Multinational Monitor

JUN 1998
VOL 19 No. 6


Dirty Old Grandfathered Plants: The Clean Air Act's Lung-Charring Loopholes
by Fred Richardson and Andrew Wheat

Wasting Away: Big Agribusiness Factory Farms Make a Big Mess
by Tanya Tolchin

Ravaging the Poor: IMF Indicted By Its Own Data
by Gabriel Kolko

An Enemy of Indigenous People: The Case of Loren Miller, COICA, the Inter-American Foundation and the Ayahuasca Plant
by Danielle Knight


Taking Aim at the Gun Makers
an interview with
David Kairys


Behind the Lines

U.S. Drug Imperialism

The Front
Emissions Omissions - Out of the Mouths of Babes

The Lawrence Summers Memorial Award

Money & Politics
Trade Association Directory

Their Masters' Voice
The Burma Lobby

Names In the News


The Front

Emissions Omissions

Federal officials in June imposed big civil fines against American Honda Motor Company and Ford Motor Company for allegedly tampering with emission control devices.

The officials refused to explain why no criminal charges were filed against the companies, although they did not rule out criminal charges being filed in the future.

Honda will spend $267 million to settle allegations that it violated the Clean Air Act by selling vehicles with disabled emission control diagnostic systems. That amount includes $12.6 million in civil penalties -- the largest civil penalty in Clean Air Act history.

Ford will spend $7.8 million -- $2.5 million in civil fines -- to settle allegations that it violated the Clean Air Act by illegally installing a device which defeats the emissions control system in 1997 Ford Econoline vans.

Federal officials alleged that Honda disabled the misfire monitoring device on 1.6 million 1996 and 1997 model year Accords, Civics, Preludes, Odysseys and Acuras, as well as 1995 Honda Civics. When the misfire device is disabled during an engine misfire, the system's malfunction indicator light will not operate. Because the vehicle's owner is unaware that the engine needs to be serviced, increased exhaust emissions of hydrocarbons and damage to the vehicle's catalyst may occur.

Honda failed to report this fact when applying for certificates of conformity, which allow for vehicles to be legally sold if they meet federal emission standards, federal officials said.

At a press conference at the Justice Department, federal officials were peppered with questions about possible criminal aspects of the case.

One reporter asked, "Is there any way that this could happen accidentally?"

"I'm trying to figure out the most politically correct way to answer this," answered Bruce Ferguson, a prosecutor with the Environmental Protection Agency's enforcement office. "Certainly engineers who are designing these cars know what they are doing when they put certain things in their computer codes. It is pretty clear to us that Honda knew that they were turning off the misfire detection system. ... With Ford, there was a motivation there -- they thought they were helping fuel economy. So, the engineers knew what they were doing. The next obvious question is, 'Did they know they were violating the law?' Frankly, the companies never told us that. Companies don't come up during negotiations and say, 'Yes, we knew we were violating the law.' So, the only thing I could do is speculate about that. I think the law is clear. The companies, I'm sure, have a different opinion about that."

Another reporter asked why no criminal charge was brought against the companies.

"These cases were both civil cases and they released the companies from liability on the civil," said Lois Schiffer, assistant attorney general for the Justice Department's environment and natural resources division. "They do not in any way address or foreclose any effort of criminal enforcement."

Asked if there is an ongoing criminal investigation, Schiffer said, "This is the Justice Department, so we don't comment one way or the other."

When asked why the Department didn't settle both civil and criminal cases globally, Schiffer said, "In the environmental area ... we almost always settle civil separate from criminal."

When asked why, in a similar case from the 1970s, Ford was criminally charged and convicted, but not here, prosecutor Thomas Carroll said that the Ford case from the 1970s "involved an allegation of intentional falsification of data in reports submitted to the EPA."

"Part of the criminal component [was] that they had a report that they had to make to the agency, they didn't like what it said, and somebody changed what it said," Carroll said. "In these cases, to get certificates of conformity to sell the vehicles, the companies have to submit data and make disclosures to the agency, and we allege that they did not adequately disclose, that they omitted material information from those disclosures."

Carroll declined to answer queries as to whether there was evidence of falsification in the current Honda and Ford cases.

"You are saying you are not going to tell us whether there was falsified information given to the government," one reporter said. "You are not going to tell us if there is an ongoing criminal investigation. And if you close an ongoing criminal investigation, you are not going to tell us. So, how do we know that you haven't already closed the criminal case?"

"I don't do what ifs," Schiffer snapped.         

-- Russell Mokhiber

Out of the Mouths of Babes

In 1997, U.S. Vice President Al Gore announced a new Executive Order to "reduce environmental health and safety risks to children." The order explicitly calls for mitigation of "risks to health or to safety that are attributable to products or substances that the child is likely to come in contact with or ingest."

A few blocks away from the White House, the Clinton Administration's Commerce Department  has worked in direct opposition to this entreaty. In recent months, the Commerce Department has lobbied on behalf of U.S. toy and chemical manufacturers against proposed new EU restrictions which would prevent children's exposure to toxic chemicals released by PVC (polyvinyl chloride) toys.

The EU took up the issue after health authorities in a number of European countries, including Austria, Belgium, Denmark, Germany and the Netherlands, called for withdrawing soft vinyl toys, such as teething rings and bath toys, from the market. In March, Spain requested action by the European Union.

At issue are a family of chemicals called phthalates (pronounced "thalates"). Phthalates are used primarily as plasticizer additives to give vinyl products softness and elasticity.  Plasticizers comprise over half of the weight of some flexible vinyl products. Ninety-five percent of phthalates are used in the production of  vinyl products.

Since they are not chemically bound to the PVC polymer itself, phthalates readily leach out of vinyl products. Up to 1 percent of the phthalate content of vinyl articles may be released during use each year. 

Although phthalates vary in toxicity, the most widely-used phthalates (e.g. DEHP or di (2-ethylhexyl) phthalate) have been linked in animal studies to a variety of illnesses, including reproductive damage and damage to the kidneys and liver.

Several agencies, including the U.S. Environmental Protection Agency, have labeled DEHP a probable human carcinogen. Other studies suggest that phthalates or their metabolites can interact synergistically with other common chemical contaminants, may be slightly estrogenic meaning they may have a role in endocrine disruption), affect blood pressure and heart rate and are potentially linked to asthma when absorbed on airborne particles.

In April 1997, a group of Danish scientists reported significant migration of phthalates used in toys. Soon after, some of Denmark's biggest retailers took precautionary action by pulling a number of PVC toys designed to be chewed off the shelves.

Since then, a number of retailers in Spain, Sweden, Italy, Germany, the Netherlands and Belgium have removed vinyl teething toys from sale.

In May 1998, the Swedish government proposed a legal ban on softeners in toys for children under three, following Austria and Denmark. Several German toy companies have now replaced their PVC toys with alternatives, labeling them clearly as "PVC-free." Others, like Lego, are eliminating soft PVC toys from their product line entirely. Recently, a large Argentinian toy producer, Babelito, announced it has withdrawn soft PVC products from sale and production.

No major U.S. retailer has taken similar precautionary action, and the Consumer Product Safety Commission, which is responsible for toy safety regulations, has yet to take action. U.S. toy makers did voluntarily substitute another phthalate for DEHP in the mid 1980s, after the CPSC looked into the leaching of DEHP from teethers.

In June, EU Consumer Affairs Commissioner Emma Bonino proposed that the European Union initiate an emergency ban on PVC toys marketed to be put in a child's mouth and containing phthalates DINP or DEHP. Almost immediately, the Commission rejected Bonino's proposal, instead suggesting that "migration limits" be established for phthalates in soft PVC toys.

Documents obtained under the Freedom of Information Act (FOIA) suggesting that the U.S. government lobbied at the behest of toymaker Mattel and chemical manufacturer Exxon may help explain the European Commission's rejection of the proposed emergency ban.

A March 8 letter from Fermin Cuza, Mattel's senior vice president, to U.S. Commerce Secretary William Daley, states, "I am writing to express Mattel's appreciation for the invaluable work being done by the European country desk of Commerce's Market Access and Compliance office." Cuza lauded Acting Deputy Assistant Secretary of Commerce for Europe Charles Ludolph for having been "critical in helping the US toy industry defend against recent EU initiatives to ban the
use of PVC in toys" and for "aggressively fighting these restrictive European actions."

Similarly, a cable from Vernon Weaver, the U.S. Representative to the EU in Brussels, sent to Washington and U.S. missions in Europe extends "heartfelt thanks to all EU posts ... in making contact with member state representatives of the EU Product Safety Emergencies Committee. We are told by Exxon Chemical Europe Inc. that the input was very effective and the weigh-in was invaluable."

-- Charlie Cray is a Greenpeace toxics campaigner

The Lawrence Summers Memorial Award

The June 1998 Lawrence Summers Memorial Award* honors "Chainsaw" Al Dunlap, who earned his moniker and reputation through implementing massive downsizings in the companies he has headed. In June, the board of directors of Sunbeam, the household appliance maker where Dunlap landed as CEO in 1996, fired Chainsaw Al. Here are some comments from Dunlap's 1996 book, Mean Business: How I Save Bad Companies and Make Good Companies Great:

  • "You're not in business to be liked. Neither am I. ... If you want a friend, get a dog. I'm not taking any chances; I've got two dogs."

  • "You cannot overpay a good CEO and you can't underpay a bad one."

  • "The most ridiculous term heard in boardrooms these days is 'stakeholders.' ... Stakeholders [including employees and home communities] don't pay a penny for their stake. There is only one constituency I am concerned about and that's the shareholders."

*In a 1991 internal memorandum, then-World Bank economist and current Deputy Secretary of Treasury Lawrence Summers argued for the transfer of waste and dirty industries from industrialized to developing countries. "Just between you and me, shouldn't the World Bank be encouraging more migration of the dirty industries to the LDCs (lesser developed countries)?" Summers wrote. "I think the economic logic behind dumping a load of toxic waste in the lowest wage country is impeccable and we should face up to that. ... I've always thought that underpopulated countries in Africa are vastly under polluted; their air quality is vastly inefficiently low [sic] compared to Los Angeles or Mexico City." Summers later said the memo was meant to be ironic.



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