Phil Mattera / Dirt Diggers Digest & Tom Risen / US News – 2015-12-13 14:36:38
A Chemical Industry Marriage Not Made in Heaven
Phil Mattera / Dirt Diggers Digest
(December 10, 2015) — A corporation once known as the Merchant of Death because it dominated the gunpowder market wants to unite with a company that became notorious for its production of napalm and Agent Orange during the Vietnam War. The proposed merger of DuPont and Dow Chemical is not a marriage made in heaven.
The more recent track records of the two chemical giants are also seriously tarnished, raising questions as to whether the plan for a merger and then breakup is really a ploy to evade liability — something each of the companies has done in the past.
DuPont’s feel-good postwar campaign promoting “better living through chemistry” gave way to a series of environmental controversies. In the 1970s and 1980s the issue was the company’s production of chlorofluorocarbons (CFCs) like Freon, which were destroying the earth’s ozone layer. After resisting for years, DuPont finally agreed to phase out production of CFCs but sought to use substitutes that were also harmful.
In 1989 evidence emerged that the Savannah River nuclear weapons plant, which DuPont had built and operated for the federal government since 1951, had serious structural flaws and safety problems that the company failed to report. Numerous accidents at the South Carolina facility, which made plutonium and the tritium gas needed in nuclear warheads, were also kept secret.
DuPont was a pioneer in developing perfluorinated compounds (PFCs), one of the most highly toxic, extraordinarily persistent and likely carcinogenic group of chemicals that work their way into the bloodstream of humans and wildlife. DuPont’s highest profile PFC-based product was Teflon, best known for its use in non-stick cookware.
In 2004, the EPA charged that for two decades DuPont failed to report signs of health and environmental problems linked to perfluorooctanoic acid (or PFOA), the PFC used in making Teflon.
Residents living near the plant in West Virginia where DuPont produced PFOA sued the company, which agreed to pay about $100 million to settle the case and spend up to $235 million on medical monitoring of residents, which is ongoing. DuPont also paid $16.5 million to settle the EPA charges and later agreed to gradually phase out PFOA.
In 2014, a leak of methyl mercaptan (used in the production of pesticides) at a DuPont plant in LaPorte, Texas caused the death of four workers. In July 2015 OSHA proposed fines of $273,000 in connection with the accident and put DuPont on its severe violator list.
This year, DuPont spun off numerous facilities with tainted environmental and safety records into a new company called Chemours. There was immediate concern expressed by groups such as Keep Your Promises DuPont that the ownership change would impair the commitments DuPont had made to deal with toxic waste sites and other contaminated areas. One of those areas was Parkersburg, West Virginia, where DuPont had produced Teflon.
DuPont’s initial SEC filing about Chemours disclosed that the new company would begin life with some $298 million in environmental liabilities but acknowledged that the total could rise to 3.5 times that amount.
Dow Chemical was involved in one of the most controversial cases of liability evasion: its decision to do nothing for the victims of the Bhopal disaster after acquiring Union Carbide, the company whose subsidiary operated the pesticide plant where in 1984 a vast quantity of highly toxic methyl isocyanate gas was released.
More than 8,000 people died in the immediate aftermath of the incident, and many thousands more suffered serious harms from exposure to the gas, including genetic damage that affected their offspring.
Union Carbide paid compensation of $470 million, far below what many advocates felt was necessary to care for the victims and their families. After the merger, Bhopal advocates began to pressure Dow to do more, but the company insisted that it had not assumed Union Carbide’s liabilities and thus had no responsibility to help.
Dow’s sins are not all inherited. In the 1980s its Dow Corning subsidiary was hit with class action lawsuits filed by women claiming that they had developed autoimmune diseases as a result of silicone leakage from breast implants produced by the company.
In 1992, following a review of Dow Corning internal company documents suggesting that the implants had been rushed to market without complete safety tests, the U.S. Food and Drug Administration called for a moratorium on new implants. The New York Times reported that the documents revealed that Dow Corning executives had delayed conducting critical safety studies for more than a decade.
In 2011 Dow had to pay $2.5 million to settle EPA allegations that the company’s complex in Midland, Michigan violated the Clean Air Act and Clean Water Act in a host of ways at its chemical, pharmaceutical, and pesticide plants.
Given the histories of these two companies, the proposed merger of DuPont and Dow deserves the utmost scrutiny so that the needs not only of shareholders but also their victims are addressed.
Dow, DuPont Agree on
$130 Billion Mega-Merger Deal
Tom Risen / US News
(December 11, 2015) – Chemical giants DuPont and The Dow Chemical Company on Friday announced a mega-merger valuing their combined firms at $130 billion that is expected to shake up the global agriculture business and affect numerous industries that rely on their services.
DuPont Chief Executive Ed Breen will be CEO of the new firm, to be called DowDuPont, while Dow Chemical CEO Andrew Liveris will be its executive chairman. The deal will eventually split the combined firm into three smaller companies, focused on agriculture, materials and specialty products — the latter of which will include electronics, the company announced in a press release.
The deal will make the combined firms potentially larger than agricultural giant Monsanto. It could take 18 to 24 months to split the companies in three because of the regulatory scrutiny this deal will face in the US and other nations, the companies estimated.
“Each of these businesses will be able to allocate capital more effectively, apply its powerful innovation more productively, and extend its value-added products and solutions to more customers worldwide,” said Breen.
Liveris called the deal “a game changer” for the chemical industry that would create value for both shareholders and customers, adding that it would be a “merger of equals” that would divide ownership equally and allow both firms to decide how the split into three companies will unfold.
This dual decision-making will matter for the employees of both companies as executives consider layoffs and the possibility of closing facilities to eliminate costs after the deal. The companies plan to maintain dual headquarters in Midland, Michigan, and Wilmington, Delaware, but also said they will “optimize” their physical footprint.
DuPont published a separate statement on Friday announcing $650 million in “employee separation costs,” hinting at layoffs following the merger.
The deal, announced hours before the market opened on Friday, did not help the companies’ stock prices. Shares of DuPont dipped 7 percent in premarket trading while Dow’s slipped 2 percent.
The merger of these two historic chemical firms is the latest of the mega deals announced in 2015 that have already made this year the biggest ever for mergers and acquisitions worldwide, according to financial software company Dealogic.
Tom Risen is a technology and business reporter for US News & World Report. You can follow him on Twitter or reach him at trisen@usnews.com
Dow Chemical’s Corporate Rap Sheet
Philip Mattera / The Corporate Research Project
Once known for seemingly benign products such as Saran food wrap, Dow Chemical later found itself widely denounced as a war criminal for its role in producing napalm and Agent Orange for US troops in Vietnam.
Still later, it was at the center of controversies over dioxin, defective breast implants made by its Dow Corning joint venture, and its refusal, after acquiring Union Carbide in 2001, to assume any responsibility for the thousands of people killed or disabled by a massive toxic leak at a pesticide plant run by that company in India.
Human Rights
During the 1960s and early 1970s, Dow Chemical was a prime target of the antiwar movement because of its role in the production of napalm and Agent Orange used by US troops in Vietnam.
Napalm, a thickening agent for jellied gasoline used in flamethrowers and incendiary devices, became a symbol of US destructive power in the war, especially against civilians. A photograph of a nine-year-old girl whose clothes had been burned off by a napalm bomb became one of the most disturbing images from the war.
Agent Orange was a defoliant used to deprive guerillas of cover and to pressure peasants to relocate to areas under US military control. Nearly 20 million gallons of the substance were sprayed on the country. Millions of Vietnamese suffered horrible health effects from exposure both during the war and for many year afterward, as the dioxin from Agent Orange lingered in the environment.
In 2004 the Vietnam Association for Victims of Agent Orange (VAVA) filed a lawsuit in federal court against Dow and other companies on behalf of Vietnamese victims. The case was dismissed the following year and the dismissal was upheld in 2007. Separate lawsuits brought on behalf of US veterans against Dow and other companies were settled out of court (see below).
Environment
Although terms like “environment” and “pollution” were not used at the time, Dow Chemical had problems with noxious emissions from its operations in Midland, Michigan almost from the very beginning. Only much later did the issue move from one of the annoyance of local residents at offensive odors to charges of serious health hazards.
Although the main controversy over the use of Dow’s Agent Orange during the Vietnam War concerned the vast number of deaths and suffering it caused, there were also environmental issues. The deforestation upset the ecological balance of many areas, and the lingering dioxin in soil and water caused ongoing contamination of the food chain.
The use of Agent Orange also had repercussions back in the United States. The company also found itself the target of thousands of lawsuits filed by Vietnam veterans who charged that the dioxin in Agent Orange had caused liver damage, nervous disorders, birth defects, and other health problems.
For a long time, Dow downplayed the risks of dioxin, but after the Agent Orange lawsuits were consolidated, documents were disclosed showing that the company was aware as early as 1965 that dioxin was exceptionally toxic. The case against Dow and other Agent Orange producers was settled out of court in 1984 with the creation of a $180 million fund.
During the early 1980s Dow led a campaign to reverse a ban on the production of an herbicide called 2,4,5-T — an ingredient in Agent Orange. Remaining stocks of the defoliant, which had been produced by Dow since 1948, continued to be used after the war to spray rice fields and range lands in the United States.
As concerns over dioxin exposure widened, Dow resisted giving the EPA some key documents about dioxin contamination at its plant in Midland. It also came to light that an EPA official had allowed Dow to edit an agency report on dioxin to remove references to the company’s contamination of waterways in Michigan.
In 1983, Dow launched a $3 million campaign to persuade the public that dioxin was nothing to worry about. That campaign struggled to compete with news reports such as those that in the 1960s Dow tested dioxin on inmates at a prison in Pennsylvania.
Dow’s resistance to a dioxin clean-up in Midland continued for years. In 2004 an article in the Detroit Free Press headlined BATTLE RAGES OVER CLEANUP OF DOW’S TOXIC LEGACY stated: “For 16 years, since a federal study said Dow Chemical Co. dioxin posed substantial health risks, the state and Dow have bickered over how and when a cleanup should begin, amid charges of Dow foot-dragging and spotty state enforcement.”
In 2007 the Free Press obtained a confidential EPA report describing Dow’s efforts to delay a cleanup and mislead the public about the dangers of dioxin. The following year the EPA’s top administrator in the Midwest said she had been forced to resign by the Bush Administration because of her efforts to get Dow to finally start dealing with dioxin contamination.
Finally, in 2009, Dow and the EPA announced an agreement on a cleanup plan. In July 2011 the Dow agreed to pay $2.5 million to the EPA to settle alleged violations of the Clean Air Act, the Clean Water Act and the Resource Conservation and Recovery Act at its Midland operation.
Dioxin was not Dow’s only environmental controversy. For example: In 2002 Dow Chemical agreed to spend $3 million on wetlands restoration in California to settle a lawsuit brought by the environmental group San Francisco BayKeeper charging that the company had unlawfully discharged contaminated water at its Pittsburg, California plant.
In 2008 Dow and Rockwell International, both of which had been government contractors at the former Rocky Flats nuclear weapons plant in Colorado, were ordered by a federal court to pay a total of more than $900 million in damages and interest to nearby residents who claimed they were harmed by airborne contamination from the facility. An appeals court threw out the award in 2010.
When it acquired Union Carbide in 2001, Dow became embroiled in the controversy surrounding the Bhopal disaster, one of the worst industrial accidents of all time.
In 1984, a pesticide plant operated by a Union Carbide subsidiary in Bhopal, India released a vast quantity of the highly toxic gas methyl isocyanate. More than 8,000 people died in the immediate aftermath of the incident, and many thousands more suffered serious harms from exposure to the gas, including genetic damage that affected their offspring.
Union Carbide paid compensation of $470 million, far below what many advocates felt was necessary to care for the victims and their families. After the merger, Bhopal advocates began to pressure Dow to do more, but the company insisted that it had not assumed Union Carbide’s liabilities and thus had no responsibility to help.
On the 20th anniversary of the disaster in 2004, an activist-prankster impersonating a Dow spokesperson pretended to announce during an interview with the BBC that the company had decided to take financial responsibility. In 2012 Wikileaks disclosed documents indicating that Dow later hired a private intelligence group to monitor Bhopal activists.
The announcement that Dow had been chosen to supply fabric used for the exterior of the stadium at the 2012 London Olympics set off international protests.
Legal actions continued to be brought against Dow in Indian courts. In 2012 the Madhya Pradesh High Court dismissed a petition filed by Dow, thus increasing the possibility that Bhopal victims may once again have their day in court.
Product Safety
Starting in the early 1980s, Dow Corning began to be hit with individual and then class action lawsuits filed by women claiming that they had developed autoimmune diseases as a result of silicone leakage from breast implants produced by the company.
In 1992, following a review of Dow Corning internal company documents suggesting that the implants had been rushed to market without complete safety tests, the US Food and Drug Administration called for a moratorium on new implants. The New York Times reported that the documents revealed that Dow Corning executives had delayed conducting critical safety studies for more than a decade.
Dow Corning quit the implant business in 1992, though it continued to insist on the safety of the product. Later that year, the company admitted that it had submitted falsified data on implants to the FDA (Wall Street Journal, 11/3/1992).
After several multi-billion-dollar tentative settlements had been announced, plaintiffs’ lawyers revealed that among the two million pages of documents released by Dow Corning in the case was a 1975 company study showing that exposure to the silicone in implants harmed the immune system of mice.
Faced with the prospect of even more litigation, Dow Corning filed for Chapter 11 protection in 1995 and remained in bankruptcy for nine years. In 1998 the company agreed to pay $3.2 billion to plaintiffs to settle the estimated 19,000 pending implant lawsuits.
During the 1980s Dow’s Merrell Dow Pharmaceuticals subsidiary was the target of several hundred lawsuits charging that its Bendectin morning sickness drug caused birth defects. Many of the suits were consolidated in a class action case that Merrell Dow won in 1986, but the company (which was later sold to Hoechst) had already discontinued the drug.
Occupational Safety and Health
In 1980, the New York Times disclosed that during the 1960s the medical director at Dow’s huge facility in Freeport, Texas began reporting evidence of genetic damage in workers exposed to benzene and epichlorohydrin. Management, however, did not want employees to be notified of the danger.
In 1984 a group of workers employed in banana plantations in Costa Rica filed suit against Dow and Shell Oil in state court in Texas, alleging that they suffered harm, including sterility, from exposure to the pesticide DBCP produced by the companies and used on the plantations. The case was settled out of court for an amount believed to be about $20 million.
In subsequent years more suits were filed by Central American banana workers. In 2002 a Nicaraguan judge ordered Dow, Shell and Standard Fruit to pay one group of workers $490 million. The following year, however, a federal court ruled that the judgment could not be enforced in the United States.
Labor
Dow had a tradition of paternalism — a profit-sharing plan was established as early as 1900 — but Midland factory workers were organized by District 50 of the United Mine Workers. The first strike occurred in 1948, when the union was seeking bigger postwar raises than the company could abide. The walkout lasted for four weeks, ending with a compromise.
District 50 later became part of the United Steel Workers, and the employees at Dow’s Midland operations, by far the largest organized group in the company, became members of Local 12075 of that union.
In 1974, amid fat times for company, Dow withstood a 121-day strike in Midland by using employees outside union jurisdiction to maintain operations. Earlier, during the 1960s Dow had broken several locals of the International Chemical Workers.
In 2002 unions representing Dow Chemical and Dow Corning workers in the United States and Canada formed a network to fight what they charged was an increasingly anti-union stance being taken by the company. In 2007 the Belgian corporate ethics watchdog Ethibel gave low marks to Dow for various reasons, including its labor relations practices.
Taxes
In 2006, local authorities in Dow’s headquarters city of Midland, Michigan agreed to pay the company $35 million to resolve a decade-old dispute in which Dow claimed it was being overcharged for city and county property taxes.
Price-Fixing
In 2013, a federal judge ordered Dow to pay $1.2 billion in damages after a jury ruled against the company in a price-fixing case involving polyurethane foam.
The Corporate Research Project is an affiliate of Good Jobs First, which researches and promotes accountability standards for economic development subsidies given to corporations by state and local governments.
The Corporate Research Project assists community, environmental and labor organizations in researching companies and industries. Our focus is on identifying information that can be used to advance corporate accountability campaigns.
CRP’s research tools include:
* Violation Tracker, the first wide-ranging database on corporate misconduct.
* Corporate Rap Sheets, detailed dossiers on some of the worst corporate actors.
* Guide to Strategic Corporate Research, an exhaustive guide to online sources.
* Dirt Diggers Digest, a weekly blog on corporate misconduct and how to research it.
DuPont’s Corporate Profile:
One of the World’s Worst Polluters
GM Watch
(October 22, 2012) — According to www.groundup.org — the genetics section of the ASEED Europe website, Dupont is the:
* Largest Chemical Company in the world
* Fifth-Largest Agrochemical Company in the world, with
* 165 manufacturing and processing facilities in 70 countries worldwide.
Via its acquisition of Pioneer-Hi-Bred, it has gained control over:
* The world’s largest seed company and so:
* Controls 42% of the US corn seed market alone (the next competitor holds 11%).
With Monsanto, Novartis, Dow, [Dow jointly] controls:
* 69% of N. American seed corn market.
* 16% of US soybean market alone (purchased seed). (PR newswire, 23/8/99)
With Monsanto, Novartis and Dow, [Dow jointly] controls:
* ca. 47% of the commercial soybean seed market.
With Dekalb (Monsanto subsidiary) and Cargill, [Dow jointly] controls
* almost 70% of the Asian seed market
(Sources: RAFI, GRAIN, Bothai, MASIPAG, 1999)
* Number Two of the Superfund polluters (Public Research Interest Groups 1999)
* Dirty Five — the five biggest polluters in the US — that together spent $6,523,677 over the period 1991-1998 US policy-makers. (PIRG)
* Among Top Ten Worst Corporations (Multinational Monitor, 1995; 1991)
* Among Worst Environmental Offenders in the US, (1993 Council on Economic Priorities)
* Largest Industrial Polluter in the US (1992, Mattera)
Agricultural Empire
The primary focus of Dupont’s agricultural research and commercial development is the output of genetically engineered food quality traits for food processing and livestock production.
Marketing Agreements for Optimum Quality Products: Archer Daniel Midlands Co. (4th largest US food company) and Conagra (50th largest US company and largest food company) for the international marketisation of its `traditionally bred’ High Corn Oil. (Agreement June 1999). Cargill (largest US grain exporter) is to market the Oil domestically.
Patents
The company owns more than 17,000 patents, which are filed worldwide, with more than 14,000 patent applications patents pending. In 1998, DP was granted almost 400 US patents and over 1,500 international patents.
The notorious Oncomouse project, conducted with Harvard University and Du Pont was granted patentability in the US in 1988. The patent is broad, covering all onco-mammals. The onco-mouse is a laboratory mouse ‘designed’ to develop cancer for research purposes.
Patentability was also granted in Europe in 1992, but is currently under challenge. On two occasions, the Canadian patent office has rejected the patent, on the grounds that the mouse is not an invention.
Through acquisition of Pioneer Hi-Bred, DP has accessed a company with one of the largest private ‘patent estates’. PHI was issued more GE-related patents in the US in 1998 than any other company, gaining a total of 108 wholly-owned patents and 18 jointly owned patents. (By comparison, Novartis was ranked 198th with 78 patents, and Monsanto 203th with 77 patents).
As of August 31 1998, PHI held over 250 patents in the US and 300 abroad, and 900 pending. (Intellectual Property Owners Statistical Series No. 1, 1999).
Du Pont is developing “terminator” seed sterilisation technologies. It holds two patents: US 5,364,780 (15 Nov 94) and US 5,608,14 (4 Mar 97) RAFI.
Functional Foods
DuPont & Pioneer Hi-Bred . . . have a joint venture called Optimum Quality Grains, LLC. They already produce several (non-GM) soybean oils, such as LoSatSoyÃ…’, which they claim are more healthy because they have lower levels of trans-fatty acids. These products are then used for example in products by DuPont subsidiary Protein Technologies International (PTI), one of the world”Å¡s largest suppliers of soy.
The joint venture and the acquisition of PTI “are important steps in our life sciences strategy to grow in the global food, feed and industrial markets with higher value products derived through biotechnology”, says Bill Kirk, vice president of DuPont Agricultural Enterprise. He continues: “We have the most complete pipeline to move ingredients from the farmer all the way to the ultimate consumer; no other company can do that while bringing value to each segment of the agribusiness market.”
DuPont: Politics of Products, Politics in Production
Tetraethyl Lead (TEL), CFC’s, Nylon Production in Goa, Lead Paint, Hormone Disruption, Military, Workers.
Throughout its near two centuries of commercial activity, DP has been one of the major industrial polluters in the US and worldwide.
Its product line has generated or provided for some of the most environmentally destructive industrial practices of this century, among them the manufacture of explosives and arms, oil exploitation, nuclear energy and weaponry, mining, industrial agricultural inputs, ozone-destroying substances such as CFCs, and the production of numerous energy intensive, chemical-based synthetic fibres.
Toxic waste from its production facilities is routinely discharged into the oceans, soil and atmosphere, not to mention the daily pollution that results from the use of the end product. Now DP is shifting a substantial portion of its economic and production to what is feared to be a new form of pollution through the release into the environment of genetically engineered organisms.
Sabotaging Environmental Protection and Policy Progress DP is not only a polluting company. It is a company that has a history of dominating the political and scientific agenda on the serious ecological problems caused by its products.
Inventor and market giant of ozone-destroying CFCs, DP is among the chemical industry giants that have stonewalled the degree of political commitment and regulation framework needed to seriously address one of the most urgent ecological issues of our time.
Dupont Greenwash Specialist
While involved in nuclear research, DuPont was allegedly represented by the notorious public relations company, Burson-Marsteller (Carmelo Ruiz, PR Watch, USA, July 1999)
DP has played a key role in the greenwashing of heavily polluting industries. Developing the language of sustainability, such as the company’s latest pledge to build “a growing partnership with nature” as it moves deeper into world food systems.
In September 1999, DP launched the latest of its umbrella PR campaigns. The “to do list for the planet” is the first global level PR campaign. The campaign has been designed by McCann Erickson. (The company has represented Exxon for 87 years. General Motors for 69. Nestle for 59.)
Ross’s M&R Gets Rebuffed Trying to
Paint DuPont Green (from www.prwatch.org)
DuPont, one of the world’s worst polluters hires PR firms with green credentials and access to environmental activists, firms such as Ecos in Australia and M&R Strategic Services in the US M&R is a PR/lobby business begun and owned in part by Donald K. Ross, an advisor to foundations who is on the board of the League of Conservation Voters.
Ross’s PR firm M&R does business with dozens of major health and environmental non-profits, many of them funded by the individuals and foundations he advises. Recently M&R sent an urgent appeal to groups asking them to sign a joint letter to President Bush calling for “a major national initiative to end childhood lead poisoning.”
However, M&R’s appeal failed to reveal that M&R works for DuPont, a company now named with others in forty-five government lawsuits
Advocacy groups including the Alliance to End Childhood Lead Poisoning have rebuffed M&R and its client DuPont saying “their recommendations to the President are incomplete and out of balance.” These groups are now circulating their own letter to the White House.
Posted in accordance with Title 17, Section 107, US Code, for noncommercial, educational purposes.
