Starmer urged to cut ties with P&O Ferries owner over links to Russia

Exclusive: UK government is facing calls to cease trading with DP World because of its sea route partnership with Putin

The British government faces calls to review the UK’s financial ties to the international firm DP World over its business deals in Russia.

The logistics firm announced a £1bn expansion of the London Gateway port earlier this month, despite a row over the transport secretary calling its ferry firm, P&O Ferries, a “rogue operator”. DP World had threatened to pull out of a government investment summit over the controversy.

The multinational logistics firm headquartered in Dubai in the United Arab Emirates is a partner in Vladimir Putin’s northern sea route project, an Arctic shortcut between Europe and Asia.

DP World has signed agreements with the Russia state nuclear corporation Rosatom since the invasion of Ukraine to help develop the route, but said this weekend it was focused on maintaining the flow of global trade and did not have “active operations” in Russia.

In an interview with Democracy for Sale, a senior Ukrainian parliamentarian has said that the UK should not be working with DP World because of its deals with Rosatom.

Oleksandr Merezhko, the Ukrainian MP and chairman of the parliamentary committee on Foreign Policy and Interparliamentary Cooperation, said: “Britain should not be doing business with a company doing deals in Russia. We are in favour of the total isolation of Russia.”

DP World has faced controversy in the UK after its subsidiary P&O Ferries fired nearly 800 staff in March 2022. Ministers said at the time the sackings were “shameful” and had exploited a loophole in which vessels were flagged in Cyprus to avoid UK laws.

Earlier this month, Democracy for Sale revealed that the then Conservative investment minister was told not to discuss the issue of the sacked P&O workers when he met DP World last year. 

The Tory government gave the go-ahead in March last year for DP World to jointly run the Thames Freeport, an economic corridor along the River Thames. The project is planned to deliver more than £4.5bn in new public and private investment.

The firm now faces scrutiny over the northern sea route along Russia’s Arctic shores from Murmansk in the west, near Russia’s border with Norway, to the Bering Strait. The route is seen by Putin as a key route in shifting trade eastwards in response to western sanctions and unlocking the Arctic’s vast oil and gas reserves.

Rosatom has been charged by Putin with developing the northern sea route, using nuclear-powered icebreakers to clear the path for container ships and tankers. The firm is a major global supplier of enriched uranium and has to date not faced western sanctions.

DP World first signed an agreement with Rosatom in July 2021 to conduct design studies for the development of the northern sea route. It then signed further agreements with the state firm at the St Petersburg International Economic Forum in June 2023 and at the COP28 Climate Change Conference in Dubai in December 2023. The two companies also formed a joint venture in 2023 to develop container shipping through the Arctic.

Nataliia Shapoval, chair of the KSE Institute, one of the largest think tanks in Ukraine, said: “We condemn any strengthening of DP World’s co-operation with Russia and in particular with Rosatom.” She said the DP World did not “shy away from working in Russia”.

In July last year Ukraine’s National Agency on Corruption Prevention added DP World to a list of the international sponsors of war because of its “strengthened cooperation” with Russia. This list has since been removed from public access over concerns from partner countries over a lack of a regulatory framework.

Michael Goldstein, professor of finance at Babson College, a business school in Massachusetts, said the projected traffic on the northern sea route had been “massively diminished” because of sanctions. He said it remained a crucial component of Putin’s economic strategy. He said: “It’s vitally important, but almost all the traffic is Russian-owned or Chinese-owned ships.”

In a statement, DP World did not respond to questions about its 2023 agreements with Rosatom, but said: “DP World does not have any active operations in Russia. We signed an agreement with Rosatom in July 2021 to conduct detailed design studies required for the development of the Northern Sea Route. No work has taken place.

“The northern sea route offers a potential long-term alternative to shipping through the Suez Canal and is a critical option to ensure resilient supply chains for the world. Global trade has face significant disruptions in recent years, from COVID-19, the Suez Canal blockage and more recently in the Red Sea. DP World is focused on maintaining the flow of global trade and finding operational solutions where possible.”

DP World said it had entered a joint venture in 2020 to operate a container terminal near Odessa which has limited operations because of the conflict, but it would “continue to play a constructive role in Ukrainian exports.”

The Department for Business and Trade has been approached for comment.

A version of this story also appeared in the Observer, with Jon Ungoed-Thomas.