US seeks to bail out Dow over Bhopal liability

The Bhopal gas leak continues to cast a long shadow, even 25 years after the accident. It has emerged that a senior US government functionary offered to help India garner greater funding from the World Bank in return for protecting Dow Chemicals from possible legal fallout from the gas tragedy.

Television channel Times Now on Wednesday revealed that US Deputy National Security Advisor Michael Froman had sought help from Planning Commission Deputy Chairman Montek Singh Ahluwalia in "monitoring" the issue of possible compensation by Dow Chemicals, so that it did not adversely affect the investor relationship between the two countries. The Indian government has been working on a petition to demand Rs 1,500 crore from Dow Chemicals as compensation for the Bhopal victims.

The email exchange started with Ahluwalia writing to Froman seeking the US government's assistance to increase borrowing from the World Bank. "The matter is coming up in the IBRD Board audit committee on Monday. The US is a member. The management wants a relaxation for India. Could you speak to the (US) Treasury to get the US ED on our side?" Ahluwalia stated in his email, which is available on the broadcaster's website.

In response, Froman wrote: "While I've got you (on the World Bank issue). We are hearing a lot of noise about the Dow Chemicals issue. I trust that you are monitoring it carefully. I am not familiar with all the details, but I think we want to avoid developments, which would put a chilling effect on our investment relationship."

Within hours of the email exchange becoming public, Ahluwalia appeared on the NDTV news channel and acknowledged the existence of the emails. At the same time, he said the two issues were unrelated to each other and that increased World Bank support to India had already been decided upon without compromise on the Bhopal tragedy issue.

"The factual position is that the matter of increased borrowing went to the World Bank board and our case has been supported … We achieved what we wanted to without compromising our position on the issue of Dow," he said.

NDTV reported that even the home ministry had told Parliament that India's stand on Dow's liability on compensation remains unchanged. Home Minister P Chidambaram heads the group of ministers on the accident.

In December 1984, thousands were killed in Bhopal after a deadly gas leak from the Union Carbide pesticide plant. Union Carbide was subsequently acquired by Dow Chemicals. Dow has argued that it has no liability related to the gas leak.

Photograph: Montek Singh Ahluwalia