many say will not adequately compensate the victims. Opposition parties and volunteer groups aiding survivors of the disaster have called a one-day strike in Bhopal on Wednesday to protest the possible settlement.
The Indian government contends that Union Carbide's negligence was to blame for the gas leak and sued the company for $3 billion in compensation for the 500,000 people it estimates were affected overall.
Union Carbide claims sabotage by a disgruntled employee caused the accident.
The sources said Union Carbide initially offered $323 million as compensation, but after protracted negotiations, the company agreed with the government on a figure of $500 million.