( ASCII text )
This is a local copy of the Multinational Monitor file http://multinationalmonitor.org/mm2000/00december/enemies.html
DECEMBER 2000 -- VOLUME 21 -- NUMBER 12
THE TEN WORST CORPORATIONS OF 2000
Enemies of the Future
The Ten Worst Corporations of 2000
By Russell Mokhiber and Robert Weissman
- AVENTIS: Making Human Guinea Pigs
- BAT: Smuggler of Death
- BP/AMOCO: Lawbreaker
- DOUBLECLICK: Cookie Crook?
- FORD/FIRESTONE: Reckless Homicide?
- GLAXO WELLCOME: Patents Over People
- LOCKHEED MARTIN: Testing its Pollutant on Humans
- PHILLIPS PETROLEUM: Deadly Employer
- SMITHFIELD FOODS: Pig Out
- TITAN INTERNATIONAL: Union Buster
Clearly, you have not been paying attention -- to the editors of Fast Company, Forbes ASAP, and Wired magazine, the authors of The Millionaire Next Door and the Beardstown Ladies investment books, to George Gilder, Tom Peters, Lester Thurow and Thomas Friedman, to the Nike and Microsoft revolutionaries -- and the myriad other business hustlers who would have you believe that popular democracy is reflected not by unions, activist groups, and communities of human beings -- but by avant garde, internet connected, tech-savvy corporations.
Revolution is the air! Forget the fight against the WTO in Seattle. We're talking about fast companies leading the way to a new marketplace -- fast companies that express the will of the e-trading people, who are buying and selling their way into millionaire status, and upending the hierarchical corporate order.
And you thought populism meant the movement of citizens to control, through democratic means, their economy, their government, and their lives?
The incessant bombardment of this drivel drove cultural critic Thomas Frank up and over the wall. This year, he landed on the other side with One Market Under God: Extreme Capitalism, Market Populism, and the End of Economic Democracy.
Frank, a social critic and editor of the Chicago-based Baffler magazine (www.thebaffler.com), has had it with the idea of "market populism" -- the notion that markets are identifiable with the "will of the people" -- one dollar, one vote.
He's had it with the corporate hucksters who continue to paint this rosy picture of the 1990s: Corporate profits multiplied. The Internet liberated a new entrepreneurial spirit. A new generation of millionaires was minted overnight. Not just the rich -- but all people in the United States -- prospered, adapted easily to downsizing.
Or as laissez faire energy specialist Daniel Yergin put it: Privatization plus deregulation plus globalization plus turbo-capitalism equals prosperity.
"From Deadheads to Nobel-laureate economists, from paleoconservatives to New Democrats, American leaders in the nineties came to believe that markets were a popular system, a far more democratic form of organization than democratically elected governments," Frank writes.
In molotov cocktail style, Frank rips into the hucksters of business hype, pointing out that democracy still means democratic institutions democratically controlled, including governments and unions, and that all the hype about the millionaire next door and fast company revolutionaries that allow workers to dress casual on Fridays and rip the boss on e-mail will not change some fundamentals about our current version of extreme capitalism -- the top 10 percent of people in the United States control 90 percent of the nation's wealth, CEO compensation skyrocketed, rising from 85 times as much as the average blue-collar wage in 1990 to some 475 times as much by 1999, union membership in the United States continues to crash, 15 percent of the U.S. population is without health insurance, and hundreds of thousands of U.S. jobs have been exported overseas.
And, it should be added, the situation is far, far worse in developing countries, where corporate power and the dogmatic markets-above-all policies of the International Monetary Fund, World Bank and World Trade Organization have left hundreds of millions of people in dire poverty.
Yet, because Frank effectively contrasts the hype of the business magazines and corporate hucksters with the reality on the ground in this country, he is considered "an enemy of the future" by Reason magazine editor Virginia Postrel.
Just practice democracy -- seek to exert people power over corporate power -- and you too can become a card carrying enemy of the future.
Frank points out that for years, corporations, fearing public control, have sought to mess with the collective mind of the citizenry.
He says he owes a debt of gratitude to Roland Marchand's classic Creating the Corporate Soul: The Rise of Public Relations and Corporate Imagery in American Big Business, in which Marchand points out that for all the legal legitimacy that the courts bestowed upon corporations at the turn of the century, corporations "conspicuously lacked a comparable social and moral legitimacy in the eyes of the public."
So big corporations launched a 100-year public relations campaign to "create the corporate soul" -- to convince the public that corporations had a moral purpose and were serving the public good.
The public relations campaign continues today at warp speed. Many have been convinced that democracy and the free market are identical. But at what price?
"Here at home the price was the destruction of the social contract, the middle class republic itself," Frank writes. "Our portfolios may have appreciated generously, but they did so only to the extent that we countenanced the reduction of millions to lives of casual employment without healthcare or the most elementary of workplace rights. We caught the tail end of the Qualcomm wave and pretended not to notice as sweatshops reappeared on our shores. We wondered like tots at the majesty of Cisco, at the generosity of Gates, and we stood by as the price of a good education for our kids ascended out of reach."
Frank and other social critics this year have helped us see through the fog of corporate hype.
We second Frank's sentiment that the interests of living breathing human beings should be put before machines, before profits, before the corporate state.
In that spirit, we present to you, our readers, the Ten Worst Corporations of 2000.
- AVENTIS: MAKING HUMAN GUINEA PIGS
Humility and caution are not the strongsuits of the corporate technocracy.
Give them a new technological toy, and they are anxious to deploy it. Give them a new technological toy with a scenario of how it can make them rich, and there's no restraining them. Prudent consideration of the social, health and ecological consequences of the new technologies routinely fall by the wayside.
No case illustrates this pattern better than the introduction of genetically modified organisms (GMOs) into the environment and, most worrisome, the food supply.
Biotech foods have been forced on the public without even the same testing required of food additives. The biotech apologists assure the world that there's no need for testing, that GMO food is equivalent to conventional food.
GMOs have been released into the environment, despite agreement that some biotech products will make lasting changes in ecosystems (for example, by building pest resistance to the naturally occurring pesticide Bt) and the near certainty that some biotech products will contaminate conventional food supplies.
The biotech and food companies have sought to block labeling of food containing GMOs, apparently on the grounds that what consumers don't know can't hurt them -- or at least can't hurt the bottomlines of the biotech peddlers whose sales figures would surely plummet if consumers could easily make a choice to avoid biotech foods.
This year, rushing to the head of the pack of irresponsible biotech companies was the French corporation Aventis, the maker of Cry9C corn, sold under the name StarLink.
Earlier this year, StarLink corn -- which has not been approved for human consumption -- contaminated Taco Bell brand taco shells sold in grocery stores by Kraft, as well as many other foods.
In 1998, the U.S. Environmental Protection Agency approved StarLink, which is spliced with a protein that kills insect pests, for use in animal feed or non-food industrial purposes only. The EPA withheld approval for introduction into the food supply on the grounds that it did not have satisfactory data to show it would not trigger allergic reactions.
The EPA's approval of StarLink was conditioned on Aventis notifying farmers of the critical importance of keeping StarLink corn separate from their other corn crops and of maintaining a buffer zone between acreage planted with StarLink and land planted with other corn.
The corn supply contamination appears to have occurred because uninformed farmers did not maintain the required buffer zone, or perhaps because corn crops were mixed in grain elevators. Aventis claims it properly notified farmers.
Biotech opponents say the StarLink contamination of the food supply was predictable. Indeed, they predicted it.
Aventis was mildly apologetic about the contamination. As pressure from the public and from companies whose products had been or might be contaminated mounted, Aventis announced that it would buy back all StarLink corn, in a program overseen by the U.S. federal government.
"This responsible, voluntary action demonstrates to growers and the consuming public the commitment of Aventis and the agencies to provide additional confidence in the integrity of the country's food supply," the company said in a statement.
But the company's main play was to push for expedited EPA approval to put StarLink in the food supply. New evidence submitted to the regulatory agency in October, Aventis said, "verifies that there is more than an adequate margin of safety for StarLink corn -- even for especially sensitive population groups (e.g. children and those whose dietary patterns include high consumption of yellow corn)."
Critics have claimed the StarLink corn poses allergenic risks, including fever, rashes or diarrhea. They are sharply critical of the scientific evidence produced by Aventis to dispel the allergenicity concern, with Friends of the Earth's Bill Freese telling the EPA in October that Aventis had submitted "shoddy" science, replete with failures to report important data. The flaws, he charged, "are not minor oversights, but rather serious breaches of basic scientific protocol; a high school biology student would be flunked for less."
Many consumers apparently agree. At least 44 people have complained to the U.S. government that they became ill after eating food contaminated with StarLink.
- BAT: SMUGGLER OF DEATH
One of the most effective ways to reduce smoking rates is to raise the price of cigarettes.
That's why the World Health Organization and health authorities consider stiff excise taxes on cigarettes as among the most important tobacco control measures a country can adopt.
It is why the tobacco industry hates excise taxes.
And, it appears from evidence made public this year, it is why the tobacco industry has promoted and managed cigarette smuggling on a massive scale throughout the world.
According to internal company documents unearthed by the International Consortium of Investigative Journalists (ICIJ), a project of the Center for Public Integrity, and the British group Action on Smoking and Health (ASH UK), British American Tobacco (BAT) for decades engineered a worldwide smuggling scheme, with extensive efforts in Latin America and Asia. BAT, which owns the U.S. company Brown & Williamson, is the world's second largest tobacco multinational, just behind Philip Morris. The documents are among millions of company documents made public in connection with the U.S. state litigation against the tobacco companies.
As Clive Bates of ASH UK summarized in testimony before the British House of Commons Health Select Committee, BAT undertook a comprehensive, planned project to promote smuggling worldwide. Among the company's key strategies, he testified:
- Adopting an approach to business planning and sales target setting which treats the various routes for smuggling as near-normal distribution channels which are under the same sort of control as legitimate channels;
- Deliberately establishing business relations with intermediaries that directly or indirectly supply smugglers and directing these companies so as to gain share in the illegal markets;
- Building warehouses and stationing marketing personnel close to borders with poor customs controls;
- Using a small legal or duty-free market to justify advertising campaigns which have the real purpose of stimulating demand for cigarettes on sale in the illegal market (these are known as ‘umbrella operations');
- Organizing complicated movements of cigarettes through several jurisdictions or multiple levels within an elaborate distribution chain -- leading to difficulties in tracing the products.
Smuggling is not a "victimless" crime, Bates emphasized. "The lower prices increase demand and improve the competitive position of the brand and stimulate overall market demand -- with knock-on health impacts due to increased smoking." The ultimate result, he said, "is increased smoking, and hence increased illness, especially in developing countries, among the poor, and among children and adolescents."
The BAT documents show high official awareness of and involvement in the smuggling operations, with contraband cigarettes referred to by a range of euphemisms, including DNP (duty not paid) and GT (general trade). Here are some excerpts from the internal documents:
- "I am advised by Souza Cruz that the BAT Industries Chairman has endorsed the approach that the Brazilian Operating Group increase its share of the Argentinean market via DNP."
- From BAT's five-year plan for 1994-1998: "A key issue for BAT is to ensure that the Group's system wide objectives and performance are given the necessary priority through the active and effective management of such [DNP] business."
- In China, the company sought to "investigate alternative export routes/customers that will improve penetration of UK brands in northern and central provinces."
- In Colombia, a memo said, "DNP product should be launched two weeks after the DP product has been launched."
Asked to respond to charges based on its own internal documents, BAT was aggressively evasive.
"We do not intend to answer questions or address allegations apparently based on highly selective and out-of-context documents, about matters which are more properly addressed -- and in many instances are being addressed with our full cooperation -- by governments and customs authorities around the world," the company said in a statement in response to the International Consortium of Investigative Journalists. The company said that it knows that some of its products "are handled other than through official channels," but added that "we cannot control the distribution chain all the way to the final customer."
Forced to appear before the British parliamentary committee with Clive Bates and Duncan Campbell, a reporter affiliated with ICIJ and the Guardian newspaper, BAT Chair Martin Broughton denounced the committee as a "kangaroo court." He ripped up a copy of an internal memo handed him that referred to the smuggling, and denied he had read a lengthy series of articles in the Guardian based on the ICIJ investigation.
What kind of nasty oil company do we have in BP/Amoco? (BP/Amoco, which is based in Chicago, was created in 1998 by the merger of Amoco Corporation of the United States and the British Petroleum Company p.l.c. of the United Kingdom.)
Let us review the evidence:
- In February, BP Amoco's Alaska subsidiary -- BP Exploration (Alaska) Inc. -- was hit with a $500,000 criminal fine for failing to report the illegal disposal of hazardous waste on Alaska's North Slope. The company was also ordered to establish a nationwide environmental management system designed to prevent future violations.
As a condition of a five-year probation, BPXA was ordered to create an environmental management system for all of BP Amoco's facilities in the United States and Gulf of Mexico that are engaged in the exploration, drilling or production of oil. This court-monitored system will be the first of its kind in the oil industry to result from a federal prosecution.
At the time BPXA pleaded guilty to this environmental crime, the company also agreed to a civil settlement involving related claims. Under the settlement, BPXA has paid $6.5 million in civil penalties to resolve allegations that the company illegally disposed of hazardous waste and also violated federal drinking water law.
Both the criminal plea and the civil claims stem from the injection of hazardous wastes on Endicott Island over a three-year period beginning in 1993.
- In April, according to a story in The Guardian newspaper, the Pension Investment Research Consultants Groups (PIRC), which advises pension funds and investment managers with combined assets over $400 billion), sent a report to its clients recommending they vote in favor of a shareholder resolution calling on BP Amoco to cancel its controversial Northstar offshore oil project now under construction in the Arctic Ocean and stop lobbying to open the Arctic National Wildlife Refuge to drilling. The resolution urges BP Amoco, which labels itself a forward-thinking energy company, to invest in the extraordinary market opportunities now opening for solar energy.
A BP/Amoco spokesperson says that "it's going to come down to Congress as to whether or not the [Arctic National Wildlife Refuge] is going to be opened up. We really don't have a say in that."
The company says it is investing hundreds of millions annually in solar, but that this does not replace the need for more oil. "Solar can't run your car at this point," says Youssef Ibrahim, vice president of media relations. "The world is consuming 76 million barrels of oil a day. When the Chinese finish buying another 170 million cars in the next 20 years, where does anybody think the stuff is going to come from to run them?"
- In April, BP Amoco agreed to pay $32 million to resolve claims under the False Claims Act and administrative claims that the corporation underpaid royalties due for oil produced on federal and Indian lands since 1988.
- In July, BP/Amoco agreed to pay $10 million to settle a Clean Air Act case.
- And throughout the year, BP/Amoco and the other oil companies used their toadies in Congress, led by Representative Don Young, R-Alaska, to threaten a public interest group, the Project on Government Oversight (POGO), with a contempt of Congress citation for failure to turn over subpoenaed documents.
POGO's lawyers say that POGO is refusing to provide the phone records to the House Committee because to do so would undermine efforts to protect whistleblowers and impermissibly intrude upon its First Amendment rights.
Young's subcommittee is investigating POGO's payment of about $800,000 to two federal employees. POGO had received $1.2 million from Mobil Oil in a lawsuit settlement and then made payments of $383,600 each to two whistleblowing federal employees.
Young argues that the POGO payment to the officials was a payoff for information. POGO says it was a reward for their whistleblowing.
POGO's executive director, Danielle Brian says that Young is acting on behalf of the oil industry in retaliation against POGO for the group's campaign to expose the federal government's overpayment of royalties to the oil industry.
"Chairman Young's subpoena is the latest in a series of reprisals from oil-friendly politicians aimed at POGO for their role in forcing the issue of oil royalty underpayments in recent years," says Brian. "The only information Chairman Young will gain from this subpoena are the identities and phone numbers of whistleblowers who have worked with POGO, including those who exposed oil industry ripoffs. We will not betray these whistleblowers and subject them to retaliation."
DOUBLECLICK: COOKIE CROOK?
Beware, computer junkies -- Doubleclick is following you.
Earlier this year, Michigan Attorney General Jennifer Granholm commenced a legal action against DoubleClick, Inc., the world's largest Internet advertising business, and two web sites that it owns and controls, IAF.net and NetDeals.com.
Granholm alleged that DoubleClick had violated the Michigan Consumer Protection Act and other laws by failing to disclose to Internet users that DoubleClick is systematically implanting electronic "cookies" -- electronic surveillance files -- on the hard drives of users' computers without their knowledge or consent.
DoubleClick then proceeds to compile personal user profiles on consumers which, potentially, can be linked directly to a consumer's name, home address and e-mail account.
DoubleClick has collected 100 million consumer profiles.
DoubleClick and the Attorney General's office have been in negotiations to resolve the dispute throughout the year, although sources close to the case said that settlement talks have broken down recently.
DoubleClick President Kevin Ryan said his company "has never and will never use sensitive online data in our profiles, and it is DoubleClick's policy to only merge personally identifiable information with non-personally identifiable information for profiling, after providing clear notice and choice."
But Granholm says that "every time you use the Internet, DoubleClick is placing a bar code on your back -- a user I.D. -- so that it can identify your interests, habits and preferences."
"Because DoubleClick secretly implants additional surveillance files as you surf the Internet, DoubleClick is continually adding detailed personal information about you to its data banks," she says. "The average consumer has no idea that their on-line movements are being spied upon. This amounts to little more than a secret, cyber wiretap."
"Cookies" are tiny, electronic files that are routinely placed on an Internet user's computer when that user visits a site on the web. The files allow the site to recognize former patrons and customize their offerings of goods and services when that patron visits again. A cookie doesn't identify users by name -- it merely tags their computer with an I.D. number.
DoubleClick operates as a third party on many web sites, however, placing additional surveillance cookies on a visitor's computer without the visitor's knowledge that DoubleClick even maintains a presence on that site.
"A consumer visiting a trusted national clothing retailer's site, for instance, might expect that retailer to collect preference information so the site could customize the consumer's next visit," Granholm says. "That consumer would have no idea, however, that a third party -- DoubleClick -- is also placing a surveillance cookie on their computer for the purpose of selling that profile information to other web advertisers."
In November 1999, DoubleClick acquired Abacus Direct Corporation, a company that compiles, analyzes and markets "identifiable" personal consumer information such as names, home addresses and phone numbers gathered primarily from catalogue sale transactions.
The Abacus database contains detailed consumer profiles on more than 90 percent of U.S. households.
DoubleClick also collects "identifiable" personal information directly through the operation of its two subsidiaries, IAF.Net and NetDeals.com.
DoubleClick has indicated that it "can associate" this "identifiable" personal information with the "non identifiable" profile information it gathers from the surveillance cookies it is surreptitiously placing on computers.
Asked for clarification, officials from DoubleClick respond that they, along with other industry players, have adopted the Network Advertising Initiative, self-regulatory principles approved by the Federal Trade Commission.
Under the principles, "network advertisers shall not use personally identifiable information about sensitive medical or financial data, sexual behavior or orientation, nor social security numbers" for online preference marketing. It prohibits the merger of data bases that include identifiable personal information with others absent an affirmative "opt-in" by consumers.
FORD/FIRESTONE: RECKLESS HOMICIDE?
In 1998, in Corpus Christi, Texas, 17-year-old Matthew Hendricks was on his way to pick up his girlfriend. He was driving a Ford Explorer. The tread ripped off one of the Ford's Firestone tires, causing him to lose control. He was thrown from the vehicle and killed.
"When I was told that my son died, I felt like someone had reached in and ripped my heart out," says Vicki Hendricks, Matthew's mom.
The death of Matthew Hendricks is one of more than 150 deaths around the world linked to Firestone tread separations.
Ford and Firestone knew of at least 35 deaths and 130 injuries before the U.S. federal government launched its probe earlier this year. They knew about these cases because they were being sued by the families of the victims. (The parents of Matthew Hendricks settled their case against Firestone earlier this year.) And as a condition of these settlements, Ford and Firestone were demanding that the lawyers who bring these cases not speak to anyone about what they found out during discovery.
Ford and Firestone should be criminally prosecuted for reckless homicide in connection with the more than 90 deaths and hundreds of injuries that resulted when 15-inch tires that are standard equipment for Ford Motor Company's popular Explorer sports utility vehicle failed, causing catastrophic accidents around the country.
Joan Claybrook, President of Public Citizen, plainly presented the evidence of corporate culpability in Congressional testimony delivered in September.
"The Ford Explorer was first offered for sale in March 1990," Claybook told the transportation subcommittee of the Senate Appropriations Committee. "Ford internal documents show the company engineers recommended changes to the vehicle design after it rolled over in company tests prior to introduction, but other than a few minor changes, the suspension and track width were not changed. Instead, Ford, which sets the specifications for the manufacture of its tires, decided to remove air from the tires, lowering the recommended psi to 26. The Firestone-recommended psi molded into the tire for maximum load is 35 psi."
"Within a year of introduction," she continued, "lawsuits against Ford and Firestone were filed for tire failures that resulted in crashes and rollovers. At least five cases were filed by 1993, and many others followed in the early 1990s. Almost all were settled, and settled with gag orders prohibiting the attorneys and the families from disclosing information about the cases or their documentation to the public or DOT. When lawsuits are filed against a company about a safety defect, the company organizes an internal investigation to assemble information and analysis about the allegations. Top company officials are kept informed about all lawsuits against the company, particularly when they accumulate concerning one problem. There is no question the companies knew they had a problem. But they kept it secret."
By 1996, state agencies in Arizona were reporting problems with Firestone tires on Explorers. By 1998, Ford and Firestone had entered into discussions over tire failures with authorities in Middle Eastern, Asian and South American countries. "Ford eventually decided to conduct its own recall without Firestone and replace the tires in the various countries in 1999 and 2000," Claybook noted.
But the companies failed to act to remedy the problem in the United States until this year, when the National Highway Traffic and Safety Administration began investigating the problem.
Senator Arlen Specter, R-Pennsylvania, a former district attorney, has said that if he were still a district attorney, he would bring such a criminal homicide prosecution under state law at the "snap of a finger."
Unfortunately, there are few prosecutors in the country today with the resources and courage to bring such a homicide prosecution against two corporate giants, and no criminal prosecution has so far been brought against Ford/Firestone.
Legislation proposed by Senators John McCain, R-Arizona, and Specter would have provided a structural remedy to deter future Ford/Firestone-style coverups by imposing jail terms on corporate executives for knowingly selling vehicles or parts with dangerous defects. But a Big Business lobby campaign defeated this proposal (though Ford supported it). Instead, Congress passed only minor legislation that requires the auto companies to notify U.S. regulators when they replace motor vehicle parts in a foreign country and to turn over to federal regulators government data on warranty claims.
While there is no longer a dispute over the danger of the Firestone-Ford Explorer combination, the two companies have sought to evade full responsibility by blaming each other for the problem.
"We take full responsibility when there is a problem with our tires," John Lampe, then the executive vice president and now CEO of Firestone told a Congressional committee in September. "We firmly believe, however, that the tire is only part of the overall safety problem shown by these tragic accidents. Mr. Chairman and members of the Committee, let me be very clear; we could remove every one of our tires from the Explorer, and rollovers and serious accidents will continue."
"My purpose is not to finger point," countered Ford's CEO Jac Nasser at a separate Congressional hearing, "but simply to tell you that at each step Ford actively took the initiative to uncover this tire problem and find a solution. It was not until we saw Firestone's confidential claims data that it became clear what had to be done. If I have one regret, it is that we did not ask Firestone the right questions sooner."
GLAXO WELLCOME: PATENTS OVER PEOPLE
More than 35 million people around the world have HIV/AIDS, well over 20 million in sub-Saharan Africa. Thirty-six percent of adults in Botswana have HIV/AIDS. About 3 million Africans die annually from HIV/AIDS.
In the United States, as well as other rich countries, drug treatments enable many or most of those with HIV/AIDS to survive.
But the life-saving drug cocktails are very expensive - costing $10,000 to $15,000 or more per person per year. These prices are unaffordable for all but a tiny few in Africa, where per capita incomes generally register in the hundreds of dollars. So for Africans, an HIV/AIDS diagnosis is a death sentence.
In a rational and humane world, the life-saving drugs would be made available to Africans, who would enjoy the same access to treatment as those in the rich countries.
Unfortunately, we don't live in a rational world.
Instead, drug companies use patents and various intellectual property protections to block distribution of cheap, generic versions of HIV/AIDS and other drugs. Since the cost of drug production is actually very low, these generic versions can reduce prices by 95 percent or more.
For years, the pharmaceutical industry was able to count on the U.S. government to pressure developing countries not to undertake to make generics available -- even when those countries sought to adhere to the restrictive rules of the World Trade Organization. In the face of strong domestic pressure from AIDS activists and others, the U.S. government has backed down from many of the more extreme threats it made against developing countries in connection with the drug access issue, though it has continued to seek to deter the use of generics through its aid and trade policy [see "AIDS Drugs for Africa," Multinational Monitor, September 1999].
While the U.S. government has restrained itself, the drug companies continue to do everything they can to block generic competition. Their great fear is not losing markets in Africa -- where sales are miniscule -- but that competition and lower prices in developing countries will generate pressure for competition and lower prices in other countries, especially the United States, where industry profiteering is at its peak.
Glaxo Wellcome, now planning to merge with SmithKline Beecham, has emerged as a particular menace among the drug industry cartel. (Burroughs Wellcome, now merged with Glaxo, was an early villain in the effort to promote access to AIDS medicines, charging astronomical prices for AZT, one of the first successful anti-AIDS drugs, and one developed by the U.S. government.)
And, in August, Glaxo dispatched a threatening letter to Cipla, an Indian generic drug maker, objecting to Cipla's distribution of a small amunt of Combivir -- a combination of two anti-AIDS drugs for which Glaxo claims to hold patent rights -- in Ghana.
"Importation of Duovir [Cipla's version of Combvir] into Ghana by Cipla or any of its affiliates represents an infringement of our Company's exclusive patent rights," Glaxo instructed Cipla.
In November, Cipla announced it would stop exporting Duovir to Ghana, even though it contested Glaxo's patent claims. At stake is whether Cipla will sell low-cost AIDS drugs in Ghana.
Ghana may represent only a sliver of Glaxo's revenue, "but where do you draw the line?" Martin Sutton, a Glaxo spokesperson, said to the Wall Street Journal.
Low-cost sales of AIDS drugs by Cipla and other generic manufacturers in Africa could suddenly make treatment within reach of hundreds of thousands or make it feasible for foreign aid and philanthropic efforts to be devoted to treatment options.
Glaxo's actions make the day when that finally happens further off.
Meanwhile, the death toll mounts.
TESTING ITS POLLUTANT ON HUMANS
For years, pesticide companies have tested their dangerous products on human beings. Now, the merchants of war are testing a pollutant on human beings.
In November, the Los Angeles Times reported that on behalf of military contractor Lockheed Martin, Loma Linda University is conducting the first large-scale tests of a toxic drinking water contaminant on human subjects -- a step medical researchers and environmentalists called morally unethical and scientifically invalid.
The Times reported that Loma Linda Medical Center is paying 100 people $1,000 each to eat a six-month daily dose of perchlorate, a toxic component of rocket fuel that damages thyroid function and is found in hundreds of water supplies in Southern California.
The Loma Linda subjects are being fed up to 83 times the "safe" level of perchlorate currently set by the state health department, which is expected to review its perchlorate standards in coming months.
The paper reported that a former Lockheed plant is the likely cause of the contamination of water wells in San Bernardino County.
In 2001, the U.S. Environmental Protection Agency (EPA) will begin national testing of water supplies for perchlorate in preparation for setting national regulations on the chemical.
If Lockheed Martin can persuade the state and EPA not to set strict standards for perchlorate allowed in drinking water, the company will save millions of dollars in cleanup costs.
The Times said the Loma Linda tests are apparently the first large-scale study to use human subjects to test a water pollutant. The EPA has set no protocols or regulations for human testing. In September the agency's science advisory panel said human testing should be used only with "the greatest degree of caution."
But two members of the panel dissented strongly, calling the studies dangerous and insufficient to judge the safety of pollutants, especially for children. A recent study by the Arizona state health department of infants near Lake Mead, Ariz., which is contaminated with perchlorate, found that many were born with altered thyroid function.
In their dissent, EPA panel members Dr. Herb Needleman of the University of Pittsburgh School of Medicine and Dr. J. Routt Reigart of the Medical University of South Carolina wrote that allowing human testing "lays the ground for a flood of research that should not be conducted and should not be accepted by the EPA for regulatory purposes."
And in a letter to the president of Loma Linda University, the Environmental Working Group warned that the ethical and scientific cloud over human testing means that "the human subjects in this experiment, including Loma Linda University students in all likelihood, will have accepted risks during the course of an experiment that will yield results that are unusable for any regulatory purposes."
As the Times pointed out, scientists who perform these human experiments compare them to clinical trials for drugs. In fact, perchlorate isn't just a pollutant -- high doses are used, in rare cases, to treat hyperthyroidism.
But people who test drugs are helping society find treatments for sick people -- consuming a pollutant has no medical benefits.
Lockheed denies responsibility for the tests. Says Gail Rymer, company director of environmental communications: "The corporation has relied on experts -- in this case, Dr. Braverman of Boston University (BU) -- to ensure that the study is safe, and ethically and scientifically sound. We believe it will help us understand better the effects of low-dose perchlorate exposure on humans."
"BU has the lead on the study. Lockheed Martin put its money into a trust run by an independent trust administrator, who paid BU, who then hired Loma Linda to conduct the study," Rymer says.
Asked about the general perception that poisons should not be tested on humans, Rymer responds: "That's not for us to determine. Again, we rely on the experts and their guidance in their areas."
Of course, Lockheed Martin is involved in much more than testing pollutants. Among other dubious activities, the company is the primary proponent of one of the greatest government boondoggles of all time and a genuine national security risk: Star Wars. Lockheed invested nearly $2 million in the 1999-2000 election cycle, not to mention millions more spent on lobbyists, think tanks and other opinion makers to push for increased support for the proposed National Missile Defense system [see "Star Wars, Continued," Multinational Monitor, October 2000]. Despite an impressive record of technological failure, all signs point to the U.S. government dumping billions more into research and development for the military fantasy.
PHILLIPS PETROLEUM: DEADLY EMPLOYER
A massive explosion at a Phillips Petroleum plastics plant in Pasadena, Texas in March killed one person and injured 74.
It was the third fatal accident at the sprawling petrochemical complex in the last 11 years, including a 1989 blast that killed 23 people and an explosion in June 1999 that left two dead.
The explosion was also the fourth within the last year at the facility.
The plant employs 850 workers who make high quality plastic resins for use in medical and consumer products.
"This tragic explosion at the Phillips Chemical complex fits only too well with the American chemical industry's history of accidents across the country and in Texas," says Jeremiah Baumann of U.S. PIRG, a public interest group based in Washington, D.C.
After a six-month investigation, the Occupational Safety and Health Administration (OSHA) proposed fining the company $2.5 million.
OSHA said that "failure to properly train workers" was a key factor in the deadly explosion.
"Unfortunately, this tragedy is not an isolated incident, but one is a series of incidents at this site," says U.S. Labor Secretary Alexis Herman. "Three workers lost their lives in explosions at this plant in less than a year's time, and 23 others were killed in a major explosion in 1989."
Phillips Petroleum disagreed with the conclusions of the OSHA investigation and expressed disappointment that OSHA "chose to issue citations rather than pursue a mutually satisfactory resolution of the issues."
OSHA blamed the blast on a chemical reaction in a 12,000-gallon tank of butadiene in the K-resin section of the complex.
K-resin is a trade name for clear plastic sold and used for such items as drinking cups, food containers and medical equipment. Butadiene is a highly reactive hydrocarbon.
"The tank had been out of service for cleaning and had no pressure or temperature gauges that could have alerted workers in the control room to the impending hazard," according to OSHA.
Jim Lefton, international representative with the Paper, Allied-Industrial, Chemical and Energy Workers International union, applauded the fine.
"I wish it could have been more. Our bottom line is that we want this company to quit killing people and quit hurting people," he says. "Our number one concern was to try to find out what the company will do for the employees who were burned in the explosion. They need to compensate the families beyond what workers' compensation insurance requires."
Spokespersons for the Harris County District Attorney's office, the Pasadena City Police, and the Harris County Sheriff's office all said that no criminal investigation had been opened.
Since July 2000, the Phillips facility in Houston is under the control of a new Phillips-Chevron joint venture, Chevron Phillips Chemical. Chevron Phillips Chemical says it is launching a comprehensive plan to make the Houston facility "one of the safest plants in the chemical industry."
"Chevron Phillips work site safety action plan not only addresses issues raised by OSHA's investigation of a March 27, 2000 accident at the facility's K-Resin Plant, but goes further," says James Gallogly, new CEO at Chevron Phillips.
The plan includes appointment of a "safety czar," development of a behavior-based safety program [see "Blame the Worker: The Rise of Behavioral-Based Safety Programs," Multinational Monitor, November 2000] and training for employees.
The 1989 accident at the Phillips facility spurred Congressional passage of accident preparedness provisions as part of the 1990 Clean Air Act amendments.
One of the provisions required facilities using extremely hazardous substances to publicly report an estimated worst-case accident scenario including the radius of vulnerability around the facility. For the Phillips facility, that worst-case accident scenario involved the butadiene used in their K-resin plant where the accident occurred.
Last August, the Chemical Manufacturers Association (of which Phillips is a member) lobbied for legislation passed by Congress barring the worst-case scenario estimates from public dissemination.
"Last summer, the chemical industry successfully undermined the public's right to know about chemical accident hazards," says Baumann. "Now we're seeing just how dangerous it is to be kept in the dark."
SMITHFIELD FOODS: PIG OUT
Things are not right in farm country. Family farmers in the United States are being driven off the land. Big corporations are taking over.
Consolidation in the ag business is accelerating.
In a merger than even stunned pro-big business allies like the Farm Bureau and U.S. Agriculture Secretary Dan Glickman, Smithfield Foods, the largest U.S. pork producer, announced that it was merging with IBP Inc., the second largest pork producer.
Smithfield currently controls 18.4 percent of the U.S. hog slaughtering capacity while IBP controls 17.7 percent.
IBP has one-third of the nation's beef processing capacity.
Smithfield's slaughtering capacity is focused in the Mid-Atlantic with only two plants in the Midwest.
In contrast, the bulk of IBP's hog processing is in the Midwest.
The two firms differ in their approach to acquiring hogs. Smithfield owns a majority of the hogs it slaughters with a reported goal of becoming 100 percent vertically integrated. IBP purchases its hogs through marketing contracts and on the open market.
"Livestock producers, and especially hog farmers, would be injured enormously by this acquisition," says Fred Stokes, president of the Organization for Competitive Markets. "With the increased consolidation, loss of a buyer and Smithfield's increased ability to manipulate prices, farmers and ranchers are guaranteed to see lower prices" [see "In Firm Control," Multinational Monitor, July/August 2000.]
The Smithfield/IBP merger comes on the heels of Smithfield's acquisition of Murphy Farms, the nation's second-largest hog producer, and less than a year after its acquisition of giant hog producer Carroll's Foods.
Four companies now control 80 percent of the beef slaughter business. Four companies control 50 percent of the pork processing business.
In November, Senator Tim Johnson, D-South Dakota, called on the Justice Department to investigate the merger.
"The strategic move to combine Smithfield with IBP would permit this unified powerhouse to nearly monopolize the hog market and vertically integrate so as to erect barriers to outside competition at nearly every level in the food chain," Johnson says. "As the largest packer and processor of beef in the world, IBP now controls 40 percent of the cattle slaughter market in the U.S. IBP, Excel, and Monfort control over 70 percent of the total U.S. cattle slaughter market. I am concerned about the erosion of local and regional market competition in the cattle marketplace as a result of this merger."
Smithfield argues that the merger will be good for small farmers. IBP will either merge with Smithfield or become a debt-ridden company through a leveraged buyout, says a Smithfield spokesperson. "In a Smithfield deal, you have a publicly traded company with financial strength to stand by communities when times get tough and not be forced to cut back to pay debt."
The company also argues that it is only responding to external forces supporting consolidation. "The retail and food service industries are consolidating, and this is a defensive response to that," says the company spokesperson. "The customers (Wal-Mart, Japan, McDonald's) need companies that can service them on a national and international scale. ... The producers and packers including IBP and Smithfield are responding to what's happening higher up in their industry. Smithfield is the stronger of the two, and therefore is better for the independent producers."
While wrecking havoc on the farm economy, the big hog companies are also destroying farm country [see "The Dirt on Factory Farms," Multinational Monitor, July/August 2000]. The rapid growth of factory farms and the resulting mountains of untreated livestock manure are fouling drinking water supplies and causing a public health risk throughout the United States.
North Carolina has put a moratorium on new corporate hog farms after waste fouled rivers and entered the Chesapeake Bay.
In 1996, the Environmental Protection Agency fined Smithfield $12.6 million after its processing plants discharged pollutants into the Pagan River.
Earlier this year, the Justice Department sued IBP alleging that the meatpacker violated pollution laws at its facility in Dakota City, Nebraska.
TITAN INTERNATIONAL: UNION BUSTER
Strike rates are at historic lows in the United States. Employer animus is now so intense that many unions believe strikes only invite companies to permanently replace their unionized workforce with strikebreakers. When unions do go on strike, it often means a particularly vicious employer has left the unionized workers with no choice.
Morry Taylor and his Titan International are the poster children for illustrating the point.
Titan International produces agricultural, off-road and construction tires, wheels and assemblies. Approximately 1,000 United Steelworker of America (USWA) workers at two Titan facilities have struck the company since 1998.
In May 1998, 670 workers at Titan's Des Moines, Iowa factory went on strike when Titan refused to seriously negotiate a new collective bargaining agreement with them. In February 1999, an administrative law judge ruled the strike was an unfair labor practice strike, which means the striking workers cannot be permanently replaced.
The administrative law judge found that the company unlawfully denied necessary bargaining information to the union, unilaterally imposed a contract on the workers, moved equipment and jobs from the Des Moines plant, and discontinued insurance to workers on leave when the strike began. The National Labor Relations Board (NLRB) would later issue a complaint charging Titan with unlawfully firing workers at the Des Moines factory for exercising protected rights.
More than 300 workers at Titan's Natchez, Mississippi facility went on strike in September 1998 after Titan fired the entire workforce in a fashion the NLRB has since alleged illegal. The firings followed a complex financial deal in which Titan and various interests associated with Titan CEO Morry Taylor and his family took a controlling interest in Condere Corporation, a bankrupt company which owned Fidelity Tire in Natchez. In September 1998, Titan bought Condere's assets, and then proceeded to fire the Natchez workers, who were represented by the USWA.
The NLRB charged in July 2000 that Titan and Condere are alter egos, meaning they share substantially identical ownership, and imposing on Titan the duty to respect the collective bargaining arrangement between Condere and the USWA. The NLRB's complaint against Titan/Condere also charges Condere with illegally threatening in August 1998 to fire workers, lower wages, move work or close the plant because of employees' involvement with the union.
Taylor responded to the NLRB complaint by reportedly telling the Natchez Democrat that it merited "laughter in its highest extent." He added, "I figure in five years they'll get that to the first federal court. By that time they'll all be enjoying retirement pay."
"Taylor may think this is a joke, but we don't," responded USWA Local 303L President Leo "T-Bone" Bradley.
The Steelworkers have organized an intensive corporate campaign against Titan. The union has highlighted the company's horrendous worker safety record and the company policy of refusing access to Occupational Safety and Health Administration (OSHA) inspectors who do not have a warrant. The union has pointed to the company's poor environmental practices.
The Steelworkers have also shined a light on the company's strange financial dealings, including a case in which a private company controlled by Morry Taylor allegedly bought a house for $165,000 and then sold it to Titan for $1 million two minutes later. Taylor now lives in the house as a CEO perk.
Titan's response to the Steelworker allegations and corporate campaign has been bluster and intimidation. In September, the company filed a RICO (Racketeering Influenced and Corrupt Organization) lawsuit against the union, charging that the USWA has threatened Titan's replacement workers and violated the law.
"It is time for companies to stand up to labor unions and demand that the laws be upheld," says Taylor. "Companies need to defend the rights of their employees. The Titan lawsuit will bring to light the union's unbelievable disregard for laws."
"The union is accustomed to using its propaganda machine to influence politicians and public opinion, but it is very difficult to bully a federal court with the same tactics. Titan will be asking other companies to step forward with information regarding similar acts committed by the USWA. Titan also plans to organize a group of companies to focus on changing the labor laws of this country to better protect workers' rights."
Annual Subscription Prices:
Single copy price
Send a check or money order to:
Or, if paying by Visa or Mastercard, please include:
Distributors and bookstores, contact the MM office
at (202) 387-8030.
(All funds in U.S. dollars)