How Dow Chemical Can End the Bhopal Tragedy

Editor's note: This article has been corrected to reflect that the Bhopal company was majority-owned, not wholly owned, by Union Carbide.

Early in the morning on Dec. 3, 1984, a leaking tank within an insecticide plant unleashed approximately 45 tons of a toxic gas in the northern area of Bhopal, a city in central India. The poisonous gas cloud -- a methyl isocyanate compound -- spread across the surrounding neighborhoods and slums as the people of Bhopal slept. Direct exposure to the substance reportedly killed 3,800 people during the night, while thousands of others fled the city and the expanding cloud of toxic fumes.

Almost three decades later, the gas has vanished, but Bhopal remains devastated by the toxic leak. The company responsible for the disaster was a majority-owned subsidiary of Union Carbide, which itself is now a subsidiary of Dow Chemical. The story of Bhopal has been unearthed because of Dow's prominent role as a key sponsor in the 2012 Summer Olympics.

A controversial Summer Games
London's 2012 Summer Olympics were supposed to be the "first truly sustainable Olympic Games," according to organizers. Contrasting with Beijing's over-the-top production, London aimed to leave a legacy of environmental responsibility. Dow's sponsorship (to say nothing of co-sponsors BP and Rio Tinto) has put that legacy in serious jeopardy. The relationship between Dow, Bhopal, and Olympic sustainability triggered protests and anti-greenwashing campaigns, while provoking outcries against globalization. We believe the story of Bhopal and Dow should be shared with investors to encourage corporate transparency around the world.

We also believe Dow can reverse this public relations nightmare by taking responsibility for Bhopal on the global stage of the Olympics. As outlined below, we propose a very clear, simple, and fair solution. We strongly encourage readers to share this article to bring further attention to an important issue. We recommend financing a Bhopal remediation effort through a public stock offering, a move that would boost Dow Chemical's reputation and, most importantly, provide the people of Bhopal with the services and health care they desperately need.

The disaster and the devastation that followed
For Americans, the disastrous gas leak is a distant memory, but the aftermath burdens the daily lives of Bhopal citizens even today. While figures vary widely, several accounts estimate the disaster ultimately led to 20,000 deaths, and a 2006 Indian government affidavit stated that the leak caused 558,125 injuries. Those numbers continue to grow because of the hazardous waste that remains at the crumbling insecticide plant. The city has become a symbol of broken governance, legal maneuvering, and extreme human suffering.

Originally, Union Carbide claimed the gas leak was a result of sabotage. However, plaintiffs in a 1998 civil suit in India revealed a laundry list of safety issues that were contributing factors to the catastrophe. Among these were poor maintenance, failure to implement safety precautions, and evidence that cost-cutting measures increased the severity of the disaster. Reports have noted that the safety equipment and procedures in place in Bhopal were seriously lacking compared to those of similar U.S.-based plants.

Following the disaster, Union Carbide failed to appear in court for trial in India, and eventually reached a settlement, agreeing to pay $470 million in 1989, which amounted to $1,500 per death and $550 per contaminated individual. The figure was substantially reduced from the $3.3 billion original claim presented by the Indian government and seems drastically low given the lingering adverse health effects of the gas leak. Unusually high instances of cancer, respiratory difficulties, immune and neurological disorders, near-blindness, reproductive difficulties, and heart problems continue to afflict the survivors. Bhopal's miscarriage rate is now seven times the average in India . Moreover, no one under the age of 18 was registered as a victim during the aftermath, yet the number of children exposed to the gas is estimated to be over 200,000.

Adding insult to injury, some 425 tons of hazardous waste remain on the grounds of the old factory today. Little has been done to clean up or remove the various chemicals, which continue to seep into the ground and pollute the local drinking water. The Indian government ships fresh water, but the deliveries are highly irregular. As a result, slum-dwellers are left with no choice but to drink the tainted groundwater.

To make matters worse, the slums expanded around the site because of the relatively low cost of nearby land. The inhabitants, already crippled by extreme poverty, develop chronic and debilitating illnesses that burden their everyday lives. Their ability to work is diminished. Children raised in this area face twice the risk of dying as do children elsewhere, partly because their parents cannot care for them adequately. Surprisingly enough, despite the serious health problems reported over the years, Union Carbide once claimed that methyl isocyanate was only a "mild throat and ear irritant."

Legal wrangling, scapegoating, and corruption have let persist an environmental cesspool that is destroying human life. Had Union Carbide or the government cleaned up the waste and provided an adequate water supply, as originally intended, countless birth defects and premature deaths could have been avoided.

Only recently has the Madhya Pradesh state government taken steps to address the crumbling factory site, which The New York Times described as a "wasteland in the city's heart." A German agency has agreed to remove 350 tons of waste over the course of the next year, all at Indian taxpayers' expense. While the local government had previously impeded studies on Bhopal's environmental contamination, the Madhya Pradesh government's willingness to let the German agency remove the waste is a hopeful sign. Still, the epic mess that began over a quarter-century ago is far from over. Who can -- and should -- help the remaining victims and put an end to the ordeal once and for all?

Why Dow should assume responsibility
For nearly three decades, the companies involved and the Indian government repeatedly deflected responsibility for the Bhopal disaster. The plant's operator at the time of the leak, Union Carbide India Limited, was spun-off from the Union Carbide Corporation after the disaster, but by then the plant had closed permanently and the assets and liabilities were no longer on UCIL's books. After an extended round of the blame game, the responsibility for Bhopal fell into a black hole while Bhopali citizens continued to suffer.

We conducted a careful analysis and believe all roads lead to Dow when it comes to Bhopal's environmental liabilities. One by one, let's dissect and rebut Dow's arguments:

  • The Indian government should take responsibility for the Bhopal site.
    Both India and the U.S. adhere to the "polluter pays" principle, which states that the producer of pollution must pay for its consequences. Union Carbide was the polluter, and the continued existence of severe health problems and toxic waste in Bhopal shows that Union Carbide never fulfilled its responsibility. Further, Union Carbide signed a lease with the Indian government, promising to return the site "in its original condition." Even though the Indian government does in fact own the site now, Union Carbide failed to fulfill its original obligation.
  • If Union Carbide owned the Bhopal plant, Dow bears no responsibility.
    In 1984, Union Carbide owned the plant. A decade later, Union Carbide claimed that the plant was sold during an auction in 1994. However, contradictory to that claim, the plant was no longer on the books at the time of the auction. Instead, the Indian government had shut down the plant, and the legal ramifications of the pollution were still being resolved. In 2001, Dow acquired Union Carbide for $11.6 billion and the two entities became one and the same. So when we write "Dow," think "Union Carbide." Union Carbide describes the relationship in its annual report: "Union Carbide's business activities comprise components of Dow's global operations rather than stand-alone operations."
  • Dow bought Union Carbide free of liabilities.
    According to international law, the principal of "successor liability" requires the purchaser to gain both the assets and liabilities of the target. So, along with the wealth of assets acquired from Union Carbide, Dow should also be responsible for the environmental and health damage Union Carbide caused in Bhopal.
  • There is no precedent for Dow assuming Union Carbide's liabilities.
    A Dow spokesperson has pointed out that providing funds for Bhopal is out of the question since it would open up the company for additional liabilities. However, after purchasing Union Carbide in 2001, Dow acknowledged its responsibility for asbestos liabilities from American incidents involving Union Carbide dating back to 1972. In fact, Dow set aside $2.2 billion to resolve the asbestos issues. So Dow recognizes that "successor liability" applies, yet it ignores the inherited liabilities of the Bhopal disaster.
  • Union Carbide settled the claim years ago.
    The Indian government's $470 million settlement with Union Carbide represented 15% of the original $3.3 billion claim, and left victims with about $550. Dow Public Relations Officer Kathy Hun once asserted that "$500 is plenty good for an Indian." According to The Bhopal Reader, "It was widely believed that the courts had been pressured or influenced by the [Indian] Congress government ... and that the government had made a private deal with Union Carbide." To this day, Dow has continued to pressure the Indian government to keep the company free of liability, acknowledging that the debt is not fully paid and the criminal case not entirely resolved. In a 2006 letter to the Indian ambassador, Dow CEO Andrew Liveris sought assurance Dow had no further responsibility at Bhopal "to ensure that we have the appropriate investment climate."
  • Eveready Industries should be liable.
    While Eveready Industries did purchase Union Carbide India Limited, Union Carbide's Indian subsidiary, in 1994, the Bhopal plant had long been closed, so there was no transfer of the site and its liability to Eveready. Union Carbide owned and operated the Bhopal site, so Union Carbide (and now Dow) should be held liable according to the "polluter pays" principle.

A company should take responsibility for the environmental damage caused by its operations. Since Dow acquired Union Carbide outright in 2001, this responsibility should lie with Dow, but thus far the U.S. courts have disagreed. Untangling the legal liability is outside of our focus, however, and the mistakes by the Indian government only made the legal mess worse. Ultimately, Dow should remedy the situation for ethical reasons, and establish an entirely new precedent.

This type of convoluted legal maneuvering by Union Carbide and Dow is not a new story. In Ecuador, beginning in the 1960s, Texaco discharged billions of gallons of oil waste directly into the Amazon rainforest, creating an oil spill that ruined the lives of countless indigenous people. Chevron, after acquiring Texaco (and its liabilities!) in 2001, has refused to pay the $18 billion fine ordered by Ecuadorian courts, claiming fraud. In a company statement, Chevron argues that PetroEcuador, the state-owned oil company that took over Texaco's facilities after 2001, should be held responsible. Sound familiar?

As these cases illustrate, multinational companies can use legal loopholes to shirk their responsibilities in developing countries. Some of the world's richest companies profit at the expense of some of its poorest citizens. Meanwhile, shareholders in these companies often remain oblivious to the true nature of these transactions.

A solution to this continuing tragedy
Dow's management team, employees, and shareholders should capitalize on the unique opportunity the company has as a sponsor of the 2012 Olympic Games. While Dow has no legal obligation, Dow has an ethical obligation to right this wrong, a move that will end up benefiting Dow in the long run. Independent of the Indian government, Dow should create a Bhopal relief fund immediately to accomplish the following:

  • End unnecessary human suffering.
    Dow must take responsibility for the survivors' health and rehabilitation. While the Indian government has attempted to finance a health insurance policy for victims, the effort failed because of bureaucracy and corruption. Dow should buy a group insurance plan to ensure people receive the care they deserve, while adhering to the "polluter pays" principle.
  • Build health care facilities.
    Dow must provide ongoing access to treatment for the individuals affected by the Bhopal disaster. Allow organizations representing victims to participate and conduct research to better understand the afflicting illnesses.
  • Clean up the site.
    A thorough cleanup is of utmost priority to prevent further exposure to toxic soil and groundwater. Beyond removing the waste, cleanup will include decontaminating the soil and water to remove all traces of the toxic chemicals and will ensure that Dow's liability does not keep growing.

Estimating the cost of the above actions is difficult. At this point, only the Indian government has access to critical information about the site and victims, and its studies recently estimated that just over $1 billion would be an appropriate comprehensive total. We outline below how Dow could finance at least half this amount (perhaps much more) soon after the 2012 Olympic games:

1. Conduct a subsequent stock offering ($540 million investment)
Dow's board of directors should propose a 1.5% dilutive stock offering, which would result in 18 million new common shares. Such an offering would raise approximately $540 million at Dow's current share price of $30, all of which would be committed to the Bhopal Relief Fund.

Initially, shareholders might balk at the idea of diluting their claim on the company's earnings. The recommended sum, $540 million, may give investors sticker shock, but this isn't an unusual move for the $36 billion company. Just last year, Dow issued 9.2 million new shares, half the amount proposed here. Even if shares drop initially, Dow's support would help erase a liability that management has ignored for over a decade. We think the market could interpret Dow's approach positively, if the company communicates the proposal effectively.

At the Fool, we encourage buy-and-hold investing practices, and shareholders with a similar outlook would recognize the move as an intangible investment in Dow's reputation. Investors should urge Dow to rise above its legal maneuvering and make a long-term investment by aiding the victims of Bhopal.

2. Sponsor an Olympic fundraising campaign ($10 million investment)
In addition to the stock offering, Dow should raise funds through a widespread campaign announced during the Olympics. Thus far, Dow's Olympic sponsorship has resulted in utter outrage in London and India. A motion in March 2012 to terminate Dow Chemical's Olympic sponsorship was only narrowly rejected in an 11-10 vote by the organizing committee.

The backlash has yet to subside, but Dow could change public sentiment during the London Games. Dow should announce the launch of a $10 million campaign to raise awareness for the people of Bhopal, calling attention to its intent to remediate Bhopal during one of the most widely watched events in the world.

While it's impossible to estimate third-party donations resulting from such a campaign, the response could be significant. Dow's willingness to take action despite its lack of legal obligation would set an important precedent in corporate America.

Overall, Dow's contribution would go a long way in addressing its liability to Bhopal inherited from Union Carbide. Dow would be committing more than half of the $1 billion requested by the Indian government. This is a fair and reasonable approach that would prevent Dow from paying for the government's inaction and missteps over the years. At the same time, this move would show that Dow has decided to rise above the legal mess, take responsibility for its subsidiary's negligence, and do what is ethically right.

Why now?
Dow's refusal to take responsibility for Bhopal has hit the company's bottom line well beyond the associated legal costs. The unaddressed liability has hurt its reputation, resulted in protests and media backlash, and even limited its ability to invest overseas. One activist organization went so far as to pose as a Dow spokesperson on the BBC, claiming responsibility for the Bhopal disaster, and consequently causing a sell-off in European markets that erased $2 billion worth of Dow's market cap (which was recovered when the hoax was revealed).

Despite Dow's disregard for Bhopal, the company's "human element" advertising campaign allegedly "showcases Dow's commitment to addressing global economic, social and environmental concerns." Now is the time for Dow to embody this uplifting message it has paid millions to publicize. By taking action for Bhopal, Dow has an opportunity to rebuild its brand and become the paradigm for corporate social responsibility.

Dow's employees, shareholders, and even the broader investing community have something at stake. Dow's reparations would pay back a debt to thousands of victims that had previously been excluded from its balance sheet, creating transparency in an opaque reporting environment. This approach should be championed across the business world.

We're forwarding this article and our proposal to Dow's 10 largest institutional investors. Alone, these 10 institutions hold 42% of the company, but there are millions of other shareholders. Every Dow investor should use his or her voice to support a resolution to help the people of Bhopal. There is no better time than now for Dow to live up to its advertising campaign and demonstrate the ideals of the Olympic Games.

How can you help? Our goal is to spread the word about a tragedy that many Americans had never heard of or scarcely remember. Share this article with friends and family, and tell them about the Bhopal tragedy. Also, contact the Dow Investor Relations Office at 1-800-422-8193 and voice your concerns about Dow's role as an Olympic sponsor.

In addition, you can learn more about Dow and the disaster through the following outlets:

Isaac Pino, Charlie Kannel, and Tom Gardner own no shares of the companies mentioned. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

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  • Report this Comment On July 27, 2012, at 8:42 PM, prginww wrote:

    god forgive us for our part in this disaster, but this article is full of errors. See for example, Union Carbide India Limited was not whole owned by UCC.

  • Report this Comment On July 27, 2012, at 8:49 PM, prginww wrote:

    "Dow has an ethical obligation to right this wrong"

    So this happened in 1984, the Indian government (good or bad deal) said this was settled in 1994 and Dow has an ethical obligation to right this? Then does not those that got the 11.6B in the Dow purchase not also have an ethical obligation (to say nothing of the financial) to right this?

    If the purchase price was 11.6B with government assurances that Bhopal event was settled and not an obligation of the buyer, what should it have been with that obligation?

    The basic argument of this is that Dow has lots of money and the Indian government screwed their people so Dow has to pay even though everybody agrees that they had nothing to do with the event.

    Now I think it would be good for Dow to do something but they shouldn't do anything without at least matching funds from the Indian Government. Otherwise the precedent is set that if a government makes a bad deal they can just go after a wealthier business sometime down the road even after they say the event has been settled.

  • Report this Comment On July 27, 2012, at 9:13 PM, prginww wrote:

    Group evil -- it exists to some degree in almost every organization including corporations, churches and the military, even more-so the larger they are. Human group morality is strikingly less than individual morality. Part of this results from the automatons of specialization that we have all become in the industrialized world. We can avoid individual responsibility and pass the buck, resulting in a reduction of group conscience.

    I guarantee that no one at DOW feels any guilt about Bhopal (maybe nobody on the planet thinks they are to blame) and therefore feels no responsibility. Action will only be taken when the consequences of inaction are more costly. Hopefully your article will cause that to happen. Very noble cause. Good luck!

  • Report this Comment On July 27, 2012, at 9:15 PM, prginww wrote:


    If you eat one chip, you have to pay for the whole bag.

  • Report this Comment On July 27, 2012, at 11:18 PM, prginww wrote:

    This article is notable for what the authors chose to omit like that the plant personnel were all Indian as the the govt. required. Another salient point was that union carbide Americans faced arrest if they set foot in India. The matter was completely and fairly litigated years ago, the Indian govt never admitted its responsibility for the safety failures but that just meant that corrupt bureaucrats and politicians were not punished because they controlled the courts.

  • Report this Comment On July 28, 2012, at 12:09 AM, prginww wrote:

    Considering the history of Dow in the chemical industry I cannot see them getting remotly involved in this.

    Just a few pennies paid could open up a lot of old lawsuits.

    If they felt some responsibility to remeadiate the site they could only be involved remotley or in a partnership with another doner (Bill Gates Foundation?) to fund an outside firm to do the clean-up.

    I agree with the responsibility and ethical argument, but I do not see this ever happening.

  • Report this Comment On July 28, 2012, at 1:54 AM, prginww wrote:

    We could argue about the accuracy of the article of documentary, the precise legal structure and ownership of the plant at the time, how the guilt should be distributed, whether the Indian government (Federal and State) should provide some matching funds, etc. But simply is "spot on" as a Brit might put it. The idea of a public stock offering by Dow and its use in this manner, while seemingly naive from a business standpoint to some, is anything but. Only a real fool, and there are unfortunately plenty of them, is unable to see that our planet and our humanity is poised at what systems theorists call a bifurcation point. Either we will rethink what's important and right, and re-envision ourselves and the future including our investment decisions, or we will remain on a trajectory that can only have dire consequences for all of us. I'm proud to be a Fool, not a fool.

  • Report this Comment On July 28, 2012, at 8:22 AM, prginww wrote:

    Great, great piece and an awesome idea.



  • Report this Comment On July 28, 2012, at 10:34 AM, prginww wrote:

    Thanks for bringing this back into the spotlight. Another reminder of why the EPA is necessary, and why I'll vote to keep our current president. The thought of dismantling the regulatory agencies that help prevent these tragedies here in the U.S.A. is scary.

    It is certainly possible and rational to invest in companies that respect the lives, health and well-being of people while providing useful products and opportunities for investors.

  • Report this Comment On July 28, 2012, at 11:39 AM, prginww wrote:

    @ buddi, I agree completely.

    Those who advocate weakening or eliminating the EPA, or other regulatory agencies for that matter, seek only to make it easier for corporate criminal misdeeds to go unpunished.

    In this election season, it is essential to remember who would give corporate America license to "police themselves." I'm not aware of any other entity in our society that's allowed to get away with that.

    Money talks, sometimes in language most foul.

  • Report this Comment On July 28, 2012, at 12:02 PM, prginww wrote:

    Dow made its purchase of Union Carbide via an open contract which excluded them from any and all previous liabilities of U C. Why, nearly 30 yrs later can it be OK for some people who want to be on the side of the angels to decide that some body needs to pay(more) for the accident and that it should be Dow and not the Indian govt?

    From living a long life, I can tell you that paying for someone else's perceived wrongs never ends. Reparations are a frightening concept.

    Look at the Civil rights movement in America. We will never satisfy Black people for their perceived wrongs in spite of the trillions paid. We will never satisfy women for theirs. We will never satisfy American Indians for theirs. We will never satisfy asbestos victims for theirs, and on and on.

    The idea of reparations is dangerous and open ended. Contact Dow on your own and express your own opinion, but carefully consider which side the angels are on before you leap.

  • Report this Comment On July 28, 2012, at 12:32 PM, prginww wrote:

    This incident is long over and it seems completely irresponsible of you to dredge this up yet again. The Indian government needs to take responsibility for whatever is left in the way of aftermath. An Indian worker intentionally caused the incident (NOT accident!). Shame on you.

  • Report this Comment On July 28, 2012, at 12:44 PM, prginww wrote:

    Ethics only come into play when it isn't your money. If the final number was only $1 billion, I could see Dow paying it as a gesture of goodwill. Everyone knows that any payment of any kind opens the floodgates of lawsuits and let's the Indian government off the hook for their part in settling for a crappy deal.

    You cite Ecuador and Texaco, but don't mention the insane levels of corruption in their courts and government and how they played an active role in that disaster but expect someone else to write an $18 billion check while the judge in the trial eats dinner with the claimants.

  • Report this Comment On July 28, 2012, at 1:00 PM, prginww wrote:

    DOW's biggest failure in this ordeal was acquiring Union Carbide without enough due diligence to verify and confirm there were no open sores left from the incident. In a sense, DOW invited the turbulence they are experiencing now, and they must now do whatever is necessary to restore DOW's reputation.

    Whether right or wrong, DOW should have anticipated the ramifications of the acquisition, and should have put people on the ground to inspect, research and evaluate the most obvious and most notorious of all incidents in UC's history. Anything less would have been negligence on their part. It is likely that some, if not most, of this was factored into their bid for UC, and also quite likely discounted the price they paid for UC as a result. Now the bean-counters are playing liability and actuarial games to line their pockets with profits they don't deserve.

    Guess what DOW? You don't get to keep the money. Stop being greedy and do what is morally right. Take a bold step in favor of humanity, you might be surprised how humanity pays you back.

  • Report this Comment On July 28, 2012, at 2:49 PM, prginww wrote:

    First of all, thank you to everyone for your comments. I'm going to respond to them one by one.

    Mortimersnerve, thanks for jumping in right away with a correction. I made that mistake on the ownership structure of UCIL. I don't think wholly-owned versus majority-owned is dramatic mistake. But it is an error. We corrected it. I genuinely apologize; that mistaken line was mine in the article.

    I have to ask you, though, what is the source for the site? It looks like a Union Carbide site. The legal agreement that Union Carbide struck after the disaster would lead me to believe they weren't actively seeking truth. Which would lead me to not rely on their FAQ as an exclusive reference area.

    If we are going to evaluate the competence of the work, we also have to consider the motivations behind the work. I can promise you that I have no particular interest in spending a sunny Saturday afternoon on an issue like this. And there was no profit incentive behind this article. All in, the work done here will lose our company money.

    So, why write the article?

    Because I'm a capitalist, and I subscribe to the basic principles of Conscious Capitalism. Namely, that companies are healthiest when they strive to meet the needs of all of their stakeholders -- customers, employees, shareholders, suppliers, and society.

    No company is flawless. Every company misses shots, turns the ball over, commits fouls, and loses games. It's life. The challenge is -- how do you respond. . as an individual or an organization? Do you learn? Are you open to new ideas? Or do you go with the stiff-arm approach and simply deny til you die.

    There is no scenario under which I can see Union Carbide's agreement with the Indian government as anything but brilliant poker play, shrewd dealing, and fancy footwork. In a game where the only stakeholder that matters is your stockholder. . . that makes sense. And 30 years ago, capitalism was advanced as a means of serving stockholders as the highest priority.

    That isn't the world we live in anymore. That is an unenlightened form of capitalism -- one that will not sustain the growth in the human population, the connectedness of world, and our innate desire to innovate and make life better for ourselves and the world. The momentum behind those forces is simply going to overwhelm fancy footwork legal agreements in "faraway lands" that rely on strong-arm tactics and a near total lack of transparency.

    The Internet is here. Crowdsourcing is real. And while there may be statutes of limitation in the legal world, the brands and reputations of organizations can extend backwards and forwards through time. We wanted to make it clear that Dow Chemical can likely completely avoid this issue, legally. And doing so will almost certainly save them cash. But I believe that equity valuation over the next century is going to factor in a lot more about values, purpose, and open service to all stakeholders.

    Diluting your stock 1.5% and making a bold statement to the world will cost Dow Chemical cash today (the cash cost of doing so and the stock dilution). My firm belief is, however, that the action would dramatically improve their standing around the world and yield far more wealth for all over the next 25+ years (my favorite timeline as an investor and entrepreneur).

    Thanks for sharing your opinion.

    Tom Gardner

  • Report this Comment On July 28, 2012, at 3:06 PM, prginww wrote:

    CluckChicken, thanks for your comments. You make some excellent points.

    I'll start by saying that I would fully support a matching payment plan that resulted in the Indian Government sharing responsibility. I wouldn't expect that to be a dollar-for-dollar match because I believe the ultimate responsibility for any majority-owned subsidiary resides with the parent corporation.

    In their documentation Union Carbide/Dow Chemical asserts that there was sabotage at the UCIL plant. I'll bite my tongue here and, for the sake of argument, I will yield that point. Let's consider the scenario where there was sabotate by an Indian-born employee of UCIL. Who is responsible for maintaining controls such that sabotage doesn't exist? Is the UK Government responsible for a rogue trader inside a financial firm that destroys that firm from the inside?

    I don't think a dollar-for-dollar match is warranted here. I think the Indian government's failure to negotiate the right terms AND to distribute the paltry sum effectively means they should be on the hook for a) admitting to their role and b) putting money up.

    The clearest thing that can be said is that if you lived or live in the effected neighborhoods in Bhopal, you were not and have not been treated like a human being should. There is no disaster-free world that we get to live in. But when the corporate response is to seal all legal risk without regard for humanity. . . I believe the next 25 years is going to supply evidence of effective, informed, non-violent, and ultimately victorious resistance against organizations that do not balance profit with purpose.

    It is an important point of our assertion in this article that we are not asking Dow Chemical to pay the maximal amount requested. And with your suggestion, which I like, capital and a confession would also be provided by the Indian government. Ultimately, this is not about blame. Nor shame. It's about finding a solution that helps people who are still drinking toxic groundwater and still enduring a massive long-term health emergency to live a better life.

    If Dow Chemical doesn't want to face this issue, with their legal and financial resources, I'm pretty certain that they'll be fine. By avoiding it -- and paying $100M to sponsor the Olympics -- will they get the optimal result for their long-term shareholders? I don't think so.

    Tom Gardner

  • Report this Comment On July 28, 2012, at 3:20 PM, prginww wrote:

    hobofbyu, I tend to agree with your sentiments, but I am a long-term optimist as well. I believe that the 21st century will mark the end of a period of dark ages for organizations (particularly large organizations, but not exclusively so).

    If you haven't looked at sites like Glassdoor, I recommend it. I don't care to debate the merits of Wikileaks here. But I do believe this. Individuals inside of organizations are going to be an unstoppable force for disclosure. And just as we learn to read Amazon reviews with the capability to screen out irration axe-grinders or blindly hyping supporters. . . we will learn to evaluate effectively the information shared by individuals inside of corporations, the military, churches, schools, NGOs, governments. . . every organization.

    We will also get better at evaluating how to weight flaws. There's a difference between racing offsides in soccer and sucker punching an opponent. One results in a change of possession, the other in fines and suspensions. It is going to take time for us to learn how to handle the huge amounts of available information that will come out of organizations. At the outset, any mistake is going to look disastrous. Over time, we'll do better at ranking and weighting the errors.

    This type of social change doesn't happen overnight. And it doesn't come without some chaos and tragedy. When game-changing new communications technologies are introduced, it can take up to 50 years before they really rewrite the rules of how we live together. I believe this. By 2030-2040 -- four to five decades after the emergence of the Internet -- organizations are going to be run very differently than they are today.

    I don't care to pick fights with Dow Chemical. No one at The Motley Fool does. It isn't our style, and it isn't our calling. The above proposal actually reflects my belief in what would lead to the greatest outcome from here for everyone involved. Dow would get far more reputationally that it is on Olympic sponsorship; Dow would attract and retain more talent (and be more highly rated on Glassdoor by its own employees); the people of Bhopal would get relief that hasn't been available for almost 30 years; the world would get evidence of how problems can be solved by stakeholders working together; and we could score one for a form of capitalism that I believe will ultimately win out. . . one whose goal is far greater than profit alone. . . but whose goal absolutely involves seeking profit.

    Tom Gardner

  • Report this Comment On July 28, 2012, at 3:38 PM, prginww wrote:


    Thanks for jumping in. I don't disagree entirely with your assertions, but I certainly can't agree with most of them. I wonder from what sources come your ideas.

    Let's start with the requirement that plant personnel be Indian. Whenever and wherever an organization chooses to do business, it must decide whether to play by the rules of "when in Rome." Once you choose to go forward, you accept the rules. That's certainly no reason to absolve the company of blame. Right?

    I'm not sure why it's relevant that American employees would be arrested if they set foot in India. I don't know your source for that opinion. But I assume you're referring to American employees that stepped foot in India *after* the disaster. More specifically, I think you're referring to the Indian government's attempts to hold to account Union Carbide's CEO when he visited the disaster site. I don't see this as a material topic either way. Whether the CEO had gone to jail in India for 3 years, 3 days, or a few hours. . . that isn't going to solve for the human suffering and environmental damage.

    Finally, are you asserting that the Indian Government is solely or even primiarily responsible for the safety failures at the majority-owned Union Carbide facility in Bhopal? I have not seen this opinion advanced convincingly anywhere ever. I do agree that political corruption in India led to disastrous results after the accident. In fact, the greatest corruption of all may have been agreeing to a settlement with Union Carbide that undershot the real costs of the disaster by 50-90%. But I have never seen it convincingly asserted that the Indian government should "admit its responsibility for the safety failures." I'm open to more information from you here, though.

    Finally, when you have the government of a country whose economy is speeding ahead alongside a company with a market capitalization of $36 billion, and both of them point fingers at one another while hundreds of thousands of people suffer over a 28-year period. . . putting down the index fingers and trying to solve the problem is a form of enlightenment that, I believe, creates wealth and productivity for everyone involved.

    I am absolutely convinced, though, that both the Indian government and Dow Chemical/Union Carbide can continue doing what they're doing. . and gradually, over a period of generations, that miscarriage rate that is 7X the average in India will work its way back to normal. I and my co-authors are firm in our conviction that there's a better way than that for everyone involved.

    Tom Gardner

  • Report this Comment On July 28, 2012, at 3:49 PM, prginww wrote:

    Anuvaka, I don't think I agree. Every circumstance is unique. And if a company like Union Carbide 25 years ago can strike an absurdly-favorable agreement with the Indian government that hasn't been penetrated since. . . they can do so again, with the aim being fairness.

    Now if by seeking fairness, they find they have other past matters to attend to, I believe they should. I do see some similarities to what is happening at Horace Mann school in New York right now, where the existing leadership is claiming complete distance from the failures of prior admistrations. Unfortunately, the communities that surround the school, the media, and the school's alumni (and increasingly their wealthiest donors) are standing up to say that they strongly disagree.

    I don't know whether the time will be now for Dow Chemical -- at a lower cost to their reputation -- or if it will require new leadership at the company. But I do believe that Dow will strike an agreement with the Indian government. . and I do believe it will create value for the stakeholders of Dow (more specifically here, for their long-term shareowners) when the deal is struck.

    What might look like a huge cash outlay for Dow, what might look like the introduction of massive re-emerging liabilities, is actually a value-creating opportunity for a dynamic, next-generation leadership team that wants to be viewed as an enlightened partner. I know that language sounds idealistic -- sounds like it comes from a scripted brand-advertisement during the Olympics. But what are merely ideals of today. . are going to be baseline requirements when society can see through organizations clearly. I'm not saying this for effect. I simply believe this is a major long-term value-creating action for Dow. . even if it does bring to the table other liabilities and settlements.

    The world is becoming global (kind of an absurd sentence there, but you get the meaning). Global business is becoming less about corporations in one country doing whatever they want elsewhere, and counting on their legal department and damage-control team and PR group to help them skate past. To grow businesses sustainably around the world -- in a networked world -- is going require a much more enlightened approach.

    Tom Gardner

  • Report this Comment On July 28, 2012, at 3:56 PM, prginww wrote:

    Alexpatinasia, I agree. For what it's worth, I sat at dinner with fellow Fools and talked with a brilliant venture capital investor in new energy technologies. And I asked him if he felt optimistic or pessimistic about our ability to solve problems like these. "Very optimistic," he said. I agree. I believe the old-way of dealing with this issues was to fence everything in legally, spin off assets, sell brands, put on sunglasses, and claim you never knew nothing ever. Tactically, in sole service to stockholders, that actually works. As a lifelong strategy for an organization going forward, I believe that'll lead to grim failure.

    Tom Gardner

  • Report this Comment On July 28, 2012, at 3:58 PM, prginww wrote:

    The authors proclaim they conducted a "careful analysis". I find this statement difficult to accept at face value given the distortions, omissions, factual errors and lack of citations of objective, unbiased sources.

    Union Carbide owned 50.9% of the entity operating the plant in India, a very thin majority. Tom Gardner, do you really think there is little difference between wholly-owned and 50.9% owned? If so, I would welcome the opportunity to buy a 49% interest in assets you own for a nominal sum. Of course, as a majority owner, I expect you to bear all liabilities and retain them even if you subsequently sell your interest in an asset, since this appears consistent with positions taken in the article.

    Are the authors legal experts qualified to judge potential liability and responsibility for same? If not, what unbiased legal authorities did they consult?

    The fact that there was at one point a $3 billion claim does not demonstrate this amount was justified. In addition, looking at a $470 million settlement with benefit of hindsight more than 20 years later does not establish it was inappropriate or inadequate at the time and place where it was concluded.

    The article fails to mention that after considerable litigation, the Indian Supreme Court approved the $470 million settlement in 1991. If the settlement amount had been appropriately used by the Indian government and reasonable steps taken to mitigate further harm, many of the adverse and tragic affects cited in the article could have been avoided.

    On the other hand, it is easy to forget that the settlement was a very large sum at the time and the financial consequences for Union Carbide and its shareholders were adverse and substantial. There were serious questions at the time from some quarters about whether Union Carbide would remain solvent and viable.

    India, like the U.S. and many other countries has established the legal principle of "res judicata" in its law. The authors fail to mention or consider this. Res judicata provides in essence that once a matter has been litigated to conclusion between parties, it should not be open to litigation a second time. This finality is important to enable other parties to ascertain potential risks in subsequent transactions. Certainly, a reasonable person would expect that a creditor of buyer might have relied on the finality of the settlement between Union Carbide and the Indian government during its due diligence.

    In turn, most shareholders would not expect a company in which they own an interest to donate hundreds of millions of dollars to a charitable cause, no matter how worthy, where no proper legal liability exists.

  • Report this Comment On July 28, 2012, at 3:59 PM, prginww wrote:

    Alyce, thank you for the kind words. And to all, as I continue typing out answers, I thank you for your contributions. Whether I am agreeing or disagreeing, I'm thankful that you took the time to share your opinion. It is advancing the conversation and leading to more insight. Thank you.

    Tom Gardner

  • Report this Comment On July 28, 2012, at 4:06 PM, prginww wrote:

    buddy and clevelandrudge,

    With no political opinion here, and with a recognition that the EPA is not above reproach itself, I will strongly support your stance that we need to, without end, work on environmental standards in the US and around the world. Doing so forces innovation and will lead to a more sustainable creation of wealth.

    Tom Gardner

  • Report this Comment On July 28, 2012, at 4:13 PM, prginww wrote:

    snapperreef, can you provide examples of where the payment of reparations led to disastrous consequence? I'll cite one example -- reparations to Japanese-Americans interred during WWII. In two separate acts, Presidents Reagan and Bush signed into law financial reparations alongside issuing a public, formal, presidential apology.

    Do you think these were mistaken decisions? And if so, is there evidence that they have led to "dangerous and open-ended consequences"?

    I believe there are circumstances where the opportunity to issue a public apology and/or to offer financial redress is a value-creating, society-building, and very defensible act.

    Tom Gardner

  • Report this Comment On July 28, 2012, at 4:15 PM, prginww wrote:

    Those of us that were working in the area of counter terrorism at the time of the incident, considered it to be a terrorist caused incident, and still do.

  • Report this Comment On July 28, 2012, at 4:29 PM, prginww wrote:


    I don't draw the same conclusions that you do. I also don't draw the same conclusion as Dow executive George Hamilton who had this to say in a Reuters article on Thursday, "I don't have empathy and sympathy for the activists and protesters and their attempt to tie it to Dow. . . Dow was not there."

    Under that line of reasoning, the best way to sidestep a wide variety of liabilities is to simply change the name of your organization. Or to sell yourself to a company with a different name. To say "Dow was not there. . . " is not to say "we have no legal responsibility." It is actually asserting, "Our company was not there."

    Is that factually accurate?

    Of course it isn't. That's the sort of talking point that is designed as a stiff arm. It doesn't reflect well on the company. We can debate whether there is any legal recourse. We can debate whether there is any ethical obligation. But can we really debate whether "Dow was there"?

    If your answer to that is that you believe Dow was not there. . . then it's simple. Every liability can be avoided with a name change. I'm assuming no one is going to debate that. Dow -- in the form of its wholly-owned subsidiary Union Carbide -- was more than "there". It was the source of the problem.

    What I find in hard-line responses -- generally but not always -- is a desire to sidestep the truth. When my instinct tells me to repeat my Shakespeare, "Methinks the lady doth protest too much. . . ", it makes me dig a little deeper and become a little more skeptical.

    I can't see how raising this issue is "completely irresponsible" and I'd ask you to provide definitive proof that the plant was sabotaged, and precisely by who. If you can't cite who was the Indian saboteur, by name, then you've just created another wonderful defense for any company with a legal liability, "We didn't do it. They did."

    It just doesn't add up for me. I'm not saying it won't at some point. My mind is open. But mny2brn, you haven't provided enough evidence. And when a Dow executive says "We weren't there. . . " that doesn't add up for me, either.

    Tom Gardner

  • Report this Comment On July 28, 2012, at 4:35 PM, prginww wrote:

    Thanks for taking up this cause. Bottom line is that it's insulting to even consider that 1500 dollars per person who died from the compensation is even remotely enough. And let's assume for a second that the blatant untruth being bandied by some of the posters is true about this being caused by a deliberate action of an Indian employee; all companies are liable for the actions of their individual employees. Everyone knows that the Indian Congress govt is and was corrupt but that does not excuse an American corporation from either it's legal ethical or moral liability. And as was clearly pointed out when another company is acquired assets as well as liabilities are transferred. Also how were the liabilities transferred in the US asbestos case and not transferred in this case. Dow has taken advantage of a poor legal system and a corrupt government but should be made to take responsibility by its shareholders especially the institutional investors. Human life cannot have a different value depending on where you live so to the poster who mentioned the principle of res judiciata if this clearly will not hold if the deCision was so egregious as this one was especially if there was a question of bribes being paid in this case. The next time a BP has another oil spill in US waters you can see if a figure of 470 million would be acceptable.

  • Report this Comment On July 28, 2012, at 4:35 PM, prginww wrote:

    Valari, I am convinced that "Everyone knows that any payment of any kind opens the floodgates of lawsuits" is an oversimplification. After all, Union Carbide made a $470 million payment a few decades back. By your reasoning, no company should ever make any payment via settlement, even in the wake of an environmental and human disaster caused by its majority-owned subsidiary.

    Your reasoning assumes that settlements lead to a floodgate of legal demands which cannot be withstood by any organization. Were that true, each settlement payment would inexorably lead to bankruptcy, in every scenario. This type of denial ends up looking like an attempt to force the end of a debate.

    I remain open to being convinced otherwise, but your argument has not gotten me there.

    Tom Gardner

  • Report this Comment On July 28, 2012, at 4:42 PM, prginww wrote:

    FoolSolo, I believe that a move to create a second settlement in the Union Carbide disaster will create value for the long-term stakeholders of Dow Chemical, as do you.

    Tom Gardner

  • Report this Comment On July 28, 2012, at 4:59 PM, prginww wrote:

    TomG, Isaac Pino, and Charlie Kannel and the Fool - thank you so much for writing this article and enlightening us.

  • Report this Comment On July 28, 2012, at 5:00 PM, prginww wrote:

    M2908, let me take your assertions one by one. Thank you very much for your thoughtful note.

    First, I see nothing trivial at all in the distance between 50.9% and 49.1% ownership. If that difference were a "thin majority", then the odds are the gap wouldn't have arrived around the 50 percent level. The importance of the distinction is precisely what you cite -- majority. Majority ownership provides substantial rights and responsibilities to one party. In many ways, the majority stakeholder is the employer, the minority stakeholder is the employee. There is a very deliberate decision made to take a 50.9% stake rather than a 49.1% stake. Union Carbide wanted the final call on the structure and decisions taken by UCIL.

    Second, the authors are not legal experts qualified to judge potential liability or responsibility. Thankfully, in order to share opinions and ideas, we don't live in a country that requires certification or approval before public speech. What we provided, in my opinion, is a financial redress that --- 28 years after the disaster --- is hardly over the top. I'm not sure to what extent you are familiar with the immediate; short-, intermediate, and long-term human and environmental consequences of the disaster.

    Third, your authors here are not advancing that the solution is another legal battle. We didn't suggest that readers forward the article to law offices or to the legal department at Dow Chemical. We are not advocating a second litigation.

    Finally, you have not asserted this, but others have. And most importantly, it is core to the assertion of Union Carbide. Namely, that the plant was sabotaged. This is core to Union Carbide's response. And so, as to your final point, I ask why Union Carbide would have agreed to any settlement. That would be akin to nothing more than a $470 million charitable donation. And in support of what? A person or team of people that committed a terrorist act. That woulld beg for massive shareholder lawsuits. Union Carbide and Dow -- asserting sabotage -- should never have settled. Since they did settle, and since I see no convincing evidence of sabotage, what am I to make of their conviction on this point?

    Tom Gardner

  • Report this Comment On July 28, 2012, at 5:09 PM, prginww wrote:

    They paid in accordance with the settlement, that ends the liability. Any new payment would open the legal floodgates and damages would far exceed your billion dollar mark. At some point, a deal is a deal no matter how terrible it turned out in the end. In this case, that happened when the Indian Supreme Court ruled in 1991.

  • Report this Comment On July 28, 2012, at 5:17 PM, prginww wrote:


    You can imagine how difficult it is to assess this claim. I am certainly not going to say that the UCIL plant was not sabotaged. It may have been. This may have been a terrorist act.

    If you refer back to the site referenced above, I'd ask you to read it with a rigorously analytical eye. Look, for example, particularly at the assertion that there were no safety issues at the plant. This is a major corporation. There formulated reply to question six reads that their internal team identified some safety issues, but no major ones, and "none of them had anything to do with the incident."

    First of all, to refer to it as an "incident" is a bad idea.

    Second of all, I think a 13-year-old child could quickly scribble a very similar defense to why their bedroom shouldn't be considered "messy." This page simply cannot be viewed as convincing by an objective reader.

    Third, I am an objective reader in this situation. I have no interest in making any company look bad. I don't have any reason to want anything but success for Dow Chemical. The world needs great chemical companies. And I'd love to invest in them.

    Fourth, if Union Carbide is certain that the plant was sabotaged, then why settle? The best explanation would be "To just get the hell out of there because we did absolutely nothing wrong." Right? I urge you to read the information from all sides on this and tell me if you think the actions and words of Union Carbide as it left India indicate a company that was firmly certain that a) it had done nothing wrong and b) it was interested in the best outcome for Bhopal even though it had done nothing wrong.

    I don't think that's the conclusion you'll draw.

    If this was a terrorist act, it has to be proven. If it doesn't have to be proven, then terrorism will be an unbeatable defense against claims of negligence.

    My mind is open to being convinced otherwise. I still remain unconvinced.

    Tom Gardner

  • Report this Comment On July 28, 2012, at 5:35 PM, prginww wrote:


    One thing to remember is that we are not asserting that Dow Chemical has a legal responsibility to make payment. They may end up having a legal responsibility -- but that development would live well outside/beyond what we are asserting here.

    The assertion is pretty simple. Dow Chemical would enhance its reputation by repairing the damage resulting from operations of a majority-owned subsidiary of its wholly owned subsidiary, Union Carbide.

    And let me try to make the problem even clearer.

    When the Dow Chemical executive in charge of the Olympic Sponsorship, George Hamilton says to Reuters, "Dow was not there. . .", let's be sure to understand why Reuters included that quotation.

    It was included because that is pure whitewashing. I believe that every single reader of this column -- no matter your opinion -- will agree to this. The level of denial in that comment is profound.

    The only corporation that was undeniably present at the Bhopal Disaster was Union Carbide, through it's majority-owned subsidiary, Union Carbide India Limited. Dow Chemical acquired Union Carbide outright.

    If you accept the assertion that "Dow was never there. . . ", then you believe that acquisitions can wipe out history. And why do I care to make this point?

    Because the position that Dow Chemical is being put in -- by protesters in London, by protesters in Bhopal, and by reporters at Reuters -- is a defensive position, resulting in their making indefensibly weak arguments. That damages the reputation.

    I'd ask everyone to take a minute and read this Reuters article. Tell me if you can find any way to read this article in a way that enhances Dow Chemical's brand and reputational standing. How is this value-creating for them as the world's population leans in to celebrate the Olympics.

    If you disagree with our article, and even if you think somehow I or we "have it in for Dow Chemical". . read this Reuters article. Look at that headline. Read right through it. Look at the denial -- "Dow was never there" -- and remind yourself that Reuters is an objective, journalistic organization. How can this possibly be anything but damaging to Dow Chemical:

    The Motley Fool is an objective organization. In fact, arguably, if we have any leaning, its toward the rights of stockholders. This article does not represent the opinions of "The Motley Fool". . but rather of its authors, all of whom are capitalists.

    That Reuters article and this Foolish article. . written by organizations with no dog in any fight here. . . must tell readers something.

    I can genuinely say that I want what is best for Dow Chemical's long-term stakeowners. . . the employees, customers, and stockowners who choose to be a part of the organizations for years and decades to come. I believe that for these stakeholders and the for the world, the greatest value creating opportunity in this circumstance is for Dow Chemical to come together with the Indian goverment, to make a second payment, and to demonstrate that it aims to be a leader in doing enlightened business around the world in the 21st century.

    Tom Gardner

  • Report this Comment On July 28, 2012, at 5:44 PM, prginww wrote:

    I think the counter point to your side of this is that making a goodwill payment will bring back the legal liability and that liability, especially in this day and age, would probably bankrupt Dow Chemical.

    This article sparked a conversation here at work and a co-worker mentioned the insane dollars awarded to smokers, people who did it to themselves with a smile on their faces. If you were running Dow Chemical, could you risk the entire company here?

  • Report this Comment On July 28, 2012, at 7:03 PM, prginww wrote:

    These comments are just brilliant! I haven't enjoyed this much exchange in a long time -both the pro and the con on the subject.

    In business I've experienced the frustrations of cleanup and I guess in one instance was even told by a judge that the company better get in line or else. No more war stories but an idea or two.

    (A) does it make sense to do a preferred stock offerring vs a common one?


    (B) I think we need a worldwide superfund to handle these catastrophies Think about the gulf oil mess.their will be hundreds of million more in claims inspite of the billion or so already incurred. How about the tobacco claims? I'll bet well less than 10% of the money went for heal care claims.

    So if you got a world wide superfund in place finding an honest manager would be nearly impossible.But this is the only way I know of to provide the help needed when needed.

  • Report this Comment On July 28, 2012, at 7:31 PM, prginww wrote:


    Thanks for the reassuring comment. When we set out to write this article, that was our main objective – to inform and enlighten our readers about a very important human rights issue related to an American multinational company. Compared to the BP oil spill, for example, this event did not cause damage in our backyard, nor is the memory of the gas leak and its aftermath fresh in our minds. Honestly, I had never even heard of the disaster until recently, which is hard to believe considering the fact that I grew up only a few hours from Union Carbide’s headquarters in Houston and I had family members that worked for the company for decades.

    While writing the article with Tom and Charlie, however, I found myself describing the event over and over to friends and family who were also completely oblivious to the fact that this incident was never fully resolved. Many of them were shocked that Indian citizens still suffered from debilitating health issues due to the toxic chemicals.

    We should not have been shocked, however, since our attention span for issues like this tends to be measured in terms of days or weeks, much less decades. Besides a few media outlets, the Bhopal tragedy has largely been ignored for years, only to resurface from time to time due to a court ruling or prominent protest. The Yes Men stunt made this all-too-obvious when their hoax resulted in hundreds of articles in U.S. newspapers due to the impact on the price of Dow’s stock. Defending their impersonation of a Dow spokesperson, the Yes Men pointed out that the “false hopes” that victims might have experienced were a side story that the media picked up on, which simply missed the point. For decades the victims had experienced “false hopes” that the government or UCC or Dow would take action. All the while, nothing happened, and the people continued to suffer. This was nothing new, and in fact many victims in Bhopal were supportive of the stunt. It brought attention to a crime that had been swept under the rug.

    After much research, I tend to agree with the statement made by a volunteer doctor in Bhopal: “Dow [UCC] was the first crime. The second crime was government negligence.” So many reports convolute the legal nuances, but ultimately I found it hard to disagree with either statement.

    I believe Dow needs to take initiative and show that the private sector can resolve matters without dealing with the fumbling government bureaucracy. I agree with Tom, “that companies are healthiest when they strive to meet the needs of all of their stakeholders -- customers, employees, shareholders, suppliers, and society.”

    Let’s focus on a resolution that will ultimately require efforts from both parties.

    Isaac (TMFBoomer)

  • Report this Comment On July 28, 2012, at 9:21 PM, prginww wrote:

    Hi all,

    Interesting article - I think I'm probably on the other side on this one compared to Tom, Isaac, and Charlie, but still thought-provoking.

    I personally think settling with the Indian government absolves Dow of any "ethical liabilities" and based on my (admittedly very modest) understanding of the law, I think there are probably no remaining legal liabilities, but that's obviously not the point.

    And there's obviously room for disagreement about the ethical liabilities the company "should" or "shouldn't" assume, because ethics is inherently subjective.

    I think that making a deal with the government regarding the disaster removes those ethical liabilities as well, because the government is saying "we agree that X amount of money is reasonable to rectify the situation."

    Based on this article, it's obvious that the people of Bhopal are still suffering from the impacts of the disaster, but I think the Indian government agreeing to the settlement places the ethical problems on them.

    I'd say they probably let down the people of India by accepting that settlement if it wasn't enough, or they let down the people of India by mishandling the proceeds, or both, but in my mind that falls on their lap ethically for accepting it.

    Tom, Isaac and Charlie disagree with my opinion on this - that's a good thing, I think. There isn't much to be learned or shared if everyone agrees about every issue; we should all look at the facts and come to our own conclusions, and share them.

    We may disagree with our conclusions, but there's a lot to be learned from each other. Perhaps someone will find something that I've overlooked that would reshape my opinion, and perhaps the same is true of the authors.

    Philosophical conflict - when properly expressed and while showing respect to those who disagree with you - can be very useful for the purpose of getting closer to the "truth" when topics are discussed in an intellectually honest manner (as opposed to the partisan talking points that often show up when discussing contentious issues).

    I may disagree with the conclusions of the article, but I think Tom, Isaac and Charlie have done a good job of bringing the issue back to the public eye.

    It's obvious you put a lot of work in to this. I hope to see more articles in the future.

    Best wishes,

    Scott (TMFRosetint)

  • Report this Comment On July 28, 2012, at 9:42 PM, prginww wrote:

    While I appreciate the argument that Dow has no remaining ethical obligations, I side with the authors here. The Indian government's acceptance of the settlement would close Dow's ethical problem only if the government acted on ethical, rather than political, motives. While I cannot claim to know for certain the government's reasoning, it boggles my mind to think that political motivations were not paramount.

    That being said, I am not at all certain that cleaning up the Bhopal site will add long term value to the company. While I personally would order a cleanup in an instant if I owned the company, and would be somewhat more inclined to invest in Dow if they ordered a cleanup, I think that a well-worded jingle or a clever commercial will be remembered far longer and carry much more weight than Dow's dismissal of this calamity. I don't think this will change anytime soon, although I hope to be proven wrong.

  • Report this Comment On July 28, 2012, at 11:24 PM, prginww wrote:

    To Tom Gardener: Thanks a ton for highlighting and investing time in this issue and the missionary zeal in point by point rebuttal. You have won me over.

    Both Stock Advisor and Rule Breakers are very good services, but knowing the owners tips the scales in me renewing this service for several more years !!

  • Report this Comment On July 28, 2012, at 11:48 PM, prginww wrote:

    A point on Indian government reaching a deal with Dow: This is just not about clever deal making on part of Dow. Large corporations, and specifically giant US corporations, have several unfair advantages. They have lobbying power in US and can use the US government to arm twist negotiations in their favor. When special interests within US are capable of hijacking decision making for domestic US issues in the fullest scrutiny of US media, they can certainly use the US government to influence outcome in their favor in dealing with other countries far more effectively. Its far more easy to manipulate when stake holders and affected population is remote. Besides India of the 80s and 90s had far less negotiating muscle vis a vis pressure applied by USA than it has today. If this accident had happened in US, DOW CEO or the concerned officials would be rotting in jail for the rest of their lives. Just because an agreement has been reached does not absolve DOW or the Indian government of it's responsibility.

  • Report this Comment On July 29, 2012, at 8:07 AM, prginww wrote:

    Hi ya'll

    Tom jumped right into with this one. How much will it take to make to make all parties fill whole again. Your stock dilution idea is fine ,but where and when does it every end?

    As a Capitalist, even a so called Conscious Capitalist the settlement was agreed upon decades ago. As the saying goes capital goes were it's treated well, and since you have enlightened everyone about this,am sure everyone is going to be buying lots Dow.

    What a Worldview conflict ! Are there absolutes ? Is there true ethics ?

    You can't find that at Harvard

    What great a discussion

    Thanks Tom

  • Report this Comment On July 29, 2012, at 8:27 AM, prginww wrote:

    Tom Gardner,

    I appreciate your efforts to respond to reader's comments, including mine, in a thoughtful way and to explain your position. Accordingly, I will attempt to reply in kind.

    You replied in part to my note:

    "Union Carbide and Dow -- asserting sabotage -- should never have settled. Since they did settle, and since I see no convincing evidence of sabotage, what am I to make of their conviction on this point?"

    First, you suggest "Dow" as well as Union Carbide should never have settled, but the point is Dow had no role in any settlement or decision to settle. The settlement negotiations occurred a decade before Dow acquired any interest in Union Carbide. In 2001, Dow acquired the stock of Union Carbide, but had every reason to believe Union Carbide's liability had been resolved in the early 1990s settlement. To attribute Union Carbide's decision to settle to suggest something about Dow's position is unjustified and fundamentally flawed logic.

    Second, if you had been involved in legal negotiations to settle a major dispute, you would appreciate that parties often agree to settlements even when they believe strongly they should not be held liable or have only a minor part of the liability. The fact a party settles often says little about its conviction whether it is properly liable. There is typically a risk-reward analysis that may motivate a party to conclude a settlement rather than litigate endlessly, even where it believes in an unbiased forum it's position should be vindicated. Unfortunately, India is a jurisdiction where litigation in the absence of a settlement may continue for decades. With perfect hindsight, if Union Carbide knew in the early 1990s that the settlement it believed final would continue to be challenged, it might not have settled. Again, this is all speculative and says little about the conviction of Union Carbide as to relative fault and liability and absolutely nothing about Dow.

    Now let's consider Mr. Gardner's point on joint ventures. When an entity owns a 50.9% interest in an enterprise, which is the interest Union Carbide owned in the agricultural chemical producing business at Bhopal, it typically has the deciding vote at the Board level. However, this is very different from having direct control over day to day operations, particularly in a foreign country where laws and local authorities protect the 49.1% interest owned by minority shareholders which in this case generally were Indian nationals and entities. Minority owners in a joint venture often press to lower costs and increase profitability and distributions more than the majority owner. It should be noted that Union Carbide paid $470 million in a settlement of its liability, but it appears the minority owners that collectively owned 49.1% contributed nothing to any settlement. Why is it that Bhopal protestors seek additional damages only from the U.S. entity with deep pockets that paid hundreds of millions of dollars to settle rather than locals with an almost equal ownership interest that paid nothing?

    As stated previously, there is subtle bias in some of the data presented in the article. I suspect some of this data has been accepted from Bhopal plaintiffs without careful examination. To cite one example, it is tragic that the miscarriage rate in Bhopal is 7 times the India national average. However, there are many risk factors for miscarriages present at Bhopal that have nothing to do with the chemical release or contamination from same. A comparison of miscarriage rates at Bhopal and other places in India with similar general risk factors (poor health care, inadequate nutrition, unsanitary conditions, socioeconomic factors) would be much more meaningful than a comparison to the national average. Making flawed comparisons is easy, unfortunately sound epidemiology requires more detailed analysis.

    For those that believe Union Carbide should have paid more, consider this scenario. What if Union Carbide had agreed to pay $3 billion for the Bhopal tragedy and gone bankrupt as a consequence? Tens of thousands of workers would have lost their jobs and many creditors might have been paid pennies on the dollar, including those at Bhopal. In addition, those who subsequently had claims against Union Carbide for other injuries, such as for asbestos exposure, would have had no recourse. If you do not believe this is possible, consider the number of U.S. companies that have already gone bankrupt in the face of asbestos litigation.

    It is interesting to note that Bhopal protests over the settlement increased dramatically after Dow acquired Union Carbide. To some this timing appears less about the merits of the matter and more about another potential deep pocket.

    It is easy to encourage spending other peoples' money to solve problems. For those that truly believe Dow should do more, why not buy Dow stock? You may then as a Dow shareholder vote your conscience.

  • Report this Comment On July 29, 2012, at 10:28 AM, prginww wrote:

    To the comment above:

    "For those that believe Union Carbide should have paid more, consider this scenario. What if Union Carbide had agreed to pay $3 billion for the Bhopal tragedy and gone bankrupt as a consequence? Tens of thousands of workers would have lost their jobs and many creditors might have been paid pennies on the dollar, including those at Bhopal."

    So ?? Union Carbide and few thousands loosing jobs is a bigger tragedy than thousands who have perished in Bhopal ?? Hundreds of thousands whose lives have been disrupted and continue to suffer to this day ?

    Companies going bankrupt is a part of capitalist society. It happens all the time. When did it become a big tragedy ? Loosing jobs is very different than loosing lives or limbs.

    in a fair world, assets of Union Carbide should have been liquidated if necessary to compensate for the tragedy of Bhopal. The tragedy cannot and should not be socialized, without consequence to the offender. It will be the right signal to companies not to cut corners when it comes to safety and security and especially in a business where it can lead to mass tragedy.

    Have you looked at the photos of the tragedy in Bhopal or the documentary film? What if something similar would have happened in USA ? Would be just talking the legal language ? Don't successor liabilities apply in USA and hasn't DOW itself accepted it when it was unable to cut corners with US law or arm twist governments of weaker countries ?

    Best case in favor of DOW is wrapped legal maneuvering, it does not absolve it of ethical responsibilities. And the fact is without going bankrupt, with just 1.5% dilution as the authors suggested, it can do hell a lot and make a difference. So why not do it ? This issue has been dragging for decades, because companies have resorted to legal maneuvering. Rise above it !

    I was particularly astounded to hear statements from company executives that $500 is enough for a local Indian !! I am originally from India and can assure you this is absolute nonsense and demeaning.

  • Report this Comment On July 29, 2012, at 10:28 AM, prginww wrote:

    For those that think the article proposes a wonderful solution, how many jobs do you anticipate Dow will eliminate as a consequence?

    A dilutive stock offering has significant financial consequences for Dow. Dividends will need to be paid on issued shares causing an additional drag on earnings. Some current shareholders unhappy with the dilution or the reason for same will sell their shares driving down the stock price more than the simple dilution otherwise might. This in turn may require more shares to be issued to raise the desired funds.

    Dow's disappointing earnings announcement last week missed analyst's EPS expectations by about 14%. Dow's CEO stated he did not expect a return to normal earnings growth for 12 to 24 months. Dow's CEO also announced efforts to cut costs and reduce capital expenditures would be ramped up. The informed reader might anticipate job cuts by Dow even without any dilutive stock offering like that proposed.

    If Dow were to implement a dilutive stock offering with the accompanying costs for same and imperative to meet earnings expectations, additional job eliminations should be expected. If Dow eliminates 1% of its employees this translates to 500 jobs. Perhaps the authors and many like-minded readers might feel this is not too high a price for Dow and its employees to pay, provided it is not their job or that of their family or friends involved.

  • Report this Comment On July 29, 2012, at 11:09 AM, prginww wrote:

    More people killed by this incident than on 911. In the aftermath thousands more suffer. Where is the outrage against companies that cause these kinds of suffering. Where is the remorse. It surely isn't in their approach to making amends. A perfect example of the love of money taking care of itself within these corporations. As long as they are allowed to continue to sidestep their responsibility to their fellow man and the environment nothing will change.....until its to late.

  • Report this Comment On July 29, 2012, at 4:12 PM, prginww wrote:

    When things go wrong, they can go horribly wrong. When that occurs, people die or are injured. Lives are ruined and families destroyed.

    Chernobyl, Bhopal, or any airliner crash attributable to manufacturing or operator error; in each, people died and lives were crushed. So too for lesser disasters.

    How many lives were ruined because of the "Crash of 2008?" How many today are going hungry because of that tragedy? With a reported 49 million in the U.S. going hungry each day, I'd say there have been some significant consequences. However, many prefer to deflect the cause to other circumstances.

    How to make Bhopal right? How to undo the wrongs? How to avoid the next disaster so people are able to live their lives?

    A good start is to look in the mirror and to realize that we're all a part of the problem. There is a consequence to our decisions, both in our work and at home. Those consequences impact our co-workers, those who use the products or services we produce and simple bystanders.

    The next step? Prepare ourselves to be an integral part of the problems and the solutions, instead of waking up in the morning, reading the paper and saying "How could that happen?" I suggest a good step is to develop more awareness, and less dependence on the byproducts of the information age, which I prefer to call the "misinformation age."

    I'm of the opinion that the difference in the various man- and woman-made "disasters" is one of scale.

    The larger question is how to make America right and end our current tragedy.

  • Report this Comment On July 29, 2012, at 8:44 PM, prginww wrote:

    Those dissenting opinion, at a minimum I urge to read the link here:

  • Report this Comment On July 29, 2012, at 8:47 PM, prginww wrote:

    Tom, I have a lot of respect for you.

    So I have some questions and comparisons.

    Has your research included hearing anything from the victims?

    How did you come up with the compensation amount?

    By way of comparison the victims of Sept 11th were compensated $390,000 each for their injurys. $390,000 x 540,000 bhopal victims is over 200 billion in comparable compensation. You offered 540 million. The cost of living and healthcare is not that much lower in India.

    Add in the 2,000,000 compensation for those who died in the World Trade Center x the 3900 deaths is just a shade under 8bil more.

    What you are offering is no more a solution than what the Indian Gov't got for them 25 years ago.

    Best wishes,


  • Report this Comment On July 30, 2012, at 1:09 AM, prginww wrote:

    To those with dissenting opinions, I would like to think you have more credible information to support the arguments of Indian sabotage, or the Indian government settlement.

    I would also like to believe if such a disaster were to occur on US soil it would be dealt with much differently. That is were I have serious issue with the opinions of those dissenters. It appears a different standard is being applied because this disaster was in India, and the casualties were non-Americans. Can you seriously put a different value on human life based on race, color, creed? I hope not.

    In cases like these, it is very difficult to separate ethics, morality and self-interest. This UC disaster is just one of many where US companies or the US government put profit or self-interest ahead of human values. I'm sure you can do a little research on Bikini Atoll and Roswell, NM, among others where similar collateral and human damage has yet to be reasonably repaired.

    While I applaud this effort, I'm not sure why this, why now?

  • Report this Comment On July 30, 2012, at 8:39 AM, prginww wrote:

    Dow had nothing to do with the Bhopal disaster. It bears no responsibility for an apology.

  • Report this Comment On July 30, 2012, at 10:39 AM, prginww wrote:

    My main problem with the author's argument is on the one side they imply this is the moral and right thing to do. Yet on the other side they argue that this could be beneficial for them and the company.

    You can enforce the laws or change the laws, but you cannot enforce morality on someone else. If the intent is to help the people hurt by the disaster, your better off runing your own charity or attempting to convince the American and Indian governments to donate a share.

    Perhaps it would make the authors feel better that Dow did relent? But what if they did because they were pressured? If Dow donated the money but for ammoral and selfish reasons do you still feel good about yourself? All you did is play the same game you are accusing them of playing. You blackmailed them into something they felt they had to do.

    As a share holder you have a right to express what you think to do. And if enough shareholders have this oppinion they technically own the company. Then again if they all feel that way they could as partial owners donate part of their dividend to the Bhopal cause.

    In parting I would waste less time trying to shame people into being moral. It is good to make the point. But if their heart is hardened, it is what it is. I don't own any Dow stock but I think I will find a Bhopal charity and donate something. After all making sure these people get help is a little more important then blackmailing someone into doing something they really do not want to do.

  • Report this Comment On July 30, 2012, at 11:48 AM, prginww wrote:

    People may care to read this ... which is about the propriety of Dow's involvement in the olympics ..

  • Report this Comment On July 30, 2012, at 12:39 PM, prginww wrote:

    valari, I love that the article got you and a co-worker talking. While I have strong feelings about this individual tragedy, I also have a larger interest in ensuring that communities around the world are served by the companies working in their area. The idea of Conscious Capitalism (I encourage you and others to Google it), advanced by John Mackey, is that organizations have equal responsibilities to all of their stakeholders. The society stakeholder has been terribly let down by Union Carbide/Dow Chemical and the Indian government.

    Tom Gardner

  • Report this Comment On July 30, 2012, at 12:45 PM, prginww wrote:

    mjlangky, I'd like to hear your thoughts behind it being a preferred stock offering.

    I also like the idea of a global superfund -- while agreeing that determining who oversees it would be a challenge.

    Here's the great danger that we face.

    If public companies slide down further into short-term thinking AND view their stockholder as the primary (or only) important stakeholder AND these organizations can, with excellent legal work, foist the external damages caused by their business on society/taxpayer/government. . . then we're just going to see the Bhopal disaster repeated. . particularly in countries with weak environmental laws, petty corrupt governments, high unemployment and deep poverty (and it'll extend beyond those areas, too).

    The reason I'm a long-term optimist is because the best tool for organizing against this dangerous behavior is the Internet. There's a lot that I disagree with the Occupy movement about -- but one of my higher forms of disagreement is that I don't think sitting in parks does all that much. Organizing on the Internet is many multiples more effective.

    Tom Gardner

  • Report this Comment On July 30, 2012, at 12:46 PM, prginww wrote:

    Isaac (TMF Boomer), great comment. Thanks for sharing that. For everyone who has read this article, I want you to know that Isaac Pino did the vast majority of work for this article. I'm proud to have been involved.

    Tom Gardner

  • Report this Comment On July 30, 2012, at 12:53 PM, prginww wrote:

    Scott (TMF Rosetint), also an excellent comment. Very thoughtful and insightful - thanks.

    Let me see if I can gin up a hypothetical that might persuade you to think differently.

    Imagine a comparable scenario where the legal settlement struck with a foreign government included bribes and coercion.

    I actually think there are legal grounds for challenging settlements struck "under duress." But I'll go back to the premise of our article. We are not pushing the idea that Union Carbide/Dow Chemical has legal exposure here (we'll leave that up to legal professionals).

    But do you think a deal -- in a hypothetical scenario -- that included bribes and coercion. . . holds up as ethical?

    My belief is that Union Carbide -- using all of the powers at its disposal -- was able to place tremendous pressure on a corrupt government to accept an absolute pittance (in 1984 dollars and in today's dollars).

    In other words, I think they got an incredible deal. A deal so good that hundreds of thousands of people have suffered -- many unnecessarily -- in the decades that have followed.

    Unless Union Carbide/Dow Chemical can prove that the plant was sabotaged, I think they have an intangible ethics liability on their balance sheet. And I suspect, in adjusted dollars going forward, the cost of that reputational liability is $1 billion+.

    I think they can largely reverse that liability and set a standard for doing business the right way by making a second payment.

    Tom Gardner

  • Report this Comment On July 30, 2012, at 12:59 PM, prginww wrote:


    Pre-Internet, I would have agreed with your assertion that a commercial jingle creates more value for a company than an environmental cleanup and an investment in the health of a community.

    But for me, that's a TV-generation view, where the audience sat passively, flicking through channels, unable to respond directly, and with no real opportunity to organize groups around concepts. Everything was much more passive and ephemeral.

    The Internet, however, is a searchable database of concepts and the greatest communication tool ever created. In other words, human beings are already and will get a lot smarter about the world as the database grows and becomes a true platform for multimedia libraries. And as humans get smarter, the Internet also helps us organize much more easily.

    We're still in the very, very early phases of this. Twitter and Facebook -- in their present form -- are going to look ridiculous within 5 years and unrecognizable in 10 years.

    And when it's very easy to click up the documentary Bhopali, and to connect with other viewers, and to connect with hundreds of other sources instantly, and to organize around taking an action. . . my belief is that a company's reputational liabilities are going to become massively more important.

    A ~ $1 billion investment in doing what is right in Bhopal will yield infinitely more value for the future of Union Carbide/Dow Chemical than will an Olympic sponsorship and stadium wrap. I may be wrong about this, but I do believe it firmly.

    Tom Gardner

  • Report this Comment On July 30, 2012, at 1:01 PM, prginww wrote:

    Swapsan, thank you for the kind words. I look forward to learning how to invest better and understand business more deeply together for many years to come.

    Tom Gardner

  • Report this Comment On July 30, 2012, at 1:08 PM, prginww wrote:


    Great questions. I guess I'd say it simply never ends. So long as our species survives, and so long as we are networked together at accelerating speeds, we are going to be able to ask and answer more philosophically challenging questions more rapidly than at any time in history. But it'll never end.

    Essentially, I don't think this story will ever end for Dow Chemical/Union Carbide. I have a similar feeling about a very different story at Penn State University today. I don't think these stories will end. The question I ask is -- can they become positive stories? Can they uplift? Can they teach and improve us?

    We are all horrified by what happened at Penn State. And the coverups that followed were extremely tragic. . because they expanded the zone of misery. But now that the story is out in the open -- with likely more discoveries and disclosures to come -- I am strongly optimistic that it can lead to something great. Not just for Penn State. Not just for the victims (whom I believe stand to benefit greatly if this story can be turned toward their triumph and the outcomes of it). But also for the world.

    It is a very different story with Dow Chemical/Union Carbide. . but then there are some clear similarities, too.

    Tom Gardner

  • Report this Comment On July 30, 2012, at 1:29 PM, prginww wrote:


    Once again, great response. I'll try to advance the ball, too.

    1. Dow Chemical knew it was taking a risk in acquiring Union Carbide. That included legal and reputational risk. Once Dow Chemical took over the operations of Union Carbide in full, they took on the legal and reputational risks associted with the company. I don't know what they valued that risk at, but I assure you it wasn't $0.00. Now that they own Union Carbide outright, they take responsibility for managing the legal and reputational risk of all of Union Carbide's operations -- past, present and future. I believe you can hold accountable a parent company for how one of its subsidiaries acted prior to being acquired. But again, it is not our aim to hold Dow Chemical legally responsible. Others can tend to that.

    2. I have, unfortunately, been involved in legal negotiations to settle a dispute so I know of what you speak. :) The fact remains, however, that legal settlements are not always impenetrable. That said, as noted above, the authors of this column aren't interested in legal dispute. Your perfect hindsight scenario is, in some ways, coming to pass. With perfect hindsight, Dow Chemical would have seen the Internet coming; would have understood the risk of crowdsourcing of information around the globe; and would have assigned a much larger cost to reputation of the acquisition. That they didn't is just a risk of doing business.

    3. I remain unconvinced by your majority-minority stakeholder position. Your first sentence captures the true reality with the words "has the deciding vote at the Board level." Those that have the deciding vote may choose to delegate out strategic and operational decisions to management. . . whatever US city, state, or foreign country in which the company does business. But the Board cannot delegate out the ultimate responsibility for everything that happens at that majority-owned subsidiary. The world would be pretty rich for majority business owners if they could push all the risk off their plate and feast on the rewards. I'd be happy, though, to see Dow Chemical put up 50.9% of a second payment and to ask for a 49.1% match from the Indian government. Good suggestion.

    4. No one -- not I -- could assert that all of the elevated miscarriage rates in Bhopal can be attributed back the worst industrial crisis in history. But I can assure you that if you read some alternate sources to the Union Carbide FAQ page, you will see just how utterly horrific was the initial outcome. . . and how clearly traceable tragic outcomes are back to that event 5-, 10-, 15-, and 28-years later. It is only a 90-minute commitment of time to view the movie Bhopali. And I wouldn't ever suggest that everything in that or any movie is entirely factually defensibly true. But I can't strongly enough recommend seeing the documentary for more understanding of the long-term effects of the disaster.

    5. Finally, society does not have a greater responsibility to the survival of any one corporation than it does to human life. If we focus just on America, the country has survived the bankruptcies of Kmart, Woolworth, Enron, Chrysler, General Motors, Lehman Brothers (and for that matter, much of Wall Street factoring in bailouts). Bankruptcies hurt. But capitalism is as much about creative destruction as it is about creation. What is clear is that Dow Chemical/Union Carbide could make a 1.5% stock offering without putting very much of anything at their business at risk. And dilution at that level is not going to affect the jobs of performers at the business. That's a routine level of dilution at many companies.

    Tom Gardner

  • Report this Comment On July 30, 2012, at 1:38 PM, prginww wrote:

    Hi all,

    First off, I wanted to thank all of you for chiming in on this conversation. It is a tough issue with no perfect solution, and this type of discussion has certainly helped me learn more about the Bhopal case and how capitalism could improve.


    Thanks for your comment. Regarding the Chevron case in Ecuador, we did not want to delve too deep because the case simply served as a parallel to Bhopal. The point was to demonstrate how powerful corporations can act irresponsibly in developing countries and delay legal proceedings, while the victims continue to suffer. Also, in my opinion, Chevron should have spent more time defending its claim that it remediated the spills and less time attacking the credentials and motives of the prosecutors. But that's a different story.


    I find your idea about a global superfund intriguing, but I think it might create more problems than it solves. Such an agency could inherently lift the responsibility placed on corporations and countries in further incidents like Bhopal by acknowledging that neither might be liable. Without the repercussions and potential for corporations to go bankrupt after a tragic incident, such an international agency might reduce the incentive for corporations to ensure that they have a spotless safety record. Or, companies might be less likely to account for environmental liabilities when acquiring another company. These two consequences (safety problems, not accounting for environmental liabilities in acquisitions) do not seem very hypothetical considering the outcome of Bhopal, so some international body seems necessary to improve enforcement.

    In my opinion, an international environmental court (similar to the International Criminal Court) could objectively judge international disputes by using litigators not affiliated with any countries of interest, and include some sort of UN-determined enforcement mechanism. Do you think such a court could resolve situations like Bhopal?


    Thanks for your response, and I appreciate your argument on the other side. While I agree that ethics are "inherently subjective", I do not believe that the 1984 settlement absolved UCC (and now Dow) of its ethical obligation (as Tom argues in his comment at 12:53 PM today). India agreed to the deal under pressure to not scare away further investment (as zymok pointed out—thanks!), which certainly passes some of the responsibility to the Indian government for failing to fulfill its citizens' needs. However, as we discussed in the article, many believe Union Carbide negotiated a private settlement with the government, who forced the courts to accept the greatly reduced sum. Whether or not Union Carbide broke any laws in negotiating the smallest settlement possible, taking advantage of a corrupt government likely did not result in a fair compromise that fulfilled Union Carbide's ethical responsibility. Plus, the fact that victims with cancer, blindness, or other horrible problems only received $500 in compensation means there is still some ethical responsibility somewhere. The size of this responsibility, and distribution between the government and Dow, is certainly a matter of debate. I am far from an expert on ethics or international environmental law, but the continued suffering indicates to me that this problem is far from resolved.

    Thanks again for all your comments!

    Charlie Kannel

  • Report this Comment On July 30, 2012, at 2:23 PM, prginww wrote:

    Darwood11 said,

    "A good start is to look in the mirror and to realize that we're all a part of the problem."

    I'm sick of being told I'm part of a particular or general problem.

    I had nothing to do with anything or anyone in India in 1984, had nothing to do with Union Carbide, and have owned Dow stock only since last year. That's the specific case.

    I am not responsible for global warming or its predecessor as imminent-doom pop science, the elimination of the ozone layer (although I believe global warming is real). I am not responsible for governmental corruption in any country. I don't even litter, let alone illegally pollute. I am sorry for the evils done to various racial, ethnic, religious, etc., groups, but I didn't do it and don't do it. That's the general case.

    One thing I am is tired of people trying to make me feel guilty.

  • Report this Comment On July 30, 2012, at 4:43 PM, prginww wrote:

    Thank you, Motley Fools! It is inspiring and refreshing and hopeful for me to participate in socially responsible investing and to get ideas of how to use money to make this world a more caring place. Thank you for for leadership!

  • Report this Comment On July 30, 2012, at 5:24 PM, prginww wrote:


    This was an Indian disaster which was settled decades ago. The Indian government is responsible for caring for its citizens, not the US.

    It sounds like you have way too much time on your hands.

  • Report this Comment On July 30, 2012, at 5:37 PM, prginww wrote:

    Great and moral approach for an event that most would like to go away... they do not live in Bopal. Fools thanks for being more than "helping us make money".

  • Report this Comment On July 30, 2012, at 5:47 PM, prginww wrote:

    Darwood11 said,

    "I had nothing to do with anything or anyone in India in 1984, had nothing to do with Union Carbide, and have owned Dow stock only since last year. That's the specific case. "

    Per Tom's analysis, if you own Dow you own a piece of the problem

    'I am not responsible for global warming or its predecessor as imminent-doom pop science, the elimination of the ozone layer (although I believe global warming is real). I am not responsible for governmental corruption in any country. "

    You don't drive, use electricity, or heat your home or buy products that consume fossil fuels, apparently.

    "I am sorry for the evils done to various racial, ethnic, religious, etc., groups, but I didn't do it and don't do it."

    Ok but at least acknowledge that you are part of a society that has done (still does) all things things and have benefitted from some of the past 'evils'. As part of society we can do some things including influencing governments and corporations through our actions including purchasing and investment.

    I am very proud today of the Fool for stimulating this discussion. We of course all have to decide what to do with the choices before us. Denial is always an option but not a very clever one.

  • Report this Comment On July 30, 2012, at 5:48 PM, prginww wrote:

    I am extremely offended at everyone who makes the incredibly weak argument that jobs might be lost if Dow does this, or that people would have lost their jobs if UC would have paid the $3 billion. That argument basically says that jobs are more important than companies that actually take responsibility for their actions. By that thought, we should never, ever punish a company or a higher up in a company, because some jobs might be lost.

    Quite frankly, I would be perfectly happy with these companies being completely closed down in order to make good on their responsibility. Some new company will rise up to take their place, and hopefully will be more conscious of both it's responsibilities to everyone involved (not just shareholders), but to the environment.

  • Report this Comment On July 30, 2012, at 5:49 PM, prginww wrote:

    whoops that was whyaduck responding to Darwood. Apologies

  • Report this Comment On July 30, 2012, at 6:02 PM, prginww wrote:

    Bravo. This piece and it's well-thought out, concrete suggestions to encourage corporate responsibility and provide some modicum of relief for the long suffering residents of Bhopal make me feel proud to be "fool". How many more fictitious greenwashing PR puff TV spots must we endure by Chevron, Exxon, BP and Dow before they are held to the same standards we hold one another to as individuals in a civilized society? Aren't we required to speak the truth, own up to our mistakes and be held responsible when we screw up? Is it too much to expect the same from corporations? (Especially now that the supreme court considers them "people").

  • Report this Comment On July 30, 2012, at 6:13 PM, prginww wrote:

    Please don't send me any more articles like this. I don't have time for witchhunts.

  • Report this Comment On July 30, 2012, at 6:44 PM, prginww wrote:

    As an Indian I have strong feelings on this issue and I feel that companies like Dow chemicals should be permanently barred from business in India. In addition, Indian Govt. can levy surcharge by way of taxes on foreign firms doing business in India to recover the cost. Today, India is worlds second largest market and everyone wants a pie of it. It is hypocritical to suggest that, it is OK to demand $20Billion from BP to clean up oil spill in the ocean that killed a few fish and birds but its not OK to demand $3.3 billions where scores of humans, mostly children died.

    One also has to take into account the political climate in 1984. India and US were not on good terms. India was a much weaker country than it is today. Had India not accepted this paltry sum, nothing would have been paid till date and american media would have potrayed Indians as gold diggers.

    I would personally never work for dow chemicals or buy their shares.

  • Report this Comment On July 30, 2012, at 6:59 PM, prginww wrote:

    I admire Mr. Gardner's courageous humanitarian stand on an almost forgotten but colossal human tragedy. Instead of pointing fingers and evading moral responsibilities by hiding behind legalities, corporations can gain a lot more in PR by initiating corrective actions to alleviate human sufferings than from sponsoring the Olympics.

    Again hats off to Gardner, you have elevated the Motley Fool team to a new height in my eyes.

    Bn R

  • Report this Comment On July 30, 2012, at 7:00 PM, prginww wrote:

    This ridiculous idea smacks of socializing the cost of a disaster that are not the responsibility of any one except the operator of that site.

    If anyone is now responsible for this disaster, it was the original company that operated the site. They, alone, are responsible. If they did not take sufficient action, that is their problem.

    This country has gotten to the point where we are supposed to "bail out everyone". We go to war with some (ok many) countries, destroy their economy and infrastructure and then we are supposed to pay to rebuild. We allow all sorts of risk taking and then we bail out the people responsible, so they can do it all again and again.

    We paid multiple millions to the families of 9/11 but did we pay for the families of Lockerbie? No. What about the families of Pearl Harbor's lost lives? No. Why were the 9/11 families unique? They were not.

  • Report this Comment On July 30, 2012, at 7:10 PM, prginww wrote:

    I am shocked at this piece by TMFG. You postulate the the final settlement made with the Indian government was somehow "corrupt". That is actualy speculation on your part, but you go on and treat your speculation as fact. How intellectually corrupt.

    A legal, final decision was made.

    When, in your strange mind, would any legal decision be final?

    I will never trust your judgment or recomendation again with your demonstrated mind set.

  • Report this Comment On July 30, 2012, at 7:32 PM, prginww wrote:

    No one really cares anymore. The Motley Fool is playing a bad hand. It will only add discredit to their image. This is like slavery reparations: impossible.

    Things must go on. Time has already closed the subject.

  • Report this Comment On July 30, 2012, at 7:32 PM, prginww wrote:

    Okay, I get it . Something bad happened; in hindsight you're unhappy with the resolution; you are able to create a link to DOW; DOW has deep pockets and is easy to identify and vilify. So, lets go after DOW so that we can feel morally superior.

    Believe it or not, I'm inclined toward a small bit of sympathy for your position. But, I fail to understand your lack of indignation about the presumed fact the minority partner contributed nothing to the settlement. Or the apparent fact that the Indian government did not use the settlement funds to even attempt to rectify the damage.

    IF, in fact you see this as a moral outrage, why do you not attempt to first hold accountable the partner that contributed nothing? Or the government that apparently pocketed the settlement funds then did nothing for its citizens?

    You seem very willing to spend other people's money to satisfy your moral agenda. In that spirit allow me to do the same: I believe Isaac Pino, Charlie Kannel and Tom Gradner should donate the first $5,000,000 of their personal cash to a new Bhopal clean-up fund. After that please go after the Indian government and the minority partner(s) ~ I am assuming you might believe they also have moral responsibility. After all that, then we can talk more about what DOW should do.

  • Report this Comment On July 30, 2012, at 7:51 PM, prginww wrote:

    Appropos of devoish a ways back in this discussion: My problem with the argument Tom has presented here is one of scale. The original settlement, 20+ years ago, was $470 M. Now you are suggesting an increment of $540M -- in **today's** dollars. what does that actually represent? I can't quote the CPI figures off the top of my head, but a reasonable estimate over that 20 year time span is that prices have increased a factor of 4-8x (and I note India has had higher inflation than we have). So, taking the middle of that conservative range, this new commitments amounts to no more than $90M in dollars of the day, which is less than a 20% increment on the original settlement. Can anybody assert that increasing that settlement by 20% would have had any major impact on today's situation? I think not! It's a drop in the bucket.

  • Report this Comment On July 30, 2012, at 7:53 PM, prginww wrote:

    The Fools have become really good at moralizing with other people's money. But they would be so much more credible if they led by example. They could, for example, refund a portion of the losses that novice investors suffer by paying for advice given recklessly by incompetent stock pickers at the fool.

    They couldn't, of course, make good all of the losses. Maybe just the ones where their innocent investors lost in excess of 90% of their investment. And we don't want to hear about contracts or disclaimers or warnings about risk that were given but went unheeded. We're talking about doing the ethical thing here.

    Why is it these fools are starting to sound more like politicians than investors?

  • Report this Comment On July 30, 2012, at 8:18 PM, prginww wrote:

    It amuses me that "doing the ethical thing" (or the moral thing or the "right" thing) is such a hard sell at TMF that the authors feel the need to respond to every counter-ethical comment with another sales pitch.

    And it IS a sales pitch: the bottom line -- as always -- is money. The authors have calculated that their strategy will be profitable for Dow and its stakeholders at some point in the future.

    This is an example of "ethicwashing" -- the equivalent of greenwashing but applied to ethics instead of the environment. The authors are trying to create the perception that Dow cares about people, when in fact all Dow really cares about is making a profit.

    As devoish pointed out, the proposed figure ($540 million) is not much more than the original settlement, which amounted to a pittance per victim, compared to compensation for the victims of 9/11. Offering a second pittance will not help the victims much, but might fool investors into thinking that Dow now cares about ethics, if the ethicwashing campaign works as intended.

    Fact 1: The bottom line for capitalists is money. If a person about to be mugged is given the choice between retaining all his/her wealth (but becoming a quadriplegic by being shot in the neck), or having all his/her wealth stolen (but left unharmed), the capitalist would say "Shoot me!" and the non-capitalist would say "Take my wealth!".

    Fact 2: The bottom line for non-capitalists is health & survival. As humanity's population continues to increase, and as the world's non-renewable resources continue to decrease, there will be a permanent shift from caring about money to caring about health & survival (in fact it's already happening). The capitalist authors of this article recognize that fact, and would like to Capitalize on this unavoidable shift while they still can. Ethicwashing will be mainstream in a year or two, so I advise all capitalists to Ca$h in NOW before it's too late!

  • Report this Comment On July 30, 2012, at 8:27 PM, prginww wrote:

    "The Fools have become really good at moralizing with other people's money. "

    Other peoples money is a result of transactions with many people. No dollar is completely your own if you don't live up to the obligations incurred as a result or byproduct of it's receipt.

    Enlightened self interest must become the modus operandi for business to succeed.

  • Report this Comment On July 30, 2012, at 8:39 PM, prginww wrote:

    Using this logic Dow must reponsible for the Holocaust and Armenian Genocide - I had no idea that buying Union Carbide made them responsible - a better argument if Union Carbide had purchasedDow.

  • Report this Comment On July 30, 2012, at 8:46 PM, prginww wrote:

    OK MassInvestor, that's enough. I invoke Godwin's Law to put an end to your nonsense.'s_law

  • Report this Comment On July 30, 2012, at 8:55 PM, prginww wrote:

    "Children raised in this area face twice the risk of dying"

    Don't we all?

  • Report this Comment On July 30, 2012, at 8:56 PM, prginww wrote:


    Your "Fact 1" is not a fact at all. I might believe it if you could provide even one example.

    If you are a capitalist the bottom line is finding equilibrium of self-interests through free exchange.

    That a capitalist cares more about money than his own survival is news to me.

  • Report this Comment On July 30, 2012, at 9:30 PM, prginww wrote:

    hbofbyu: capitalists are willing to risk their own lives on betting that their financial investments will be profitable.

    In the turmoil leading up to the crash of 2008-09, capitalists in the USA bet that their investment losses would be bailed out by taxpayers, and they were right, so their lives were spared.

    In the "Asian Contagion" of 1997-98, capitalists bet that their investments would be bailed out by taxpayers, and they were wrong, so they (the ones in Asia at least) did the "honorable" thing of committing suicide. I was living in Seoul at the time and witnessed a man throwing himself from a skyscraper, which was a common occurrence.

    The capitalist bottom line is making money (profit). Always was and always will be -- until the day all capitalists are dead -- a date, incidentally which will pre-date the death of our species.

  • Report this Comment On July 30, 2012, at 11:08 PM, prginww wrote:

    It would be great if Dow provided additional funds to help alleviate this tragedy. I would agree that Dow has an ethical obligation to fix this problem--10 years down the road, $1B will be but a minor blip on their bottom line. People are to focused on making the most money in the short to remember that without taking care of people and the planet there really isn't much point to all this money grabbing. The cost to be good stewards as opposed to maximizing profits is pretty minor in the long run. (In the 80's we were too focused on maximizing profits to think about the long term costs of sending jobs overseas, which is not paying off too well for us now, but it sure made everyone, including mom and pop shareholders, richer back then so it was okay. Unfortunately, many of those same mom and pop investors aren't feeling so rich today.)

    Unfortunately, you omitted who/what agency is to oversee the expenditure of the funds. To me this is the issue, and until this issue is clarified, I'd have to side with Dow and oppose any additional payments. If Dow raised $500M or $1B, what do they do with it?

    I have not worked in India. However, I have lived/worked in other countries with questionable governments (Tanzania, Saudi Arabia, and Afghanistan). If Dow simply provided this money to the Indian government (federal or local) almost none of it would find it's way to those who truly need it. Sure, a couple of high profile projects would be started (a clinic, site cleanup, etc.), but chances of them getting completed properly (if completed at all) are slim (especially after all the bribes are paid). So then, what is the point? Dow spends a $1B, the victims get almost nothing, and a bunch of government officials open or add to Swiss bank accounts. Even the health insurance would be problematic--what stops people who weren't affected from getting on the list? The Indian government?

    Sorry to be so cynical, but after 3 1/2 years of working in Afghanistan and see hard-earned American tax dollars line the pockets of corrupt Afghani government officials every step of the way, I have lost some of my innocence and patience I fear. If it was American, Western Europe or some parts of Asia, then I could see the benefit of the $1B payment (yes, there would be some graft and corruption, but the majority of money would be put to the proper use).

    Solve the oversight problem, and you will have a better chance of convincing Dow and me. And don't volunteer the UN as the oversight agency either, please. Otherwise, making Dow pay $1B is purely punitive in reality; and while it might make the activists feel better, they would only be deluding themselves because conditions for the real victims likely will not improve noticeably.

  • Report this Comment On July 30, 2012, at 11:11 PM, prginww wrote:

    First I want to express appreciation for the Fools such as m2908, valari25, damilkman, whyaduck1128, and oxo7 among others for giving their non-emotion based opinions.

    An example where reparations have had disastrous consequences are those of the Civil Rights era such as building and forcing Black people into ghettos where they now live in fear for their lives with no family structure and no fathers at home for the children. The laws to protect all citizens were needed but the further extensions of these laws like busing little children for miles to meet the ideas of some judges who never suffer consequences for their actions are a tragedy we live with today.

    The open ended consequences of reparations bankrupted great companies like WR Grace.

    if I were a shareholder of Dow, I would not like for people outside my company to make decisions for me that have lasting effects on my financial well being. A company's reputation would not be enhanced in my opinion by recklessly diluting the value of my property based on the ideas of some who admittedly are not familiar with all the facts and the laws involved.

    The words expressed by zymock regarding reparations for newsletter holder losses make as cogent and argument as those for Dow except for the higher losses.

    Last, everyone on these boards should, in my opinion only, read T Sowell's, "Intellectuals and Society" to see how far amok our attempts at remedying perceived wrongs can carry us.

    He says, " If the real purpose of social crusades is to make the less fortunate better off, then the actual consequences of such policies...require investigation, in order to avoid 'unintended consequences'. Min wages and extended unemployment payments are an example.

    He goes on to say, "But if the real purpose of social crusades is to proclaim oneself to be on the side of the angels, then investigations have a low priority."

    One need only go to Dow's website and see how the money advocated in this 'feel good' program could much better help the people of India with new and better ways to feed, clothe, and protect themselves from disease and insects.

  • Report this Comment On July 30, 2012, at 11:30 PM, prginww wrote:

    KunoUKnow, I agree that there must be changes to the way that organizations serve the communities they serve in -- in addition to serving the needs of their stockholders, employees, and customers. The 21st century successfully capitalistic organization is not going to narrow its stakeholders. It's going to broaden them. In the paraphrased words of master business thinker and philosopher Roy Spence, "If you're not in the business of making the world better, things are going to get real tough for you this century."

    Tom Gardner

  • Report this Comment On July 30, 2012, at 11:37 PM, prginww wrote:

    Devoish, you make some excellent points. I will admit that it would be very difficult to accurately calculate what Dow Chemical should pay. Again, we are not making a legal case. Instead, we're making an argument that it would be in the best interests of the long-term stakeholders of Dow Chemical for the parent to make amends for the Bhopal disaster. In this case, a $540 million commitment is substantially more money than is flowing in to clean up the damage. It is also a dilution that Dow Chemical could digest. We did not talk to the victims. I think doing so would be more expected in legal proceedings.

    As you can see in the scroll of comments, there are pretty strong opinions on either side. Our goal was to make a suggestion to Dow Chemical that could be seriously considered.

    Tom Gardner

  • Report this Comment On July 31, 2012, at 12:36 AM, prginww wrote:


    We are going to see the stock markets of the world converge over the next 25 years. It is going to be as easy and cheap to buy stock in a company anywhere in the world as in your home country. I say this because, as investors gain easy access to new markets, transparency will increase in those markets (not instantly, but gradually). And as they do, gradually not instantly, the responsibilities of companies will level out across the world. An organization will not be so easily able to take advantage of low environmental standards and corrupt governance in one country then skate away without reprimand or financial consequence. I am a long-term optimist in this respect.

    Tom Gardner

  • Report this Comment On July 31, 2012, at 12:43 AM, prginww wrote:

    As a long-time fool, I'm especially pleased that The Fool has stepped up and taken ahold of a major ethical problem in a company that many of us are invested in. Congratulations to all 3 of you; Isaac Pino and Charlie Kannel and Tom Gardner!!

    I'm a wildlife biologist and conservationist.

    I follow and respond to more than 100 of these issues a year.

    Some argue that it's "not my responsibility" and I understand that. But I see my responsibility in the very real fact that we as a culture have not demanded that our government consistently acts ethically. In the last 10 years I've seen more than 2 dozen companies and institutions respond and correct unethical practices because of public pressure. Just recently Apple (AAPL) was taken to task for some of it's component manufactures in other countries, who where controlling their employees essentially as slaves, driven by over seers to work 12 hr. a day, 7 days a week with no medical benefits or time off for medical problems. They were simply fired. Apple's eye was getting blackened and they moved quickly to address the problem; probably not to the extent that we would see as fair, but many times better than conditions were.

    That is where I think my responsibility lies. If I let these conditions exist without at least adding my voice and sometimes dollars, I'm not meeting my societal obligations.

    There is one other company that I must mention; Monsanto (MON), (My Saint in spanish). Every one of us is eating Monsanto products daily and everyone of us is being poisoned by those products. Monsanto is the Co. that has developed what’s called Genetically Modified Organisms, otherwise known as GMO’s. and are in corn, soy beans, alpha They do the research for the effects that their products, like GMO’s and RoundUp herbicide might have on the customer. They write the final reports on that “research” and that 
“research” is what Monsanto presented to Congress - from which Congress renders it’s predictable approval.

    GMO seed on the market now;

    Monsanto’s Roundup Ready alfalfa

    Monsanto’s Roundup Ready sugar beets

    Syngenta’s Enogen corn for diesel fuel

    (FDA) is now considering the commercial release of genetically modified salmon.

    Monsanto’s GMO sweet corn for you!

    Monsanto’s GMO field corn (livestock feed)

    More info at;



  • Report this Comment On July 31, 2012, at 7:40 AM, prginww wrote:

    what a minute, in your article you talk about transfer of liablitiy with the transfer of ownership, well when UC India was transfered to eveready regardless if the plant was operating at the time it included the liability, in 2001 which did not included UC India to Dow . it is like you want to impose the rule of law on Dow , yet ignore the rule of law with eveready. which makes your whole belonging in the recycle bin

  • Report this Comment On July 31, 2012, at 9:57 AM, prginww wrote:

    When you talk about the Chevron-Texaco legal case in Ecuador, you are forgetting a major piece of the puzzle - the Ecuadorian government essentially forced Texaco to sale them back their producing concessions, including the polluted ones. One of the pieces of compensation was a waiver of any liabilities related to operations in that area, which was granted by a legitimately elected government.

    Many of these countries have been used, and the Bhopal example is quite different than the CVX example in Ecuador. Please get your facts straight and stop comparing apples to oranges.

  • Report this Comment On July 31, 2012, at 10:56 AM, prginww wrote:

    @TMFTomG -- I love your passion about this issue. My first response was to start a petition on to have Dow clean up the site at the very least. However, I defer to you, as originator of this article and much more knowledgeable about the issue than I. Will you start the petition?


  • Report this Comment On July 31, 2012, at 4:28 PM, prginww wrote:

    As one of the first attorneys to Bhopalafter the disasterI arrived with Melvin Belli and Damodar Airan, interviewed the UC plant manager who described the annual payment of $500,000 for safety inspections by UC of America which were never done.

    Absurd idea that UC could avoid liabiliy by suggesting it was possily the work of Sikh Terrorists.But Indian law like US law following English law provides STRICT Liability on hazardous activities (like the wartime Delaware powder plant explosion). No negligence proof is necessary. Making poison gas or dynamite carries strict responsibility. The Bhopal plant was surrounded by high fence topped with barb wire- hundreds of yards of floodlit fields between.. Workers bodies were all found dead at the site. None were Sikhs. Never any legitimate evidence of sabatoge. Pure BS.

    When we arrived in India we first met with The Attorney General who approved our visa and bowed to Belli saying " I'm unaccustomed to receiving Royalty:I uderstand in America you are called "The King of Torts! " He explaine there was no allowable personal injury claims, no recovery for pain and suffering or wrongfull death and only a lawsuit in the American courts could compensate the victims.a Federal Judge in New York refused to accept jurisdiction and approved transfer to India on he urging of the Indian Govt lawyers on the principle of 'parens patria'.

    WE urged the Judge to approve the Settlement on behalf of the 60 lawyers involved as he only way to dole the money to the survivors and not the Indian treasury.

    The UC PR firm decided the best way to deflect criticism from UC was to assassinate the US attorneys as greedy bastards feeding off te plight of the victims. They ignored the fact we raisd money for ambulance and for two young doctors to fly to Bhopal to treat the people. We requested UC to immediately pay $10 million into a disaster fund with the Red Cross to be credited to any later setlement. Silence.

    In Miami we arranged a private fund raiser premier with the new movie "Passage to India" and a cocktail party inviting Zubin Mehta.

    Our first client was employed at the rain station. He reacted to he stinging pain in his eyes and lungs by putting a wet towel on his face while he stopped an incoming train from disaster. His fellow workers ran from the building to die in the poison fog. When he went home he found his wife and son dead in bed.

    I can't weep over the site clean up or whether DOW can be held responsible. I've shed too many tears for the victims I represented ineffectively due to the injustice of our Federal courts, Union Carbide and the Indian Government.

    Incollege at the U of Florida I built a canvas and barrel replica of the Taj Mahal for the I949 Homecoming

    swimming event taken from an encyclopedia. My last day in New Delhi I was able to take a 5 hour taxiride to

    Agra to see the building of my dreams to lift me from the smell of death and destruction of Bhopal.

    I'm pleased someone else remembers ths tragedy.

  • Report this Comment On July 31, 2012, at 4:38 PM, prginww wrote:

    "We recommend financing a Bhopal remediation effort through a public stock offering, a move that would boost Dow Chemical's reputation and, most importantly, provide the people of Bhopal with the services and health care they desperately need."

    I will tel you that if Dow finances anything then the problem will indeed never go away. I see another opportunity for green activists, government and NGO's to milk this tragedy forever. This will never go away and Bhopal will never be fixed because otherwise the gravy train will end.

  • Report this Comment On July 31, 2012, at 4:47 PM, prginww wrote:

    "The inhabitants, already crippled by extreme poverty, develop chronic and debilitating illnesses that burden their everyday lives."

    And I am supposed to take your word for it? This article is nothing but emotional bribery. If land is cheap because is polluted, he who settles there is accepting the price of it. Poverty in India, just like anywhere else is due to govt Central Planning. That is not going to change with Dow spending more and charging it to me everytime I buy one of their products.

    This article is so intellectually dishonest and fallacious that it doesn't belong in TMF. I am starting to see changes in TMF and I don't like it. All of this political activism is not what I pay my subscription for.

  • Report this Comment On July 31, 2012, at 4:53 PM, prginww wrote:


    How about we change the wording a little of Isaac, Charlie and Tom's article and start making some demands of Mansanto and the fruits of their Agent Orange and other herbicides which caused cancer in U.S. Veterans. The Vietnamese government claims that 400,000 either killed or disabled while 500,000 children were born with birth defects as a result of exposure.

    On a personal level the dandelions in my lawn no longer die when I put weed killer on them (the clerks at home depot are stumped). I am seeing first hand how their technology is panning out.

  • Report this Comment On July 31, 2012, at 4:58 PM, prginww wrote:


    You say;

    "An organization will not be so easily able to take advantage of low environmental standards and corrupt governance in one country then skate away without reprimand or financial consequence. I am a long-term optimist in this respect."

    Unfortunately, there is a fallacy in this argument. It is not "low environmental standards and corrupt governance" which causes the behaviour you believe will be more difficult to excercise in the future. It is indeed the lack of competition due to Central Planning which creates the regulations you seemed to believe are good, but in reality only help creat monopolies due to the high cost of entry to the particularly regulated market.

    See, any problems you have with the Bhopal settlement is really due to the regulations which allow Dow, Union Carbide and any other Big anything (Oil, Utilities, Telcom, Auto, Bank, etc.) to do as they please as the monopolies they are. Unfortunately, when you hear clamor for more regulations in order to avoid the problems which were actually caused by the regulations themselves, you are just digging a deeper hole in hopes of getting out of it. Flawed Keynesian economic thought is what is prevalent these days.

  • Report this Comment On July 31, 2012, at 5:04 PM, prginww wrote:

    " Agent Orange and other herbicides which caused cancer in U.S. Veterans."

    There have been numerous articles debunking dioxin as a cause of cancer. There is nothing toxic about dioxin. Caffeine is one of the most potent herbicides known to man and we drink it everyday by the tons. Cancer has only decrease.

    Look up dioxin research and you will be surprised.

    There are only a few toxic substances in quantities found near sources in the atmosphere;

    Lead and mercury(to children), also lead in bullets.

    Radon gas

    Sulphur Dioxide (soot) if you are athmatic

    Carbon Monoxide if you fill your house with it

    That's it. Everything else is pretty much ecosocialist propaganda...

  • Report this Comment On July 31, 2012, at 5:58 PM, prginww wrote:


    That is a powerful first hand account.

    I know that the word "evil" is taboo in a lot of circles but there really are people and institutions made up of people, who respond to crises not with conscious malice but blindly, lacking awareness of the evil they may have done -- truly seeking to avoid any such awareness. As has been described of the devil in religious literature, they hate the light and instinctively will do anything to avoid it, including attempting to extinguish it.

    The larger the organization - in this case; Dow, UC, the Indian government, US courts, the more diffusion there is of responsibility. No raindrop will ever blame itself for the flood and no one at Dow will likely feel any kind of obligation to bring more light upon this matter.

  • Report this Comment On July 31, 2012, at 7:11 PM, prginww wrote:

    Thank you for this article.

    It is because The Motley Fool investing values that I remain a member. We can invest, be a part of a corporation, make money, but always demand from it transparency and responsibility towards its employees, its shareholders, the community and the earth. The Earth, this little vessel in which all of us navigate the space and that we all should take very good care.

  • Report this Comment On July 31, 2012, at 10:49 PM, prginww wrote:

    Thank you Tom for this article and intiative. I sincerely hope it will be successful.

    Unfortunately it also shows that some corporations are not living up to their responsiiblities and investors are happy with it as long as they make money. I could not otherwise understand why the principle "privatize profits, socialize loss" is still so prevalent. One posterchild is the nuclear industry. No insurance for nuclear disaster. In the end it is the tax payer who pays, look at Fukushima, what is happening there.

    Also, as long as the disaster is far away, corporations, owners and investors have an easy going consience.

    I hope your article will contribute to change this attidude and increase the standard of how we conduct business in our world and see ourselves as investors and part owners.

  • Report this Comment On August 01, 2012, at 7:05 AM, prginww wrote:

    Hey, TopAustrianFool,

    Are you saying it was lack of competition that caused the Bhopal tragedy???

    Please elaborate.

    I think is was because Union Carbide couldn't afford to build a safe enough plant in the States and found someplace they could on the cheap, without regard to enviromental stewardship responsibilities.

  • Report this Comment On August 01, 2012, at 12:02 PM, prginww wrote:

    Hi everyone,

    I found this article very inspiring; some of you may know I have a real-money portfolio I'm managing for that focuses on socially responsible investing. Needless to say, a company like Dow Chemical would not be on my short list to be included in my portfolio. However, should Dow Chemical undertake the initiative my Foolish colleagues have suggested and pursue remedying this situation it would do a lot to alter my position. Here's a piece on why I would buy shares if such a stock offering to repair the situation in Bhopal would be undertaken:

    The marketplace can do much good in the world; investing in solutions is a path to that end.


    PS hbofbyu, my article also mentions Agent Orange and Monsanto; there are some parallel issues, I think, in terms of corporate responses to old and ongoing ills.

  • Report this Comment On August 01, 2012, at 1:43 PM, prginww wrote:


    "Are you saying it was lack of competition that caused the Bhopal tragedy???"

    No. I am actually very familiar with the technical aspects of the accident. The tragedy was mainly an engineering judgement mistake. Instead of using original engineering design, due to the specifics of the situation, certain procedures were used as regulated minimum, which in many industries is typical. Because what was used was standard procedure, the people in charged actually made a mistake due to complacency.

    "I think is was because Union Carbide couldn't afford to build a safe enough plant in the States and found someplace they could on the cheap, without regard to enviromental stewardship responsibilities."

    This is not the case. Union Carbide built a plant there because labor and raw material gave them a competitive advantage.

    What I am saying is that because Dow is a govt supported monopoly, they do not have to compete with new-comers and because of this complacency is acceptable. If APPL, AMZN or NFLX made a similar mistake they would have dissapeared. On the other hand monopolies, which are created by govt regulations, survive gulf spills, and any other catastrophies because of the govt protection.

    Look at the Banks. Super regulated, but they survive with bail-outs and exclusivity rights provided by regulations. The point is that most of the problems we argue about on a daily basis are caused by the regulations we are asking the govt to create. Its ironic and until we realize this, nothing will get better.

    The only solution is limited govt. That will reduce Central Planning and will increase the individuals freedom of choice.

  • Report this Comment On August 01, 2012, at 8:13 PM, prginww wrote:

    I'll close out my comments on this thread by thanking everyone for jumping in. I learned a tremendous amount throughout the entire process of this article and Foolish exchange.

    Our aim never was to shame an organization nor to imply any legal action. Instead, I have a strong belief that enlightened organizations are going to win the lionshare of the upside in the 21st century.

    These organizations are open and transparent. They balance their actions to meet the needs of all of their stakeholders. I believe that the shareholder-obsessed organization will falter in the 21st century. . as a networked world discovers and shares evidence of organizations mistreating their employees, taking advantage of their customers, or damaging the world.

    I think the 20th century company distinguished itself by learning how to truly serve shareholders. But then it lost its way by imbalancing that service not just to stockholders, but to those with shorter and shorter time horizons.

    I believe there is a lot more to be learned about what happened in Bhopal. And, while history provides plenty of evidence that this story might just vanish, there are some key reasons I don't believe that'll happen here.

    1) The Internet -- linking together people with common interests

    2) The Internet -- acting as a permanent reference library

    3) The Internet -- as a multimedia platform

    4) The Internet -- as a permanent reference library of audio and video

    5) The emergence of India as a major economic force

    6) The greater involvement of all stakeholders in the functioning of a business (the great businesses have customers, employees, stockholders and citizens of the world believing they have a stake in that organization)

    I remain convinced that Dow Chemical can turn the page from 20th century to 21st century leadership and impact by helping to solve the Bhopal disaster and its subsidiary's role in the tragic events and aftermath. I believe doing so is many times more valuable for every stakeholder than a mere Olympic sponsorship.

    All of us should want a productive, healthy chemicals company that is transparent in its service to customers, employees, stockholders and the world. I hope the company takes our recommendation under consideration.

    Tom Gardner

  • Report this Comment On August 01, 2012, at 8:33 PM, prginww wrote:

    "All of us should want a productive, healthy chemicals company that is transparent in its service to customers, employees, stockholders and the world."

    Why would they? They don't have much competition.

    Sure, in the 21st Century shareholders will turn away, but Dow is the sole provider of many chemicals that are needed in products we buy everyday. As long as this monopoly continues through Central Planning and govt regulation Dow will just ignore you, and everyone else.

    The only way to keep companies honest is competition. The only way to have competition is less regulations. The only way to have less regulation is for all of us to take more responsibility for our own actions, accept our losses and stop asking govt to fix everything.

  • Report this Comment On August 02, 2012, at 1:47 AM, prginww wrote:

    Having read all of the comments and having been to India in 1972 and 1983 - talking to various regional bureaucrats (unofficially), I still do not know why the TMF took up this cause. Is this related to a research methodology we support with our various subscriptions? Please give me (us) an illuminative policy statement, so we can make a decision as to what the TMF policies are or are not.

    The TMF , in my opinion, definitly should not model itself after CALPERS !!!

    The intensity of the above discussion leaves me a bit forlorn, to say the least.

  • Report this Comment On August 02, 2012, at 6:42 AM, prginww wrote:

    Nothing good ever comes from activism.

  • Report this Comment On August 02, 2012, at 11:16 AM, prginww wrote:

    I am proud of your for writing this article. We need both government and corporate regulations. Corporations have a moral obligation to right atrocious wrongs. They do not have a legal obligation to avoid the negative consequences of their unethical behavior.

  • Report this Comment On August 02, 2012, at 1:45 PM, prginww wrote:

    TopAustrianFool wrote,

    "Nothing good ever comes from activism."

    Wow. How wrong can you get? Lots of good has come from activism; to name two off the shiny top of my head, the civil rights movement and the environmental movement of the late Sixties-early Seventies. A lot of bad has come from activism, generally when it gets hijacked by publicity/money seekers or becomes too entrenched in its positions, but much good comes from it, too.

    Activism is good. It shakes things up when needed. Often it goes too far or becomes corrupted, in fact it usually does, but by and large it is both necessary and good. I happened to disagree on this one, but still welcome the discussion.

  • Report this Comment On August 02, 2012, at 3:33 PM, prginww wrote:

    Mr. Gardner:

    Whether or not one agrees with you and the ensuing necessary actions is not important. I tip my hat to you for writing an interesting piece, raising an issue you care about and proposing solutions to the problem. Activism might not always work, but there will never be anything wrong for peacefully fighting for something you believe in.

    In addition, all my respect for answering sometimes aggressive comments with tact, when it would have been so much easier to ignore them.

  • Report this Comment On August 02, 2012, at 4:16 PM, prginww wrote:

    "The only way to keep companies honest is competition. The only way to have competition is less regulations. The only way to have less regulation is for all of us to take more responsibility for our own actions, accept our losses and stop asking govt to fix everything."

    Events like this one are the reasons for regulations. How many events need to take place before it sinks in that unregulated business will just screw people? Look at the banks, they are fighting to have less regulation yet every couple of weeks a new reason why they need to have more regulations pops up, and all of this with the memory of the morgage crisis still oh so fresh. How long ago was it that the S&L was finially offically wrapped up?

    Big business shows time and time again that self regulation does not work.

  • Report this Comment On August 03, 2012, at 10:23 AM, prginww wrote:

    Sorry to hear how some of our companies in concert with corrupt foreign governments are contributing to human suffering. In spite of all this, Dow chemical should not assume corporate liability for the ongoing environmental disaster in Bhopal, India. Dow, however, through a foundation either already in existence or newly created for the purpose of first cleaning up the sight and providing health care for the citizens of the region. Dow would do this because it recognizes the ongoing suffering and that sight remains toxic. Dow would gain credit for being a responsible global corporate citizen which could pay dividends of all kinds. How Dow funds the entity is up to their board of directors and what they by-laws would allow them to do.

  • Report this Comment On August 03, 2012, at 11:28 AM, prginww wrote:

    I agree with wyaduck1128 & wzfinance's comments. I further state that if the three of you, Isaac Pino, Charlie Kannel, and Mr. Tom Gardner are as passionate about this as it seems, you and your sponsored site (Motley Fool) might consider starting a movement to clean this up the site as a matter of constructive public activism. I'm sure a non-profit could be put together, solicit world wide participation, buy/or clean up the site, without taking on continuing liability beyond the contributions in an attempt to do something good. Maybe even tie in a financially beneficial result, hopefully totally from private enterprise & creative minds. A little brainstorming might bring some really creative solutions.

  • Report this Comment On August 03, 2012, at 11:30 AM, prginww wrote:

    If the Dow board proposed a measure to dilute the current stock to pay for all of the items discussed in this piece, I suspect an overwhelming majority of Dow stockholders would approve it. This tragedy has long been out of the press, and forgotten about. It is time to right this wrong, no doubt about it. It is great to see journalists focus on real, and important topics that can make a real difference in the world. My hat's off to you Isaac, Charlie, and Tom.

  • Report this Comment On August 03, 2012, at 11:38 AM, prginww wrote:

    This article is filled with so many errors that MotleyFool has actually lived up to it's name. You've now lost one viewer permanently. Good luck going forward, you're going to need it.

  • Report this Comment On August 03, 2012, at 11:39 AM, prginww wrote:

    I do believe as such a thing as res judicata, and not some moralistic calls for action.

    I will never read anything by those authors again: they have absolutely no credibility with me now.

    I must further ask why India with a very lavish defense budget could not do more?

    Should we take up a collection because India cannot maintain its power grid, blaming the vendor of ours.

    Finally the piece has absolutely no place in this venue.

  • Report this Comment On August 03, 2012, at 11:52 AM, prginww wrote:

    AFTER A VERY LONG TIME SOME ONE HAS WRITTEN A VERY GOOD ARTICAL AND RAISED AWAIRENESS AND GAVE SUGGESTIONS TO DOW CHEMICAL-WAKE UP AND START SOMETHINGExcellent suggestions are given to take care of Ten of Thousands of suffering people. Dow Chemicals must start somewhere and should put aside money from their big profits. It is for a humanitarian cause. Dow is a cosponsor for the 2012 olympics-they will make lot of money from increased sales.

    These people are already living under poverty and are suffering a lot. I want to pray for their good health and hope this movement of persuading Dow Chemicals to do something as very well outlined in suggestions-what Dow Chemicals can do and should do to help Bhopal Tragedy sufferer. I am a US citizen and we care about people. God bless America

  • Report this Comment On August 03, 2012, at 12:13 PM, prginww wrote:

    <<This type of convoluted legal maneuvering by Union Carbide and Dow is not a new story. In Ecuador, beginning in the 1960s, Texaco discharged billions of gallons of oil waste directly into the Amazon rainforest, creating an oil spill that ruined the lives of countless indigenous people. Chevron, after acquiring Texaco (and its liabilities!) in 2001, has refused to pay the $18 billion fine ordered by Ecuadorian courts, claiming fraud. In a company statement, Chevron argues that PetroEcuador, the state-owned oil company that took over Texaco's facilities after 2001, should be held responsible. Sound familiar?>>

    B as in B and S as in S. Texaco settled with the Ecuadorian government, PetroEcuador, which dictated the environmental standards to begin with, continued to pollute. Then the new Marxist Ecuadorian government attempts to shake down Chevron which purchased Texaco using lies and fraud.

    Well, at least Tom Gardner's political agenda is clear. I'll never trust another word he writes.

  • Report this Comment On August 03, 2012, at 12:14 PM, prginww wrote:

    Fully agree with the principle of Conscious Capitalism. Businesses who recognize a balanced approach for satisfying all stakeholders will generate more value in the long run. But this principle should be accompanied by Tort Reform, or the likes of John Edwards will come out of the woodwork and loudly claim to be the fierce defenders of innocents, while quietly calculating their fees.

  • Report this Comment On August 03, 2012, at 12:29 PM, prginww wrote:

    Tom (et al.),

    I enjoyed reading this article and several of the comments. I have't read them all...who has the time? I spent an hour. You guys are smarter than I am so I have no basis to doubt you're proposing a viable option for Dow and India. In fact, I might welcome this outcome and model of corporate and national responsibility.

    But I wanted to respond to your challenge to read the Reuters article and imagine how it might enhance Dow's image. I think it does in this simple, human way: hubris.

    I think there are many readers who like the ideas of bigger, stronger, faster, tougher; of winner in the face of hard challenge. Of kicking a&= and taking names. Of getting our from under. Etc. It sounds a lot like sporting metaphors. And the bulk of this article is about the great plans, the big money, the humble piece of the action, the more than just a player in tomorrow's game, the cash on the barrelhead staring tomorrow's brave Dow salesmen in the face as they trudge through muddy rain forests and freezing tundras of Brazilian and Russian fantasies, respectively. I don't think the bulk of the article is about how "Dow wasn't there..." shows weakness. The between the lines message takes over, I'm afraid. An ironic Olympic message of "Go Dow...Go with a Winner!" seeps through.

    So, when faced with the Dow brand as a viable choice for product or investment, I think there are enough Reuters readers who would either look past the protests or puff up their eyeballs at every turn of phrase linking Dow to Big, to Winner. The whole article can be read as corporate hubris par excellence.

  • Report this Comment On August 03, 2012, at 1:13 PM, prginww wrote:

    This sounds like the petition that was put on but leaving out the information about "INDIA's government" having accecpted a "settlement" years ago??

  • Report this Comment On August 03, 2012, at 1:52 PM, prginww wrote:


    OK. Now you have stepped into my area of expertise, i.e. toxicology. And you have stepped wrong. In the first place, “dioxin” is a family of chemical compounds. Many are not very toxic. However, 2,3,7,8 tetrachloro-dibenzo-p-dioxin (2,3,7,8,TCDD) has median acute toxicity values (LD50) as low as 1 microgram per kilogram (mcg/kg) of body weight in some mammals. The generally comparable rat LD50 is 20 mcg/kg. The generally accepted rat LD50 for caffeine is 192 milligrams/kg (mg/kg), which makes 2,3,7,8 TCDD 10,000 times as toxic as caffeine.

    The U.S. National Toxicology Program and the International Agency for Cancer Research both classify 2,3,7,8 TCDD as a “known” carcinogen. Debunkers of the carcinogenicity are similar to the tobacco companies “proving” that smoking cigarettes is safe.

    Caffeine was never proposed as an herbicide in the 33 years I worked on pesticides. It was considered as a potential agent for frog control, but that was not pursued.

    Your (false) argument that dioxin does not cause cancer, and that we ingest huge amounts of caffeine, and that cancer is decreasing constitute a major non-sequitor. Where is the relationship between these three points?

    Soot is fine carbon. It may or may not have any sulfur dioxide.

    Mercury is toxic to adults. Did you ever hear “mad as a hatter”? Hatters used to use mercury in their occupation.

    Carbon monoxide will kill you long before a fraction of your house is filled.

    I guess this all makes me an “ecosocialist propagandist.” But I’d like to think I have (or know where to find) the facts that I use. I hope your economic arguments are better than your chemical ones.

  • Report this Comment On August 03, 2012, at 2:04 PM, prginww wrote:

    The best thing would be revitalization of the area of the disaster, but, given the reality of local prejudices that mound in a population prone to superstition and fantasies, one cannot expect much from a direct movement that seeks to erase the past. It is outside forces that have kept the "promotion" of this disaster going and one has to ask what they are in it for...all altruism aside, to be sure.

  • Report this Comment On August 03, 2012, at 2:12 PM, prginww wrote:


    Thanks for your idea to start a petition on The intent of our article was to propose and advocate for an innovative solution to an ongoing problem. We encourage readers to take action by contacting Dow and voicing their concerns. However, we will pass the torch to you to organize an online petition. I did notice a few petitions already exist (link below), but if you would like to create one specific to our proposal feel free to do so.

  • Report this Comment On August 03, 2012, at 2:42 PM, prginww wrote:

    Wonderful article and discussion. I was a Pastor in a church in Seadrift Texas in 1994-98, there was a Union Carbide Chemical plant on the road between the two churches I was serving at the time. Many Sunday's as I was driving between the two churches, as I passed the plant all of a sudden my windshield would be covered in a blue haze, which turned to a light platic coating. It was not difficult to remove, but, when we complained to the plant about it the denied any discharge from their plant. UC was not a responsible company then in the USA either. Does Dow have a legal or even ethical responsibilty. Maybe not, but in our country, corporations are also legaly considered persons. It seems to me that the Corporation does have a Moral responsibility to at least make some sort of effort to right a terrible situation.

    People need to act in moral ways, if they do then perhaps less of these types of things would happen. It is reprehensible to me that these folks in Bhopal are still suffering, no matter who is to blame, it needs to be made right. Was Dow there, what difference does it make, there is still a moral imperative her. People are suffering and dying, for no good reason other than governmental and corporate greed and inability to act to relieve the suffering. Someone mentioned the BP disaster, yes that was a terrible thing, but people acted and quickly once the understood the magnitude of the disaster. The gulf is already changing and becoming again the beautiful place it was.

    Morality says we must act. I have great respect for Dow chemical, they have been a good company to the best of my knowledge, yet this is a blot on that record, it will cost them unless they can make it at least partially right.

    My .02 cents for way its worth. I do not a present own any shares so really don't have dog in the fight, but do appreciate the discussion. God bless y'all.

  • Report this Comment On August 03, 2012, at 3:24 PM, prginww wrote:

    The Bhopal case has been legally closed for decades. Either hire a qualified law firm and try to reopen it on solid legal grounds or, Get Over It - at least from a legal, if not ethical perspective.

    Yes, the consequences of the tragedy still remain. Yes, questions of ethical liability still remain - more in some minds, less or none in others. What constitutes "correct ethics" at a given time is in the minds of the beholders - which can change often, sometimes radically.

    Seems like just yesterday, in this land of the free and just, the majority did not consider it unethical (much less illegal) to burn a witch, run a brothel, own a slave, bar women from voting, discriminate, or provide no legally mandated accommodations for the handicapped. If a time comes when sufficient people agree that it was unethical for the US population to permit its military to kill millions of innocent civilians with A bombs, laws will be passed to mandate each American man, woman and child to pay reparations for the "sins of their fathers".

    It is a similarly far-fetched and (currently) a foolish idea to think that current Dow shareholders will or should feel ethically responsible for the Bhopal tragedy ostensibly caused by the failure of past shareholders to elect directors and officers who might have prevented it.

  • Report this Comment On August 03, 2012, at 3:33 PM, prginww wrote:

    Thanks for this recommendation. This is what corporate responsibility looks like. If Dow follows your suggestions, I'll buy some of those newly issued shares to support them.

  • Report this Comment On August 03, 2012, at 5:11 PM, prginww wrote:

    Wow, Tom. I am really impressed and pleased that you have elected to continue the conversation with your Fools and rebut or support the comments they've made regarding this Indian/Union Carbide/DOW case of abuse of power..

    I'm also just delighted to read so many articularte, thoughtful responses your opening comments have elicited.

    For me, this comes at a time when I'm trying to figure out just how I can use my own ownership of stocks to make some kind of impact on the embarassingly unethical practices of corporations gone wild with global power. I have withheld votes, or written "abstain" on proxies, and have written Rio Tinto and Chevron - but I have to admit that I also make useful, helpful income from those stocks. My working alone isn't going to have much impact. But having some leadership and a plan is clearly a first step toward requiring that companies that represent this nation recognize that their moral and ethical responsibilities reach to other nations as well as to their own country (whom many of them have abandoned for cheaper labor).

    Time and again the verbiage that I've read in the few objections included here smacks of exactly what the "corporate response" has sounded like - regarding raped mine sites, toxic water contamination in current fracking efforts - and hundreds more. If we can't trust corporations to have some level of "conscience", then complaints and charges will continue indefinitely.

    I give you much credit for saying what needs to be said - to customers who know these underlying problems exist but feel unempowered to take effective action.

  • Report this Comment On August 03, 2012, at 6:36 PM, prginww wrote:


    Thank You for your reply.

    I think the idea of Dow actualy doing anthing at all is a la-de-da liberal dream. Sure, it is probably the right, just and ethical thing to do, but there is no history of taking such an action from any corporation.

    Take GE. A huge company, they have chosen to fight cleaning up the Hudson river sediment, and there are no companies around that could have dumped that tonnage of metalic and chemical wastes.into the river.

    Bethlehem Steel, once a Dow company, has been in and out of the courts for years. The Hill to Hill site is still too contaminated for residential uses although some commercial uses have been made. The agencies funded for clean up and employee pensions are now going broke. About 40% of the site is too contaminated from metals, slag and paint to be anything useful. Except the museum building, you shoud tour them.

    Ingersol-Rand left their manufacturing site to move down South for lower labor costs. And left behind a large site of empty, contaminated buildings. They did tear down and dispose of a group of buildings in the '90s, to avoid paying the taxes on them. Some buildings now house industrial companies or warehouses but the large acreage is unused. The township proposed capping several areas, leaving the pollution underneath. But there are no plans to actually clean the area.

    All these companies could benefit from better public sentiment but all have fought in the courts for years to deny responsibility or limit liability. And use a lot of money for lawyers instead of cleaning the contamination. While past performance is not an indicator of future results, this has been the generic corporate attitude for all the life I have lived. I also believe it will continue.

    Could we have regulation to prevent this? Sure. But the EPA and other environmental agencies are being dis-armed in their powers and funding.

    We could have had a smaller financial crash if there had been some regulation on derivatives, mortgage loans and in general, investment banking. Even the LIBOR problem could have been defused. And no one has gone to jail yet.. And there is no talk of regulating that industry either.

    In short, I do not think there will be a corporate sense of responsibility that becomes a part of the culture. Even "Don't be evil" has only gone so far. And making new regulation will be resisted by the companies that supply generous campaign contributions. I will continue to support proper regulations, but remember 'pick up your toys' is better than put Thomas the Tank back on the shelf.


  • Report this Comment On August 04, 2012, at 12:44 AM, prginww wrote:

    Again: The petition on does NOT bring up the fact that the government of INDIA did reach a "settlement" years ago?? Definitly a "bum deal", ....But??

  • Report this Comment On August 04, 2012, at 1:12 AM, prginww wrote:

    I cannot believe that the vilification of Dow Chemical (which has recently been resurrected due to the activism on the left as a result of the Olympics) has gotten any traction. Comments to this article has lumped Dow with other corporate sacrificial lambs of the left such as Monsanto (can someone please provide evidence that genetically modified food is not fit for human consumption) and Big Oil (such as Chevron and Texaco). All we need is to tie in Chick-Fil-A and any large Israeli corporation and Jackpot!, we have found all of the requisite villains for the ills of the world.

    Union Carbide settled its obligations for Bhopal with the Indian government. India is a common law country that adheres to the doctrine of res judicata. Down Chemical bought Union Carbide because it assumed that the doctrine of res judicata applies, as it has applied to every court decision or settlement since the founding of the common law system. Dow Chemical shareholders bought their shares because they thought the doctrine of res judicator applies. To force these shareholders to accept a dilution of their investment because political activists feel the need to disrupt the very foundation of our legal system is simply wrong.

  • Report this Comment On August 04, 2012, at 2:19 AM, prginww wrote:

    Thanks for publishing this very good article on a humanitarian issue. It shows that Motley Fool is not just an investing community but also a caring community, which cares for the sufferings of the fellow humans of the world.

  • Report this Comment On August 04, 2012, at 4:02 AM, prginww wrote:

    On July 30, 2012, at 12:53 PM, TMFTomG wrote:

    My belief is that Union Carbide -- using all of the powers at its disposal -- was able to place tremendous pressure on a corrupt government to accept an absolute pittance (in 1984 dollars and in today's dollars).

    Tom, An hypothetical argument is rarely valid as it ignores all the real world factors in play.

    I think most would agree, in principle, that a deal struck under duress can/should be challenged

    Do you have reason to believe (i.e. evidence) that UC offered or paid bribes, whether to the Indian (or local) government or others, or otherwise used coercion to have the offer accepted?

    Do you have any evidence for your belief that UC actually placed "tremendous pressure" on the Indian government (or anyone else) to accept what it "knew" to be a "pittance."

    Tom, I am asking you to adhere to the same standards you are requiring of those who claim "sabotage."

    Without evidence it seems to me you wish that was the case. Surely not Tom, surely not!!.


  • Report this Comment On August 04, 2012, at 4:12 AM, prginww wrote:


    In order to understand why Dow and other 'connected' firms can pull strings, in my opinion the work of

    Eustace Mullins: "The Secrets of the Federal Reserve"

    adds to a much deeper understanding of the rules of the game. I find it worthwhile because it enables me to ask better questions, and see through the information as presented in FT and papers of that kind including forex rates, energy and gold prices.

    Highly recommended!



  • Report this Comment On August 04, 2012, at 9:55 AM, prginww wrote:

    All the time the site remains contaminated, it will continue to be a thorn in the side of Dow's reputation. It's all very well citing the various legal decisions about how Dow/UC have paid compensation and are no longer legally responsible, but the contamination remains. New documentaries continue to be made, new generations are finding out about the disaster, and regardless of Dow's legal obligations, anyone watching a documentary about Bhopal are not left with any doubt that Dow/UC were the entity responsible.

    We can talk about the 50.1% UC ownership and where's the minority contribution, but the sign on the front gate said UC, which are an American company now owned by Dow.

    If Dow reckon that the $470m compensation included the cleanup, then why is it still contaminated and maiming people?

    As India continue to grow in importance in the world, then the repercussions for Dow will also grow in importance, as the recent demonstrations in London have shown.

  • Report this Comment On August 04, 2012, at 11:10 AM, prginww wrote:

    What a crap article. The Indian people ran the plant, they made the mess, and the poor rich American company paid already for their Indian mistakes on runnning the plant. The Fool is the fool for writing this article. What a load of crap. Just like Gardner recommending Netflix over and over as it went off the cliff. Gardner is not the know it all he thinks he is. Go by BWA for a stock going some where, don't listen to Gardener he is all wet.

  • Report this Comment On August 04, 2012, at 12:28 PM, prginww wrote:

    had this tragedy happened in america every lawyer and his grandma wuold have sued for trillions of dollars. since third world citizens are low class human beings american companies can escape with murder. this is exactly the reason why indian govt. does not allow too much involvement by greedy foreigners.traditionally india has been an ally of soviet russia because india learned very painfully that it can't trust US govt. or US companies. I sincerely hope that indians remember this when american kids go there looking for jobs

  • Report this Comment On August 04, 2012, at 3:34 PM, prginww wrote:

    I made a concious decision years ago to steer clear of DOW stock/debt until they resolve this justly. Not sure if there are many more individual investors who refuse to have a part of this atrocity, but I sure hope that is the case...

    I hope the opportunity cost of not being able to participate in Indian markets will force a just resolution.

  • Report this Comment On August 04, 2012, at 6:40 PM, prginww wrote:

    Ditto mapartha's comments:

    "Thanks for publishing this very good article on a humanitarian issue. It shows that Motley Fool is not just an investing community but also a caring community, which cares for the sufferings of the fellow humans of the world."

    I would also add how impressed I am at most of the comments and on the authors' numerous respectful responses. I am relieved to find capitalists who genuinely care about the planet and their fellow world-wide neighbors.

  • Report this Comment On August 05, 2012, at 1:21 AM, prginww wrote:

    The authors have done a great service towards promoting responsible corporate behavior. No company that makes such an inhuman deal should expect a legal cloak to protect them from being liable in the eyes of fair minded people. Such deals are bound to be questioned and reconsidered when lots of the victims are still suffering. Like, the union carbide before it, Dow knows what it owes the victims of Bhopal disaster. The rest is all legal manoeuvering and ducking. Its ability to get the Indian. Govt. on its side means nothing to clear thing people.

  • Report this Comment On August 05, 2012, at 2:23 PM, prginww wrote:

    Thanks for your factual comments on toxicity, Citellus. Your technical expertise is appreciated.


  • Report this Comment On August 06, 2012, at 9:37 AM, prginww wrote:

    The Sins of the Father are the Sins of the Son…or…The Sins of the Son are the Sins of the Father,,, both can have very different financial outcomes when we consider the legal wrangling after a fatal accident within the Americas. Just let it be said, the Sins are in the Family so on whose shoulders should the final financial burden be placed? The Father? The Son? The Family? As Tom and I are not lawyers, we will side step attempting to provide guidance as to who is ‘legally responsible’ for the Bhopal incident. However Tom does delve into ‘who bought who’ and ‘who is the majority owner’. I caution you here Tom, once you go into the legal battle, you must stay in the war and emerge either victor or vanquished. You cannot stand outside the court room and offer testimony or make your motions to the court. You cannot pick and choose when and where to use the ‘legalize arguments’ to best suit your position. I do notice however you quickly duck out the back door in the ‘legally responsible’ issue and promote the ‘good corporate ethics, due diligence and proper governance’ doctrines. I couldn’t have done it better myself.

    I do know this however. If the ‘blood money’ Tom is suggesting DOW now ponies up becomes a reality, by whatever creative funding tools the financial artisans can compose, darn little of it will find its way to the ones harmed. ‘Good money after bad’. I know this because I know India is one of the most corrupt and viral social, legal and governmental cesspools on the planet earth. Almost all jurists, lawyers and bureaucrats are indeed ‘jailable’ in terms of USA legal processes. All demand graft, bribes, favors, kickbacks and payoffs. It is estimated some $3 trillion USD is lost every year to India’s GNP due to corruption. (The Economist) You cannot get telephone, a passport, a driver’s license unless you pay off the appropriate government official. So, if the $1billion or so is delivered to India, and the siphon of illegality is applied from the top down, I would say $100 or so might be applied to the victims. Drop the idea Tom. No way. Not now, not in a decade will any DOW supplied funds reach the hapless victims of the tragedy. And once delivered, the snakes in the grass will come forth seething with greed and lust for more. Once in for a penny, DOW will be in for billions more and precious few pence will make it to those who need it. It will not happen in today’s India.

    However I applaud Tom’s altruism. I believe his heart is pure in his intent. I also believe when put in the context of really providing any real relief for the victims, it is a waste of time and effort. The discussion is indeed enlightening and as a whole, honest and intelligent in form. This is always good. Rekindling intelligent exchange is stimulating even though it is not Tom’s normal purpose within TMF confines. This is a step out of the box. Good. OK. Certainly makes for a good read.

    I also criticize the use of the Olympics as the form or a publicity tool for this issue. I know, I know. Some believe it is apposite to right a wrong at any place and at any time. I just believe otherwise. An appropriate time and place for everything, not the Olympics. I also believe DOW’s CEO was correct when he said DOW was not at Bhopal. They weren’t. UCC and Eveready were. The Indian government and the Indian investors were also. And, unfortunately for them, so were 20,000 or so Bhopal residents. The disgust at having DOW as an Olympic sponsor is misdirected. DOW’s board did not govern at Bhopal. We now say ‘guilt by association’? I say no.

    So, all this puts us right back where the thread begins. “how do ‘we’ provide for relief to the victims”? Yes I used ‘we’. In one of the above responses a respondent complains of attempts at being forced to feel culpable for an incident that occurred on foreign shores merely because the home office of the major shareholder resides in the USA and ‘we’ are USA citizens. And ‘we’ may be DOW stockholders. I say I agree with him. I should not feel, nor do I, feel ‘guilty’ about the incident. I feel sorrow for the victims but do not feel responsible because DOW is a US held company. Yes DOW bought UCC. Yes, they bought the GOOD AND THE BAD and now they must learn to deal with both. Sins of the Father, Sins of the Son issues. Again, here, Tom side steps legality and takes the ‘High Road’ of ‘good ethics’ and ‘do what’s right’. Or, What can DOW do? – What could DOW do? – What should DOW do? My retort to these questions are more broadly based.

    One must understand the CEO of DOW is charged with really one item. Simply, the aggrandizement of DOW Chemical, Inc. How he goes about accomplishing this feat is where Tom steps in and offers his advice. I say BRAVO Tom! You offer a path, a solution. But, the CEO has board members and stockholders and branding issues and profits and stock prices to consider. Tom has none of these and Tom does not offer any of ‘his money’ as assisted recompense. Tom suggests the CEO should pick up the flag of Righteousness, color its thread with blood money and tote the banner across the stage at the Olympics. Tom offers this will help DOW in the long run and DOW will be better off. I question all this as I ponder the plight of the victims. None of those individuals will be competing this Summer. I question if any will attend events in London. So, really, what SHOULD DOW do? Who really should help the victims? I believe DOW has been identified as they are the new owners with deep pockets. Even Tom offers a billion or so off the bottom line won’t throw the baby out with the bath water. I say ‘foul ball’ Tom.

    I believe I can summarize Tom and say he believes ‘DOW should pay’. OK, let DOW whip up a billion or so and pack it off to India. Boil has been lanced, let the healing begin. I think not. Legally, DOW is now off the hook. Court done, payment made, money gone. Results, victims in worse shape now than before. Now what? Indian mismanagement and graft didn’t make things turn out the way everybody wanted the first time, so, let’s go get some more money and do the same darn thing all over again. Open the wound and let the blood flow. “Take the high road and pay”. As I am sure the DOW CEO will offer, even the high road if fraught with danger and is frequented by bandits and is lined by legally egregious ditches. If that man steps back into the Bhopal quagmire, he and DOW will never emerge in any admirable form no matter what banner they carry into the pit. Just because they, (“we”-DOW) is a US company and is profitable, we assume they are culpable and since they have plenty of money, make them kick out some more bucks (blood money) and pay off the victimized. Here is where Tom and I go astray. Another pertinent question could be “How many times must we pay”? If India had come to DOW and said ‘here is our $500 million, you kick in $500 and come over here and clean up, we will protect you’ then I would be more willing to support DOW in any mutual reparation effort. The idea some people have is that ‘others peoples’ money is good to spend. This refrain echoes throughout the US Congress. I mean, it is not my money, why not spend it?

    No solution to Bhopal will be useful until the Indian government can make meaningful improvements and this will not happen within my life time. They are too corrupt and all money sent to help victims as managed by Indian officials will be squandered. So, what is my solution? Regretfully, I have none that will help those poor, poor people. If a funded entity outside the auspices of the Indian government can be concocted, and if they can be legally protected, then something might be done. But without full legal protection, the first foot on the ground on the first day of the remediation of the site or clinic construction will be the first day legal battle lines will be drawn in India and the available resources that were sent to help the victims will be channeled to the greedy.

    God Bless those poor victims. I do believe suffering should be addressed. I do believe India doesn’t want to help their own citizens as they allow the graft and illegality to be rampant. In this environment I believe the USA, DOW, “we” have little role to play. Under current conditions more of ‘our’ money will not address the suffering in Bhopal. Here again is where Tom and I differ. I do not have an optimistic view as to the likelihood of any money provided from any source will be utilized to provide relief to those ravaged in Bhopal.

    Let me be clear. Money from any source sent to India for Bhopal victims will be squandered within the corruption, graft and greed that is India. Who this money comes from will only be identified as a ‘good Corporate Neighbor’ even though the shareholders have had their pockets picked. If it would be DOW, then they can only place battle ribbon on their worldwide standard, walk away feeling good about themselves while the victims continue their plight throughout the remaining days of their lives. Many believe our American dollars do wonders overseas. Dream on.

    The situation reeks. India reeks. Many believe corporate America owes the victims this blood payment to make Americans feel good and ‘look good’ on the world stage. If DOW management believes it will help DOW’s world corporate imagine, then, let the cash flow, but we must be real in our expectations. Little real assistance will arrive at the site and little real relief will be delivered to the victims.

    Welcome to India my friends. Oh, by the way, did you slip my cousin a $20 at the door?

  • Report this Comment On August 06, 2012, at 11:10 AM, prginww wrote:

    I really think those posters who made comments like, "Human life cannot have a different value depending on where you live" should have all of their comments automatically thrown in the trash heap. Seriously, devoish says, " The cost of living and healthcare is not that much lower in India." (Have you heard of medical tourism? There is a reason "rich" Westerners go to India for healthcare...)

    OMG...let me spell it out, OH MY GOD! The cost of living and healthcare is dramatically different in New York (the city) and rural America! The cost between NYC and rural India are not even comparable. Period. The fact you can think this wholly invalidates ANY other argument (or thought) you might make.

    To Tom G and the other feel gooders: India cannot keep the lights on. You think they are the "solution" to helping these victims? These things can be fixed when there is a will. The Indian government has no will...only corruption and graft. India *could* be great....

  • Report this Comment On August 07, 2012, at 10:48 PM, prginww wrote:

    Really? 23 years and $600 million in settlements and set asides for future claims later? What would that be worth today, assuming conservative investing at 5%? Hell, what would 1/2 of that be.

    There is no doubt that Bhopal was a tragedy, but your false sense of outrage serves no purpose.

    Did a corrupt government fritter it all away? UC and its successors have held up their end and should be free from any further liability.

    Here is what Dow can do:

    1. Buy back all outstanding stock.

    2. Liquidate all assets - convert everything to cash.

    3. Give the cash to the Indian goverment.

    Would that make the Fools happy? Would the victims see a single dollar? Can you say "No?"

    And sustainability? So called green and sustainable solutions paid for at exorbitant prices only COST jobs. Legislating it is the most egregious form of crony capitalism. Great Britain will only be further in the hole when the games are over. Thank God they had the sense to use as many existing venues as possible. (That's green, right?)

    Who are you guys reading? John Kenneth Galbraith and John Maynard Keynes? Al Gore and Jimmy Carter?

    Most of us monitor the Fool for common sense, and not some unjustified, lame sense of guilt.

    Snap out of it!

  • Report this Comment On August 13, 2012, at 3:52 PM, prginww wrote:

    Dow is merely using the President's logic: "We didn't build that ... somebody else made that happen!"

  • Report this Comment On August 22, 2012, at 1:54 PM, prginww wrote:

    Liability now belongs to India. I don't think Dow Chemical has any more responsibility, ethically or otherwise, for the incident than the US government. A tragedy? Yes. But tragedies happen every day. If bleeding hearts and goody-two-shoes want to do something, pony up your own money. Talk with Warren Buffett and George Soros and Bill Gates, maybe they will help. I don't own Dow Chemical, but if I did I would not want them becoming tools of the bleeders at my expense. Company wealth should be returned to shareholders for them to decide what they want to do with the money. After all, what Dow would spend on India's problems would be money NOT spent on other uses that share-holders feel is more important -- maybe their own child's health. That's what has happened with government -- It's easier (more successful?) to go to government with a request for my money to support a cause than it is to come to me. As a result, a lot if very "important" projects get paid for at my expense, but not necessarily the one's that I think are most important. When you advocate for the "seen" you need to consider the "unseen". Read Frederic Bastiat if you want an economic lesson.

  • Report this Comment On September 08, 2012, at 4:09 PM, prginww wrote:

    I know I am coming late to this discussion but there are several issues I feel I have to address. Also, I am a DOW shareholder and absolutely disagree with the whole premise of this article.

    It has already been pointed out that the authors want to have it both ways, they don't want to get into the "legality" of any possible DOW liability but they trumpet the fact that DOW bought both the assets and liabilities of UCC. Since the legal issue was settled by the Indian government in 1991, 10 years before DOW acquired UCC, DOW has no connection to Bhopal and this discussion is moot. If you do not not like the settlement or the ineffective way the funds were used, take it up with the Indian government. I'm sure they will be happy to listen to your complaints.

    The authors continually ask for proof that the plant was sabotaged (to include the name of the saboteur) and yet blithely assert that UCC bribed and coerced Indian government officials. Where is your proof? I would like to see the names, dates and payments. If you do not have proof, don't make that assertion.

    The authors' statement that Reuters "[has] no dog in any fight here" is simply naive. Reuters survives by publishing stories (note that I did not use the term "news") and Reuters knows that controversy sells stories. Did Chris Wickham and Keith Weir ask the Indian Olympic team how they could represent a government that performed so poorly in this situation? No, they did not. They targeted DOW simply because it is easy to portray a corporation in a bad light.

    Finally, for all who rail against the "unfairness" of the $470 mil payout and state that such a settlement would not be acceptable in the US. You are absolutely correct, such a small payout would not be acceptable, nor would I allow my government or the courts to accept such a small settlement. Or if they did, I would do my best to hold the officials involved to account. I recommend that you do the same with the Indian government.

    All in all the Bhopal incident was a tragedy but the Indian government has settled UCC's (and subsequently DOW's) involvement in this issue. I recommend that a Bhopal relief charity be nominated for the next FoolAnthropy campaign, but I disagree with any effort to make DOW a scapegoat.

  • Report this Comment On November 07, 2012, at 1:15 PM, prginww wrote:

    Dear chchewy,

    I have arrived at this discussion even later than you!

    Firstly, I would like to say that I am very pleased to hear your suggestion that a Bhopal relief charity be nominated for the Foolanthropy campaign.

    this is an excellent idea and I would like to propose us, the Bhopal Medical Appeal.

    We fund clinics where anybody affected by the gas, or the ongoing contamination, can get free, first-class health care.

    Secondly, I would like to gently point out an error in your post. As a Dow investor with a conscience you need to be aware that Union Carbide are, in fact, still wanted on criminal charges in Bhopal. These are of 'culpable homicide, not amounting to murder'.

    The Madhya Pradesh courts summonsed Dow to explain the non-appearance of Union Carbide to these criminal proceedings back in 2005.

    Dow used an Indian subsidiary (Dow Private India Ltd) to block this summons using a stay order.

    BUT, this stay order has now been lifted and we expect Dow to be properly summonsed by the Madhya Pradesh criminal courts any time now.

    I don't wish to comment on UCC bribing the Indian Government but it is quite easy to prove that Dow have done this in recent history- which may suggest these practices are endemic within Dow/ Union Carbide.

    Dow (Agro Sciences) are currently blacklisted by the Indian Agriculture Ministry for these practices.

    Dow was fined $325,000 by the New York SEC for making ‘improper payments’ to Indian officials in order to facilitate the registration of four pesticides.

    They were found guilty, in India, in 2010. In 2011 the registrations of various Dow products were cancelled.

    One of these products is the notorious Dursban which you will be aware has been banned in the US for many years.

    I would be happy to give you, or any other readers, as much more information as you need.

    For what it's worth, from an investment perspective, my opinion is that Dow are a very risky company to be investing in until they clean up their act.

  • Report this Comment On November 19, 2012, at 4:50 PM, prginww wrote:

    Ha ha. You lose.

  • Report this Comment On January 07, 2013, at 2:15 PM, prginww wrote:

    TOXIC TRAIN SAFETY - A First Responders Petition caused The Chlorine Institute to conduct a five-month study comparing the safety of secondary containment to the chlorine “C”-Kit for chlorine tank cars. The study proved secondary containment to be, by far, the safest technology for containing and preventing releases of chlorine gas. To see secondary containment - search “CHLORTANKER.”

  • Report this Comment On January 07, 2013, at 2:22 PM, prginww wrote:

    HazMat Experts and Firefighters petition Dow Chemical and Union Pacific for safe rail tank cars transporting gas chlorine. Secondary containment is a necessary improvement that must be implemented. See--PETITION C KIT for First Responders Comments.

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