Dow Chemical Faces Mounting Pressure from Investors to Disclose Risks to Company from Scientific and Legal Trends Targeting Dow’s Toxic Chemical Production

BOSTON COMMON ASSET MANAGEMENT, LLC
TRILLIUM ASSET MANAGEMENT CORPORATION
MEDIA ADVISORY
for May 12, 2005
Contact: Shayna Samuels,917-817-3396
or Glenn Turner, 718-541-4785
Recent Supreme Court Decision Allowing Lawsuits for Injuries Caused by Pesticides to Impact Upcoming Dow Shareholder Meeting
New Laws in Europe Anticipated to Phase Out Harmful Chemicals May Affect Dow’s Bottom Line
(May 12 — Midland, Michigan) — A shareholder resolution will be presented to the Dow Chemical annual meeting this week, calling on the Board of Directors to disclose the risks to the company posed by changing scientific knowledge and public policies regarding Dow’s toxic chemicals.
The shareholder meeting will occur in the wake of a landmark U.S. Supreme Court decision, in Bates v. Dow Agrosciences on April 27, 2005, which affirmed the right of citizens to sue chemical manufacturers for harm caused by their pesticides. The Supreme Court ruled against Dow AgroSciences and the Bush Administration, who claimed that federal pesticide laws shield chemical manufacturers.
Dow is already expending hundreds of millions of dollars on environmental liabilities. According to shareholders planning to attend the annual meeting, the company’s SEC reports inadequately assess how new trends may further increase liability and constrict the company’s product lines. A shareholder resolution filed by Trillium Asset Management asks the company to:
1) Account to investors for the impacts of changing science and new public policies that are increasingly targeting chlorpyrifos (Dursban), dioxins and other persistent bio-accumulative toxics associated with Dow products.
2) Provide a plan for phase-out of products targeted by public policymakers in the U.S. and Europe.
Chlorpyrifos, also known by Dow’s trade name Dursban, is a neuro-toxic pesticide that can cause respiratory paralysis, convulsions, nausea, headaches and other symptoms with acute exposure. In 2004, the Centers for Disease Control (CDC) reported that 93% of the US population had this chemical in their bodies. Market analysis indicates that Dow Chemical likely contributed at least 80% of public exposure to chlorpyrifos. Yet Dow’s published statements are largely silent regarding the related risks to the company. Nearly 300 Dursban-related lawsuits have been filed against Dow since 1990. The shareholders who filed the resolution believe that the data finding these chemicals in US populations makes more litigation against Dow likely.
Dioxin, a chemical known to cause cancer, immune suppression, reproductive, developmental and liver damage, is a byproduct in the production of some Dow chemicals. A class action lawsuit by Michigan residents is seeking compensation for the contamination. Residents in the region are asserting approximately $100 million in property damages and seeking medical monitoring. The medical monitoring claim is now before the Michigan Supreme Court. Dioxin is also a severe problem in Agent Orange hotspots including Vietnam, New Zealand and Australia, where the Dow-produced herbicide was sprayed as a lethal war defoliant and released at manufacturing facilities. Roughly 100,000 claims of Agent Orange exposure-related health problems by U.S. veterans have been filed with the government since 2000. U.S. and Vietnamese veterans and their families are suing Dow for compensation.
REACH — The European Union is expected to soon begin implementation of a new policy entitled REACH (Registration, Evaluation, and Authorization of Chemicals). Chemical companies will need to provide data on their products including toxicity and exposure to humans and the environment. Toxic chemicals must be registered, and the worst could be restricted in favor of safer alternatives. Some industry associations suggest that up to 20% of chemicals on the market will be discontinued. Approximately one-third of Dow’s revenues are derived from Europe.
“As one of the world’s largest manufacturers of persistent toxic chemicals, Dow appears to be on a head-on collision course with changing public policies,” said Shelley Alpern of Trillium Asset Management. “We hope our resolution will help put the company on a more financially sound path.”
Bhopal — In addition, Dow continues to be under fire for failing to provide compensation and environmental clean-up for the 150,000 residents of Bhopal, India who are still suffering from a chemical factory explosion twenty years ago. At the upcoming annual meeting, a member of Boston Common Asset Management will deliver a letter to the 14 members of Dow’s Board of Directors regarding Bhopal. The letter notes that the Sarbanes-Oxley Act of 2002, (the investor protection law enacted after Enron and other corporate scandals), requires Dow’s CEO to certify that financial reports “fairly present” the company’s financial condition. The letter states that Boston Common believes “this requires better discussion of the issues surrounding Bhopal.” The letter lists ongoing criminal and civil litigation, reputational damage associated with unresolved issues in Bhopal, and potential constraints on business in India and Asia. In addition, the letter states that the management should also disclose the status of any of its initiatives to resolve the outstanding issues associated with Bhopal.
“Shareholders should demand that Dow be held accountable for the atrocity in Bhopal, and clean up the highly contaminated land and water once and for all,” said Lauren Compere, Chief Administrative Officer of Boston Common Asset Management. “Bhopal is only the latest example of Dow’s underreporting of potential environmental liabilities, following asbestos, Agent Orange and dioxin. We believe this pattern will hurt all Dow shareholders.

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