London Olympics

Lord Goldsmith of Richmond Park Excerpts

Tuesday 21st February 2012 Westminster Hall

[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?