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US Chemical Giant Faces Hurdles in India Due to Bhopal Gas Leak Legacy

Dow Chemical, the world's second-largest chemical manufacturer, is facing difficulties trying to expand in India. The company is haunted by the 1984 leak of methyl isocyanate, one of the most lethal chemical compounds invented by man, from a Union Carbide pesticide factory in the Indian city of Bhopal. Dow bought Union Carbide in 2001 and many Indians want Dow to take responsibility for the 1984 disaster before it is allowed to increase its operations in India. VOA correspondent Steve Herman reports from Bhopal.

A lingering stench hovers over Dow Chemical's attempts to become a major player in the booming Indian market. Many Indians hold Dow responsible for the 40 tons of methyl isocyanate that leaked in Bhopal on December 3, 1984, and for not paying adequate compensation for the thousands killed and disabled.

Despite repeated requests, Dow declined to provide a company official for an interview. The company's Web site states that because it did not own or operate the Union Carbide plant at the time of the disaster, Dow bears no responsibility for it.

That argument does not wash with many people here.

Yawar Rashid is an aristocrat and businessman of the Muslim royal dynasty that ruled Bhopal for two centuries.

"People know the association of Union Carbide and Dow, so people would definitely be upset because people are very emotional about this subject in Bhopal," Rashid said.

The memory of what happened early that morning in 1984 remains fresh in the mind of Dr. H.H. Trivedi. Rushing to a hospital emergency room to treat countless patients suffering acute respiratory syndrome, the internist himself was exposed to the toxic gas, and he still suffers from shortness of breath.

"As a physician still I feel it - what is the meaning of being a doctor when I am not able to do justice to the patient? I'm helpless - helpless and depressed. Sometimes it makes me really feel sad," Dr. Trivedi said.

Jawaharlal Nehru University Professor Kamal Mitra Chenoy has long criticized the lack of accountability for the tragedy. He says Dow is the only entity the Bhophal victims can look to for compensation.

"Union Carbide sold out, and therefore they ran away from their liability," Prof. Chenoy noted. "The government of India has put the entire onus on Union Carbide, which no longer exists. So the only entity that can take any responsible is Dow Chemical. That is why there is this anger with Dow Chemical. There is no one else."

Activists have urged engineering graduates and students from the country's elite institutes of technology to refuse job interviews with Dow on moral grounds.

Chenoy says at some of the universities Dow, which has annual sales of nearly $50 billion and employs 43,000 people worldwide, is finding doors closed to its recruiters.

"Bhopal has become a symbol of dangerous foreign technology and carelessness towards the victims of a tragedy," Prof. Chenoy said. "So it has enraged a lot of people in India, and that is why these young people are moved by the dimensions of the tragedy."

Dow has said it wants to triple its investment in India over the next couple of years, to the $1 billion level. The company plans to open a regional research and development hub this year in Pune, which is eventually to handle half of the company's global R & D.

Dow also wants to open new manufacturing plants in India. Last year, it discussed a multi-billion-dollar joint venture with a major Indian conglomerate, Reliance Industries.

Here at the site of the 1984 disaster, there has yet to be a full cleanup. Union Carbide's old pesticide manufacturing units are slowly rusting. Cattle and goats graze on the contaminated property, which is now under state control.

Activist groups say the groundwater, which is used for cooking and bathing by residents of a nearby slum, is toxic.

A half billion-dollar settlement, approved by India's Supreme Court in 1989 and which the chemical company and its Indian subsidiary paid promptly, absolved Union Carbide of further civil liability. The company also agreed to pay for a hospital and fund it for eight years.

But critics say by the time the award trickled down to those permanently disabled by the gas, the average claimant received only a few hundred dollars.

Union Carbide, some of its directors - including former chairman Warren Anderson - and the company's Indian subsidiary still face criminal charges of causing death through negligence. But the case has languished in the Bhopal District Court since 1992.

Union Carbide and Dow have refused to acknowledge court summonses. Critics say India's government appears reluctant to pursue the case.

Being blocked from a major developing market like India could adversely affect Dow's business. Business consultants say it is essential for multi-national corporations to move much of their operations to lower-cost centers in the developing world. If Dow is not able to expand in India, one of the world's largest and fastest-growing markets, it could be at a disadvantage vis-a-vis its competitors.

International activists such as Tim Edwards, a trustee of the Bhopal Medical Appeal, say Dow will face stiff resistance to its expansion until it takes responsibility for the gas released over the central Indian city.

"It's difficult to see how Dow is going to be able to expand into India if it's unable to hire technical and engineering staff locally," Edwards said. "If Dow can't expand into India then its plans to save its business in relation to rising energy prices are going to be in severe jeopardy."

Dow itself is under fresh scrutiny here. India's Central Bureau of Investigation raided offices of a Dow subsidiary five months ago. The raids followed allegations of bribes being paid to Indian regulatory officials to facilitate licenses for Dow pesticide products. Dow last year paid a $325,000 penalty to the U.S. Securities and Exchange Commission to settle an S.E.C. investigation into those same payments.

Dow has also garnered some strong allies here, including corporate titans of the Tata and Reliance conglomerates, and some top government officials including Commerce Minister Kamal Nath.

They are urging an out-of-court compromise for the Bhopal claims, in order to pave the way for new investment by Dow in India.