Is it possible for a company to be legally in the right but ethically off the mark? That’s an issue The Dow Chemical Company has been facing ever since it bought Union Carbide Corporation (UCC) in the US in 2001. UCC once owned the Bhopal-based pesticide plant, a leak from which caused over 5,000 deaths in 1984.
As the newest controversy over Dow’s sponsorship of the London Olympics shows, no matter how hard Dow and its public relations team may work at educating public opinion to dissociate itself from the disaster, the ghost of that tragedy will haunt it for many years to come. On January 25, Sustainability Commissioner Meredith Alexander resigned her honorary position in protest over the sponsorship deal with Dow and what she called its “toxic legacy”. The resignation came a little over a month after Dow agreed to remove its logo from the fabric wrap around the Olympic Stadium.
Even if we set aside the lateness of her resignation – the £7-million (Rs 54.6 crore) Dow sponsorship deal was tied up some years ago – was Ms Alexander right? In strictly legal terms maybe not, but she is on stronger moral ground when she deplores the fact that Dow is using its letter from the London Olympic organising committee expressing satisfaction to strengthen its case that the corporation had nothing to do with the Bhopal disaster.
What is Dow’s legal position? As it explains ad nauseam, UCC exited India in 1994, settling its liabilities for the Bhopal disaster with the Indian government and selling its Indian subsidiary to B M Khaitan-owned, Kolkata-based McLeod Russel. Union Carbide India Ltd (UCIL) was subsequently renamed Eveready Industries India Ltd (the company even launched a packaged tea brand called Eveready Tea some years later on the back of that acquisition). Dow, therefore, had nothing to do with UCC or UCIL when the tragedy occurred. Dow also said the Supreme Court ordered a settlement of $470 million (Rs 750 crore at the time), which was paid, and in 1989 fully released UCC and UCIL from any civil liability for the gas tragedy.
None of this, of course, has put an end to the 28-year-old controversy over the adequacy of compensation for the victims — the families of those who died and 35,000 people suffering major injuries after inhaling methyl isocyanate (MIC) gas that spewed from one of the tanks in UCIL’s pesticide plant (in a section entitled “Bhopal information center” the company claims it was an act of sabotage, not negligence).
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Part of Bhopal’s unending nightmare has been the result of not a little cynical inaction from the central government, which assumed responsibility for disbursing the funds from the settlement, and the state government, which took over the facility in 1998 (it had been leasing the property to UCIL/Eveready) and was supposed to continue to clean up the site. Dow now finds itself opposing a curative petition submitted by the government in the Supreme Court raising the compensation to Rs 7,200 crore on the reasoning that the number of deaths and injuries was much higher than originally thought.
So far, so many facts. The question that might be worth asking is: what was Dow’s management thinking when it bought UCC in the first place? True, the Bhopal factory was just one of 14 plants the UCIL ran in India and India was one of many countries in which UCC operated. Still, this was the company that owned a plant in which one of the world’s worst industrial disasters occurred and which cynically exited the country nine years after that, albeit after paying a court-mandated compensation and undertaking some clean-up operations.
And true, legal opinion may have advised Dow that it had no liability for Bhopal. But lawyers are not great judges of public opinion. And no matter how unfair Dow may deem it, the magnitude of the tragedy has ensured that the court of global public opinion has chosen not to dissociate it from that tragedy. The fact that Dow agreed not to display its logo at the 2012 Games is an oblique testimony to this.
Dow’s somewhat amoral stance is hard to understand when you know it suffered a similar public relations disaster in the sixties over the use of the notorious napalm or Agent Orange by the US military in Vietnam. Again, it argued that it only made the stuff and didn’t actually spray it all over north Vietnam. But it is also true that it continued to supply the chemical after other suppliers stopped under pressure from public opinion.
The other question that no one seems to ask is what the Khaitan empire has done for the Bhopal victims since UCIL did not shed its liabilities when it was sold. Maybe it will take a major sponsorship deal to raise that particular issue. Meanwhile, in a world in which corporate social responsibility is being forced to look beyond mere image-cleansing exercises, Dow will continue to struggle to exorcise the ghosts of Bhopal.