Bhopal Haunts Dow Chemical
Two Decades After the Disaster


Disaster Survivors to Speak At Shareholders Meeting

By JIM CARLTON and THADDEUS HERRICK
Staff Reporters of THE WALL STREET JOURNAL


SPOT THE MAJOR BOO-BOO IN THIS ARTICLE - WHICH REMAINED UNCORRECTED DESPITE LETTERS FROM BHOPALIS POINTING OUT THE MISTAKE - CURIOUSLY THIS IS THE SAME "MISTAKE" MADE BY DOW CEO STAVROPOULOUS AT A SHAREHOLDER ANNUAL GENERAL MEETING WHEN HE ALSO SAID THAT THERE WERE NO CRIMINAL CHARGES OUTSTANDING AGAINST UNION CARBIDE. COMPANY PR MAN JOHN MUSSER LATER SAID THAT HIS BOSS "MIS-SPOKE".


Nearly 20 years after an environmental disaster at a Union Carbide plant in Bhopal, India, the tragedy remains a thorn in the side of Dow Chemical Co.

Dow, which acquired Union Carbide in 2001, is expected to come under attack at its annual meeting of shareholders Thursday from a group of survivors of the 1984 incident, in which a pesticide plant leaked toxic gases that killed at least 3,000 people and injured tens of thousands more.

Union Carbide years ago sold its interest in the plant and paid $470 million to the Indian state of which Bhopal is the capital to settle all claims of liability. But survivors and their supporters continue to hound Dow to pay as much as $1 billion more in damages for what they call unmet medical bills and toxic-cleanup needs. The group is seeking to make Dow liable for the Bhopal legacy through a suit filed in U.S. District Court in Manhattan. The suit, originally filed against Union Carbide in 1999, was dismissed by the court in 2000, reinstated on appeal, and dismissed again in March. Survivors have filed an appeal.


Bhopal is just one of a series of problems for Dow that don't seem to go away. Profits, which fell 28% in the first quarter, are down amid high energy prices and weak demand for commodity chemicals. Indeed, the company's earnings have failed to cover its dividend payment costs for the past 10 quarters.

Dow has other environmental headaches, too. Environmentalists say the company may be responsible for dioxin pollution in groundwater near its headquarters in Midland, Mich., among other places. Dow says the origin of the pollution is unclear, but that it is a high priority for the company to address and resolve.

 

Bhopal survivors Rashida Bee (left) and Champa Devi (right) with
Bhopal activist Satinath Sarangi (center) participate in a protest last week in New York City.


A DISTANT TRAGEDY

1984: Methyl isocyanate gas leaks from a Union Carbide pesticide
plant in Bhopal, India, killing at least 3,000 people.

1989: Union Carbide pays $470 million to
Madhya Pradesh state government to settle all liability claims. [Wrong, it was the Union Government]

1994: Union Carbide sells its interest in the plant.
[But retains control of the site until after 2001]

1999: Bhopal survivors file lawsuit seeking damages against Union Carbide in U.S. court. Suit is thrown out but that decision is appealed.

2001: Dow Chemical acquires Union Carbide.

2003: Delegation from Bhopal travels to U.S. to ratchet up public pressure on Dow. They start a hunger strike on Wall Street last week, and plan to attend Dow's annual meeting Thursday and to confer with the company's chairman.


The Bhopal controversy is beginning to resonate with some investors.

"We believe the continuing protests and media coverage around this issue pose a risk to Dow's reputation and undermine Dow's stated commitments to sustainability," said a Dec. 2 letter to company officials signed by San Francisco-based Trillium Asset Management and eight other self-described "socially responsible" investment firms. Trillium said it doesn't own Dow stock but represents clients who do.
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The delegation representing Bhopal survivors has journeyed to the U.S. to ratchet up public pressure on Dow. Two Bhopal survivors, 46-year-old Rashida Bee and 50-year-old Champa Devi, last week launched a hunger strike at the giant bull statue near New York's Wall Street to draw attention to their cause. They and another activist, Satinah Sarangi, plan to speak out at Dow's annual shareholders meeting Thursday. They have also arranged a meeting afterward to discuss the situation with Chairman William Stavropolous. Company officials have said they would consider offering some additional aid for Bhopal, without admitting liability.

"If Dow were a truly responsible company, it would have settled the Bhopal issue the day they acquired Union Carbide," said Ms. Bee, who suffered partial blindness and lost five family members in the Bhopal disaster.

Union Carbide's environmental legacy has begun to appear on Dow's bottom line. Last year the company estimated pending and future liability on asbestos claims against Union Carbide to be $2.2 billion and took a charge of $800 million, with the balance of the estimated obligations to be covered by insurance. Union Carbide made asbestos as far back as the 1960s.

In India, a longstanding criminal case remains unresolved against eight officials of Union Carbide, including Warren Anderson, the company's chairman during the Bhopal disaster.

The charges, originally filed as "culpable homicide not amounting to murder,"
were later downgraded to a "rash and negligent act." [NB: YOU HAVE NOW DISCOVERED THE BIG BOO-BOO. SEE BELOW FOR THE FACTS]

The officials have denied the charges but have failed to appear in court. It isn't expected the Indian government will seek their extradition.

John Musser, a Dow spokesman, said the criminal case is against Union Carbide and hasn't affected Dow's business dealings in India. He said any argument that Dow has "unresolved liabilities [related to Bhopal] is only accurate to the extent it relates to criminal charges against Warren Anderson and Union Carbide." Any other claims have been resolved for more than a decade, he added.

Write to Jim Carlton at jim.carlton@wsj.com3
and Thaddeus Herrick at thaddeus.herrick@wsj.com4

 

BHOPAL.NET COMMENT ON THAT BOO-BOO:

The statement that the criminal charges of "culpable homicide not amounting to murder" against Warren Anderson and eight officials were later downgraded to "rash and negligent act" is wrong.

The facts are are these.

The Indian government instructed the Criminal Bureau of Investigation to apply to have the charge of "culpable homicide" lowered to "a rash and negligent act". This would have reduced the deaths of more than 20,000 people to the status of a car accident. The survivors, naturally, protested.

Last summer's massive worldwide hunger strike was focused squarely on this issue. On August 28th 2002, as all the world's press reported, the Judge in the Bhopal Magistrate's Court threw out the CBI application, admonished them for wasting the court's time and instructed the Indian government immediately to pursue the extradition of Warren Anderson.

Check out the massive international press coverage reporting these facts! Look for stories breaking August 28th.

Check out the Judge's statement dismissing the application to reduce charges here.

The chargeof "culpable homicide" still stands against Anderson and his merry men. A powerful committee of Indian MPs has demanded to know why the Indian government's delay in actioning Anderson's extradition.

See Bhopal.Net front page story last month, now archived here.