Dow Chemical has been consistent in its refusal to admit liability for the Bhopal disaster. The grave mistake the Government of India made in the 1989 settlement with Union Carbide for $470 million serves as the basis for all their arguments. According to Dow, Carbide has done everything legally necessary. This is their stance, in spite of the fact that the settlement was reopened in 1990 with a different outcome in 1991; and in spite of the fact that Carbide had lied its way through its entire time in Bhopal. In addition, Dow was quick to settle suits in the USA with favorable outcomes for Carbide victims, but about Bhopal, Dow Public Affairs person said “$500 is plenty good for an Indian.” (Kathy Hunt, 2002)
Lie #1: No Liability because of the 1989 settlement
The1989 settlement between Carbide and the Indian Government for $470 million was reopened the following year because of complaints from the survivors.
- The outcome was that the monetary amount stands, but criminal charges for manslaughter, causing grievous harm, and poisoning animals were reinstated.
- The 1989 settlement was for the gas-affected survivors only. It did not include those poisoned by the water contaminated from Carbide’s abandoned chemicals.
- Before acquiring Carbide, Dow asserts it had done an “exhaustive” study to determine any liability for Bhopal. They obviously did not “study” very hard. Yet they continue to claim, “there is no legal foundation for application of liability.”
Lie #2: The Liability is Carbide’s, not Dow’s
- Dow accepted Carbide’s asbestos liabilities in the US, paying survivors $2.2 billion to resolve all claims
- Dow continues to maintain, contrary to laws in India and the US, and International Corporate Law, that it acquired the assets of Union Carbide without its liabilities.
- “Union Carbide remains as a subsidiary of Dow, with its own board of directors, and its own assets and liabilities,” said a Dow spokesperson. The argument is that just because they own stock in a company does not make them liable for the company’s liabilities. However, Carbide
- now supplies only to Dow’s businesses,
- has a board comprised of Dow managers and executives,
- sold its headquarters in Danbury, Connecticut,
- its business activities, according to Dow’s official regulatory filings, are part of “Dow’s global businesses rather than stand-alone operations.”,
- Essentially, Carbide is Dow is Carbide.
Lie #3: No Jurisdiction
- Dow spokesperson John Musser claims that the “Indian government has no jurisdiction over Union Carbide or Warren Anderson; therefore, they are not appearing in court.”
- This fabrication has been used by others, including Dow’s Indian lawyer and spokesperson, and the Indian Law Ministry.
Lie #4: It’s the Government’s problem
- Dow’s propaganda website, bhopal.com, claims that “In 1998, the state government of Madhya Pradesh revoked Eveready Industries’ lease on and took possession of the facility and publicly assumed all accountability for the site, including the completion of any further remediation.”
- Fact: Eveready Industries India Limited’s (EIIL) “escape” from the site remains unrecognized by the MP Government. In 1998, EIIL was in the middle of a remediation program, supervised by the Madhya Pradesh Pollution Control Board (MPPCB). In error, a notice was sent to EIIL from another district office, telling EIIL to return the lease. EIIL left, and when MPPCB demanded they come back and clean up, they refused.
The aftermath of this saga makes a mockery of Dow’s assertion of governmental responsibility:
- July 28, 1998: the Madhya Pradesh (MP) Government issued a statement saying that they (MP Government), in consultation with NEERI-Nagpur and IICT-Hyderabad, will ensure “. . . safe disposal of the residual Sevin Tar and Napthol Tar from the factory.”
Dow perpetually alludes to this statement, but never actually produces it as evidence. The State government is not saying it will undertake the work itself, just that it will ensure it is done, and with proper professional scrutiny. The work mentioned only entails surface wastes and does not encompass a comprehensive remediation program. EIIL itself had paid for the consultation of NEERI and the IICT at the request of the MPPCB.
- Feb 1999: The MPPCB, which had been consistent in requiring EIIL/UCIL to remediate the site, wrote to the site manager demanding that the work be done, citing, in so many words, the polluter pays principle.
- Oct 19, 2002: The MP Government announced it would approach the Supreme Court and the government of India in order to hold Dow accountable for remediation.
- February 5, 2003: The MP Government advised the Central Pollution Control Board to recover costs of clean up from Dow and EIIL. They argued that EIIL was still the occupier of the factory site and owner of its contents because of the absence of any formal handover.
- March 13, 2003: Forbes Magazine called Dow’s purchase of Carbide “a mistake” because of lingering liabilities regarding Bhopal. The article outlines both sides, but clearly indicates Dow’s liability. (http://www.forbes.com/forbes/2003/0331/078.html)
- June 7, 2004: The MP Government submitted a formal letter to the Indian Government in response to the Bano v Union Carbide case in New York. The letter states that the government’s policy regarding remediation is that “The State Government shall not bear any financial burden for this purpose. The disposal of the chemical waste shall be at the cost of Union Carbide.”
- June 28, 2004: The Government of India submitted a formal notice before the US federal court in New York (Bano v Union Carbide). It states its official policy: “Pursuant to the ‘polluter pays’ principle recognized by both the United States and India, Union Carbide should bear all of the financial burden and cost for the purpose of environmental clean up and remediation.”
- July 15, 2005: Legal counsel for the government of India entered a court directive to UCC, Dow and EIIL asking that they deposit Rs. 100 crores (about $22 million) for site remediation costs.
Shareholders Not Buying It
During the administration of the merger of Dow Chemical and Union Carbide, officials from both companies stated: “there are no…criminal…actions, suits, claims, hearings, investigations or proceedings pending…No investigation or review by any Government Entity with respect to it or any of the subsidiaries is pending.”
- This incredible statement outraged many of the company’s shareholders; several filed suit in 2001 to stop the merger.
- In 2004, other shareholders, led by Boston Common Asset Management and including several church-based trusts, filed a shareholder’s resolution with Dow. It sought Dow’s full disclosure of the impacts the Bhopal matter might pose to the company, its reputation, its finances, and its expansion in Asia.
- Earlier in 2004, a report by Innovest Strategic Value Advisors, “Dow Chemical: Risks for Investors,” stated that Dow faces “significant unreported, or underreported environmental risks.” The report details Dow’s failure to disclose liabilities relating to Bhopal, Agent Orange, Dursban, and dioxin in its SEC filings and statements to shareholders.
- The Innovest report and Dow’s continued misrepresentations on its website and at its 2004 Shareholders’ Meeting led to a shareholder coalition that filed a letter with the SEC, alleging material misstatements [financial irregularities?] and asking that the SEC investigate.
- May 12 2005: “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.”
- Dow’s response was to reiterate that the company’s disclosures are appropriate. Shareholders disagreed, saying that the company’s response is inadequate, and expressing shock that “the Board of Directors approved a response that does not address our company’s responsibility to remediate the impacts of that accident on the people and their communities” (consultant to the Sisters of Mercy Trust).
- November 30 2005: New York-Concerned Dow Chemical (NYSE:DOW) shareholders announced that they filed a resolution with the company requesting that it address its outstanding responsibilities for the 1984 Bhopal Chemical facility explosion.
- May 2006: Shareholders filed a resolution requesting the company produce a report on new initiatives instituted by management to address health, environmental and social concerns of the Bhopal, India survivors.
- December 1 2006: Dow shareholders announced that they filed a resolution with Dow asking that it address outstanding issues resulting from Carbide chemical facility explosion in Bhopal.
- May 11 2007: Three shareholder resolutions were filed; they raised concerns about Dow’s ability to manage risks, reputational damage, and failures to disclose material liabilities to investors. One of the resolutions related to Dow’s failure to remediate the abandoned waste in Bhopal.