Carbide legacy fouls Dow’s buiness deal with Indian Oil Corporation

For immediate release
18 JULY, 2005. BHOPAL, NEW DELHI, CHENNAI Dow Chemical’s business expansion plans in India suffered their first serious setback after a campaign by survivors of the 1984 Union Carbide disaster resulted in a dramatic reversal of Indian Oil Corporation’s decision to purchase technology from Dow for IOC’s proposed mono ethylene glycol plant in Panipat, India. The Bhopal streets were agog today with survivors celebrating the victory.
Sources from Indian Oil have confirmed that their agreement with Dow was cancelled after IOC found that critical submissions made by Dow were false. Dow had conveyed to IOC that the technology in question was a patented Dow technology, developed and marketed by Dow. However, Bhopal campaigners unearthed and presented evidence to the Government and IOC that confirmed that the Meteor technology remained a Union Carbide technology. Despite that, the Ministry of Chemicals and the Secretariat for Industrial Approvals have failed to reject Dow’s proposed business in India. “The Government must be ashamed of its lack of courage and decisiveness in dealing with fraudulent corporations like Dow. If the WorldCom scandal demonstrates the high levels at which the corporate crime game is played, the casual manner in which Indian Oil and the Government of India are dealing with Dow’s
dishonesty and lack of respect for law tells you why WorldComs
happen,” said Satinath Sarangi of Bhopal Group of Information and
In their response to IOC, Dow officials have reportedly alleged that
the cancellation of the deal has caused a loss of 1.5 million US
Dow subsidiary Union Carbide was declared an absconder by the Bhopal Chief Judicial Magistrate’s court for the company’s failure to appear in a criminal case against it for its role in perpetrating the Bhopal disaster. In November 2004, Bhopal survivors and their supporters launched a nationwide agitation demanding the blacklisting of Dow Chemical by the Government, and protesting against Indian Oil’s proposal to do business with a company that has refused to address its pending Bhopal liabilities. In January 2005, the Bhopal Magistrate ordered the issuance of summons to Dow Chemical requiring the parent company to produce Carbide in Court. Dow says that it does not recognise the Indian court’s criminal jurisdiction over Carbide.
“Dow has been implying that it can and will do nothing to help the
people of Bhopal, and that the unresolved troubles in Bhopal have no
impact on Dow as the parent corporation of Union Carbide. Indian Oil’s
actions demonstrate the enormous reputational costs of Dow’s inaction
and lack of accountability,” says Sanford Lewis, a Boston-based
attorney who assisted some Dow shareholders to move a resolution in
2004 urging Dow to disclose its unresolved liabilities in Bhopal.
On 27 May, 2005, Shahid Noor, a survivor youth leader, launched a
boycott of Indian Oil petrol stations with the support of student
organisations and transport worker unions in Chennai and Bhopal.
Madras Bulls, a Chennai-based collective of Royal Enfield motorcycle
enthusiasts, led a rally from Mayiladuthurai – Petroleum Minister
Mani Shankar Aiyar’s constituency – to Chennai.
Says attorney Rajan Sharma, who is conducting the Bhopal survivors’ class action suit against Dow in New York, “The success of the survivors’ campaign should send a message to Dow Chemical that it cannot do business as usual in India unless it resolves Union Carbide’s liabilities for Bhopal, including the New York civil claims for environmental remediation and the criminal charges for the 1984 disaster which remain pending.”
Indian Oil’s u-turn is a significant blow to Dow, which has earmarked
South Asia as a critical region for future growth of its global
businesses. More than the financial loss, Dow’s problem arises from
the fact that a blue-chip Indian company has rejected its bid due to
suppression of facts relating to Carbide’s ownership of the technology
in question. Dow retains four major subsidiaries in India, all of
which now look vulnerable to further protests.
At the Dow shareholders AGM in May 2004, survivor leaders and Goldman
award winners Rashida Bee and Champa Devi Shukla issued an ultimatum
to Dow that they would preventing Dow’s expansion in Asia. “Dow’s true
face as a company that resorts to untruths to further its business now
stands revealed. Dow shareholders and investors have refused to
question their company on humanitarian grounds. Let this be a message
to shareholders that the Bhopalis too mean business, and we’ll work to
erode Dow’s shareholder value by preventing its expansion in India,”
said Rashida Bee.
For more information, contact:
Mr. Srikumar, Head, Corporate Communications, Indian Oil:
+91 9811354000.
IOCL Switchboard: +91 (0)11 26260140. Fax: +91 (0)11 26521949
Rachna Dhingra,
ICJB. Tel: +91 9826167369
Nityanand Jayaraman,
ICJB. Tel: +91 9444082401

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