245 - march 2002

Corporate Responsibility and the Mission of theCongregation
Séamus FinnO.M.I.

The People of Godwere challenged by Vatican II to be a Church which is at once “a visibleorganization and spiritual community” that “travelsthe samejourney as all mankind and shares the same earthly lot with the world”striving always “to be a leaven and as it werethe soul of human societyin its renewal by Christ and transformation into the family of God”(Gaudium et Spes#40). One of the ways in which religious communitieshave responded to this challenge is to search for ways to integrate the socialmission of the Church into the mission of their congregations. One specificincarnation of that commitment is found in the corporate social responsibilityprograms which many congregations and religious institutions have developed.

Since 1972theOblate Congregation has said on a number of occasions that action on behalf ofjustice is a constitutive dimension of evangelization. We have furtherarticulated this to include a witness to the integrity of creation andcommitted ourselves to be present where decisions affecting the lives of thepoor and marginalized are made. In the contemporary world these decisions aremade not only in domestic and international legislative bodies but also in theboard rooms of multinational corporations. As they continue to search for newopportunities to growboth the size and the depth of their influence on localcommunity development continues to increase.

In the search forevery opportunity to be “at once the sign and the safeguard of thetranscendental dimension of the human person” (Gaudium et Spes#76)the Church seeks to work for the transformation of all systems andstructures that diminish the image of the divine which is reflected in thedignity of human persons. In the public sector the Church enters the publicdebate to safeguard human dignity and ensure that no public policies areenacted which demean or diminish that dignity. Similarly the Church pursuesevery opportunity to be a leaven of justice in the private sector and to usewhatever tools are available to preach the “gospel of life”.

Corporateresponsibility programs seek to bring the leaven of the Gospel to themarketplace by interacting directly with other shareholders and stakeholders incorporations and by engaging in substantive dialogues and advocacy with theboards of directors and the management of these corporations. Theseopportunities are rights which are guaranteed by the fact that individuals orinstitutions hold shares of stock in these corporations. The regulationsgoverning these rights and responsibilities are different in each country andare determined by the jurisdiction in which the corporation is chartered.

Corporate responsibilityprograms are fundamentally about influencing the debate on sustainabilityand are therefore about promoting ideas and values which safeguard humandignity. They are furthermore about the role of the “private sector”and multinational corporations in promoting development in countries andregions where they have a presence and in using their influence to positivelyeffect the policies of governments and international institutions forthe safeguarding of human dignity and the promotion of the common good.

The CorporateResponsibility program of the Missionary Oblates of Mary Immaculate is runthrough the Justice & Peace/Integrity of Creation Office in Washington DC.In the past year the program has been actively engaged with a number of thecorporations in which the Missionary Oblates of Mary Immaculate arestockholders. In many instancesissues have been addressed through filingstockholder resolutionsbut there have also been a number of dialogues withcorporations. The seven areas listed here demonstrate the issues that havereceived the most attention in recent months.

I – Accessibility and affordability of Medicinesfor people suffering with HIV-AIDSTB or Malaria

The statistics on theplight of the more than 30 million people who are HIV infected are numbing. Thestories of orphaned children and communities who have lost a generation ofpotential teachers and leaders have been writ large.

The Global Aids Fundwhich was established by the Secretary General of the United Nations Kofi Annanestimates that close to $10 billion dollars a year will be necessary to wrestlewith the suffering and the consequences of this deadly pandemic.

Over the past eighteen months we haveengaged the top ten U.S. pharmaceutical companies and a number of Europeanpharmaceutical companies to press them to be more generous in their response.The five areas of concern for us and for other religious colleaguesorganizations and non-governmental organizations are the following:

  • Makingmore medicines available to clinics and hospitals throughout Africa that needthem.

Rural clinicshospitals and hospices from different countries in Africa have identifiedspecific medicines for the treatment of people who are HIV-positiveafflictedwith TB or malaria or other opportunistic infections associated with the AIDSvirus. Part of our agenda is to get companies who manufacture or distribute theneeded medicines to donate a quantity of those medicines to these places oftreatment and refuge.

  • Eliminating all barriers to patents and intellectual propertyrights which would prevent a country from accessing the necessary medicines tohelp their citizens

At the4th World Trade Organization meeting which took place in Doha(Qatar) in November 2001NGO’s were successful in pushing governments andothers to make it somewhat easier for sovereign nations to manufacture themedicines needed to respond to a health emergency. Some strings are stillattached to the ways in which countries like India or Brazil could export theirgeneric medicines to other countries.

  • Exploring waysfinancial and otherthat the companies cancontribute to the functioning and resourcing of the Global Aids Fund.

A number of thingsremain to be clarified concerning this fund. What is clear is the need for apledge from individual countries and corporations and individuals. The UnitedStates has thus farafter a great deal of arm twistingagreed in earlyDecember to donate $735 million. Given the U.S. share of the global economy theproportionate share would be $2.5 billion. Few companies have yet made formalpledges to the fund and we hope to push them to be very specific about theirdonation.

  • Theestablishment of a sustainable global pricing structure for countries that areimprisoned by povertydisease and debt.

The expectationthat the poor and less developed countries can pay the same amount formedicines as people in North America and Europe is simply inconceivable. Thisleaves them always in a begging situation or totally dependant on thegenerosity of the donating corporation to acquire adequate medicines. The titleof a forthcoming book on the subject of development best captures this dilemma;it is called “Kicking Away the Ladder”.

  • Theactive advocacy of more poor country policies at the level of thePharmaceutical Manufacturers Association and its international corollary.

The size andprofitability of pharmaceutical companies is well documented. Their researchand manufacturing of medicines is of utmost importance for all humanity.However this is not like any other business either in the service sector or inthe manufacturing sector. Without the necessary medicines to treat knownviruses and infections people will die.

Companies andresolutions filed in 2001:

  • Schering-PloughHIV/AIDS-TB-MALARIA
  • Pharmacia Corp HIV/AIDS-TB-MALARIA
  • American Home ProductsHIV/AIDS-TB-MALARIA
  • Bristol-Myers SquibbHIV/AIDS-TB-MALARIA
  • Johnson & Johnson CoHIV/AIDS-TB-MALARIA
II –Money Laundering

This issue has been apart of the Corporate Responsibility Program for a number of years but it hastaken on additional importance in light of the events of September11th. In the past this issue was addressed in order to diminish theaccess which dictatorstyrants and corrupt public officials were making of theinternational financial system to move public money into their own privateoff-shore bank accounts. Numerous reports on money laundering have indicatedthat the system was used by the following former leaders: El Hadj Omar Bongo(Gabon)the sons of Sani Abacha (Nigeria)Mobuto sese Seko (Congo)RaulSalinas (Mexico)Vladimiro Montesinos (Peru) and Asif Ali Zardari (Pakistan).

The system was alsofrequently used to launder drug money and to hide illicit arms transactionsbetween illegal organizations and corporations. There is a consensus among U.S.Congressional Investigatorsformer bankers and international banking expertsthat U.S. and European Banks launder between $500 billion and $1 trillion ofdirty money each year. Over a decade thenfor instanceit is estimated thatbetween $2.5 billion and $5 trillion criminal proceeds have been laundered byU.S. banks and circulated in the U.S. financial circuits. This does not includeillegal transfers and capital flows from corrupt political leadersor taxevasion by overseas businesses.

New legislation whichhas been passed in a number of countriesincluding the United Stateshasprovided us with a number of new tools with which to address this issue and toprevent this illicit activity. This is also forcing the G7 and the 30 membersof the Organization for Economic Co-operation and Development to look seriouslyat some of the less than transparent dimensions of the international financialsystem that they have allowed to function for their convenience. These includeoffshore tax havensshell banks and corresponding banking relationships.

Companies andresolutions filed in 2001:

  • Bank of America Money Laundering
  • Citigroup Money Laundering
  • FleetBoston Money Laundering
  • JP MorganChase Money Laundering
  • Merrill Lynch Corp MoneyLaundering
III– Greenhouse Gas Emissions

This yeartheOblates filed resolutions with seven companies in collaboration with theICCR’s (Interfaith Center on Corporate Responsibility)2 effortsto press energy-intensive companies to reduce green house gas emissions thatcontribute to global warming/climate change. For the past ten yearstheseefforts have focused on chemical and petroleum companiesautomotive andappliance manufacturersutilitiesand insurance companies affected byproperty damage from global warming.

Citing increasing evidence from theU.S. Environmental Protection Agency and the Intergovernmental Panel on ClimateChange that human activityspecifically fossil fuel burningcontributessignificantly to global warmingand noting that 178 nations have signed on tothe emissions reduction standards for the Kyoto Protocolthe resolution callson the companies to enact policies which will contribute to re-stabilizing theglobal climate. Shareholders request that the companies report on greenhousegas emissions; targets and measures to reduce those emissions; and plans todevelop clean/renewable energy.

Companies andresolutions filed in 2001:

  • Sprint Reducing Greenhouse GasEmissions
  • United Technologies ReducingGreenhouse Gas Emissions-Appliances
  • Eastman Chemical ReducingGreenhouse Gas Emissions
  • AES Corporation ReducingGreenhouse Gas Emissions-Utility
  • Allegheny EnergyInc. ReducingGreenhouse Gas Emissions-Utility
  • ChevronTexaco Corp ReducingGreenhouse Gas Emissions
IV –Labeling Genetically Engineered Foods

This issue isconcerned generally with “food security” and has a number ofdifferent implications. It is first of all a health safety issue in as much asfood is essential for human survival and therefore any tampering with it toeither extend its shelf lifeincrease the output of plants or seeds or anycross fertilization efforts can have serious and long term consequences. Soilcontamination and water contamination are also serious considerations as aresult of chemical fertilizers and excessive use of pesticides that may beintroduced into the food production process.

Finallyany genetictampering which is not disclosed adequately can have immediate fatal or seriousimpacts for people who may have certain allergies. Furthermore any impact onthe reproductive capacity of human beings who consume genetically modifiedfoods is a very important consideration. This issue also raises a number ofissues related to intellectual property rights particularly to tribal andindigenous herbal and medicinal products and indigenous crop varieties.

Companies andresolutions filed in 2001:

  • PepsiCo Label GeneticallyEngineered Food
  • Albertson’s Inc. LabelGenetically Engineered Food

V – MacBride Principles

The Mac Brideprinciples which are named after the Nobel Peace prize winner Séan MacBridecalls on corporations that are doing business in Northern Ireland tofollow these principles in all their business practices and places of business.These principles focus directly on hiring policiespromotion and disciplinarypoliciesthe location of factoriesthe display of any sectarian and divisivesymbols in the workplacethe use of sectarian tools in marketing. Supportersof these principles maintain that ethical corporate practices in these areascan make a positive contribution to the ongoing peace process in NorthernIreland and can be supportive of the efforts to build peaceful localcommunities in the areas where they have operations.

Companies andresolutions filed in 2001:

  • TJX Co MacBride Principles(Northern Ireland)
  • Interpublic Group MacBridePrinciples
VI –Weaponization of Space

Some militaryanalysts believe that U.S. companies are likely to invest $500 billion in spaceby 2010; hencethe military will be called upon to defend American interestsin space. During the next 20 yearsthe United States military plans to developtechnologies with the potential to wage war from space. Meanwhile on Nov. 11999in the UN General Assembly resolutionPrevention of an Arms Race in Outer Space138 nations reaffirmed The Outer Space Treaty of 1967andspecifically its provision that reserves space "for peaceful purposes."

In collaboration withother religious investors we believe that outer space is the common heritage ofall and should be used for peaceful purposesfor economicscientific andcultural developmentfor the well-being of all peoples. We also believe thatshareholders deserve company transparency with regard to our company'sinvolvement in researchdevelopment and promotion of weapons for space.Therefore we have requested a report which could describe the current value ofoutstanding contracts to develop components of the Space Command's programs andthe amount of the company's own money (versus government funding) spent onin-house research and development for the Space Command program in comparisonto non-military contracts in this segment of its businessas well as theethical and financial reasons for being involved in the Space Command program.

Companies and resolutions filed in2001:

  • General Dynamics Weaponization ofSpace
  • Boeing Corporation Weaponizationof Space
VII– Global Human Rights Standards/Vendor Standards

The goal of theseresolutions is to advocate and encourage corporations to adopt corporateprinciples which are applied to their operations wherever they are located inthe world and to also insist that other companies who supply them with goods orservicesor who assist in any way in the production and delivery process oftheir productswill also abide by their principles. These principles arespecifically designed to address issues of slave laborchild labordiscrimination wage structurehealth and pension benefitssafety standardsand the freedom of association into independent trade unions. These resolutionsare applicable to most multinational corporations but especially to those whoare involved in the apparelfootwear and toy sectors.

Many codes of conducthave already been put in place and corporations have elicited the help of theUnited Nations and other global-wide non-governmental organizations in theeffort to improve their records in this area. We continue to be skeptical ofany codes and processes which do not provide for independent monitoring andtransparent reporting of monitoring efforts both to shareholders and customers.We are ably assisted in this effort by a number of other organizations but mostparticularly by the efforts of college and high school students who are quickto demonstrate and boycott any products which are deemed to have a very laxmethod for compliance with their human rights principles.

Companies and resolutions filed in2001:

  • General Electric Global HumanRights Standards
  • Home Depot Global Human RightsStandards
  • Coca Cola Corp Global CorporateStandards
  • ExxonMobil Corp Global HumanRights Standards
  • Kohls Vendor Standards (Suppliersof goods)
  • Federated Department StoresInc.Global Human Rights Standards

A key component inthis advocacy for human rights and the promotion of a global common goodwhichis at the heart of Catholic Social Teaching and clearly enunciated in papalencyclicals over the last forty yearsis the connection that we as Oblateshave with Oblate colleagues throughout the world and with colleagues from otherreligious congregations and organizations. Their contact with people at thelocal level and especially with the poor whose lives are most immediatelyimpacted by the practices and policies of corporations are an invaluableresource for testimony and information. This network of solidarity is a clearexample of one of the ways in which our missionary efforts contribute to theglobalization of hope which is a cornerstone of the kingdom of God.

The resolutionsprocess takes place over a period of about six months and operates in a numberof different ways. We are presently active in conversations with about 15companies concerning the issues raised in the resolutions. These conversationswill continue right up to the time of the corporation’s annual meeting.Usually we are represented at the annual meeting and are afforded time toaddress those present at the meetingto answer any questions and to talk withmembers of the media.

1 Thisterm is used to express the “long-term viability” of any programproject or process without undue dependence on outside life support and also ofprograms etc. that do not irreparably harm the environment or communities wherethey operate andthereforedepend on for existence.

2 TheInterfaith Center on Corporate Responsibility is a 30-year old coalition of 275faith-based institutional investors which is part of the larger corporateresponsibility movement that has over $2.03 trillion in invested portfolioworth.

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