When Dubai Ports Ltd first bought up the ports and ships of P&O 16 years ago, the question that preoccupied a country reeling from the 2005 Islamist terrorist attacks was Britain’s physical security.
Now, the questions are focused on the economic security of Britain’s workforce.
From DP World’s vantage point in the Gulf, the crew of the loss-making ferries of P&O may never have been a pressing concern. The heart of DP World’s global operation is the enormous Jebel Ali port, at the trading crossroads of continents, boasting the largest artificial harbour in the world, incorporating ever more and ever bigger container ships.
It is also one of the world’s biggest free trade zones. Such zones are a place where businesses can incorporate with the lightest of tax and regulatory frameworks.
DP World is ultimately owned by Dubai’s ruling royal family. The chairman and group chief executive is Sultan Ahmed bin Sulayem, who has long been near the heart of government; he chairs a government department that includes the Dubai customs workforce, and leads the Jebel Ali free zone authority.
Bin Sulayem and DP World originally bought P&O – then a London listed company – in 2006 for £3.3bn. It paid a huge premium, about 70% over the market value, for a group that Margaret Thatcher had once described as “the fabric of the British empire”.
However, the ports were always its key target: Bin Sulayem admitted then that he had limited knowledge of the ferry business that came alongside, but denied he had plans to sell them off. They were however sold to a separate state-owned entity, Dubai World, around the time of the financial crisis, before DP World bought them back for $322m (£244m) in 2019.
Among its 70 ports worldwide, the closest to home, as far as most sacked P&O workers see it, are the big container operations at London Gateway and Southampton. Both now are the central hubs of the first freeports, Thames and Solent, putting DP World firmly in the slipstream of post-Brexit government economic policy.
The chancellor, Rishi Sunak, has championed the controversial freeports as a key part of levelling up – allegedly providing more jobs for the deprived port regions. Critics have already questioned the freeport model as potential “mini-tax havens” that could fuel a race to the bottom on regulation, and see more profits sent offshore rather than reinvested in the UK.
DP World however has been a key proponent: it says it has already “replicated in key international locations” the model of Jebel Ali. “By expanding this successful model we now own, develop and operate industrial parks, inland cargo depots, special economic zones and specialist facilities around the world that help to enable trade.”
More politicians may now be questioning an economic model developed in Dubai. Even outside Jebel Ali in Dubai, as in all Gulf states, employment law is hardly weighted to the worker: largely carried out by migrants operating under the kafala system, in which employers have the right to decide if they can ever change job, or leave the country.
Those reporting from Britain have also apparently felt the strain: P&O Ferries had three chief executives in little over a year, after first Janette Bell in August 2020 and then David Stretch in November 2021 handed in their notice to Dubai. The latest, Peter Hebblethwaite, handed over the job of firing crew by video to the company’s HR chief. DP World said that both “left the business for completely unrelated reasons” to this week’s mass sackings.
DP World and P&O Ferries have also been embroiled in controversy over a £146m deficit in the industry-wide seafarers’ pension fund, the Merchant Navy Ratings Pension Fund, where P&O is the largest single employer. Parts of the Royal Navy’s pensions are involved, and the taxpayer could be left on the hook if P&O do not pay the money they owe.
While that row rumbles on, DP World signed up last November to sponsor the European golf tour for an even bigger sum – footing the lion’s share of the $200m prize money.
Meanwhile, the global operation rolls on: it paid out a dividend of $332m in 2020, and saw its revenues jump 27% to a record $10.8bn in 2021, in results announced by Bin Sulayem earlier this month. On Wednesday, as DP World marshalled security teams in British ports to escort crew off ships, he tweeted from a seminar in the UAE, speaking to young Emiratis: “I strongly believe in investing in the next generation.”
