Table of Contents
by Robert Weissman
Editorial: Smoke and Mirrors
The Front
Interview: Sacrificing Sustainability
An Interview with Indro Tjahjono
Labor
Repression to Cooptation: Challenges for Women Workers in Southeast Asia
by Robert Weissman
Economics
by Pratap Chatterjee
Giants of Garbage
by Brian Lipsett
Re: "Losing Jobs to 936," by Katherine Isaac (July/August 1993 ): There was something, well, slightly xenophobic and certainly historically and politically misleading about the article.
A few reminders:
o In early 1897, after a long struggle, Puerto Rico won an automatic charter from Spain . The autonomous government began to function in July 1898. A month later, the United States "liberated" Puerto Rico - by invasion and cancellation of all autonomous rights that Spain had just granted.
o In 1917, the United States "granted citizenship" to Puerto Ricans. Actually, the United States declared as "automatic citizens" all Puerto Ricans save those who signed a document specifically refusing citizenship - a document that also deprived signers from many rights they had held (including the right to hold office) and made them what has been deemed essentially "illegal aliens in their own birthplace." U.S. citizenship did confer on them the right to become military fodder, however.
o Not until 1948 were Puerto Ricans for the first time granted the right to vote for their own governor - after a half century of 15 U.S. government-appointed civilian governors, not a one of whom mastered Spanish - and they still don�t have the right to vote for President.
o In 1952, the island was designated a U.S. Commonwealth - in Spanish Estado Libre Asociado ("associated free state"), though the island�s history has been anything but that.
o The U.S. government has economically and politically coerced Puerto Rico into accepting whatever industry has been most advantageous for the U.S. government and corporations, and discouraged domestic production that would have been manageable with local investment (and would have put Puerto Rico in the position of being able to demand the eventual independence it was originally promised). Sugar and rum supplier at first, place to test bombs and put military and spy bases next, Puerto Rico, beginning in the 1960s, was then pushed to accept petrochemical and pharmaceutical production, industries that have been quickly destroying what had been a tiny pristine island (30 miles by 120 miles in size and containing the now greatly diminished "only tropical rainforest in the United States."). Along with few jobs have come, as well, the pollution of the air and the poisoning of the water supplies of whole towns. U.S. military and other federal installations are even more extensive, and no one denies the fact that the F.B.I. and the Secret Service still abound to keep an eye on "radicals" pushing for nationhood and an end to this kind of forced and injurious dependence.
o The official unemployment rate in Puerto Rico has been running at about 20 percent for the past decade. (Estimates climb as high as 40 percent if including those no longer seeking work and those who are "under-employed.")
o Application for the "Free Zone" jobs to which you refer come mainly from women, single heads-of-households. They see no other choices (except starvation for themselves and their children) than to work where they are paid "piece rate," and can be hired and fired at will depending upon the weekly vicissitudes of the "free market" - or to leave their homes, language and culture to travel "freely" on their U.S. passports to the mainland (one right they didn�t lose as citizens, and a right not open to Haitians, Dominicans, etc.), where I guess the Multinational Monitor would then consider them legitimate workers with legitimate jobs...
Puerto Rico is part of the United States - if not a part of the mainland United States (a conditional acknowledged, but tucked into the article and negated by the headlines). Would the main head have been "Losing Jobs" if the jobs had been moved from Massachusetts to Michigan? Yes, Puerto Rico is not a state - but neither is the District of Columbia. Would the chart head have been "U.S. Jobs Lost Due to Transfer of Work" if the transfer had been made to D.C.?
Puerto Ricans are U.S. citizens, too, though they get even more screwed, and the corporations get even more benefits off their backs, then others elsewhere. Are "mainland" citizens entitled to more "workers� rights" than others?
"U.S. Jobs" were not "lost," - but workers in two parts of the United States all suffered because of corporate greed. It�s not a new story, either. Workers all over this country can tell you how corporations shift factories from state to state, too, depending upon tax breaks, (lack of) environmental and safety standards or enforcement of same, and other "incentives."
Please don�t help them divide us to conquer. Don�t frame the issue as worker against worker. Please do place blame where blame belongs - on those who control the workers� lives, who take away our jobs when we demand safe, healthy work at a decent wage, and then move those jobs to where they can take advantage of us in other places.
Mary L. MacArthur
Somerville, MA
The article "Losing Jobs to 936," by Katherine Isaac in your July/August 1993 issue details jobs lost to workers in the mainland when companies in the continental United States settle in Puerto Rico to avail themselves of incentives generated by a law enacted by the Congress of the United States.
This legislation corrects, in part, the dislocation caused by nearly one hundred years of colonialism imposed on the Puerto Ricans by the imperialist practices of the United States when its invading forces landed on their island in 1989 during the Spanish American War. Puerto Rico, at that time, was on its way to become an independent country, like the other Latin American countries. Instead it became a colonial property of Uncle Sam who promptly pocketed it and forgot all about it. A succession of U.S. military and civilian governors ensued. Legislation was enacted in 1917 in Washington making the Puerto Ricans citizens of the United States who from that time on were conscripted into the U.S. armed forces. To their credit, the Puerto Ricans have participated in every war in which the United States has become involved in the twentieth century, but their colonial status prevents them from voting on legislation sending their men into battle for the United States, or putting it in other words, they are good enough to get killed for Uncle Sam but not good enough to participate on the discussions which will decide their fate. As a colony they do not rate representation in Washington, that is, no senators and no representatives. They are only allowed a commissioner, who has no voice and no vote on legislation being debated by the houses of the Congress of the United States.
Your article is a disservice to the Puerto Ricans, loyal citizens of the United States; it blames them for doing exactly what the states on the mainland do to each other, that is, offer inducements to investors so they can bring their business to their state. Add to this competition the attitude of people like Ms. Isaac who would deny the Puerto Ricans their place in the sun.
Frank De La Rosa
Brooklyn, NY
Vermont Quibble
I have one quibble with the editing of my July/August Multinational Monitor article, "The Corporate Crunch in Vermont." On page 22, you inserted: "A VPIRG staff member told the Monitor that the organization could not make S1 a priority. �I would have liked time to put into the bill, but there were other competing issues: we were working on health care reform, telecommunications and air quality issues.�"
1. I do not think the statement you printed from an unnamed person sheds much light. Several VPIRGers had told me they did not have the time to deal with S1. But everybody who is resisting corporations is short of time. The issue is: what criteria were Vermont organizations using to decide how to allocate scarce resources? Was VPIRG caught napping by S1 or did its staffers discuss it at length and decide to skip it? Was there a difference of opinion within PIRG? What were the various points of view? Did anyone on the board of directors play a role? Etc.
The fact is, NONE of the groups I mentioned - groups one would suspect to be upset about S1 - decided to put time into S1. Their actions are consistent with those of other groups around the country, leading me to believe that citizen activists need to start talking about rewriting basic enabling laws which grant corporations more rights and powers than we people have.
I did not investigate why these groups chose not to become involved in S1. That, obviously, was not the purpose of the article. But I learned enough in Vermont to suspect that rather strong, coordinated pressures were brought on behalf of S1. Maybe that VPIRG was a recipient of these efforts. Or maybe that VPIRGers found S1 too complex, or concluded that resistance would be hopeless.
Perhaps self-censorship was operating here, staffers believing that if they got active on S1 they would have tougher times on health care reform, telecommunications and air quality issues.
2. The quotation reflects special treatment. Neither the Vermont Business Association for Social Responsibility nor Bernie Sanders was given space to explain their decisions not to address this legislation so germane to the issues with which they are publicly identified.
3. Your VPIRG insertion suggests the I was party to this special treatment, and moreover was willing to settle for a very weak excuse by an anonymous staffer that shed no light on what was really going on within VPIRG (and by extension within the public interest community in Vermont) around S1.
I was not party to this effort, but the article transmits a different impression.
If I HAD been searching for the reasons for hands-off on S1, I would have queried people from all the groups, and poked around the state. I would not have settled for mush from people without names.
Richard Grossman
Provincetown, MA
Burning Issues
Having received the July/Aug. issue of Multinational Monitor; I am duly impressed. As one who has spent the past two years fighting Ogden Martin�s incinerator in Lee County, Florida, I commend you for your factual report on O-M�s bullying tactics and its money-ladened behind-the-scene maneuvers. We in Lee County will get a more than $200 million MSW incinerator just a few years before all MSW incinerators are banned because of dioxin pollution of the environment.
W. Dexter Bellamy, PhD
Fort Meyers, FL
Over the past 20 years, Texaco has assisted the Ecuadoran government in its effort to develop Ecuador�s oil industry. The oil company pulled out of the country in 1992, leaving the Ecuadoran government and local communities to deal with a legacy of oil spills, wastewater discharges and hundreds of unlined toxic waste ponds in the rainforest where the company operated. According to Critobal Bonifaz, co-counsel for the indigenous people, "3,500 gallons of oil per day are dumped into the Amazon, and this oil has contaminated all the wetlands and drinking water in the area ... Even the rainwater has been found to be contaminated."
The Rainforest Action Network is a leading group in a coalition calling for an international boycott of Texaco aimed at pressuring the company to take responsibility for the environmental degradation and harm to indigenous peoples resulting from its activities in Ecuador. According to Glen Switkes, spokesperson for the group, "A company that implants a project that extracts billions of dollars worth of oil has both the legal and moral responsibility to ensure that the safety of the people living in the zone where they work is protected when it leaves." Other coalition members include the Indigenous Peoples Organizations of the Amazon Basin, Oxfam and the Environmental Defense Fund.
While the government of Ecuador has sponsored an environmental audit of past oil activity, indigenous and environmental groups were excluded from the audit process and the results of the audit have remained secret.
Texaco denies that it owes anything to Ecuador or its citizens. "Texaco operated under Ecuadoran law and international standards for the industry," according to Dave Dickson, spokesperson for Texaco. "We believe that we have been consistent with the environmental rules and regulations of Ecuador, ... and in the process of assisting Ecuador in developing their natural resources, provided jobs, education, health and other economic benefits to the country."
From 1987 to 1990, Hydro Quebec negotiated "risk-sharing" contracts behind closed doors with aluminum companies. The program was put on hold in 1991 after intense public outrage over the secrecy of the contracts, the cost to consumers of covering the debt of the publicly-owned utility, and the environmental impacts and infringements on native rights of the utility�s hydro mega-projects such as James Bay II. The contracts have factored heavily in the James Bay II debate (see The James Bay Disaster," Multinational Monitor, December 1991 ) because the utility has long argued that Quebec will need such projects to provide electricity for its industrial customers.
In September 1993, Greenpeace obtained an internal Hydro-Quebec document showing that the crown corporation will lose $5 billion over the duration of the contracts. Because the risk-sharing contracts linked the price of electricity to market prices for metals, depressed prices in the global metals market mean that Hydro-Quebec is selling the companies electricity below the cost of producing it, and far below what ordinary consumers payed. This confirmed an April 1991 revelation by Norsk Hydro , a magnesium firm that is a party to one of the contracts, that it was paying only half the already discounted industrial rate of 3.3 cents per kilowatt-hour.
Hydro Quebec is "built to overcapacity," according to Fran�ois Tanguay, Greenpeace Quebec�s Energy Campaign Coordinator, to a point where "they are selling almost 10 percent of their total output at a loss." He says that the risk-sharing program amounts to "corporate welfare."
Hydro Quebec�s chief media officer, Guy Versailles, maintains that the contracts will make money "equivalent to the standard industrial rate." He states that "the contracts were designed to make money over the duration ... we lose money at certain times and make money at others."
The poultry industry�s reluctance to embrace irradiation represents a serious setback to Vindicator, which has yet to gain any major food company or supermarket clients and was counting on irradiating poultry to reverse its spiraling losses, according to the Vermont-based group Food & Water. In its most recent filing with the Securities and Exchange Commission, Vindicator stated that unless the company could begin irradiating substantial amounts of poultry, "there are no assurances that continued funding will be available to the company."
Food & Water�s executive director Michael Colby applauds Gold Kist and Claxton "for listening to their customers and rejecting the dangerous irradiation technology."
Vindicator spokesperson Sam Whitney calls Food & Water�s claims "erroneous," questions the credibility of the group and maintains that Vindicator is a "reputable company." When asked about the cancellation of the poultry irradiation programs however, he declined to comment.
- Aaron Freeman
The incinerator sits in a residential neighborhood in Hudson Falls, by the Hudson River, a waterway that has already been contaminated with 500,000 pounds of PCB waste by General Electric . It is a mere half-mile from the city�s drinking water reservoir, one mile from an elementary school and within five miles of dairy farms and pasture lands. And even if the trash burner meets the requirements of its operating permit - which many incinerators fail to do - it will still be allowed to spew 3.7 tons of lead and 1,382 pounds of mercury into the air each year.
The small, mostly rural counties are paying over $22 million more than what Foster Wheeler representatives initially said the burner would cost. The incinerator�s promoters enthusiastically overestimated the amount of garbage that the local counties would feed the incinerator, so in order to comply with the guaranteed tonnage clause that appears in the incinerator�s contract (and in most incinerator contracts), the counties are heavily subsidizing the importation of waste from outlying areas, while residents pay the highest fees in the state. Built to burn residential waste, the incinerator is now burning whatever waste it can - industrial waste, pharmaceuticals; the counties have even threatened to burn collected recyclables.
Disputes about the controversial incinerator have spurred at least a half-dozen lawsuits, making it the most litigated burner in North America. After 328 residents sued the proponents of the incinerator, which included the county government, the county countersued the residents (with their own tax dollars) for $1.5 million on the grounds that the residents� suit negatively affected the bond rating for the burner.
The scenario unraveling in Hudson Falls is astonishing, but hardly unique. Increasingly, communities across North America are waging similar battles against incinerators, which the trash industry continues to tout as a solution to the garbage crisis.
But citizens fighting incinerators have reason to believe that the smoke may be clearing. Some of the most outspoken critics of trash incineration now come not from environmental groups but from municipalities that have been burned by incinerators. The New York City Comptroller�s Office, for example, published a 1992 report Burn, Baby, Burn: How to Dispose of Garbage by Polluting Land, Sea and Air at Enormous Cost. Bans on incineration now exist in West Virginia, Rhode Island and the Canadian province of Ontario, and cancellations of existing contracts for incinerators have outnumbered new contracts every year since 1987.
Growing opposition to incineration, combined with the inherent problems with incinerator technology, have soured the economic outlook for the industry. An August 11, 1993 Wall Street Journal article warned investors that "[v]ery simply, the current economics [of incineration] are terrible. ... And things could go from bad to worse."
Opposition to the industry has also emerged in the U.S. Congress, where Reps. Bill Richardson, D-New Mexico, and Edolphus Towns, D-New York, have introduced legislation that would place common-sense, modest restrictions on MSW incinerators. Their bill would prevent the locating of facilities near schools and drinking water sources, and prohibit the incineration of batteries, chlorinated plastics and household hazardous waste. If the bill does eventually pass, its requirements may prove restrictive enough to kill many incinerator proposals.
If the battle over incineration sounds familiar, perhaps it is due to the eerie parallels with the struggle to close down the nuclear power industry. Indeed, many incineration firms tried to sell nuclear power as the safe energy alternative of the future. These same players - companies such as Westinghouse , Blount and Babcock & Wilcox - as well as their coaches - the supporting consultants, investment bankers and lawyers - have changed uniforms, but they still have the same interest in capital-intensive megaprojects that generate long-term corporate profits, while imposing environmental and financial risks on local communities.
These merchants operate in a world of secrecy, where bribes and conflicts of interest abound and money greases the decision-making process. A rapidly-spinning revolving door connects the trash industry and the environmental regulators. The appearance of corruption, collusion and unseemly coincidence in the regulatory-industrial complex is endemic. Take, for example, former U.S. Environmental Protection Agency official Lou Crampton, who worked on the infamous Waste Technologies Inc. (WTI) incinerator case in East Liverpool, Ohio for the EPA just before transferring to WMX - formerly Waste Management, Inc. - which has had a controlling interest in many aspects of the WTI project.
Proponents of incineration rely on "risk assessment," which surmises the added risk of cancer death from a new facility. There are myriad flaws with the methodology of risk assessment, but the fundamental defect is in debating risks when viable alternatives that present no risks are available.
And alternatives to incineration do exist: Seattle is well on its way to recycling 60 percent of its waste; several states have recycling targets of 50 percent; and the city of Toronto has a plan to reduce its total waste by 90 percent by the year 2030. Germany has implemented a "polluter-pay" law that requires companies to take back and recycle packaging from their products.
While alternatives are proving their worth, they cannot succeed under the regime of incineration. Incineration contracts impose penalties if a guaranteed amount of waste is not burned, effectively imposing a ceiling on recycling. Moreover, once a community has invested its waste management resources on incineration, few funds remain for a meaningful recycling program.
The technological "fix" of incineration has proved to be nothing more than a smokescreen for corporate greed. The time is long overdue for a comprehensive ban on these toxic money pits that have compromised the health, environment, economy and democracy of communities nationwide.
Information now surfacing in that country shows that workplace safety protections may be another expense the company has been willing to cut in order to increase profits. Seagate has responded to an official Thai investigation into the deaths of workers at its disk drive factory outside Bangkok by denying responsibility for worker health concerns, firing workers who held a one-day strike and attacking the credibility of the government doctor assigned to investigate the case. In a letter by Seagate�s Far East Safety, Environmental and Health Manager Pertpal Singh, Seagate claims that "No violations or problems have been noted concerning lead exposures."
The Seagate controversy began in 1991, when hundreds of workers in a Seagate plant in Samut Prakan, Thailand, just outside Bangkok, started reporting illnesses, including respiratory ailments, eyestrain and unusual fatigue. The workers believed the illnesses were caused by working conditions, particularly lead emissions in the manufacturing process, as well as poor ventilation and cramped quarters.
The situation came to a head when five Seagate workers, ranging in age from 23 to 28, died of unknown causes. After the deaths, the Thai government was forced to investigate, sending an occupational health doctor to the factory to review the case of the workers who died and to examine medical conditions of other workers at the factory. The doctor assigned to the case was Dr. Orapun Methadilokkul, a highly respected doctor from the National Institute of Occupational and Environmental Medicine in Bangkok. Dr. Orapun discovered that as many as 700 workers per shift were ill. She determined, however, that although lead levels were very high, lead was probably not the direct cause of the deaths of the five workers.
From her initial investigations, Dr. Orapun believed some of the deaths and illnesses were likely caused by "solvent-induced poisoning." She asserted that three of the deaths were "definitely cerebral hemorrhages caused by solvents." Orapun identified TP-35 as a particularly hazardous cleaning solvent.
Seventy percent of workers tested showed signs of "positive phenol exposure," believed to be caused by the use of solvents in hand-cleaning operations. TP-35 is a benzene derivative produced by DuPont that is also known as Freon TP-35. According to Material Safety Data Sheets, the standard forms used in the United States for identifying hazardous materials, "breathing high concentrations of these products ... may lead to narcosis, cardiac irregularities, unconsciousness or death." It is therefore recommended that TP-35 be used "only in well ventilated areas." However, Lee Kuhre, an environmental and health safety specialist with Seagate, describes TP-35 as a "completely benign" substance that is "in no way related to workplace illnesses." He believes that "the deaths had nothing to do with the Seagate workplace." Rather, they were caused by "breast cancer," "intra-cerebral hemorrage," "a brain hemmorage due to brain tissue bleeding," "heart rheumatic," and "infection after delivery."
Dr. Orapun also found that 26 percent of the workers had blood lead levels four to five times higher than the already high levels of the general public in Bangkok. Chronic lead exposure was present throughout the factory. A significant reduction in blood platelet levels, which allow blood clotting to take place, was also found for workers in the plant.
As illnesses persisted, Seagate employees demanded action from management, asking for safer working conditions, higher pay and medical examinations for lead contamination and eyestrain. When Seagate denied responsibility for illnesses, the workers staged a one-day strike in April 1991 for better working conditions and an increase in pay. According to Electronic Buyers News, the strike was "the largest to hit an electronics company located in Thailand."
Although Seagate announced that "operations of its disk-drive assembly plant were not affected" by the strike, management responded by firing seven workers believed to be strike leaders. When worker protests continued, Seagate fired 80 more workers. Finally, Seagate fired over 750 workers, sending a clear message to those demanding improved working conditions and higher pay.
Seagate management viewed the strike as nothing more than an employee power play. Ronald Verdoorn, Seagate�s senior vice-president for global production, says that the strike was "completely politically motivated," and that the company "had a labor issue that created the health issues."
But the workers at Seagate have a wide variety of substantive complaints. Seagate workers earn an average of $4.60 per day. Alan Shugart, the president of Seagate Technology, had a salary of over $775,000 in 1992, more than $2,900 per day (or more in one day than the Thai workers will make in two years). The Seagate workers have no union. Strikes are rare, and under Thai labor laws, which are designed to be particularly advantageous for multinational corporations, companies are essentially free to fire and re-hire workers at will.
The protesting Seagate workers were charged with breaking Thai labor laws. Verdoorn calls the workers� action a "wildcat, illegal work stoppage, instigated by a few individuals." The workers presented Seagate with a list of demands which Verdoorn characterizes as a demand of "we want better, better, better."
Having defeated workers� efforts to organize for better pay and health and safety improvements, Seagate turned its focus to Dr. Orapun. The company wrote letters to the Medical Council of Thailand in October 1991 requesting a review of Orapun�s "medical ethics." Seagate claimed that Dr. Orapun was interested only in making money off the workers, who in fact were not sick at all. Seagate also argued that Orapun checked workers� blood lead levels much too often.
Dr. Orapun says Seagate�s accusations are completely groundless, since "Seagate workers don�t pay me or the hospital for their treatment anyway. The social security program pays." She notes that she was assigned to the case by the Thai government, and did not choose to investigate the worker deaths and illnesses at Seagate. Dr. Orapun says she has even received anonymous death threats for her investigation into the Seagate case.
When information on the Seagate case emerged in the Thai press, the Thai government itself began backtracking on the case. Seagate is the second largest foreign company in Thailand, and wields immense influence in the government. The director of the Thai Board of Investment, a very powerful government agency, told Dr. Orapun directly to keep quiet about the Seagate case, saying her investigation was "hurting the investment environment in Thailand."
In an attempt to end the controversy, it was reported in the Thai press, the Thai government "ordered the closure of the National Institute of Occupational and Environmental Medicine instead of speeding up the Seagate�s [sic] investigation." Orapun was thus removed from the case. As Seagate notes, three separate Thai government agencies have since visited the plant and given the company a clean bill of health. However, the government still refuses to publicly release the final results of Dr. Orapun�s investigation. And Seagate is attempting to have Dr. Orapun�s medical license revoked, having recently submitted a third request to have her medical ethics reviewed.
Almost two years after the deaths of the five workers, Seagate has still not accepted any responsibility for the deaths or illnesses at its plant in Thailand. Verdoorn asserts that Seagate "has been completely exonerated of the allegations." Seagate continues to fight claims that there are workplace health problems in the factory, which would require the company to improve working conditions and pay workers� medical costs.
Dr. Orapun believes there are a number of easy steps Seagate could take to reduce worker exposures and illnesses, such as "isolat[ing] hazardous processes, and improv[ing] ventilation in areas with solvents." She also argues that Seagate and other multinational manufacturers should better "educate and train their workers in handling of dangerous substances, particularly heavy metals," and provide gloves and other simple protection. The Material Safety Data Sheet for TP-35 recommends that companies reduce crowding in the solvent areas, and install local exhaust systems.
Asked about these recommendations, Verdoorn�s responds simply, "We have no workplace health issues in our factory."
- Dara O�Rourke
Capitalizing on the worldwide fascination with U.S. culture and mythology, U.S. tobacco companies are aggressively hawking their cigarettes in the economically fast-growing region as the embodiment of U.S. lifestyle.
"Winston. Spirit of the U.S.A.," blared television commercials in the Philippines during telecasts of the U.S. professional basketball championship series in June 1993. Winston was the primary sponsor of the televised games, shown twice a day in June. The advertisements pictured healthy, vibrant, young Americans at play on the beach or the ballfield - smoking Winstons.
In Indonesia , billboards picturing rugged white men read "Lucky Strikes. An American Original." In imitation of the theme, signboards on display throughout the country for a local cigarette called "Kansas" urge potential consumers to "Taste America, Taste Kansas."
In Malaysia , the tobacco companies use the same themes. In an attempt to undermine and circumvent government anti-smoking initiatives - which include a ban on television advertisements for cigarettes - the tobacco companies sponsor televised events and use other businesses as fronts to promote their deadly product. Marlboro sponsors the "Marlboro World of Sports." Camel runs a clothing line. The British company Rothmans promotes its Peter Stuyvesant brand with billboards that picture images of the Statue of Liberty, American football players and cheerleaders and use a slogan connecting the brand name Stuyvesant to the magic word "America." Salem runs a music store, Salem Power Station, and a travel company, Salem World, which jointly took out full page advertisements in Malaysian newspapers in the summer of 1993 to promote a contest which had a trip to London to see a concert by the rock group U2 as its grand prize. The Salem brand name was prominently displayed in the advertisement, linked with the image of the band.
The effect of these advertising strategies, says Karen Lewis, manager of tobacco policy resources at the Washington, D.C.-based Advocacy Institute�s Smoking Control Advocacy Resource Center, "is an increase in tobacco use and enormous increases in cancer mortality." The use of images that evoke "America" is particularly insidious, she contends, since it preys on poor people�s longing for the political freedom and economic advancement popularly associated with the United States. "People want to be as American as they can be, if they associate it with being able to buy shoes."
The U.S. tobacco companies defend these advertising practices. While many of their advertising strategies might seem objectionable in the United States and some - notably television advertisements - would be illegal, "it is patently unfair to compare marketing and advertising practices of a given foreign country with the United States," says Brenda Follmer, director of public relations at R.J. Reynolds Tobacco International, the maker of both Winston and Salem brands. "It is the sovereign right of each government to establish its own laws and regulations. The reverse of this would be a foreign country dictating to the United States how it should regulate various industries. The respective governments establish their own laws and regulations, and companies must comply with those laws."
Moreover, argues Folmer, "it is a well-documented fact that all of these markets historically have had high rates of smoking."
But while tobacco use has long been widespread in Southeast Asia, says Lewis, "smoking in most traditional societies has been confined to adult men." In an effort to expand the market, the U.S. companies target women and young people, the groups which have historically had low smoking rates. "The focus on sports and rock concerts is obviously geared to young people," she says, and images of "American, thin, economically liberated women" are designed to entice women to take up the habit.
The tobacco companies deny targeting young people, with Follmer claiming that Reynolds "follows an internal policy of marketing our products exclusively to adult smokers, even in those markets where there is no minimum age requirement for purchasing or consuming cigarettes."
The slick advertisements based on sports, rock music and other elements of U.S. culture are only one component of the comprehensive marketing strategy pursued by the U.S. tobacco companies. Other elements, according to Lewis, range from shop-level strategies to industry-wide plans. Tobacco companies will offer to redecorate the entire exterior of a store or restaurant in exchange for the prominent display of the company�s product and logo, and they may also provide interior point-of-sale displays. And they will strike similar deals with national tobacco companies, entering into joint ventures in which the U.S. company upgrades the national company�s plants in exchange for a share of the company.
Even if they do not enter into joint ventures with foreign tobacco companies, national tobacco monopolies and private local companies respond to market pressures and begin to act more like the multinationals, imitating the U.S. corporations� Madison Avenue techniques and aggressive promotional tactics. Taken as a whole, the U.S. tobacco company strategy works to completely transform the national tobacco industries, even in countries where U.S. companies do not command major shares of the national market.
There is little question that the U.S. tobacco companies� strategies pay dividends, as the results of the sudden introduction of U.S. cigarettes and tobacco company promotional techniques in the Korean market in 1988 make clear. In the year after the U.S. government forced Korea to lift import restrictions, the smoking rate among male teenagers rose by more than 50 percent, and among female teens by more than 300 percent, according to a U.S. General Accounting Office study.
Despite the eventual public health disaster the U.S. tobacco companies have virtually ensured for Southeast Asian countries in the decades to come, a much more frightening prospect looms on the horizon. These same companies are now working to knock down the trade barriers by which China limits foreign cigarette imports [see China�s Tobacco Wars," Multinational Monitor, January/February 1992 ]. Replication in that vast market of the tobacco companies� "success" in Southeast Asian countries would be a public health nightmare with few historical parallels.
- Robert Weissman
Spearheading the sanctions campaign is the Coalition for Corporate Withdrawal from Burma, a diverse group of Burmese exiles, human rights activists, environmentalists, trade unionists, religious organizations and social investors. Members include the Associates to Develop Democratic Burma, the Sierra Club, the Oil Chemical and Atomic Workers union and the Interfaith Center on Corporate Responsibility. The coalition plans to file shareholder resolutions with companies maintaining business interests in Burma, asking each company either to issue a report revealing their activities in Burma or to cut off all business ties with the military regime. Companies targeted in the campaign include the oil companies Texaco, Unocal and Amoco, as well as PepsiCo., which owns a bottling plant in Burma. The coalition is not asking those with shares in these companies to sell their stock, but rather is urging them to vote their shares in favor of the resolutions in order to pressure the companies.
Burma is an ideal candidate for a campaign of economic disinvestment, as South Africa was in the 1980s, according to coalition campaigner Simon Billenness, of the socially responsible money management firm Franklin Research and Development Corp. "The repressive regime in Burma is propped up, at least in part, by multinational corporations, and people who can legitimately claim to speak for the Burmese people are calling for the sanctions."
In 1988, the Burmese military junta, called the State Law and Order Restoration Council (SLORC), renamed the country Myanmar and declared martial law. International suspension of aid money and deepening economic troubles led the regime to promise democratic elections in 1990. The elections, in which the National League for Democracy party of Daw Aung San Suu Kyi won 82 percent of the seats in government, have been disregarded by the SLORC, which has placed Aung San Suu Kyi under house arrest and initiated a campaign of violent repression against others in Burma seeking democratic reform. Aung San Suu Kyi has since won the Nobel Peace Prize, focusing world attention on the plight of her country.
Since August and September 1988, when the SLORC military opened fire on thousands of peaceful pro-democracy demonstrators, Burma�s despotic rulers have tightened their grip on the country. The human rights group Freedom House now ranks the regime as among the 12 most repressive in the world. And, according to "Towards Democracy in Burma," a report by the Washington, DC-based non- governmental organization Institute for Asian Democracy:
o detention without trial is commonplace;
o torture and other abuses are widespread;
o religious and ethnic persecution is rising;
o roughly 400,000 refugees have fled the country;
o forced labor imposed by the army is increasing daily; and
o politically-motivated evictions of city dwellers to squalid sites outside urban areas have compounded the misery of hundreds of thousands of Burmese.
Since 1988, facing severe economic woes, the SLORC has embarked on a fire sale of Burma�s natural resources, and multinationals, particularly oil and timber companies, have eagerly lined up for their place at the trough.
It has been estimated that 70 to 90 percent of the profits from oil and gas development directly buoy the SLORC regime (see Oil in Burma: Fueling Oppression," Multinational Monitor, October 1992 ). Companies including Texaco , Unocal , and Amoco prop up the SLORC by providing a much-needed source of foreign exchange. One oil project, in the Andaman Sea south of Rangoon, will involve the building of a pipeline that environmentalists believe will pass through a delicate ecosystem containing Burma�s last remaining habitat for several endangered species.
According to "Towards Democracy in Burma," over 1.2 million acres of Burma�s forests each year are sold off to multinational logging firms such as Wilmington, North Carolina-based Dean Hardwood, a rate that will wipe out Burma�s forests within a decade. The denuding of all vegetation in some areas has caused flooding and the destruction of fisheries and plantations, which in turn has led to massive displacement of rural communities. Indigenous people that depend on forest resources for their livelihoods are facing cultural extinction.
A country that was once self-sufficient in food and abundant in resources, Burma is now listed by the United Nations as a "Least Developed Country."
While China has furnished the SLORC with much of its military hardware (to the tune of roughly $1 billion), U.S. and foreign multinationals have been crucial suppliers of the regime as well. Bell Helicopter, a subsidiary of Providence, Rhode Island-based Textron, Inc. , has engaged in contracts with the SLORC for helicopters and parts, which have particular military value in the harsh landscape of Burma.
In a statement on Amoco�s activities in Burma, Amoco president William G. Lowrie says that Amoco "avoids interfering with the internal affairs of its host country ... maintaining strict neutrality in Myanmar." Lowrie asserts that this is what has enabled Amoco to conduct business in countries such as Burma, as well as Argentina, despite "coups and military ousters of the ruling party." Jim Fair, director of media relations at Amoco, notes that Amoco has introduced many benefits to the Burmese, which include "expos[ing] people to Western practices."
International donors such as the World Bank , the Asian Development Bank , the United Nations Development Program and the Japanese government have advocated continued economic engagement with Burma, arguing loans, trade and investment are the best means to persuade the SLORC to voluntarily forego its repressive measures.
This approach has been strongly criticized by environmentalists, human rights advocates and a mission of 10 Nobel Peace Prize Laureates that includes the Dalai Lama, Ross Daniels of Amnesty International and Archbishop Desmond Tutu. In February 1993, the mission traveled to Thailand in an effort to free Aung San Suu Kyi and support efforts to restore democracy to Burma. Refused entry into Burma, they spoke with refugees along the Thai-Burmese border about the torture and repression of the Burmese people at the hands of the SLORC.
The mission joined in Aung San Suu Kyi�s call for an economic embargo against the SLORC. Archbishop Tutu analogized the SLORC�s dependence on foreign investors with that of the South African apartheid regime, and stated that reform in South Africa only began when the impact of serious economic sanctions was felt there. Another one of the laureates, Betty Williams, asserts that the situation in Burma is "all of our concern," and for companies to claim political neutrality is a "dreadful cop-out."
At least one company, Levi Strauss & Co. , has divested from Burma, stating that "under current circumstances, it is not possible to do business in [Burma] without directly supporting the military government and its pervasive violations of human rights." It is the hope of those pushing for democracy in Burma and an end to the brutal the SLORC regime that more companies will follow.
- Aaron Freeman
"Fifty-five rural guards came with guns. They bulldozed our farms, our crops, our trees to erase all that we had worked for. They came into our houses and dragged us outside - men, women, even little children. Then they burned everything that remained. Stone didn�t warn us they were coming because what they did is illegal. This is what foreign companies do."
That is how Elias Villalobos Parjeles, a peasant farmer who squatted two years ago on an abandoned plot of Costa Rican land now leased to the Stone Container Corp. , describes the scene he witnessed as the National Guard forcibly evicted him and other squatter families, allegedly at the direction of Stone, a Chicago-based pulp and paper company. The conflict between the farmers and Stone here in the heart of the Osa Peninsula, located on the southern cone of Costa Rica, just off the shores of Golfo Dulce at Punta Estrella, stems from Stone�s plans to build Central America�s largest chip mill in this rainforest jewel.
The planned chip mill and port facility near Mogos could annually export up to 1.4 million tons of wood chips cut from Stone�s extensive gmelina plantations. Ston Forestal, a subsidiary of its Chicago- based parent Stone Container, has planted over 25,000 acres of the non-native, fast-growing gmelina with plans to expand the monoculture plantations to 60,000 acres.
Gmelina, which Stone calls a "miracle tree," can grow up to 12 to 18 inches per month and resprout from the stump three times over its life cycle. Stone intends to plant 27 million gmelina trees and begin harvesting at 6-year intervals in 1995, over an 18-year period.
The company�s expansion has provoked a fiery opposition from international rainforest groups and an alliance of non-governmental organizations and local officials in Costa Rica. They say the Stone project will displace local farmers and pose serious environmental threats - all for temporary and limited economic gain. Stone has declined to respond to these claims, and Max Koberg Van Patten, Ston Forestal�s general manager, refused repeated requests by Multinational Monitor for an interview.
In the Tico Times, Juan Jose Jiminez, a technician for BOSCOSA, a sustainable development organization that has projects in the Osa, says that using land currently cultivated with rice, beans and other staples for Stone�s plantation is a bad trade. "Stone is using the best soils that could be used for agriculture, it is a waste," he says, noting as well that the jobs Stone provides at its chip mill will only be temporary, disappearing when Stone abandons its plantations.
At present, Stone�s plantations employ 700 to 1,100 workers, with another 1,000 jobs promised once the mill begins production. Gerald Freeman, Stone�s chief financial officer, says so far the company has invested $15 million in its Costa Rica operations. The company operates in a "Free Zone," paying no property, income or export taxes, and can take advantage of duty-free imports on equipment.
Activists are concerned that Stone�s "economic development" plan could harm Costa Rica�s internationally renowned parks and reserves, which serve as an attraction to tourists, the country�s largest source of foreign income in 1992.
The Rainforest Action Network, a San Francisco-based environmental group, contends the absence of environmental studies of the effects of Stone�s gmelina plantations on native biodiversity, chemical use, depletion of soils and occupation of prime agricultural land is an outrage, given the delicate and flourishing ecosystem in which the plantation would be located. Osa Peninsula, home to Corcovado National Park, contains one of the last expanses of intact rainforests found in Central America; viable populations of jaguars, tapirs and spider monkeys make their home here. Because of its unique biological diversity, sparse development and cultural heritage, the Osa has been nominated for protection as a United Nations World Heritage Site and Biological Reserve.
In a letter to Costa Rican President Rafael Angel Calderon Fournier, Oscar Fallas Baldi, who leads the Asociacion Ecologista Costarricense, AECO, said that unique aquatic systems in the Golfo Dulce - coral reefs, mangroves, estuaries and breeding grounds for bottle-nosed dolphins, turtles and whales - would be "violently impacted" by Stone�s chip mill and port facilities. Because the Golfo Dulce is a deep tropical basin with poor water circulation, it is particularly vulnerable to long-term damage from oil spills, chemical run-off and other industrial pollution.
The multiple concerns about the effects of Stone�s plans has led to the creation of a broad coalition opposed to the corporation�s Osa project. Costa Rican ecologists, local politicians and residents of the Osa Peninsula, including cattle ranchers, farmers, workers and indigenous peoples, have formed The Puerto Jiminez Committee for the Defense of Our Natural Resources to stop Stone�s expansion.
In late May 1993, opponents sailed the Golfo Dulce in a flotilla under the banner "Stop the Chip Mill in Punta Estrella," in an effort to draw international attention to their plight. The protesters released to the media a list of violations of forestry laws, government subsidies, unacceptable ecological impacts from the expansion and local repression linked to Ston Forestal.
Nelson Godines, the head of a local Costa Rican agricultural center and member of the Puerto Jiminez Committee, says, "We here see Stone as a big monster that squeezes us more and more and does not bring anything to the area but problems and destruction."
- Darrell Geist
Darrell Geist writes for Cold Mountain, Cold Rivers, a grassroots media group based in Missoula, Montana.
The U.S. plan would result in both higher health care costs and a drop in consumption as Argentinians either pay the higher prices or do without needed medicines, says Pablo Challu, executive director of CILFA, a consortium of Argentinian drug makers.
Argentina�s current drug patent law, in effect since 1864, provides patent protection for manufacturing processes used to make specific products, but not for the products themselves. The U.S. Pharmaceutical Manufacturers Association and the U.S. government want Argentina to expand the law to include product protection as well.
Argentina�s existing patent laws have helped fuel the development of a vibrant sector of the Argentinian economy engaged in the making of pharmaceutical drugs, as well as leading to prescription costs far below what U.S. citizens pay for identical drugs, Challu says.
"Why not tell the truth that what they are after is a substantial increase in the flow of resources away from this country?" says Challu, Argentina�s foreign trade minister during the late 1980s.
Challu, an economist by training, estimates that the price increases for drugs under the U.S.- favored patent exclusivity system would exceed 273 percent in Argentina. Consumption of drugs would decline by 45.4 percent as many people do without medicines because of higher costs.
"If the national labs disappear, it will be possible for the foreign labs to charge the same prices in Argentina that they charge in the United States," Challu contends.
Challu also says he objects to the U.S. government�s heavy handed tactics to secure this change in Argentina�s patent law, which has been in place since 1864.
"If the monopolistic patent advocated by American institutions and the American embassy in Argentina were really the best thing for this country," he asks, "why are they threatening us with trade sanctions if we make a sovereign decision to choose another path?"
The U.S. government and U.S. drug makers support product patent restrictions to protect the inventions and make it worthwhile for an inventing firm to develop new drugs.
"What is the purpose of going into that kind of research, spending tens of millions of dollars on inventions, when you have to license it to someone else?" asks Harvey Bale Jr., senior vice-president of the Pharmaceutical Manufacturers Association.
Tighter patent restrictions would spur greater inventiveness in Argentina as well, he says. The Challu proposal would do the opposite, discouraging new research both by Argentine drug companies and by foreign drug companies operating in Argentina.
"This [proposal] is a gimmick to [enable] some of the Argentine companies who would otherwise be doing their own research to continue to be able to feed off from and bleed the innovators," Bale says.
Bale notes that this is not simply an issue relating to pharmaceuticals. The Clinton administration�s efforts to secure better intellectual property protections in world markets would also help protect computer software innovations, as well as preserve an author�s rights to books and articles, he says.
U.S. Trade Representative Mickey Kantor this spring included Argentina on its "Priority Watch List" for insufficient laws on intellectual property. The designation represents a warning to Argentina that it needs to modify its trade laws to satisfy the United States or face trade sanctions in the future.
But Argentina�s existing patent laws have advantages, particularly for drug prices. Price comparisons of the same drug, form, strength and quantity in the United States and Argentina reveal the much lower prices found in the South American nation, even where the same corporation is marketing the same drug in both places.
Such comparisons demonstrate both the excessive profits the firms can extract in the United States, a nation with broad patent protections, and suggest what Argentineans would have to pay if that South American government succumbs to U.S. pressure.
Consider, for example, the case of Zantac, a popular anti-ulcer medication. A Zantac prescription that costs $91.98 in the United States costs $18.17 in Argentina. Both are made by Glaxo Pharmaceuticals . The difference is that in Argentina Glaxo must compete with 12 Argentinian national laboratories making the drug and charging an average of $12.75 for the dosage.
The story is similar for Feldene, produced by Pfizer Inc . A dosage that sells for $37.88 in Argentina sells for $228.44 in the United States, six times more. The average price charged by 27 national laboratories in Argentina for the same drug, form, strength and quantity is $15.85, well under even the Pfizer price in Argentina.
A recent study by Challu showed the Zantac and Feldene examples to be typical. Of 38 drugs studied by Challu, only two were cheaper in the United States than in Argentina, 10 were more than 500 percent more expensive in the United States than Argentina, and four of them were more than 1,000 percent higher in the United States. The drugs with these four highest mark-ups were: Ativan, sold by Wyeth-Ayerst Laboratories and used to treat anxiety and depression; G.D. Searle�s Flagyl, used for various infections; Smith Kline Beecham�s Tagamet, an anti-ulcer treatment and Pfizer�s Feldene.
A United Nations report earlier this year on intellectual property rights estimated that national pharmaceutical firms account for 55 percent of the total sales in the domestic Argentinian market, a performance the report said was "rather exceptional in the developing world."
If Argentina is forced to adopt product patents for drugs, the nation may end up repeating the experience of Italy , where tighter patent laws led to huge increases in sales by non-Italian drug companies. That led to a dramatic decline in Italy�s trade balance on pharmaceuticals and medicines. In 1978, the year Italy reestablished product patent protection for phamaceuticals, the country had a trade surplus of $40.6 million in medicines and pharmaceuticals. By 1989, that surplus had given way to a deficit of $826.8 million, the UN report said.
During the first seven years after the change in the law, foreign firms� sales in Italy increased by 200 percent. The foreign companies� gain was the domestic corporations� loss; many smaller laboratories in Italy were closed as a result of the changes in the law, while many others were swallowed by foreign firms, according to the report.
In an attempt to save Argentina�s pharmaceutical sector from the fat that befell Italy, Challu has proposed a middle course of patent law reform that would require payments of modest royalties to a company which invented a drug while allowing competitors to produce the drug by another process.
Challu estimates that his approach would keep drug prices 38 percent below what they would be if Argentina adopted the U.S. proposal while increasing the quantity of pharmaceuticals domestically produced and sold by more than 207 percent. Stephen Schondelmeyer, director of the Pharmaceutical Research Institute of Management and Economics at the University of Minnesota�s College of Pharmacy, says that Challu�s royalty plan is better for consumers than Canada�s recently abandoned compulsory licensing plan, which allowed for at most two producers of a drug. Challu�s plan, in contrast, would allow for as many producers as wish to pay royalties.
Schondelmeyer says having larger number of producers competing to sell drugs may lower prices by 50 to 80 percent from monopoly levels, compared to about 20 percent price reductions when there are only two producers.
But Challu�s study, coupled with the U.N. report, demonstrate the difficulties people in the developing world have obtaining affordable medicines when the U.S. government and U.S. industry urge tight patent restrictions.
By requiring the licensing of the technology under royalty terms which are fixed by the government, rather than providing exclusive marketing rights, Argentina is trying to preserve a competitive and low-cost pharmaceuticals industry.
- Steve Farnsworth
Steve Farnsworth is a researcher with the Washinton, D.C.-based Taxpayer Assets Project.
by Robert Weissman
PEKANBARU, INDONESIA - The trees in front of Ahmad�s house, along the Mempura River, are dead, leafless and brittle symbols of development gone awry in Indonesia�s Riau Province, on the island of Sumatra. "I relied on the trees for wood for my roof and for food," Ahmad says, "but now there are only a few trees left."
Ahmad (not his real name) blames Caltex, the Asian joint venture of oil giants Texaco and Chevron, for the death of the trees. Six miles upstream, at one of its network of 78 "gathering stations," Caltex separates water from oil recovered from its Zamrud field. After initial separation of oil in tanks from water, the water is discharged into a series of lagoons, where gravity is supposed to separate any remaining oil from the water and the water temperature is reduced by surface cooling; the water then released into canals and eventually into the jungle watershed.
Dead trees are not the only ills for which Ahmad thinks Caltex is responsible. In recent years, the Mempura�s fish population has also declined, posing severe hardship for people like Ahmad, who formerly worked as a fisher. Now he only works sporadically, collecting rubber from area trees. Ahmad says he wishes he could move his house, but, for him, leaving his village is practically inconceivable.
Others in Ahmad�s village echo his complaints - and also pin responsibility for their problems on Caltex. Nazwar (not his real name), who says the river often smells of oil, reports that the river water is no longer safe to drink, and that those who have drunk the water have become very sick or even died. Nazwar worries about the future of the village, and wonders how it will survive with the river, its lifeblood, polluted and unsafe. "We try to make do," he says.
Caltex flatly denies any responsibility for the village�s problems. "Oil content of fresh water discharged from [the Zamrud] gathering station has been consistently within guidelines," says Erwin Kasim, government and public relations general manager of Pertamina, the Indonesian state oil company for which Caltex is a contractor. "The surface water in the Zamrud area, including the Mempura River, is heavily laden - in fact black - with peat and tannin and is not a typically good habitat for fish," Kasim adds. "These heavily organic jungle streams are not a good source of drinking water."
The dispute in the Mempura village is only one of a number of emerging environmental conflicts between Riau communities and Caltex. Although the company boasts about its social and environmental policies and practices, there is increasing evidence that Caltex�s operations are polluting areas throughout Riau. In June 1993, researchers from the British branch of Greenpeace tested water samples near six Caltex gathering stations and concluded in a report that Caltex�s operations have been responsible for "large-scale releases of hydrocarbon contaminants into the freshwater system [that] have led to irreparable environmental damage resulting in severe long term hazards to human health and the quality of both surface and subsurface freshwater environments."
Greenpeace did not test the Mempura River for oil pollution, but Simone Troendle, the Greenpeace scientist who took the Riau water samples, says it is entirely possible that Caltex�s upriver operations are responsible for the problems about which Ahmad, Nazwar and the other villagers are complaining. How oil contaminants are spread throughout the Riau rainforest ecosystem is a complicated process, she says, varying at each gathering station according to the direction of groundwater flows, how much waste Caltex is discharging and a number of other factors. At the very least, she says, the Mempura villagers� complaints "must be looked into."
The government�s cut
Caltex�s operations are spread widely throughout Riau. The company operates more than 100 oil and gas fields within a concession area of 32,000 square kilometers, and its pipelines and access roads criss-cross the province, cutting swaths through the Sumatran rainforest.
Caltex, which first invested in Riau in the early part of this century, is by far the largest oil producing company in oil-rich Indonesia. Each year the company pumps more than 200 million barrels of oil out of the ground.
Caltex�s operations are governed by a production sharing contract with the Indonesian government. The current agreement allocates 10 percent of the profits derived from Caltex�s Indonesian operations to the company, and the remaining 90 percent to the government. Accordingly, Caltex is a highly valued foreign investor, and not likely to be criticized by the government; despite Indonesia�s ongoing and somewhat successful attempts to diversify its economy, oil still accounts for 31 percent of the debt-ridden country�s foreign exchange earnings.
Local villages polluted
The environmental impact of Caltex�s vast operations is only just beginning to be scrutinized, and even now local villagers are hesitant to challenge the company�s effect on the Riau ecology.
That the environmental problems caused by Caltex have not been recognized until now is not surprising, says Greenpeace�s Troendle, because of the capacity of the natural environment to absorb pollution. That capacity is limited, however, and the effects of pollution do eventually manifest. That is what is now happening, Troendle believes.
It is not surprising either that the political response to the pollution is developing slowly. In Indonesia, where nearly three decades of brutal authoritarian rule under President Suharto have taught people that protesting against government-supported projects can have extremely high costs, fear is pervasive, especially in the countryside, and remote villages do not have much recent tradition of standing up for their rights.
In the Mempura village, for example, Nazwar says residents have never complained directly to Caltex about their problems. "We don�t know how to do it," he explains.
But now, aided by local environmentalists, Riau villagers may be slowly beginning to challenge the company.
The village of Sungai Limau has been the leader so far. It reportedly first complained - to both the company and the government - of the effects of alleged Caltex pollution in 1991. But its complaints were not addressed, and they did not generate any media or outside attention.
Then, in a January 1993 letter, Sungai Limau, now supported by the Riau chapter of the Indonesian environmental group WALHI, again charged Caltex with polluting the Sungai Limau and Siak rivers. The Sungai Limau villagers reported problems almost identical to those cited by the Mempura villagers. Their letter noted that oil is often visible in and around the rivers, and they complained that the rivers� fish population has declined so much that they can no longer fish in them. They also said that a number of villagers have contracted rashes, diarrhea and other sicknesses as a result of the oil pollution.
During the same period, WALHI Riau brought together a coalition of individuals, known as Solidarity Forum, to investigate the Sungai Limau people�s claims. From January to April, the Solidarity Forum investigated Caltex�s operations.
At the end of April 1993, WALHI Riau wrote a letter to the Indonesian environmental ministry, Bapedal, in which the organization claimed that the preliminary Solidarity Forum investigation had found Caltex�s Pusaka gathering station, located near Sungai Limau village, responsible for the pollution of the Sungai Limau and Siak rivers. WALHI Riau alleged the water to be contaminated with cyanide and hydrogen sulfide, and polluted for a decade. The letter called on Bapedal to conduct a special investigation of Pusaka and other Caltex gathering stations.
The government did respond to this round of complaints. In January 1993, the Riau governor sent a fact-finding mission to investigate and in April 1993, Bapedal conducted an investigation. The government investigations did not substantiate the charges. Caltex touts the investigations as proof that it is not responsible for the problems besetting Sungai Limau and other villages. As he does in the case of the Mempura village, Caltex�s Kasim says the river is peat-laden and unfit for household use. The January 1993 investigation team, says Kasim, found "the oil content and discharged temperatures [at the Pusaka gathering station] below guidelines. No oil was detected along the [Caltex]-built discharge canal" which leads to the Siak River. The team also concluded that there was no disturbance of local fish populations and that the skin irritations of which villagers complained were due to poor hygiene, not pollution.
There are reasons to doubt the government�s findings, however. First, the close Caltex- government relationship raises serious questions about the government�s willingness to regulate or sanction the company. Second, Ribut Susanto, president of WALHI Riau, claims that WALHI Riau members witnessed Caltex engaging in a special clean-up of waste canals just prior to the Bapedal investigation in April. Caltex categorically denies Susanto�s claim, but if it is true, Susanto�s contention would undermine any basis for trusting the government�s findings. Finally, Greenpeace tests of water samples near six Caltex gathering stations concluded that the villagers� claims are valid, and that water supplies are seriously polluted, posing severe health and environmental dangers.
Black gold, toxic effluent
The Minas gathering station, another of the 78 Caltex gathering stations dotting the Riau countryside, lies only a few miles to the north of Pekanbaru, Riau�s capital. It appears as a bizarre anachronism, its huge oil tanks standing on open tracts of land cleared from in the middle of the Sumatran rainforest. The water treatment system here is very much like those upstream from the Mempura and Sungai Limau villages. Pipes carry oil-contaminated production water, pumped from Caltex�s fields along with oil, from the tanks to mucky pits, where the water is dumped. The water in the pits, or lagoons, is steaming hot, and sometimes bubbling hot, because the underground fields from which it came are close to the western Pacific volcanic zone. The banks of the lagoons are covered with oil deposits and patches of oil float on top of the lagoons. Water which has settled to the bottom of the lagoons, supposedly free of oil contaminants, is discharged into a series of canals, or streams, which eventually lead to the Siak River, the main river running through Riau.
The June Greenpeace test, however, found the water discharged from the Minas gathering station to be highly contaminated, with oil registering 190 parts per million. This level of contamination, explains the Greenpeace report, poses serious threats to human health and the environment.
Caltex challenges the validity of the Greenpeace findings for the Minas gathering station, with Kasim contending that the Greenpeace sample at Minas was "taken not from a final discharge stream but from an intermediate treatment pit discharge." But Troendle says she walked along the artificial channels running out of the Minas gathering station for several miles and saw no other water treatment mechanism.
Although the Greenpeace study found the highest level of contaminants at the Minas gathering station, it found oil pollution at each of the other five sites it tested. Contamination levels at the other sites averaged an unsafe 9.4 parts per million.
Caltex denies that these discharge levels endanger human health or the environment, with Kasim pointing out that Indonesian guidelines limit oil concentrations in water discharges to 25 ppm. Kasim says the company�s "effluent processing technology achieves effluent discharge concentrations of dissolved and suspended materials that are within worldwide limits for prudent operation. We simply do not agree that [Caltex�s] effluent treatment is inadequate."
Unsafe discharges were not the only environmental problem with Caltex�s operations which the Greenpeace researchers identified. Because the settling lagoons are not sealed and receive effluent loads which are then poorly confined, hydrocarbons contaminate the soil below the settling lagoons and threaten groundwater quality, the Greenpeace researchers wrote. Again, Caltex denies any problem; Kasim says, "the settling lagoons or treatment pits are specifically designed to allow separation time for water and oil. The sites will be reclaimed and remediated to full legal and prudent standards when production operations are complete."
A final problem cited by Greenpeace stems from the discharge of hot water. Because the discharged water is as hot as 175 degrees Fahrenheit, according to Greenpeace, hydrocarbon contaminants in the water are likely to evaporate, creating local air pollution, much of which can return to the earth in Riau�s frequent rains. Caltex denies that its discharges are hotter than 113 degrees.
Cutting a deal
That the Sungai Limau villagers and WALHI Riau were able to pressure the government into conducting an investigation of Caltex�s environmental performance is itself somewhat remarkable, given the repressive nature of Indonesian government and its tight alliance with Caltex.
Both the government and Caltex appear very interested in defusing any protest activities in their infancy, and a key element of their strategy is dividing the local community and splitting it off from non- governmental organizations such as WALHI Riau. Government representatives told Singau Limau villagers that they should negotiate directly with Caltex, without the interference of third parties such as WALHI Riau.
And, according to Susanto, Caltex has succeeded in negotiating directly with leaders of the community, without the involvement of either WALHI Riau or broad segments of the village. At a June 1993 meeting with the head of Sungai Limau village, according to Susanto, Caltex agreed to help build a few wells, make an addition to a school, repair a road and provide some other assistance to Sungai Limau, as well as to investigate the side effects of the company�s discharge system. These forms of compensation, says Susanto, "are very far from what the community wants."
Whether Caltex can reach a final agreement with Sungai Limau and snuff out the complaints there is likely to affect what other villages who may be affected by Caltex�s expansive operations do. If the Sungai Limau dispute can be resolved quietly, without much local or international publicity, it will not have much ripple effect. But if the Sungai Limau villagers can force an admission of Caltex wrongdoing or extract substantial compensation for the damages they have suffered, or if international attention is focused on Caltex�s operations, local communities and the provincial and national governments will direct a much more searching eye at the Caltex operations which dominate the Riau countryside.
The company presents itself as a paragon of social responsibility. In the September-October 1993 issue of the Harvard Business Review, Julius Tahija, former Caltex managing director and current chair of the CPI board of commissioners, proclaims, "For transnational corporations, meeting social responsibilities is an indispensable part of doing business in the developing world. ... It is perfectly true that an oil company�s principal purpose is to extract oil from the ground and sell it at a profit. ... [But multinational corporations] need development. And their need is urgent, whether they acknowledge it or not." Caltex, he asserts, recognizes the need for development and has provided a model for other companies.
Whatever the company�s contribution to the region may be, there is no denying that the sharp contrast of the wealth Caltex is tapping below the ground and the extreme poverty in villages above ground is stunning. Ahmad and his Mempura village, for example, have no electricity or running water, and their situation is replicated throughout Riau.
It would not be fair, however, to hold Caltex primarily responsible for the poverty in Riau. Caltex pours huge sums into the Indonesian government�s coffers, but all of the money goes to the central government in Jakarta. "Every year we pass a resolution asking that some of the money go to Riau," says Dr. Chaidir, a member of the Riau Parliament, but every year the Jakarta government ignores or denies the request.
Still, Caltex�s claims of social responsibility ring false in the impoverished villages whose subsistence-level economies have been tipped out of balance by what they believe to be the company�s environmental degradation.
- R.W.
An interview with Indro Tjahjono
Multinational Monitor: What are the primary causes of deforestation in Indonesia?
Indro Tjahjono: Indonesia �s deforestation has increased since 1966, with the change from Sukarno�s civil regime to Suharto�s military regime. While Sukarno was more nationalistic and favored an economic system closed to foreign investors, Suharto increased the country�s foreign debt and introduced an open-economy system by inviting foreign investors to invest their capital in Indonesia. The Suharto plan seemed to be that the deteriorating economic condition and increasing debt was to be covered by the extractive economy, through mining natural resources and forests which were traded with low value-added.
This economic process, in fact, was only a continuation of the military�s economic designs, previously evidenced in economic competition between the establishment and military groups. The military group, which felt that it deserved credit for freeing Indonesia from the Dutch, in 1945, has always sought rewards for its accomplishments. Military leaders pioneered the nationalization of Dutch companies, most importantly taking a dominant role in the oil company PERTAMINA (a merger between PERTAMIN and PERMINA).
With its success in the political power change of 1966, the military was able to realize its ambitions of dominating all extractive economic sectors. A military official, Mr. Soedjarwo, was appointed as the Forestry Minister. Logging concessions were given mostly to local and national military figures, without regard to professional qualifications. In fact, these military people later sold their concessions to ethnic Chinese businessmen who mostly have the ethic of traders, rather than of loggers or foresters. The traders� aim was to sell trees rather than to manage the forests. This is the political background of the forestry mismanagement which has caused deforestation in Indonesia.
Meanwhile, the government designates revenue from the forest to pay debts. Through political maneuvering, forest income has become the nation�s second largest source of foreign exchange revenue, after oil. The goal of earning enough foreign exchange to pay off the interest on outstanding loans so the government can take out new loans has turned the supposedly long-term timber business into a short-term one. It accelerates deforestation beyond the capacity of reforestation.
All of the forest policies and management systems are oriented towards those goals. Forest inventory has not been conducted properly, and the forest management system known as TPTI (Indonesian Selective Cutting and Planting Systems) was implemented in a vast area without any pilot programs to test it. The negative result was revealed in a follow-up study on the impacts of logging under TPTI. The study found that, as a result of logging, 18.5 cubic meters of timber per hectare is destroyed and 347.50 square meters of land per hectare is opened and threatened by erosion. Since 1970, the deforestation rate has increased from 550,000 hectares per year to more than 1.5 million hectares per year.
In 1971, amidst mounting concern that the economy of Indonesia would collapse as a result of increasing debt, President Suharto openly stated that the Indonesian people did not need to worry about paying debts, because the country�s forest was still extensive enough to pay them off. Suharto�s statement also indicated that income from the forestry sector would be used to support the progress of other sectors. And so timber tycoons began to emerge. They use the timber business to generate capital for other businesses, making forestry a strategic sector. Over time, the position of timber businessmen became stronger, and the position of the Department of Forestry weakened, so that now it only serves as an assistant to business interests working in collaboration with the political-military elite.
Since the moment of Suharto�s statement, the government has suffered from a "denial syndrome," that is, the refusal to acknowledge the scenario of environmental destruction which environmentalists have described.
Multinational Monitor: What strategy does SKEPHI propose to protect Indonesia�s forests?
Tjahjono: Since 1986, SKEPHI has reduced its involvement in the carrying out of conservation programs. Since that time, SKEPHI has emphasized policy reform and putting pressure on the government. The advocacy program is conducted as part of an effort to promote policy reforms by highlighting successful examples of forest conservation in the field. Our program includes campaign organizing and generating international pressure to influence policy in the Indonesian forestry sector. International pressure is needed to empower the environmental movement in a developing country which is in a weak position vis-a-vis military power.
Multinational Monitor: What should the role of indigenous people in protecting Indonesia�s forests be, and what sorts of protections for indigenous people�s rights does SKEPHI advocate?
Tjahjono: Indigenous people�s role in forest conservation goes virtually unrecognized in Indonesia. The Basic Forestry Act (UUPK) subordinates traditional laws and rights over land to the development interest. Thus, the government gives out logging concessions (called HPH) on traditional indigenous lands, forcing the eviction of indigenous people.
SKEPHI thinks that the role of indigenous people in forest protection is very substantial. Their traditional laws and rights must be recognized. The geographical boundaries of their territory must also be delineated and recognized through participatory mapping programs. Through seminars, campaigns, advocacy efforts and direct action, SKEPHI works to protect indigenous people�s rights. SKEPHI also helped indigenous people in Indonesia form an indigenous peoples� organization. This is the foundation for all activities that empower the political position of indigenous people and protect their rights. SKEPHI also helps organize indigenous people in the course of working on specific cases of abuses of indigenous rights.
Multinational Monitor: How do you view the forest-protection strategies, such as the creation of protected reserves and debt-for-nature swaps, advocated by many environmentalists?
Tjahjono: The forest protection strategy of developing protected reserves is not effective at all. Protected reserves are maintained to mask deforestation in other areas. And, in Indonesia, the protected reserve areas are increasingly reduced as a result of development activities permitted by the government. At present, mining of cement material, gold and sand, plantations, logging concessions, highway development and other developmental projects are carried out in protected reserves. Protected reserves are sometimes converted to timber estates on the grounds that the reserves� condition is already bad. (Under Indonesian regulations, timber estates may only be developed on critical lands.) Many protected reserves are deliberately allowed to deteriorate in order to justify the conversion.
Perhaps to rehabilitate the over-exploited forests of Indonesia, debt-for-nature swaps may be more effective. Deforestation is indeed connected to payment of debt and interest on debt to the lending countries. But the agenda of debt-for-nature swaps should not become an effort to solve the problem only partially. Debt-for-nature swaps must be connected with complete elimination of the Third World debt, which Southern countries find very difficult to pay. Globally, a new world economic system that guarantees nature conservation must be created. Thus, responsibility for nature conservation can be evenly borne between countries of the North and South. This must be followed with sectoral reforms in trading, technology transfer, protection of intellectual property rights and other bilateral and multilateral agreements.
Advocacy efforts by environmentalists are effective in anticipating management and policies in forestry, including technical and other microproblems. But advocacy can never guarantee long-term reforms and solutions. There must be a political agenda in the form of structural reform at both national and global levels. The political agenda will include the arrangement of fair relationships between developed and developing countries, regulation of down-stream and up-stream industries, and democratization of public decision-making. In this case, democratization includes the promotion of people�s right to control the use of natural resources which exist in their surrounding area.
Multinational Monitor: The government has been promoting the development of a domestic pulp-and-paper industry as a means to derive more value from logged trees. How do you view that effort?
Tjahjono: The Indonesian government has promoted the pulp-and-paper industry at a time when the country is in the grim financial situation of paying back international loans. Indonesian decision-makers saw the global requirement for pulp and paper, a result of the growth of the information industry, as a great opportunity, and they decided to give the industry a go without careful calculation. In fact, the industry has to compete with the existing plywood industry for resources, i.e. natural forests. SKEPHI�s analysis is that the pulp-and-paper industry has reached a capacity that cannot come close to being satisfied by the allocated natural forests. Coupled with the fact that the Selective Cutting and Plantation Tree program crashed due to unavailability of replacement trees, then it is just natural to expect the pulp-and-paper industry to rely on illegal logging. PT Indah Kiat, the country�s largest pulp-and-paper company, was recently fined 3 billion rupiah [$1.5 million] for this type of crime, and the company is also known for illegally acquiring timber intended for non-forestry needs, such as plantations, transmigration, mining, housing development, etc. It is obvious that forests are at real risk of such moves of unjustifiable conversion.
In the last two years the pulp-and-paper industry has silently tripled its production, in an effort to secure market share. This led to a sharp increase in illegal logging. Since the current timber estates may only be cultivated in the year 2000, the government can confidently anticipate the threats the pulp and paper companies pose to protected forests. With their firm determination to secure sufficient supplies of trees at any price, and the government regulators virtually powerless, intensive removal of trees from Indonesian soil is imminent.
Multinational Monitor: One of the government�s forest protection strategies is the creation of tree plantations. How do you assess that strategy?
Tjahjono: Timber estates or tree plantations are of course an attractive alternative when the market demand for pulp and paper is estimated to increase. But the timber estate concept contradicts the polyculture principle of tropical forest conservation. Timber estates will be inclined to use exotic trees, which contradicts the principle of biological diversity conservation. Indonesia�s formal policy is only to allow timber estates on critical, or environmentally deteriorating, lands. But, in practice, timber estates are permitted in logged-over lands or in natural forest areas.
A systematic conversion of tropical forests to timber estates is taking place. Moreover, the funds to exploit the timber estates are taken from the funds which were allocated for regreening the leftover forests after HPH logging. Timber estate companies can utilize the funds through a zero percent interest credit. Timber estate companies have used this zero percent interest credit to finance their unrelated businesses.
The timber estate target itself has never been reached simply because loggers refuse to confine themselves to critical regions. SKEPHI contests any timber estate program which will eventually lead to the degradation of the tropical forests� biodiversity, and the acceleration of the conversion to monocultural forests.
Multinational Monitor: How effective is the government�s forest protection regulatory system?
Tjahjono: The government through its Department of Forestry is in charge of regulating logging activities at the national level. This control system is not working properly, due to collusion between government officials and loggers. Logging companies usually work with military people in carrying out illegal logging, so it is difficult for the officials in the field to refuse to participate in corrupt activities.
Here is an example of a common corrupt practice. Loggers, with the knowledge of the regulating agency, use one log transportation document for sending four to seven times the amount of logs listed in the document. As a result, the average actual logging is five times the volume approved by the Department of Forestry. The volume difference is usually filled with logs obtained from conservation forests.
That is not the only example of corruption. The penalty system, which is supposed to be carried out by the Department of Forestry, is often crippled by none other than the president�s exclusive circle. Loggers with access to, or involved in business with, the president�s family or other important figures, are virtually "the untouchables." Here�s an example: when the Department of Forestry discovered that PT Barito Pacific Timber (the First Family business) was engaged in illegal logging, it levied a 1.2 billion rupiah [$600,000] fine against the company, but the company agreed only to pay a tenth of the amount, and that was it.
Some other factors have successfully contributed to making the regulatory system a complete comedy: the tiny budget allocated for it, the chronic shortage of staff, the lack of modern supports such as a satellite camera, wicked personnel and barely any law enforcement.
Multinational Monitor: The campaign against Scott Paper�s plans to create a eucalyptus plantation and pulp mill on Irian Jaya received a lot of international attention and support. How successful was that campaign?
Tjahjono: In cooperation with overseas non-governmental organizations (NGOs), SKEPHI won a major victory in preventing the takeoff of Scott Paper�s joint venture plans with PT Astra in Irian Jaya.
The company felt more pressure from overseas than from inside Indonesia. As a huge and established corporation, it is immersed in international markets; potential repercussions in the environment-conscious world markets forced the company to review the project. Unfortunately, however, this interesting story has not triggered meaningful development of domestic environmental awareness. SKEPHI, which strongly supported the anti-Scott campaign, has been branded a "radical NGO" by the government and some major NGOs.
This led to a situation where the issue has split the Indonesian NGO community as well as the SKEPHI organization.
The majority of NGOs in Indonesia argued that the Scott Paper plant in Irian Jaya would boost the local economy and therefore labeled SKEPHI as non-cooperative. The obvious reason for their disapproval is their unrealized expectation of self-interested gain. They had been dreaming of enjoying some of the handsome funds to be provided by the Scott-Astra joint-venture. Church-affiliated NGOs had expected the project to facilitate missionary work, and the church had even prepared indigenous people to be employed by Scott-Astra had the plant been realized.
A key factor in the success of the anti-Scott campaign was international interest in Irian Jaya as the largest tropical forest with indigenous people in Indonesia. International activists referred to Irian Jaya as "Indonesia�s Amazon" and proposed that the region be declared a World Heritage Site.
Multinational Monitor: As Indonesia industrializes, what are some of the major new environmental problems it is facing?
Tjahjono: Tropical forest conservation is not the only environmental problem in Indonesia related to industrialization. Other areas include: raw materials depletion; the land requirements for both the supply of raw materials and industrial sites; and industrial waste discharge, which is inflicting almost irreversible damage on tropical seas and rivers once rich with living organisms.
Forest and geological problems arising from the mining industry (gold, cement, copper) are common across the country. One monumental case involves the U.S. company Freeport McMoran . Freeport operates in Irian Jaya, where its huge site clearing and waste discharge is severely damaging the environment.
Another serious problem involves the government�s moving of indigenous people to other locations in the name of resettlement or transmigration programs. This is an ongoing and never-ending source of heartbreaking stories.
On top of these problems, industrialization demands a higher supply of energy. In anticipation of this growing demand, the government is now planning to build a nuclear-fired energy generator in Central Java.
by Robert Weissman
MANILA, THE PHILIPPINES - By now, it�s an old story. An electronics, textile or shoe multinational company closes a factory in an industrialized country and moves its operations to a Third World nation. At its new factory, the company hires the most desperate and vulnerable members of the population: women and girls from the provinces. It pays these women extraordinarily low wages, subjects them to dangerous and fast-paced work and crushes any efforts they make to organize themselves.
In Southeast Asia, the story has been repeating itself for more than two decades, and it shows no sign of stopping any time soon. But in countries where the history of labor abuses is long and where women workers have accumulated experience and seniority in some runaway factories, foreign companies are increasingly developing new tactics to maintain control over their workforce.
Indonesia: fighting repression
With Indonesia having only recently begun its push for export-oriented industrialization and its intense wooing of foreign manufacturing investment, domestic and foreign companies operating in Indonesia still seem to rely on the old methods of labor repression. The space for independent organizing is very narrow; workers� organizing efforts are routinely met with military force (one Indonesian organization estimated the average amount spent by factories for military "protection" at three times the cost of wages), and most of the approximately 5 percent of the workforce which is unionized belongs to the government-controlled SPSI. Now, however, developments inside and outside of Indonesia are placing significant stress on the country�s system of labor repression.
One of the most significant recent events was the May 1993 murder of a woman trade union activist named Marsinah, which has galvanized Indonesian non-government organizations (NGOs) to demand that the Indonesian government enforce basic labor rights.
Marsinah, a 25-year-old factory worker for the Indonesian company PT Catur Putra Surya (PT CPS), disappeared on May 5 in the midst of labor strife at a PT CPS factory that produces watches for export; her dead body was found three days later, on May 8. She had been an organizer and leader of a PT CPS workers� strike to demand better wages and working conditions.
Military involvement in the case has been pervasive. Three days before her disappearance, the local military, which had been sitting in on company-worker contract negotiations, called 12 PT CPS employee leaders into a meeting and told them they were fired. Marsinah was among those who loudly protested the firings. The military has been investigating Marsinah�s murder, even though preliminary, unconfirmed reports place a company car near the time and site of her disappearance, and both military and company vehicles near the place where her body was dumped.
"The case is representative," says Tati Krisnawaty of the Solidaritas Perempuan (Women�s Solidarity for Human Rights), "in that the military repressed workers and protected the company rather than workers."
But non-governmental and student activists are working to ensure that Marsinah�s death marks more than the government�s single-minded drive to export-oriented industrialization. More than two dozen women�s, labor and other NGOs have formed a solidarity committee for Marsinah. A June 1993 statement by the Committee demanded a fair and impartial investigation of the murder and that there be no harassment of Marsinah�s family. Krisnawaty, whose organization is a member of the Solidarity Committee, says NGOs from various sectors and student activists throughout Java, the most populous Indonesian island, are working together on a campaign to prevent the military from intervening in labor disputes and to ensure that the rights of women and men Indonesian workers are respected.
Indonesian women�s rights and labor activists received a boost in late June, when Mickey Kantor, chief of the Office of the U.S. Trade Representative (USTR), announced he would revoke Indonesia�s Generalized System of Preferences (GSP) trade benefits in early 1994 unless the country improved its respect for basic labor rights. The decision of the Office of the U.S. Trade Representative came in response to petitions filed by the New York-based human rights group Asia Watch and the Washington, D.C.-based International Labor Rights Education and Research Fund.
While the USTR rarely follows through on threats to revoke GSP privileges, the threat alone is often enough to persuade governments to afford greater respect to labor rights.
Whether the Indonesian government will respond with real improvements is unclear. Since the USTR�s announcement, the Indonesian government has banned the first nationwide conference scheduled by a new trade union federation, reportedly on the grounds that the new federation did not qualify as a union because it had not been established by workers. The federation, the Indonesian Prosperous Labor Union, claims to have 100,000 members, with roughly 40 percent of its factory-level leadership positions filled by women.
The Philippines: subcontracting blues
The tactics practiced by the Indonesian government and employers in Indonesia remain current in other Southeast Asian nation, but they have joined by a host of other, more sophisticated and subtle strategems.
At the huge Gelmart garment factory in metropolitan Manila, the workers - 90 percent of whom are women - are represented by the United Workers of Gelmart Industries union, an affiliate of the National Federation of Labor (NFL), which in turn is affiliated with the militant Kilusang Mayo Uno (KMU) labor center. The bras, swimwear and infant wear that U.S.-owned Gelmart produces in the Philippines are sold to a variety of clothes companies and retailers, including Playtex , Walmart and K-mart .
The women workers at Gelmart are overwhelmingly from the provinces, but Gelmart has been in the Philippines since 1952 and its employees are not very young, or new to the job. Most Gelmart employees appear to be in their thirties, and the majority have been with the company for more than 10 years, according to Rodolfo "Ogio" Aronas, the president of the Gelmart workers� union.
The Gelmart union had traditionally been a company union, but that changed in the mid-1980s, when the NFL entered the picture. After the union affiliated with the NFL, says Cora Distura, secretary of the Gelmart union, things changed dramatically. Workers� wages went up and are now high by Philippine garment industry standards (though even now they only average around $6 a day), working conditions improved, the company lost it right to force pregnant women to work at night and excitement about the union increased, she says.
Despite the gains, the workers still have numerous complaints. Working in the plant is hard, and the temperature is very hot. The most common illness suffered by the workers are urinary tract infections, contracted because workers fear they will fall below their production requirements if they leave their posts to go to the bathroom. The workers want better medical coverage, more vacation time and greater retirement benefits.
But it is unclear if the union will be able to win these or other gains, since its strength is being undercut as Gelmart replaces retiring workers with contract workers. Gelmart is hiring new workers as five-month contract employees, according to Aronas, who do not work with the company long enough to qualify to join the union or enjoy the protections it can afford members.
Contract workers and subcontractors (outside of the walls of the factory) have become the union�s greatest problem, and the union has not yet developed an effective strategy for dealing with these new threats.
Malaysia : cooperation and cooptation
In Malaysia, where there is no militant labor strain but also less military involvement in the workplace than in either Indonesia or the Philippines, foreign and especially U.S. electronic firms have been employing thousands of low-wage women workers in free trade zones for two decades. Irene Fernandez, director of the Tenaganita (Women�s Force), an NGO based in Kuala Lumpur, the Malaysian capital, estimates there are currently 150,000 women workers in the nation�s electronics industry.
The biggest foreign multinationals - companies such as Motorola , Texas International , Intel , National Semiconductor and Harris (formerly RCA) - follow the national labor regulations, pay relatively decent wages and provide government-required benefits plus some additional rewards. Nonetheless, working conditions at these large companies are often dangerous, says Fernandez, and "in terms of hazards at the workplace, workers find they have very little recourse." When workers go to company doctors with work-related injuries or illnesses, she says, the doctors often give them aspirin and tell them to rest and then return to work. Recently, she reports, there have been a rash of apparently work-related deaths at Texas International, but detailed information is hard to obtain, in part because Texas International tends to provide good life insurance plans for employees, and family members often believe that challenging the company in any way will jeopardize their insurance payment.
Corporate anti-union efforts in Malaysia are multifaceted, aimed at diffusing labor-management conflict and generally not dependent on military or police involvement. Company managers, says Fernandez, often project an air of informality, introducing themselves by their first names and claiming to maintain an "open-door" policy. Many workers who go in the open door to voice complaints or concerns, however, find that the managers use the policy to find out which workers are assertive. And those who speak up face harassment or dismissal, Fernandez says.
More intricate corporate anti-union policies are also being introduced. Companies may set up joint consultative councils, which Fernandez says are "another facade to make it seem as though dialogue between management and workers is taking place." A key problem is that the company selects the representatives to the councils and appoints workers who have strong pro-management orientations. According to Fernandez, quality control circles are prevalent, as are a vast array of other efforts to mute labor-company conflict, including: motivation programs, leadership trainings (led largely by U.S. trainers) and profit-sharing incentives. The basic goal, concludes Fernandez, is to convince workers that "they don�t need their own organizations," that they can rely on the company or the company manager, their "big godfather."
The future of Southeast Asian women manufacturing workers is not bright. While some runaway multinational companies have demonstrated a willingness to stay in their adopted homes even as wages and benefit levels rise slightly, virtually all of the electronics and low-technology manufacturing firms operating in the region have shown a deep antagonism to unions. The supplementing of physical intimidation with more sophisticated anti-union techniques - the use of subcontractors, quality control circles and similar methods - presents a new set of challenges to independent labor and women organizers, challenges which their colleagues in the industrialized countries have not, for the most part, met successfully.
Sidebar
The New Multinationals
BANGKOK, THAILAND - While U.S., Japanese and
European firms still play a dominant role around the world, in rapidly developing areas such as Southeast
Asia, it is now as likely that a new foreign-owned factory will be run by Tatung (Taiwanese), Samsung
(Korean) or Chareon Popkind (Thai), as IBM , Sony or ICI .
Formerly medium- to large-size domestic corporations based in the Newly Industrialized Countries (NICs) of Taiwan , South Korea , Hong Kong and Singapore , as well as future NICs Malaysia and Thailand, are branching out in search of new markets and new production bases.
Some observers in Asia worry that these corporations will be even less responsible than the well known multinationals. Because of their anonymity, they have more freedom to operate with little regard for the people or the environment of countries in which they operate. And because many of these companies primarily sell components or raw materials to other companies, they are often insulated from public pressure in the their home countries and from the countries of final sale, often the United States, Europe and Japan.
Why leave home?
Rising wage levels have hurt NIC-based corporations which have historically relied on wage differentials to compete with higher technology Japanese and U.S. producers. Instead of investing in research and development to compete on an equal footing with industrialized countries, many of the companies faced with this dilemma have decided to move operations to lower wage rate countries in the region, such as Thailand, Malaysia, Indonesia, Vietnam and mainland China .
This strategy is evidenced by the exodus of companies from South Korea and Taiwan in the last few years. In the early 1980s, for instance, Pusan, Korea was a leading global center for shoe manufacturing. Companies such as Nike and Reebok subcontracted much of their production to firms in and around Pusan. By 1990, most low-cost shoe manufacturing had left Korea. Foreign competitors gobbled up some of the market share, but Korean companies maintained a large portion - from their factories in Indonesia, Thailand, Malaysia and China.
It is now quite apparent that the Four Tigers are on the move. Hong Kong is the leading investor in China. Taiwan is the leading investor in Vietnam. And South Korea is a leading investor in Indonesia. Although Singapore is expanding into nearby Indonesian Sumatra, for a number of reasons, its companies have generally been slower to invest in nearby countries: the Singapore government is now trying to encourage domestic countries to invest abroad.
Exploit your neighbors
The impetus to go multinational often stems from a simple assessment of a neighbor�s resources. For example, a 1989 Thai logging ban drove Thai companies to look to their neighbors for new sources of wood. They have since become heavily involved in the clearcutting of the hardwood forests of Burma, and more recently of Cambodia. Thai gem mining companies have also secured major concessions with the Burmese military junta SLORC, and with the Khmer Rouge in Cambodia. Thai energy companies are also currently working on a number of major deals with Laos and Burma.
Several of Thailand�s older, more established conglomerates are also expanding throughout the region. The CP Group, a large agribusiness conglomerate, is investing heavily in Southern China, as well as in shrimp farms in Cambodia and Vietnam. Thai banks are establishing themselves throughout the region.
Vietnam - the new frontier
In Vietnam, one of the world�s hottest new markets, the NIC multinationals are leading the way towards development based on their own histories of natural resource depletion, environmental degradation and establishment of labor-intensive industries. Taiwan tops the list of countries with direct foreign investment in Vietnam, with more than $1.1 billion invested. Hong Kong is ranked third, and South Korea is ranked fifth. All three are ahead of Japanese and projected U.S. investment.
Taiwanese, Korean and Hong Kong companies are setting up cement plants, textiles facilities and low-tech consumer products factories, as well as a number of natural resource extraction industries. The five largest companies in Vietnam are owned by Chingfong (Taiwan), Vedan (Taiwan), Orion (South Korea), Very Good International Group (Hong Kong) and Paradise Development (Taiwan).
There are almost no institutions or social movements to hold these companies accountable for their performance in Vietnam. One World Bank consultant asserts that Korean companies are mainly setting up operations in Vietnam, particularly in the cement industry, that are too dirty even for their own country, which has serious environmental problems of its own. The first workplace strikes in modern Vietnamese history have all been in Korean factories, where workers claim the Korean managers regularly hit and kick workers, and where minimum wage rules are frequently ignored.
The future of the new multinationals
Are these multinationals any different than their larger and more famous forebears in Japan, the United States and Europe?
In many ways, maybe not. But as consumer, environmental and labor groups have begun to make inroads in placing market pressure on corporations, it is clear that these new NIC multinationals will be much more difficult to monitor and pressure for changes. Subcontracting firms� anonymity and insulation from the marketplace makes them much harder to influence.
These corporations have also shown almost no willingness to acknowledge the legitimacy of environmental and social concerns, as even the large multinationals purport to do.
With Increasing collaboration between the old and new multinationals, the old companies may shunt off their "dirty work" on to their Southeast Asian allies. Already, U.S., Japanese and European companies are increasingly forming joint ventures with the new multinationals. Finding it easier to have Thai companies pull out logs and deal with a repressive regime, for example, Japanese companies are content to purchase wood once it has reached the safety of Thailand. Similarly, Nike, which subcontracts with mostly Korean companies to run its factories, would prefer not to deal with striking Indonesian workers directly.
If cooperative arrangements between the old and new multinationals proliferate, activists may find the new multinationals spell new problems.
- Dara O�Rourke
Economics
Clubbing Southeast Asia
The Impacts of Golf Course
Development
by Pratap Chatterjee
LANGKAWI ISLAND, MALAYSIA - Pak Ahmad�s mango orchard is a small one-acre plot just below the Seven Wells waterfall on Langkawi Island in the Andaman Sea just off the coast of mainland Malaysia. It�s the only mango orchard in the valley, and its existence is threatened by plans to build a golf course.
Pak Ahmad�s story is one of a growing number of golf-related conflicts in Southeast Asia. Golf course development is now emerging as a major environmental and social issue in Asia, as golf-crazy Japan looks abroad for sites for new courses and Asian countries work to attract Japanese tourists, and as other Asians, especially business people, take up the sport. The problem is particularly acute in Southeast Asia because of the sudden proliferation of golf courses, and because the maintenance of large, closely trimmed grassy areas is more difficult and environmentally hazardous in tropical areas which are home to greater numbers of pests, diseases and weeds.
The golf course development problems are quite evident on Langkawi Island, where there are already two golf courses and three more are planned. In order to build the golf courses, developers have cleared, or will clear, hundreds of acres of rainforest, says Gen Morita, a Japanese environmental activist who visited Pak Ahmad�s orchard in April. In addition, he says, the golf courses bring a host of other environmental problems with them. Removing trees and vegetation from the sites brings about gullying and erosion, and in order to build the system of reservoirs and drainage pipes to irrigate the golf courses, natural slopes and ground water levels are changed. This weakens the underlying foundation of the site and makes it more prone to damage from wind, rain and earthquakes.
When heavy rain falls on golf courses, the water initially drains into holding ponds, and when the inflow exceeds capacity, these ponds suddenly release large amounts of water. Occasionally, the holding pond itself will be breached, causing damage downstream.
Golf greens� need for constant watering poses additional problems. An 18-hole golf course consumes 5,000 cubic meters of water a day, enough for 2,000 families, according to Morita, and this intense thirst for water can have perverse consequences. Just east of Langkawi, for example, the Malaysian government is paying more than $7.5 million for a pipeline to feed water to a golf course resort on Redang Island from the mainland area of Terengganu, where a cholera epidemic recently broke out because of an inadequate supply of clean water, according to Chee Yoke Ling, Secretary of Sahabat Alam Malaysia (Friends of the Earth Malaysia).
Reliance on toxic chemicals
Just before the visit with Pak Ahmad, Morita and a group of 15 other activists and journalists drove to the newly completed Datai Bay golf course on the other side of Langkawi. A staff official proudly presented the new facility and then, becoming suspicious in the line of questioning, asked, "Are you environmentalists?"
"No matter," she said. "We plan to bring in orchids from the forest and replace all our plastic signs with wood." When the group stared somewhat aghast at her, she fumbled a bit. "Don�t worry, we use only organic fertilizer on our grass," she added hastily. Doubting this last assurance, Morita ventured outside to look at the grass. It�s imported Bermuda and Tifdwarf, he says, grasses that will require tons of pesticides and soil hardening agents, some of which could be cancerous.
According to Morita, the average amount of agrochemicals used on a golf course is 1,500 kilograms every year. Mineral-, plant- and animal-based, and compound chemicals are used for soil improvement. These include zeolite, which consists mainly of silicic-acid, aluminum oxide and iron oxide, all potential carcinogens. The soil-coagulating agent used to strengthen the foundation of artificial lakes in golf courses uses acrylamide, which is a strong poison. Its contamination of underground water supplies has caused severe poisoning and disorders of the central nervous system.
"Not only do these chemicals pollute waterways, but up to 90 percent of the chemicals sprayed on the course ends up in the air. People don�t realize that they are breathing in poisons," says Morita. A number of golfers, caddies and residents have been found to suffer irritations, skin diseases and other allergic reactions, he adds.
The dangers of the high pesticide and fertilizer use at golf courses was illustrated at the Sapporo Kokusai Country Club in Hiroshima township on the Japanese island of Hokkaido, where managers had organic copper compounds spread on the grass to keep it from rotting under the winter snow. When it rained, the chemical was washed into the water system, killing over 90,000 fish in a nearby aquaculture project.
As a result of chemical use at this course and six other golf courses in the town, many cases of allergic rhinitis, chronic rashes and asthma have been reported. The incidence of asthma in the town is five times the island�s average.
In the United States, there has been at least one death from the use of pesticides on golf courses. Navy Lieutenant George Prior died 20 days after he fell ill immediately after a round of golf. A post mortem revealed that he had died from exposure to chlorothalonil, a pesticide used on golf courses.
Darryl Carlin, an environmental economics researcher from New Zealand, contends that golf courses are in fact an environmentally unsound form of monoculture where exotic soil and grass, chemical fertilizers, pesticides, fungicides and weedicides, as well as machinery are all imported to substitute natural ecosystems.
The latest promotional trend in golf course development is the "environmentally safer" methods of Integrated Pest Management (IPM). But Carlin says IPM still uses chemical pesticides in addition to other pest control techniques, such as biological husbandry practices, to reduce pesticide loads. The problem is that IPM on golf courses is untried and, owing to the lack of technically advanced expertise necessary to make it work, is unlikely to be an effective pest control technique in the short or long term.
A closed door process
Despite the significant environmental effects of golf courses, local communities are routinely excluded from any role in deciding if a golf course should be constructed and, if so, on what terms. When Carlin, who has just completed a thesis on the proposed Sho Lo Tung golf course in Hong Kong, called the Hong Kong Royal Jockey Club to ask its managers if they would be interested in talking to local activists, the official who answered simply said, "I don�t deal with crackpots," and hung up.
The problem is that there is no law or regulation that requires consultation, or even information sharing with local communities. "In Hong Kong there are provisions for an environmental impact assessment, but the results are not open to the public. For that matter the golf course proposal does not have to be shown to local residents," says Carlin. The problem is similar in Thailand, says Anita Pleumaron of the Asian Tourism Network (ANTENNA). Environmental assessments may be conducted but the results are rigged, she says.
In the United States, the rules allow for public hearings. Yet Kay Varela, a member of the Hawaii Golf Course Action Alliance, whose community of Opihihale is currently being threatened by golf course development, says that regulators ignored testimony from experts at public hearings in her town that showed that three endangered species would be affected by the development, and that scarce fresh water supplies would be depleted.
Profits bypass the communities
The negative impacts of golf extend beyond the environment. In Thailand, developers buy up the land around a proposed site, and villagers living within this boundary have little rights of entry or exit and are forced to sell. A local Thai newspaper reported that one elderly woman in the north of the country was told by developers: "If you don�t sell voluntarily, you�ll have to buy a helicopter to use every time you leave your house, because whenever you go out and pass our land, we�ll sue you."
According to research done by Pleumaron, the average cost of developing a golf course in Thailand is $47 million, not including the cost of hiring consultants. In Indonesia, the construction of a golf course in Cimacan, West Java, displaced 287 peasants in 1991. Villagers who lost their lands were paid 1.5 cents per square meter of land by the Badung Asri Mulia Construction Company.
In general, after losing their farms, villagers end up as laborers on their own lands. Working on these golf courses represents a drastic change from their once independent and self-reliant way of life. All too often, this kind of change leads to the collapse of whole rural communities. Those who are not employed by golf courses move to big cities, contributing to the urban problems of slums, traffic congestion and pollution.
Pleumaron says that, contrary to developers� claims, golf course developments rarely benefit the local economy. Instead, most of the profits are reaped by foreign investors and multinational companies. "The big losers are the local people whose government agencies neglect the social and environmental costs of superfluous golf resorts and even subsidize this fickle business by spending tax money on golf tourism promotion," she says.
Sidebar
The Global Anti-Golf
Movement
THE GLOBAL ANTI-GOLF MOVEMENT (GAG�M) was launched on World No-Golf Day (April 29, 1993)
following a three-day conference on Golf Course and Resort Development in the Asia-Pacific Region in
Panang, Malaysia from April 26 to 28, 1993.
The three sponsoring organizations are the Japan-based Global Network for Anti-Golf Course Action (GNAGA), the Thailand-based Asian Tourism Network (ANTENNA) and the Malaysia-based Asia-Pacific People�s Environmental Network (APPEN). Twenty delegates from Hawaii, Hong Kong, India, Indonesia, Japan, Malaysia, the Philippines and Thailand were also present.
Below is the statement of the Movement:
1. Golf courses and golf tourism are part of a �development� package which includes infrastructure (multi-purpose dams, airports, ports, roads, bridges), mass tourism, expensive housing, entertainment facilities, export-oriented agriculture (flowers, exotic fruits and vegetables), and industrial parks/zones.
2. At the heart of the golf industry is a multi-billion-dollar industry involving transnational corporations, including agribusiness, construction firms, consultancies, golf equipment manufacturers, airlines, hotel chains, real estate companies, advertising and public relations firms as well as financial institutions.
The transformation of golf memberships into a saleable commodity has resulted in widespread speculation and dubious practices. In many countries golf course/resort development (including time- sharing resorts) is in reality often a �hit-and-run� business. The speculative nature of memberships and associated real property transactions also makes the industry very high risk. In the wake of the current slowdown in the Japanese economy, many golf course and resort companies have become bankrupt, with investors and banks bearing the losses.
The bulk of the foreign exchange earned from golf courses and golf tourism does not stay in the local economy. The benefits which do remain are reaped by a few business people and their patrons.
3. The �green� golf package can be compared to the Green Revolution package in agriculture. Golf courses are in fact another form of monoculture, where exotic soil and grass, chemical fertilizers, pesticides, fungicides and weedicides, as well as machinery, are all imported to substitute for natural ecosystems. These landscaped foreign systems create stress on local water supplies and soil, at the same time being highly vulnerable to disease and pest attacks. Just as the Green Revolution is collapsing in country after country, the Golf Green is also fraught with ecological problems.
The environmental impacts include water depletion and toxic contamination of the soil, underground water, surface water and the air. This in turn leads to health problems for local communities, populations downstream and even golfers, caddies and chemical sprayers in golf courses.
The construction of golf courses in scenic natural sites, such as forest areas and coral islands, also results in the destruction of biodiversity.
4. In addition to environmental damage, golf course and resort development often creates skewed land use, displacing local communities or depriving them of water and other resources. In a number of countries, the victims of such projects are subject to police or military intimidation when they protest against the destruction caused by golf courses.
5. The golf industry aggressively promotes an elitist and exclusive resort lifestyle and notion of leisure. This globalization of lifestyle is also a form of exploitation, the victims being the wealthy urban population who are encouraged to spend their surplus dreams and illusions, at the expense of the environment and other members of society.
Golf course and golf tourism development violate human rights in every sense of the word.
6. In the face of growing criticism of the adverse environmental impacts of golf courses, the industry is promoting the notion of "pesticide-free," "environmentally-friendly" or "sensitive" golf courses. No such course exists to date, and the creation and maintenance of the "perfect green" comprising exotic grass inevitably requires intensive use of chemicals.
7. Similarly, the increasingly touted Integrated Pest Management (IPM) system as an alternative to the use of pesticides on golf courses is not a solution. In practical terms, application of pest control through IPM is impossible to achieve and should be viewed as nothing more than a hollow attempt to make golf courses appear less toxic than they are.
The danger is that IPM will be taken seriously by officials involved in the approval of golf courses. Under scrutiny, the theory of IPM can be easily discredited.
It should also be stressed that considerable amounts of chemicals are used in the preparation of a golf course and in fertilizing the grass. These are toxic, too, and thus make golf courses a threat to the environment and health.
The Conference delegates call for the following:
1. An immediate moratorium on all golf course development.
2. An open and public environmental and social review/audit of existing golf courses.
3. Existing golf courses should be converted to public parks, and where they lie in forest areas, wetlands and islands, there should be rehabilitation and regeneration of the land to its natural state.
4. Investigations into illegalities in the golf industry, including illegal occupation of public lands and encroachment into protected forests, diversion of water, violation and evasion of corporate regulations and corruption. We call on governments to prosecute the violators.
5. Laws should be passed to prohibit the advertising and promotion of golf courses and golf tourism.
6. Overseas development assistance, from countries including Japan and Australia, should not be used for the promotion of golf courses and golf tourism or the construction of infrastructure related to such development.
o In view of the fact that 1993 has been declared by the United Nations as the International Year of Indigenous People, and this has been endorsed by all member governments, we condemn the appropriation of indigenous peoples� lands for golf course/resort development.
o We appeal to golfers to be fully informed and aware of the adverse environmental, health and social impacts of golf tourism.
o We support the decision of the International Olympic Committee (IOC) to reject the inclusion of golf as an Olympic �sport� in the 1996 Atlanta Games. We call on the IOC not to change this decision, for it would amount to the legitimization and international recognition of a �sport� which destroys the environment, creates social disruptions and which is financially unsound.
o We reject the myth of "pesticide-free," "environmentally-friendly" or "sensitive" golf courses. The adoption of the U.S. Golf Association specifications as the international standard for golf course construction and maintenance inherently requires a total package of exotic grass, toxic chemical fertilizers and pesticides, high water consumption, turf equipment, etc. This is by its very nature destructive of the environment and the entire ecosystem. Toxic chemicals used at the golf course construction stage, for example, include hydrogen peroxide to harden soil before turfing.
o Even if it were technically and economically feasible, determined by a full cost-benefit analysis, to construct and maintain pesticide-free golf courses, the industry is still unacceptable due to the wide range of social problems and other environmental impacts (e.g. water depletion, inappropriate land use) that are generated.
o We also reject the myth of Integrated Pest Management because it is experimental, the conditions for its application cannot be achieved and it still relies on toxic chemicals.
Giants of Garbage
by Harold Crooks
300 pages
James Lorimer & Company, Toronto, 1993.
HAROLD CROOKS� NEWEST BOOK, Giants of Garbage, is the most comprehensive and incisive account of the rise of the global waste industry available in print. In Giants of Garbage, Crooks adeptly refines his 1983 study of the waste industry, Dirty Business, by tracing a decade more of the antics of corporations like Browning Ferris Industries (BFI), Laidlaw and Waste Management Incorporated (WMI); the lukewarm efforts of government regulators to check these companies� abuses; and the rising tide of grassroots opposition to the waste industry.
In Giants, Crooks provides a wealth of new evidence strongly suggesting collusion among the main trash corporations, widespread use of unfair pricing and other oligopolistic practices. And, building on Dirty Business�s documentation of WMI�s incursion into Saudi Arabia and Argentina , and into Canada in conjunction with BFI, Giants of Garbage traces the spread of the North American garbage kingpins into the markets of continental Europe, Asia, and Indonesia.
Monopolizing the waste trade
Central to Crooks� expos� is a series of lawsuits charging the large waste disposal firms with a wide array of antitrust law violations.
o In 1987, a group of commercial business customers filed a national class action lawsuit against Houston, Texas-based BFI and Oak Brook, Illinois-based WMI, alleging the highest echelons of both companies had orchestrated a nationwide price-fixing conspiracy. In one important document, the business customers detailed a number of antitrust cases across the nation and the involvement of key corporate officers from both firms. In 1990, both firms agreed to settle the case for a total of $50 million plus $13 million in attorneys� fees, while denying any wrongdoing. All evidence in the case, including some "4 million pages of documents," was sealed.
o In 1987, following WMI and BFI�s settlement of a federal antitrust case for $1 million each and guilty pleas, BFI sued one of its employees, Dave Yeager, claiming that he was responsible for fixing commercial garbage prices with WMI representatives for the Toledo, Ohio region. Yeager counter-sued and vigorously denied BFI�s charges.
As the case wore on, Yeager approached the national grassroots environmental organization Citizens Clearinghouse for Hazardous Waste with information detailing BFI�s practice of promoting employees responsible for the Toledo price fixing violations, as well as for Burlington, Vermont predatory pricing violations. In Toledo, Yeager charged, BFI used two different price lists for prospective clients. If a potential customer currently had a contract with WMI, BFI employees were instructed to quote a prohibitively high price. If the potential customer had an existing contract with another competitor, BFI employees were instructed to quote a seductively low price.
Ultimately, BFI reached a settlement with Yeager. "What was fully evident," Crooks points out, "was that the out-of-court resolution of the conflict was bought at the price of keeping David Yeager�s mouth shut."
o In 1992, the Canadian Competition Tribunal charged Burlington, Ontario-based Laidlaw with developing a captive market on Vancouver Island in Canada. Crooks describes the central facet in Laidlaw�s Vancouver strategy as the "evergreen" contract, business agreements that obligated clients to ten years of service to Laidlaw. Clients who wanted to change trash haulers were required to notify Laidlaw 10 years in advance of the termination of the contract or pay a six-month service charge as a cancellation fee. The contracts automatically renewed themselves each year (hence evergreen).
The concern of the Tribunal�s deliberations was the way in which Laidlaw secured its clients� signatures on the contracts. "A disturbingly recurring theme through much of the evidence before the Tribunal was that the signature on many of these contracts had been obtained by representing to the customers that the documents they were being asked to sign were �a mere formality,� or because it was �the national corporate practice that Laidlaw followed.�" The Tribunal�s members frowned on Laidlaw�s argument that the evergreen contracts were no different from those of its competitors (i.e. WMI and BFI). The Tribunal ordered Laidlaw to modify the contracts, ruling that they were predatory agreements designed to keep competitors out of the market.
o In 1991, Laidlaw, without admitting guilt, settled fraud charges with the State of California by paying $3 million in fines. The state charged Laidlaw with mailing agreements to its customers seeking to secure a pledge that the customers would not dispose of hazardous waste in Laidlaw�s dumpsters, ostensibly for insurance purposes. When the customers returned the signed forms to Laidlaw, a peel-off sticker was removed. In the absence of the sticker, the documents appeared as enforceable business contracts, and that is how Laidlaw treated them.
All of these incidents were resolved without major implications for the perpetrators other than a few million dollars in fines. With the exception of the federal antitrust case in Toledo, no guilt was established. And all of the evidence compiled by the plaintiffs in these cases, including the informed internal knowledge of the once-vociferous David Yeager, was effectively buried, hushed up and squelched.
Giants makes the case that the ability of the waste industry to violate and skirt the law, absorbing occasional fines, convictions and civil penalties without major negative impact is a result of its enormous economic and political power.
Crooks traces that power to the industry�s successful efforts to cultivate profits through the takeover of municipal waste services, landfills, incinerators and recycling operations, on the one hand, and to its practice of hiring prominent former government regulators and officials (e.g., former two-time EPA administrator William Ruckelshaus, former Bush Chief of Staff James Baker, and former EPA general counsel John Bernstein) on the other.
Crooks strongly argues that the alleged links between organized crime and the waste industry, while historically grounded, are now beside the point because while many current business practices of the waste industry mimic traditional organized crime tactics, they are nonetheless business practices and not the work of a familial clan. "Financial muscle [has] replaced the physical kind," he writes.
There can be little doubt that the industry wields tremendous political clout. For example, a series of U.S. Supreme Court rulings prevents states from banning waste imports, on the grounds that trash is a protected commodity under the constitution�s interstate commerce clause. States will not be able to protect themselves from becoming national dumping grounds by banning or restricting waste imports unless Congress gives them the power. But congressional efforts to remove waste from protection under the Interstate Commerce Clause of the Constitution have been thus far forestalled by the lobbying power of the waste industry in tandem with opposition from politicians from heavily populated East and West coast regions. Efforts by grassroots groups in coalition with politicians from states where much out-of-state waste is currently shipped are continuing, but the outcome of this struggle is uncertain.
Despite the immense industry power he describes, Crooks is not despairing or hopeless. He calls attention to the efforts of a broad-based citizens� opposition to the industry, encompassing people of all races, creeds and political ideologies. Crooks weaves an analysis of the political economy of waste together with the spirit of the grassroots resistance to the garbage giants. The book accurately reflects the concerns of hundreds of grassroots groups, combining tales from the front lines - where local activists confront the high-power consultants, salespeople and attorneys of the waste industry head on - with a play-by-play history of these companies� rise from the trash heap to multinational status, complete with a litany of their crimes against society.
Crooks does leave out of the story one important recent development: the emergence of the "bad boy strategy" being employed by grassroots activists and state legislators alike in the control of the waste industry. Bad boy legal mechanisms require companies to provide the contracting or licensing agency with a full disclosure of their criminal and civil legal violations during the last three to 10 years. These laws also allow government agencies to punish a company with a history of legal and procedural violations by rejecting or revoking its permits, barring it from contracts with government agencies, and/or "executing" the company by removing its charter to operate. Several state legislatures have passed permit bar statutes or stiffened their permitting statutes in order to prevent bad actors from setting up landfills for out-of-state waste, thus avoiding constitutional issues involving interstate commerce. Many more states, at the behest of grassroots activists, are now seeking passage of such laws.
This oversight aside, Giants of Garbage is a tremendous accomplishment, a book which should become an almanac for grassroots activists fighting the waste industry. What makes the movement so important is well articulated by Crooks himself, who explains why the stakes are so high in the fight for environmental justice. Like all for-profit business enterprises, the waste companies rely on the minimization of expenses in order to maximize profits. However, "what makes the [waste industry] unlike most industries is that the consequences of its activities have to be measured on a time scale without historic precedent. ... Since major waste depositories most likely will require oversight for periods ranging from several generations to forever, the windfall profits of corporate dumping are privatized while the longer-term liabilities are socialized."
Under the plan, the average homeowner will receive a total refund of $221 and an additional rate reduction of $51. The refund, believed to be the largest of its kind in the nation, will be paid as a credit on electric bills over a 12-month period beginning in November.
The refund and rate cut stem from the settlement of six pending lawsuits challenging Edison�s rates. Several of those cases have been dragging through the courts and the Illinois Commerce Commission (ICC) for years.
"Consumers have been waiting years for the refunds Comm Ed owes," said CUB executive director Susan Stewart. "This agreement will end those delays once and for all and guarantee ratepayers immediate reductions on their electric bills. For consumers who have been fed up with Edison�s high electric rates, that�s a great deal."
The bulk of the refund and rate cut stems from a January 1993 case in which CUB and other consumer groups convinced the Illinois Commerce Commission to order a $339 million rate cut and a $600 million refund for Edison customers. The company appealed that ruling and the savings to consumers never materialized. Under the current plan, Edison will drop its appeal and comply with the Commission�s January 1993 ruling.
Stewart said the agreement is a vindication of the battles CUB and other consumer groups have waged against Edison rate hikes. "For years, CUB has been fighting Comm Ed�s attempts to charge consumers billions of dollars for three unneeded nuclear power plants," Stewart said. "This agreement means those efforts have paid off big for consumers."
The refund agreement must be approved by the courts and by the ICC.
"For a company to engage in a pattern of using unsuspecting patients as guinea pigs and operating rooms as laboratories for unapproved products, shows a blatant disregard for the health and safety of the patients who literally entrusted their lives to the company�s products," said Food and Drug Administration (FDA) Commissioner David Kessler.
Bard, one of the world�s largest health care products companies, will pay $30.5 million to settle civil charges, and pay the largest criminal penalty ever imposed in a medical case - $30.9 million.
A heart catheter is a wire with a balloon-like tip which is temporarily threaded into a person�s coronary arteries by a doctor and then inflated. The device widens the path through which blood can flow to the heart muscle.
The company pleaded guilty to conducting illegal experiments on people with the unapproved catheters, including illegal testing of catheters on people for the purpose of determining whether the catheters were safe and effective. Bard also pleaded guilty to changing the designs of catheters without seeking approval from the FDA for the changes.
The Justice Department said the catheter tips broke off within the coronary artery in about 50 patients, requiring about 22 emergency coronary artery bypass graft surgeries, and causing one heart attack. The failure of a catheter to deflate while being used by an interventional cardiologist caused one death.
"The management of C.R. Bard, Inc. sincerely regrets the activities that led to this plea agreement," said Bard spokesman William Reilly. "I want to reassure our customers and patients that Bard products, including all angioplasty products, have received all necessary FDA approvals."
In a letter to the steering committee of lawyers representing women injured by the breast implants, Dr. Norman Anderson called the proposed settlement "seriously flawed" and urged the committee to reject it. Anderson said the medical damages from breast implants could reach $169 billion, more than 35 times the amount proposed by Dow Corning. "[V]ery conservative estimates project total expenditures of $133 to $169 billion for effective monitoring, management and rehabilitation of breast implant recipients residing in the United States. ... These conservative numbers just cover medical procedures."
"Because these amounts could double or triple if worst-case scenarios hold true and become compounded by inflation, any demands seeking dollar for dollar compensation could consume the corporate assets of every manufacturer without achieving the restitution desired," he added.
Anderson said the proposed $4.85 billion settlement "amounts to little more than sanctioning the evasion of corporate responsibility." He noted that liability insurance coverage could "permit a manufacturer who has marketed a million of these devices to escape with in-house costs of 200 million dollars which represents little more than a 0.1 cent to the dollar solution that can only be offset by a continuous drain on the public coffers."
The entire premise of the settlement proposal "seems based more upon the dollar amounts that manufacturers are willing to pay to put this problem behind them than fairly compensating the medical costs that implant failures will impose upon patients, third-party payers and American taxpayers over the next 30 to 40 years," Anderson wrote.
- Ben Lilliston
Tromol Pos 1410
Jakarta 13014
INDONESIA
Jl. Kartini No. 30
Pekanbara 28111
Riau, Sumatra
INDONESIA
1436 U Street
Washington, DC 20009
J. Tutl IX - 594 R
Pondok Bambu Kavling
Jakarta 13430
INDONESIA
Industries
Km. 15, South Superhighway
Paranaque, Metro Manila
PHILIPPINES
Rm. 301, Philippine Herald Bldg.
60-62 Muralla Street
Intramuros, Manila
PHILIPPINES
Rm 332, Regina Bldg., Escalda
Manila
PHILIPPINES
28C Lorong Bunus Enam
Off J. Masjid India
50100 Kuala Lumpur
MALAYSIA
Action
1047 Naka
Kamogawa
Chiba
JAPAN 296-01
Soi Nuan Chan
Sukhaphibal 1 Rd.
THAILAND
19, Kelawei Road
10250 Penang
MALAYSIA
1730 Rhode Island Avenue, NW
Suite 600
Washington, DC 20036
87 Cantonment Road
10250 Penang
MALAYSIA
208 S. LaSalle, Room 584
Chicago, IL 60604
Depot Hill Road
RR 1, Box 114
Marshfield, VT 05658-9702
PO Box 389
Seattle, WA 98111-0389
450 Sansome, #700
San Francisco, CA 94111
Hazardous Wastes
PO Box 6806
Falls Church, VA 22040
c/o Franklin Research & Development Corp.
711 Atlantic Ave.
Boston, MA 02111
2000 Westchester Avenue
White Plains, NY 10650
Paul & Ellen Connett
Canton, NY: Work on Waste, USA
Toronto: Province of Ontario, Ministry of Environment and Energy
Washington, DC: Institute for Asian Democracy, 1993
New York:
Amnesty International, 1993
By Edith Mirante
Grove Press, 1993
Writings
By Aung San Suu Kyi
New York: Penguin Books, 1991
By Walden Bello
San Francisco: Food First, 1992
By Daniel Yergin
New York: Simon and Schuster, 1991
Edited by Women Working
Worldwide
London: Black Rose Press, 1991
Crisis
By Jeanne Vickers
London: Zed Books, Ltd., 1991