Dow Chemical's Olympic PR push dogged by Bhopal

Mon Feb 20, 2012 11:43am EST
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By Ernest Scheyder

NEW YORK (Reuters) - Dow Chemical Co (DOW.N: Quote) hoped an Olympic sponsorship would boost its global cache, but the company's link to a gas leak tragedy 28 years ago threatens to curb some of the benefits from the $100 million advertising deal.

As many as 25,000 residents of Bhopal, India, died in the aftermath of a 1984 gas leak at a pesticide factory that was owned by a subsidiary of Union Carbide, which sold the facility in 1994. Dow bought Union Carbide in 2001.

Since then, India, Amnesty International, Greenpeace and some members of the British Parliament have demanded Dow increase a $470-million compensation package that Union Carbide paid victims in 1989.

The Indian government wants Dow to pay an additional $1.7 billion, but Dow has refused, saying it has no responsibility for Bhopal and that Union Carbide settled liabilities with the Indian people.

The dispute was resurrected in the public eye by Dow's sponsorship of this year's Olympic games in London, home to a large South Asian population.

Activists succeeded in forcing Dow to remove its logo from a decorative wrap that will don London's Olympic stadium. Dow had hoped the wrap would showcase its environmentally friendly plastic.

"When you're doing an Olympics in England, considering the huge Indian population there, you probably could have suspected that there was going to be some protest," said Elliot Schreiber, executive director of Drexel University's Center for Corporate Reputation Management. "Dow has walked into a period of time where there's a lot of sensitivity."

The U.S. chemical giant will spend roughly $100 million every four years to sponsor the Olympics through 2020, a deal that extends to the 2014 Winter Olympics in Russia's Sochi, the 2016 Summer Olympics in Brazil's Rio de Janeiro and the 2018 Winter Olympics in Pyeongchang, South Korea.   Continued...

Local activists attend a demonstration to mark the 25th anniversary of the Bhopal gas disaster in Bhopal December 3, 2009. REUTERS/Reinhard Krause