Tuesday 3 July 2007

Govt tries to cleanse Dow investment of Bhopal stain

NEW DELHI: In a bid to clear Dow Chemicals, the American giant that took over Union Carbide in 2001, of civil liabilities in the Bhopal gas tragedy — said to be the worst industrial disaster in the world — the Centre is making a concerted effort for an out-of-court settlement with it. The victims of the tragedy may find this hard to believe, but documents with TOI show that the PMO, backed by finance and industry ministers and the vice chairman of the Planning Commission are trying to find ways to clear Dow Chemicals of any legal liability, so that the company agrees to invest in India. Key issues of the 1984 disaster remain unresolved. While direct victims of the poisonous gas leak have been compensated, toxic waste from the plant in a 7-hectare area is said to have contaminated Bhopal's ground water. While the case is going on at the Jabalpur bench of the Madhya Pradesh HC, Union Carbide was bought over by Dow. With that, it would have taken over Carbide's civil liability. In the Jabalpur court case it is named as one of the respondents and the chemicals and fertiliser ministry has raised a demand of Rs 100 crore from Dow to clean up the contaminated factory site in Bhopal. Faced with this, as well as the prospect of higher demands if the court holds it responsible for the ground water contamination, Dow first offered in 2005 to invest in a giant petrochemicals hub, covering 250 sq km, and then showed its reluctance to do so, citing the potential risk to its investment should liability come on it from the Bhopal case. This is where, it appears, government machinery got whirring to allay Dow's fears by seeking to reach an out-of-court settlement and thus pave the way for the investment in the petrochemicals hub. Documents acquired through an RTI application show a series of rapid-fire moves.If settled out of court, Dow won't have any liability

NEW DELHI: Documents in TOI's possession show that an offer by Ratan Tata, who heads the Indo-US business council, to take up 'remediation' - in plain words, cleaning up - of the Union Carbide plant site has been picked up by the PMO and top ministries to find a way out for Dow. The problem with this, say activists, is that once settled out of court, Dow will no longer be responsible for compensating for the water contamination. In other words, while the site might be cleaned up with the help of Tata and other industrialists, the indirect victims of Carbide's cavalier factory management might be left high and dry. What do the documents show? They consist of several notes generated by the PMO, finance and industry ministers, the Planning Commission and the Cabinet Secretary. Commerce and industry minister Kamal Nath wrote to the PMO in February 2007, ''While I would not like to comment on whether Dow Chemicals has a legal responsibility or not, as it is a matter for courts to decide, with a view to sending an appropriate signal to Dow Chemicals, which is exploring investing substantially in India, I would urge that a group under the chairmanship of the Cabinet Secretary be formed to look into the matter in a holistic manner.'' He added," In a similar manner as was done with respect to the Enron Corporation with respect to Dabhol Power Corporation.'' In the Dabhol case, an out-of-court settlement was reached with its now defunct promoter, Enron. Deputy Chairman of Planning Commission Montek Singh Ahluwalia wrote to the PM, Finance Minister P Chidambaram and Kamal Nath in December 2006: ''Ministry of Industry has granted foreign collaboration approval for a technical collaboration between Dow and Reliance. This was greatly appreciated as a signal that Dow was not blacklisted. ''However, they have sought a statement from GoI in the court clarifying that GoI does not regard Dow as legally responsible for liabilities of Union Carbide. Similarly Shri Ratan Tata has written to the FM suggesting that we should launch an industry led intiative. Dow Chemicals indicated that they would be willing to contribute to such an effort voluntarily, but not under a cloud of legal liability.'' Ahluwalia goes on to advise: ''Cabinet secretary should be asked to try and resolve the issue in an inter-ministerial meeting including Ratan Tata or his representative.'' Earlier, Tata wrote to Ahluwalia in November 2006: ''Dow has mentioned in their letter that it is critical for them to have the ministry of chemicals and fertilisers withdraw their application for a financial deposit by Dow against remediation costs, as that application implies that the Government of India views Dow as liable in the Bhopal Gas Disaster case. This is obviously a key aspect and I want your assessment as to whether it is possible.'' He also wrote to Chidambaram. The finance minister concurred with Tata while writing in December 2006 to PMO: ''I think we should accept this offer and constitute a Site Remediation Trust under the chairmanship of Shri Ratan Tata and including executives from the private sector.'' Dow, in the meanwhile, was in touch with top officials in PMO, in which they got the advice to consult top lawyer and Congress spokesman Abhishek Manu Singhvi. Documents show the legal advice given by Singhvi saying that Dow could not be held responsible for the disaster and also not be held liable for any alleged contamination and consequent cleaning up of the Bhopal site. This advice forms part of the PMO file. When contacted on the advice given, Singhvi said, ''I have been appearing as a senior counsel in this case for over 18 months. I was engaged by a leading solicitor firm. I am not in any manner engaged in any matter of the case except appearing at the Jabalpur High Court case and advising Dow on various legal aspects involved in those proceedings. I am not aware of anything else.'' Eventually, in April 2007, the cabinet secretary put up a note that says: ''It stands to reason that instead of continuing to agitate these issues (Dow's legal liability) in court for a protracted period, due consideration should be given to the prospect of settling these issues appropriately. An important aim is to remove uncertainties and pave the way for promoting investments in the sector.'' It adds that instead of leaving the matter to be settled by the court, the government should reconstitute the existing group of ministers (overseeing the work at Bhopal site) with an appropriate mandate.

30 Jun, 2007
Courtsey TIMES NEWS NETWORK
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