Time to establish human rights criteria for selecting corporate sponsors

The resignation of Meredith Alexander from the Commission for a Sustainable London 2012 Olympics raises the question of the factors organisers consider in deciding supporters for such major events. Dow Chemical’s sponsorship of the Olympics has been contentious - with activist groups in the UK and in India, and some former Indian Olympians, joining the rising chorus of complaints over the company’s role in the 1984 Bhopal gas disaster and its aftermath.

In response to these criticisms, Dow decided in December to withdraw its logo as an official sponsor of the Games. Human rights groups now want the Olympic organizing committee to accept that it made a mistake when it chose to work with Dow. Ms Alexander’s resignation in protest reflects those lingering concerns, as well as Dow’s continued association with the games, although it is not yet known why the resignation has come about now.

This is not the first such controversy surrounding Olympic sponsors. During the 2008 Beijing games, the Save Darfur campaign targeted major corporate sponsors like GE 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 for the campaigners they were legitimate targets. They believed the companies could intercede with the Chinese, and the Chinese would in turn use their influence to stop the Sudanese government from continuing the atrocities in Darfur.

Coke and GE then, Dow now. There is of course, a difference: no one was accusing companies sponsoring the Beijing Games of being complicit in human rights abuses in Darfur. Dow’s case is different, since many activist groups argue 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 in the Indian city in 1984. The plant was operated at the time by Union Carbide, an American corporation which Dow Chemical acquired a few years later, although Union Carbide’s Indian assets were sold to an Indian company prior to that acquisition.

The entire conversation about Bhopal has rightly focused on corporate responsibility, but all too often the Indian government gets a free ride. Indian officials who did not inspect the plant properly in the 1980s failed in their regulatory oversight role. Equally troubling, the Indian government prevented the Bhopal victims from suing Union Carbide after the accident, restraining their right to seek justice, and becoming the sole negotiator with Union Carbide. The government also argued that the case not be tried in the United States, and an American judge agreed. It then negotiated a settlement (worth $470m), which several victim groups in India have termed insufficient. In addition to corruption charges, the government of India was allegedly tardy in compensating victims. And for 27 years it has prevented proper chemical analysis of the plant, and has failed to check groundwater for contamination.

What this case shows is 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 adequate remedy for victims – just the sort of scenario for which the UN adopted in 2011 Guiding Principles on business and human rights.

The ongoing controversy surrounding Dow raises the important question of what sort of sponsor screening processes organizing committees of major events should undertake. Large sporting events cost huge amounts of money, and taxpayers are reluctant to pay the bills, particularly in times of austerity. Organisers have few options other than to go to large corporations for financial support.

Who should get naming rights? Should it be companies with a squeaky clean reputation, and if so, how is such reputation defined? If companies responsible for specific abuses are to be eliminated, who makes the determination – civil society, or courts of law? What sort of due diligence steps are necessary for the company, and what sort of due diligence should event organisers themselves undertake?

It is clear that a quick check of company reputation isn’t adequate. Reputation surveys are notoriously subjective. Nor can the existence of corporate sustainability policies be sufficient: there are many companies that have policies in place which commit them to respect human rights, to act in a responsible manner, to operate in a sustainable way, and to obey the law. And yet, many companies still end up committing or being associated with abuses. The new UN 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 – are a promising yardstick to deploy. Companies that can effectively demonstrate they are acting in line with this international framework should in theory pass such a screening.

Developing and implementing more rigorous criteria of this kind isn’t easy. Organisers of the 2012 London Games face many competing priorities and claims. But 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.