Posted on 14-6-2004

Barren Justice
by Sasha Lilley, Special to CorpWatch, May 13th, 2004,

Francisco Gonzáles believes he lost his chance to be a father because of
the pesticide DBCP. "I can't have children," says Gonzáles who began
working in the banana plantations of Chinandega, Nicaragua, in 1975, when
he was 20 years old. "It's very painful, you know, each one of us would
like to have our own child, a child of our blood. But I was poisoned."

Gonzáles said that he was exposed to DBCP, the key chemical in the
pesticides Nemagon and Fumazone, while he worked as a sprayer. "We first
sprayed water and, later at night, we sprayed the pesticide over the
entire plantation, spraying poison all night long. This poison stayed on
the leaves and the other people who worked during the day were also
affected by it."

Gonzáles is one of tens of thousands of plantation workers in Central
America, the Caribbean, Western Africa, and the Philippines who have sued
several U.S. corporations for exposure to DBCP over the last two decades.
In March, Nicaraguan banana workers brought a lawsuit in Los Angeles
Superior Court against Dole, Dow, Occidental, and Shell, among other
corporations, alleging that exposure to DBCP made them sterile. DBCP, or
dibromo-chloropropane, was banned in the United States in 1979, but U.S.
chemical companies continued to export it until the mid-1980s.

The results from these lawsuits, which add up to more than $11 billion in
claimed damages, have so far been disappointing for the workers, and the
legal process they have gone through demonstrates the obstacles workers in
developing countries face when they attempt to win damages from
transnational companies. While some DBCP cases were settled out of court,
the awards workers received were relatively small, and many other
lawsuits have been stymied by legal and political barriers and may be
impeded in the future by free trade agreements.

Known danger

Starting in the 1960s, U.S. chemical companies exported DBCP to the
Central American banana plantations of Standard Fruit and other food
growers, which used the fumigant to combat a worm that afflicts the roots
of the plants and mottles the appearance of the fruit bound for
supermarket bins in the United States.

More on DBCP

Pesticide Action Network

Nicaragua Network

"Dow Chemical: Risk for Investors" (pdf)

In addition to controlling pests, however, the fumigant also had toxic
effects on animals--something the manufacturers of DBCP have known for
decades. In the mid-1950s, Shell and Dow conducted animal studies that
found that exposure to DBCP led to sterility, as well as liver, kidney,
and lung damage. However, the companies did not limit production of DBCP
but chose to export it worldwide.

In 1977, after learning that the chemical also caused workers at an
Occidental Petroleum factory to become sterile, the U.S. Environmental
Protection Agency prohibited the use of DBCP in California. In 1979, the
EPA banned DBCP in the continental United States.

Because other nations had less stringent labor and environmental
regulations, however, chemical companies continued to export DBCP,
possibly as late as the mid-1980s. According to the lawsuits brought by
banana workers, following the US ban Dow Chemical, Shell Oil, Occidental
Petroleum, and Amvac Chemical deliberately exported their existing DBCP
inventory to Nicaragua, and Standard Fruit continued to use it on banana
plantations. Nicaragua did not prohibit the use of DBCP until 1981.

After the U.S. ban, Dow told its client Dole Fruit that it was concerned
about possible liabilities arising from export of the chemical, and Dow
threatened to halt production. According to Dow spokesman Scot Wheeler,
Dow agreed to continue to produce DBCP and Dole agreed it would assume
liability. Dole asserts, however, that the company did not use the
chemical after it was banned in the United States. Shell also denies
liability for the Nicaraguan DBCP lawsuits, stating that the company did
not export DBCP to the Central American country.

Nicaraguan workers claim that the companies not take adequate measures to
protect them from exposure to the fumigant. "We sprayed without any
protections," says José Antonio Rodríguez Pineda, a banana worker who was
employed at the San Carlos plantation in El Viejo. "We worked in shorts
because it was so muddy, without any protection on our feet or hands."

Carl Smith, project director at the Los Angeles-based Foundation for
Science and Education, which tracks the export of banned and hazardous
pesticides, says that chemicals that are dangerous in this country are
even more unsafe in the developing world. "In these countries it's not
like you work in the fields all day and take off your work clothes and put
on your smoking jacket," he says. "You're wearing pesticide-impregnated
clothing all the time."

Inconvenient territory

When the banana workers brought their cases against these corporations,
they faced an even more formidable challenge: the American legal system.
One of the most considerable impediments to compensation in U.S. courts is
the legal doctrine of forum non conveniens or inconvenient forum. Under
this doctrine, a case can be rejected by a court on the grounds that it
would be more appropriate to hear it in another locale, such as the
plaintiff's home country.

Forum non conveniens was used against plaintiffs from the world's worst
industrial accident in Bhopal, India, who sought to sue the U.S.
corporation Union Carbide, now owned by Dow Chemical. The disaster killed
14,000 people and injured hundreds of thousands. In 1986, a federal court
in New York rejected the case on the grounds that India would be a better
forum for the lawsuit. Subsequently, little has come of the case in
Indian courts. Oil company Unocal, maquiladora-operator EMOSA, Cambior
mining company , and many others have also attempted to use forum non
conveniens to dismiss lawsuits brought by foreign workers and citizens.

Erika Rosenthal, who was counsel to the banana workers in the early 1990s
and is currently a legal advisor to Pesticide Action Network, says that
forum non conveniens has been used since the 1980s to close the door of
U.S. courts to foreign plaintiffs injured by American corporations.

"Forum non conveniens - especially in the globalized economy where
products are sent around the world, and industrial processes, especially
the most dirty and dangerous ones, are often exported to the developing
South - has been used to create this horrible double standard … one for
the North, one for the South," she says. "And it has been used as a shield
or a way for U.S. corporations to evade liability."

In the early 1990s Texas was one of the few states in the United States
that didn't recognize forum non conveniens. Plantation workers from a
number of countries brought a suit in Texas courts against DBCP-producing
chemical companies that eventually went to the Texas Supreme Court.
Following this case, Fortune 500 companies in Texas put pressure on the
legislature to institute forum non conveniens, claiming that the state was
becoming prey to tort-happy foreign plaintiffs.

With this doctrine in effect, Rosenthal believes that DBCP-affected
workers have a slim chance of getting justice. In their home countries,
she explains, they face prohibitive costs and legal systems that are
unable to handle complex tort cases and that are often corrupt. "[The
banana workers] should be able to take advantage of the legal system here
in the United States and all its procedural advantages, considering that
the United State is the headquarters, the home country of these big
transnational corporations," she argues.

U.S. influence

With the hurdles of forum non conveniens in mind, banana workers pressured
the Nicaraguan government of Arnoldo Alemán to find a different route to
justice. In January 2001, the Nicaraguan National Assembly passed Law 364,
which was specifically designed to assist banana workers in gaining
compensation from companies that produced or used DBCP.

"This law establishes a very rapid procedure for handling judgments that
workers bring before the courts," says Bayardo Izaba, an attorney with the
Nicaraguan Human Rights Center in Managua. The law, Izaba adds,
establishes that the responsible parties include the chemical
manufacturers, its distributors, and the landowners who use the pesticide.

Officials with companies such as Shell and Dole argue that the law is
unjust because it requires defendants to post a bond of $100,000 for each
worker bringing suit. "Special Law 364 contains numerous provisions that
simply make it impossible for Dow (or the other targeted companies) to
receive a fair trial in Nicaraguan courts," says Dow spokesman Wheeler.
"In fact, Law 364 ensures the entry of judgments that are completely
inconsistent with due process."

According to The New York Times, Dow, Dole, and Shell hired lobbyists to
encourage the Bush administration to help annul Law 364. Secretary of
State Colin Powell was reported to have intervened with Nicaragua's
foreign minister over this issue, as did Otto Reich, Assistant Secretary
of State for Western Hemisphere Affairs.

On March 19, 2002, then-U.S. Ambassador Oliver Garza submitted a letter to
Nicaraguan Foreign Minister Norman Caldera asking the new government of
Enrique Bolaños, a close ally of the United States, to look into the
constitutionality of Law 364. According to the Nicaraguan press, the
letter suggested that if the law were not removed, investment in the
country would be reduced.

In September 2002, Nicaraguan Attorney General Francisco Fiallos
dispatched a petition to Nicaragua's Supreme Court calling Law 364
unconstitutional and suggesting that it be nullified. In an interview
with El Nuevo Diario the following month, Fiallos stated that the attorney
general's office judged the law unconstitutional after receiving a letter
from Caldera that conveyed Garza's petition to intervene against Law 364.

Revelations of the letter prompted a massive protest of banana workers
over U.S. meddling in Nicaragua. As a result, the Nicaraguan government
withdrew Fiallos' statement and the Supreme Court affirmed the
constitutionality of the law.

Powerful lobbying

But the fight over Law 364 did not end there. A number of powerful groups,
including chemical companies and national Chambers of Commerce, used last
year's Central American Free Trade Agreement (CAFTA) negotiations to
target the law. Sources close to the CAFTA talks say that the chemical
companies, particularly Dow, lobbied against Law 354.

Mark Smith, who attended the negotiations as a representative of the
Association of American Chambers of Commerce in Latin America (AACCLA) and
the U.S. Chamber of Commerce--whose board includes a Dow executive--argued
that the neutralization of Law 364 should take place before trade
agreements are signed. CAFTA still awaits ratification.

Dow acknowledges that it has put pressure on the U.S. and Nicaraguan
governments to eliminate Law 364. "The last clause of [the First
Amendment] protects every citizen's, including corporate citizens, right
to 'petition the government for a redress of grievances,'" says spokesman
Wheeler. "Dow attempted to make the U.S and Nicaraguan governments aware
of the total lack of fair play that Dow has been subjected under Special
Law 364 and in the Nicaraguan courts."

While the final version of CAFTA does not contain language that
specifically targets Law 364, if ratified, the free trade agreement's
investment rules may lead to the gutting of legislation such as Law 364.
According to Stephen Porter, senior attorney with Center for International
Environmental Law in Geneva, CAFTA's investment rules parallel NAFTA's
infamous Chapter 11, which allows corporations to sue governments if they
feel that domestic policies or laws create obstacles to profit-making.

"If a law, such as the law allowing these banana workers to sue foreign
companies, were challenged by one of the trade tribunals, it wouldn't make
Nicaragua eliminate its law, but it could render it totally ineffective,"
says Porter. He adds that even a Supreme Court decision could be
challenged by an investor under these rules if they are seen to go against
CAFTA's "fair and equitable treatment" rule. "It creates a fuzzy, almost
arbitrary legal standard and allows investors to run roughshod over
domestic laws," he says.

Setting a precedent

Plaintiffs' lawyer Juan J. Dominquez is, nonetheless, optimistic that the
banana workers will find justice. He argues that the outcome of the most
recent lawsuit would set a precedent. "For the first time, there's a law
in the country where the tort occurred," he explains. "It provides
defendants with a forum to defend themselves. They can choose either forum
and there are adequate laws and measure of damages."

Since the passage of Law 364, two Nicaraguan courts have ruled against the
chemical and fruit companies. On December 11, 2002, one court concluded
that Dow, Shell, and Dole should pay $489.4 million to 486 banana workers.
In a separate case on March 15, 2004, a civil court in Managua decided
these same companies must pay another group of workers $82 million .

However, because the companies no longer have assets in Nicaragua,
following the Sandinista revolution in 1979, and because the companies are
prepared to fight the judgments, the enforcement of rulings in that
country will be an uphill battle, according to Kathy Hoyt of the Nicaragua
Network, a public interest group that has been assisting the banana
workers.

Last December, Dole brought a lawsuit against some of the workers and
their lawyers under the Racketeer Influenced and Corrupt Organizations
Act, or RICO, accusing them of falsifying evidence. And in January, Shell
and Dow filed a declaratory judgment action asking the federal court in
California to declare future rulings in any of the lawsuits filed in
Nicaragua under Law 394 to be unenforceable in the United States courts.

Banana worker Francisco Gonzáles nevertheless hopes that U.S. courts will
be able to provide rulings and enforcement that differ from the mainly
fruitless attempts in the past. "I ask the companies and the North
American judges to have a little bit of conscience with us, the
Nicaraguans affected by [DBCP] that was used here in the '70s and '80s,"
he says.

Sasha Lilley is a staff writer for CorpWatch and a producer for Pacifica
Radio's KPFA. Nan McCurdy contributed interviews to this article.