Multinational Monitor

JUL/AUG 2002
VOL 23 No.7


Introduction: The Corporate Reform Moment
by Monitor Staff

Commons Sense: Community Ownership and the Displacement of Corporate Control
by David Bollier

An Answer to Marketization: Decommodification and the Assertion of Rights to Essential Services
by Patrick Bond

28 Words to Redefine Corporate Duties: The Proposal for a Code for Corporate Citizenship
by Robert Hinkley

The Dormant Power of the Purse: The Failure of the Government to Use its Purchasing Power to Promote Corporate Compliance with the Law
by Seth Morris

The Sunshine Standards: The Powerful Potential of Corporate Disclosure Requirements
by Ralph Estes

The Corporate Crime Scorecard
by Monitor Staff


Overturning the Economic Aristocracy: Toward New Models of Corporate Control
an interview with
Marjorie Kelly

Ownership and Sustainability: The Case for Shareholder Activism to Promote Corporate Responsibility
an interview with
Robert Monks

Corporate Codes of Conduct Regulation, Self-Regulation and the Lessons from the Baby Food Case
an interview with
Judith Richter



Behind the Lines

It's Worse Than You Think

The Front
The Great Hormone Hoax - Fish and Empire

The Lawrence Summers Memorial Award

Names In the News


Names In the News

Two Deaths, $91,000 Fine

The deaths of two workers from exposure to high concentrations of hydrogen sulfide gas at a Pennington, Alabama paper mill has resulted in citations against Fort James Operating Company, a Georgia-Pacific subsidiary, by the Occupational Safety and Health Administration (OSHA).

OSHA proposed a measly $91,000 in fines.

On January 16, contract employees were replacing a pipe rack in the chemical wash area of the plant.

As they worked, sulfuric acid and wastewater, released simultaneously into the sewer system, combined to form high levels of hydrogen sulfide gas which escaped through a manhole cover, killing two workers and injuring eight others.

OSHA handed the company a willful citation, with a proposed penalty of $70,000 for failing to protect workers by installing engineering devices to control the addition of chemicals into the sewer system and to prevent accidental releases. OSHA also issued three serious citations, with proposed penalties totaling $21,000 for failing to tell contractors and their employees of the potential for hazardous chemicals in the area, provide chemical detection monitors, and install an alarm system to alert employees of a hazardous gas release.

"Adding to the tragedy of these deaths and injuries is the fact that they could have been avoided," says Lana Graves, OSHA's Mobile area director. "Anticipating and preventing accidents is key to a safe work place."

OSHA issues a willful citation when the alleged violation is committed with an intentional disregard of, or plain indifference to, the requirements of the Occupational Safety and Health Act and regulations.

The agency defines a serious violation as one in which there is a substantial probability that death or serious physical harm could result and that the employer knew or should have known of the hazards.

The Fort James facility and Georgia-Pacific facilities have been cited by OSHA in the past.

Executive Duty to Report

The California State Senate in June approved legislation designed to hold executives accountable for financial fraud that they knew of but did not report.

SB 1452, pushed by the Foundation for Taxpayer and Consumer Rights, also creates a confidential whistleblower hotline and adds new protections for employees who blow the whistle on companies that break the law.

"Executive silence must be punished and whistleblower speech must be protected," says Doug Heller, a consumer advocate for the Foundation. "This is a landmark shift of public policy in response to the Enron debacle and should be adopted as a national model."

Consumer advocates have argued that such protections are of critical importance in light of the fact that half of adult Americans are invested in the stock market, either directly or through their retirement accounts.

The recent Enron collapse and similar problems at Tyco, Adelphia and Global Crossing demonstrate the devastation that corporate fraud has on retirees' and investors' livelihoods, Heller says. SB 1452 makes executives who do not report known violations of financial fraud laws liable for fines of up to $100,000 per incident.

"This proposal creates an early warning system to protect the public from the next corporate scandal," says Heller.

A Cartel for Every Product

The European Commission has fined Degussa AG $118 million and Nippon Soda Company Ltd $9 million for participating in a price-fixing cartel in methionine together with Aventis SA.

Aventis (formerly Rhone-Poulenc) was granted full immunity from fines because it revealed the cartel's existence to the Commission and provided decisive evidence on its operation.

Methionine is one of the world's most important amino acids used mainly in feed for poultry and pigs.

The cartel operated for nearly 13 years until 1999.

"The behavior of Aventis, Degussa and Nippon Soda has shown a complete disregard for their customers and, ultimately, consumers of chicken and pork meat which paid more for the products concerned than if the companies had engaged in healthy price competition," says Competition Commissioner Mario Monti. "The Commission hopes that like Aventis other companies will feel encouraged to come clean and denounce any such illicit behavior whose sole purpose is to rip off consumers."

The Commission found that the cartel agreed on price targets, implemented price increases and exchanged information on sales volumes and market share.

During the infringement period, the annual market was worth around $260 million in the European Economic Area -- the 15 EU member states plus Norway, Iceland and Liechtenstein.

The companies held regular meetings both at top level -- so-called "summit" meetings -- and at a technical level -- "managerial" or "staff" level meetings.

During these meetings, the participants exchanged sales volumes, which would then be compiled and used in the discussions to determine the target prices to be fixed.

The difference in the fines reflects the variance in the market shares of Degussa, the world's biggest producer of methionine, and Nippon Soda, almost five times smaller in terms of 1998 market shares figures.

Nippon Soda and Degussa cooperated with the Commission and were therefore granted reductions in penalty.

-- Russell Mokhiber


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