NYT’s Incomplete Bhopal Story

The paper raises questions it doesn't answer

The New York Times has an interesting page-one story today about the legacy of pollution at the Union Carbide plant in India, twenty-three years after the worst industrial disaster in history.

But while it reports on the Indian government’s haplessness and what we’d call criminal negligence, the paper skims over the business angle and lets Dow Chemical, which now owns Union Carbide, off the hook too easily. It also doesn’t really explain the government’s inaction.

First a little background. In 1984, more than 3,000 died in their sleep after the Union Carbide pesticide plant in Bhopal, India, released forty tons of poisonous gas into the air. The Times says thousands more may have died later from the effects.

But there are still hundreds of tons of toxic waste on the abandoned site that Union Carbide apparently didn’t clean up and which the government has barely touched. That’s filtered into the water table and polluted drinking water and the soil.
The question now is who should pay for the cleanup? The Times says activists want Dow to pay, though government officials are afraid the company will cut back its investment in India if they move against it. And no wonder:

In a letter to the Indian ambassador to the United States in 2006, the Dow chairman, Andrew N. Liveris, sought assurance from the government that it would not be held liable for the mess on the old factory site, “in your efforts to ensure that we have the appropriate investment climate.”

So why doesn’t the government just clean it up anyway? No money? The Times doesn’t say.

And it unfortunately leaves the question of Dow’s liability and responsibility hanging, giving it the last word on whether it should have to clean up the site, which it turned over to the government ten years ago. Why, and what did that deal entail? We’re not told.

Dow, based in Michigan, says it bears no responsibility to clean up a mess it did not make. “As there was never any ownership, there is no responsibility and no liability—for the Bhopal tragedy or its aftermath,” Scot Wheeler, a company spokesman, said in an e-mail message.

Say what? Last we knew, when companies buy other firms they take on their assets and liabilities. Look at why Bank of America analysts and shareholders were so concerned with its purchase of Countrywide, and why JPMorgan Chase wanted the Federal Reserve to backstop its liability with Bear Stearns. It makes no sense to us that Dow wouldn’t have to pay to clean up a disaster that one of its units created.

Maybe Dow somehow protected itself against the Bhopal liability when it bought Union Carbide seven years ago. The Times doesn’t tell us and doesn’t report anything from, say, an independent analyst on whether Dow is liable for the cleanup.

In not doing so, the Times leaves a gaping hole in its report.

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Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu. Follow him on Twitter at @ryanchittum.