In 2006-2007, two of the Ministers endorsed freeing American company from clean-up responsibility

The reconstituted Group of Ministers on the Bhopal gas tragedy headed by Home Minister P. Chidambaram has been given a vastly expanded mandate, which includes remediation measures at the site of the 1984 disaster.

Internal memos and letters suggest that this inclusion of “remediation measures” originally comes from Dow Chemicals' lobbying to escape liability, holding out promises of substantial investments in India. Mr. Chidambaram and Kamal Nath, who were the Ministers for Finance and Commerce respectively in 2006, endorsed the proposal that would get Dow — which now owns Union Carbide — off the hook with regard to remediation, or clean-up, of the contaminated site.

Ironically, both Ministers are part of the GoM, leading some NGOs to allege that their inclusion represents a “conflict of interest.”

Documents released by the Prime Minister's Office under the RTI Act show that in 2006-2007, both Ministers recommended that a Site Remediation Trust be set up to let Indian corporates fund and implement remediation activities, leaving Dow free of any responsibility. This would send “an appropriate signal to Dow Chemicals, which is exploring investing substantially in India and to the American business community,” Mr. Nath said, in a memo dated February 2007. Mr. Chidambaram's recommendation came in the wake of the Indo-U.S. CEOs Forum meeting in October 2006, where Dow CEO Andrew Liveris wanted to discuss the issue. “I think we should accept this offer and constitute a Site Remediation Trust,” he said in his memo.

Following the notes of the two Ministers, the Cabinet Secretary, in April 2007, recommended that the existing Group of Ministers be reconstituted with appropriate changes in its mandate. Three years later, the government has accepted that recommendation to offer a wide mandate to the new GoM announced this week.

Senior government sources say that “the earlier GoM was only to coordinate and oversee disbursal of compensation under the Bhopal Gas Leak Disaster Act, 1985, handling of funds and final recommendation to the government on compensation… this is a much wider GoM.” This wider mandate is due, in large part, to the representations made by the two Ministers in favour of the proposal allowing Dow to shrug off responsibility.

After Dow bought Union Carbide in 1999, it insisted that it had no legal liabilities in the Bhopal case. However, a 2005 PIL case in the High Court of Madhya Pradesh named Dow as a respondent. In the same case, the Government of India, also named a respondent, moved the Court to demand that Dow deposit Rs. 100 crore toward remediation costs.

Between July 2006 and January 2007, Ratan Tata wrote to Mr. Chidambaram, Deputy Chairman of the Planning Commission Montek Singh Ahluwalia, and finally, Prime Minister Manmohan Singh in his personal capacity and as a member of the Investment Commission. Mr. Tata proposed the Site Remediation Fund, and put forth Dow's view, quoting a letter from Dow CEO Mr. Liveris urging the Government to withdraw its application for a financial deposit, and to ensure an appropriate investment climate.

The Prime Minister then asked for “serious consideration” of the Tata proposal.

Having taken into account the recommendations of the Ministers, the Cabinet Secretary noted that “given the scope for future investments in the sector, it stands to reason that instead of continuing to agitate these issues in court for a protracted period, due consideration be given to the prospect of settling these issues appropriately. An important aim is to remove uncertainties and pave the way for promoting investments in the sector.” He then recommended an amended mandate for the reconstituted GoM.

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