Dow Investors Request SEC Investigation on Lack of Dow Disclosure

For Immediate Release
Wednesday, May 14, 2008
Dow CEO’s Request for Liability Shield Appears Rebuffed
Washington, DC – A group of investors wrote to the Securities and Exchange Commission to request an investigation of the Dow Chemical’s failure to disclose current impediments to a purported $1 billion investment in India.
A “smoking gun” document obtained last week through a public records request shows that the Indian government’s Law Ministry has advised the Government that investments by Dow Chemical in India are not immune from court orders, particularly in the matter regarding environmental contamination pending in a state High Court. The documents confirm that the Indian government is NOT in a position to waive those potential liabilities, despite a prior request from Dow CEO Andrew Liveris for the government of India to do so.
Dow Chemical merged with Union Carbide Corporation, the company that owned the Bhopal plant at the time of the contamination and the 1984 Gas Leak, in 2001. Since then, civil cases for environmental contamination cleanup and damages to victims of the contamination have been filed against Dow. In 2005, the Indian Ministry of Chemicals approached the Court to direct Dow to deposit $22 million towards clean-up costs for toxic waste remediation in Bhopal. A criminal case for the 1984 disaster is pending against Dow subsidiary Union Carbide, where the latter has been proclaimed “absconder” for failure to appear in the case.
An internal document from the Prime Minister’s office dated February 2, 2008 notes that Dow has proposed $1 billion in investments in India and that the Ministry of Law “has categorically stated… it cannot …be said that the investment proposed to be made by the Dow Chemicals will be immune from orders of the Court.”
The document also notes, “Irrespective of the manner in which [Union Carbide Corporation] has merged or has been acquired by Dow Chemicals, if there is any legal liability, it would have to be borne by Dow Chemicals.” The document was obtained via the Indian Right to Information Act by survivors of the Bhopal Chemical Disaster on Thursday, May 8th from the Indian Prime Minister’s Office.
Sanford Lewis, attorney for the investors who filed a complaint with the SEC today stated, “These documents highlight a concern that Dow has failed to disclose significant risks to its investments in India. Dow has stated repeatedly it has no liability for remediation of the Bhopal site, yet the document released by the Indian government tells a different story.” The letter from investors seeks and SEC investigation and any appropriate enforcement action.
Last year, it came to light that Dow Chemical CEO Andrew Liveris wrote to India’s US Ambassador seeking assurance that Dow investments would not be subject to liability for issues remaining in Bhopal. However the internal Prime Minister document appears to provide the answer – that no release of such liabilities would be forthcoming.
In addition to the Prime Minister’s document, there is other evidence of impediments to Dow’s ability to invest and do business in India due to its Bhopal legacy issues. “Should Dow be Allowed to do Business in India?” Dow’s efforts to build a research and development center outside of Bombay have been stymied for nearly 5 months by local groups who have occupied the roads to Dow’s construction site. “Pune Protests Dow Research Facility”. The villagers cite Dow’s treatment of Bhopal as one of the reasons for the blockade. Six Dow offices around India were raided by the Indian Central Bureau of Investigation after Dow admitted to bribing Indian officials from 1996 to 2001. “CBI Raids Dow Chemical’s Indian Subsidiary for Graft.” Four of the prestigious Indian Institutes of Technology (IITs) refused to allow Dow Chemical to recruit on their campuses, and two IITs returned Dow’s sponsorship funds because of alumni, faculty and student objections to Dow’s conduct vis a vis the Bhopal survivors: “IITs, academics snub Dow for Bhopal tragedy link”.
Survivors of the 1984 Bhopal Chemical Disaster and toxic water contamination from the former Carbide factory site are camped out in New Delhi demanding that Dow Chemical’s pesticides registered via bribery be de-registered, its deal with Reliance for purchase of a Carbide technology be scuttled, and that Carbide be extradited to the Indian Criminal Court from which it is absconding. The 1984 Bhopal Chemical Disaster has killed more than 23,000 people in the past 24 years according to the International Campaign for Justice in Bhopal. Multi-generational chronic health effects from gas exposure and contaminated water consumed by 25,000 daily, leads to illness and birth defects, the survivors say.
The investors’ letter to the SEC comes the day before Dow Chemical’s April 15 annual general meeting on. Dow Chemical investors signing the letter to the SEC include Trillium Asset Management, Sisters of Mercy, Regional Community of Detroit, Adrian Dominican Sisters, Newground Social Investment, Harrington Investments, American Baptist Home Mission Society, Trinity Health, Sisters of St. Francis of Philadelphia and Amnesty International, USA. Calvert Asset Management Company also signed the letter. A copy of the SEC letter and backup documentation is available via email request to Attorney Sanford Lewis, sanfordlewis’at’
More Information:
Sanford Lewis 413 549-7333 sanfordlewis’at’
Aquene Freechild, 617-378-2579 , afreechild’at’

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