London Olympics

Tuesday 21st February 2012 Westminster Hall

13:00

[Barry Gardiner (Brent North) (Lab)]

I have no declarable interests relating to the sustainability of the London Olympics, other than that more than a decade ago I was the founding chair of the all-party group on the Olympics. We formed the group to encourage a then hesitant Government to bid for the Olympic games. My father was an Olympian in 1936, playing as a Scotsman for the British football team—those were the days when the Scottish Football Association had no qualms about joining the football associations of the other home nations to field a strong British team. My point is simply this: if I am critical of aspects of the 2012 games, it is not because I am or ever have been antipathetic to the Olympics; it is because I care passionately that the games in London this summer should be the best ever staged and that nothing should be allowed to bring them into disrepute.

At the start, let me make common cause with the Minister in applauding much of the work done by the Olympic Delivery Authority in achieving so much of the vision of an Olympics that respects sustainability. I praise the London Organising Committee of the Olympic Games and Paralympic Games for becoming the first games organising committee to be certified to the British standard 8901 specification for sustainability management systems for events.

I recognise that the Olympic Delivery Authority for London 2012 is creating venues, facilities and infrastructure that will leave a lasting social, economic and environmental legacy for London and the UK while minimising any other adverse impacts during the design and construction of the Olympic park, venues, infrastructure and housing. The creation of new infrastructure, sporting facilities and housing in an area currently experiencing high levels of deprivation will help to create neighbourhoods and vibrant places where people will want to live and work after the games are over. Communities are being reconnected by the building of more than 30 bridges across the waterways, railways and roads that currently divide the Olympic park area. All that is good.

The ODA has also sought to minimise carbon emissions associated with the development and to optimise efficient water use—indeed, many of the construction materials have been brought on site by barge via Prescott lock to reduce road traffic congestion. To reduce the risk of flooding in the Lea river valley, 100 hectares of new green space has been created. The ODA has worked with the construction industry to source environmentally friendly and ethically produced materials to produce a low-carbon construction footprint. Even rubbish and waste have been thought through: a contractor has been engaged specifically to compact and transport waste from site by barge, and 90% will be recycled or reused. For all that, John Armitt, the ODA’s chairman, and Dennis Hone, its chief executive, deserve Parliament’s thanks and praise. On the site itself, the ODA has spent in excess of £1.8 million cleaning up the toxic legacy of chemical contamination that blighted the area. The remediation of the site has brought the land back into public use and has been a wonderful focus to improve the environment and quality of life for people in that part of London.

What an irony, then, that this most sustainable of all Olympic games should embrace as one of its key sponsors a company whose name is inextricably linked with the worst chemical disaster in human history—a company that owns Union Carbide Corporation, which was responsible for up to 25,000 deaths that have been directly associated with the Bhopal gas tragedy in India. To this day, the company has failed to remediate the Bhopal site: the water table is now so contaminated that children in Bhopal are born with deformities at 10 times the rate elsewhere in India. In this debate, I will claim that the Dow Chemical Company, which owns Union Carbide Corporation, has failed to live up to the high corporate social responsibility standards that are supposed to characterise the Olympic movement across the globe and the London games in particular—standards that Lord Coe, the chairman of LOCOG, referred to in his evidence to the Select Committee on Culture, Media and Sport as ethical, social and environmental.

[Michael Connarty (Linlithgow and East Falkirk) (Lab)]

Does my hon. Friend agree that Union Carbide is different from Union Carbide India, and that Union Carbide was bought by Dow nearly 12 years after the Bhopal disaster? It would be good to clarify ownership.

[Barry Gardiner]

I assure my hon. Friend that I will address that point later in my remarks.

The sustainable sourcing code published by LOCOG states:

“Sustainability is one of a number of core elements which together represent what value for money means to LOCOG. As a result it will place a high priority on environmental, social and ethical issues when procuring products and services for the Games. This means we want to do business with responsible suppliers and licensees; companies who treat their staff and sub-contractors well, who understand the nature of the products and materials they are supplying, and who recognise their responsibility to protect the environment and foster good relations with their local communities.”

The Minister is here today to respond to this debate on behalf of the Secretary of State, who is, after all, the chair of the Olympic Board. With reference to the sustainable sourcing code, I challenge the Minister to provide justification on three distinct points relating to the appointment of Dow Chemicals Ltd as a sponsor of the London Olympics: first, the propriety of the procurement process itself; secondly, Dow’s legal responsibility for Union Carbide and the consequences of the Bhopal tragedy, which my hon. Friend the hon. Member for Linlithgow and East Falkirk (Michael Connarty) mentioned; and thirdly, the wider ethical concerns about Dow’s practice as a company and its suitability as a sponsor.

I want to be sure that the Minister has no grounds to think that I have misled him, so I ask him to intervene on me at any stage if he thinks that I have misrepresented a fact pertaining to the case. If he does not I will assume that, although he may disagree with the conclusions I draw, he none the less accepts the facts as I have stated them.

[The Parliamentary Under-Secretary of State for Culture, Olympics, Media and Sport (John Penrose)]

To pick up on the hon. Gentleman’s kind invitation, I might intervene if I am so concerned, but it is also possible that I will want to reserve my remarks until the end in order to wrap them all up in one go. Therefore, if I do not intervene, it is not because I necessarily accept what he is saying. I will deal with it either then or later.

[Barry Gardiner]

The Minister will make the response that he wishes to make.

[Mr Andrew Smith (Oxford East) (Lab)]

I congratulate my hon. Friend on securing this important debate. His concerns are shared more widely in the House. Will he also take it that those of us who do not intervene agree with the facts that he is presenting?

[Barry Gardiner]

Yes indeed. I am grateful to my right hon. Friend for his intervention.

First, I will raise my concerns about the chronology, openness and transparency of the Olympic wrap procurement process. I understand that just three months after Dow was confirmed as an official partner of the International Olympic Committee, LOCOG chose the Olympic stadium wrap as one of the areas of the Olympic budget that would be cut. I accept that that was a perfectly proper response to the spending review, but reports from LOCOG at the time estimated savings from the wrap at £7 million. It was also reported at the time, by the tenacious Sunday Express journalist Ted Jeory, that the Secretary of State for Culture, Media and Sport had been informed that finding a private sector partner for the wrap was highly likely—that was in an e-mail from the Department on 16 December. We now know from Architen Landrell, a UK company based in Chepstow, that it was appointed under a tier 3 contract by Sir Robert McAlpine, the main contractor for the stadium’s construction. Architen Landrell was asked to produce eight test panels and give a final costing for the stadium wrap, which it did, at a price of approximately £1.5 million.

Two questions arise from that. Why did the Secretary of State believe it was highly likely that a private sponsor would be found for the stadium wrap? Why were the media given the figure of £7 million as the projected saving, when the actual saving was known to be only £1.5 million?

On 8 February 2011, it was reported that the tendering process for a company to sponsor the wrap would go ahead, with expressions of interest due by 18 February. That was an extraordinarily short time in which to source a major supplier. The public might consider it inconceivable that only 10 days were allowed for such a major tender, unless there had been clear and ongoing discussions with potential partners before the announcement. In a recent response to a written question to the Department, I was told that the shortest period that the Department had allowed in the previous 12 months for any tender where the contractor would be paid more than £1 million was 28 days, yet LOCOG allowed only 10 days for someone to bid to pay a sum, publicly estimated to be £7 million, to sponsor the wrap. Does the Minister think that LOCOG would have set the tender window at a mere 10 days if Dow Chemicals had not already been lined up as a sponsor?

In his letter to London assembly member Darren Johnson, Lord Coe said that the Government took the decision to ditch the wrap in order to achieve the announced saving. That prompts several further questions. What discussions did the Department, the ODA and LOCOG have about the decision to put the wrap up for sponsorship? Did the International Olympic Committee put any pressure on LOCOG to provide a niche for Dow as a sponsor of the London games? If the Government simply wanted to achieve savings in the original budget, why did they not press on with the Architen Landrell wrap, which would have shown a saving of £5.5 million against the original budget and given the project to a British company?

The ODA procurement policy on the Olympics states:

“As a public body the ODA is required to operate in the procurement framework set out by European Union Procurement Legislation and UK Regulations.”

Was that the reason why the procurement of the wrap was passed from the ODA to LOCOG—LOCOG is not a public but a private body and was therefore not obliged to follow the standard EU and UK procurement rules?

Another company, the Nottingham Textile Company, is adamant that it submitted an expression of interest before the deadline of 18 February. It heard nothing for a long time and eventually inquired why it had received no response. The company was told by LOCOG that its submission had been too late. Will the Minister undertake to check the date on which Nottingham Textile Company’s submission was received by LOCOG and whether, in fact, it was in time?

Let me be clear: I believe that the Government quite properly wish to achieve savings in the cost of the Olympic games. I also believe that Dow Chemicals was putting pressure on the IOC to find a way for it to become a key sponsor with sector-exclusive marketing rights for the London games. I believe that LOCOG wished to assist the IOC in that endeavour and therefore suggested that £7 million could be saved by taking the wrap away from Architen Landrell and procuring it under a sponsorship deal with Dow. I believe that the Government knew that a sponsorship deal was being negotiated and were content to collude with the IOC and LOCOG to facilitate a major IOC sponsor and to pretend to the public that in doing so, they were saving £7 million. In short, the procurement process was rigged in favour of Dow Chemicals. It was a sham.

[Zac Goldsmith (Richmond Park) (Con)]

I congratulate the hon. Gentleman on securing this important debate, and I agree with much of what he says. I hope he does not mind my adding that Dow Chemicals has or shares responsibility for 96 of the US’s so-called superfund toxic waste sites, which are the most polluted sites in the entire United States. That makes it one of the world’s most polluting companies. Given that the emphasis is on a green Olympic games, it is hard to imagine a less appropriate partner.

[Barry Gardiner]

I am delighted to have spared the time to give way to the hon. Gentleman, who makes an important observation. I will come back to that in the final section of my speech.

Sadly, LOCOG is a private organisation that is not subject to the Freedom of Information Act 2000. On 18 December last year, I therefore wrote to Lord Coe, chairman of LOCOG, asking many of the above questions and many more. To date, he has not seen fit to answer them. When asked on 24 January this year in the Select Committee whether he thought it

“appropriate for London 2012 to be so closely associated with a company like Dow Chemicals”,

the Secretary of State replied:

“Obviously it is a decision for LOCOG, but it is a decision that, as a result of the controversy that we had last autumn, I looked into very carefully. After looking at it very carefully, I…wholeheartedly supported the decisions that LOCOG had taken.”

He went on to justify Dow’s involvement, saying that

“they did not own Union Carbide at the time of the Bhopal disaster in 1985”—

a point made by my hon. Friend the Member for Linlithgow and East Falkirk. In fact, it happened in 1984, but that was perhaps just a simple slip of the tongue by the Secretary of State. He also said that Dow did not own Union Carbide

“at the time of a final settlement with the Indian Government in 1989”

and added that

“that has been upheld three times in the Indian Supreme Court”—

twice, in fact—which made him confident that

“it was a very reasonable decision.”

Many commentators have found it frankly astonishing that both LOCOG and the Secretary of State seem to have taken Dow’s claims regarding those cases at face value and repeated Dow’s press lines verbatim. Surely the Secretary of State knows that when someone purchases a company, they purchase both its assets and its liabilities. Before the Minister repeats his Secretary of State’s evidence to the Select Committee, where the right hon. Gentleman opined of Bhopal:

“I do not believe that Dow were responsible and I think we should support them as a company”,

let me ask the hon. Gentleman whether he is aware that Dow’s wholly owned subsidiary, Union Carbide Corporation, is wanted by courts in India on criminal charges of culpable homicide? Because UCC is considered to be a fugitive from justice in India, and because Dow wholly owns UCC but has not produced it in court, I understand from legal advice that I have taken that that puts Dow in the position of sheltering a fugitive from justice. Does the Minister’s own legal advice concur with that?

Is the Minister aware that Dow Chemicals itself is a named respondent in public interest litigation in the Madhya Pradesh high court, seeking remediation of the abandoned Union Carbide factory site? Is he aware that Dow is a named respondent in a forthcoming curative petition in India’s supreme court that aims to address the inadequacies of the 1989 civil settlement made by Union Carbide of $470 million—a figure that equates to approximately $600 per victim? Compare that with what happened in the Gulf of Mexico and the payout that the American Government demanded of BP. By some ironic coincidence, the hearings on the petition were granted on 28 February 2011—the same day the sponsorship contract closed—by a five-judge bench that included India’s chief justice.

Union Carbide is also subject to a civil action in the southern district court of New York. The action relates to the ongoing contamination in Bhopal through chemical dumping by the company in and around the factory. Significantly, the US court accepts that that is a distinct case from the 1984 disaster and that it has not been dealt with under any pre-existing settlement. In New York, Dow’s wholly owned subsidiary UCC has pleaded that only Indian courts can order it to remediate the site; but in India, both Dow and UCC have pleaded that the Indian courts have no jurisdiction over them.

Dow has consistently claimed to the Indian authorities that Dow and UCC are independent entities and that on those grounds Dow should be held immune from prosecution in relation to the Bhopal disaster. Documents made public in The Independent by Nina Lakhani two weeks ago, however, have revealed that Dow Chemicals secretly traded through a network of intermediaries to avoid a legal ban imposed after the Bhopal tragedy on the sale of UCC products in India. The documents prove that, far from being a separate company, Dow Chemicals controlled and manipulated its wholly owned subsidiary, setting prices and setting up supply chains to secure profits for Union Carbide products that in India were illegal. As Tim Edwards from the Bhopal Medical Appeal said,

“these documents...show Dow shielding UCC and obstructing justice. If however Dow is also misrepresenting its relationship with UCC, then it is obstructing justice and shielding itself from trial. Either way, LOCOG’s insistence that Dow is a fit sponsor for Britain’s Olympics appears perverse.”

In a letter addressed to IOC President Jacques Rogge, a copy of which was sent to Lord Coe, V. K. Malhotra, the acting president of Indian Olympic Association, stressed that there were active court cases against Dow. He said:

“A false campaign has been launched by the Dow Chemicals saying that the matter has been settled. It is not correct. The case is still pending in the court and no final compensation has been made.”

Why have LOCOG and the Government chosen to believe Dow Chemicals over the acting president of the Indian Olympic Association?

Let me repeat the words of LOCOG’s sustainability code:

“This means we want to do business with responsible suppliers and licensees; companies who treat their staff and sub-contractors well, who understand the nature of the products and materials they are supplying, and who recognise their responsibility to protect the environment and foster good relations with their local communities.”

When LOCOG awarded the sponsorship contract to Dow, was it aware of the pending criminal charges for culpable homicide against Dow’s fully owned subsidiary UCC in the Bhopal criminal court? Was LOCOG aware that Dow’s fully owned subsidiary, UCC, was declared by that court as an absconder from justice as long ago as 1992, and that the company remains an absconder from justice to this day?

[John Penrose]

I am conscious of the passage of time and want to make one point en passant, in case I do not have time to cover it. The hon. Gentleman asks whether LOCOG was aware of the situation when it awarded the sponsorship contract. I am not clear whether LOCOG was aware of it. I understand that he has already asked LOCOG that question, and LOCOG is the body who can answer it. However, he should bear in mind that LOCOG did not award the sponsorship contract: it was awarded by the International Olympic Committee, not by LOCOG.

[Barry Gardiner]

The Minister really needs to get a much better brief because the Olympic programme contract was the contract awarded by the IOC. The contract for the stadium wrap was taken away from the ODA and put to LOCOG precisely because LOCOG was in charge of sponsorship contracts. If the Minister does not know that, he does not understand the core of this debate.

[John Penrose]

I apologise to the hon. Gentleman if I have misunderstood him. When he was discussing sponsorship, I thought he was talking about becoming a sponsor of the Olympic movement. I have been using a different term and have been talking about the contract for the Olympic stadium wrap as a commercial supplier deal. If he is using the word “sponsorship” to cover both those terms, of course, I appreciate what he is saying and I will happily adjust my language to match his.

[Barry Gardiner]

The sponsorship was tendered under a tier 3 arrangement by LOCOG, and it was the body that awarded that sponsorship contract to Dow Chemical.

Was LOCOG aware that Dow is a party to a public interest litigation suit in India concerning clean up and environmental rehabilitation of UCC’s factory site? If LOCOG was aware of those issues, how were they considered in the decision-making process on Dow’s suitability as a partner for London 2012 on ethical, social and environmental grounds? Did LOCOG seek any further legal or other advice in relation to the issues mentioned, other than that given by Dow and its representatives?

Last month, the procurement process and the Dow sponsorship deal suffered its biggest blow to date. Meredith Alexander, one of the 12 sustainability commissioners, resigned in protest over what she believes was the airbrushing of Dow out of Bhopal and into the Olympics. She has made her case as follows:

“In 2010, the International Olympic Committee appointed Dow as an international sponsor for the Games. This decision was taken in Geneva, and the commission had no ability to take a stand. Then last year, LOCOG, the London Games organiser, invited companies to tender for a major contract to provide a wrap for the main Olympic stadium. Dow won this bidding process.”

That is the point the Minister failed to appreciate. Meredith Alexander goes on:

“Many groups and individuals raised questions and finally the commission was asked to investigate. I was shocked to see that the result of our investigation was a public statement from the commission that essentially portrays Dow as a responsible company. I had been providing information about Bhopal to commission members and I was stunned that it publicly repeated Dow’s line that it bears no responsibility for Bhopal. I did everything I could to get the statement corrected or retracted. When it became apparent that this would not happen, I realised that the only way to ensure that my name was not used to justify Dow’s position was to resign.”

[Jason McCartney (Colne Valley) (Con)]

Will the hon. Gentleman give way?

[Barry Gardiner]

No, I will not. Meredith Alexander goes on:

“And the only way to ensure that the victims’ side of the story was told was to do so in public.”

She concludes:

“I would like to see Dow take responsibility for the Bhopal tragedy and finally ensure that real justice is achieved for the victims and the families of those who died. This would be a true Olympic legacy.”

Finally, I turn to the wider issues regarding Dow’s reputational and ethical suitability to be an Olympic partner. In relation to ethical sourcing, the Olympic Delivery Authority guidelines on procurement policy state:

“The ODA will seek to work with suppliers who have a good track record in human rights and who use goods and materials that have been produced ‘ethically’. This includes seeking suppliers who operate within the laws of their country and who do not have discriminatory practices.”

Bearing that in mind, it is difficult to see how LOCOG could justify appointing Dow as a sponsor, given the facts that were known at the time about the company and its wider regard for law and regulation. The key facts are these. In February 2007, the Securities and Exchange Commission in New York imposed a cease and desist order on Dow Chemical for its improper payment practice and improper accounting. In September 2010, Dow was blacklisted by the Indian Government for bribing officials in order to fast track licensing of the chemical Dursban, which has been found to be dangerous to human health in the USA. A report by Innovest indicates that Dow failed to disclose in statements to investors its $2 million settlement of a consumer fraud lawsuit brought by the New York State Attorney-General in 2003.

[Jason McCartney]

On a point of order, Mr Dobbin, I would like to hear the Minister’s response. A lot of questions are being posed and I would really like to hear the Minister’s response.

[Jim Dobbin (in the Chair)]

I am sure that the Member leading the debate would like to hear the Minister’s response as well, but unfortunately time is running out. If the Member who is in charge of the debate wants to get complete answers, he must take that into consideration.

[Barry Gardiner]

Since then, earlier this month, Dow Chemical lost its bid to overturn anti-trust fines totalling in excess of €25 million imposed by the European Union for its part in colluding to fix prices of chloroprene rubber. Just last week, Dow was penalised and heavily fined for underestimating the greenhouse gas emissions from its Grangemouth plant in Scotland.

What is perhaps most incredible is that the Chairman of the Commission for a Sustainable London 2012, Shaun McCarthy, has gone on record as saying:

“LOCOG carried out its due diligence exercise with regard to reputation risk in relation to this procurement. At the time, when the bids were being considered in early 2011 LOCOG found no current media, political or NGO commentary that would give cause for concern.”

As ever, Meredith Alexander makes the best riposte. She has said:

“Even a twelve year old could have found them”.

The Minister is not a 12-year-old, and he knows that the public are not naive either. He must not reply with a speech that is long on examples of sustainability and good practice but short on answers to the questions that I have posed about Dow. To assist the Minister in preparing for the debate, I sent all the questions I would be raising to his office—[Interruption.] I did so at 3 o’clock this morning, to enable him to come to the House prepared.

Today, the Minister should have the courage to stand up and accept that Dow is not a fit and proper company to be a sponsor of the most sustainable Olympic games ever staged. If he does so, everyone would accept that although a mistake had been made, the Government have the determination to put it right. If he does not do so, he must accept that a cloud will hang over the London games. They will be tainted by a sham procurement process and a sponsor that has shown it is contemptuous of the law, defiant of regulations, willing to engage in bribery and corrupt practices, but indifferent to the continuing suffering of thousands of human beings.

[Jim Dobbin (in the Chair)]

Minister, as I am sure you are aware, you only have two minutes.

13:28

[The Parliamentary Under-Secretary of State for Culture, Olympics, Media and Sport (John Penrose)]

Thank you, Mr Dobbin. I am, indeed, aware that I have only two minutes. I am very sad about that, because many important points have been raised and there is virtually no time to respond to them.

I was glad to hear the hon. Member for Brent North (Barry Gardiner) start his remarks by pointing out that there has been a great deal of cross-party support for the entire Olympic bid process, of which he is a long-standing supporter, and for maintaining and delivering the most sustainable Olympics ever. I completely agree with his support for that, and I hope that hon. Members on both sides of the House will continue to provide such support.

Incidentally, I should mention that the reason why I am responding to the debate rather than the Minister for Sport and the Olympics is that he is opening an iconic sports facility in Durham, which will be part of the nation’s sporting legacy. I am therefore responding on his behalf.

The limited amount of time available means that all I can say is this. As I am sure the hon. Gentleman is aware, LOCOG is an independent company. The Government have one board member out of 19 or 20. Most of the decisions he is criticising were taken by LOCOG, and asking the Government to respond on behalf of a private organisation on which we have one board seat is, I am afraid, shooting at entirely the wrong target.

I understand the hon. Gentleman’s concerns and, indeed, I doubt anybody here would disagree with his point. I am sure that everybody here shares his concern to ensure that there is justice for the victims of the Bhopal disaster. As another contributor to the debate mentioned, there is a difference between legal liability for the company that Dow Chemical bought after the awful tragedy at Bhopal—as he rightly observes, that persists; when someone buys a company, they inherit its legal liabilities as well as its assets—and being morally responsible for causing the problem. Those two things are linked but distinct. We need to be careful in how we talk about responsibility. He was using that term rather loosely throughout his remarks. I am terribly sorry to have run out of time but, fundamentally, the answer to the vast majority of the hon. Gentleman’s questions is: ask LOCOG.