Dow shall be liable
Post-merger, who shall account for Bhopal?
MUMBAI-- More than 500 survivors of the Union Carbide 1984 gas leak from Bhopal protested outside the Dow headquarters in Mumbai, accusing the Michigan-based company of double standards and racism, on Friday, April 5, 2002. According to the survivors, Dow Chemical has inherited the pending liabilities of Bhopal through its merger with Union Carbide on February 6, 2001. After buying Union Carbide for approximately $10 billion, Dow is now the largest chemical company in the world with a customer base across 170 countries.
Survivors, who blocked the entrance to the Dow headquarters for more than two hours, say the chemical giant has ignored their demands. "All we have got from Dow so far is hollow promises of humanitarian assistance," says Rashida Bi, a victim of the gas leak and a spokesperson for the Bhopal Gas Affected Women's Stationery Workers Association. Rashida Bi and several other representatives of survivors and survivor support organizations have now been in fruitless dialogue with Dows Indian headquarters for over a year.
The April 5 demonstration was held at the end of a 30-day period that Dow had requested from the survivors to respond to their demands. At the end of the demonstration, a delegation of survivors and their supporters met Ravi Muthukrishnan, managing director of Mumbai-based Dow Chemical International Private Ltd.
"First [Muthukrishnan] said they want more time -- 10 to 15 days. When we said we'll give Dow 15 even 20 days more, Dow refused to be bound by any timeline. He merely asked us to trust in us and wait," says Satinath Sarangi of the Bhopal Group for Information and Action (BGIA). "We have waited long enough; we'll see them in America next month," said Sarangi, who was part of the delegation that met Muthukrishnan on April 5.
In contrast to its denial of Carbide's liabilities in India, Dow settled in an asbestos-related litigation against Union Carbide in the US less than a year after its merger with Carbide. The lawsuit was filed in Texas by 14 plaintiffs against Union Carbide for damages arising from the company's asbestos mining and asbestos-based product manufacturing operations. According to Reuters, the settlement sent Dow shares on a 22 percent slide eating nearly $7 billion from the companys stock market value.1
Survivors say that Carbide's Bhopal-related liabilities -- which could add up to a substantial sum -- are now Dow's. At the April 5 meeting between Dow and the survivors, Dows managing director Muthukrishnan said that Dow settled Carbide's asbestos liabilities in Texas because that was not subject to a previous settlement, Sarangi reports. According to Dow, Carbide's liabilities in Bhopal are a closed chapter because of a 1989 settlement between Union Carbide and the Government of India -- arrived at without the knowledge of the claimants in Bhopal.
Union Carbide paid $470 million -- a pittance according to survivors -- in damages for the gas leak that has killed 20,000 people and left more than 150,000 people with health effects. Many more, including people not exposed to the gas and those born to survivors after the gas leak, have been exposed to carcinogens and other poisons that have leached into their underground drinking water sources from the toxic wastes abandoned by the company at their Bhopal factory site. The toxic wastes that are still lying at the factory and related damages are not covered by the $470 million settlement. A suit seeking reparations for these damages is currently being heard in a court in New York.
Dow has not been upfront in acknowledging its potential liabilities in Bhopal, survivors allege. "Dow's position is not legally tenable. According to Indian corporate law, it has inherited Union Carbide's criminal liabilities after its merger," says advocate Vinod Shetty, a member of the National Campaign for Justice in Bhopal.
Indian case law in criminal liability transfer contains instances2 where the courts have relied on Section 394 of the Indian Companies Act to prosecute the new company formed after a merger (Dow Chemical Corp., in this instance) and hold them liable in the legal proceedings against the transferee company (Union Carbide Corp. in this case).
In fact, in late 2001, the Chief Judicial Magistrate (CJM), Bhopal, approved the Central Bureau of Investigation's move to name Dow in place of Union Carbide in a criminal case implicating the then chairman Warren Anderson and other Carbide officials. "The CBI can now prosecute Dow and have an enforceable judgement because Dow has four subsidiaries and considerable assets in India," said BGIA's Sarangi.
Dow seems unperturbed by the outcome of the pending suit. Two years ago, it announced plans to invest $1 billion in India and set up a one-million-tonne a year naphtha cracker unit.
"I think the Dow company should be held responsible," says Sunil Kumar, 30, the eldest member of a family of ten, and one of the hundreds of survivors protesting at Dow's corporate headquarters here. Kumar lost seven of his family members in the gas tragedy.
The survivors congregate around anyone who asks about their fate, although they must have tired of recounting the incident that traumatized their lives. Their main demand has been for economic rehabilitation, social support and clean up of the contaminated factory site.
The tragedy that haunts Bhopals survivors is palpable even today. CorpWatch India spoke to Sajida Bano at the protest site. Bano's husband, Ashraf Mohammed Khan, was among the first of Carbide's victims. Khan, who was a fitter in the plant, died in a chemical leak there in 1981.
"It was after night duty, at around 6.30 am," his widow recalls. "He was ordered to open some valves. He asked if there was any chemical present [in the tank], which his superiors denied. He was exposed to three bucketfuls of phosgene and survived for only three days. The doctor said he had never seen a patient like this: his lungs had virtually liquefied." Phosgene is a deadly gas employed in the first World War and one of the controversial chemicals used by Carbide at its Bhopal plant.
In a tragic turn of events, Bano was travelling back to Bhopal from Lucknow with her two infant sons on December 3, 1984 and was overcome by the gas at the railway station. The elder, Arshad, who was 3 years old, died, while Shoaib, a year younger, was afflicted by acute diarrhoea. "I was unconscious for several hours and when I came around, saw that Shoaib had survived. I now suffer from diabetes and asthma. Shoaib is mentally disturbed and does not have the faculties to pursue his studies." Bano has not received all her husbands dues from the company and even the lawyer who was fighting her case has now died and the papers are missing.
For 17 years, the struggle against the state and the Corporation (Union Carbide and Dow) has defined the lives of people like Rashida Bi and Bano. Today, they have little to show for it.
Darryl D'Monte and Nityanand Jayaraman
Vulnerable Assets: Dow in India
Dow currently has, at a minimum, the following subsidiaries in India:
Dow Chemical (India) Private Ltd, Mumbai: Dow is 100% owner.
Dow Chemical International Private Ltd, Mumbai:
Dow is 100% owner. This office handles the marketing and sales of Dow products in India. It also houses the Technical Centre for Polyurethane Systems.
Anabond Essex India Private Limited, Chennai:
Anabond is 50% owned by a New Jersey-based Essex Specialty Products, Inc., which in turn is 100% owned by Dow. Anabond Essex imports and sells paste-grade PVC resins, and other specialty chemicals. In addition, it manufactures and sells adhesives and sealants in the automotive industry.
DE-NOCIL Crop Protection Ltd.:
DE-NOCIL is a joint venture which is 51% owned by Dow through various subsidiaries. The name DE-NOCIL comes from DE (formerly Dow Elanco) + NOCIL (National Organic Chemical India, Ltd.) DE-NOCIL participates in global generic product development, sales of herbicides, and the production and sale of pesticides. It also operates an agricultural chemical plant in India, which manufactures the pesticide Dursban (Chlorpyriphos) among other things. Dursban is marketed by Dow in India. However, the pesticide was withdrawn from household use in the U.S. by Dow after it was proven that the pesticide caused serious health effects, particularly in children.
Darryl D'Monte is a well-known journalist based in Mumbai.
Nityanand Jayaraman is the India organizer for CorpWatch India. This article is republished with permission.
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- Dow stock battered by asbestos concerns, David Howard Sinkman, Reuters, 14 January, 2002.
- The trend of prosecuting the new company and holding them liable in the legal proceedings against the transferee company has been observed in the case of : State of UP. v. Jayashree Textiles and industries LTD . (AIR 1985 ALL 212); and R.N.T Estates Ltd. v. Union of India (1989 2 Corpt. LA 1541 cal.).