Will merger deal allow Dow to evade their toxic liabilities in Bhopal?

As vigils, protests and torchlight rallies mark the passing of another year since the Bhopal gas tragedy, the area remains contaminated and a third generation now suffers health problems caused by the disaster. Thirty-two years later, survivors in the Indian city of Bhopal in the central state of Madhya Pradesh are still waiting for justice. But a planned corporate merger deal looks set to help the companies involved avoid their toxic liabilities altogether.

For more than three decades, campaigners have been calling for Dow Chemical, the US-based company held liable for the disaster, to accept responsibility, compensate victims properly, and to pay for the clean-up of the still-contaminated area.

Thousands of people were killed on the night of 2 December, 1984, when the toxic gas methyl isocynanate leaked from a pesticides factory in Bhopal owned by Union Carbide India Limited (UCIL), a subsidiary of the US firm Union Carbide Corporation (UCC) which was bought by Dow Chemical in 2001.

The total death toll is estimated at between 8,000 and 16,000 people, and some 40,000 were left seriously ill or permanently disabled by exposure to the gas. A second disaster was caused when thousands of tonnes of toxic waste, which had been dumped at an abandoned UCIL-owned factory, contaminated the local water supply.

Since then, tens of thousands more people have been poisoned by drinking the water pumped up in their wells and boreholes. Medical groups working with survivors say that the human suffering caused by the disaster is now affecting a third generation in Bhopal.

Dow has made no move to accept liability for the disaster or to pay for a clean-up of the area. It holds that a settlement of US$470 million made in 1989 was “full and final”. But the Indian government says the “gross inadequacy” of the 1989 settlement has resulted in an “irremediable injustice”, and it has called for a further settlement in excess of US$1 billion. Additional filings in support of the petition request a further US$8.1 billion.

UCC has not answered the criminal charges relating to the disaster, and they remain outstanding. Dow has been summoned by the Indian courts on four separate occasions to explain UCC’s non-appearance, but Dow has so far failed to attend.

And now, frustrated campaigners say justice may soon be placed ever further out of reach.

Dow-DuPont – a “complicated new layer”

A planned merger deal between corporate giants Dow and Dupont is set to add a “complicated new layer” to the corporate structure of UCC, making it harder still for victims to get justice.

According to the Bhopal Medical Appeal, the merger would potentially allow both companies to avoid their legal obligations to the Bhopal victims, as well as to thousands of other people around the world who have been poisoned by toxic chemical manufacturing processes.

“After the merger, the new Dow-DuPont company will be split into three different entities and Union Carbide, currently a 100 per cent owned subsidiary of Dow Chemical, will take on a new corporate form,” Colin Toogood, campaigns manager at the Bhopal Medical Appeal, told Equal Times.

“This adds a complicated new layer to the corporate veil,” he explains, “which must be pierced before the new entity can be held to account for the old Carbide’s actions, and the Bhopal issue finds itself kicked even further out into the long grass.”

But the proposed merger is stalled. It’s now under investigation by both US state attorneys and the EU on anti-trust grounds, after both companies failed to submit the required documents.

Other concerns have been raised surrounding what the Bhopal Medical Appeal describe as “apparent attempts, by both companies, to see the back of potentially vast liabilities connected with contamination legacies” – Bhopal in the case of Dow, and DuPont’s C8 chemical scandal.

DuPont has dumped 62 per cent of its environmental claims, along with US$4 billion of existing debt, into new company Chemours, which has been described as “a bankruptcy waiting to happen”.

Neither Dow nor DuPont have explained to involuntary creditors what will happen to existing liabilities in the aftermath of the merger and corporate restructuring.
Neither Dow nor DuPont had responded to requests for comment at the time of writing.