By Ernest Scheyder
NEW YORK Feb 20 Dow Chemical Co
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
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.
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.
Dow will not be putting its logo on a decorative wrap that
will don London's Olympic stadium in the months leading up to
the opening ceremony. 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.
London will host the first games since Dow Chief Executive
Andrew Liveris signed the deal in July 2010.
The Indian Olympic Association has asked the International
Olympic Committee to revoke Dow's sponsorship, though so far the
IOC has refused, saying Dow had nothing to do with Bhopal.
Dow said the controversy has not hurt sales of its plastics,
insulation and other products. The company said it was surprised
at what it considers a large amount of misinformation
surrounding its link to Bhopal.
"Dow was never there. We did not acquire any of the
connection with Bhopal," said George Hamilton, Dow's vice
president of Olympic operations. "For some to try to tie Dow to
this, and then to use the Olympic platform to try to serve their
cause, it does call for some strong words."
Dow justified the sponsorship by forecasting an
Olympic-related sales boost of $1 billion by 2020. Hamilton said
that revenue goal remains on track.
Part of the $1 billion is expected to come from supplying
Styrofoam insulation for the aquatics center, where U.S.
swimming champion Michael Phelps will try to win his 15th gold
medal, and specialty plastic materials for the seats in the East
London stadium that will host the opening ceremony on July 27.
Unlike the majority of the 11 global Olympic sponsors, Dow
does not sell its products directly to consumers. That means the
Bhopal public relations sting is unlikely to make a dent on
Dow's sales, said Hassan Ahmed, a chemical industry analyst with
Alembic Global Advisors.
"By the time you buy your iPhone, you have no idea what Dow
material is being used inside," he said. "I don't think there'll
be a sales impact."