Investment
Firm Publicizes Risks to Dow Shareholders
(Beyond Pesticides, April 28, 2004) A
new report from the New York-based investment firm Innovest
Strategic Value Advisors, Inc. tags Dow as a risky stock investment
due to mounting potential liabilties, according to Midland
Daily News. Among its liabilities, Dow is facing criticism
for not compensating survivors of the devastating chemical plant disaster
in Bhopal, India, which left thousands dead and from which over 120,000
people continue to suffer to this day. "While most chemical companies
carry ample environmental liability burdens, Dow appears to have many
large scale challenges converging all at once in this area," said
Innovest Senior Analyst Marc Brammer, author of the report.
Dow officials say Innovest’s 100-page document lacks objectivity and was prepared for the sake of issues advocacy. Despite these claims, the companies’ shareholders are responding to the issues in the firm’s report. Three shareholders submitted a resolution that calls for Dow to "institute new initiatives to address the specific health, environmental and social concerns of the (Bhopal) survivors.” They are proposing Dow release a report that assesses the impacts that the matter could pose to the company, its reputation, its finances and expansion in Asia and elsewhere. The resolution is up for a vote at the company’s annual meeting on May 13.
Dow denied responsibility for the Bhopal disaster when it acquired Union Carbide, the Indian plant’s parent company, in 2001, and continues to deny responsibility today. Dow’s board of directors is recommending the proposal be rejected. However, as detailed in Innovest’s report, Bhopal is one of its most potentially expensive liabilities. The report argues that shareholders and potential investors should be made aware of any known trends and or uncertainties that could have an impact on the company’s overall financial performance. The firm said environmental matters could black list the company for investors who value social responsibility.
Dow’s problems
are not limited to Bhopal. Other liabilities the company faces include
costs to remediate dioxin contamination in the Tittabawassee River,
the Saginaw River and in Midland soils. The Innovest report says Dow
statements omit mention of the potential class action lawsuit by Tittabawassee
River flood plain property owners pending in Saginaw County Circuit
Court.
TAKE ACTION: Learn more about the Dow and
the Bhopal disaster from Beyond Pesticides’ Daily News story Activists
Mount Global Challenge to Dow and from The
International Campaign for Justice in Bhopal. Stand up to Dow by
rejecting their products. Look for the Dow label on consumer products,
including such items as pesticides, bathroom cleaners, kitchen cleaners
and furniture polish.