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August 31, 2007
Indian govt says there's no deal with Dow on 1984 Bhopal clear up
Mukesh Jagota, Market Watch, August 31, 2007
NEW DELHI -- The Indian government Friday said it hasn't reached a deal with Dow Chemicals Co. on the payment for cleaning up the site of the 1984 Bhopal poisonous gas leak.
Replying to lawmakers queries in the upper house of parliament on whether the government is negotiating an out of court settlement with Dow, the junior minister for chemicals, B. K. Handique, said no such deal is being discussed.
A leak of poisonous gas from the Union Carbide factory in Bhopal killed nearly 4,000 people and a settlement on compensation was eventually reached after a legal battle. However, a dispute over clearing 70 metric tons of poisonous residue from the closed factory site is still pending.
As Dow acquired Union Carbide in 2001 along with its liabilities, it is facing a lawsuit in which the Indian Ministry of Chemicals and Fertilizers has demanded a token deposit of $250 million as initial payment for the cost of the clean up.
Posted by tim at 10:30 AM | Comments (0)
August 28, 2007
The perfect business plan
It seems that somebody at Dow has had a 'eureka!' moment. Whilst it's a given that arms manufacturers thrive while countries burn, the business gains from mass pollution aren't so immediately obvious. Perhaps that's why it's taken world-class global polluter Dow this long to see the commercial opportunities in profit-oriented water purification schemes. And where better to make your socially responsible lucre than India, where eight in ten people suffer major stomach complaints due to water contaminated by pesticides, industrial effluents and raw sewage?
KAIKALURU, India -- After draining this town's pool of drinking water recently, cleaners found drowned rats and bloated lizards. But at least, as is common at other storage tanks across this parched land in eastern India, there were no dead monkeys.
Kaikaluru's drinking water, filtered through sand from a nearby pond, is amber in color and alive with microbes. Even so, a survey of the town's residents showed that half the people still prefer it to a sanitized version dispensed at a new store operated by a tiny Orange County, Calif., company, WaterHealth International Inc.
WaterHealth operates about 60 stores in India's Andhra Pradesh state.
"The old water is free," explains Dhana Lakshmi, a 43-year old mother and local resident. Daily, she walks past WaterHealth's store to a community tap, rather than pay less than half a penny for the company's five-gallon jug of purified water. Ms. Lakshmi says her family of five earns about 80 rupees a day, or about 40 cents per person. Most families that size go through about five gallons of water a day.
Holdouts like Ms. Lakshmi highlight the difficulty of diving into the potentially massive, but messy business of selling clean water to poor people. Many have tried to help developing nations with their water problems; few have come up with a way to profit from the effort.
But WaterHealth, led by its Ghanaian-born chief executive, Tralance Addy, believes it can do both. Mr. Addy, the sixth of 12 children, used to wait in line at the village water tap when he was growing up in West Africa. Today, he's quickly expanding WaterHealth's business in India and other countries, while eyeing big markets such as China and Mexico. "It doesn't surprise me that people would pay for clean water," says Mr. Addy, who retired in 2001 after more than two decades at Johnson & Johnson and is now a citizen of both Ghana and the U.S. "It surprises me that people thought that they wouldn't."
Whether or not WaterHealth succeeds in India, the company could provide clues as to how nations tackle a prime public-health concern: contaminated water. About 450,000 Indians die every year from diarrhea, far more than in any other country, according to the United Nations 2006 Human Development Report. While the report notes other factors can cause the diarrhea, "low levels of spending on water and sanitation surely contribute."
Despite one of the world's fastest-growing economies and a cutting-edge technology sector, India still struggles to distribute clean water. In rural areas, cow dung, pesticides and human waste mix together in irrigation canals and seep into ground water. Last month, Indian Prime Minister Manmohan Singh acknowledged government failures to stem water-borne diseases.
In Asia, about 635 million people don't have access to safe drinking water, or 19% of the region's total population, according to 2004 figures from the Asia Development Bank.
The problems in developing countries have attracted those who see huge commercial potential in cleaning up water. GE Water & Process Technologies, a unit of General Electric Co., currently does about $20 million in sales in India, mostly catering to the clean-water needs of industrial customers such as power plants. But GE would like drinking water to help drive the business "well beyond $100 million annually in the very near future," according to Steve Fludder, a company vice president.
Steps to overhaul water supply have met resistance, though. In 2005, for example, a World Bank proposal to hand over limited management of the New Delhi municipal water board to a contractor provoked an outcry. Public-interest groups alleged irregularities during a bidding process among consulting firms for the project's plan. The World Bank's India country chief, Michael Carter, denied any wrongdoing. The bank later backed away from the project.
"The right idea is to have the community control the water," said Arvind Kejriwal of Parivaran, an Indian citizens group that opposed the World Bank plan. "The World Bank is trying to promote privatization. That's not the best model."
Many past efforts to provide purification equipment and train personnel for free haven't worked, says Gangji Reddy, project director for Chaitanya, an Indian organization that works on natural-resource-management issues. Poorly trained and sporadically paid technicians fail to maintain equipment, leaving the door open for farmers who sell access to clean water at exorbitant prices.
WaterHealth aims to step between the profiteers and nonprofit programs. Unlike much bigger multinationals, WaterHealth is also willing to stay small and rural even as its business grows. In the state of Andhra Pradesh, WaterHealth currently operates about 60 stores, mostly through joint ventures with local governments. An Indian organization, Naandi Foundation, supports the venture by educating locals about the health benefits of clean water. The company also operates in the Philippines and Ghana.
The joint-venture model grew out of WaterHealth's earlier troubles of relying on sales of equipment to customers in other countries, many of whom failed to maintain it. After years battling insolvency, WaterHealth emerged from bankruptcy in 2004 thanks to Mr. Addy's Orange County, Calif., venture-capital firm, Plebys International. He took control of the company for $2 million.
Since restructuring, WaterHealth has attracted several big backers. They include Dow Venture Capital, a unit of Dow Chemical Co., which has acquired about 30% of the company for $7.25 million. International Finance Corp., an arm of the World Bank, has kicked in $1.2 million.
Mr. Addy declines to provide sales and profit figures for the privately held company. But one question is how WaterHealth will be able to make enough money by selling water so cheaply.
In Kaikaluru, despite Naandi's survey showing that half the town prefers the community tap, signs of the business's potential are surfacing. A summer morning crowd forms in front of WaterHealth's four taps. Mr. Addy shows how water at the store is filtered through a series of tanks before entering a plastic chamber. Inside, a lamp administers a lethal dose of ultra-violet light to remaining bacteria and viruses.
In a village outside Kaikaluru, a local leader laments that dirty water has driven up medical costs and caused kids to miss school. Mr. Addy listens, but later says the village isn't big enough to support a WaterHealth store. Maybe later the company might sell it smaller-scale equipment it's developing. "You can have a soft heart in this business," he says, "but you need a hard head."
Write to Peter Wonacott at peter.wonacott@wsj.com
Posted by tim at 04:08 PM | Comments (0)
August 24, 2007
123 Agreement could be used to get Dow off the hook
Staff Reporter, The Pioneer, 24 August 2007
Bhopal gas tragedy victims unhappy with 123 Agreement... say it may used as a tool to pressurise Government on Dow Chemicals application
Bhopal: While, the impasse between the Left and the Congress on the nuclear deal continuing, it seems that the 123 Agreement has suddenly turned more than important for the State capital.
This has become evident after CPI National Secretary D Raja wrote a letter to Prime Minister Manmohan Singh. In the missive, it was mentioned that the 123 agreement may be a tool to pressurise the Government to withdraw the application filed in the High Court against Dow Chemicals for depositing Rs 100 crore, as compensation for the environmental loss caused due to the gas tragedy.
Leaders of three survivors' organisations - Bhopal Gas Peedit Mahila Stationery Karamchari Sangh, Bhopal Gas Peedit Mahila Purush Sangarsh Morcha and Bhopal Group for Information and Action provided copies of the correspondence between the Prime Minister and D Raja based on environmental and criminal liabilities of Dow Chemicals.
Raja had reportedly written a letter to the Prime Minister requesting his effective intervention in the matter related to Dow Chemical's environment and criminal liabilities in Bhopal. In his letter, Raja also mentioned the proposed 123 agreement between India and the US, which reportedly has held the uncertainty faced by Dow Chemicals as a major irritant which needed to be tackled with priority. It is pertinent to remember that Dow Chemicals had expressed its wish to invest about $ 1 billion in India.
The CPI National Secretary through the missive informed the Prime Minister that Dow Chemicals might be pressurising the Government to withdraw the application filed by the Ministry of Chemicals in the MP High Court through the 123 agreement. Remarkably, the application filed with the High Court demanded Rs 100 crore as an advance and part payment towards cost of environment redemption of the Union Carbide factory and its surroundings from Dow Chemicals.
Acquainting the Prime Minister about the pathetic condition of gas victims, Raja sought his immediate intervention so that the victims of toxic contamination of ground water and soil in Bhopal could be saved from being subjected to betrayal.
Posted by tim at 12:10 PM | Comments (0)
August 06, 2007
Documents show that Dow Chemical has been pressing India to disassociate the firm from the 1984 tragedy
Jean-François Tremblay, Chemical & Engineering News, August 6, 2007
Volume 85, Number 32, p. 26
Getting Past Bhopal
Documents show that Dow Chemical has been pressing India to disassociate the firm from the 1984 tragedy
DOW CHEMICAL would like to do more business in India, but today it finds the risks too high. Since last October, and perhaps earlier than that, the firm has been lobbying the Indian government to clarify that the company had nothing to do with the tragedy that occurred in Bhopal in 1984 when gas leaking from a Union Carbide plant killed thousands of people. Dow bought Union Carbide in 2001.
Unresolved Failure to clean up the old Union Carbide site in Bhopal is an impediment to Dow's business in India.
Dow's lobbying efforts are described in documents that the International Campaign for Justice in Bhopal obtained this summer through India's information access laws. The documents' 50 pages also provide a status report on the Indian government's convoluted effort to clean up the former Union Carbide site. The documents are available on ICJB's website, www.bhopal.net.
ICJB is a coalition of Indian and foreign groups that strive to secure additional compensation and better health care for victims of the 1984 tragedy. ICJB also seeks "exemplary punishment" for Dow and the former Union Carbide executives who managed the Bhopal site in 1984. The coalition insists that Dow must pay for a cleanup. A 1989 settlement under which Union Carbide paid $470 million to India was inadequate, it contends, and did not cover the issue of site cleanup.
Among the documents released is a letter sent last October by Andrew N. Liveris, Dow's chief executive officer, to Ronan Sen, India's ambassador to the U.S., in which the CEO refers to the "Bhopal legacy issue." Liveris wrote that when he met Sen at the U.S.-India CEO forum in New York City earlier that month, he was assured that Dow was not considered responsible for the tragedy.
But the Indian government is in fact suing Dow, Liveris pointed out in his letter. The Ministry of Chemicals & Fertilizers initiated a court action in May 2005 demanding that Dow deposit $22 million to help pay for the cost of cleaning up the old Union Carbide site. In his letter, Liveris hints at future Dow investments in India and tells the ambassador that the suit has to be dropped to tangibly show that "the government of India means what it says about Dow's lack of responsibility in the matter."
The documents obtained by ICJB describe the complicated road map the government is following to clean up Bhopal. Since March 2005, several research institutes and government agencies have been working together to draw up a comprehensive plan to rehabilitate the site, which has been managed by the state of Madhya Pradesh since 1998.
In spite of the clarifications the documents provide, a timetable for just when a comprehensive remediation likely will begin remains unspecified. The documents say, for example, that proposals for soil and groundwater remediation "are being prepared" by India's National Environmental Engineering Research Institute and National Geophysical Research Institute, but they do not reveal this work's current status. Both NGRI and the Madhya Pradesh Pollution Board declined to comment to C&EN on this matter.
The documents make no mention of Cherokee Investment Partners, a North Carolina-based site remediation company that offered to lead efforts to remediate the old Union Carbide site on a charitable basis (C&EN, Feb. 5, page 18).
According to the documents, however, Ratan Tata, chairman of India's Tata Group, offered in early October to set up a remediation fund to spearhead a Bhopal cleanup. In a letter addressed to the deputy chairman of the National Planning Commission, he notes that the contaminated site is one of several impediments to the growth of business ties between the U.S. and India.
INDIAN OFFICIALS initially took Ratan Tata's offer seriously. A memo written by Shaleen Kabra, an official in the prime minister's office, notes that such a fund would eliminate Dow's need to pay a deposit on any cleanup efforts. Dow, the memo adds, is mulling "substantial investments" in India. But Satinath Sarangi, a key ICJB coordinator, claims that the government has recently cooled to the offer.
Neither Tata nor Dow would provide comments for this article, even regarding the question of what projects Dow is looking at in India. But Gujarat Alkalies & Chemicals informed the Bombay Stock Exchange in early July that it had signed a memorandum of understanding with Dow Europe to collaborate in the business of "chlorinated organics." Dow currently employs only about 300 people in India.
Unless the Bhopal issue is resolved, Dow will find it difficult to do more business in India. Pressure from activists forced the cancellation of a technology licensing deal between Dow and Indian Oil Corp. in 2005. And an ICJB member filed a lawsuit in Bhopal last year to prevent Dow from licensing Unipol technology, catalysts, and solvent recovery units to Reliance Petroleum.
Worth tens of millions of dollars, such licensing deals are a relatively small matter for Dow. A bigger loss for the firm would be a clear statement by the Indian government that Dow has a responsibility in the cleanup of Bhopal, which could open the door to private lawsuits from city residents claiming to have suffered from the contamination of the site. Such a development could completely spoil Dow's chances in the growing Indian market.
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Posted by tim at 05:31 PM | Comments (0)
August 04, 2007
Hold Dow responsible for Bhopal gas tragedy: US senators
Mahendra Kumar Singh & Bisheshwar Mishra, Times of India, 4 Aug 2007
NEW DELHI: Even as the PMO is working to facilitate investments by chemicals giant Dow in India by resolving the issue of its 'legal liability' in the Bhopal gas tragedy, a group of 20 US Senators have pleaded that Dow be held responsible for the disaster.
The senators wrote to Prime Minister Manmohan Singh in March 2006 seeking justice for Bhopal gas victims and demanded that Dow Chemical, the parent company of Union Carbide, too be held responsible.
This is in contrast to the government's decision to ask the department of chemicals and petrochemicals to formulate a Cabinet note in order to probe the possibility of resolving the legal liability of Dow outside the courts.
The department has, in an ongoing case in the Madhya Pradesh High Court, demanded that Dow pay Rs 100 crore as advance for the clean-up of the affected area. TOI had reported moves by the finance and commerce ministers, supported by PMO and other senior officials, to find ways about this demand in order to facilitate investments by Dow.
In the letter to PM, American legislators, including well-known Indian Caucus members Frank Pallone Jr and Joseph Crowley, said, "It is difficult to understand why few steps have been taken to alleviate the suffering of the Bhopal survivors. The Indian government has repeatedly said that justice will be served, but has exemplified no commitment to this end."
The letter, which was signed by 20 senators, added that the government must hold Union Carbide and its parent company Dow Chemical responsible for the disaster.
"Although it has been more than 20 years since the disaster, approximately 10-30 people continue to die every month in Bhopal from toxic exposure and around 150,000 people suffer long-term health consequences.
The effect of the toxic gases also appear to be harming the next generation, as overwhelming evidence is surfacing that points to a higher incidence of health effects and birth defects among children born to gas-affected people," said the letter, adding that the disaster raised fundamental questions about government and corporate responsibility.
Posted by tim at 12:38 PM | Comments (0)