News of the Week
Study backs Carbide's Bhopal sabotage theory About a year after the 1984 chemical disaster in Bhopal, India, Union Carbide hired the consultant firm Arthur D. Little Inc. to investigate the cause of the calamity. Last week, the investigation team's director reported the results in London and corroborated what Carbide has been contending was the situation all along: sabotage and official Indian coverup of the sabotage. The paper was presented by A. D. Little's Ashok S. Kalelkar at the Institution of Chemical Engineers Conference on Preventing Major Chemical Disasters. In essence, Kalelkar said that the deed was done by a disgruntled employee. The employee, intending to spoil a batch of methyl isocyanate (MIC), removed a pressure gage over the MIC storage tank, attached a hose to the opening, and ran more than 2000 lb of water into the contents. Plant supervisors and workers then concocted a story designed to deflect investigations away from the true cause. What subsequently happened on that December night is, of course, well known. The water triggered a violent exothermic reaction that spewed 40 tons of MIC out over most of the poor sections of Bhopal. About 1600 people were killed at the time, according to official estimates, 1400 added deaths are reckoned to have occurred since then, and about 50,000 were injured badly enough to be chronically debilitated. Kalelkar's team conducted hundreds of interviews and examined all the records they could gather. And while it acknowledges that information is still incomplete and faulty accounts have solidified into perceived truths, it says the cause could only have been sabotage. Moreover, the team says the Indian government and its Central Bureau of Investigation (CBI) know this and have been collaborating in a coverup. CBI, to date, has not released its own investigative report. The popular version of the accident's cause—the washing of piping some 400 feet from the storage tank—is discarded by Kalelkar on the basis of hydraulic improbabil6
May 16, 1988C&EN
ities, assessments of open and closed valve arrangements, distance to storage tank, and post-facto test results. Just how the A. D. Little report will affect the stormy legal proceedings in India is conjectural. Indian government lawyers deny sabotage as the cause and contend sabotage is a moot issue anyway, since at question is the plant's basic design. Carbide is pressing on with the sabotage theory anyway in hopes of forcing a settlement.
The current proceedings are now in an appeal phase over an interim compensation order. The compensation case is expected to reach the Indian Supreme Court, where some observers say, a "resolution," based on a mandated sum, could be forged by the judges hearing the case. Carbide's last offer was around $500 million, an amount the Indian government, under pressure from activists, refused. Wil Lepkowski, Washington
Dow moves deeper into Italian chemical deals Italy's small investors have been up in arms ever since Italian agroindustrial group Ferruzzi announced a complicated scheme to gain complete control of a profitable financial services subsidiary of Montedison, of which it owns a controlling 42% share. The deal strips valuable assets from the chemical producer, they claim, and ignores their rights. These complaints Ferruzzi chairman Raul Gardini has brushed aside. But now a shareholder with some clout—Dow Chemical—has entered the fray, complaining to the Italian stock market regulatory body, Consob, about insufficient information on the deal. Dow also has expressed reservations about the price Gardini has set on the deal, about 75% above current market worth. Adding to the drama is intense speculation in Europe over the U.S. company's true motives in its actions. Over the course of the past month, Dow has gradually accumulated about 5% of Montedison, worth probably just under $125 million. If the plot isn't yet thick enough, on May 4, talks between Montedison and the other Italian chemicals giant, state-owned EniChem, began heating up after several years of rumors regarding consolidation of basic commodity chemicals into one joint unit with annual sales of roughly $10.4 billion. Says a Dow executive of the firm's Italian campaign, "We wanted to be in a position to respond to anything that came out of those talks. That changed us from being just a passive investor." With a change in intent and because it holds more than $15 million of another compa-
ny's stock (the U.S. threshold), Dow had to file a statement with the U.S. Justice Department. All of this has led to a flood of sometimes wild, sometimes intriguing press speculation on just what Dow wants out of all this. Analysts have pointed out some possibilities—the urethane and styrene divisions of Montedison's Montedipe subsidiary, for example. Dow already has a joint v e n t u r e with EniChem in epoxy resins. Dow flatly denies wishing to make a hostile bid for Montedison, a near impossibility, anyway, given the incredibly complex pattern of Montedison's ownership. Nor does Dow intend, company executives say, to interfere with talks between EniChem and Montedison. "Those talks would be good for the Italian industry," says one executive. And earlier this month, Dow management was invited to meet with officials of Consob. "We explained the nature of our investment, and the president of Consob said he was comfortable w i t h t h a t , " a Dow spokesman says. Italy at present accounts for about 5% of Dow's total sales, which amounted to $13.2 billion in 1987. Most analysts are convinced that the company is seeking to expand that percentage, and that playing an active role in the restructuring of the industry, with Montedison and EniChem, will be the way for the company to accomplish that. But whatever Dow eventually does, it is clear its shadow will be obvious to the Italian chemical industry for some time to come. Patricia Layman, London
