Bhopal issue takes centre stage in corporate accountability debate: Dow Chemical being damaged by shirked responsibilities

December 12, 2005
SAN FRANCISCO – The global struggle to force Union Carbide and its current owner, Dow Chemical, to take responsibility for a deadly gas leak that occurred in India 21 years ago has gradually gained steam and is now a centerpiece in the growing movement to hold corporations accountable for the negative aspects of their business practices.
December 2 marked the 21st anniversary of the methyl isocyanate gas leak from a Union Carbide pesticide plant in the city of Bhopal that killed some 15,000 people and left another 800,000 suffering from the after-effects of inhaling toxic fumes, according to figures from the Indian government.
The Bhopal issue, which has bubbled up to embroil not just victims of the industrial disaster, but coalitions of company shareholders, global activist networks, the U.S. Supreme Court, and even the White House, has largely centered on Dow’s liability for compensating victims and for cleaning up the still-toxic site.
Union Carbide Corporation (UCC) paid a $470-million settlement to victims in 1989, five years after the 40-ton gas leak, but victims’ advocates say this was far too little. Dow Chemical, which took over UCC in 2001, says it is not responsible for further compensating victims or for cleaning up any toxins still draining into the soil.
Many children of Bhopal residents were underdeveloped, with smaller heads, shorter limbs, and thinner bodies than normal, says Satinath Sarangi, an activist who runs a clinic to treat the gas victims. Even newcomers who were not exposed to the original gas leak have reported suffering from back pains and sterility, according to Amnesty International.
“The toxic effect has been such that mercury and lead contamination have found their way into the breast milk of those living in the gas-hit localities near the Carbide plant,” said Sarangi.
Students in Michigan, where Dow is headquartered, and hundreds of citizens and victims in New Delhi, India, gathered on the anniversary of the disaster to demand that former Union Carbide CEO Warren Anderson and Dow face trial.
The Indian government has charged Anderson and Union Carbide with manslaughter for killing 15,000 people, and claimed damages for injuries to 100,000 more.
The U.S. State Department denied India’s request to extradite Anderson after the U.S. Department of Commerce pleaded on the former CEO’s behalf, according to documents released in 2004 as the result of a freedom of information act request.
The demonstrators in New Delhi, who were organized by the international environmental group Greenpeace, also demanded that Dow pay additional money for victims’ ongoing medical treatment, compensation, economic rehabilitation, and clean up of the still-poisonous site.
Around 20,000 people living near the broken-down Union Carbide plant are drinking contaminated water, according to Amnesty and local activists.
UCC has blamed the tragedy on Union Carbide India Ltd. (UCIL), claiming it had no control over its Indian subsidiary. Amnesty International, however, says that UCC owned 50.9% of UCIL and maintained enough control to prevent the disaster.
In November, these continuing disagreements led a coalition of shareholders owning more than 4.5 million Dow Chemical shares worth some $200 million to file a resolution asking Dow to disclose the financial impact of the Bhopal survivors’ outstanding social and environmental concerns. The company refused.
Dow wrote that, “we continue to believe the Company’s disclosures of these matters are appropriate and in full compliance with the Generally Accepted Accounting Principles and other requirements of the Securities and Exchange Commission.”
The shareholders, which include the New York State Common Retirement Fund, the New York City Fire Department Pension Fund, Sisters of Mercy Regional Community of Detroit Charitable Trust, and Boston Common Asset Management, say that failure to disclose the requested information poses a threat to the company’s reputation and market growth in Asia.
“Dow Chemical, with its 2001 acquisition of Union Carbide, has inherited a serious environmental issue. Management really needs to prepare for the potential liability it faces, particularly lost business opportunities around the world, if these issues regarding the Bhopal incident are not resolved,” said New York State Comptroller Alan G. Hevesi.
In a related case the Supreme Court ruled in April that citizens damaged by pesticides have the right to sue companies the manufacture these toxic products.
Dow–a key stakeholder in the case–had argued along with the Bush administration that the Environmental Protection Agency’s registration on products should shield chemical manufacturers from litigation.
A Texas fisherwoman has taken the company head-on over another high profile scandal.
Diane Wilson, a mother of five and fisherwoman off the coast of Seadrift, Texas, launched a one-women war against Dow when she found out the company was dumping lethal pollutants into Seadrift’s bay, killing shrimp and allegedly causing cancer in local residents, including some of her friends.
Wilson forged an alliance with the survivors in Bhopal and was arrested and convicted of a minor misdemeanor after hanging a banner declaring “Dow Responsible for Bhopal” and chaining herself to a tower in her local Dow factory.
Wilson was also fined $2,000 and sentenced to four months in prison.
Refusing to serve her sentence until former UCC CEO Warren Anderson faced the charges against him in India, Wilson left Texas in search of Anderson. She found him at his home in the town of South Hampton on Long Island in New York and stood outside with a sign that said “Warren, shouldn’t you be in India?”
“This company has warrants out for their arrest, and they can be defiant and not show up, but let a little woman with a banner drop it…and I’m a dangerous woman–and I have to be thrown in jail,” Wilson said.
Bhopal has come to be a prime example cited by advocates for more responsible business practices, and some corporate watch groups say the case is the result of some of the more negative aspects of globalization.
“The problem with globalization is that industry can take advantage of lax environmental standards and get away with it–like Texaco in Ecuador or Shell in Nigeria,” Pratap Chatterjee, executive director of the non-profit group CorpWatch in Oakland, California, told OneWorld.
“There isn’t a legal regime to enforce regulation and make people accountable, so the United States will not force American executives to comply with Indian laws in the case of Bhopal,” said Chatterjee, whose brother gave medical aid to victims in Bhopal days after the gas leak.
Amnesty International agrees that more laws are needed to enforce corporate responsibility, but says that the United Nations has taken positive steps.
“There is a real need for global human rights standards for corporations,” said Benedict Southworth, campaigns director at Amnesty International, in a statement on the organization’s Web site.
“The U.N. Norms for Business are an important step in this direction, but to hold companies accountable and prevent disasters like Bhopal happening again, it is imperative to have enforceable standards that guarantee redress for victims,” Southworth said.
Many of those advocating stiffer legal controls on big business see the Bhopal disaster as just one of many examples of corporate negligence.
“Bhopal was a more dramatic example but this sort of thing happens every day all round the world–a lot of them are unseen disasters, even right here in the Bay Area people are poisoned by industries. It’s a slow death–heart problems, respiratory problems, and cancer. You don’t see people die overnight but the toxic effects of major industry are felt worldwide,” Chatterjee said.
A study released last week in Fortune Magazine found that U.S. companies scored far lower than their European and Asian counterparts on a new corporate accountability rating of Fortune Global 100 companies.
Studies by the U.S. Centers for Disease Control have also found that over 75% of people tested carry breakdown products of chlorpyrifos, a highly toxic pesticide. Dow produces about 80 percent of all chlorpyrifos worldwide, according to the Pesticide Action Network of North America.

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