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US govt lobbied hard for Union Carbide to extend footprints in India: WikiLeaks

13th Apr 2013

Documents show that Union Carbide decided to install the unproven MIC technology in the Bhopal plant while noting that they were not agreeable to any condition that would reduce their equity in the Indian unit below 51%. The leakage of toxic gas from the plant in 1984 killed thousands in the city.

NEW DELHI: The new set of WikiLeaks cables have revealed how in the 70s the US government had pushed the case for Union Carbide Corporation (UCC) to set up the operations of Union Carbide India Limited (UCIL) in India. The US government followed the Union Carbide’s case with the Indian government seeking exceptional terms to help the company set up a factory in Bhopal, the Kissinger cables reveal.

A series of cables show that UCIL managers in India were in touch with US diplomatic officials, seeking their intervention to secure terms for UCC’s investment in India. Both US officials and UCIL had lobbied hard to ease norms for the company under Foreign Exchange Regulation Act (Fera) that limited equity participation of foreign firms.

This dates back to 1973, when the a cable shows the then head of UCIL had approached US ambassador Daniel Patrick Moynihan asking the visiting US deputy secretary of state to lobby with the Indian finance minister on behalf of the company.

Other documents show that the same year UCC decided to install the unproven MIC technology in the Bhopal plant while noting that they were not agreeable to any condition that would reduce their equity in the Indian unit below 51%.

In Delhi, UCIL continued to seek the US government’s help to get exemptions under Fera. Another cable showed that in 1975 the US embassy asked the state department to help the Indian company secure a loan from the US Exim Bank.

Finally, in September of 1975, the US lobbying achieved a critical result for the company. UCIL got a full manufacturing licence for 5,000 tonnes of MIC-based pesticides. The lobbying continued with the US Embassy pushing for easing of the norms under Fera even as it noted that the company had already secured some concessions from the Indian government. By end-1975, UCIL had also secured the loan from US Exim Bank and the company was well on its way to set up the ill-fated plant in Bhopal

http://timesofindia.indiatimes.com/india/US-govt-lobbied-hard-for-Union-Carbide-to-extend-footprints-in-India-WikiLeaks/articleshow/19522599.cms?intenttarget=no

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