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While the controversy over US multinational Dow Chemical Company sponsoring the 2012 London Olympics rages, certain court documents have come to light which may help Bhopal gas tragedy survivors seek compensation from the company. Though Dow Chemical had bought over Union Carbide Corporation (UCC), which owned the pesticide plant in Bhopal from where the deadly methyl isocyanate gas had leaked in 1984, Dow has been maintaining that UCC is a separate legal entity.
Now documents in a US district court reveal the direct link between Dow Chemical and UCC. Activists have requested for the inclusion of these in the government of India's curative petition filed in the Supreme Court. They are also demanding that Dow be dropped as the Olympic sponsor.
Clinching evidence
The documents include a series of mails exchanged between Dow Chemical officials (See 'Email extracts') and Megavisa—a front company set up in 2001, the same year that Dow bought over UCC. They also include observations made by a US district court, recognising UCC being the same company as Dow Chemical (see 'What the US court said').
The correspondence reveals how Dow officials set up a system to sell Union Carbide products like bulk chemicals, wires and cables through the front company. The documents also show how Dow continued to set the prices for UCC products in India, though it now claims UCC is a separate entity and has no responsibility for the firm's liabilities in connection with the 1984 Bhopal gas tragedy. These documents came to light after Megavisa filed a lawsuit against Dow Chemical in the Connecticut court, in the US. The case was filed in 2003 and the court's observations were made over the subsequent years.
The documents prove that Dow Chemical can be held liable for the 1984 gas leak and contamination from the Union Carbide plant in Bhopal, say activists. Tim Edward, trustee of Bhopal Medical Appeal, a UK-based advocacy group supporting Bhopal gas victims, says the Connecticut documents show both UCC and Dow perpetrating a fraud on India and its courts in order to avoid asset seizure. This fraud facilitated obstruction of justice by enabling a fugitive from justice, UCC, to be sheltered by Dow. It was done in order that Dow could profit from trading UCC products in India. He adds, once the veil has been pierced, all outstanding environmental, civil and criminal liabilities of UCC resulting from its business activity in Bhopal will be transferred wholesale to Dow.
In India, Dow Chemical has repeatedly claimed it is not liable for the Bhopal incident and that while Union Carbide is a Dow subsidy it holds a separate legal status. As recently as January 27, 2012, Dow released a statement saying it never owned or operated the Bhopal plant and neither did the company acquire any part or issues related to it. The company further said, “the settlement between the Government of India, Union Carbide and Union Carbide India Limited occurred in 1989, long before Dow acquired the shares of Union Carbide in 2001.” It also said that those trying to connect Dow to the incident were misinformed or misguided.
The statement came close on the heels of the international debate over Dow sponsoring the 2012 London Olympics and the resignation of Meredith Alexander, commissioner of the Sustainable London 2012 Commission, who protested Dow's toxic Bhopal legacy. In 2004, too, the company had made similar claims in an affidavit in the Indian court, denying any liability in the gas leak case. While India debates whether or not to boycott the Olympics and international pressure to drop Dow as a sponsor increases, activists in India, are gearing up for another round of battle with chemical giant Dow.
Rachna Dhingra of Bhopal Group for Information and Action says the US court documents “show that Union Carbide is Dow and and Dow is Union Carbide, so the public relations spin of Dow Chemical that UCC is a separate company does not hold. We hope that Indian government will pursue legal action in holding Dow Chemical accountable for its Bhopal liability so that justice can be provided to Bhopal gas victims.”
'Curative petition designed to fail'
The Madhya Pradesh government and five organisations campaigning for the Bhopal tragedy survivors have submitted the US court documents along with an intervention application in the Supreme Court which is hearing the Centre's curative petition. The petition in the Supreme court has demanded higher compensation from UCC, but it does not demand for establishing the link between Dow chemical and UCC so that Dow can be held liable.
The intervention application says the US court documents are “evidence that its (Dow's) subsidiary, UCC, sold its technology indirectly to India.” The US district court's observations show that Union Carbide continued to run its businesses by circumventing the Bhopal chief judicial magistrate's order in 1992 to confiscate UCC's assets after declaring it a proclaimed offender, explains Dhingra.
Edward of Bhopal Medical Appeal says a careful reading of India's curative petition suggests it is actually designed to fail. “Besides weak reasoning, making little case in law for overturning the 1991 review and undermining its own claims by using patently false figures for morbidity and mortality, it names both UCC and Dow but makes absolutely no case for piercing the veil between the two,” explains Edward.
Adding that the intervention in the Supreme Court by the survivors' groups stresses on the necessity of piercing the corporate veil between Union Carbide and Dow, Edward explains this could be the final chance for some form of substantive civil justice for Bhopal's dead and maimed victims.
Will the Indian government act on the fresh evidence?
| How Union Carbide evaded Indian courts
Following summons issued by the magistrate in September 1988 after the gas tragedy victims filed a complaint, UCE took steps to close its business in Hong Kong, and was dissolved in April 1991. Soon after, a near identical entity was formed with the modified title Union Carbide Services Eastern (UCSE) Limited. As this business was not named in criminal proceedings, CBI was unable to proceed against it. This successor company, too, was dissolved in 1995, paving the way for UCAP to assume full responsibility for managing UCC's business in Asia, states the activists' intervention application. The emails and documents are snatches of correspondence and steps taken to disguise UCC products under different names. This was because April 1992 onwards UCC's assets (movable and immovable) in India were to be seized as a consequence of UCC's fugitive status in the Bhopal criminal case, says Tim Edward. These documents show that Dow consciously violated the court's order to attach properties by continuing the practice established by UCC (in 1987) of utilising third party agents to distribute millions of dollars worth of UCC products exclusively in India. To avoid detection, first UCC, then Dow, disguised the origin of UCC goods to port authorities, customs officials and end users, allege activists. They did so because the goods would otherwise have been seized or turned back, it is alleged. The email documents also reveal a clear functional integration of a range of Dow affiliates worldwide, including in India. They show, for example, that Dow maintains control over ordering systems and pricing of UCC products and technology following the merger. In Indian courts, however, Dow claims it has no business, assets or personnel in India, and that UCC is an entirely separate company. January 2001: Mail from Graham Fox, Dow Chemical regional general manager for the Middle East and Indian subcontinent, to Ravi Muthukrishnan, country manager, Dow Chemical International Pvt. Ltd. (Mumbai): “As you will be aware, UCC have not sold directly to India since Bhopal and have used Mega Visa to handle many of their sales of speciality chemicals, some bulk chemicals and wire and cable products. They work across our Dow businesses and have some several million $ sales revenue as I understand it.” July 6, 2001: Mail from Dow Pacific manager Atsuko Serizawa to Edward Neunueble of Dow's legal department: “Since Megavisa Singapore is a dummy company who negotiates nothing and owns nothing, Dow India now would like to do the business with MegaVisa India direct." The mail further said: “Country management and I are against this idea at the present time due to the threat of litigation and the protest incident of a couple of months ago.” The Connecticut district court in the lawsuit filed by MM Global Services INC, MM Global Services PTE Ltd and Megavisa Solutions against Dow and and Union carbide companies made the following observation: “In February 1989, Union Carbide and its Indian affiliate were ordered to pay a total of $470 million for all civil claims arising from the tragedy. Union Carbide thereafter ceased selling products directly to customers in India. In 1987, Union Carbide appointed the plaintiff, Mega Visa Marketing Solutions Ltd, as a non-exclusive distributor to maintain Union Carbide's access to the Indian marketplace.” The court further said: “In 1993, Union Carbide requested that MVMS form separate corporate affiliate and open offices outside of India that would buy Union Carbide products in the United states and resell them to end-users in India. Over the next decade, Union Carbide would distribute its products, according to differing agreements, in Asia through other entities.” |