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Barren Justice

by Sasha LilleySpecial to CorpWatch
May 13th, 2004

Cartoonist: Khalil Bendib

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.