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Dow investors and analysts may be interested to work out for themselves the potential liabilities faced by their company.
Dow can hardly go on denying that it has a legal problem in India. It can no longer rely on its old PR soundbyte about the 1989 settlement extinguishing all criminal liablities. That settlement was appealed and was amended by an Indian Supreme Court judgement in 1991 which reinstituted the criminal charges. By not acknowledging this fact, first Carbide, then Dow, have in effect lied to their shareholders for years. Dow, as predicted by those of its shareholders who opposed the 2001 merger, has now been dragged into the criminal case and the question of criminal liabilities remains wide open. Should judgement go against it, the company will face huge criminal damages.

As we have already seen, the 1989 settlement figure of $470 million was pitifully inadequate. It gave most survivors just $500 each, which was not enough to cover the cost of medicines in the first year after Carbide's poison gas leak, let alone the eighteen years which have elapsed. The future health care of survivors becomes the company's responsibility. Harmful effects of the gases have now begun appearing in the second and third generations of Bhopal citizens living near the plant. Their future health care will have to be taken into account. Many thousands of people were unable to work after they were exposed to Carbide's gases and were driven to destitution. Reparation will duly have to be made to them.

The official death-toll from the poison gas leak already stands at more than 20,000. Families of victims of the 9/11 attacks in New York have been awarded around $1,000,000 for their suffering. Suffering is a universal human experience, not dependent on geography or social status. The anguish of a mother in Bhopal is just as grievous as the anguish of a mother in Brooklyn.
The abandoned factory site is polluted by some of the most dangerous chemical poisons on the planet. Both soil and ground-water are contaminated. The Greenpeace guidelines presented this week to the Chief Minister of Madhya Pradesh –who is petitioning the Supreme Court to make Dow pay for the clean-up – specify that the clean-up should be carried out to standards which operate inWestern countries.

Ruth Stringer, scientist from Greenpeace Research Laboratory, Exeter University (UK) and co-author of the technical guidelines said "Clean-up should be aimed to remove all detectable contamination from the site wherever technologically possible.Where this is not possible, final concentrations should be based on the highest standards applicable at the intergovernmental level (eg WHO limits for drinking water) or, where these do not exist, the most stringent limits applicable in the USA or other industrialised countries." Download the Greenpeace guidlines here. (735K PDF )

Costs may exceed $500 million.What Dow shareholders urgently need to realise is that the 1989 settlement did not and does not cover the issue of contamination. Union Carbide systematically dumped lethal chemicals for years before and after the gas leak. People living in communities near the factory have been exposed for upwards of two decades to Carbide's poisons, the lists of which read like a toxicologist's nightmare.

A Class Action suit brought by survivors and their supporters against Union Carbide on this issue is currently underway in New York. We will keep you informed of progress.

It has been a bleak week for Dow. There is worse to come. Watch this space.