A report by Liz Alderman for The New York Times.
Decades ago, banana plantations around Central America sprayed a powerful pesticide with a terrible side effect: It sterilized workers on a mass scale. Thousands of victims have sought compensation ever since from the chemical companies that produced it.
Now, some survivors and their families are suing three big chemical makers in France to recover hundreds of millions of dollars in unpaid damages awarded to them by courts in Nicaragua, where many of the poisonings of banana workers occurred. If successful, the case could set a legal precedent and lead to more lawsuits in France for harm done in other countries by the pesticide Nemagon.
Last decade, Nicaraguan courts ordered a total of $805 million in damages to be paid to hundreds of victims by Dow Chemical, Shell Oil and Occidental Chemical, which has since become OxyChem. The companies refused to pay, saying the courts lacked jurisdiction and had denied them fair trials.
The case now has a new life half a world away in Europe, where the companies have significant assets and 1,245 former workers and relatives are looking to collect the money. While French courts have been open to hearing cases linked to human rights abuses that have occurred elsewhere, this is the first with such a large monetary award at stake. On Tuesday, a French court delivered documents to Dow France provisionally freezing shares worth 99 million euros, or about $110 million, pending a trial scheduled for January at the Paris Trial Court.
Dow Chemical, in a statement, disputed that the freezing had taken place, claiming that the United States-based parent company did not own any capital in Dow France, which is held by other Dow European entities.
The action is a precautionary measure to prevent Dow from moving assets out of France until the trial, said François-Henri Briard, a French lawyer who is part of an international legal team representing the former workers and relatives. A French judge will determine whether court opinions in other countries — in this case, Nicaragua — can be enforced in France and in the European Union.
If the plaintiffs prevail, they will seek to collect part of the $805 million from the Nicaraguan judgments from Dow in France and move to freeze and sell assets owned by Dow, Shell and Occidental in other European countries where they operate. They would cite a European Union rule that allows a court order issued in a member state to be enforced in any of the bloc’s 28 countries.
“We live in a globalized world where it’s easy for multinational companies to hide assets so as not to allow justice and court orders to be enforced,” Mr. Briard said. “This is what the U.S. companies did in Nicaragua: They poisoned people, they were sentenced by the courts, and they left without paying anything.”
In such a world, he added, victims should also be allowed to cross borders to enforce payment.
Dow said in its statement that the Nicaraguan courts hadn’t given it and other defendants a fair trial. “Courts confronted with these Nicaraguan judgments have unanimously held them to be unenforceable,” it said. “We are confident that French courts will conclude the same.”
The case caps decades of high-stakes legal maneuvering and litigation that have bounced back and forth between the United States, where the companies are based, and countries in Central America and beyond where the chemicals were used.
The chemical dibromochloropropane, or DBCP, an active ingredient in Nemagon, was banned in most of the United States in 1977 after it was found to have caused sterility among thousands of male workers who were exposed to it at Dow, Shell and Occidental plants across America. Food growers based in the United States continued to use Nemagon through the early 1980s at banana and pineapple plantations in countries with lower environmental standards, according to lawsuits filed in Nicaragua and elsewhere.
“It’s a sperm-killer,” said Stuart H. Smith, an environmental lawyer in New Orleans who is part of the plaintiffs’ legal team. “Thousands of individuals were knowingly put into the zone of risk of these pesticides after it was banned.”
He added that the sterilizations prevented them from having “a normal life with a family and children.”
A wave of lawsuits by Nicaraguan plantation workers followed in the United States in the 1990s. Dow and Shell — along with the growers Dole Fruit, Del Monte Fruit and Chiquita Brands — blocked the suits on the ground that the United States was not the place to try them because the alleged damage happened in Central America.
Nicaragua passed a law for DBCP victims that required corporate defendants to put up a bond of $100,000 per case, triggering hundreds of lawsuits there last decade. When Nicaraguan courts awarded hundreds of millions in compensation to victims, Dow, Shell and Dole declared that the courts lacked jurisdiction and refused to pay.
In particular, Shell said that the courts lacked jurisdiction because its headquarters were in the United States, and that it had no employees in the country. Dow said the Nicaraguan law for DBCP victims denied it due process, and Dole said the court had never obtained jurisdiction over it.
Efforts to enforce Nicaragua court judgments in the United States failed. A Florida court denied recognition of a $97 million judgment against Dow and Dole in 2009, saying the Nicaraguan proceedings were biased against the companies.
A California judge in 2009 also threw out separate lawsuits brought in the United States against Dow and Dole after ruling that the plaintiffs and their lawyers used fraudulent tactics, including faked sterility results and plaintiffs who never worked on banana plantations.
Those cases recall another widely publicized litigation, over oil-related pollution in Ecuador. In 2014, a federal judge in Manhattan threw out a $19 billion verdict against Chevron after finding that a lawyer had submitted false evidence. The judge did not dispute that pollution occurred in the Ecuadorean Amazon.
Mr. Smith said that the plaintiffs seeking enforcement in France were damaged by the chemicals and that the Nicaraguan Supreme Court had upheld their cases.
French judges will consider whether the Nicaraguan judges who ruled on the cases were competent and if any fraud or violation of due process was involved in determining whether to seek enforcement of the $805 million in payouts in France.
Mr. Smith said the case constituted a “multibillion-dollar liability” that had not been disclosed to Dow Chemical’s stockholders or the Securities and Exchange Commission. Dow said in its statement that it was in compliance with all laws and regulations regarding its reporting requirements.
The chemical and banana companies have long argued that they have no further responsibility after settling claims decades ago. All except Dole settled in 1997 with 26,000 former banana workers in Central America, Africa and the Philippines for $41 million. Dole agreed in 2014 to compensate more than 1,700 former banana workers from Nicaragua for an undisclosed amount.
The workers and families suing in France were not part of those agreements, and Mr. Briard said they were ultimately hoping to reach their own settlement.