The Multinational Monitor

  July/August 2001 - VOLUME 22 - NUMBER 7& 8

T H E    F R O N T

Spoiled Lunch

The federal school lunch program has continuously awarded hundreds of millions of dollars in federal contracts to 12 companies that have had massive food safety recalls or violated environmental and worker safety laws, the Sierra Club charges in a June report, “Spoiled Lunch: Polluters Profiting from Federal Lunch Programs”

During the past five years, the federal government paid these companies $485 million for meat for public schools and other federal food programs.

“The animal factories producing meat for the federal School Lunch Program have polluted our air and water, experienced industrial accidents that resulted in worker deaths, and put children’s health at risk,” says Hank Graddy, of the Sierra Clubs Clean Water Committee. “Meanwhile the federal government continues to reward this bad behavior by giving irresponsible federal contractors millions of taxpayers’ dollars every year. It’s time to turn off the spigot of taxpayer money flowing to companies that violate our environmental and worker safety laws and threaten public health.”

The report reviews the records of 18 slaughterhouses and meat processing plants, owned by 12 companies that sold meat to U.S. Department of Agriculture’s School Lunch Program.

Based primarily on state and federal regulatory agencies’ records, court documents and corporate reference materials, the study provides many examples of contaminated food, worker endangerment and pollution at these slaughterhouses and processing plants:

• Tyson Food, the largest supplier of food to the School Lunch Program, racked up $102.7 million in sales from that and other programs for sales of poultry, despite a history of environmental violations at its Monett, Missouri plant.
At another Tyson’s plant in Kentucky, two workers were killed in an industrial accident.
• In 1996, John Morrell & Company paid $3 million in fines and penalties for criminal violations of the Clean Water Act at its Sioux Falls, South Dakota plant, yet continued to receive payments for sales of pork for federal nutrition programs.
• Between 1993 and 1997, the State of North Carolina documented at least 120 violations of pollution limits at Smithfield Packing Company’s Tar Heel plant.

Smithfield, which now owns John Morrell, is the world’s largest integrated pork producer and packer.

In December 2000, a judge with the National Labor Relations Board found that Smithfield had committed “egregious and pervasive” violations of federal labor law at its Tar Heel plant. Yet Smithfield has received $9.5 million from the sale of pork for the federal food programs since 1997.

•Over a recent eight-month period, five of the 12 companies have had to recall large quantities of contaminated food. Both Gold Kist and Supreme Beef Processors sold meat to the School Lunch Program during this time and Gold Kist, H&H Meat, IBP and Tyson have all sold food to the School Lunch Program since having had recalls.

“The strongest incentive these animal factories have to safeguard our air and water, produce safe food for schoolchildren and protect their workers is the potential loss of contracts worth millions of dollars,” says Graddy. “The federal government should contract with companies capable of abiding by our laws.”

A Tyson’s representative emphasizes that the problems highlighted in the Sierra Club report occurred a few years ago and that the company has since made a concerted effort to improve its record. One of the plants named “has not had any out of compliance incidents in two years,” he says. At the Kentucky plant, “the record has been exemplary” since the 1999 fatalities. In general, he says the Sierra Club is “taking two incidents and blowing them out of proportion.”

A spokesperson for Cargill, the owner of Excel (cited in the report for many documented permit violations at an Iowa slaughterhouse, though having received only two violation notices from Iowa regulators), was more dismissive. “I think the report was a joke ... they must have paid an intern to do a word search on the Internet,” he says. “They took information, and they twisted it, because they have an agenda and everyone knows it.”

An H&H Meat Products spokesperson argues that H&H was improperly included in the report, because the report lists only one problem for the company. “Most companies had violations repeatedly. It’s our opinion that we are not repetitive [violators],” the spokesperson said. The single reference to H&H in the Sierra Club report highlighted a November 2000 recall, triggered by U.S. Department of Agriculture testing, of approximately 58,000 pounds of ground beef patties potentially contaminated with potentially deadly E. coli 0157:H7 bacteria.

The Sierra Club report urges that repeat violators of environmental, public health and worker protection laws and regulations be disqualified from receiving School Lunch or other government contracts. “To provide its vendors with every incentive to adhere to
environmental, worker health and safety, food safety and other laws,” the report concludes, “the USDA food purchasers should be required to take into account a company’s record of complying with federal laws. If these companies consistently fail to abide by federal laws, the government should not reward them with federal contracts.”

Tyson indicated support for the recommendation, while Cargill and H&H said they either had no opinion or offered no comment.
The report notes that a Clinton administration rule would have permitted government contracting officers to deny contracts to repeat lawbreakers [see “Controlling Corporate Scofflaws or Blacklisting?” Multinational Monitor, July/August 1999], but that the Bush administration suspended the rule on its first day in office (one day after the Clinton rule went into effect) and has proposed eliminating it [see “Defending Contractor Responsibility,” Multinational Monitor, May 2001].

“Common sense would dictate that the government put an end to the practice of doing business with companies that make a habit of breaking laws that protect our health, our environment, and our workers,” the report argues.

— Russell Mokhiber

Deadly Drilling in Aceh

ExxonMobil is culpable for some of the mass atrocities committed by the Indonesian military in Aceh Province, in North Sumatra, a June lawsuit filed in the United States alleges.

Filed by the Washington, D.C.-based International Labor Rights Fund on behalf of 11 John and Jane Does, the suit charges that Mobil Oil (now merged with Exxon) contracted with the Indonesian military to provide security for its Arun natural gas project, and controlled and directed the units assigned to it.

The Indonesian military has engaged in a bloody conflict with separatist forces in Aceh for more than a decade. Human rights groups have long condemned its operations. Amnesty International reports that hundreds of civilians in Aceh were extrajudicially killed in 2000. “Torture and ill-treatment were routine in both police and military custody and some people died as a result of torture,” Amnesty states in its most recent annual report. “A significant proportion of the victims were ordinary civilians, including women, children, humanitarian workers, human rights defenders and political activists.”

The International Labor Rights Fund suit charges ExxonMobil with complicity in these abuses, arguing that the company directed the forces to a considerable extent, and that the military used facilities and resources provided by ExxonMobil and its Indonesian partner PT Arun (also a defendant in the case) in the commission of widescale human rights violations.

“The Mobil Companies and Defendant PT Arun knew or should have known that their logistical and material support was being used to effectuate the Indonesian military’s commission of the human rights atrocities,” the suit charges, and ExxonMobil and PT Arun are therefore liable for the human rights abuses inflicted on the plaintiffs by the Indonesian military.

The case is filed under the Alien Tort Claims Act, which gives standing to torture victims to sue in U.S. courts.

In a statement issued in response to the suit, Exxon Mobil said that it is “disturbed by any suggestions that ExxonMobil or its affiliate companies are in any way involved with alleged human rights abuses by security in Aceh. ExxonMobil condemns the violation of human rights in any form and categorically denies these allegations. We believe a lawsuit recently filed by the International Labor Rights Fund (ILRF) containing these allegations is without merit and designed to bring publicity to their organization.”

Mobilizing the Military
Mobil discovered the natural gas field around Arun in the early 1970s. It contracted with the Indonesian government to gain exclusive rights to the field, in a deal that the ILRF says involved the transfer of shares in Mobil Oil Indonesia to Indonesian dictator Suharto’s government and/or his family. The Arun Project is one of the largest natural gas projects in the world.

The natural gas field happens to be located in Aceh, where an armed resistance organized under the banner of the Free Aceh Movement has long been seeking independence. From 1989 to 1998, the Indonesian government designated Aceh as a Military Operation Area, with thousands of troops assigned to defeat the armed independence force. Human rights organizations report that more than 1,000 people were killed during the period of military rule. After longtime Indonesian dictator Suharto fell from power in 1998, the new president, Abdurrahman Wahid offered to permit the people of Aceh to vote on independence in a referendum, but then subsequently withdrew the offer. Violence in Aceh soon escalated to its present levels.

The lawsuit charges that ExxonMobil is complicit in the long-running human rights abuses. “The extraction and liquefication activities could not have been performed without a heavy military presence by the Indonesian military because of the involvement with and identification with the project by the Suharto regime,” the suit charges. As part of the deal in which Mobil gains rights to the Arun field, Suharto agreed to dedicate a unit of the military, known by its Indonesian acronym TNI, to provide security to the natural gas project, the suit claims. “At least one unit of the TNI, No. 113, was assigned for the sole and specific purpose of providing such ‘security’ for the Arun Project.”

The lawsuit charges that Mobil and PT Arun always “had the ability to control and direct, and have indeed controlled and directed, the activities of the TNI units assigned to protect Defendants’ interests in the Arun Project. Such control and direction includes conditioning payment on the provision of specific security services, making decisions about where to place bases, strategic mission planning, and making decisions about specific deployment areas.”

Mobil worsened the situation by providing logistical and material support to the TNI, the suit claims. It alleges Mobil provided buildings and barracks near the company’s operations which were used by the Indonesian Kopassus special forces “to interrogate, torture and murder Achenese civilians suspected of engaging in separatist activities,” and provided heavy equipment used by the military to dig mass graves.
The unnamed plaintiffs in the case all allege to have been severely injured or had family members killed by the military forces in TNI Unit 113. They recount gruesome incidents of torture and mistreatment. The suit alleges that one of the John Does was shot in three places in his leg while riding a motorcycle to a refugee camp for people displaced by the ExxonMobil security forces. Soldiers took him to a military camp, letting him bleed and torturing him for hours, breaking his kneecap, smashing his skull and burning him with cigarettes. After his wounds were eventually treated, the suit claims, TNI kept him in custody for a month, torturing him regularly. He was finally released only after a human rights group bribed government officials.

Tortuous Rationales
The suit alleges that ExxonMobil is culpable for these abuses, and many others alleged, via a variety of legal theories. At root, these theories emphasize that ExxonMobil “pay[s] a monthly or annual fee for security services provided by specific units of the TNI,” and that these units are therefore agents of the company, with the company liable for the actions of its agents.

ExxonMobil disdains the notion that it is in any way responsible for the violence and human rights abuses in Aceh. “We are deeply troubled and highly concerned about the violence in North Aceh,” ExxonMobil said in its statement. “We have a very long history in Indonesia and we have always been sensitive to the needs of local residents, our employees and the government. The unrest in this area seriously impacts the safety and well being of our workers, their families and our contractors, as well as those who live in the area.”

ExxonMobil points out that it suspended operations in Aceh because of violence in March 2001, though the suit argues that the suspension came because the company wanted TNI to increase the number of troops in the area, not ratchet down the violence.

“We do not underestimate the severe economic and political disruptions that Indonesia is experiencing,” ExxonMobil says. “It is our steadfast hope that the political and economic turmoil in Aceh will be peacefully resolved, so that Indonesia might use its rich base of natural and human resources for the benefit of its people and to maintain its leadership position in the Asia Pacific region.” The company says it is a positive force in the region, employing more than 2,000 Acehenese, providing health services to local villagers, supporting schools, and building water systems, roads, bridges and other community infrastructure projects.

— Robert Weissman