Ethical Performance
inside intelligence for responsible business


Bhopal still haunts Dow

February 2003

Dow Chemicals has found itself at the centre of a debate on the limits of corporate accountability as non-governmental organizations and social investors increase pressure on the company to deal with the legacy of the 1984 Bhopal disaster in India.

The gas leak at Bhopal, which killed more than 3800 people, was caused by Union Carbide, a company that Dow bought two years ago. Although Union Carbide paid $470million (£291m) in compensation in 1989, pressure has been growing on US-based Dow to provide more help to people in the town in north-western India.

A group of socially responsible funds that includes the US-based Trillium Asset Management, Domini Social Investments and the Calvert Group has written to Dow expressing concern that ‘continuing protests and media coverage around this issue pose a risk to Dow’s reputation and undermine its stated commitments to sustainability’.

The investors, who together manage assets of $13billion, say Dow should ‘take more responsibility for addressing the continuing health and environmental impacts’ of the disaster.

Greenpeace has also stepped up its Bhopal campaign, calling on Dow to pay $500m to clean up the site, and to help with the health needs of people who have since had medical problems. But Dow says it is unreasonable to be held to account for an event in which it was not involved.

‘In the eyes of the highest courts of India, the Bhopal case is closed,’ said Dow president Michael Parker, adding that the Indian Supreme Court had reviewed the original settlement and decided it was acceptable. ‘What we cannot and will not do is accept responsibility for the Bhopal accident.’

However, Parker said Dow is making efforts to put ‘humanitarian’ assistance in place. ‘The black and white legal case is one thing, but there is more for us to consider,’ he said. ‘We also have an entirely separate humanitarian question with which we have to wrestle. That is why, despite the fact that we clearly have no legal obligations, we have been exploring various philanthropic initiatives which might address some of those needs.’

Although Dow has not announced what it might do, it has been talking to Bhopal residents’ organizations, and the group of investors has urged Dow to ‘work towards a mutually acceptable solution’ with them.

Dow told EP: ‘The Bhopal site is certainly contaminated and we have seen reports that there is about 100 tons of material that needs to be cleaned up, but the land has belonged to Madhya Pradesh state government since 1984 and it is their responsibility.

‘It is very difficult to understand what is the right thing to do, but we’ve looked at this very carefully, and frankly we do not see that it is our responsibility. It’s a question of where you draw the line. We want to implement some kind of humanitarian effort in Bhopal but we’re not going to accept responsibility for something we were not involved in.’

Union Carbide India, which operated the plant, was 51 per cent-owned by Union Carbide and 26 per cent-owned by the Indian government, with the balance held by 24,000 private Indian citizens.

Dow, which has an annual turnover of $28bn, recently announced it would begin stakeholder dialogue with community leaders around the world, with the aim of completing the programme by the end of this year (EP4, issue 8, p5).


3BL Media News
Sign up for Free e-news
Report Alerts
Job Vacancies
Events Updates
Best Practice Newsletter