A Legacy Acknowledged
In response to growing public outrage over its handling of the Bhopal disaster's legacy, Dow issued a statement on December 3, 2002 explaining why it is unable to more actively address the problem. The statement went to thousands of journalists and others. (For selected responses, click here.)
"We are being portrayed as a heartless giant which doesn't care about the 20,000 lives lost due to Bhopal over the years," said Dow President and CEO Michael D. Parker. "But this just isn't true. Many individuals within Dow feel tremendous sorrow about the Bhopal disaster, and many individuals within Dow would like the corporation to admit its responsibility, so that the public can then decide on the best course of action, as is appropriate in any democracy.
"Unfortunately, we have responsibilities to our shareholders and our industry colleagues that make action on Bhopal impossible. And being clear about this has been a very big step."
On December 3, 1984, Union Carbide--now part of Dow--accidentally killed 5,000 residents of Bhopal, India, when its pesticide plant sprung a leak. It abandoned the plant without cleaning it up, and since then, an estimated 15,000 more people have died from complications, most resulting from chemicals released into the groundwater.
Although legal investigations have consistently pinpointed Union Carbide as culprit, both Union Carbide and Dow have had to publicly deny these findings. After the accident, Union Carbide compensated victims' families between US$300 and US$500 per victim.
"We understand the anger and hurt," said Dow Spokesperson Bob Questra. "But Dow does not and cannot acknowledge responsibility. If we did, not only would we be required to expend many billions of dollars on cleanup and compensation--much worse, the public could then point to Dow as a precedent in other big cases. 'They took responsibility; why can't you?' Amoco, BP, Shell, and Exxon all have ongoing problems that would just get much worse. We are unable to set this precedent for ourselves and the industry, much as we would like to see the issue resolved in a humane and satisfying way."
Shareholders reacted to the Dow statement with enthusiasm. "I'm happy that Dow is being clear about its aims," said Panaline Boneril, who owns 10,000 shares, "because Bhopal is a recurrent problem that's clogging our value chain and ultimately keeping the share price from expressing its full potential. Although a real solution is not immediately possible because of Dow's commitments to the larger industry issues, there is new hope in management's exceptional new clarity on the matter."
"It's a slow process," said Questra. "We must learn bit by bit to meet this challenge head-on. For now, this means acknowledging that much as it pains us, our prime responsibilities are to the people who own Dow shares, and to the industry as a whole. We simply cannot do anything at this moment for the people of Bhopal."
For selected responses to this press release, click here.