Dow Chemical to face civil & criminal cases over Bhopal
‘Curative Petition’, Indian Supreme Court on August 5th &
Bhopal Chief Judicial Magistrate, in Criminal Case, 12th November.
US chemical giant Dow Chemical faces a ‘curative petition’ in the Supreme Court, New Delhi, on Tuesday 5th August. This curative petition is designed to address inadequacies within the 1989 settlement on the basis that the correct figures for dead and injured were not used.
The Indian government is now seeking an additional amount of up to $1.24billion, but the Bhopal survivors groups are quoting the Government of India’s own previously published numbers (Indian Council of Medical Research, epidemiological report, 2004), which are considerably higher, and would raise the required settlement amount to $8.1billion.
The other respondents are Union Carbide Corporation, Union Carbide India Limited and Eveready Industries.
Dow Chemical owns 100% of Union Carbide Corporation, which, in turn, always owned the controlling interest in Union Carbide India Ltd- the company operating the doomed pesticide plant in Bhopal, India, site of the 1984 Bhopal Gas Disaster.
Dow Chemical maintains that it’ ‘never owned nor operated’ the plant and that a ‘full and final settlement’ was reached (a 1989 civil settlement of $470m).
Whilst the first statement is not relevant, in the eyes of the law, the second statement is simply untrue.
In addition, Dow Chemical has been summonsed to appear in front of the Chief Judicial Magistrate, in Bhopal, to explain why Union Carbide along with erstwhile CEO Warren Anderson have never faced the criminal charges of culpable homicide outstanding against them. Despite 1989’s civil settlement, Union Carbide Co, have refused to face the criminal charges outstanding against them and are proclaimed absconders from Indian justice.
Dow Chemical is expected to argue that it should be immune from liability. Dow Chemical states that it is an entirely separate corporate entity to Union Carbide but that is not, of itself, a sufficient statement of law to divorce it from Union Carbide’s legal liabilities (see notes).
Colin Toogood, of the Bhopal Medical Appeal said: “Lifting the corporate veil between Union Carbide Corporation and Dow Chemical would be a major step towards seeing justice finally come to the survivors of A DISASTER THAT IS STILL GOING ON ALMOST THIRTY YEARS AFTER IT BEGAN.”
Amnesty International Statement: HERE
NOTES:
1: Dow Chemical’s Role in the Outstanding Criminal Case
2: Dow Chemical Company’s Ownership of Union Carbide Corporation
3: Appeal Letter to Indian PM from Survivor’s Organisations
1: Dow Chemical’s Role in the Outstanding Criminal Case
Dow’s wholly owned subsidiary Union Carbide Corporation (UCC) is a ‘proclaimed absconder’ from Indian justice. It is wanted on CRIMINAL charges of ‘culpable homicide not amounting to murder’. Dow has total control of UCC but has not produced UCC in court. Instead, Dow used another wholly owned subsidiary to block a 2005 judicial summons, addressed to its Michigan HQ, requesting it explain the non-appearance of UCC in the courts. The Bhopal Chief Judicial Magistrate removed the illegal blocking order, in 2012, and a summons was issued to Dow in 2014 originally requiring it attend court on July 4th. This will now be delayed for a further 12 weeks. Dow will be required to explain why UCC has repeatedly ignored court summons in the ongoing criminal case.
2: Dow Chemical Company’s Ownership of Union Carbide Corporation
The Dow Chemical Company continues to maintain that it is not responsible for the acts of its wholly owned subsidiary the Union Carbide Corporation
Dow states that it is an entirely separate corporate entity to Union Carbide but that is not, of itself, a sufficient statement of law to divorce Dow from UCC’s legal liabilities. It is not possible to say, given that information, that “there is no justification for a claim being brought against Dow”.
A parent company may be held liable for the debts of its subsidiary in circumstances which vary between legal systems. But Dow has the legal power to control, and therefore the legal responsibility for, UCC’s current behaviour with regards to Bhopal.
This is because:
· UCC is a wholly owned subsidiary of Dow. UCC’s board of directors is appointed by Dow and Dow can, through its shareholding, exercise actual control over UCC. If Dow wishes UCC to take, or refrain from taking, any steps with regard to its business, Dow can in practice require UCC to take those steps.
· Dow’s relationship with UCC is much closer than a simple parent/subsidiary relationship: Dow manages all major aspects of UCC’s business: legal, accountancy, treasury, procurement, human resources, environmental, health and safety, management, etc. For all material purposes Dow runs UCC. This means that not only is Dow able to control UCC indirectly through its share ownership as a parent, it is able to control UCC directly because it manages all its business, including crucially its legal affairs. As a consequence, Dow cannot say that it is not responsible for UCC’s current behaviour when that behaviour is controlled, directly and indirectly, by Dow itself.
· Dow’s and UCC’s operations are so intertwined that it is difficult to separate the two. UCC’s submissions to the US Securities and Exchange Commission present its business as a “component” of Dow’s business. UCC’s business is fully integrated with Dow’s. In addition, UCC sells substantially all its products to Dow (and Dow sells UCC’s products under Dow’s name). This means that a distinction between the two companies exists only in terms of formal “corporate personality”. In commercial and reporting terms the two companies are one.
· UCC’s behaviour actually benefits Dow in so far as not paying a debt enhances a subsidiary’s ability to pay dividends to its parent. Importantly, Dow has almost certainly procured that conduct (denying Bhopal liabilities) since it is responsible for legal and accountancy services for UCC. UCC has paid dividends to Dow since completion of the acquisition in 2001. From 2009-2011 these dividends amounted to $2200m. Dow has made the choice not to require these funds to be used to compensate Bhopal survivors or decontaminate the affected area.
· Dow is wholly responsible for the current conduct of UCC, and for how UCC chooses to deal with the “issues outstanding in Bhopal, particularly in relation to the remediation of the site”. It follows that Dow is necessarily responsible for UCC’s refusal to give further compensation to the victims of the Bhopal disaster, and its refusal to pay for the environmental clean-up of the Bhopal site. To state that “these outstanding issues are not the responsibility of the Dow Chemical Company” is therefore incorrect.
· Dow distances itself from UCC implying that it does not have a relationship with UCC but Dow provides UCC products and dealing with Dow is no guarantee that products supplied are not UCC products. Given the total convergence of Dow’s and UCC’s business, stockholders and management, there is no substantive difference between dealing with UCC and dealing with Dow. For all material purposes, including those relating to ethics and corporate responsibility, any suggested dichotomy between Dow and UCC is a false one.
· If UCC refuses to compensate victims of the Bhopal disaster, pay for the environmental clean-up, or submit to the jurisdiction of the Indian Court in criminal proceedings, those are all decisions for which Dow has direct management control and therefore responsibility (further to point 2 above).
· Dow is no less responsible for UCC’s conduct with regards to Bhopal than any other supplier would be with regards to a fully owned subsidiary found to be abusing human rights. For example, if UCC was found to be employing slave labour, then Dow, the supplier, as parent would rightly be held “responsible” for the acts of its subsidiary.
3: Appeal Letter to Indian PM from Survivor’s Organisations
Honourable Prime Minister,
Government of India,
North Block,
Raisina Hill,
New Delhi 110 011
August 1, 2014
Sub. Urgent Directions for Filing of Application for Amending Civil Curative Petition No 345-347/2010 for Additional Compensation before Supreme Court on August 5, 2014.
Dear Sir,
On behalf of the survivors of the December 1984 Union Carbide gas disaster in Bhopal we wish to draw your urgent attention to the hearing of the Curative Petition filed by the Government of India on December 3, 2010 that is scheduled to be heard on August 5, 2014.
For the last several years we have attempted to apprise the Prime Minister’s office that the figures of exposure related deaths and injuries in the Curative Petition filed by the Government of India are wrong and without any basis.
The government’s curative petition mentions a figure of 5,295 deaths caused by the disaster, which happens to be one fourth of the figures of death reported by Indian Council of Medical Research (ICMR) in its epidemiological report published in 2004. Likewise, the petition mentions that 93 % of the victims were only temporarily injured which is against the findings of the ICMR.
You can stop a great injustice being done to the Bhopal victims by issuing directions for filing an application before the Supreme Court on August 5, 2014 for amendment of the Curative Petition. Figures based on ICMR’s scientific research can then be incorporated in the amended Curative Petition.
We request you to issue directions to concerned officials in the Ministry of Chemical & Fertilizers for filing an application before the Supreme Court for amendment of the Curative Petition on August 5, 2014.
