London Olympics

John Penrose Excerpts

Tuesday 21st February 2012 Westminster Hall

[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.

--- Later in debate ---

[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.”

--- Later in debate ---

[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.