Criminal // Current TV

DOW Chemical re labelled and sold Union Carbide products to evade law

Dow and its affiliate companies, knowingly and willfully, sold products of Union Carbide Corporation (UCC) in India routing it through untainted companies by re-labeling them to subvert the asset attachment orders of Indian courts. TOI has accessed internal documents - emails, correspondence and memos etc - of Dow showing how the chemical giant decided to label UCC products and sell them in its name to evade taint and prosecution.

The documents show Dow continued to set the prices for UCC products in India, though it now claims UCC is a separate entity and it has no responsibility for the firm's liabilities for the 1984 Bhopal gas tragedy. Dow sold goods worth $24 million of UCC products in 1999 through one company alone. The correspondence indicates that there was a concerted and conscious attempt to create a firewall between Dow and UCC in public domain, and rebrand UCC as Dow's.

These documents were submitted as evidence by one such front company in litigation against Dow in a US Court, which remained buried in the records so far.

Dow has never claimed ownership over UCC's liabilities in India, and insisted that the latter is a separate legal entity. The Bhopal activists have demanded that the corporate veil between the two be breached by courts and the government to prosecute the chemical giant, which has also got embroiled in the controversy over sponsoring the London Olympics, 2012.

A mail from Dow Chemical Pacific Manager in April 2001 reads, "There was a big lawsuit with UCC in India in the past. UCC considered the case is closed but India's official and companies didn't think so. Presuming the product ships directly from USA to India, my suggestion is to selling the product under Dow legal entity with Dow label and document will be a good way to proceed."

Another email from Graham Fox, Dow Chemical regional GM for Middle East &Indian subcontinent, to Ravi Muthukrishnan, country manager, Dow Chemical International Pvt. Ltd. (Mumbai) in January, 2001, states, "As you will be aware, UCC have not sold directly to India since Bhopal and have used Mega Visa to handle many of their sales of specialty chemicals, some bulk chemicals and wire & cable products. They work across our Dow businesses and have some several million $ sales revenue as I understand it."

A third letter indicates that this was part of a well-thought out strategy to create a firewall between Dow and UCC after their merger. A Catherine Maxey, Public Affairs director at Dow, wrote in March, 2001, "Union Carbide Corporation is a wholly owned subsidiary of The Dow Chemical Company. UCC will not be issuing any more press releases, product announcements, price increases, etc. All business activities are done under the umbrella of a Dow business. We face the market as Dow. Reporters will be tempted to keep talking about Union Carbide. But we should discourage reporters from using the words Union Carbide, unless it's reference to a historical activity. There should be no need for a trade press reporter to refer to Union Carbide, as we face the market as Dow They should not call a product a "Union Carbide product." All products are sold as Dow products now. Any current or future activity of a business is done as Dow."

Another email reveals that Dow officials were making crucial decisions like price of UCC products.

An email from Arpana Mody, Dow India manager in June, 2001, reads, "We agreed on the following procedural steps for handling Mega Visa orders through Singapore: Mega Visa-Mumbai, after obtaining enquiry will refer to respective Business Managers in Dow-India for pricing. This will be for products where pricing is not standard and subject to change. After getting order from Mega Visa-Mumbai, Mega Visa-Singapore will place order on UCC-Singapore, under copy to respective Business Managers and Mr Ashish Mitra at Dow India for price approval."

Yet another email from a Dow manager says, "Since Megavisa Singapore is a dummy company who negotiates nothing and owns nothing, Dow India now would like to do the business with MegaVisa India direct." But the idea was shot down by higher ups in the legal department of the company, stating, "Country management and I are against this idea at the present time due to the threat of litigation and the protest incident of a couple of months ago."

The series of correspondence reveals the linkage between various Dow companies internationally, the use of `corporate veil' and their continued trading of UCC products in India after the courts here named it as a proclaimed offender and ordered its movable and immovable properties attached.

The Indian government in its curative petition has not asked the Supreme Court to breach the corporate veil between Dow and UCC.Dow and its affiliate companies, knowingly and willfully, sold products of Union... more