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February 24, 2007

Dow to US watchdog: we bribed Indian officials for clearances

Sonu Jain, Indian Express, February 24, 2007

NOCIL: SEC ruling details how Dow Chem senior management greased palms of top regulatory officials through petty contractors

NEW DELHI, FEBRUARY 23: Dow Chemical has admitted that to "expedite" registration of its pesticides in India between 1996 and 2001, its senior management in India approved and made "irregular payments" to government officials, at the Centre and in states, including an influential member of the registration committee of the Central Insecticide Board, the Agriculture Ministry's apex regulatory authority responsible for approving pesticides.

This startling disclosure appears in a February 13 ruling by the US Security and Exchange Commission (SEC) which got Dow to pay $325,000 in penalty after the chemical giant detailed the steps it had taken to investigate and expose the corruption and take clean-up action. Dow conducted an internal investigation and voluntarily approached the commission.

"We have not received any official communication on this as yet," P K Mishra, Secretary, Agriculture, told The Indian Express tonight. "This sounds very serious and we will make enquiries."

Michigan-based Dow is the largest manufacturer of chemicals, pesticides and plastics. DE-Nocil was established in 1994 as a joint venture when a majority-owned Dow subsidiary, Dow Elanco, acquired 51% stake in the local National Organic Chemicals Industry (Nocil). In 1997, Dow Elanco, became a wholly-owned subsidiary of Dow and was renamed Dow Agro Sciences. In 2005, Dow attained 100 per cent ownership of DE-Nocil.

The SEC report details the way money was allegedly routed from the company to government officials. Before a pesticide is marketed, the company requires registration at the Central level by the Central Insecticide Board (CIB). Within CIB, is a six-member registration committee. "A key member" of this committee, the SEC says, "was able to determine if and when a company's agricultural chemical would be registered. And, in effect, the CIB official would refuse or delay registrations unless he received financial payments. The individual left CIB in 2000.''

The others who received payments are "licensing officers'' in each state. These are officials who could prevent the sale of the product by drawing samples and falsely claiming that the samples were misbranded or mislabeled. This would have meant the company challenging these accusations in court. "However, rather than face a suspension in sales of products caused by false accusations, companies would make petty cash payments to state inspectors,'' says the report.

Most of these payments to state-level officials were petty amounts — well under $100, amounting to $87,400 in these five years.

"DE-Nocil's commercial vice president, who later became a technical development leader, developed an improper payment practice to facilitate these registrations, they used consultants and unrelated companies to make these improper payments,'' states the SEC report.

DE-Nocil personnel enlisted one of their contractors, an Indian product formulator. to accumulate funds on their behalf. The contractor, through an agreement with DE-Nocil, added fictitious charges called "incidental charges'' on its bills to DE-Nocil. The contractor agreed to segregate the funds representing these incidental charges and to disburse these funds as directed by DE-Nocil. When needed, DE-Nocil contacted the contractor and asked it to disburse the funds to third party "consultants'' who delivered the fund to CIB official.

DE-Nocil made approximately $20,000 in improper payments to the CIB official through this contractor.

The second contractor , also one of DE-Nocil's product formulators, issued a false invoice for $12,000 in capital equipment. The payment authorised by DE-Nocil's Managing Director was then delivered to the CIB official.

The payments resulted in the expedited registrations, Dow estimated that DE-Nocil generated $435,000 in direct opening margin from accelerated sales of these products, 76% of which went to Dow.

An independent auditor retained by Dow identified $75,600 of payments and by extrapolations estimated that $125,000 additional amount was paid.

THE BRIBE BREAK-UP

Money to register its products $39,700
State-level agriculture inspectors $87,400
Gifts, travel and entertainment $37,000
Government officials $19,000
Sales tax officials $11,800
Excise tax officials $3,700
Custom officials $1,500

Posted by bhola at 08:57 AM | Comments (0)

February 17, 2007

Dow chem’s kick-back issue rocks agriculture ministry

ASHOK B SHARMA, THE FINANCIAL EXPRESS, FEBRUARY 17, 2007

NEW DELHI, FEB 16: The agriculture ministry has been taken aback by reports that a heavy penalty has been imposed on US company Dow Chemical for making “improper” payments to Indian government officials for allowing the use of its pesticides.

The Securities and the Exchange Commission (SEC) in the US on Tuesday slapped a civil penalty of $325,000 on Dow Chemical in an effort to settle the charge that the company’s subsidiary, DE-Nocil Crop Protection Ltd, made “improper” payments to Indian government officials. Dow Chemicals agreed to settle the matter without admitting or denying wrong-doings and to desist from future violations of the Foreign Corrupt Practices Act.

The SEC found that DE-Nocil improperly paid an estimated $200,000 to government officials in India for registration of some of its products in the period 1996-2001. The SEC noted that the payments were not adequately reflected in Dow Chemical’s books and records, and the company’s internal control failed to prevent the payments.

When asked to comment on the situation, a senior official of the Union agriculture ministry said: “We are surprised at this development. We follow strict norms for registration of pesticides in the country. There is a registration committee of experts to assess the hazards connected with pesticides and their effectiveness. On the basis of the registration committee’s recommendations, the Central Insecticides Board allows registration and use of pesticides.”

According to sources in the ministry, the registration committee and the Central Insecticides Board would be asked to review all the products of DE-Nocil registered in the period 1996-2001. Over 203 pesticides have been so far registered in the country. The manufacture and import of about 27 pesticides have been banned.

Posted by bhola at 10:18 PM | Comments (0)

Punish Dow for bribing Indian officials, say gas victims

THE PIONEER, FEBRUARY 17, 2007

Leaders of four Bhopal gas tragedy survivors and support organisations urged the Government to lodge an FIR against Dow Chemical and its Indian subsidiary Dow Agro Sciences India (earlier DeNocil) for bribes paid by the company. They have also demanded separate enquiries by law enforcement agencies and the Economic Offences Wing of the Government of India into the matter.

Earlier this week, Dow Chemical paid a fine of $325,000 (Rs. 1.43 crore) to US financial regulator Securities Exchange Commission(SEC) for paying $200,000 (Rs. 88 lakhs) in bribes to several Indian Government officials. According to SEC records, a senior official in the Central Insecticides Board received $39,700 (Rs. 16 lakhs) for registering Dow's pesticides in India between 1996 and 2001. Other State officials received $87,400 (Rs. 38 lakhs) for facilitating distribution and sales of Dow's pesticides.

Speaking to mediapersons in Bhopal, Satinath Shadangi of the Bhopal Group for Information and Action said that the Securities Exchange Commission had found Dow guilty under the Foreign Corrupt Practices Act. He added that Dow Chemical continues to use insecticides like Dursban (Chloropyriphos) that have been banned in the United States.

He also said that there have been several instances in the past when Dow's dishonest practices in India have been exposed. In 2005, Indian Oil Corporation cancelled a deal with Dow because the company falsely sold Union Carbide technology as its own. Last year, Dow Corning, a joint venture of Dow Chemical, obtained regulatory approval from the Maharashtra Pollution Control Board for setting up a factory near Pune despite making false submissions. Dow Corning managed to get permission to operate their factory despite submitting a map of its factory in Elizabethtown in the United States instead of a local site map as under Indian law.

Shadangi also attacked the Prime Minister's Office and the MP Government and said that they had been turning a blind eye to the activities of Dow Chemical in India.

He criticized the Madhya Pradesh Government's recent move in the High Court to help Dow evade environmental liability by applying for Rs. 2 crores from the Government of India for disposal of hazardous chemical waste stored inside the Bhopal factory.

In a clarification available on the Dow website, the Company said that the bribe paying in India was unauthorized and action has been taken against employees found guilty. The company also claimed to have strengthened its financial controls to prevent the recurrence of such incidents.

Posted by bhola at 09:02 AM | Comments (0)

Row over Dow's alleged payments to Indian officials

DAILY NEWS ANALYSIS, FEBRUARY 16, 2007

WASHINGTON: US-based company Dow Chemicals has got embroiled in a controversy following allegations that payments were made to Indian government officials to enable its operations in India between 1996 and 2001.

In the wake of the allegations by regulator US Securities and Exchange Commission (SEC), Dow has agreed to pay an amount of $325,000 as civil penalty to settle the matter without admitting or denying the charges.

In Bhopal, the 1984 gas leak survivors demanded filing of a police case against the company and separate investigations by law enforcement authorities and Economic Offences Wing.

"The payments were made without the authorisation or knowledge of Dow or Dow AgroSciences employees in the US. Once Dow discovered the matter, the company conducted a thorough investigation and voluntarily notified the SEC of its findings," a press statement on Dow website said adding its Code of Business Conduct explicitly prohibited making improper payments to third parties.

"We will pursue every violation that we uncover and respond with appropriate discipline," the Dow AgroSciences President and CEO Jerome Peribere was quoted as saying in the press statement.

Settlement has been reached with the SEC, resolving issues arising from allegations of payments to government officials in India by DE-NOCIL Crop Protection Ltd, a third-tier joint venture subsidiary of Dow AgroSciences, itself a second-tier wholly-owned subsidiary of The Dow Chemical Company, the statement said.

Posted by bhola at 09:00 AM | Comments (0)

Gas tragedy survivors seek action against US firm

THE PENINSULA, QATAR, FEBRUARY 17, 2007

Bhopal • Survivors of the Bhopal gas tragedy have called on the central government to file a police complaint against a US-based chemical company and its Indian subsidiary for allegedly paying bribes to Indian officials to get its pesticides registered.

Dow Chemical Company, which was fined by US financial regulator Securities Exchange Commission (SEC) earlier this week for paying $200,000 (Rs8.8m) in bribes to several central government officials. Dow's Indian subsidiary is Dow Agrosciences India.

The US-based firm now owns the Union Carbide Corp (UCC), where disaster occurred on the intervening night of December 2-3, 1984 after over 40 tonnes of lethal Methyl Iso-Cyanate (MIC) spewed out of its pesticide plant here, killing more than 3,000 people instantly and maiming thousands of people for life. More than 15,000 people affected with the exposure of toxic gas have died since then.

Addressing a joint press conference yesterday, the leaders of various organisations, including Bhopal Gas Peedit Mahila Stationery Karmachari Sangh (BGPMSKS), Bhopal Gas Peedit Mahila Purush Sangharsh Morcha (BGPMPSM), Bhopal Group for Information and Action (BGIA) and Bhopal Ki Aawaaz (BKA), have also demanded separate enquiries by India's law enforcement authorities and the Economic Offences Wing into the matter.

"According to SEC records, one senior official in the Central Insecticides Board received $39,700 (Rs1.6 m) for registering Dow's pesticides in India between 1996 and 2001 while other state officials received the remaining amount for facilitating distribution and sale of Dow's pesticides," Satinath Sarangi of BGIA said.

Posted by bhola at 08:59 AM | Comments (0)

Probe sought into Dow company activities

THE HINDU, FEBRUARY 17, 2007

`Order probe by law enforcement authorities and EOW'

BHOPAL: Leaders of four voluntary organisations working with the victims of the 1984 gas tragedy here have said that an FIR should be lodged against the Dow Chemical Company of the United States and its Indian subsidiary the Dow Agrosciences India (earlier DeNocil) for "bribes" paid by them for setting up a factory near Pune.

They demanded separate enquiries by the law enforcement authorities and the Economic Offences Wing into the matter.

At a press conference, organised jointly by the Bhopal Group for Information and Action, the Bhopal Gas Peedit Mahila Stationery Karmachari Sangh, the Bhopal Gas Peedit Mahila Purush Sangharsh Morcha, and the Bhopal ki Aawaaz, founder-chairman of Bhopal Group for Information and Action Satinath Sarangi alleged on Friday that the Dow Chemical Company paid a fine of $3,25,000 to the U.S. financial regulator Securities Exchange Commission earlier this week without admitting or denying the commission's allegations.

Posted by bhola at 08:57 AM | Comments (0)

Dow fined in US for bribes: NGO

HINDUSTAN TIMES, FEBRUARY 16, 2007

INSECTICIDES BOARD OFFICIAL TOOK MONEY

M/S DOW CHEMICALS has been fined US $ 3,25,000 (Rs 1.43 crore) by the US financial regulator Securities Exchange Commission (SEC) under Foreign Corrupt Practices Act for paying $ 2,00,000 (Rs 88 lakh) to several Government officials in India for registering its pesticides in India.

Informing this at a press conference, Satinath Sarangi of International Campaign for Justice in Bhopal, an NGO spearheading the campaign against Dow Chemicals to own up its liabilities towards Bhopal gas victims, said that SEC records showed that a senior official in the Central Insecticides Board received $ 39,700 (Rs 16 lakh) for registering Dow’s pesticides in India between 1996 and 2001 while Indian states’ officials received $ 87,400 (Rs 38 lakh) for facilitating distribution and sales of Dow’s pesticides.

He was accompanied at the press conference by US representative of International Campaign for Justice in Bhopal Aqutne Freechild, who showed papers in which Dow Chemicals had itself confessed to have paid the penalty for wrongdoing of its officials. The papers stated that Dow Chemicals conducted an internal investigation and voluntarily presented the results to the SEC.

Sarangi, while demanding action against Dow Chemicals and Indian officials, who received bribe from the company, under Prevention of Corruption Act, said that NGOs working among gas victims in Bhopal have long been demanding withdrawal of Indian registration of Dow’s flagship product - Dursban - a pesticide banned for domestic use in the USA.

He further said that there had been several instances in the past when Dow’s ‘dishonest’ practices in India have been exposed. In 2005, Indian Oil Corporation cancelled a deal M/s Dow Chemicals because the company falsely sold Union Carbide’s technology as its own, he pointed out.

Posted by bhola at 08:56 AM | Comments (0)

Bhopal gas survivors demand action against US firm

THE MANGALOREAN, FEBRUARY 17, 2006

Bhopal, Feb 17 (IANS) Survivors of the Bhopal gas tragedy have called on the central government to file a police complaint against a US-based chemical company and its Indian subsidiary for allegedly paying bribes to Indian officials to get its pesticides registered.

Dow Chemical Company, which was fined by US financial regulator Securities Exchange Commission (SEC) earlier this week for paying $200,000 (Rs.8.8 million) in bribes to several central government officials. Dow's Indian subsidiary is Dow Agrosciences India.

The US-based firm now owns the Union Carbide Corp (UCC), where disaster occurred on the intervening night of Dec 2-3, 1984 after over 40 tonnes of lethal Methyl Iso-Cyanate (MIC) spewed out of its pesticide plant here, killing more than 3,000 people instantly and maiming thousands of people for life. More than 15,000 people affected with the exposure of toxic gas have died since then.

Addressing a joint press conference Friday, the leaders of various organisations, including Bhopal Gas Peedit Mahila Stationery Karmachari Sangh (BGPMSKS), Bhopal Gas Peedit Mahila Purush Sangharsh Morcha (BGPMPSM), Bhopal Group for Information and Action (BGIA) and Bhopal Ki Aawaaz (BKA), have also demanded separate enquiries by India's law enforcement authorities and the Economic Offences Wing into the matter.

"According to SEC records, one senior official in the Central Insecticides Board received $39,700 (Rs.1.6 million) for registering Dow's pesticides in India between 1996 and 2001 while other state officials received the remaining amount for facilitating distribution and sale of Dow's pesticides," Satinath Sarangi of BGIA said.

The survivors, he said, have long been demanding withdrawal of Indian registration for Dow's flagship product - Dursban (chlorpyriphos) - a pesticide banned for domestic use in the US.

"In 2000, US environment officials forced its withdrawal as they found the chemical - strong enough to damage the brain - widely present in ground water and human body. Yet, Dow continues to produce and market Dursban in India for domestic use falsely claiming that it is safe for humans," Sarangi lamented.

He said there were several instances when Dow's dishonest practices in India were exposed. In 2005, Indian Oil Corp cancelled a deal with Dow because it falsely sold Union Carbide technology as its own.

Last year, Dow Corning, a joint venture of Dow Chemical, obtained regulatory approval from the Maharashtra Pollution Control Board for setting up a factory near Pune. The firm managed to get permission to operate its factory despite submitting a map of its factory in Elizabethtown in the US instead of a local site map as required by Indian law.

"The bribes to senior officials are merely the tip of the iceberg. We find even the prime minister's office turning a blind eye to the ongoing crimes of the Union Carbide and Dow Chemical and offering special privileges for expansion of the latter's business in this country." said the Golden Peacock award winner Rashida Bee of BGPMSKS.

Posted by bhola at 08:54 AM | Comments (0)

February 16, 2007

Dow Chemical caught bribing Indian officials, fined $325,000

SIOBHAN HUGHES, DOW JONES NEWSWIRES, FEBRUARY 15, 2007

WASHINGTON -- Dow Chemical Co. will pay a $325,000 civil penalty to settle charges that a subsidiary made improper payments to Indian government officials who held sway over regulatory approvals for the company's pesticides, the Securities and Exchange Commission said.

Midland-based Dow also agreed to cease and desist from future violations of the Foreign Corrupt Practices Act. It settled without admitting or denying wrongdoing, the SEC said late Tuesday.

The SEC found that from 1996 through 2001, Dow's DE-Nocil Crop Protection Ltd. unit improperly paid an estimated $200,000 to Indian state and federal officials as it sought to register several products slated for marketing in time for India's growing season. The SEC said these payments weren't reflected adequately in Dow's books and records.

The SEC said Dow conducted an internal investigation, voluntarily presented the results to the SEC and disciplined employees. The company also hired an independent auditor to review its books, the SEC said.

A Dow spokesman wasn't immediately available to comment.

Posted by bhola at 05:26 AM | Comments (0)

February 14, 2007

UPDATE 1-US says Dow Chemical fined $325,000 for bribing foreign officials

REUTERS, FEBRUARY 13, 2007

AT THE HELM OF THIS CORRUPT COMPANY:
Andrew Liveris
Chairman of the Board, President, Chief Executive Officer
Salary: USD 1,087,500
Bonus: USD 2,250,000
Age: 51

Full Management Team
Insider Trading

WASHINGTON, Feb 13 (Reuters) - Dow Chemical Co. (DOW.N: Quote, Profile, Research) agreed to pay a $325,000 civil penalty to settle allegations a unit made improper payments to Indian officials, the U.S. Securities and Exchange Commission said on Tuesday.

The company, the No. 1 U.S. chemical maker, agreed to settle the SEC charges of violating the Foreign Corrupt Practices Act, without admitting or denying any wrongdoing, the SEC said.

The SEC's complaint said DE-Nocil Crop Protection Ltd., a pesticides subsidiary of Dow based in Mumbai, made an estimated $200,000 in improper payments to Indian government officials from 1996 through 2001, in part to expedite registration of some of the unit's products.

The subsidiary also made improper payments to state officials to distribute and sell its products, while other payments were made to government, tax and customs officials for gifts, entertainment and other items, the SEC said. (Additional reporting by Leonard Anderson)

Posted by bhola at 09:04 AM | Comments (0)