Dow Mythbusting

The Indian government has stated that it is “dismayed” that Dow, despite widespread outrage, remains an Olympic sponsor. The London Organising Committee of the Olympic Games (LOCOG) is supposed to promote environmental, social and ethical issues, but Dow is responsible for this ongoing humanitarian and environmental disaster.

Dow has run what the Indian Olympic Association has called a false campaignto deny or draw attention away from Dow’s responsibilities in Bhopal.

We feel that it is important to answer the common questions that arise from Dow’s campaign of misinformation and half-truth.

“The 1984 disaster was Union Carbide’s fault, so what does this have to do with Dow?”

It is true that Union Carbide (UCC) owned and was responsible for the factory at the time of the disaster in 1984. But Dow, LOCOG and David Cameron have all stated this as though it exempts Dow from responsibility. This is not the case.

In fact, UCC is now a wholly owned subsidiary of Dow Chemical. As UCC explains, their business activities “comprise components of Dow’s global operations rather than standalone operations” (UCC’s 2010 Securities and Exchange Commission filing).

‘Successor liability’ means that when one company merges into another, it gains BOTH its assets AND its liabilities. So, in gaining UCC’s wealth, Dow also gained UCC’s responsibility for the ongoing tragedy in Bhopal.

 

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 “Wasn’t there a compensation settlement in 1989? Does that not mean that UCC’s liabilities are resolved?”

The Indian government has recognised the settlement deal as an “irremediable injustice” and is now challenging its legitimacy in the Supreme Court.

The settlement reached in 1989 – $470m –was 15% of the original claim for $3bn. $470m is roughly equal to £600 per survivor, none of whom were consulted. The case for compensation is far from closed.

Also, there is still a criminal case open against UCC. UCC was charged with ‘culpable homicide’ in 1991 and has refused to appear in any Indian court for the past 21 years. Since UCC is 100% owned by Dow, and Dow elects all directors to the UCC board, Dow is sheltering UCC from trial.

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“Surely this is the responsibility of the Indian government by now?”

The ‘polluter pays’ is a principle adopted by India and the US: if a company creates pollution, they must pay for it. Any damage the pollution causes is the company’s responsibility. Cases in both Indian and US courts are trying to make the polluter – UCC – pay to clean up and decontaminate the site of the disaster, and deal with the water contamination.

When UCC merged into Dow in 2001, Dow became responsible for UCC’s ‘polluter pays’ liabilities. Dow even recognised this by accepting UCC’s asbestos-related liabilities in the US which date back to 1972. Dow set aside $2.2 billion to resolve these claims in the US, yet they refuse to accept liability in Bhopal.

The message from Dow and LOCOG is that ‘it is now the Indian government’s responsibility to clean up the site’ in Bhopal. But the government did not pollute the site, UCC polluted the site. Moreover, if the Indian government was to clean up the site, the money would come from Indian taxpayers, some of whom live in Bhopal.

Dow is asking the victims of the gas disaster and water contamination to pay up.

The polluter should pay, not the victims.

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 “So what about Eveready? Dow says that if any company should be targeted, it should be this other company…”

The responsibility to compensate the gas victims, clean up the site and compensate those poisoned by the contaminated water lies with UCC, which is now 100% owned by Dow. Which means Dow is responsible.

UCC created a subsidiary called Union Carbide India Ltd (UCIL) to do business in India, including at the pesticide factory in Bhopal. UCC owned majority shares (50.9 %) of UCIL, and therefore had ultimate decision-making power at the time of the Bhopal gas disaster. UCC was directly involved in the design, construction, supervision and maintenance of the pesticide factory in Bhopal.

So why mention Eveready at all?  UCIL was at least formally independent from UCC, and in 1994, UCC sold its 50.9% shares in UCIL to an Indian company. UCIL became Eveready Industries India Ltd, producing “Fast Moving Consumer Goods”. In 2010, eight officials from UCIL were found guilty of criminal negligence in relation to the Bhopal gas disaster, and Eveready is currently being pursued by Indian courts.

However, this doesn’t let UCC off the hook. UCC designed, specified and exported the unproven technology used in the factory, and UCC actually overruled UCIL’s CEO in installing the chemical tanks, one of which cracked, releasing the toxic gas which caused the 1984 disaster.

UCIL and UCC are ‘joint-tortfeasors’ – they are both responsible.

Now 100% owned by Dow, UCC’s liabilities become Dow’s liabilities.

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 “Dow claims that activists have blocked remediation and cleanup attempts, why would they do that?”

There have been two offers of ‘charitable’ cleanup to which Dow could be referring. Neither were trying to help the survivors in Bhopal. They were essentially smoke screens behind which Dow hoped to avoid its liabilities.

US private financial firm Cherokee offered its services, but then they were revealed to be working on behalf of Dow’s legal affairs department. Their intention was not to help the survivors in Bhopal, but to aid Dow in evading liability. The other ‘initiative’ was by Ratan Tata, which was also aiming to shield Dow from its liabilities. After this ‘initiative’ was attempted, Tata announced a highly lucrative new business partnership with Dow.

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~ by dropdownow on March 16, 2012.

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