The Dow side of corporate sponsorship

Dow Chemical got it wrong if it thought when it acquired the worldwide assets of Union Carbide that it wouldn't have to deal with the legacy of the 1984 Bhopal disaster that killed thousands of people. Persistent campaigning by Indian civil society groups and international human rights organisations has made sure that what happened in Bhopal 28 years ago is not forgotten.

The legacy of Bhopal has returned to haunt the 2012 London Olympics. Meredith Alexander, head of policy at Action Aid, a U.K.-based charity, recently resigned from the Commission for a Sustainable Olympics in protest over how organisers determined who could sponsor the Games. Activist groups in the U.K. and in India, as well as some former Indian Olympians, have joined the rising chorus of complaints against Dow and its actions in the aftermath of Bhopal.

Last week, Amnesty International expressed disappointment after the International Olympic Committee (IOC) rejected the Indian Olympic Association's call to terminate Dow's sponsorship of the Games. Dow announced in December that it was withdrawing its logo as an official sponsor of the Games but human rights groups want the IOC and others organising the Games to go further, including by acknowledging a mistake in working with Dow. Ms Alexander's resignation reflects those lingering concerns.

Olympic sponsors have faced criticism in the past. During the 2008 Beijing Games, the Save Darfur campaign targeted major sponsors like General Electric and Coca Cola, urging them to use their influence with the Chinese government to stop the crimes against humanity that the Sudanese government was accused of committing in Darfur. The companies weren't in any way involved with the abuses, but campaigners saw them as legitimate targets. They believed the companies could intervene with the Chinese, and the Chinese would in turn use their influence to stop the Sudanese government from continuing the atrocities in Darfur. The record of such actions is mixed and when such interventions become public, have often been unsuccessful.

Coke and GE then, Dow now. But there is a crucial difference: no one was accusing companies sponsoring the Beijing Games of being complicit in human rights abuses in Darfur. In Dow's case, many activist groups claim that the company has a case to answer over the tragedy in Bhopal, when thousands of people died after methyl isocyanate gas leaked from a fertilizer plant. The plant was operated at the time by Union Carbide, an American corporation Dow Chemical acquired a few years later, although Union Carbide's Indian assets were sold to an Indian company prior to that acquisition. The liability of Dow with regard to the disaster in 1984 itself is not easy to establish, but activists and lawyers in India assert that Dow cannot escape responsibility for the ongoing contamination of ground water in Bhopal, and its health impacts.

The conversation about Bhopal has rightly focused on corporate responsibility, but it is important to remember the role of the Indian government as well. Indian officials who did not inspect the plant properly in the 1980s failed in their regulatory oversight role. Equally troubling, the government prevented Bhopal victims from suing Union Carbide after the accident, restraining their right to seek justice, and taking over the role of being the sole negotiator with Union Carbide. The case moved to India, and the government negotiated a settlement (worth $470 million), which several victim groups in India have termed insufficient. There were charges of mishandling of the money involved, and allegations that compensation payments were tardy. The government has also been sluggish in requiring proper chemical analysis of the plant to check groundwater for contamination.

The Bhopal case shows corporate failure to respect rights (as in the case of Union Carbide), state failure to protect rights (in the conduct of the Indian government), and the absence of an adequate remedy for victims — just the scenario for which the United Nations adopted in 2011 Guiding Principles on business and human rights. According to that framework, governments have the obligation to protect human rights; business has the responsibility to respect rights; and where protection gaps exist, an effective remedy is needed.

But wider questions for the IOC and the London Games organisers remain. What sort of screening should be in place when selecting sponsors? Large sporting events aren't cheap, and taxpayers don't want to pay the escalating bills. Organisers have few options besides turning to corporations for financial support.

Who should get naming rights? Should only companies with a squeaky clean reputation be chosen? And if so, how is such reputation defined? Who decides that a particular company is guilty of a specific abuse? Should it be courts, or are allegations by civil society groups sufficient? There is now some clarity regarding the due diligence steps companies should take to prevent human rights abuses. But what due diligence should organisers undertake?

A simple check of a company's “reputation” won't be adequate. Reputation surveys are notoriously subjective. Nor can one assume that a company with policies supporting sustainability or responsibility conducts its operations consistent with those policies.

The U.N. Guiding Principles on business and human rights — which provide the authoritative due diligence steps all companies need to take, including to track and monitor performance — offer a promising yardstick. Companies that can effectively demonstrate they are acting in line with this international framework should in theory pass such a screening. But would that satisfy civil society?

Developing and implementing more rigorous criteria won't be easy. But organisers cannot shirk that responsibility. The Olympics represent the noblest of human efforts to strive towards higher standards. Citius, Altius, Fortius, or “faster, higher, stronger” is the motto of the Games. By the same standard, organisers should aspire towards the highest standards when they undertake due diligence to select partners, in celebration of this ultimate test of human endeavour.

(Salil Tripathi is Director of Policy at the Institute for Human Rights and Business in London. E-mail: salil.tripathi@ihrb.org)