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.”

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