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Corporate Social Responsibility Press Release
Provided by CSRwire |
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Dow Chemical Shareholders Challenge Management on Dioxin
Investors Seek Disclosure of Company’s Unreported Environmental Liabilities
(CSRwire)
Dow is one of the largest manufacturers of dioxin generating products in the world. Dioxins are a group of toxic substances that have been linked with cancer, and damage to the immune, hormone and reproductive systems.
Though the company has not published projections of liabilities related to dioxins, Dow recently disclosed other long-term toxic liabilities. In December of 2002, Dow published projections of long-term asbestos liabilities related to its purchase of Union Carbide two years previously. The result was a declaration of a potential $2.2 billion in liabilities, and $832 million charge against 4th quarter 2002 revenues.
"Given the recent disclosures on asbestos, and grave concerns about Dow dioxin contamination, our resolution asks the management to provide shareholders with a detailed accounting of the financial risks posed by dioxin from Dow facilities," said Shelley Alpern, Assistant Vice President at Trillium Asset Management. “We’re also asking the company to report on a group of particularly toxic chemicals that don’t break down in the environment, so shareholders can assess the potential for future liability.”
Dow has not disclosed the extent of liability associated with extensive dioxin contamination downstream from the Dow facility in Midland. Last December, Dow and the state of Michigan proposed, and later dropped, a settlement that would have radically raised the threshold for allowable dioxin levels near the Dow facility in Midland. Environmental organizations had filed suit against the pact, alleging that it was illegal. The elimination of the pact increases the likely costs of remediation.
And in March 2003, a class action was filed against Dow for property damages and medical monitoring on behalf of 2,000 contaminated residents of Michigan. According to the plaintiffs, the property damages alone are estimated at $100 million.
Sanford Lewis, attorney who defended the shareholder resolution at the SEC against a company challenge, said that Dow shareholders deserve better disclosure. “Dow is at risk of becoming the Enron of the environment. Will the management avoid calculating and reporting their environmental liabilities until someone or something forces their hand? Will they continue producing compounds that international treaties are targeting?”
Dow asserts that its website on dioxin contains information for investors. But according to the proponents of the resolution, the Dow website does not provide projections, similar to Dow's new asbestos calculations, on the largest potential dioxin liabilities and market risks
"Dow has not informed investors on the extent of contamination at existing Dow facilities nor quantified the associated long-term liabilities as requested in the resolution," said Alpern. “Dow shareholders don’t need another unknown and open-ended risk.”
Trillium Asset Management Corporation is the oldest and largest independent investment advisor devoted exclusively to socially responsible investing. Sanford Lewis is an attorney whose practice emphasizes issues of corporate disclosure and accountability.
To view the text of the shareholder resolution and additional information please visit www.proxyinformation.com
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