Dow protests govt's SC move on Bhopal

The US-based Dow Chemical Company has protested the filing of a curative petition by the government to the Supreme Court in the Bhopal gas tragedy case last week.

It has termed the government action “ill-advised” and “misconceived”.

In a strongly worded statement issued for the first time after the controversy arose earlier this year, the company said, “If India truly wants to be seen as “open for business”, its sovereign legal commitments cannot be open to revocation.”

Adding: “In filing a curative petition to reopen settlement of the Bhopal gas tragedy some 21 years later, the Government of India is abrogating an agreement it negotiated and signed with Union Carbide Corporation (UCC) and its then Indian subsidiary, an agreement that was repeatedly reviewed and approved by the highest court in the country as a final disposition of all liabilities related to that event.”

Dow Chemical had taken over Union Carbide Corporation in 2001. “The 1984 tragedy occurred 17 years before Dow acquired stock in UCC and the rationale for holding Dow responsible is based on a fundamental mischaracterisation of the relationship between Dow and UCC – which are, and have always been, separate companies,” said the company.

When Dow acquired UCC’s stock in 2001, UCC no longer had holdings in India, since the company had sold its entire stake in the operator of the Bhopal plant, Union Carbide India Ltd, in 1994 to McLeod Russel India. “Moreover, under well-established principles of corporate law, Dow and UCC remained separate entities and Dow did not assume UCC’s actual or potential liabilities as part of the transaction,” added the statement.

Coinciding with the anniversary of the 1984 Bhopal gas tragedy, the government had last Friday filed a petition seeking enhancement of the compensation of $470 million determined by the Supreme Court in 1989. It said the settlement was arrived on the basis of assumptions of truth unrelated to realities.

The petition sought a review of the May 4, 1989, and October 3, 1991, orders of the SC. An additional compensation of Rs 675.96 crore under various categories had become due and payable in 1989. Since the amount was being claimed in 2010, the value of the sum would come to around Rs 5,786 crore. The government sought another Rs 1,743.15 crore for relief and rehabilitation, which the Madhya Pradesh government undertook and had to be reimbursed by the company on the ‘polluter pays’ principle. The petition also claimed Rs 315.7 crore towards measures for remedying environmental degradation caused by the respondents.