Ministers are facing calls to review the UK’s financial ties to the multinational logistics company DP World over its business deals in Russia.
The business announced a £1bn expansion of the London Gateway port earlier this month, despite a row over the transport secretary, Louise Haigh, calling its ferry subsidiary, P&O Ferries, a “rogue operator”.
DP World had threatened to pull out of a government investment summit over the controversy.
The company, which has its headquarters in Dubai, 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 Russian 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 the investigative newsletter 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 chair 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 P&O Ferries business 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.
Despite the row, the Tory government gave the go-ahead in March last year for DP World to jointly run the Thames freeport, a low-tax zone along the River Thames. The project is planned to deliver more than £4.5bn in new public and private investment.
The company now faces scrutiny over the northern sea route along Russia’s Arctic shores, from Murmansk in the west, near its border with Norway, to the Bering Strait. The route is seen by Putin as a key passage in shifting trade eastwards in response to western sanctions and unlocking the Arctic’s vast oil and gas reserves.
Rosatom was appointed by Putin to develop the northern sea route, using nuclear-powered icebreakers to clear the path for container ships and tankers. The Moscow-based company is a large global supplier of enriched uranium and to date has not faced western sanctions.
DP World first signed an agreement with Rosatom in July 2021 to conduct design studies for the development of the route. It then signed further agreements with the state-owned business 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, according to a Reuters report.
Nataliia Shapoval, chair of the Kyiv School of Economics’s KSE Institute, one of the largest thinktanks in Ukraine, said: “We condemn any strengthening of DP World’s cooperation with Russia and in particular with Rosatom.” She said 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.
Michael Goldstein, professor of finance at Babson College, a US business school in Massachusetts, said the projected traffic on the northern sea route had been “massively diminished” because of sanctions, though 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.”
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 added that it had entered a joint venture in 2020 to operate a container terminal near Odesa that has limited operations because of the conflict, but it would “continue to play a constructive role in Ukrainian exports”.
The UK Department for Business and Trade has been approached for comment.
