PMO and friends begin pr offensive on Dow deal

“The one entity that has no culpability in the matter is Dow Chemicals that agreed to take over UC in 2001, under the impression that the matter was closed.” So ends the commentary of Laveesh Bhandari, published in the Indian Express this week, the most disingenuous piece of sophistry yet to emerge from the Prime Minster’s office-deal-with-Dow scandal.
The article’s ‘authority’ is set out in the first few paragraphs, wherein the author attempts to convince the reader of his expertise on the issue by making arcane observations about the origins of the Bhopal disaster. Arcane to anyone unfamiliar with some of the arguments presented by Union Carbide’s legal counsel in the civil proceedings of the 1980’s, that is, for these are, indeed, the arguments being parroted here.
The article goes on to pinpoint legitimate areas of blame in the official medical, social and legal response to the disaster, and by doing so appears to establish the writer’s credentials as a sympathiser with the Bhopal survivors. The finger is pointed at State and Centre governments and the Indian juduciary. Neither is the author unsparing of Union Carbide, whose officials, he asserts, “should have been incarcerated for negligence”.
Yet Laveesh Bhandari’s resounding conclusion, and the sole purpose of the article itself, is that everyone should leave Dow alone. The reason? Dow was “under the impression that the matter was closed”. As anyone except Laveesh Bhandari knows, stupidity is no defence against culpability.
Still, poor, deceived Dow and its incompetent yet highly paid lawyers… the same poor Dow that in 1999 was among was’s first and most regular readers, some 15 months before the merger, the same Dow that at the same time faced a lawsuit initiated by shareholders attempting to stop the merger by pointing out the liabilities Dow would inherit from Carbide for Bhopal, the same Dow that enacted a highly complex and arguably fraudulent merger transaction with Carbide, utilising an undercapitalized ‘shell company’ in order to create further layers to the corporate veil that would make it even more difficult for the courts to get at Carbide after it was digested by Dow…
Just who the hell is Laveesh Bhandari anyhow?
Crazy, man…
Dr Bhandari works for The National Council of Applied Economic Research (NCAER), an organisation that relies upon contracts from the Indian government. NCAER counts the Indian Ministry of Finance and Ministry of Commerce and Industry among its partners – ministries both involved in the secret plans to bail out Dow from its Bhopal related problems. Also among NCAER’s partners & sponsors is, inevitably, Dow’s Indian pimp Tata, alongside the likes of Citi Bank, the World Bank and the Narmada Valley Development Authority. Sitting as NCAER’s chairperson is the newly garlanded ‘world’s richest man’, Mukesh Ambani – yes, the same Mukesh Ambani recently looking to buy a slab of Dow – and acting as NCAER’s Chief Mentor is one Tarun Das, a former Director General of the Confederation of Indian Industry awarded a prize by the US-India Business Council in 2004 “for his contribution towards developing new, mutually supportive relationships between India and the U.S.”
And what of Bhandari himself? Bhandari’s Ph.D. dissertation “was on the success and failure of international alliances”. He is founder of Indicus Analytics, which “has been providing research inputs to institutions such as The World Bank, Harvard University, The Finance Commission, and many other national and international institutions. Key decision-makers such as the President of India Dr. APJ Abdul Kalam, the Prime Minister Dr. Manmohan Singh, and the Finance Minister Mr. P. Chidambaram, have used or referred to our work in the field of Indian economy.”
Clearly a man on the up. He’s also a Visiting Faculty at IIT Delhi where he teaches Economics. Oh, wait, IIT Delhi? Does he know what his students are doing to his poor Dow?
Laveesh Bhandari, Indian Express, 27 October, 2007
1984: the Dow story
Justice has been inadequate for Bhopal victims, but don’t blame the latecomers to the story.
The Union Carbide Bhopal gas leak of December 3, 1984, was the largest industrial disaster in terms of its human costs. Between 40,000 and 50,000 people died due to the tragedy, and another 40,000 to 600,000 reportedly suffered adverse health consequences since.
It is of course likely that many more have been affected than show up in the statistics. Those affected may be completely, moderately or marginally disabled. Others may have ill-health that is non-disabling, but causes suffering nevertheless. There’s little doubt that UC and its managers have a lot to answer for, and there’s little doubt that many have got away quite easily. The burden of someone else’s mistake, greed, and ineptitude is being borne by a population that had no say in the matter.
But the governments at the national, state and local level have to also take the blame. Indeed, if blame is to be assigned, there are layers within layers. And like an onion, every layer stinks. But of all to blame and those who should pay for, Dow Chemicals, which purchased UC in 2001, is the least culpable.
First, our industrial pollution regime did not prevent the manufacture/storage of a large amount of patently hazardous material right in the centre of a densely populated area. The Centre did little to provide an enforceable regime. Our famous inspectors at the state level didn’t perceive the potential for such disaster in the plant. The state government never even asked UC to relocate to a safer environment. And the Bhopal local government had no idea how to cope with disasters.
Second, after the event occurred, again big mistakes were made. The Bhopal Gas Leak Act of 1985 ensured that individual action against UC was not possible and only the Central government could deal with the matter. This could have been a positive development, had it the ability to fight adequately for compensation/relief and provide it. That ability, and perhaps even intention, was missing. Under the aegis of a Supreme Court judgment, it gave up all claims (civil and criminal) in return for $470 million in 1989. Later, in 2001, the Court re-introduced the possibility of criminal claims.
Most, including this writer, believe the 1989 decision of the Centre was stupid. For one, the $470 million figure was derived on the basis of a head count of those who would suffer adverse health consequences of the leak. The problem is, no one can adequately predict them. It is extremely difficult to differentiate a particular ill-health episode caused by the leak, catalysed by it, or totally independent of it. And this is more so in the case of a chemical that has multiple ill-health outcomes. Consequently, one cannot provide either health care or compensation relief to the identified few, but to all who exhibit such symptoms.
The costs of care and compensation were therefore going to be far higher than what calculations based on increased probability of ill-health will yield. We would have to provide relief to all who claim, not just a few who we can tangibly prove have been directly affected. Indeed this is a problem being faced today. There are many who have made claims but not received relief, even while there are large amounts lying unutilised.
But that’s only one facet. Within hours of the leak it was clear that this was a huge tragedy. Within days, it was clear that a large amount of funds would come in. The first task of the government should have been to set up a large health care and relief system, without even waiting for UC’s money to come in. But we did not do so. A few clinics were set up, the number of hospital rooms were increased, some interim relief was provided, but nothing on the scale required. While the people were suffering and dying, our government was busy shouting about the horrible MNC and how it needed to pay. It may have been correct in its outburst, but it was also less than honest in its concern for the gas-affected.
The money finally came in 1989. Now we come across the most obvious consequence of governmental inaction. The government has no idea what to do with the millions of dollars. The judiciary kept telling the government to use it, but the government was unable to do so. It does not have the machinery in place to either provide quality health care to the affected, nor does it have the administrative wherewithal to properly identify the ‘truly’ affected. In the process large numbers continue to suffer.
When such state failure is observed, it’s natural for NGOs, fringe groups and well-meaning individuals to take matters into their hands. But here what is most curious is that those who are responsible for the mess — UC’s senior management, Centre, state, local governments, even the judiciary — are not being targeted. Instead those who came in much later and had no role to play in this tragedy are being targeted.
What should we have done? Health care relief should have received the first priority. A large, universally accessible tertiary health care system needed to be set up in Bhopal. This should have been accessible to all and the full range of health services required should have been provided. If this had cost us more than $470 million, so be it. And this should have been in place in 1984 itself. Second, monetary compensation needed to be paid. The principles for this are well identified but the recipients are not. Had the state and local government put their minds to it in 1984, the problem would have been much easier to handle. All it required was a proper health census in 1984. A costly exercise but one that was possible.
Third, the judiciary failed in 1989 in agreeing to the $470 million in lieu of protection from criminal and civil cases. It partially undid this in 1991 when it ruled no protection was to be given to UC and its managers against criminal cases. But it got into an area it had little understanding of and now our hands are tied to that $470 million figure. Moreover, our judicial system has also been unable to extradite the senior managers who should have been incarcerated for negligence.
When the government takes away an aggrieved party’s right to go to court (as it did by passing the Bhopal Gas Leak Act), it is taking on the task of providing adequate relief. If it cannot, then the government should be in the dock. The one entity that has no culpability in the matter is Dow Chemicals that agreed to take over UC in 2001, under the impression that the matter was closed.
The writer heads the economic research firm, Indicus Analytics

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