Dow Continues to Face Heat on Bhopal(A)

On July 18, 2003, eighteen members of Congress, including Democratic presidential primary candidate Dennis Kucinich sent a letter to Dow Chemical that argues, “By refusing to address the liabilities it inherited in Bhopal via its acquisition of Union Carbide, Dow Chemical is party to the ongoing human rights and environmental abuses in Bhopal.” Trillium Asset Management led a coalition of shareholders in raising similar concerns earlier this year, and sent the following letter to Dow on the heels of the Congressional letter.
July 29, 2003
Samuel SmolikVice President, Environment, Health & SafetyThe Dow Chemical Company2030 Dow CenterMidland, Michigan 48674
Dear Mr. Smolik:
Since it’s been some months since we’ve been in touch on the Bhopal issue, I am writing to inquire about the current status of Dow’s negotiations with Bhopal survivor groups and to again urge the company to take action to address this ongoing controversy.
The controversy surrounding the responsibilities for Bhopal that Dow assumed in its merger with Union Carbide seems to show no sign of abating. Since we last communicated, both Forbes and The Wall Street Journal have written articles focusing on the controversy. We understand that the Michigan Student Assembly of the University of Michigan, Ann Arbor, passed a resolution calling for the university to sever its ties with Dow Chemical over the Bhopal issue and that similar resolutions are pending at other leading universities. Now we have learned that eighteen members of Congress, including Democratic presidential primary candidate Dennis Kucinich sent a letter to Dow Chemical that argues, “The disaster in Bhopal continues and is likely to worsen if Dow Chemical does not step forward to fulfill its responsibilities.”
As we discussed previously, we continue to believe that the ongoing controversy hurts Dow as a company and undermines its stated commitment to Sustainable Development and corporate responsibility, particularly given the emotionally charged symbolism of Bhopal and the continued contamination facing the survivors. Negative coverage of the ongoing controversy is only likely to increase as we approach the 20th anniversary of Bhopal disaster.
In your letter of March 3, 2003, you wrote to us, “Since acquiring Union Carbide, we have been engaged in thoughtful discussions to answer the questions, ‘What role might Dow assume, as a global corporate citizen, to voluntarily address any of the present day needs of India, or in particular, Bhopal?'” For the long-term benefit of Dow, its shareholders, and the people of Bhopal, we sincerely hope you can negotiate a mutually acceptable solution with groups representing Bhopal survivors.
As an important first step in this process, we suggest that Dow ensure that Union Carbide abides by any legal summons from Indian courts in ongoing civil and criminal cases addressing Bhopal. The recent letters by members of Congress to Dow noted, “More disturbing is the manner in which Union Carbide and Dow Chemical have ignored the summons of the Bhopal court. This exposes a blatant disregard for the law.” Similarly, we were concerned about potential “mis-statements” at Dow’s 2003 annual meeting by Dow Chairman denying the existence of the criminal charges against Union Carbide in India. In fact, we understand that the criminal case against Union Carbide is moving forward and that a special public prosecutor in India submitted documents to the court relating to the indictment of Dow in the pending case.
We’d appreciate an update on Dow’s current thinking about proactive ways to resolve this controversy in a way that demonstrates its commitment to Sustainable Development and that puts this issue behind it. Thank you for the opportunity to share our perspective.
Best regards,
Steve LippmanSenior Social Research AnalystTrillium Asset Management Corporation
cc: John Musser