Fighting off shareholder environmental resolution, Dow cites inaccurate information in its SEC filing

In an effort to ward off a shareholder resolution that sought greater transparency in the company’s handling of dioxin contamination in the Saginaw River watershed, Dow Chemical gave the Securities and Exchange Commission inaccurate information about the state of Michigan’s consumption advisory for walleye downstream from the company’s Midland plant.

In a proxy statement filed with the SEC on March 31, Dow Chemical’s board of directors urged shareholders to vote against the resolution, introduced by the Sisters of Mercy of Detroit, which asked the company to prepare a report on “the pace and effectiveness of the environmental remediation process being undertaken by Dow in the vicinity of and downstream from its Midland headquarters.”

Dioxin, a highly toxic byproduct of the chemical manufacturing process, has spread from the company’s Midland plant, through the Tittabawassee and Saginaw rivers and into Lake Huron’s Saginaw Bay.

The Sisters of Mercy resolution noted the dangers involving dioxin, a carcinogen that requires clean up at levels of 90 parts per trillion. At points in the Saginaw River watershed, the contamination level has been found to be as high as 1.6 million parts per trillion.

The resolution also warned that Dow faces a class-action suit by local residents and that this suit, “seeks damages possibly totaling $100 million dollars.”

“Proponents believe that continued delays in thorough characterization and remediation of dioxin exposures near Dow’s Midland facilities may lead to increased long-term liabilities and reputational damage for Dow,” the resolution stated.

In the proxy statement, Dow’s board of directors called the resolution “ill-informed” and downplayed environmental dangers in the area, stating:

The current Michigan Department of Community Health (“MDCH”) fish consumption advisory lists walleye, the preferred species for consumption from the Tittabawassee River, as a “safe fish for families” and allows “unlimited consumption of walleye under 22 inches” for adults.

Dow’s claim, however, is not true. The fish advisory for the river system was strengthened in May 2008 in response to heightened concerns about contamination. The Michigan Department of Community Health recommends that no one ever eat carp, catfish or white bass from downstream of Midland because of the PCB and dioxin contamination and also advises restrictions on the consumption of walleye, a comparatively less-contaminated fish.

According to MDCH’s 2008 Michigan Family Fish Consumption Advisory, pre-menopausal women and children under 15 should not eat walleye larger than 18 inches and only one meal per month of smaller walleye. Adult men may eat one meal per week of walleye over 18 inches. For adult men, there is no consumption restriction advisory on walleye between 14 and 18 inches.

Dow spokeswoman Mary Draves said that the company is reviewing the issue.

At the annual shareholders meeting last Thursday, approximately 28.5 percent of shareholders voted in support of the resolution.

“When nearly 30% of Dow’s 939 million shares voted for more transparency and action on this issue, the company should take notice,” Sanford Lewis, the attorney who drafted the resolution said in statement. “The company has appeared in a series of high-profile negative media stories related to the contamination. The reputational damage to the company is significant, and suggests a resolution to this issue is long overdue.”

In an interview with Michigan Messenger, Lewis said he was surprised that the company would give false information to the SEC but said that the agency is unlikely to take action given that the resolution has already been voted on.

Lewis said that he plans to contact the SEC with information about Dow’s inaccurate fish advisory statement.

In April, Dow sponsored a walleye festival near Freeland, a town between Midland and Saginaw, where anglers caught more than 2,800 pounds of the fish. As Michigan Messenger reported last month, many people at the fishing festival were not aware of the state’s fish consumption advisories and intended to eat fish caught from the river.

In a 2004 legal agreement with the state, Dow agreed to fund the posting of fish consumption advisory signs along the banks of the Tittabawassee and Saginaw rivers.

According to the Michigan Department of Environmental Quality, Dow has failed to fund those signs and as a result, the public has not been adequately informed of the state’s fish consumption advisories.