US multinational The Dow Chemical Company (TDCC) has been issued with a summons(1), after a hearing of the Chief Judicial Magistrate’s Court in Bhopal, India, requesting it explain why it does not produce its’ wholly owned subsidiary, Union Carbide Corporation (UCC), to the criminal courts in Bhopal.
UCC faces the criminal charge of ‘culpable homicide not amounting to murder’, in respect of the 1984 Bhopal Disaster, and Dow is now directly involved in the criminal case.
US-based UCC and former Chairman, Warren Anderson, were charged in 1987 but have consistently refused to face trial. All efforts to extradite Warren Anderson have been unsuccessful. UCC continues to defy Indian jurisdiction, failing to abide by repeated summons to appear before the Bhopal criminal court. As a result, the criminal prosecution of Anderson and UCC has not, thus far, been possible.
In light of the recent US stance, on the extradition of whistleblower Edward Snowden,(2) the US Government faces accusations of double standards. India and the US maintain an extradition treaty but the US has refused to extradite UCC or Warren Anderson to India.
Dow were originally issued with the summons in January 2005 but used another wholly owned subsidiary, Dow Chemical International Private Limited (DCIPL) to appeal for a stay order on the summons- despite DCIPL earlier claiming that it “has no direct nexus either in terms of holdings or in terms otherwise with TDCC USA and/or UCC.”(3)
The illegal stay was lifted by the Madhya Pradesh High Court, on 19 October 2012, and an application was made, by the Bhopal Group for Information and Action, an on-the-ground Bhopal Survivor’s organisation, on 13 January 2013 at the CJM court to issue the summons directly to Dow’s Michigan HQ.
UCC has been a wholly-owned subsidiary of The Dow Chemical Company (Dow) since 2001 and has consistently denied any responsibility for UCC’s liabilities in Bhopal.
But UCC is a wholly owned subsidiary of Dow and its board of directors is appointed by Dow. If Dow wishes UCC to take any steps, with regard to its business, it can require UCC to take those steps(4) and the courts now clearly believe that Dow has a case to answer regarding UCC’s refusal to answer the criminal charge.
Dow famously maintains that Bhopal is a settled matter but the Indian Government does not agree:
“It is the official position of the Government of India that the previous settlement of claims concerning the 1984 Bhopal Gas Disaster between Union Carbide and Union of India has no legal bearing on or relation whatsoever to the environmental contamination… Pursuant to the ‘polluter pays’ principle recognized by both the United States and India, Union Carbide should bear all the financial burden and cost for the purpose of environmental clean-up and remediation. The Union of India and the State Government of Madhya Pradesh shall not bear any financial burden for this purpose.”(5)
On 7 June 2011 Mohan P.Tiwari, Chief Judicial Magistrate, Bhopal, stated:
“Mr. Warren Anderson, UCC USA and UCC Kowloon Hong Kong are still absconding and therefore, every part of this case (Criminal File) is kept intact along with the exhibited and unexhibited documents and the property related to this case, in safe custody, till their appearance.”
Colin Toogood, Bhopal Medical Appeal spokesman said:
“It is a major breakthrough to, finally, have this summons issued to Dow’s HQ and we trust that the US Government will now ensure that Dow and Union Carbide comply with the process of the law. BP was, quite rightly, held to account for the 2010 Deepwater Horizon Disaster, and levied the largest criminal fine in US history. Union Carbide is a proclaimed absconder from the Indian Courts and we would like to see it, along with its owner Dow Chemical, pursued with similar vigor.”
“To demonstrate the disdain with which Dow holds the Indian legal system, the merger agreement Dow presented to the New York Securities and Exchange Commission actually denies there is an existing criminal case outstanding against Union Carbide”.(6)
Barry Gardiner MP, Chair, Labour Friends of India said:
“I am delighted that the Dow Chemical Company has been summonsed. I trust that the court will force them to explain whether they have in fact been shielding from justice a corporation guilty of “culpable homicide not amounting to murder.” The tragedy is that it has taken almost 30 years to get to this point.”
Balkrishna Namdeo of Bhopal Survivors Organisation BGPNPBSM said:
“While Union Carbide does not do business in India, Dow Chemical does through its many Indian subsidiaries. It can not afford to disregard the orders of a Criminal Court as Union Carbide has been doing all these years.”
Navin Shah AM, Assembly Member for Brent and Harrow, had a motion passed in the Assembly condemning Dow Chemical. Mr.Shah said:
“It is high time that Dow Chemical was made accountable for the actions of its subsidiary Union Carbide. Union Carbide has been an absconder from justice for over two decades and this summons to Dow is a major step towards justice:
Bianca Jagger, from Bianca Jagger Human Rights Foundation said:
I applaud the decision of the Bhopal Chief Judicial Magistrate’s Court asking the Dow Chemical Company (TDCC) to produce the Union Carbide Corporation (UCC) at a criminal court.
A warrant was issued for CEO Warren Anderson in 1987, but he has refused to face trial and the US has refused to extradite him. The seven former employers of Union Carbide India Limited convicted of criminal negligence in 2010 were all Indian nationals, sentenced to two years each. Dow has yet to satisfactorily answer even the most basic questions about their conduct. The people of Bhopal have suffered an appalling miscarriage of justice.
It is my hope that the decision by the Chief Judicial Magistrate’s Court is a step towards achieving that long-awaited justice – that the people of Bhopal will have their day in court and justice will be served, at long last.
Only hours after the Bhopal tragedy in 1984, nine individuals and three corporations were accused. These included 8 Indian individuals working for Union Carbide India Limited (UCIL), and Warren Anderson, a US national and Chairman of UCC at the time. The companies accused were Indian-based UCIL, its US-based parent company UCC, and UCE, a wholly owned subsidiary of UCC based in Hong Kong but incorporated in the USA. Arrests were made swiftly afterwards, although charges were only pressed in 1987.
In 2005, the Bhopal Court issued a summons for Dow to attend the proceedings and give account as to why it should not produce its fully owned subsidiary and proclaimed absconder, UCC, in court. Dow’s subsidiary in India, Dow Chemical India Private Ltd, successfully applied for the summons to be stayed.
In 2010 Seven Indian nationals, who formerly worked for UCIL, were found guilty by the Bhopal Court, on a lesser charge of causing death by negligence, a charge that carries a maximum two-year sentence.
1. Timeline of Summons to Dow Chemical (full timeline below)
On February 26 2004 Bhopal Group for Information and Action (BGIA) filed an appeal in the Central Judicial Magistrates Court (CJM) court, Bhopal, asking that The Dow Chemical Company (TDCC) be summoned to show cause why it does not produce its wholly owned subsidiary, the Union Carbide Corporation-USA (UCC) before the Bhopal court in the ongoing criminal case. UCC-USA has been a proclaimed absconder, since February 1992, from charges originally filed in December 1987.
On January 6 2005 CJM, Bhopal ordered that summons be issued to TDCC, USA. A wholly owned subsidiary of Dow’s, Dow Chemical International Private Limited (DCIPL), filed an appeal in the MP High Court and, in response to this appeal, Justice Rakesh Saxena granted a stay on issuing of summons against TDCC, USA on March 17 2005.
This was an illegal order (see also point 3, below) as DCIPL was neither aggrieved nor affected by the Bhopal CJM order of January 6 2005. The stay was finally lifted by the MP High Court on 19 October 2012. Following the vacation of the stay BGIA moved an application at the CJM court for issuing summons to TDCC on 13 January 2013.
2. US Double Standards Over Extradition. US National Security Council spokeswoman Caitlin Hayden issued a statement, on Monday June 24th, criticizing Hong Kong authorities, as well as the Chinese government, for allowing Edward Snowden to flee the country:
“We are disappointed by the decision of the authorities in Hong Kong to permit Mr. Snowden to flee despite the legally valid U.S. request to arrest him for purposes of his extradition under the U.S.-Hong Kong Surrender Agreement. We have registered our strong objections to the authorities in Hong Kong as well as to the Chinese government through diplomatic channels and noted that such behavior is detrimental to U.S.-Hong Kong and U.S.-China bilateral relations.”
White House Press Spokesman Jay Carney said this:
“The Chinese have emphasized the importance of building mutual trust, and we think that they have dealt that effort a serious setback. If we cannot count on them to honor their legal extradition obligations, then there is a problem. And that is a point we are making to them very directly.”
3. Illegal Stay Order on Summons to Dow. In February 2005 Mumbai based Dow Chemical International Private Limited (DCIPL) filed an Appeal before the M.P. High Court seeking quashing of the order of CJM, Bhopal dated 6 Jan 2005. (Case No. MCRC 1377/2005 filed in MP High Court.
On 17 March 2005 High Court Judge (Mr. Rakesh Saxena) granted stay on the summons against The Dow Chemical Company, USA and listed the matter for 27 April 2005 despite DCIPL previously claiming that it “has no direct nexus either in terms of holdings or in terms otherwise with TDCC USA and/or UCC.” [DCIPL’s affidavit before CJM, Bhopal, dated 03 September 2004].
Given that DCIPL was not a party aggrieved or in any way affected by the 6 January 2005 order of the Bhopal CJM, there is no legal basis for entertaining DCIPL’s Appeal let alone granting a stay on the Bhopal CJM’s order.
4. The Relationship Between the Dow Chemical Company and Union Carbide Corporation. A parent company may be held liable for the debts of its subsidiary in circumstances which vary between legal systems and the statement, often made by Dow, that “Union Carbide remains an entirely separate corporate entity to Dow Chemical” is not, of itself, a sufficient statement of law to divorce Dow from UCC’s legal liabilities.
Dow’s relationship with UCC is much closer than a simple parent/subsidiary relationship. UCC’s board of directors is appointed by Dow and Dow manages all major aspects of UCC’s business: legal, accountancy, treasury, procurement, human resources, environmental, health and safety, management, etc. For all material purposes Dow runs UCC. This means that not only is Dow able to control UCC indirectly through its share ownership as a parent, it is able to control UCC directly because it manages all its business, including crucially its legal affairs. As a consequence, Dow cannot say that it is not responsible for UCC’s current behaviour when that behaviour is controlled, directly and indirectly, by Dow itself.
Dow’s and UCC’s operations are so intertwined that it is difficult to separate the two. UCC’s submissions to the US Securities and Exchange Commission present its business as a “component” of Dow’s business. This means that a distinction between the two companies exists only in terms of formal “corporate personality”. In commercial and reporting terms the two companies are one.
If UCC refuses to compensate victims of the Bhopal disaster, pay for the environmental clean-up, or submit to the jurisdiction of the Indian Court in criminal proceedings, those are all decisions for which Dow has direct management control and therefore responsibility.
5. Official Indian Government Position. An Indian government letter, dated June 8, 2004, to the Lower District Court, Manhattan, in a case focusing on the remaining chemical contamination in Bhopal, stated:
“It is the official position of the Government of India that the previous settlement of claims concerning the 1984 Bhopal Gas Disaster between Union Carbide and Union of India has no legal bearing on or relation whatsoever to the environmental contamination… Pursuant to the ‘polluter pays’ principle recognized by both the United States and India, Union Carbide should bear all the financial burden and cost for the purpose of environmental clean-up and remediation. The Union of India and the State Government of Madhya Pradesh shall not bear any financial burden for this purpose.”
6. Dow Merger Agreement to New York SEC Denying Criminal Case. The merger agreement between Dow and UCC denies that any pending criminal prosecution exists against UCC. Article V of the Merger Agreement 214 states: “there are no (i) civil, criminal or administrative actions, suits, claims, hearings, investigations or proceedings pending or, to the actual knowledge of its executive officers, threatened against it or any of its Subsidiaries… except for those that are not, individually or in the aggregate, reasonably likely to have a Material Adverse Effect on it.”
214 Submitted with the Schedule 13D, as well as in other public filings before the Securities and Exchange Commission.
TIMELINE- The criminal case against Union Carbide Corporation and the summons against the Dow Chemical Company.
1 December 1987
Central Bureau of Investigation (CBI) files charge sheet against Union Carbide Corporation (USA), Warren Anderson and ten other accused including Union Carbide (Eastern) Hong Kong, and Union Carbide India Limited.
1 February 1992
Chief Judicial Magistrate, Bhopal proclaimed UCC (USA) as an absconder and ordered UCC to present itself before the CJM on 27/3/1992
30 March 1992
Chief Judicial Magistrate, Bhopal orders confiscation of Union Carbide Corporation’s properties in India– its 51 % shares in Union Carbide India Limited.
6 February 2001
Union Carbide Corporation merges with The Dow Chemical Company becoming 100% owned subsidiary of The Dow Chemical Company, USA.
26 February 2004
Bhopal Group for information & Action (BGIA) file an application before the Chief Judicial Magistrate, Bhopal asking that the Court issue a Letter Rogatory for International judicial assistance from the United States Department of Justice to serve summon/ notice/ warrant upon the Head Quarters of The Dow Chemical Company [TDCC] at Midland, Michigan, USA to produce proclaimed absconder accused Union Carbide Corporation in the criminal trial on the December 1984 Bhopal disaster.
BGIA filed further application at the CJM court
10 September 2004,
BGIA filed additional submission at the CJM court
6 January 2005
Chief Judicial Magistrate passes order to issue summons against The Dow Chemical Company (TDCC), Midland USA, REQUIRING DOW CHEMICAL COMPANY, USA TO STATE WHY IT SHOULD NOT BE ASKED TO PRESENT ABSCONDING ACCUSED UNION CARBIDE CORPORATION IN THE ONGIONG
Mumbai based Dow Chemical International Private Limited (DCIPL) file an Appeal before the M.P. High Court seeking quashing of the order of CJM, Bhopal dated 6 Jan 2005. (Case No. MCRC 1377/2005 filed in MP High Court despite DCIPL previously claiming that it “has no direct nexus either in terms of holdings or in terms otherwise with TDCC USA and/or UCC.” [DCIPL’s affidavit before CJM, Bhopal, dated 03 September 2004].
17 March 2005:
High Court Judge (Mr. Rakesh Saxena) grants stay on summons against The Dow Chemical Company, and lists matter for 27 April 2005,
Given that DCIPL was not a party aggrieved or in any way affected by the 6 January 2005 order of the Bhopal CJM, there is no legal basis for entertaining DCIPL’s or granting a stay on the Bhopal CJM’s order.
27 April 2005
Justice U.C. Maheswari approves Stay on summoning TDCC and extends it till further orders.
8 July 2005
Justice Ajit Singh approves Stay on summoning TDCC and extends it till further orders.
18 August 2005
High Court’s Order directs that Notices be issued to all applicants within a week. No notices were ever served to Bhopal Group for Information and Action- the original applicants.
15 February 2006
Judge A.K. Shrivastav continues Stay on summoning TDCC but asks the matter to be listed after four weeks for final hearing.
The case is listed several times for Final hearing as per the MP High Court website but no hearing takes place before July 2012.
Case goes to following judges for final hearings:
Sugandhilal Jain; Suresh Chandra Sinho; P,K. Jaiswal; U.C. Maheshwari; M.A. Siddiqui; Rakesh Saxena; Tarun Kumar Kaushal; G.S. Solanki; N.K. Gupta; R.C. Mishra
17 September 2009
Bhopal Group for Information and Action file application before MP High Court for urgent hearing
21 June 2010
Group of Ministers (GOM) meeting, following conviction of Indian accused (UCIL), GOM stipulates that timeline for pursuing UCC and/ or successor company would be 14 August 2010. Ministry of Law and Department of Chemicals and Petrochemicals on the advice of Attorney General would move on this matter.
“Separately CJM Bhopal issued summons on 6.1.2005 to Dow Chemicals Company, US. Subsequently the company filed an appeal in the High Court and on 17.3.2005, the High Court stayed the order issuing summons.
The liability of Dow Chemicals Company is being contested in these and other proceedings by the said company. It is essential that the question of liability of Dow Chemicals Company should be first settled before any proceedings can be taken against the company.
Hence, GOM recommends that Ministry of Chemicals and Fertilizers and CBI may be directed to file appropriate applications/motions before the Courts concerned and request the courts, especially the High Court to expeditiously decide the question of liability of Dow Chemicals Company and/or any other successor to UCC/UCIL. Once this question is decided the various legal proceedings involving Dow Chemicals Company and any other person/company found liable can be taken forward.”
21 September 2010
Solicitor General of India (Mr. Gopal Subramanium) states:
“In my opinion it does not appear necessary to file a separate application. Since the CBI is a party, it would be appropriate if submission is urged by the CBI in the said application in accordance with instructions from the Central Government.”
18 March 2011
Mr. Rakesh Aggarwal, Dy Inspector General of Police, CBI, AC.I, New Delhi writes to the Secretary, Department of Legal Affairs seeking clarification on the opinion of Attorney General.
“The CBI wanted to know the nature of the application that has to be filed in the High Court in terms of the advice by the Solicitor General that the same is to be “in accordance with instruction from the Central Government”
21 March 2011
Solicitor General clarified CBI query and writes:
The expression “in accordance with instructions from the Central Government” is intended to means such directions as are issued by the Central Government parens partria, in the larger interests of Public Justice including the victims.
Thus I conclude that
a) CBI may request the High Court to take up the matter at the earlier and determine the liability of M/s Dow Chemicals.
b) Urge necessary submissions in this regard
Since the CBI is the prosecution agency, and if the matter can be mentioned before the Court, that would suffice. If it becomes imperative for the Court to receive any formal application seeking early hearing, then the same may be filed. There is no need for any further application since the Trial Court had issued notice and the High Court is seized of the mater
24 March 2011
GOM meeting held and a copy of the opinion of the Solicitor General given to representative of CBI.
22 September 2011
Representatives of five Bhopal survivor organizations write to Director, CBI, GoM on Bhopal and Prime Minister regarding urgent intervention in the matter of summoning The Dow Chemical Company, USA as the 100 % owner of absconding UCC, USA in the criminal case on the Bhopal disaster.
3 November 2011
Representatives of five Bhopal survivor organizations meet Mr. Prabodh Kumar, HOZ of Anti Corruption Unit I urging CBI to file an urgent application for vacation of stay against summoning The Dow Chemical Company. As per the GOM’s March 2011 decision, the application should have been filed by August 2010
2 January 2012
CBI files the application for urgent hearing in the MP High Court.
7 March 2012
DCIPL files application for adjourning case. Granted by the High Court. While BGIA though its counsel Mr. Avninder Singh opposes adjournment, CBI’s counsel does not oppose DCIPL’s application for adjournment.
26 March 2012
DCIPL files application for adjourning case. Granted by the High Court. BGIA opposes adjournment but not CBI
9 May 2012
DCIPL files application for adjourning case. Granted by the High Court. BGIA opposes adjournment but not CBI
5 July 2012
DCIPL files application for adjourning case. Granted by the High Court. BGIA opposes adjournment but not CBI
23 August 2012
DCIPL filed an application for adjourning the case. BGIA opposes the adjournment but not CBI. Justice G S Solanki directs that the matter be set for final hearing on September 13.
13 September 2012
Justice G S Solanki hears matter and reserves judgement.
19 October 2012
Order vacates Stay on summoning TDCC, USA before the court of CJM.
19 Jan 2013
MBGIA moves application in Chief Judicial Magistrate Court, Bhopal for starting procedure to send summons to Dow Chemical Company
23 February 2013
BGIA members argue in the matter on why summons needs to be reissued to The Dow Chemical Company in the Chief Judicial Magistrate Court
5 March 2013
BGIA argued the matter as the a new CJM was appointed
20 March 2013
BGIA presented its arguments on summoning to CJM, Bhopal
2 April 2013
CBI presented its status report on extradition of Warren Anderson and matter of summons postponed til next hearing.
24 May 2013
BGIA presents arguments on summoning to CJM, Bhopal
6 June 2013
5 July 2013
BGIA files additional submissions and argues the matter
23 July 2013
Case is listed for orders