« May 2007 | Main | August 2007 »
July 30, 2007
Dow faces Paswan hurdle on gas clean-up!
JAYANTA ROY CHOWDHURY, Calcutta Telegraph, July 30, 2007
New Delhi, July 29: The Centre may not be able to let Dow Chemicals shrug off responsibility for cleaning up the toxic residue left behind by the Bhopal gas disaster.
A note being prepared by the ministry of chemicals and fertilisers is expected to argue against letting Dow walk away without paying for clearing the waste.
The tragedy occurred when toxic gas leaked from Union Carbide’s Bhopal plant in December 1984. About 8,000 people were killed and thousands injured in the gas leak.
Since Dow bought Union Carbide for $9.3 billion in 2001, the ministry feels the responsibility for the clean-up is on the acquirer under Indian corporate laws.
Ram Vilas Paswan, the chemicals and fertilisers minister who has been vying for political space among the Scheduled Castes of Madhya Pradesh, has asked his office to prepare the note.
Officials say it will be difficult for the government to spare Dow as there is a legal case pending against the company before Jabalpur High Court. It would also set a bad precedent for future global corporate takeovers which have repercussions in India.
“Indian law is very clear a successor company is liable for the acts of its predecessor. Dow wants to skirt this. It bought Carbide knowing fully well the legal liabilities here,” an official said.
“We are not against Dow’s entry into India... we hadn’t objected to its tie-up with Reliance but we need to respect our legal system.”
A proposal by Ratan Tata to organise a clean-up is not acceptable, too. The ministry, which represents the Centre in all cases related to the Carbide tragedy, says the idea is against the principle of making the successor pay.
Tata co-chairs a forum of CEOs of India and the US, of which Dow president Andrew N. Liveris is a member. He had proposed a fund, with contributions from Indian and US firms, for the clean-up.
Jabalpur High Court, acting on a PIL, has already ordered Dow to deposit Rs 100 crore for clearing the toxic waste in and around the site of the Bhopal factory.
The court wants some 70 tonnes of poisonous residue which have seeped contaminated the soil and groundwater and affected vegetation and animal tissues in the area removed. There are also demands for compensation to nearly 20,000 people who were affected by exposure to contaminants in water and food.
Dow argues that the plant was owned by Union Carbide India — a joint venture between Union Carbide Corporation, the Indian government and private investors — in 1984. Union Carbide sold its shares in 1994, seven years before Dow acquired the company.
But NGOs and associations representing victims of the gas leak have been demanding that Dow pay for the environmental and health damages caused by the reckless dumping of hazardous chemical wastes in the factory. Protesters claim contaminated water from the factory flowed into Bhopal localities after rains.
Some NGOs say they have documents — procured under the Right to Information Act — that suggest members of the Union cabinet would like some kind of a compromise, one that helps Dow invest in India.
Commerce minister Kamal Nath is reported to have written to the Prime Minister’s Office earlier this year asking for a panel to look into the clean-up issue.
“With a view to sending an appropriate signal to Dow Chemicals, which is exploring investing substantially in India, I would urge that a group under the chairmanship of cabinet secretary be formed to look into the matter.”
Posted by tim at 04:28 PM | Comments (0)
July 27, 2007
Dow's Bhopal legacy under scanner
Economic Times, G Ganapathy Subramaniam & Gireesh Chandra Prasad, TNN, 27 Jul, 2007
Editor's note: The following story signals a potentially key event in Bhopal's long fight for justice and economic and environmental rehabilitation. If the PMO files caught numerous Indian officials en flagrante with Dow, the following news signals preliminary plans for a shotgun wedding, with the law ministry as registrar. Though Bhopal survivors are unlikely to receive an invitation, it will not prevent them taking a role in the ceremony...
NEW DELHI: The Cabinet is all set to take a final view on the legal liability of multinational giant Dow Chemicals in the Bhopal gas tragedy.
The Trade and Economic Relations Committee (TERC) headed by Prime Minister Manmohan Singh has decided that the issue should be considered by the Cabinet since it is turning out to be a contentious one, hampering economic ties between India and the US. The government is also trying to resolve a dispute between another US company, McDermott International, and Kolkata-based Burn Standard.
The TERC has directed the department of chemicals and petrochemicals to consult the law ministry and draft a note on the legal liability of Dow so that the Cabinet could take a decision thereon.
Chemicals and fertilisers ministry officials said they are finalising their opinion by taking legal advice and keeping in mind the perception of NGOs. The note would be ready very soon, said an official.
The development is significant in view of the 123 agreement between India and the US being finalised. The US side has emphasised that the uncertainty faced by Dow — which plans to invest $1 billion in India — is a major irritant that needs to be tackled as a priority.
As ties between the two countries are expected to hit a new high after the 123 pact is concluded, New Delhi wants major disputes related to US corporations to be resolved without any delay. In the case of a commercial dispute between Kolkata-based Burn Standard Company and McDermott International of the US, the ministry of heavy industries has been asked to expedite a decision.
The heavy industries ministry has already circulated a note for the consideration of the Cabinet Committee on Economic Affairs (CCEA) to take a final call on the disputes associated with McDermott International.
The external affairs ministry highlighted the disputes related to Dow Chemicals and McDermott International during a presentation to the TERC earlier this month, highly-placed government sources said.
The meeting was attended by finance minister P Chidambaram, commerce and industry minister Kamal Nath and Planning Commission deputy chairperson Montek Singh Ahluwalia. A number of senior bureaucrats were also present, the sources said.
Earlier, Tata Group chief Ratan Tata, in his capacity as Investment Commission chairman, has proposed cleaning up of the Bhopal Union Carbide site through a settlement plan. In view of the litigation over the issue, the government did not go ahead with the proposal.
Leak of poisonous gas from the Union Carbide factory killed 4,000 people in 1984 and a settlement over compensation was arrived at after a protracted legal battle. However, a dispute over clearing the site of toxicity still persists.
In 1994, Union Carbide sold its stake in its Indian company to Kolkata-based McLeod Russel. In 2001, Dow bought Union Carbide for $9.3 billion. The Bhopal unit of Union Carbide remains shut since the 1984 tragedy.
Posted by tim at 03:52 PM | Comments (0)
July 19, 2007
Dow Chem tries to avoid paying Rs 100cr
Olga Trellis, The Asian Age, July 18, 2007
Mumbai, July 18: Dow Chemical chairman Andrew Liveris has in a letter to Indian ambassador to the United States Ronen Sen tried to enlist his support to get the Union ministry of chemicals and fertilisers to drop its demand for the payment of Rs 100 crores as a deposit for environmental remediation costs in Bhopal.
Dow Chemical, which now wholly owns Union Carbide, is currently embroiled in court proceedings, to which the Indian government is also a party, over a final settlement in Bhopal, where over 22,000 people were killed following a horrific gas leak at the Carbide plant in December 1984. The ministry of chemicals and fertilisers had applied to the court to order the company to pay Rs 100 crores as a deposit before anything else.
This is one of the obstacles that Dow Chemical wants removed before it re-enters India to do business, a move which the Indian government has been quietly encouraging.
In the letter to Mr Sen, Mr Liveris said: "The Government of India’s ministry of chemicals and fertilisers applied to the court in May 2005 to order Dow to pay a deposit of Rs 100 crores (approximately $22 million) against environmental remediation costs. The court has to date deferred the ruling on the merits of the application. It follows logically from the GoI’s statements regarding the non-liability of Dow that the MoCF should withdraw its application for a financial deposit against remediation costs. Certainly a withdrawal of the application would be a positive, tangible demonstration that the GoI means what it says about Dow’s lack of responsibility in the matter." Mr Liveris begins his letter to Mr Sen by saying: "It was a pleasure to see you again at the US-India CEO Forum in New York on October 25. I specially appreciated your support in discussing a resolution of the Bhopal legacy issue as a tangible deliverable outcome of the CEO Forum. Given the statement made by the Government of India representatives in front of all meeting attendees that Dow is not responsible for Bhopal and will not be pursued by the Government of India, it will be important to follow through to ensure that concrete, sustained actions are taken that are consistent with these sentiments."
Mr Stanford (sic - Sanford, ed.) Lewis, attorney on behalf of some shareholders of Dow Chemical, sent a copy of Mr Liveris’ letter to Mr Sen to the US Securities and Exchange Commission and drew the attention of the SEC to the tone and contents of the letter. Mr Lewis writes: "In what would appear to be a naked effort to circumvent the normal judicial process, Mr Liveris seeks the intervention of the ambassador to get the ministry to withdraw its application. Regrettably, this effort does not take place in a vacuum. We note the recent bribery disclosures by Dow Chemical and the $325,000 penalty paid by the company to the commission related to bribes to Indian officials to register its pesticides in India."
Mr Lewis adds: "This letter betrays how difficult it will be for the company to resolve the Bhopal legacy in the manner now being attempted by Mr Liveris. As Mr Liveris acknowledges, the GoI and Dow are co-defendants in a public interest litigation. The GoI, he notes, has taken positions adverse to Dow."
Mr Lewis asks the SEC to note that the "letter may be seen to be contradicting arguments presented by the company in its no-action request on the Bhopal resolution." In a letter to the SEC on February 16, 2007, he said, Dow’s counsel had asserted that the company "was taking no new initiatives regarding Bhopal", and submitted that there was inadequate evidence that the CEO has personally sought a response from the Indian government." Mr Lewis encloses Mr Liveris’ letter to Mr Sen, saying that the letter demonstrates that the CEO and the company "are indeed actively involved in a form of negotiation and advocacy to address issues relative to remediation and liability — albeit to attempt to alter the course of current legal proceedings." Mr Lewis said in his letter: "We are gravely concerned that the company has set upon a course of doggedly standing on a prior legal outcome and refusing to take further action that could truly put the Bhopal tragedy behind it, all to the company’s detriment. Whatever the merits or demerits of the company’s legal position, the legacy issue persists as an impediment to future investment by the company in the important and burgeoning Indian economy. We believe that a reassessment of the company’s best interests would dictate a different course and that consideration of new initiatives to address the specific health and environmental concerns of Bhopal’s survivors will be critical to Dow’s re-entry into this market. That is why we have proposed a resolution to require Dow’s management to report to stockholders by October 2007 on any new initiatives regarding Bhopal."
Posted by tim at 03:01 PM | Comments (0)
Carbide owner on way back
Olga Trellis, The Asian Age, July 17th, 2007
Mumbai, July 17: The Indian government has been quietly trying to facilitate the entry into the country of Dow Chemical, now the parent company of Union Carbide. New Delhi appears to take the view that Dow Chemical bears no responsibility for the December 1984 gas tragedy at Union Carbide's plant in Bhopal, in which at least 7,000 people were killed immediately and 15,000 more died over the years.
Union Carbide, whose operations in India were shut down shortly after the Bhopal disaster, has been a wholly-owned subsidiary of Dow Chemical since 2001.
Documents available with this newspaper indicate that India's ambassador to the United States, Mr Ronen Sen, has been playing a key role in efforts to create a climate in which Dow Chemical can enter India and do business unencumbered by the baggage of Bhopal. The government had in the aftermath of the gas disaster been engaged in protracted court battles with Union Carbide both in India and in the United States, and had even launched criminal proceedings against the company and its officials, including then chairman Warren Anderson. Some of these cases are yet to be resolved.
The documents show that encouraged by the government's current stand, Dow Chemical chairman Andrew Liveris had written to Mr Sen, setting out an agenda for the company to start business in India. Mr Liveris wrote: "With the support of local Indian CEOs and foundations, there is opportunity now for the Government of India to work closely with the state of Madhya Pradesh and Indian industry to remediate (meaning remedy, or redevelop) the Bhopal site. This should take place expeditiously - beginning immediately with GoI officials and industry leaders meeting with the relevant Cabinet Secretary who has executive oversight for the remediation efforts. GoI and the state government will need to work with the court overseeing the site cleanup to assure that this effort will pass legal muster as the site's final remediation plan."
This letter literally tries to dictate to a sovereign government on what should be done in its own territory.
After this letter became public, Amnesty International USA, which is a shareholder of Dow Chemical and of New York City Pension Funds, has sought an inquiry by the US Securities and Exchange Commission "into the significant concerns about the company's failure to disclose risks to shareholders" regarding developments in the Bhopal gas tragedy.
A lawyer, Mr Stanford (sic - Sanford, ed.) J. Lewis, had on behalf of Amnesty and others written a letter on April 12, 2007 to Mr Conrad Hewitt, chief accountant, Securities and Exchange Commission, and Mr John W. White, director, division of corporation finance, SEC, about Dow Chemical's moves which had left its shareholders in the dark. Mr Lewis wrote: "The chairman and CEO of Dow Chemical, Andrew Liveris, had written to Mr Ronen Sen, Indian ambassador to the US, on November 8, 2006, saying that despite Dow's assertions to the contrary, the Bhopal legacy issue is not behind the company. Mr Liveris urges the Government of India, which is a co-party in certain legal proceedings and an adverse party in other proceedings, to take various steps to support the company's position that it has no ongoing liability for the Bhopal tragedy.
"He goes on to express a desire to discuss the next steps with Ambassador Sen with a goal of supporting economic growth in India, by which he means 'key foreign investments that will promote job creation, economic diversification and technology updates.' The reference is unmistakably to Dow's own investment activity in India," Mr Lewis wrote.
Tomorrow: Dow Chemical chief tries to avoid paying Rs 100 crores in environmental remediation costs
Posted by tim at 02:46 PM | Comments (0)
July 10, 2007
Dow's bucks: where do they stop?
The story below about the Dow bribery scandal that we published back in May now looks more than a little ironic. Even as the Indian government was promising action against Dow Chemical to members of the Rajya Sabha, the Upper House of India's Parliament, its officials were deeply involved with trying to get the chemical giant off the Bhopal hook.
The stench of corruption hangs over the whole affair.
One wonders about the motives of the officials who have secretly been so keen to help Poison Incorporated. Where exactly does the Dow buck stop?
Indian government assures action against Dow Chemicals
The Statesman, New Delhi, May 4, 2007
NEW DELHI, May 4: The government today assured that it would take
action against Dow Chemicals, the multinational company which took
over the controversial Union Carbide in 2001, if the company is found
guilty with respect to reports that it bribed Indian officials to get
its products registered.
Ms Brinda Karat of the CPI-M alleged in the Rajya Sabha that these
products are banned in the US and other developed countries due to
adverse effect on children, and demanded blacklisting of the company.
The issue was raised by BJP MP S S Ahluwalia who cited reports of US
Securities Exchange Commission (SEC) about confessions by Dow
Chemicals regarding it having bribed Indian officials some years ago
for securing approval of its products.
The MP also queried the minister about the MNC allegedly pressuring
the government to get rid of its financial liability for clean up of
the Bhopal toxic waste.
Posted by bhola at 12:40 PM | Comments (0)
July 02, 2007
Dow no to Bhopal gas liabilty
MP Central Chronicle, July 2, 2007
Agencies,New York, July 1:
In 2001, Dow Chemical bought Union Carbide for $9.3 billion, despite this, Dow has refused to accept moral responsibility or be held accountable for the Bhopal gas tragedy.
It argues that Union Carbide had sold its shares in Union Carbide India before Dow Chemical acquired it and that Dow had never owned or operated that plant. It now seems that the Commerce Minister has concurred with this view, saying that Dow cannot be held accountable for Union Carbide's liabilities.
Bhopal gas tragedy survivors have charged union Commerce and Industry Minister Kamal Nath and the prime minister of a `sell-out` to Dow Chemical, saying the government was making a concerted move for an out of court settlement to clear the US firm, which owns Union Carbide, of all responsibility of paying damages to the thousands of gas leak victims.
`As 100 percent owner of Union Carbide, Dow Chemical is liable for the clean up of toxic contamination of the soil and ground water in and around the abandoned factory in Bhopal,` maintains Satinath Sarangi, of the Bhopal Group of Information and Action (BGIA) that is fighting for the survivors` rights.
`Dow Chemical is also liable for the health damages, including congenital malformations, caused to the 25,000 people living near the Carbide factory who have been drinking water laced with toxic chemicals and heavy metals for the last 15 years or more,` he asserted.
The gas victims have been demanding that Dow provide medical rehabilitation and economic reparation; clean up contamination in and around the former factory site in Bhopal and ensure that Union Carbide Corporation, now a 100 per cent subsidiary of Dow, appears before the Chief Judicial Magistrate`s court in Bhopal, where UCC faces criminal charges of manslaughter.
`But the PMO (Prime Minister`s Office) files obtained by us (survivors` organisations) under the Right to Information reveals that the prime minister is involved in plans that would allow Dow to walk away from its liabilities in Bhopal`, Sarangi added.
`The `PMO Files` have been uploaded to: www.bhopal.net/pmo.html,` he said.
Sarangi has charged Planning Commission Deputy Chairman Montek Singh Ahluwalia and Union Finance Minister P. Chidambaram with writing to the prime minister recommending taking the matter out of court.
The deadly gas leak from the Union Carbide pesticide factory in Bhopal on Dec 3, 1984, killed more than 20,000 people so far. An estimated 150,000 people continue to suffer from the toxic effects of the gas, including diminished vision, cancer, respiratory, neurological and gynaecological disorders.
Second generation victims are suffering from growth defects and women from severe menstrual disorders.
However, Dow, which took over Union Carbide in 2001, has rejected the contention that it has inherited Union Carbide`s Bhopal liabilities - something the activists don`t agree.
As Union Commerce Minister Kamal Nath sold American investors the India story at the annual US-India Business Council Summit in Washington DC, outside the conference protesters held their ground.
The group, Association for India's Development or AID has charged the Commerce Ministry of working behind the scenes to absolve Dow Chemical, the American corporation that took over Union Carbide in 2001 of legal liability for the Bhopal Gas Tragedy in return for investing in India.
According to documents obtained through a Right To Information application on February 7, 2007, Commerce and Industry Minister Kamal Nath wrote to the PMO saying: ''While I would not like to comment on whether Dow Chemical has a legal responsibility or not, as it is a matter for courts to decide, with a view to sending an appropriate signal to Dow Chemical, which is exploring investing substantially in India, I would urge that a group under the chairmanship of the Cabinet Secretary be formed to look into the matter in a holistic manner.''
AID claims that despite what the Minister says about leaving the issue of Dow's legal liability to the court, this letter is a clear indication of where his sympathies lie.
In response to a PIL, the Jabalpur High Court had ordered Dow Chemical to deposit Rs 100 crore for the clearing up of toxic waste and contamination in and around the Bhopal factory site. Protesters claim that since the issue of Dow's liability is being heard in court, it is improper for a Cabinet Minister to take the matter up directly with the Prime Minister.
"Sure, they can improve the business climate in India but they should send a signal to corporations that when some thing like the Bhopal disaster happens, the company will be held fully liable for all the damage that it has done and not send a signal that we are going to be soft. We are going to let them off the hook," said Kiran Kumar Vissa, Director, AID.
Dow Chemical's official stance is that the plant was owned by Union Carbide India - a joint venture between Union Carbide Corporation, the Indian government and private investors. Union Carbide had sold its shares in Union Carbide India in 1994, seven years before Dow acquired it.
The plant is now controlled by the Government of Madhya Pradesh and Union Carbide India is now renamed Eveready Industries.
"The tragedy was at Union Carbide and Dow by integration inherited it. Union Carbide-Dow themselves had no status in this. So, that does not affect Dow's investments. Of course with the court cases, the court procedures will continue. But we like to see this resolved and to see that this chapter is put behind us," said Union Commerce Minister Kamal Nath.
Posted by tim at 05:24 PM | Comments (0)
July 01, 2007
Activists, victims oppose out-of-court settlement
Times of India, 1 Jul 2007
NEW DELHI: There is outrage and shock among thousands of victims of the Bhopal Gas Tragedy, and in colonies surrounding the closed Union Carbide plant, over the move for an out-of-court settlement between the Government of India and Dow Chemical Company on cleaning up the contaminated site as reported yesterday in TOI. Activist groups working among the victims say that without a proper scientific assessment of the extent of environmental impact and damage to people’s health through groundwater pollution, it is impossible to arrive at a fair settlement.
According to N D Jayaprakash, convener of the Bhopal Gas Peedith Sangharsh Sahyog Samiti (BGPSSS), which along with two other organisations has been fighting the protracted legal battle in courts, once Union Carbide Corporation (UCC), USA, which is accused No.11 in the Bhopal gas leak disaster criminal case, became a wholly owned subsidiary of The Dow Chemical Company (TDCC), USA, on February 6, 2001, TDCC has to take on the liability of UCC.
The whole controversy has erupted again because of two pending aspects of the 23-year old tragedy in which 15,000 people died and over 5 lakh suffered health damages. One is the ongoing criminal case in the court of the chief judicial magistrate, Bhopal in which Warren Anderson, the then head of UCC and the two corporate bodies — UCC and UCIL — are co-defendants with some others. The second issue is of the poisonous chemical waste — 44,000 kg of tarry residue and 25,000 kg of alpha naphthol — lying in the abandoned premises of the pesticide plant. Various studies have established that the soil, groundwater, vegetables and even breast milk of women in surrounding localities have traces of toxic chemicals.
Dow Chemicals is a $49-billion giant with 43,000 employees and operations in 175 countries. Any out-of-court settlement may absolve Dow Chemicals, the successor of UCC, from both aspects — criminal liability and cleaning up of the site and compensating the victims of the ongoing contamination.
According to BGPSSS, on January 6, 2005, the CJM, Bhopal issued notice to Dow Chemicals to appear before the court in the criminal case. The MP HC at Jabalpur stayed the order. BGPSSS and others filed an application for vacation of the stay, which is still pending before the high court.
With regard to the cleaning up of the contaminated site, the High Court had set up a technical sub-committee of scientists to assist the task force set up to propose a plan for remediation of contaminated area in and around the former UCIL plant site. According to BGPSSS, two members of the sub-committee - Dr P M Bhargava and Dr J P Singh - urged that "the first option should be to apply the ‘polluter pays’ principle and hence, disposal of toxic waste should be undertaken by the polluter, viz. successors of Union Carbide Corporation, M/s Dow Chemicals Co." However, the sub-committee ignored this view and recommended that incineration is the only way of getting rid of the waste, without going into the issue of responsibility.
According to Jayaprakash, the present move for an out-of-court settlement would pave the way for cleaning up the site without "giving justice to those who had suffered from contamination due to negligence of the companies (UCC and Dow)".
Posted by tim at 03:45 PM | Comments (0)