New Delhi – Almost three years after poisonous gases from a Union Carbide Company’s (UCC) manufacturing unit killed an estimated 15,000 individuals and left greater than half 1,000,000 critically in poor health within the Indian metropolis of Bhopal, a chemical buying and selling agency – Visa Petrochemicals Personal Restricted – was included in Mumbai.
Over the subsequent 14 years, Visa Petrochemicals turned a linchpin in an elaborate plan by American chemical large UCC to discreetly promote its merchandise in India whereas it evaded legal trial for spewing deadly gases that killed the residents of Bhopal on the midnight of December 2, 1984. A Bhopal court docket had declared UCC’s then-CEO Warren Anderson a fugitive and ordered that the properties and merchandise of UCC and its subsidiaries, all of which have been proclaimed offenders and absconders in India for not showing within the legal trial towards them, be seized.
Inner firm data, accessed by The Reporters’ Collective (TRC) for Al Jazeera, now reveal that UCC discreetly bought its merchandise to a number of companies owned by the federal and state governments, and a few massive personal firms. Amongst them was a purchaser from floor zero: a agency owned by the federal government of Madhya Pradesh, the state whose capital Bhopal noticed one of many world’s worst industrial disasters. The agency was a three way partnership companion in a cable firm that purchased UCC merchandise.
To create a discreet backdoor into India the place the general public noticed it because the satan of Bhopal and courts have been going after it, UCC and its associates floated three companies, one every in India, the US and Singapore. In its inside data, Carbide workers referred to as them “entrance” and “dummy” firms. At instances, they referred to those firms as their “prolonged arms”. These companies took orders from Indian prospects on UCC’s behalf, relabelled its merchandise, routed them via a number of ports and equipped them to prospects. The corporate bought supplies that went into the making of family merchandise starting from phone cables to paints.
UCC internally admitted that the dummy firms have been “a authorized requirement” to assist it maintain its “distance from India”. This admission was made in an inside marketing strategy for UCC to maintain promoting its items in India even after the Indian court docket had ordered the seizure of all its moveable and immovable property within the nation. The court docket didn’t explicitly declare the longer term sale of UCC merchandise unlawful. Nevertheless it had ordered that every one its property be seized, together with merchandise and items meant on the market.
The federal government firms that traded with UCC knew about this backdoor association, as UCC privately knowledgeable them when its entrance firm participated in tenders.
This backdoor association continued till 2002, a yr after American large Dow Chemical purchased all property of Carbide for $9.3bn. The interval noticed Union governments led by each the primary Indian events, Congress and Bharatiya Janata Get together (BJP).
Between 1995 and 2000, the corporate bought greater than 55,800 tonnes of wires and cables within the Indian market, in response to data. In 1999 alone, the corporate bought merchandise value $24m via this association.
Whereas media in India had reported that Dow relabelled UCC’s merchandise and bought them within the nation via a entrance firm for a yr, the group’s elaborate discreet channels – the community of entrance and dummy firms – and knowledge on UCC prospects, together with authorities firms that knowingly purchased merchandise via this shadowy channel, had been buried to date. Info on the individuals behind the dummy firms and their workings – lively for nearly 14 years – is being revealed for the primary time.
The fountainhead of those revelatory data are paperwork submitted in a US court docket listening to when Dow, UCC and its dummy firms bought into litigation over the pricing of merchandise within the early 2000s and submitted proof of their relationships.
The collective despatched detailed queries to UCC and Dow however didn’t obtain a response.
Deadly enterprise
It was the dying of a technician from phosgene poisoning on a chilly Christmas eve in 1981 that first foretold an impending disaster and revealed cracks within the UCC manufacturing unit in Bhopal. UCC’s international income had plummeted 90 % within the three years previous the catastrophe. Its India unit might promote lower than half its manufacturing capability of Sevin, a “miracle insecticide” born on the banks of the Hudson and reborn in India on the sands of Narmada.
Layoffs took maintain, and cost-cutting affected security and upkeep protocols within the Bhopal plant. On the evening of the catastrophe, the security valves and alarm techniques of the tank that saved the deadly chemical substances, together with the deadly methyl isocyanate used within the manufacturing of Sevin, didn’t work. Some have been dysfunctional, others have been turned off since malfunctioning alarms would repeatedly go off within the leaky plant.
“I keep in mind that evening,” stated 60-year-old Leelabai, who lives in Bhopal’s JP Nagar, situated close to the catastrophe website. At a distance, overlooking her one-room home is the metallic carcass of the manufacturing unit.
“I keep in mind it like yesterday. Our eyes burned, and folks started vomiting. There was a stampede,” she stated, tearing up. A lethal fog had crammed close by slums. Dying struck in seconds, and nobody was ready.
Leelabai and her husband have been the one survivors within the household. Her three youngsters died through the years as their well being debilitated. “Our lives are worse than dying,” she stated.
“None of us knew they’d chemical substances this harmful,” Savitribai, one other resident of JP Nagar, advised TRC.
Greater than 2,000 individuals died over the next days after respiration a cocktail of lethal fumes, one being hydrocyanic acid, a chemical that causes a collection of reactions resulting in lack of blood circulation to the mind and leading to speedy dying.
As per estimates by survivors’ teams, 13,000 individuals died over the subsequent few years from broken lungs, brains, kidneys, and nervous and immune techniques. A whole lot have been disabled for all times. The toxic chemical substances polluted (PDF) Bhopal’s soil and water for many years, inflicting a perpetual well being tragedy for residents.
Three days after the catastrophe, when Anderson – nonetheless one of many West’s strongest industrial leaders – visited India, he was positioned below home arrest in UCC’s luxurious guesthouse over fees together with culpable murder, inflicting dying by negligence. Three hours later, Anderson, whose manufacturing unit poisoned a metropolis, was launched on a bail of 25,000 rupees (about $300 on the present alternate fee). Inside 24 hours, he was mysteriously flown out of Bhopal in state Chief Minister Arjun Singh’s jet after which to the US within the firm’s airplane. Anderson by no means returned. He by no means confronted trial. And died peacefully in 2014, aged 92, on US soil the place he rose from a salesman in UCC to its CEO.
UCC was nonetheless the US’s third-largest chemical producer and thirty seventh among the many prime 50 US firms in 1984. The Bhopal accident was unhealthy for enterprise. It was a public relations nightmare and would run up a number of thousands and thousands in authorized prices. UCC needed to discover a method to proceed commerce. Who would assist the corporate transfer previous this?
The spin-off
For as much as two years after the catastrophe, UCC did its enterprise in India as ordinary regardless of protests and outrage from survivors and activists. In December 1987, India’s Central Bureau of Investigation (CBI) filed fees towards Anderson, UCC and its subsidiary that oversaw Asia operations, Union Carbide Jap, which was included in Delaware, US. By then, UCC had set in movement a collection of occasions that may assist retain its grip on the Indian market whereas preserving a protected distance from courts. The primary amongst them was the start of Visa Petrochemical Restricted.
The corporate was a “spin off from UCIL [Union Carbide India Limited]”, stated Visa Petrochemical’s Annual Enterprise Plans, submitted to the UCC in 1994. Ravi Muthukrishnan, the then India nation supervisor of Dow Chemical, famous in an e-mail to his bosses in 2001 that Visa Petrochemical was shaped by former UCC workers engaged in “worldwide commerce” after the “authorities suggested them to exit completely out of India”. He additionally famous that Visa, whose title was modified to MegaVisa Advertising and marketing and Options in 1999, was UCC’s “prolonged arm” into India.
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UCC signed an settlement with Visa Petrochemical on 14 November 1987, 15 days earlier than the CBI filed fees towards the previous, and designated the brand new firm its “non-exclusive distributor in India”. The association allowed UCC to route its merchandise via Visa. Underneath the contract, Visa’s “obligation” was to “canvas and promote gross sales” of UCC merchandise. It was to do all this whereas “representing” UCC. The latter’s enterprise might now proceed with out the taint of its previous.
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Within the subsequent few years, UCC included a brand new subsidiary – Carbide Asia Pacific – in Delaware, which slowly took over the operations of Carbide Jap, an accused get together within the Bhopal case. This ensured UCC’s Asia companies, together with the settlement with Visa Petrochemicals in India, have been carried out by a agency not named within the case.
In 1989, UCC paid $470m as compensation for the catastrophe in response to the civil lawsuit, which the survivors’ representatives stated was a meagre $500 for every sufferer, and one-sixth of the compensation initially claimed by the federal government. However the authorities accepted the proposal with out consulting the victims.
In 1992, after all of the overseas events who have been accused evaded Indian courts within the legal lawsuit, Bhopal’s chief judicial Justice of the Peace seized all of UCC’s moveable and immovable properties in India. It did so after noting: “The accused Union Carbide USA desires to evade the prosecution happening on this court docket by transferring its properties in India by any means.” The Justice of the Peace labelled Anderson, UCC (dad or mum firm based mostly within the US) and Union Carbide Jap as “absconders”.
For UCC, persevering with commerce now could be more durable and extra difficult than earlier than. UCC and its associates needed to provide you with a brand new plan.
New companions
In February 1994, a younger businessman referred to as Ajay Mittal from Mumbai met UCC officers in Danbury to debate the cargo of its merchandise. The officers discovered the assembly with Mittal “glorious” and “frank”, as per a fax despatched by UCC officers to Mittal a day after their assembly, a duplicate of which was submitted in court docket paperwork.
Mittal, an American enterprise faculty graduate, is an inheritor to the realty enterprise household Mittal Group and at the moment owns and runs Arshiya Restricted, a logistics and provide chain agency. A 2001 Dow India inside report described his household as a “pretty established group” that owns greater than 3,000 buildings in Mumbai.
After the court docket declared UCC an “absconder” and seized its India property, Mittal’s companies proved essential in fulfilling Carbide’s “authorized requirement to distance from India”, reveal firm paperwork.
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Mittal owned a agency in Houston, referred to as Mega World Providers, which was arrange in March 1993, paperwork present. A month later, Carbide Asia Pacific terminated its contract with Visa Petrochemicals and, on the identical day, signed a brand new settlement with Mega World.
Mega World Providers’ position, in response to the brand new contract, was to first purchase UCC merchandise and resell them to “prospects situated in India”. UCC’s merchandise could be relabelled as that of Mega World Providers on this course of.
Mittal didn’t cease there. Two months after the assembly in Houston, he purchased an 89.5 % stake in Visa Petrochemical. His group now owned each the intermediaries essential to UCC’s backdoor channel. Mittal, UCC and Visa Petrochemicals labored out Carbide merchandise’ route into India, which was specified by an annual marketing strategy of Visa Petrochemical.
Visa Petrochemical would scout for patrons. It could go on formal worth queries from potential prospects to each Mega World Providers and Union Carbide Asia Pacific. They, in flip, despatched them to the dad or mum UCC, which might ship the costs to Carbide Asia Pacific. The Asia-Pacific unit would additional ship that data to Visa Petrochemical which despatched it to the client.
If the client agreed, it will place the order with Mega World Providers. UCC would promote the product to Mega World Providers. UCC would organize a third-party transporter, often called a “freight forwarder”, to ship the products to the client, in response to the settlement. Visa Petrochemical would log off on an indent – a doc itemizing out the merchandise imported – for the client.
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Whereas the product originated from UCC warehouses, the vendor on paperwork given on the Indian port was Mega World Providers, for which it earned a fee.
Mega World Providers was known as a “entrance get together as a conduit” in inside correspondence. The vast majority of Mega World Providers’ enterprise revolved round shopping for after which transport UCC merchandise as their very own.
In 1998, it was changed by a Singapore agency with an analogous title – MegaVisa Options Pte Ltd. This too was owned by the Mittal Group.
A July 2001 e-mail by a Dow India supervisor to his bosses within the US says, “MegaVisa Singapore entity was set as much as handle the post-Bhopal state of affairs, and is basically a shell firm.”
MegaVisa Singapore purchased UCC merchandise within the US, “took title to them there, after which organized to ship the merchandise to our prospects from there”, Sanjiv Sanghvi, director on the Singapore agency, submitted in an affidavit to the US court docket in 2002.
This Mittal-owned community of “prolonged arms” and “shells” would guarantee UCC’s merchandise continued to be bought within the Indian market from 1993 to 2002. And amongst its prospects have been companies owned by the Indian authorities – the very get together that was suing it for inflicting dying and accidents to its residents.
Authorities purchasers
Amongst UCC’s prospects have been wholly government-owned companies corresponding to Fuel Authority of India Ltd, Hindustan Photograph Movies Manufacturing Firm Ltd and Hindustan Cables. Lubrizol India, then an equal three way partnership between federal government-owned Indian Oil Company (IOC) and American chemical firm Lubrizol, was additionally a buyer.
Firms promoted by the governments of Gujarat (Gujarat Alkalies and Chemical compounds Ltd), Tamil Nadu (Indian Components Ltd) and Madhya Pradesh (Vindhya Telelinks Ltd) additionally purchased UCC’s merchandise via the channel. The record of shoppers additionally consists of greater than 150 personal companies, together with Reliance Industries, Sterlite Industries, Finolex Cables, Crompton Greaves, Berger Paints and Castrol India.
A lot of UCC’s consumers clearly knew who they have been shaking arms with. Paperwork present UCC knowledgeable Oil and Pure Fuel Firm (ONGC) and IOC that the Houston-based Mega World Providers would bid on its behalf for a young floated by the general public sector firms.
“We hereby authorise Mega World Providers to cite towards the above [ONGC’s] tender,” reads a letter, dated November 16, 1994, by Carbide Asia Pacific to ONGC’s common supervisor. Visa Petrochemical’s 1994 Annual Enterprise Plan notes that the corporate managed a “breakthrough on TEG with ONGC”. TEG, or triethylene glycol, is a plasticiser chemical for which ONGC invited sellers.
“If MM World Providers is profitable in profitable the tender,” UCC’s December 1999 letter to IOC reads, “Union Carbide Company will provide the amount required, and the product equipped will meet all the necessities of our specification.”
MegaVisa Singapore submitted a July 2001 gross sales bill for an order for methyl isobutyl carbinol value $77,656 by Lubrizol India. Lubrizol India was collectively owned by IOC and Lubrizol.
Visa Petrochemicals, which modified its title to MegaVisa Advertising and marketing and Options, labored carefully with India’s Division of Telecommunications (DoT). “MegaVisa is working with DoT to enhance OIT take a look at within the specification,” reads one in every of Visa’s emails to Dow. OIT or oxidative induction time refers to a take a look at to determine the thermal stability of a wire.
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UCC’s Indian entrance, in truth, had some stage of affect on the federal government. An inside communication from MegaVisa to Dow from 2001, for instance, states that “with a variety of groundwork”, the corporate managed to persuade the Indian telecom division (DoT) to drift a young for the acquisition of a cable product. It is a product that UCC, via MegaVisa, was supplying to the Indian market. “We want technical assist from Dow [the US-based chemical giant had at this point taken over Union Carbide] to push DoT and Utilities for upgradation of specs”, it says in the identical be aware.
“Even on this time of utmost turmoil & hostile surroundings for our group now we have continued to work with DoT,” Mittal stated in an e-mail to a UCC official on Could 5, 2000. He additionally notes that MegaVisa’s work with DoT will assist “drive out smaller gamers”. “As we go forward we’re assured of reaching higher volumes and higher netbacks for UCC,” he wrote.
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Correspondence from two personal companies – Sterlite and Finolex – present they too knew they have been shopping for UCC merchandise. Each companies despatched authorized notices to UCC and its subsidiary within the US, and Sterlite even filed a civil swimsuit towards the corporate after some orders they positioned with UCC’s Houston-based entrance firm Mega World didn’t come via. The businesses finally settled the case out of court docket.
Mittal didn’t reply to queries from Al Jazeera. An Indian Oil Company spokesperson stated the corporate “didn’t have any feedback concerning the trailing communication”. All the opposite authorities and personal companies that traded with Carbide’s entrance firms, together with the DoT, didn’t reply to Al Jazeera’s queries.
Dow’s takeover
In February 2001, Dow purchased UCC. Quickly, activists demanded that the corporate come clear on why its totally owned subsidiary by no means confronted trial and pay extra compensation to victims. Dow refused to take possession of UCC’s liabilities, arguing that it by no means owned the Bhopal plant and that the latter is a separate authorized entity.
Nevertheless, Dow additionally continued buying and selling UCC’s merchandise for a yr utilizing its middleman firms. Nevertheless it was eager to masks its hyperlink to UCC. An e-mail by the corporate’s public affairs director in March 2001 reads, “Reporters shall be tempted to maintain speaking about Union Carbide. However we must always discourage reporters from utilizing the phrases Union Carbide, until it’s a reference to a historic exercise.”
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In January 2002, Dow (India) knowledgeable MegaVisa that it will not be the distributor of most UCC merchandise. By this time, suggestions from no less than one Indian buyer, Berger Paints, on MegaVisa’s personnel was not constructive – referring to them as “non-committal”, paperwork present. Moreover, Dow’s India officers internally advisable that “main prospects needs to be dealt with immediately by Dow”.
MegaVisa, in flip, held Dow liable for its losses. A yr later, Houston- and Singapore-based MegaVisa companies filed a case towards Dow and UCC on “antitrust” grounds within the US Connecticut District Court docket. The MegaVisa companies alleged Dow had gone again on its contractual obligations and hampered its income.
Dow finally settled with the Mittal-owned companies out of court docket, together with the companies in Houston, Singapore and India. The main points of the settlement aren’t recognized. UCC’s Indian entrance MegaVisa filed for liquidation in 2010. Its funds mirror an organization that was struggling losses.
The identical yr, the then Congress-led federal authorities moved India’s prime court docket to alter its 1989 order setting the compensation for the catastrophe’s victims. In its petition, it requested the Supreme Court docket to rethink that quantity and demand extra compensation collectively from UCC, Dow and Union Carbide India Restricted. On the time, the victims’ representatives additionally demanded that the “company veil” of UCC, its subsidiaries and Dow be lifted. The case, pending for greater than a decade, was final heard in October 2022 during which the Supreme Court docket requested the federal government to incorporate the victims’ calls for in its illustration.
Shreegireesh Jalihal and Kumar Sambhav are members of The Reporters’ Collective.