Organic Consumers Association

Banana Workers Win Against Dow, Shell & Standard Fruit

January 6, 2003

In December 2002, a Nicaraguan judge ordered three U.S. companies, Dow Chemical, Shell Oil Company and Standard Fruit (Dole Food Company in the U.S.), to pay US$490 million in compensation to 583 banana workers injured by Nemagon, an extremely toxic soil fumigant that has sterilized thousands of Central American banana workers. The pesticide, used to control burrowing rootworms or nematodes, is also known to cause impotence, depression and is suspected in increased rates of stomach cancer. Nemagon's active ingredient is dibromochloropropane or DBCP, formerly classified "extremely hazardous" and now classified "obsolete or discontinued" by the UN World Health Organization (WHO).

The nematicide was first produced in the late 1950's by Dow and Shell, which conducted toxicity tests before U.S. registration. Those early tests revealed that DBCP reduced sperm counts and atrophied testicles of rabbits and monkeys: however, neither Dow nor Shell revealed that information to government regulators. In 1964, the U.S. government approved DBCP for commercial use, and the companies proceeded to market the pesticide but did not divulge its full toxicity or recommend protective clothing. The companies produced roughly 11 million kilograms of Nemagon each year in the 1960s and early 1970s.

Standard Fruit was the largest user of the pesticide in Central America. In 1977, workers and their union at a formulating plant in Occidental, California, identified the first human sterility cases linked to DBCP. The product was banned in the U.S. after the California cases became public, but exports of DBCP continued. Two of the three major banana-producing companies in Central America switched to other, more expensive nematicides in 1977, but Standard Fruit continued using Nemagon.

An attorney for the Nicaraguan workers called the December court ruling historic. However, a Dow Chemical spokesman termed the recent judgment unenforceable because the case was supposed to be moved to a U.S. court, and because the ruling was ``based on a law passed in Nicaragua that its own attorney general has called unconstitutional.'' This is in reference to a 2001 Nicaraguan law intended to help DBCP victims bring suit against foreign chemical and agribusiness companies responsible for their injuries. The Nicaraguan workers' suit is not the first to seek compensation for harm caused by DBCP. In the early 1990s, more than 16,000 banana plantation workers from Costa Rica, Ecuador, Guatemala, Honduras, Nicaragua and the Philippines filed a class-action lawsuit in Texas against a number of U.S. fruit and chemical companies asking for compensation for permanent sterility linked to DBCP exposure. In 1997, the four chemical corporations that produced DBCP--Amvac, Dow, Occidental and Shell--agreed to pay US$41.5 million in an out-of court settlement that resulted in relatively small payments to affected workers.

The case against the banana plantation owners, Dole, Chiquita and Del Monte, is ongoing. It was possible to go forward with the 1990s suit because at the time Texas did not recognize the legal doctrine of forum non conveniens (inconvenient forum). This doctrine allows a judge to refuse to exercise jurisdiction over a case if he or she feels that another forum is more convenient. International corporate defendants have successfully used this legal doctrine to escape liability claims in U.S. courts (the claims against Dow by Bhopal survivors are one striking example).

Liability suits face greater barriers in foreign countries where the cost to pursue a case may be prohibitive, compensation awards are usually low or are limited by law, and where few precedents exist for complicated toxics cases. In response to petitions from Texas corporations, many of which were Fortune 500 members, Texas changed its law and now recognizes forum non conveniens. The case of Nicaraguan banana workers illustrates the need for global accountability for global corporations. As Erika Rosenthal, legal advisor for Pesticide Action Network Latin America states, "There should be global access to justice for citizens injured abroad by the products or services of U.S. corporations." The use of the legal doctrine of forum non conveniens currently protects U.S. corporations from such claims; Rosenthal reports that only 4 percent of the liability cases turned away in U.S. courts through forum non conveniens have been brought to court in other countries. Dow Chemical, in particular, stands to benefit from this protection as it attempts to fend off liability claims brought by survivors of the pesticide plant explosion in Bhopal, India. Ever since Dow purchased Union Carbide in 2001, the company has accepted responsibility for Union Carbide liabilities in Texas--but not in India.

Hopefully the Nicaraguan court, in assessing Dow and others nearly US$500 million, has raised the ante in the international movement for corporate accountability. Sources: December 15, 2002, El Nuevo Dario, DBCP Out-of-Court Settlement. PANNA Global Pesticide Campaigner, March 1998. Direct Damage, DBCP Poisoning in Costa Rica, PANNA Dirty Dozen Campaigner, May 1989. Nicaraguan Banana Workers May Sue International Firms, Reuters, Sept 2000.

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