Table of Contents
The World Bank’s Bangladesh Flood Action Plan
by Leonard Sklar
Dumping Toxic "Fertilizer" on Bangladeshi Farmers
by Ann Leonard
Behind the Lines
Editorial: Burning Promises
The Torturers’ Lobby
Sustainable Development: Grassroots Initiatives in Bangladesh
An Interview with Farhad Mazhar
The Business of Government: Clinton’s Corporate Cabinet
by Nadav Savio
The Soul of Labor
by Ellis Boal
Ciba Geigy: Pushing Pills and Pesticides
by Holley Knaus
Names in the News
To the editor:
We were very pleased to see your article, "Gold-Plated Giveaways," in the January/February issue of Multinational Monitor. I really appreciate the continued effort that you have put into tracking the mining law issue, and raising people’s attention to it.
I attended Bruce Babbit’s January 19 confirmation hearing. The first serious question put to him was by Senator Bumpers, D-Arkansas - a lengthy recounting of the problems of the 1872 Mining Law and a question to Babbit on how he would react. While Babbit was being cautious, he did comment that he had a very favorable experience with the state of Arizona’s leasing and royalty system for handling hardrock and minerals, and that he would be influenced in his action as secretary of the Department of the Interior by his experience as governor of that state.
Thanks for your continued diligence. I think we are making very important progress on this, and the 103rd Congress may see victory!
Philip M. Hocker
Mineral Policy Center
Citizen opposition within India has been organized and vocal throughout the project’s execution, with critics claiming that the World Bank did not fulfill its obligation, according to the conditions of the $450 million loan package agreement with India, to investigate the dam’s social and environmental problems. The project would have displaced 240,000 villagers, many of whom have vowed to drown in the Narmada River rather than move [See Cracks in the Dam: The World Bank in India," Multinational Monitor, December 1992 ].
In 1991, an independent review team headed by Bradford Morse, former head of the United Nations Development Project, and former Canadian Supreme Court Judge Thomas Berger found that the Bank had not been meeting environmental and resettlement requirements and warned that the project could not be finished "except as a result of unacceptable means."
According to Al Drattell, senior public information officer at the World Bank, the Indian government will complete construction of the dam, which is currently about 50 percent completed. Drattell says that "under the circumstances, [India] wished to proceed with the project on its own, without the financial assistance under the Bank loan."
Patricia Adams, executive director of PROBE, a Toronto, Ontario-based watchdog organization, says that as far as the Bank’s dangerous development schemes are concerned, "Narmada is just the tip of the iceberg. The dam opponents have done the rest of the world a great service by revealing how much damage the World Bank is prepared to wreak and how determined it is to evade responsibility."
o Mandate that every business - regardless of size - have a health and safety plan;
o Cover the 7.5 million public sector workers currently unprotected by any state OSHA plans;
o Require that employers correct imminent dangers identified by OSHA or face $50,000 daily fines - rather than permitting them to wait out a lengthy appeals process;
o Set minimum penalties of $1,000 for each serious OSHA violation to help raise revenues for other OSHA programs;
o Strengthen criminal penalties for employers whose willful negligence results in the death or serious injury of a worker; and
o Require companies to set up joint worker-management safety committees to allow workers an greater input in preventing hazards.
The Congressional Budget Office estimates that it will cost the government $100 million to implement changes called for in the reform bill. Ford proposes to raise $70 million in part by charging businesses for OSHA consultations they now get for free as well as by setting higher fines for health and safety violations.
On April 28, Worker’s Memorial Day, U.S. Labor Secretary Robert Reich is scheduled to testify in the first House hearing on the bill. According to Labor Department spokesperson Jay Rosenblum, Reich and his staff are still reviewing the proposed OSHA reform bills.
Lynn Rhinehart, occupational safety and health specialist at the AFL-CIO, says that the organization and its unions strongly support OSHA reform legislation. "It has been 23 years since the Occupational Safety and Health Administration was created, and since then it has not been revisited," she says. "It is time to strengthen the law."
The study, Truck Scales and Economics of Scale: Weighing NAFTA and the Politics of Transportation, written by Kristin Dawkins, focuses on the agreement’s predicted effects on U.S. domestic transportation carriers and their employees. The report criticizes NAFTA for requiring all U.S. states to honor Mexican commercial drivers’ licences, which are not based on the same rigorous training, testing and certification demanded of professional drivers in the United States. While the NAFTA text urges Canada, the United States and Mexico to "endeavor to make compatible" their licensing and other standards for safety, health, environmental and consumer protection, it contains no stipulation for enforcing this recommendation.
"Perhaps the most alarming information I discovered in my research was the way that NAFTA will encourage the consolidation of the transportation industry, leading to ever-larger, more concentrated companies," says Dawkins. "NAFTA’s impact on transportation illustrates the way so-called free trade policies are tools for accelerating the concentration of services and wealth in fewer and fewer transnational corporate hands."n
- Julie Gozan
OPPONENTS OF A HAZARDOUS WASTE INCINERATOR on the Ohio River believed they had cause for celebration when Vice President-elect Al Gore vowed in December that the Clinton administration would block its operation, requesting a General Accounting Office (GAO) investigation of the facility. Yet the incinerator began a test burn on March 8, and President Bill Clinton announced that he will not oppose commercial operation of the East Liverpool, Ohio plant.
Throughout the Clinton-Gore campaign, the ticket had made significant statements in opposition to the incinerator. In response to questions posed to presidential candidates by the League of Conservation Voters in December 1991, Clinton said, "I am in support of a moratorium on the construction of new garbage and hazardous waste incinerators." And on July 19, in Weirton, West Virginia, a stop on Clinton’s first post-convention bus tour, Gore said that the Ohio incinerator was "deserving of a full-scale investigation," claiming, "if you had seen a Clinton-Gore administration in the past four years, you would not have seen this."
Citizen activists in the tri-state area of Ohio, Pennsylvania and West Virginia have waged a 12-year campaign of resistance against the construction of the facility, which is owned by a Swiss multinational corporation and was eased into existence by the Environmental Protection Agency of the last two anti-environment U.S. presidencies.
Perhaps the president believes that promises made before he took office are meant to be broken, but to Ohio Valley residents, the question of whether or not the toxin- spewing incinerator would be allowed to burn has always been more than a matter of political posturing. "Our families’ lives are at stake," says Terry Swearingen, a Chester, West Virginia activist.
A mere quarter of a mile from an elementary school and a hundred yards from the nearest residence, the incinerator, owned by Swiss Von Roll, Inc. and the U.S. Waste Technologies Industries (WTI), could dramatically increase incidents of cancer, birth defects, reproductive dysfunction, neurological damage, respiratory ailments and other health effects which can occur at very low exposures to many of the metals, organochlorines and other pollutants released by waste-burning facilities. Dioxin emissions from incineration have reproductive, behavioral and immune-system effects on humans. Toxins released by the WTI incinerator will be trapped within the valley’s notoriously stagnant air.
Furthermore, ash produced by hazardous waste incineration is even more toxic than the original waste chemicals and contains increased concentrations of heavy metals, in forms that are particularly susceptible to groundwater leaching. The plant is sited on a floodplain of the Ohio River Valley, over aquifers that provide water for millions of homes.
One hundred and twenty-one physicians from Ohio Valley communities have appealed to Clinton and Gore for a commitment from the administration to withhold all permits for the facility in order to preserve the health of Valley residents. In a letter to the White House, they wrote that "essentially all the medical associations of the region are currently on record opposing this facility for its myriad threats to public health. The location of this facility gravely concerns us; the legally permitted emissions of dioxin, heavy metals and other toxic chemicals pose significant health risks to valley residents, especially the children."
Since November, over 100 people engaging in nonviolent civil disobedience have been arrested at the site. On March 18, incinerator opponents staged a sit-in inside the White House, demanding a meeting with Clinton. The residents of the Ohio Valley called upon the president to keep his campaign promise and revoke the facility’s permit. Swearingen, who was arrested for participating in civil disobedience at the White House, said, "We’ve come here because Mr. Clinton is trying to abandon us and we are not going to let him. ... Candidate Clinton said he was on our side, that the facility did not belong there, and that there should be no burning until a full investigation was completed. The facility is now operating with the full blessing of the Clinton EPA."
Clinton’s decision to cave in to the waste-burning operators of the Ohio plant, which came a day after a federal appellate court in Cincinnati cleared the way for the WTI incinerator to begin accepting tons of toxic wastes, has profound national implications. Seventeen hazardous waste incinerators are currently operating in the United States, and the incinerator industry depends on the continued generation of hazardous waste for its growth and profitability. The demand for dangerous waste created by the industry stands at odds with environmentally sustainable goals of reduction and recycling of waste.
The Clinton administration should immediately revoke the incinerator’s permit based on the threat the facility poses to human health and the environment. In keeping with the stance Clinton took during his campaign, the administration should also seek the introduction of and support national legislation for a moratorium on siting, permitting or increasing the capacity of hazardous waste incinerators. An immediate prohibition of the incineration of wastes containing substances with devastating health effects, such as dioxin, should be implemented. And the Clinton-Gore team should establish a mandatory pollution prevention program, with stringent requirements for all industry and government-owned incineration facilities.
In the meantime, those Ohio Valley residents who were betrayed by Clinton will continue to fight against the poisonous plant that is now expelling toxic ash and smoke 1,100 feet from the playground of their children’s school. Says Swearingen, "The president and vice president campaigned on a promise to reverse the business-as-usual environmental policies of the Bush administration. They have the power to revoke this permit and shut down the incinerator, and we’ll keep pushing until they live up to their promises.
ANGOLA HAS A LARGER DISABLED population than any other country in the world. Detonating land mines have been commonplace in the fields of the former Portuguese colony since the Soviet-allied Popular Movement for Liberation of Angola (MPLA) won independence in 1975.
While citizens in the United States may sympathize with the plight of Angolan children, plagued by low birth weight and malnutrition and immobilized by lack of prostheses and wheel chairs, few are aware that until last year, U.S. tax dollars bought up to $60 million a year in guns, ammunition and other military supplies - shipped into Angola via Zaire by the Central Intelligence Agency - to arm Jonas Savimbi’s anti- communist, South Africa-backed rebel movement, the National Union for Total Independence of Angola (UNITA).
Savimbi’s history of success in garnering U.S. aid is due in part to ideological support from powerful forces in Washington, and in part to the Alexandria, Virginia lobbying firm of Black, Manafort, Stone and Kelly. The firm’s services, bought for $600,000 a year, have resulted in favorable media coverage for UNITA and secured further political support and aid from U.S. politicians and lending agencies. While the firm works to generate publicity for its clients, it apparently shuns media attention itself; Black, Manafort failed to respond to repeated requests from Multinational Monitor for comment about its lobbying efforts for UNITA.
According to The Torturers’ Lobby: How Human Rights Abusing Nations Are Represented in Washington, a report based on the results of a year-long investigation by the Washington, D.C.-based Center for Public Integrity (CPI), 10 major U.S. foreign aid recipients with a history of hideous human rights abuses spend $24 million on lobbying, legal representation and public relations in the United States each year. Many of the countries receiving U.S. aid through multilateral and bilateral lending agencies collectively receive billions of dollars in U.S. aid and other benefits.
Pamela Brogan, author of The Torturers’ Lobby, reviewed hundreds of pages of documents filed at the Justice Department by U.S. agents representing overseas interests and examined major U.S. foreign aid recipients, all violators of international standards of human rights, that pay Washington lobbyists to press the U.S. Congress for increased aid: Turkey, Nigeria, Morocco, Kenya, the Philippines, Indonesia, Egypt, Israel, Guatemala and Angola’s UNITA. All 10 commit torture and other atrocities, according to the U.S. State Department and watchdog organizations such as Amnesty International and Human Rights Watch.
The Torturers’ Lobby also examines Colombia and Peru , which hire Washington lobbyists to boost their image and lobby for favorable trade and commercial treatment; and three human rights-abusing nations - China , Saudi Arabia and Kuwait - that receive no U.S. aid but have close political and commercial relationships with the United States and pay foreign agents to lobby Congress and the executive branch. The study found Kuwait to be the biggest individual spender, doling out more than $12.5 million in fees to U.S. lobbyists, lawyers and public relations firms.
Among the report’s most shocking examples of corrupted Washington spending priorities are the following:
o Guatemala received nearly $91 million in U.S. assistance in 1991, despite the fact that U.S. military aid and commercial arms sales to Guatemala were suspended and the U.S. ambassador to Guatemala was recalled in December 1990. To maintain the money flow and gloss over its wretched human rights reputation, Guatemala spent more than $650,000 for Washington lobbyists and public relations experts. The law firm Patton, Boggs and Blow - at which Commerce Secretary Ron Brown was a former partner - was the biggest recipient, charging Guatemala $220,000 in 1991. Steven Schneebaum, chair of the pro bono committee and partner at Patton, Boggs and Blow, has been a member of the board of the International Human Rights Law Group for 12 years and says that the firm has done extensive work "in defense of human rights norms." As far as Guatemala is concerned, he says, "We have a client that’s done some bad stuff, but I’m tired of taking the rap for every bad thing that a client has done." He attributes CPI’s focus on Patton, Boggs and Blow to "a trend in the media now against successful firms."
"I suppose people are resentful of a successful firm that is keeping the system working," says Schneebaum. "Led by the New York Times, the entire print media has been coming down on Patton, Boggs and Blow - but we’re all big people, we can take it." David Todd, the attorney in charge of the firm’s Guatemala account, declined to comment to Multinational Monitor.
o In 1991, Turkey received more than $800 million in U.S. aid, an exceptional return on its $3.8 million investment in Washington lobbyists. "We are very concerned because there has been a marked decline in the last year in the human rights situation in Turkey," says Maryam Elahi, Amnesty International’s government program officer for the Middle East. "The newly elected Prime Minister has failed in his promise to end torture. Political killings rose from 50 in 1991 to over 300 in 1992, with serious allegations that government security forces colluded in many of these killings." The public relations firm Hill and Knowlton , which CPI found to be the company paid the most by human rights abusers, took $1.2 million to represent Turkey from November 1990 to May 1992. Frank Mankowitz, the firm’s vice chair, declined to comment on Hill and Knowlton’s representation of Turkey, but claims that "human rights [are] a factor in our decisions about whether to take on a country as a client. We have turned down countries recently because of human rights violations."
International Advisers, Inc. , another firm that was paid more that $1 million for representing the Turkish embassy in the United States, refused to offer any comment to Multinational Monitor.
o In 1991, Kenya received $38 million in U.S. foreign aid, spending over $1.4 million on Washington lobbyists to get it; Nigeria received $8.3 million and spent in excess of $2.5 million. Kenyan president Daniel Moi has a notorious history of violating the human rights of his government’s critics; and the military government of Nigerian general Ibrahim Babangida continues to rely on force to remain in power. The bulk of those countries’ payments went to Black, Manafort, Stone and Kelly Public Affairs , which took $660,000 from Kenya in 1992-1993 and $1 million from Nigeria in 1991.
Janet Fleishman, research associate at Africa Watch, says that human rights abuses involving use of the military, government manipulation of ethnic conflict, and particularly flagrant attacks "in rural areas against the opposition and the independent press," are prevalent in both countries.
"Unfortunately, the governments of many of the countries that receive U.S. aid money are committing very serious, tremendously documented human rights abuses," says Brogan. The Torturers’ Lobby cites critics of the lobbying and appropriations process, who suggest that Congress prohibit foreign-aid recipients from hiring foreign agents, or put a cap on the amount of fees that countries can pay lobbyists.
The author notes, however, that the work of CPI and the report have "already had a significant impact." Unlike past administrations, "Clinton has pledged that all of his top- level people are banned for life from representing foreign governments. Of course, he cannot correct the sins of the past," says Brogan, but it is a step towards "correcting the sins of the future."n
- Julie Gozan
by Leonard Sklar
IN JULY AND AUGUST OF 1988, Bangladesh was hit with the flood of the century. Rainfall ponding on lowland fields combined with water spilling over the banks of the country’s huge rivers to cover nearly half the nation, killing 2,500 people and forcing millions to temporarily abandon their homes. For the first time in memory, floodwaters reached the diplomatic quarter of the capital city Dhaka, helping to capture the attention of the world’s media. As the floodwaters receded and a new flood of emergency supplies poured into Bangladesh, the possibility of a bonanza of development aid contracts attracted the interest of engineers and consultants from Paris to Tokyo. Within a year, the mega-project now known as the Bangladesh Flood Action Plan (FAP) was born at a meeting of the Group of Seven country leaders in July 1989. The World Bank was given responsibility for coordinating the 15 donor countries and multilateral agencies that were involved.
Now, almost four years later, the growing movement in opposition to the controversial scheme to construct up to 8,000 kilometers of embankments along Bangladesh’s three major rivers is challenging many of the assumptions underlying the international aid business, and forcing several wealthy governments to reconsider their participation in the multi-billion dollar project. In a victory for Green Party activists from France , Germany and the Netherlands , the European Parliament will host an unprecedented open debate of the merits of the FAP May 26 and 27, 1993, where project opponents will have an opportunity to present their case directly to many of the governments funding the scheme.
They will argue that the Flood Action Plan embankments will force as many as eight million people from their homes, greatly damage the valuable inland fisheries and ultimately fail to deal with the threat of coastal cyclones, the most pressing flood hazard. Moreover, say critics of the scheme, the true beneficiaries of the plan will be foreign consultants and contractors who will collect hundreds of millions of dollars in fees, the cost of which will be added to Bangladesh’s already crushing foreign debt.
Birth of a mega-project
Among those trapped by the rising waters of the 1988 flood was Danielle Mitterand, whose husband happened to be president of France. After hearing her vivid account of the experience, François Mitterand commissioned the French Engineering Consortium to draw up a plan for controlling future floods in Bangladesh. Wary of letting the French get the inside track on the inevitable contracts to implement whatever plan emerged, the Japanese and U.S. governments commissioned separate studies, as did the United Nations Development Program (UNDP).
The French plan called for a massive program of embankment construction to channel all the major rivers of Bangladesh, and for the building of a giant honeycomb of compartments behind the embankments. Within these compartments, surrounded by embankments on all sides, flood-sensitive, high-yield varieties of rice could be cultivated and shrimp farms established to boost the country’s exports. The full scheme would take up to 20 years to implement at a cost of $10.2 billion. While the UNDP’s experts also called for an ambitious embankment building program, they said it could be done for a mere $4 billion. The U.S. and Japanese studies, on the other hand, concluded that embankments were unlikely to effectively control the major once-in-a-century floods and recommended focusing on less costly flood management measures such as flood preparedness, forecasting and warning systems.
Despite these conflicting recommendations, the World Bank’s comprehensive Plan for Action, published in 1990, declared that "the country cannot be at the mercy of floods forever and all the major rivers must be contained so that the floods are safely passed through Bangladesh to the ocean." The plan called for an initial investment over five years of $150 million for a series of 15 additional studies, and $500 million for the first phase of 11 "pilot" embankment construction projects. The various donors - which include several Northern countries and multilateral lending agencies - each fund one or two components, with the World Bank playing the role of coordinator. Most of the studies are now nearing completion, and with new funds becoming available, construction could begin before the end of 1993.
A flood of refugees?
As the FAP has gained momentum, so has an increasingly vocal movement opposing the project. Among the first to speak out against the plan were leaders of the people who live on the shifting sand bar islands known as chars. "The embankments will destroy the life of the char people" says Mujibul Huq Dulu, director of the Jamuna Char Integrated Development Project. "How is the FAP going to compensate for this tragedy?" The FAP calls for the 15-kilometer-wide Jamuna reach of the Brahmaputra River in west central Bangladesh to be embanked first, with the French- funded FAP component embanking 70 kilometers of the left bank and the World Bank- funded FAP component rebuilding much of the 240-kilometer right-bank levee, first constructed in the 1960s with World Bank funding, but now nearly destroyed by erosion and lack of maintenance. Project engineers predict that the embankments will raise river levels as much as several meters, making the land between the embankments uninhabitable for the 2.1 million people who now live there.
In addition, embankment construction along the Jamuna will displace tens of thousands more from the lands where the new embankments are sited. Those whose land is confiscated can expect little or no compensation. According to Farhad Mazhar, managing director of the development organization UBINIG (Policy Research for Development Alternatives), "The procedures of land acquisition and resettlement are highly bureaucratic and inherently based on state violence and denial of citizens’ rights. The people almost invariably are not compensated. The poor and the powerless are obviously the main victims." Hashem Ali, who lives in the district of Sirajganj, lost most of his land during a previous rebuilding of the right bank embankment in 1972. "We could not stop the government from taking our land because if they select the land and put a flag on it, we already lose it. We become beggars. I am always scared of the possibility of seeing another flag on my small piece of land," says Ali. "Where will I go?"
Although World Bank guidelines require consultation with the people who will be impacted by the plan, residents of the Sirajganj district have had little contact with project authorities. "Nobody ever asked us how we will be affected, nobody wants to listen to us," complains 70-year-old village elder Mohammad Sekander. "If we were asked, we would never have let them carry on the plan of making embankments. Our opinion is not taken but we are the ones to be affected badly."
Walling off the rivers
The strong popular sentiment against flood control embankments is based on bitter experience. Bangladesh is located on one of the largest and most active river deltas in the world, formed by the confluence of the Ganges, Brahmaputra and Meghna Rivers; 80 percent of the country’s 144,000 square-kilometer area is floodplain. While Bangladesh is vulnerable to infrequent extreme floods, the traditional agricultural system depends on the milder annual monsoon floods to moisten and fertilize the fields of rice and jute. In fact, the Bengali language has two words for flood, barsha, used for the normal beneficial floods, and bona, the infrequent and destructive large floods. "We are the people belonging to the land of rivers," says Sekander. "We have learned that floods bring more fertility to our land. One can compare the lands which are within the embankments with those which are outside. We need to apply 50 kilograms of fertilizer to the same amount of land inside the embankment whereas outside we apply only 15 kilograms. Yet the crop yield inside is not any better."
Past flood control embankment projects have had devastating impacts on the inland fisheries. Twenty years ago the fisheries supplied 80 percent of the protein consumed in Bangladesh, but the supply has dwindled as embankments increasingly block migration pathways for riverine fish. The majority of fresh water fish species in Bangladesh depend on access to the floodplain during the annual monsoon barsha flood for spawning and rearing habitat. The largely landless or land-poor rural population would be particularly hard hit by the further declines in the inland fisheries caused by the FAP embankments. However, Liaquat Hossain of the Bangladesh Water Development Board asserts that "it is not correct that fishery resources will be reduced" by the FAP. "By construction of hatcheries, fishery resources can be increased tremendously," he says. Many experts disagree. Dr. Chu Fa Tsai, professor of fisheries biology at the University of Maryland, describes the potential impact in apocalyptic terms. "What a cyclone is to the coastal areas of Bangladesh, FAP is so to the fisheries of the country." Either way, a shift from open water fish capture to closed water aquaculture would in effect involve a massive transfer of common resources into private hands. Moreover, the loss of normal flooding may lower groundwater levels, drying up important wetlands and lakes, and further reducing habitat for fish and already threatened migratory birds, amphibians and reptiles.
Beyond the severe social and environmental impacts of the scheme, critics also point to the plan’s technical deficiencies. Dr. Philip Williams, president of the Berkeley, California-based International Rivers Network (IRN) and a noted hydrologist, claims that "the plan is likely to fail even in its narrow technical goal of reducing damages from extreme river floods. Flood control embankments in Bangladesh have been spectacularly unsuccessful in the past, and there is no indication that the World Bank has learned anything from its past failures."
The FAP must overcome tremendous technical obstacles to achieve the World Bank’s stated goal of "eliminating the flood problem." The rivers of Bangladesh are among the most powerful and sediment-laden on earth. Even the most heavily fortified embankments, such as the one at the city of Chandpur which was destroyed in the 1988 flood, have proven ineffective in stopping the natural migration of Bangladesh’s river channels across the delta.
Embankments built on smaller rivers in Bangladesh have resulted in rapid accumulation of sediment within the river bed - sediment which otherwise would be spread across the floodplain. This process is likely to be repeated on a much larger scale if the FAP embankments are built. As river beds rise higher, the rivers will become perched above the surrounding land, and embankments will need to be continually raised to maintain flood capacity. In this unstable situation, "any embankment failure could lead to a catastrophic flood as the confined river permanently abandons its former path and cuts a new channel across the ‘protected’ former floodplain, leaving the expensive embankments high and dry," warns Williams.
One critical problem in past embankment projects in Bangladesh has been the lack of careful and regular maintenance. The UNDP, in its 1989 study, blames the "total disinterest often demonstrated by the population to maintain the structures and works that are to protect their life and property." However, most rural Bangladeshis do not consider the embankments in any way beneficial. In fact, it is often the people living directly behind embankments who intentionally create breaches known as "public cuts" in order to allow water into their fields or to drain ponded rainwater trapped behind the embankments.
Perhaps of greatest concern is the charge that the FAP neglects Bangladesh’s most pressing flood danger, posed not by rivers but by cyclones which sweep out of the Bay of Bengal and regularly devastate the densely populated coastline. According to Williams, "The real flood risk is from cyclone-driven coastal floods which have killed more than a million people in the past two decades." The most recent cyclone killed at least 150,000 people in April 1991.
Bangladeshi non-governmental organizations (NGOs) have put forward numerous flood management alternatives which are intended to assist Bangladeshis in their traditional adaptations to living on the flood-prone delta. This approach is based on the view that coastal dwellers threatened by cyclone-driven floods need high-ground refuges and effective warning systems so they can evacuate low-lying areas in time. The NGOs also assert that long-term protection could be provided by replanting the extensive coastal mangrove forests, cleared in part for commercial shrimp cultivation in previous World Bank-funded projects. Coastal mangrove forests are capable of absorbing much of the energy in the cyclone-driven storm surge, sheltering lands directly inland. Similar flood- preparedness programs could protect upstream populations threatened by river flooding, by providing rural community centers placed on high ground where tents, food, water and medicines would be available during an extreme flood event. An accurate flood forecasting and warning system could provide people with adequate time to harvest crops and move themselves and their livestock to refuge areas.
The direct economic benefit of reducing damages from extreme river floods is too small to justify the great expense of the FAP, so the World Bank bases its justification on the indirect benefits of projected increases in wet season agricultural yields. However, the greatest potential for growth in agricultural production lies in the dry season through the expansion of so-called "minor irrigation" technology, tubewells and low lift pumps, which do not require any structural flood-control investment. According to U.S. Agency for International Development reports, Bangladesh currently utilizes only 25 percent of its dry season irrigation potential. The primary constraint to the growth of small scale irrigation has been difficulty in obtaining credit, a problem likely to be exacerbated by the huge expenditures of the FAP.
Many critics of the FAP believe the plan is really more about providing contracts to donor country businesses than it is about saving the lives of Bangladeshis who live along the rivers. One consultant to the U.S.-funded component, who requested anonymity, told Multinational Monitor that "the FAP has been driven by the donor countries from the beginning. Even if the studies show that building embankments is just throwing money in the river, there is tremendous pressure from outside Bangladesh to see some earth moved." Khorshed Ahmed of the Bangladesh People’s Solidarity Center is equally blunt. "The primary beneficiaries of the FAP will be the consultants and construction companies from industrialized countries who will be employed to build the embankments."
Bruce Rich, attorney for the Washington, D.C.-based Environmental Defense Fund and a long-time critic of World Bank lending for destructive mega-projects, asserts that funneling money to donor country businesses has always been a top priority for the World Bank. "Most World Bank disbursements flow right back again out of borrower countries in the form of procurement contracts, and the lion’s share of these contracts go to the 10 richest industrialized nations."
Recently, the campaign against the FAP has put the World Bank on the defensive. When Bank President Lewis Preston visited Bangladesh in November 1992, he was greeted by nearly 1,000 demonstrators in the first public anti-FAP protest. Student organizers were joined by women’s organizations protesting World Bank-funded population control programs and trade unionists denouncing Bank-supported structural adjustment policies. Confronted at a reception by NGO representatives who told him of the millions of char people potentially affected by the project, Preston "seemed shocked," according to one eyewitness who added that the Bank president said, "The last thing we need is another Narmada." This was a reference to the resistance campaign of tens of thousands of villagers in India fighting the World Bank-funded Sardar Sarovar Dam [see Cracks in the Dam: The World Bank in India," Multinational Monitor, December 1992 ]. The World Bank announced in March that it is ending its involvement with the Narmada project.
The Bank is sending a delegation to the European Parliament debate in May to attempt to reassure European governments that the problems with the FAP are not grounds for withdrawing from the project. But several governments are reportedly considering doing just that. A high-level mission from the Dutch government has just returned from Bangladesh with a highly critical report. Bangladeshi NGOs are now calling for a suspension of work on studies and "pilot" construction projects until certain minimum conditions are met. "The legal basis for public consultation and people’s participation must be ensured first," says Mazhar. "Access to information must be ensured," and comprehensive social and environmental assessments should be done, "given the enormous impact the project will have on ecology and environment and the displacement of people. This is the least one can expect [in order] to have a meaningful dialogue with the World Bank."
Meanwhile, the French Government has just approved a loan of 20 million francs to finance its component, and the World Bank’s executive directors are scheduled to vote in July on $163 million more in loans for the FAP. IRN’s Williams stresses the importance of immediate action to resist the project. "The time to act is now if we’re going to stop the FAP," he says. "This project is not for the benefit of the people of Bangladesh; it is for the benefit of the same international consultants and contractors who profit from other World Bank-sponsored mega-projects, who build engineering monuments to the Bank’s technocratic development ideology and then walk away to leave the local people to clean up the environmental and social mess they created."
by Ann Leonard
The Bangladesh Agricultural Development Corporation (BADC) reports that the fertilizer has been distributed to 12 BADC regional warehouses throughout the country:
Area Amount Sent Sold Remaining Stock
(tons) (tons) (tons)
Sombhuganj (Mymenshing) 40 1 39
Chittagong 475 269 206
Melandaho (Jamalpur) 39 19 20
Rangpur 39 5 34
Gaibandha 40 8 32
Kurigram 20 8 12
Dinajpur 20 3 17
Panchagar 20 2 18
Sibganj 19 4 15
Khulna 2,412 695 1,717
Barguna 5 0 5
Patuakhali 5 unknown
TOTAL 3,134 1,014 2,115 tons
Posion or Poverty
ENVIRONMENTALISTS MAINTAIN THAT THE ASIAN DEVELOPMENT BANK (ADB) is obligated to resolve the Bangladeshi fertilizer crisis, since it provided the funding for the Bangladesh government to purchase the fertilizer. "Since the ADB’s money was used to import the toxic fertilizer, we believe the bank has a responsibility to pay for its return to the United States," Farida Akhter, executive director of the research organization UBINIG, explains. "Is this the kind of project the U.S. taxpayers want their foreign aid money to be spent on?"
Dave Batker, multilateral development bank policy analyst for Greenpeace, agrees. "Since the ADB is established to be a development organization, and this is clearly not a beneficial development project, the Bank should ensure that the waste is removed and the environment cleaned up as soon as possible," he says. In November 1993, Batker met with officers of the ADB at its headquarters in Manila in the Philippines to request that the bank assist in resolving the situation. According to Batker, ADB officers in Manila have expressed alarm, but have not offered financial assistance to contain and ultimately remove the waste.
ADB’s Bangladesh Project Officer Karimul Haque Talukdar rejects the notion that the ADB should fund the return of the waste to the United States. When asked about ADB environmental policy, Talukdar admitted that environmental impacts were not considered when evaluating bids from fertilizer suppliers.
In November 1992, he told a Greenpeace representative that the ADB chooses the "lowest responsive bid," considering only two factors: price and adherence to ADB procedures. "Once the payment is made," he explained, "we wash our hands of it. We are not involved."
For this reason, Talukdar believes the ADB has no responsibility to remedy the damage caused by the imported fertilizer. When asked if the ADB would consider funding the removal of the waste, Talukdar responded, "There is no possibility of that."
"By providing funding for the import of toxic waste in the form of low-cost products, the ADB forces Third World countries to choose between poison and poverty," Batker says. "Instead of funding toxic trade, the ADB and other international lending institutions should fund environmentally beneficial projects which truly involve and meet the needs of the receiving communities."n
An interview with Farhad Mazhar
Farhad Mazhar is managing director of the Dhaka-based research organization UBINIG, or Policy Research for Development Alternatives. The organization works with communities to strengthen popular struggle for social change and serve the research and informational needs of grassroots movements of women, farmers and workers. UBINIG campaigns on issues of popular concern in Bangladesh, including structural adjustment policies, agrarian and ecological issues including land reform and food security, export- oriented industrialization, marginalization of women and the poor majority in the rural areas, population control, health service delivery structure, trade union issues and issues of national health and drug policies. UBINIG publishes Chinta, a Bengali journal on social change and ecological issues and runs the only feminist bookstore in Bangladesh, Narigrantha Prabartana.
Multinational Monitor: Why has UBINIG focused its attention on structural adjustment?
Farhad Mazhar: If you work on health issues, you see that the degradation of health conditions is linked with conditional lending. If you work on the environment, you see the destruction of the environment is linked with conditional lending. This focus on how multilateral lending agencies affect the development of countries like Bangladesh represents the logical outcome of our analysis, a logical means of understanding why our society is becoming increasingly impoverished, why our balance of payments is getting so much worse, why our environment is being degraded. It is a way of linking and analyzing all the different issues .
We see structural adjustment policies as representative of how corporate interests operate. When we criticized the World Bank and the International Monetary Fund (IMF) with regard to some of their policies in the past, a lot of the issues were not very clear to us - we did not understand why, for example, these agencies wanted to impose certain conditions on our countries. But the reason became increasingly apparent.
Through our community development work we realized how our grassroots programs are being frustrated by global forces beyond our immediate control. We realized that all local efforts for social change or even minimal reforms are futile unless we understand the interconnection of the global and the local processes.
Policies do not originate from the heads of consultants or from the clerical desks and "development" theorists of the World Bank and IMF. They are formed in the reality of global accumulation and expansion of capital of which multinational or corporate capital is the dominant form. The corporate environment shapes ideologies and casts theories and thus determines policies.
Once structural adjustment policies are seen in the context of the dynamics of the money, trade and production structures of the global economy, the reason behind imposing structural adjustment programs becomes increasingly apparent: to represent and promote corporate interests.
MM: In what ways do you consider World Bank and IMF policies to be an expression of international corporate interests?
Mazhar: The lending agencies push structural adjustment as a means of developing the "free market" in Third World countries. But structural adjustment is actually destroying these countries’ national markets, meaning the small producing markets with potential to grow and expand. Before the World Bank and IMF had a presence there, the market was only beginning to evolve in many Third World countries. The nascent entrepreneurs needed time and experience to adjust to the new social reality emerging from the transformation of the rural areas and the disintegration of feudal and semi-feudal social structures. What they needed was a new political state, a democratic culture in which to realize their aspirations.
The imposition of structural adjustment policies formulated outside the political environment and the struggle of different classes within the country has reinforced the old military-bureaucratic state, a colonial legacy. It was inevitable because implementation of such policies requires an anti-people state. It must destroy the emerging national market and the aspiration of small national entrepreneurs. Structural adjustment programs are not designed to benefit the "free market," but rather to destroy the national capacities of Third World countries. They destroy not only our economic capacity, but also our social, political and cultural capacity to participate in the world market with strength and gain a favorable position within the international division of labor.
Lending conditionalities - such as privatization and currency devaluation - are now destroying the capacity of the national industries, meaning small producers and small businesses, by creating favorable conditions for large industries, multinational companies and large-scale financiers. In contrast to the nascent entrepreneurs who were catering to the needs of the local market, the large industries, multinationals and big financiers are linked to the export market. Their operations are global.
Thus the logic of the export market, that is, the world market, now determines the internal development of our economy. Locally based development has been eroding. Possibilities for internal development have been stagnating and consequently the small producers and the local market that satisfies local needs are being wiped away. It is a new form of colonialism.
MM: Can you describe the ways in which this new colonialism is manifested in Bangladesh?
Mazhar: In the past, it was easy to see how colonialism functioned. The British came to our country and harvested our raw materials. They set up the colonial state for the expansion of their industrial base, to safeguard and expand the market for the commodities produced by their industries as well as to ensure the raw materials for those industries. They had to do these things coercively, using force and violence.
Now you see coercion being imposed in the name of structural adjustment. The lending agencies tell the state to devalue its currency, meanwhile dictating the exchange rate and prohibiting the country from developing the rate determined by the market. This is a form of violence.
The agencies say that debt situations and export performance will not improve unless the government devalues the currency or privatizes industries; they demand that the government stop taxing its imports and generate internal resources by taxing the people. You can see the connection between the old colonial force and this new colonialism. Only the form has changed with regard to coercion and violence.
The lending agencies talk about the market, but they are not really allowing the market to take command. They are not allowing Bangladesh or other Third World countries to compete in the world market on their own terms. They are forcing Third World governments to accept a position within the international distribution of labor which is disadvantageous for them and their people. Bangladesh has absolutely no choice - we have to take money from the agencies to pay back the balance of payment deficits.
The World Bank and the IMF are taking advantage of Bangladesh and other Third World countries by creating this balance of payment deficit. Many of the economic policies and much of the tied aid develops out of this form of coercion. They are not allowing us a fair chance to compete on the market, because their real purpose is to destroy the national market.
Who benefits from this? Multinational companies benefit. The big financial institutions benefit. If we reduce our exchange rate, then obviously those who are trading at the international level are the ones to benefit. Not the people of Bangladesh. The policies to boost exports favor only those who can operate globally. The adjustment policy is mainly centered around the circulation of money and commodities, not at the level of production or production structures. The policies do not aim to create new conditions of production favorable to our countries. Rather they thwart any new breakthrough made by any Third World country. The precise purpose is to retain and reinforce the colonial domination of the North over the South by controlling the flow of commodities and money.
Over the years, many of my colleagues working on the issues of development have argued that a world economic order exists and that the capitalist system is to blame for placing countries like Bangladesh at a severe disadvantage. But now we feel that this analysis does not go far enough. It is not enough to say that capitalism is at the root of destructive development. We now see that the system being used is not a capitalism of the free market. It is a capitalism of corporate violence, facilitated by the state. It is a capitalism of coercion.
MM: What are the main corporate operations in Bangladesh?
Mazhar: The multinational pharmaceutical companies have a huge presence in Bangladesh. We consider Ciba Geigy to be a criminal presence in our country, and its power is expanding. Pfizer is also very active.
These companies are not bringing capital into Bangladesh. World Bank officials say that the purpose of opening markets is for multinational corporations to bring capital into your country. But in fact, these companies are bringing in only a very small amount of capital while taking loans from the national bank. So the money that Bangladeshi people are depositing in the bank has been used to the service of multinational companies. And in turn, what these companies are doing to the Bangladeshi people in terms of health effects is criminal.
Ciba Geigy has recently been promoting one of its psychotropic drugs, Ludiomil, a tetracyclic antidepressant. The company has been advertising the drug on television as if antidepressants could be bought just like chocolate from the drugstore. It advertised the drug in a tricky way, without mentioning the name of the product. The Ludiomil commercial depicted a depressed yet very beautiful adolescent girl; then showed a white dove that is unable to fly because its wings are so heavy. A voice-over then announced, "if you suffer like this day after day, see a doctor." The doctors had already been told to prescribe Ludiomil when patients sought advice after seeing the ad. The patients are mainly adolescent, an age group that easily becomes addicted to drugs. Retail pharmacies were also told to provide the drug if asked about the ad.
In Bangladesh we do not have control or regulation of drugs sales through U.S.- type retail pharmacies. People can buy drugs without a prescription. So people are buying Ludiomil just by going to their drugstores and asking for it.
The advertising was a carefully orchestrated promotion to drug the youth of Bangladesh by exploiting innocence and emotion. Ciba Geigy has been unethical not only in its promotion of the psychotropic drug but also in the way that it medicalizes the normal worries and tensions of life.
Development strategies and lending policies create tremendous insecurity and have forced a bleak future upon the younger generation. Ciba Geigy is making money by exploiting that tension and insecurity. In this case you can see that multilateral development policies are indirectly creating new markets for multinationals like Ciba Geigy in ways we could not have previously imagined.
Ciba Geigy is also promoting pesticides without informing people of the possible consequences to health and the environment. The farmers do not know how to use them. There are severe health consequences for many of these pesticides.
These companies are very secretive and resist giving out any information. UBINIG has tried to get information from Ciba Geigy about its products, for example, the side effects of the drugs, what kind of safety information was being given to farmers. The company has refused to cooperate with us.
MM: How are your efforts to promote beneficial, community-based development influenced by corporations and by the World Bank and the IMF?
Mazhar: The issue of how to industrialize our country is very important to us. However, "industrialization" has a completely different meaning to us than the World Bank’s definition. The historical model developed in the industrialized North and the ideology of "growth" in quantitative terms is not acceptable. Nevertheless, the present global system generates and promotes this model in many different forms. Ecologically, this model is not sustainable, and sooner or later will have to be dismantled. This is a global task.
We do not have a formula to offer except to build up solidarity and collaboration between popular people’s movements throughout the world as quickly and as earnestly as possible.
Critical rejection of the existing processes of global economics and politics does not mean that we will have to regress to the past and glorify an existence narrowly defined by national or local boundaries. We are not opposed to exports, or to the socialization of life at the international level. Yet we see very clearly that export-oriented industrialization is not the answer for our country.
We definitely do not want international corporate interests planning our economy. At the same time, we can see that the evolution of industry in Bangladesh has some positive effects on a very disadvantaged sector of the population: women. So we had to find an alternative model to export-oriented industrialization.
MM: What role has the home-based weaving sector played in providing employment and contributing to an alternative export market in Bangladesh?
Mazhar: The weaving sector has great potential to produce enough for the whole market and thus spark a tremendous amount of employment in rural areas, which would mean that women who are now migrating to the cities to get jobs could get jobs back in the villages. In fact, we found that with some development of technologies and some reorganization of weaving production, home-based Bangladeshi weavers can actually compete with the big textile factories now being promoted by the government, the World Bank and the IMF.
That is the conflict. The government and the multilateral lending agencies do not want weavers to have five to 20 looms and run a small factory, satisfying the need of the community while producing a small surplus for export to an external market. They do not want these types of producers to develop. They prefer to destroy them and to create a new class of people in our country who are given money to set up textile companies and linked with international traders and retailers.
Most of the products from the home-based weaving sector are better in quality than anything the textile industry can produce. The weavers produce certain artisan products against which factory-made products can never compete. The government and the World Bank claim that the big textile mills are more efficient than the small producer, but we question their definition of efficiency. There are two types of small-scale weavers - the very small type has one or two looms and the other type has maybe five to 20 looms.
We support both. Neither one is using fossil fuel - a fact which has tremendous ecological implications. We would like to develop an industrialization that is different from that of the West which is based on fossil fuel use and large industries. We feel that Bangladesh can satisfy its own need for textiles and also compete in the world market, in a way that does not depend on polluting the air.
So we are trying to create employment and environmentally sustainable industrialization, while studying how structural adjustment and other World Bank/IMF policies are actually a constraint to the development of the smaller markets in our country.
We are not claiming that home-based or small factories are the only forms we envision for the future. We are only saying that this is the foundation upon which we may build up slowly and gradually. We do not claim that small production is the ideal form of production for all phases of our society. We are for socialization of life and labor and therefore for expanded production to satisfy our varied social needs.
MM: Could you elaborate on the forces that are holding back the development of the home-based weaving sector? Why isn’t it currently competing successfully with the larger textile mills?
Mazhar: The handloom sector is capable of competing with large-scale textiles and of surviving through fierce competition. The point is that the international market is situated against it, as is government policy dictated by multilateral agencies. When the government devalues the currency, for example, the weavers have to buy their yarn at a higher price. Then they have to export the product at lower prices. Our government should have played a much stronger role in securing a place for them in the international market.
On the one hand the government is talking about the market; on the other hand it is closing the market for us through multilateral arrangements. For example, the government imposed a quota on how much countries like Bangladesh could export to North America and Europe. This is simply hypocrisy. If they expect us to compete in the international market, then we need access to the market in the North.
MM: How does UBINIG address ecological issues in Bangladesh?
Mazhar: We began by addressing our deep concern about how the multilateral agencies impose detrimental economic conditions on our countries; by asking ourselves, is there any way out of it, and what should be our political strategy for fighting it? The classical strategy was to separate economic and social activities from political activities. The strategy of the left was to form a political party or to create a movement against the government, the World Bank and the IMF.
But that is not enough. We have to reconstitute our community. We have to reorganize our production system. We have to introduce a new relation to production at the community level while political struggle is continued. We avoid mechanical separation between the political and economic sphere. We also do not separate ecology or the natural basis of life from economic activities. Similarly one can not separate culture from nature or nature from culture. Indeed, economy, ecology and culture are interrelated. This is the key principle of how we address ecological issues.
When we started working on the ecological issue, we found that all these issues came together at the entry point. We tell farmers not to use pesticides because they harm the environment, which reduces productivity. You cannot produce as much fish in rice fields that have been sprayed as you could produce in a field without pesticides. Many of the species are extinct because of pesticide use; the land becomes very degraded. The farmers understand these issues very quickly.
On the other hand, adopting more traditional farming methods gives them the opportunity to develop self-reproducing farms rather than to depend on the market. They use the green manure from their own farmland which frees them from the pesticide market. We organize the farmers, helping them exchange products among themselves to make sure there is some kind of subsistence food in their homes, so they are not affected by every fluctuation of the market. We organize around an agricultural/ecological/political strategy, not just an economic strategy.
We oppose those environmentalists who claim that to conserve certain species you have to exclude people from land use, or evict people from certain areas. They see the people as the enemy of the environment. We think that is a very racist and anti-people, especially anti-poor people, view. We want to demonstrate that historically, people have conserved nature by using it. People did not destroy forests. People did not destroy the agricultural lands. People did not destroy plant species.
Modern agricultural technology has been the cause of that destruction. Timber companies have destroyed the forests. These same companies now want to blame poor people for environmental destruction. What we are trying to do in our ecological agriculture program is to encourage farmers to take care of certain endangered species while engaging in agriculture.
MM: What are some examples of the traditional farming methods encouraged by UBINIG?
Mazhar: For example, people kill and export the monitor lizard, which is one of Bangladesh’s endangered species. In Germany and other countries you see purses made of Bangladeshi monitor lizard. This situation relates to World Bank policies which encourage development through a non-traditional export market. We are telling farmers that the monitor lizard is a very important animal within the ecosystem because it eats snakes, rats and rodents and keeps their numbers down. When you discuss their role in this agro-ecosystem with the farmers, they understand immediately. And now they do not allow anyone to kill the monitor lizards.
Another example is the owl, which feeds on bats and rodents. We tell the farmers to erect pillars out of dead trees on their farmland so the owls can build their nests there. The farmers realize the importance of maintaining different species of animals.
We also try to educate people about medicinal plants. Our ecological program works to integrate medicinal plants into primary health care. We tell the people about the different plants - which are effective for cuts or fever, for example - and we tell them to use the plants directly from the field.
We have also developed a kind of inventory of what plants grow in the area so our primary health care clinic workers can use them along with other medicines. We are integrating medicinal plants into our ecological scenario and then working to develop a primary health care delivery structure which is dependent on these plants. This project, while providing health care directly to people, also works as a political strategy against corporate interests.
We call it a survival strategy. We have to convince people in the North that, unless we change the world order, it is not possible for people in Third World countries to survive.
MM: What is the relationship of the IMF and World Bank to your efforts to promote ecological agriculture?
Mazhar: The IMF and the World Bank are opposed to the institutional changes that we support, such as land reform. They say the market will take care of it. So they do not allow the people to determine what type of land reform will be implemented.
If we didn’t have anyone dictating policy to us in such a coercive manner, the Bangladeshi people would have demanded some kind of institutional reform by now. They would have struggled, they would have challenged the land tenure system and limits on access to credit and capital.
When you turn to the land question, you see that the lending agencies are promoting increased productivity in agriculture through modern agriculture and through the market. That means that pesticides and fertilizers will be sold in the open market. That is the real agenda of the corporate interests that produce and sell pesticides.
This country is not being given a chance to improve the performance of agriculture through land reform, through reform of the land administration, or through other institutional changes that involve giving the rural poor credit. In fact, the government leaves it to the non-governmental organizations to give credit to the rural poor.
For us, ecological agriculture is not separate from industry. The separation or delinking of agriculture and industry is the key feature of underdevelopment and ecological destruction. Development is set in the industrial sector.
We propose the reverse. Agriculture is a way of life for us, not a sector of production. Industrial activities, such as weaving, are an integral part of agriculture. That is the difference between our development model and the dominant development model.
by Nadav Savio
MICHAEL DUKAKIS’S LOSS to George Bush in the 1988 presidential election left the Democratic Party leadership desperately assessing blame and searching for some way to capture the seemingly unreachable White House. By creating and working with the Democratic Leadership Council (DLC), Bill Clinton believed he could achieve that goal. As a founder of the DLC, Clinton hoped to forge a "new Democratic Party," one that could win back both voters and corporate contributors lured away by the Republicans’ feel-good imagery and conservative fiscal policy. As president, Clinton has seen his plan come to full fruition in a cabinet that looks less like America than like American Express or Philip Morris.
Now, more than ever, multinational corporations are multi-partisan; entrenched corporate influence extends well into the Democratic Party, once dismissed by conservatives as the party of organized labor. The Clinton cabinet’s corporate ties are especially troubling to environmental, consumer and labor activists who had hoped for a change from the preceding administrations’ business bent. Neither Reagan nor Bush appointed as many millionaires to cabinet positions as Clinton has.
Among the cabinet positions of most interest to business are those overseeing trade, finance and commerce. As well, the secretary of state will play a key role in negotiating U.S. - and U.S. corporations’ - global interests. It is worth examining the past and present corporate ties and activities of Clinton’s appointees in these key areas in order to gauge the tack the new administration is likely to take on such important issues as the pending North American Free Trade Agreement (NAFTA), reform of the nation’s health care system, the management of taxpayer assets and worker and consumer protection.
Perhaps the cabinet agency most attuned to corporate concerns is the Treasury Department. By all accounts, Clinton’s Treasury Secretary Lloyd Bentsen has been a dependable ally of business throughout his congressional career. "The joke about Bentsen is that he never met a tax break he didn’t like," says Dean Baker, staff economist for the Washington, D.C.-based Economic Policy Institute (EPI). In 1986, for example, then- Senator Bentsen, along with Senator David Boren, D-Oklahoma, pushed to preserve tax breaks for the real estate, oil and gas industries in that year’s major tax-reform legislation. As recently as last year, Bentsen supported efforts to reinstate lucrative tax breaks for those industries by reversing key portions of the 1986 Tax Reform Act. Given Bentsen’s allegiance to corporate interests, it is hardly surprising that business Political Action Committees (PACs) contributed 89 percent of the $2.5 million in PAC contributions Bentsen received for his most recent reelection bid, according to Open Secrets, a review of congressional campaign spending. Journalist Sam Smith reports that "when he [Bentsen] became head of the Senate Finance Committee in 1987, he invited corporate lobbyists who contributed $10,000 to his re-election campaign to monthly breakfasts. After the story became public - dubbed ‘Eggs McBentsen’ - Bentsen cancelled the meetings and returned the contributions."
The business community is well aware of the influence it has gained on Capital Hill by its contributions. Following his nomination, Bentsen received glowing praise in the press from, among others, Charles J. DiBona, president of the American Petroleum Institute, top business lobbyist Charls Walker and Paul Taylor, vice president of the National Association of Industrial and Office Parks, a real estate industry organization.
Bentsen’s deputy treasury secretary, Roger Altman, is even more directly linked to the corporate world than his boss. As a treasury official in the Carter administration, Altman helped to manage the federal bailout of the Chrysler corporation, one of the more egregious examples of government-sponsored corporate welfare to date. More recently, as vice chair of the New York investment banking firm, the Blackstone Group , Altman completed four of the six largest acquisitions of U.S. firms by Japanese corporations, including Sony ’s much- publicized takeover of CBS Records and Columbia Pictures. "Altman and [assistant to President Clinton for economic policy and former Goldman Sachs chief executive Robert] Rubin are obviously both big-time Wall Street characters," Baker says, "which makes one wonder what sort of legislation they would be willing to consider."
At the Commerce Department, former Democratic National Committee (DNC) Chair Ron Brown will have extensive opportunities to return favors to corporations such as RJR Nabisco , MCA , Sony, Philip Morris and Atlantic Richfield (ARCO), each of which donated more than $100,000 to Brown’s DNC. As a lawyer, Brown represented American Express , Japan Airlines , Oman , Zaire , Gabon and a coalition of 21 Japanese electronics producers. He formerly represented deposed Haitian dictator "Baby Doc" Duvalier, lobbying the U.S. government on behalf of the human rights-abusing Haitian government.
Brown has offered to recuse himself for only one year on issues handled by his former law firm, Patton, Boggs and Blow , which represents New York Life Insurance , Mutual Life Insurance and, formerly, BCCI . Citing his "very far-reaching recusal," a Brown spokesperson told Multinational Monitor, "I don’t see there being any problem or potential problem." Critics, however, say Brown’s failure to recuse himself from dealing with current and former clients for his entire time in office belies the likelihood of undue outside influence at the Commerce Department.
Past events do not encourage those who fear Brown may be tempted to trade political power for money or favors. Reports have surfaced that Brown and Thomas Boggs, a major Clinton fundraiser and former law partner of Brown, also ran a waste treatment company which was granted a $210 million contract with New York City just before the DNC selected New York for its 1992 convention site. While Brown has denied any connection between the contract and the selection of New York, the city subsequently rescinded the contract and Brown resigned from the company’s board. Reports of similar dealings appearing in both the New York Times and Washington Post suggest Brown used inside influence to gain a contract for Capitol Pebsco Inc., which he founded, to manage $100 million in Washington, D.C. city employee pensions. Another company has charged that Capitol Pebsco was not the lowest bidder for the lucrative city contract, but Capital Pebsco District Director Lawrence Johnson insists, "That’s been dealt with. ... We’re the lowest bidder."
Laura D’Andrea Tyson
Laura D’Andrea Tyson, the new chair of the President’s Council of Economic Advisors, is known as a liberal for her advocacy of industrial policy, a view that the federal government should actively intervene in the economy to promote strategic industries; she is also a friend of the electronics and other high-tech industries. As a professor at the University of California at Berkeley, Tyson co-founded and co-directed the Berkeley Roundtable on the International Economy, a University of California trade and technology research organization which has been heavily financed by the Silicon Valley businesses and trade groups on whose behalf Tyson advocates government intervention. Critics worry that Tyson’s "industrial policy" will be implemented as nothing more than a big business subsidy policy. "To have an administration coming into power that is explicitly committed to moving money from taxpayers’ wallets into high-tech companies and politically favored industries is going to mean a lobbying field day for every company and trade association," Brink Lindsay, director of regulatory studies at the CATO institute, told the San Francisco Chronicle. "There’s no lobbyist worth his salt who can’t make a plausible argument for why his client industry is the linchpin of U.S. strategic interest and deserving of support."
Making corporations’ case to Tyson will be former colleagues and peers of Washington lawyer-lobbyist Mickey Kantor. Advocates of political reform have decried Kantor’s nomination as United States Trade Representative (USTR) as a continuation of the sort of revolving-door lobbyist influence which has helped fuel voter dissatisfaction with the federal government. As a partner in the law firm of Manatt, Phelps, Phillips & Kantor, the new USTR has represented Philip Morris, Occidental Petroleum, Martin Marietta, ARCO and a host of other companies. Kantor has been especially involved in tobacco industry lobbying and legal efforts. According to a joint 1992 report by the Public Citizen Health Research Group and the Advocacy Institute, "In 1987 he represented the Beverly Hills Restaurant Association, a group organized by the [industry funded] Tobacco Institute to oppose an ordinance making all restaurants smoke-free. After the city council unanimously passed this ordinance, the first of its kind in California, Kantor filed a suit to repeal the ordinance. ... Legal fees were paid for by the Tobacco Institute." In addition, Manatt, Phelps, Phillips & Kantor has represented GE , United Airlines and NEC .
Named Secretary of Energy, Hazel O’Leary has been lauded for her emphasis on energy conservation and commitment to moving away from the country’s dependence on oil. However, O’Leary’s past work as executive vice president for corporate affairs for Northern States Power of Minnesota, a major private utility company, suggests she was more concerned with company profits than with environmentally sound energy policy. "She was a spokesperson for a very pro-nuclear utility," says Peter Grinspoon, director of Greenpeace’s nuclear power campaign, "and we basically think that in much of her experience at Northern States Power she was on the wrong side of the trench." O’Leary has led several efforts by Northern States to pursue environmentally questionable practices over opposition by environmental and other groups. The utility, for example, is attempting to store radioactive waste from its Red Wing nuclear reactor near a Native American reservation on the Mississippi River plain. While the plan has been approved by state regulators, the conflict is still being contested in court. Native Americans have joined environmental groups in fighting the plan. Separately, O’Leary led Northern States’s attempt to burn PCB-contaminated oil at a separate facility. A permit was granted, but later blocked by state lawmakers. While environmentalists have offered only muted criticism in light of O’Leary’s conservation efforts, it remains to be seen whether her commitment is to energy efficiency or profits for nuclear power companies. According to Grinspoon, "It’s still too early to tell."
As a lawyer for the O’Melveny and Meyers firm, new Secretary of State Warren Christopher represented Exxon in lawsuits related to the oil giant’s pollution of Prince William Sound. In 1985, Christopher helped E.F. Hutton conduct damage control in the aftermath of the company’s check-floating scheme in which the financial giant took advantage of the lag between when its checks were written and when they actually cleared to earn millions of dollars in interest over several years. Along with such cases of aiding known corporate wrongdoers, Christopher served on the board of Lockheed and Southern California Edison , and his former firm represents IBM , United Airlines, Occidental Petroleum , Fuji Bank , Mitsubishi and Banker’s Trust . Christopher also lobbied for the European chemical conglomerate, CEFIC . Such corporate - in particular oil industry - ties suggest the potential for business interests to help shape key U.S. foreign policy decisions during Christopher’s tour of duty.
"The corporate crew"
Corporate influence does not automatically dictate policy; the Clinton administration’s cabinet members may spurn the corporate pandering feared by their critics. In addition, not all of the Clinton appointees have strong corporate ties and some appointees, such as Secretary of the Interior Bruce Babbit, have earned praise from citizens’ organizations. Big business’s former representatives and friends do, however, occupy key positions in the new administration, and they are likely to provide access and influence to their old colleagues. Says EPI’s Baker, "They’re pretty tied in with the corporate crew. ... It’s certainly caused worry in terms of how fair their programs will ultimately be."
by Ellis Boal
IN LATE 1988, Electromation , an Elkhart, Indiana-based manufacturer of small electrical items, recognized that it was facing financial difficulties.
Concluding that it needed to undertake cost-cutting measures, Electromation’s executives decided to cut back on the company’s bonus system for faithful attendance and to forego wage increases for the upcoming year. The company announced the cut-backs to its approximately 200 workers at an employee Christmas party on December 23 at which it also distributed length-of-service bonuses designed to take the place of the wage increases.
When the workers returned to work after New Year’s Day, they presented Electromation with 68 signatures complaining about the company’s policy changes. After holding a meeting with a selected group of employees, management realized it had trouble on its hands.
The company decided to set up "action committees" comprised of employees and members of management to help improve morale. Company executives selected the members of the committees, coordinated them, provided facilities where they could meet and paid employee-members for attending the meetings. The company also selected the issues the committees would address: absenteeism/infractions; no smoking policy; communication network; pay progression for premium positions; and the attendance bonus program. The committees would make recommendations to management, which would evaluate them and implement suggestions it found feasible.
The employees were not very enthusiastic about the action committees; in the words of a National Labor Relations Board (NLRB) administrative law judge who later examined the case, "They just wanted action and did not want any more committees." Nonetheless, the committees were selected and began their work. At about the same time, in January 1989, some of the employees contacted the Teamsters, which began a union organizing drive among the Electromation workers. In mid-February, the Teamsters demanded company recognition of the union as the representative of the Electromation employees, and petitioned the NLRB for a certification election.
The Teamsters lost the subsequent March 31, 1989 election. But the union did not accept the result meekly. It cried foul and asked the NLRB, the federal agency which regulates collective bargaining, to investigate whether the workers were given a fair choice in the election.
The Teamsters charged that Electromation’s action committees constituted a management-dominated employee organization, in violation of the 1935 National Labor Relations Act (NLRA, or the Wagner Act), which sought to prohibit businesses from forming "company unions" to preclude independent unions from representing workers. The existence of the action committees, the Teamsters contended, misled workers into believing they already had a means to bargain collectively with the company and interfered with their right to organize an independent union.
Administrative Law Judge George F. McInerny agreed with the Teamsters. He ordered Electromation to disband the action committees and instructed the regional office of the NLRB to hold a new union election at the company. The Teamsters won the new election, and a few months later had a union contract.
When Electromation appealed McInerny’s decision to the full National Labor Relations Board, the business community saw more at stake than just the fate of a small Indiana company’s employee committees. Big business groups decided to turn Electromation into a test case which the Detroit News labeled a battle for the soul of labor law. The NLRB’s December 1992 ruling upheld McInerny’s decision in strong terms, but it is a ruling that may soon be eroded or legislated away.
Against the background of concerns about international competitiveness, labor- management cooperation programs became the rage among U.S. corporations in the 1980s, and remain so today. According to a 1992 survey by Fortune magazine, 80 percent of the nation’s 1,000 largest corporations have some type of employee participation program.
Known variously as quality circles, team concept, jointness or participation programs, these labor-management cooperative programs appeal to benign concepts like harmony and teamwork in an effort to subordinate conflict between workers and their employers. With the power and influence of organized labor in the United States dropping precipitously over the last two decades, few unions have been willing to oppose the cooperative programs so enthusiastically advocated by management, and many unions actively support them.
Among the more progressive and dissident elements in the labor movement, cooperation programs have been widely denounced [See "Management By Stress," Multinational Monitor, January/February 1990]. Critics charge the purpose of the programs is to squelch labor militancy by coopting workers and their unions so that they identify with management and lose sight of their independent interests. Cooperative programs are misnamed, they assert, since they are controlled almost entirely by management, which determines which topics joint committees can address and which they cannot. Finally, critics allege, the productivity gains these programs generate generally stem from forcing employees to work faster, not by improving the production process.
Whatever the merits of the critics’ claims, it is clear that cooperation schemes represent a major departure from traditional U.S. labor-management relations. And since the U.S. Congress enacted the Wagner Act with the traditional, adversarial model of labor relations in mind, many new cooperative plans and committees seem to run afoul of the law. Accordingly, the business community is eager to see the law modified - and it hoped the NLRB might do that through the Electromation case.
Powerful business groups, including the National Association of Manufacturers and the American Iron and Steel Institute, jumped into the case as friends of the court to argue for management. They launched a media campaign, demanded rare oral argument before the full NLRB and submitted briefs to the Board totalling more than 400 pages.
The business groups asked for "clarification" of the law to allow employers to dominate committees if their "intent" was good. They argued that because Electromation executives did not have knowledge of the Teamsters’ organizing drive when the company set up the action committees, the intent of the committees was not to prevent organizing.
The union responded that the intent of the company is irrelevant. By their very nature, the Teamsters and others argued, cooperation teams squelch independent concerted worker activity. They function as an alternative to independent labor organizations, and lead employees to believe their grievances may be addressed through cooperative committees. The problem is that those committees are under management’s control; anything short of a real union prevents workers from joining together to advance their interests in bargaining with their employer.
The NLRB decision
The NLRB rejected the arguments of Electromation and its business allies. Using its traditional two-step analysis, the NLRB concluded first that the company’s action committees were labor organizations, and second that they were management-dominated. When the Electromation employees resisted the initial suggestion to create action committees, the Board concluded, the company essentially issued them an ultimatum that they could accept the committees or accept the changes introduced by management at the 1987 Christmas party. Every element of the committees reflected management domination, the Board decided, ruling: "The [company] drafted the written purposes and goals of the Action Committees which defined and limited the subject matter to be covered by each Committee, determined how many members would compose a committee and that an employee could serve on only one committee, and appointed management representatives to the Committees to facilitate discussions. Finally, ... [Electromation] permitted the employees to carry out the committee activities on paid time within a structure that the [company] itself created."
The case really was not that close. All 13 prior U.S. Supreme Court decisions on the contested issues have been decided unanimously. Electromation and its friends were asking the Board to ignore that precedent in light of the stagnant U.S. economy and the widespread use of labor-management cooperation schemes. But they asked for too much.
Most NLRB decisions on employee committees or employer-dominated unions are short and pro forma. In this case, however, the Board issued a lengthy opinion. It harked back to the passage of the NLRA in 1937 and the words of Senator Wagner, the author of the NLRA, on the pernicious effects of management-dominated employee committees or unions: "Genuine collective bargaining is the only way to attain equality of bargaining power. ... The greatest obstacles to collective bargaining are employer- dominated unions, which have multiplied with amazing rapidity since the enactment of [the National Industrial Recovery Act]. Such a union makes a sham of equal bargaining power. ... [O]nly representatives who are not subservient to the employer with whom they deal can act freely in the interest of employees. For these reasons the very first step toward genuine collective bargaining is the abolition of the employer-dominated union as an agency for dealing with grievances, labor disputes, wages, rates or hours of employment."
The Board concluded its decision by denouncing Electromation for trying to create the impression that the action committees were bilateral solutions to problems when they were actually a unilateral, management-imposed form of bargaining or dealing.
The meaning and reaction
Labor and management divided on the meaning of the Electromation decision, but not in entirely predictable ways. Normally, the winning side in a legal dispute tries to read a court or administrative agency’s decision broadly and the losers attempt to explain why the ruling applies only to the specific facts in the case decided. To a significant extent, those typical, post-decision roles were reversed in this instance.
Following the decision, the AFL-CIO issued a perfunctory statement that said, "All that the National Labor Relation Board’s Electromation decision does is to faithfully follow what the [Wagner] Act says and what it means." The AFL-CIO’s position essentially is that ruling would not impede the ability of corporations to create much- needed employee participation committees, but that the committees should be established on an "honest and equal" basis: "Only companies that are commited to an honest and equal partnership between management and labor can create and sustain the kind of employee participation that is essential if this country is to meet the competitive challenge of a world economy."
In notable contrast, the Teamsters, now headed by reformer Ron Carey, more directly challenged the entire concept of labor-management cooperation as it is currently conceptualized. Carey interpreted the ruling in terms that apply more generally to all jointness programs. "This ruling exposed management-dominated quality of work life programs for what they are: attempts to pit worker against worker and undermine workers’ rights," he said. Carey suggested an entirely different way to improve labor- management relations, saying, "It’s time to strengthen this country’s labor-management relations by restoring the right to organize and bargain collectively that has been systematically undermined in recent years."
But it was business groups that interpreted the NLRB decision as the greatest threat to currently existing labor-management cooperation schemes. Quentin Riegel, deputy general counsel at the National Association of Manufacturers, told Multinational Monitor, "We are very concerned about the implication of the Electromation decision because although the National Labor Relations Board tried to make the decision as narrow as it could, the decision on its face seems to apply to any cooperative committee between workers and management. All such cooperative committees are now subject to challenge by unions or employees claiming that they violate the National Labor Relations Act." The strategy underlying the business response to the Electromation decision is clear: business groups are hoping to have the National Labor Relations Act itself changed.
The prospects for business groups succeeding in pressing for legislative or judicial reform of U.S. labor law on the matter of employee committees are unclear, but certainly not hopeless.
The NLRB itself may work to narrow its ruling in Electromation. NLRB member Dennis Devaney told a Stetson University conference in January that the Electromation opinions will be clarified in future cases and in Congress. He teased the conferees with insinuations that a forthcoming case was "in some ways even more interesting" than Electromation.
The Electromation decision specified that one problem with the company’s action committees was that they were established to resolve employee grievances, not to discuss product quality, and intimated that labor-management committees devoted to product quality issues might be viewed differently. The NLRB may follow up on that suggestion and hold in future cases that management-dominated worker committees devoted to product quality are permissible. That will be a very difficult tack to navigate, however, because even committees focused on quality issues almost always end up discussing working conditions, which is a subject for collective bargaining under the NLRA.
The Electromation decision will also be challenged in Congress, where Representative Steve Gunderson, R-Wisconsin, and Senator Nancy Kassebaum, R- Kansas, have proposed legislation to ensure that cooperative committees will be legal, with or without union participation.
Support for legal change may also be forthcoming from the Clinton administration. In March 1993, Secretary of Commerce Ron Brown and Secretary of Labor Robert Reich announced the formation of a 10-member "Commission on the Future of Worker- Management Relations." According to the panel’s mission statement, it will consider "what (if any) new methods or institutions should be encouraged, or required, to enhance workplace productivity through labor-management cooperation and employee participation" and "what (if any) changes should be made in the present legal framework and practices of collective bargaining to enhance cooperative behavior, improve productivity and reduce conflict and delay."
In announcing the new panel, Brown said, "We must create an environment within which American business can prosper. An instrumental part of this mission is to create a new model of worker-management relations that allows American businesses to flourish." Reich added, "We are seeking to establish new partnerships between workers and managers."
The wave of enthusiasm for cooperation schemes has not yet crested, and it is quite possible that it will gather enough force to wipe out many of the traditional protections guaranteed workers by U.S. labor law. Business interests clearly plan to do everything in their power to achieve that result; unfortunately, while the Teamsters and some other national unions and local labor activists may oppose their efforts, the response of the mainstream of the U.S. labor movement is less clear. The AFL-CIO may try to use the panel to revive 1978 legislation to streamline NLRB procedures for organizing unions. But that is not in the panel’s mission statement, and the 1978 reforms went down in a Senate filibuster.
The most powerful force opposing corporate-driven changes in U.S. labor law may be business leaders’ fear that it is not worth the risk of amending a body of labor law and focusing attention on labor law enforcement mechanisms that are now strongly pro- management. At a conference sponsored by the National Association of Manufacturers, former NLRB General Counsel John Irving, now with a management firm, warned that business could be "walking into a trap" by proposing changes in the NLRA, since labor organizations might be waiting with their own labor law reform package. Rosemary Collyer, another former NLRB general counsel who now works with management, urged companies simply to maintain their labor-management cooperative committees. Even if the committees are vulnerable to challenge, she said, in most instances the only NLRB remedy would be to order disbandment, and that will only occur in the relatively few cases where the NLRB chooses to undertake enforcement action.
by Holley Knaus
THE 1970 MERGER OF CIBA AND GEIGY, two Swiss pharmaceutical and chemical companies, created a massive corporation with operations in over 50 countries. Ciba Geigy is the third largest manufacturer of prescription drugs in the world, and the second largest producer of insecticides and fungicides. The company is the largest producer of dyes in the world. And it has a consistent record of disregarding the health and safety effects of the products it pushes throughout the world, bearing responsibility for one of the greatest drug disasters ever.
While Ciba Geigy has recently demonstrated some willingness to respond to pressure from public health and consumer advocates, it continues to market useless or harmful products in countries in which limited resources could be put to better and safer use.
The SMON tragedy
One of history’s most horrifying cases of corporate negligence involved Ciba Geigy and its drug clioquinol. Ciba started marketing clioquinol in 1934 to fight amoebic dysentery. By the time the company entered the lucrative Japanese market in 1953, it was pushing clioquinol worldwide for all forms of dysentery. Ciba was permitted to market the drug in Japan for all types of abdominal trouble, with no limitation as to dosage or length of treatment. Ciba promoted the drug throughout the 1950s and 1960s as being safe and effective, even for children, and as having no adverse permanent side effects.
By 1970, 10,000 Japanese citizens, and hundreds of others worldwide, were afflicted with a little-known but devastating disease called subacute-myelo-optico- neuropathy (SMON). SMON victims suffered a tingling in the feet that eventually turned into total loss of sensation and then paralysis of the feet and legs. Others suffered from blindness and serious optic disorders. Almost 90 percent experienced sensory disturbances in the lower back and limbs. Japanese researchers did not identify clioquinol as the cause of SMON until 1970; until that discovery, patients suspected of being in the initial stages of SMON - those suffering from common abdominal pains or diarrhea - were treated with clioquinol, thus causing many who had not contracted SMON to actually develop the disease.
In September 1970, just one month after receiving the report of a researcher attributing SMON to clioquinol, the Japanese Ministry of Health banned the drug from the Japanese market. Ciba Geigy (now merged) released statements defending the drug, stating that clioquinol could not be the cause of SMON because it was essentially insoluble and could not be absorbed into the body. However, in preparing a lawsuit against the company, attorneys found disturbing evidence that the drug could indeed be absorbed into the body and that it was hardly as safe as Ciba had been claiming - evidence that had been available to the company for many years.
In 1944, clioquinol’s inventors advised, in light of animal studies, that the administration of the drug be strictly controlled and that treatment not exceed 10 to 14 days. In 1965, a Swiss veterinarian published findings that dogs treated with clioquinol developed acute epileptic convulsions and died. Ciba simply inserted a warning in the drug’s packaging in England that it should not be used for animals. In 1966, Swedish pediatricians Olle Hannson and Lenart Berggen studied a three-year-old boy who had been treated with clioquinol and suffered severely impaired vision. Hannson and Berggen reported in medical literature and directly to Ciba that clioquinol was absorbed into the intestines of the boy and that the drug could damage the optic nerve and lead to optic atrophy and severe deterioration of vision. Other studies challenged the drug’s efficacy as an anti-diarrhetic.
Ciba, and other producers of clioquinol, failed to respond to any of these warnings with serious investigations into the effects of the drug, instead continuing to market it in Japan as well as throughout Europe and in Indonesia, Australia, India and the United States. The Japanese were particularly devastated by SMON because it had been administered to great numbers of people in large doses over long periods of time. In Japan, SMON victims filed over 5,000 lawsuits against the company. By 1981, Ciba Geigy had paid out over $490 million to Japanese SMON victims.
The company eventually released an apology to the victims of its drug: "We who manufactured and sold clioquinol drugs deeply sympathize with the plaintiffs and their families in their continuing unbelievable agony; there are no words to adequately express our sorrow. In view of the fact that medical products manufactured and sold by us have been responsible for the tragedy, we extend our apologies, frankly and without reservation, to the plaintiffs and their families." In March 1985, Ciba Geigy finally took the drug off the market worldwide.
The SMON case was not the only instance in which Ciba Geigy has earned criticism for its marketing decisions. The company, for example, produces Butazolidin and once manufactured Tenderil, non-steroidal anti-inflammatory drugs once widely used for the treatment of arthritis and rheumatism. Their side effects include agranulocytosis, a potentially fatal blood disorder. In 1983, Ciba Geigy issued an internal memo saying that the drugs had caused the death of 1,030 people and seriously injured 4,481 others. The company did not withdraw the drugs, but instead only advised public health officials that the use of the products be limited to treatment of acute illnesses and administered for a maximum of one week.
It was not until Hansson, who was instrumental in the fight against clioquinol, obtained and publicized the memo that the company was forced to take substantive action on the drugs. In 1985, in response to pressure from the Amsterdam-based consumer and health advocacy group Health Action International (HAI), Ciba Geigy withdrew Tanderil from the market worldwide, and severely restricted the use of Butazolidin. Dr. Andrew Herxheimer said in a statement released at the time by HAI, "Safer alternatives for both drugs have existed for years. ... Ciba’s decision was overdue."
Even now, the company displays an appalling lack of responsibility in its marketing of Butazolidin, particularly in Third World countries. A report on Ciba Geigy’s social performance by the Info-Center, a Swiss-based research organization, says "In Switzerland , Ciba Geigy recommends a short one-week therapy with ... Butazolidin. This indication of time is non-existent in Mexico ."
More recently, the company came under pressure in Bangladesh for its 1991 "depression awareness and detection" campaign. Ciba Geigy’s Richard Williams describes the program: "Television, radio and print media were used in addition to stickers (used in doctors’ offices and chemists’ shops) and posters (used in doctors’ offices only). No products name were included in any of the public material. The whole campaign was submitted to, and approved by the Ministry of Information, the Ministry of Health and the Director of Drug Administration."
Bangladeshi activist Farhad Mazhar, however, claims that the company had already advised doctors and pharmacists to prescribe its anti-depressant Ludiomil to patients seeking advice after having seen the advertisements. In response to questions about Mazhar’s claim, Williams says simply that "Despite favorable public and medical feedback, the Director of Drug Administration expressed concerns with the campaign and requested that it be withdrawn. The campaign was immediately discontinued in June 1991."
The company does not restrict its questionable advertising methods to the Third World. In 1988, Ciba Geigy came under fire from the U.S. Food and Drug Administration (FDA) for its publicity campaign for a new arthritis medicine called Voltaren. The FDA forced the company to discontinue public relations events (including a press conference featuring athlete Mickey Mantle praising the drug which he also hawked on NBC’s "Today" show). The FDA claimed these events allowed the company to in effect market a prescription drug directly to consumers, in violation agency policy at the time.
Pioneering poisonous pesticides
Ciba Geigy holds the dubious honor of having discovered the pest control uses of DDT, and of marketing the poisonous pesticide worldwide. While the company no longer produces the toxic substance, in 1991 it was forced to repurchase over 100,000 gallons of insecticide containing DDT which had been sold to Tanzania in violation of the company’s internal policy relating to the marketing of banned products to the Third World.
Ciba Geigy also has an extensive record of manufacturing and marketing other dangerous pesticides throughout the world:
o One of the most appalling episodes in Ciba Geigy’s history occurred in 1976 in Egypt, when the company paid six boys to stand in a cotton field while it was sprayed with the insecticide Galecron in a test to see how much of the chemical would be absorbed into their bodies. Galecron was long suspected to be a carcinogen, but it was not until 1988 that Ciba Geigy agreed to pull it off the market. In the United States, the company recalled the product from farmers after the Environmental Protection Agency (EPA) announced it would make distribution or use of the pesticide illegal.
Remarkably, the Galecron incident was not the first to involve tests of this nature. According to Greenpeace, in 1975 the company’s Indian affiliate Hindustan Ciba Geigy sprayed the pesticide monocrotophos on more than 40 Indian children and adult volunteers over the course of four days. The World Health Organization classifies monocrotophos as highly hazardous, and the EPA considers it a highly toxic organophosphate that is neurotoxic to insects and animals.
o Ciba Geigy produces dichlorvors, which, according to the Washington, D.C.-based National Coalition Against the Misuse of Pesticides, is an acutely toxic substance when absorbed orally or through the skin, and is classified by the EPA as a probable human carcinogen. The company also manufactures the pesticides monocrotophos and phosphamidon. According to The Pesticide Hazard: A Global Health and Environmental Audit, a 1993 study by the UK-based environmental foundation The Pesticide Trust, all three pesticides are being considered for early inclusion on the United Nations Food and Agriculture Organization (FAO)’s Prior Informed Consent (PIC) list. The voluntary PIC process is designed to provide information about the health and environmental effects of potentially hazardous pesticides before a government agrees to allow their import.
o The Pesticide Trust report also notes that Ciba Geigy has cultivated relationships with the Ministry of Agriculture in Paraguay, and holds courses and seminars in some of the country’s agricultural schools, including a series of talks on the uses of chemicals in agriculture. The report expresses concern that the "links between private industry and the country’s university and research centers [will] create an atmosphere for promoting pesticides rather than non-chemical methods of control of pests."
Mask of concern
As their activities come under increased scrutiny by international health, consumer and environmental watchdogs, chemical manufacturers are changing tack slightly, emphasizing concern for health and environmental standards in the countries in which they operate. Klaus Leisinger, director of Third World relations at Ciba Geigy, says, "Ciba Geigy is the only multinational corporation in the world that has an explicit Third World Policy. ... Part of that policy forbids double standards with regard to the safety of and information on products which are sold in Third World and developed countries."
There is some indication that consumer demand and pressure are having some effect on the products the company is choosing to market, particularly in the Third World. The Australia -based health advocacy organization Medical Lobby for Appropriate Marketing (MaLAM) ranked the company first in marketing standards among the 10 largest pharmaceutical manufacturers. And a 1992 MaLAM newsletter says that the "company’s guidelines include many excellent features not found in any of the other companies’ standards."
Furthermore, in 1977, Ciba Geigy founded a subsidiary, Servipharm Ltd., which supplies appropriate pharmaceuticals (those which are of some use in rational drug therapy) at a lower cost to Third World countries. A 1989 HAI study on German and Swiss drug supplies to the Third World found that Servipharm was exceptional in supplying essential and appropriate drugs. "The Swiss firms’ overall product range, with 17 percent essential drugs, ... display no specific targeting of the most urgent needs of the Third World. One exception is the Ciba Geigy subsidiary, Servipharm, with 58 percent essential drugs in [its] range." The report notes however, that Servipharm is unique not only among other Swiss pharmaceutical manufacturers, but also differs greatly from its parent company. "If the figures for all Ciba Geigy companies are combined ... the percentage of essential drugs drops to 19 percent," the report points out.
Anna Sax of the Berne Declaration, a Swiss advocacy organization that works on Third World development issues and launched the HAI study, says that the group is currently corresponding with Ciba Geigy as a follow-up to the investigation. Sax says that in response to HAI’s findings, the company suspended sales of "two or three products, and [it] changed some details in product information in Mexico and Brazil ."
Leisinger told Multinational Monitor, "Ciba Geigy is not only open to dialogue with consumer groups regarding the safety and efficacy of its products, but has initiated a ‘development dialogue’ between all Swiss NGOs, the Swiss Development Cooperation, churches and Ciba Geigy." He says that "the last dialogue was on the issue of pesticides in the Third World; the critical aspects were presented by a member of PAN [Pesticide Action Network] Germany."
Catherine Hodgkin, Europe coordinator for HAI, however, questions the usefulness of communication with Ciba: "Ciba Geigy is anxious to promote an image of being very open to dialogue with consumer groups and setting high standards for the industry. In our experience, organizing a serious and productive dialogue with them rather than a Public Relations ‘chat’ is not easy."
Useless and dangerous products
Ciba Geigy’s vices are not restricted to its Third World marketing practices. The company has come under fire around the world for its environmental practices. In 1985, for example, the state of New Jersey fined the company’s U.S. subsidiary $1.4 million for illegally dumping hazardous wastes at three landfills near its Toms River dyeworks. A year later, an accident at a company facility in Basel, Switzerland led to the release of a large amount of the herbicide atrazine into the Rhine River. The accident occurred only a few days after a fire at a facility of competitor company Sandoz led to the dumping of toxic mercury compounds into the same river.
But it is the Ciba Geigy’s promotion of itself as an ethical and benevolent corporate presence in the Third World that most angers its critics. Health and consumer advocates concede that the company has set up some charities to benefit people in developing nations; they note, however, that these programs do little to provide systematic change for the improvement of life in these nations, and that they also serve as good public relations for Ciba Geigy. Charitable contributions, critics insist, should not be allowed to obscure the mendactity of the company’s core operations. As Sax concludes of the company’s pharmaceutical operations, "We still think that selling useless or even dangerous drugs to people who are sick because that have not enough to eat, no clean water or appropriate housing, is a scandal."
The Washington, D.C.-based Center for Auto Safety (CAS) called on the U.S. Justice Department to investigate whether GM violated section 1001 of the U.S. Criminal Code and the Vehicle Safety Act by withholding or submitting misleading information to the National Highway Traffic Safety Administration.
In February, an Atlanta jury decided that the pickup trucks were built with an unsafe fuel tank design, making them vulnerable to fires in sideswipe accidents. The jury awarded $105 million to the parents of Shannon Moseley, who was killed in a fiery crash involving one of GM’s pickup trucks in 1989. The award includes $101 million in punitive damages.
In a February letter to acting U.S. attorney general Stuart Gerson and Federico Pena, head of the Department of Transportation, CAS charged that documents on the fuel tank design were collected and shredded in the early 1980s by the company’s legal department and a task force of lawyers. "GM’s engineering department accumulated vast amounts of information on the hazards of gas tanks located outside the frame of its full- size pickups built after 1972. This information ranged from accident data, to crash tests in which GM pickup gas tanks split like melons, to recommendations for improving fuel tank safety."
CAS executive director Clarence Ditlow points to 22 safety tests performed by GM on the pickups in 1981-83, which were concealed until exposed during the 1990 Moseley litigation. Ditlow charges that by covering up this data on the safety hazards of the fuel tank design, GM violated criminal law.
GM responded to the allegation of document-shredding in a February 16 statement. "This allegation is a matter of great concern to GM. We have been investigating this matter internally and have thus far found no evidence of destruction of documents to avoid discovery, or otherwise to obstruct the process of justice."
CAS charges that GM pickups have been responsible for the deaths of over 300 people in fire crashes and that GM has been covering up the danger of the pickups for nearly 20 years.
Cosmetic surgeons Laurence Wolf and James Moore of Houston filed suit against 11 makers of silicone implants including Dow Corning Corporation, seeking unspecified monetary damages. The lawsuit was filed in the District Court of Harris County, Texas. At least a dozen more doctors are expected to join the lawsuit. Toni Young of the National Women’s Health Network says she believes that the doctors’ lawsuit is the first of its kind.
The complaint charges that implant manufacturers engaged in a "civil conspiracy" to deprive doctors of information about the dangers of breast implants: "Defendants conspired between and among themselves to mislead and defraud the medical community, the United States government and the general public about the proven safety characteristics of the breast implants."
Approximately one million women in the United States have silicone gel breast implants. In April 1992 the Food and Drug Administration (FDA) limited use of the implants for cosmetic purposes to women who are part of small studies, and said that implant makers must prove the product’s safety.
The doctors’ complaint charges that the defendants put them at risk for malpractice suits because they "intentionally and purposefully led the plastic surgery community to believe that extensive research had been performed concerning the potential health effects of the implants, and that the research proved that the products were safe for their intended use."
"We’ve conducted hundreds of tests on the safety of silicone over the past 30 years and the results ... have shown that silicones are safe and effective and they don’t pose an unreasonable risk," responds Christy Meter, spokesperson for Dow Corning.
In return for approximately $300 million over the next four years, Scripps turned over to Sandoz the rights to commercialize any or all of its research between 1997 and 2007.
The NIH announcement came after the San Diego Union-Tribune reported the deal and Representative Ron Wyden, D-Oregon, wrote a letter to NIH director Bernadine Healy calling for the investigation. Wyden’s letter noted that under the terms of the agreement, "in essence, Scripps becomes a Sandoz laboratory. ... What is most troubling about this deal is the apparent fact that the government has raised no objection to the arrangement."
Wyden went on to ask, "To what degree will the NIH, which could also invest $1 billion in tax dollars in the institute over the next decade, have a hand in restraining the price of drugs commercialized by Sandoz?"
"The government underwrites millions of dollars in drug development," Wyden wrote. "The manufacturer steps in to commercialize the development once the government has proven its profit potential. And the taxpaying consumer gets bumped twice in the form of paying for a highly subsidized drug at a highly inflated cost."n
- Ben Lilliston
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