Dow chem’s kick-back issue rocks agriculture ministry

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New Delhi, Feb 16: The agriculture ministry has been taken aback by reports that a heavy penalty has been imposed on US company Dow Chemical for making “improper” payments to Indian government officials for allowing the use of its pesticides.

The Securities and the Exchange Commission (SEC) in the US on Tuesday slapped a civil penalty of $325,000 on Dow Chemical in an effort to settle the charge that the company’s subsidiary, DE-Nocil Crop Protection Ltd, made “improper” payments to Indian government officials. Dow Chemicals agreed to settle the matter without admitting or denying wrong-doings and to desist from future violations of the Foreign Corrupt Practices Act.

The SEC found that DE-Nocil improperly paid an estimated $200,000 to government officials in India for registration of some of its products in the period 1996-2001. The SEC noted that the payments were not adequately reflected in Dow Chemical’s books and records, and the company’s internal control failed to prevent the payments.

When asked to comment on the situation, a senior official of the Union agriculture ministry said: “We are surprised at this development. We follow strict norms for registration of pesticides in the country. There is a registration committee of experts to assess the hazards connected with pesticides and their effectiveness. On the basis of the registration committee’s recommendations, the Central Insecticides Board allows registration and use of pesticides.”