PANNA: Dow Chemical, Union Carbide and Bhopal
|Pesticide Action Network Updates Service (PANUPS)
Dow Chemical, Union Carbide and Bhopal
August 25, 1999
On August 4, 1999, Dow Chemical Company announced that it would acquire Union Carbide Corporation, creating the world's second largest chemical company. DuPont and Company remains the world's largest producer of chemicals.
Dow Chemical gained notoriety in the 1960s as one of the makers of the herbicide known as Agent Orange, used as a defoliant during the war in Vietnam. Union Carbide owned the pesticide plant in Bhopal, India, that in December 1984 was the site of the world's worst industrial accident. Thousands of people died, and an estimated 140,000 survivors still suffer from a range of diseases linked to exposure to the gas that leaked from the site.
News of the merger evoked sharp protest from the survivors of the 1984 disaster in Bhopal. Three organizations representing survivors have sent a memorandum to the chief executive of Dow Chemical reminding him of liabilities arising from the Bhopal disaster. They hold Union Carbide responsible for the deaths and injuries caused by the accident. For years, the survivors' organizations have called upon the corporation to release precise details of the chemicals released during the accident and results of tests conducted by Union Carbide to assess the effects of methyl isocyanate (one component of the toxic release) on animals. This information has been withheld by Union Carbide because the company claims it is confidential business information; however, such data is still needed for effective treatment of those who remain ill.
Although no criminal verdicts have been issued in the Bhopal case, Union Carbide settled with the Indian government for US$470 million in 1989. To date, individual settlements have been in the range of US$3,300 for loss of life and US$800 for permanent disability. Union Carbide has since abandoned the Bhopal plant, that produced pesticides for use in cotton production, and has not cleaned up the extensive pollution of water and soil it left behind. Criminal cases against Union Carbide are still pending in the Bhopal district court.
The merger between Dow and Union Carbide, estimated to be worth approximately US$11.6 billion, is expected to be finalized during the first three months of 2000. The new Dow would operate in 168 countries and have more than US$24 billion in revenue. The president and chief executive of Dow stated that the company should save at least US$500 million annually as a result of the merger.
A chemical industry analyst stated in the Washington Post that "the merger is a good fit of products and geography. Union Carbide is growing in Asia and plans a major facility in Malaysia, while Dow is strong in Europe and South America." Dow Chemical produces pesticides and chemicals used in dry cleaning, paint and antifreeze and is a leading maker of caustic soda, chlorine, ethylene, polyethylene and polystyrene. Union Carbide, no longer a pesticide manufacturer, is the world's number one producer of ethylene oxide and ethylene glycol used to make polyester fibers and antifreeze, respectively.
A spokesperson for the Bhopal gas victims organizations said "Dow Chemicals has made a serious mistake if it thinks that the disappearance of the Union Carbide name will bring the Bhopal issue to a close. Dow will inherit all of Carbide's liabilities and responsibilities. Dow needs to know that the gas victims of Bhopal will never give up their fight for justice and fair compensation." The spokesperson added "However a change of management may also mean a change of heart and the fact remains that the organization which could and should do the most for the welfare of the gas survivors is Union Carbide and its successor."
For more background on the Bhopal disaster, including survivor testimony and a history of the long struggle, visit http://www.bhopal.org. To find out about the international campaign to mark the fifteenth anniversary of the Bhopal disaster, visit http://www.EssentialAction.org/bhopal/index.html.
Sources: Bhopal Gas Peedit press release, August 8, 1999. "Chemical Giants Agree to Merger: Dow to Acquire Union Carbide," Washington Post, August 5, 1999. "Union Carbide, Dow--Images of Bhopal, Vietnam War," Reuters, August 5, 1999. "Dow Buying Union Carbide in $11.6 Billion Deal," Reuters, August 4, 1999. Pesticide Action Network press release, December 3, 1999.