Multinational Monitor

SEP/OCT 2008
VOL 29 No. 2


Biotech Snake Oil: A Quack Cure for Hunger
by Bill Freese

Nuclear's Power Play: Give Us Subsidies or Give Us Death
by Tyson Slocum

Conservation Corp.: Enviros Ally with Big Grain Traders
by Christine MacDonald

The Concession Trap: Auto Worker Givebacks and Labor's Future
by Simone Landon

The Commercial Games: Selling Off the Olympic Ideal
by Jennifer Wedekind


Bad Samaritans: How Rich Country "Help" Hurts the Developing World
an interview with
Ha-Joon Chang

Unhealthy Solutions: Private Insurance, High Costs and the Denial of Care
an interview with
Steffie Woolhandler

Arts, Inc.: The Corporate Control of Culture
an interview with
Bill Ivey


Behind the Lines

The State of Corporate Welfare

The Front
Climate Changing Africa -- African Inequality

The Lawrence Summers Memorial Award

Greed At a Glance

Commercial Alert

Names In the News


Conservation Corp.: Enviros Ally with Big Grain Traders                                     

By Christine MacDonald

Judson Barros lives in the state of Piauí in northwestern Brazil — a region known as El Cerrado that is traditionally dominated by dirt poor family farms and tropical woodland savannahs. It’s a stunted, scruffy landscape often overshadowed by the larger and more romanticized Amazon jungle to its west. But it is nonetheless important as Brazil’s second-largest ecosystem. Scientists say it is one of the most biologically diverse savannahs on the planet.

In 2003, New York-based agribusiness company Bunge Ltd. opened a soybean-crushing factory in the city of Uruçuí in the south of the state. In search of cheap land, a few commercial soybean farmers had already moved into Piauí from soy-growing strongholds in southern Brazil. Once the Bunge plant arrived, the conversion of Piauí’s Cerrado into industrial farmland began in earnest. The state’s soybean cultivation nearly tripled over the next three years. Such was the rush to expand the agricultural frontiers that new fields were often cleared without the proper land titles and required environmental permits. By 2006, soybeans became the state’s number-one cash crop.

To clear the land, plantation owners commonly stretch a long chain between two bulldozers and rip out the vegetation along their path. Then the roots and top layer of soil are swept together and set on fire. Trucks cart off the native wood to be burned as fuel at the Bunge plant. With help from state officials, the company obtained a 15-year tax holiday for the factory and permission to burn all the savannah hardwood within a 17-mile radius of the plant, eventually extending its wood purchasing to a 100-kilometer, or 62-mile, radius. Once all the native wood is gone, Bunge says it will switch to eucalyptus plantation wood that it is having grown just for this purpose. “It’s a fairly common practice in Brazil that people use biomass of a variety of types to fuel the plants, and that’s what we’re doing,” says Stuart Lindsay, director of global communications for Bunge.

Barros, president of the nonprofit Fundação Águas do Piauí (the Waters of Piauí Foundation, known as Funaguas) was outraged by this plan. So Funaguas teamed with the attorneys general offices of both the state and federal governments and sued Bunge, charging it had neglected to adequately study the environmental impact of its operations, as required by Brazilian law. A federal judge ruled in the group’s favor and ordered the company to find a more environmentally friendly alternative to the firewood. But when Bunge executives threatened to close the factory and leave the state, a judicially approved deal was cut that allowed the company to keep burning the firewood.

Funaguas filed a formal objection to the ruling in 2004. The group has also publicly denounced Bunge, alleging its involvement in an array of environmental and human rights offenses.

Funaguas’ fight with the multinational hasn’t made Barros popular among plantation owners and their farmhands. He has received death threats and has been burned in effigy. And he’s fighting civil lawsuits for the equivalent of $1 million that Bunge filed for alleged “moral damage” to its reputation. Lindsay says the company filed the suit “because of statements that were made implying that we were engaged in unlawful activity. We deny those claims and took legal action against Mr. Barros to see that those types of statements were not made anymore.”

Facing intimidation tactics, death threats and even lawsuits is nothing out of the ordinary for activists in developing countries who take on powerful economic interests.

Perhaps the most remarkable part of Barros’ fight with Bunge is that he’s found himself in conflict with one of the largest environmental groups in the world, Conservation International (CI). CI, a suburban Washington, D.C.-based nonprofit with operations in 40 countries, counts Bunge among its corporate sponsors.

CI officials in Washington say they are unaware of any organizational efforts to support Bunge in its dispute with Barros, but Barros says CI officials in Brazil have pressured him to end Funaguas’ campaign against the company. CI staff were also at Bunge’s side in a May 2005 meeting, where the company offered to drop its $1 million lawsuits if Funaguas would withdraw its objections to the Piauí operation. According to an official account published by CEBRAC, a Brazilian organization for soy growers that mediated the meeting, CI officials also made a presentation highlighting Bunge’s commitment to CI’s conservation work in the region.

For Barros, Bunge’s partnership with CI only serves to obscure human and environmental costs of Bunge’s expansion. “In Piauí, CI is good for nothing. It just gives a seal of approval to Bunge’s brutality,” says Barros, who resisted the pressure and finally won an important victory earlier this year. In March 2008, a Brazilian appellate tribunal ruled in favor of Funaguas allegations that Bunge’s use of firewood violates the country’s environmental law.

The ruling hasn’t stopped Bunge from burning up the local savannah, however. The company continues to run the plant on firewood, maintaining that it is the most environmentally friendly option available. It vows it will ultimately win the case on appeal.

Habitats Imperiled

The fight to save El Cerrado is just one of many underway to stop deforestation and preserve natural ecosystems around the globe. Besides species extinction, the clearing of forests accounts for about one fifth of global greenhouse gases. In places like Brazil and Indonesia, with some of the last great tracts of wilderness, destruction of rainforests, savannahs and peat swamps is happening at a stunning rate. One United Nations report predicts, for instance, that the vast primary forests that once covered the Indonesian side of the island of Borneo could be completely gone within 15 years, taking with them the last remaining orangutans that have called the island home for millennia.
    Grassroots activists in South America’s heartland of Brazil, Argentina and Paraguay, in Asian Pacific countries such as Indonesia, Malaysia and Papua New Guinea, and elsewhere in the developing world, have formed groups to fight against plantation expansion. For them, it’s as much a fight against assaults they perceive on their communities and food security, as on the environment.

 Asian Pacific wildernesses are axed to make way for palm oil plantations that supply a raw material so cheap, versatile and ubiquitous it can be found in an array of products — from Dove soap to Pringles potato chips, and even in biofuels. In South America, natural ecosystems are falling to expand the agricultural frontier for palm oil, soybeans and sugarcane, but soy is the dominant force transforming economies and, activists say, sweeping away entire rural communities and their traditional pastoral and indigenous ways of life.

Many herald plantation agriculture as bringing modernization and prosperity. Brazilian agricultural exports, for instance, helped generate a 5.4 percent growth rate last year, and The New York Times proclaimed in July that the country “has huge potential to expand a booming agricultural sector into virgin fields and holds a tremendous pool of untapped natural resources.”

While the country might be riding what the Times called “its biggest economic expansion in three decades,” critics say conventional economic measures do not take into account the social or environmental costs of the plantation economy. Among the litany of complaints are the use of pesticides and other chemicals that harm human health and pollute watersheds; and long-term changes in climate such as the drying up of rivers and increasingly extreme weather patterns. Many communities also oppose the use of genetically modified seeds that factory farms rely on to assure high crop yields and maximum profits. Farmers and indigenous groups also maintain that the soy economy only enriches large landowners and multinational companies, while forcing small farmers off their land and into the ranks of the unemployed.

NGO-Corporate Connections

In fights like the battle to save El Cerrado, it would seem logical that well-funded international conservation groups would join forces with frontline organizations like Funaguas.

Frequently, however, that does not happen. While groups such as Conservation International, The Nature Conservancy and World Wildlife Fund share Funaguas’ mission to protect the environment, they collaborate with — and receive donations from — the very corporations that grassroots groups are confronting, including the world’s biggest agribusiness companies.

International commodities traders Bunge, Archer Daniels Midland and Cargill are the dominant forces in many commodities markets, controlling both ends of the supply chain. In some Asian countries, they own large palm oil farms. In Latin America, they finance plantation production by contracting with growers to provide them with seed, fertilizers and other necessities, and they purchase their crops once harvested. The traders then sell the goods to grocery manufacturers.

These companies have ties to big environmental groups and are engaged in joint projects to mitigate the damage caused by expanding plantation agriculture. CI and Bunge began working together in Piauí in 2003, in an effort to help soy plantation owners comply with Brazilian environmental rules requiring them to set aside portions of the farms as nature preserves.

“The project is focused on helping farmers with legal compliance which requires setting aside protected areas of natural habitat,” says John Buchanan, senior director for business practice at CI. “Through the project we have 60,000 hectares [one hectare is about 2.5 acres] of new reserves established, and another 60,000-odd in process of legalization according to the Brazilian law.”

Buchanan says corporate partnerships “are certainly not the only way” to address deforestation challenges, “and that’s why CI takes a wide range of approaches in all the regions where we work. So we work with government, we work with local communities, we work with other NGOs and research institutions, but we also work with businesses.”

“In the Cerrado,” he says, the reason CI works with Bunge “is the vast majority of the land is privately owned — in some cases more than 90 percent is privately owned — as opposed to someplace like the Amazon, which is mostly government owned. In the Cerrado, the vast majority of those landowners do some sort of agriculture activities, either farming or ranching. Therefore, if you want to do conservation in the Cerrado, you have to work with farmers. Farmers and NGOs, as you can imagine, don’t typically have the greatest relationships, the greatest history. There are a lot of historical tensions there. If you want to influence those farmers, one of the best ways to do it is work with groups they trust, and those are the agribusiness companies. And so we think that working with those companies to engage farmers in conservation is an essential part of the overall strategy, but certainly not the only strategy nor the main part of it. It is just one of many elements.”

Cargill and The Nature Conservancy have a project with soy growers supplying the export facility in the Brazilian Amazon outpost of Santarém that closely resembles CI’s partnership with Bunge in El Cerrado.

“The Nature Conservancy works in partnership both with Cargill and Santarém’s rural producer’s union (SIRSAN),” explains The Nature Conservancy in a statement provided to Multinational Monitor. “In the project, named Responsible Soy and supported by the Cargill Foundation, we work with soy farmers with the objective of helping them develop eco-friendly practices that abide by Brazilian environmental legislation, which requires, in the Amazon, that 80 percent of the land must be set aside as protected forest preserves. The rules also mandate that landowners leave forests standing within 10 to 50 meters of streams and rivers as ‘areas of permanent protection.’”

Cargill says the initiative “enables the company to be seen more visibly as a champion of prudent conservation practices around the world” — exactly the kind of green gloss that local groups criticize. Critics on the ground say whatever benefits are gained from collaborating with the grain traders pale beside the devastation wreaked by the plantation economy. CI’s project with Bunge, for instance, has preserved about 120,000 hectares. However, by CI’s own estimates, 2.2 million hectares of El Cerrado’s ecosystem are lost every year.

Similarly, TNC and Cargill advertise the conservation boon of their efforts with Amazon soy farmers to preserve part of their converted rainforest holdings but neglect to mention the uproar and legal challenges that accompanied Cargill’s move into Santarém. International and Brazilian environmental groups have condemned the Santarém export facility for providing new economic incentive to growers pushing the soy frontier deeper into the Amazon region. “The size and location of the plant show that Cargill is counting on increased deforestation in the Amazon to meet its huge export capacity,” says a 2006 Greenpeace study. “The plant offers yet another incentive for farmers to open up new frontiers.”

South American environmental groups also say that, while the big NGOs have at times been critical of plantation agriculture — especially illegal activity associated with plantation expansion — their corporate ties inevitably soften their criticisms.

“It is simply naive to pretend there would not be a subtle tendency to be a bit more modest in criticisms when it concerns companies that you financially depend on because part of your funding comes from a ‘partnership’ with them,” says Simone Lovera, the Global Forest Coalition’s managing coordinator in Paraguay. The Global Forest Coalition is a worldwide network of nongovernmental organizations and indigenous organizations.

Plantation Labor Rights and Wrongs

The companies that dominate international grain commodities markets have also been dogged by persistent allegations that extreme labor abuses, including abetting modern-day slavery and child labor, are perpetrated on the plantations from which they purchase crops. Tens of thousands of people are believed to be working in slave-like conditions in Brazil alone, according to human rights organizations.

Bunge, Archer Daniels Midland and Cargill deny involvement in labor abuses and each has signed Brazil’s National Pact for the Eradication of Slave Labor, pledging to sever ties to companies convicted of labor abuses. But problems persist, according to rights groups.

“They are definitely still involved in very egregious practices — not just environmental destruction but human rights violations,” says Andrea Samulon, a campaigner with Rainforest Action Network (RAN), which has targeted the three companies in a campaign to halt forest destruction.

RAN paid for Judson Barros to travel to New York last spring to speak at Bunge’s annual stockholder meeting, where he charged Bunge-affiliated plantations with relying on forced labor, violently evicting small farmers from their land and perpetrating environmental abuses. In his statement, he called plantation soy irresponsible and unsustainable, and provided some specifics of what it’s like to work on a factory farm. “A farmworker earns 30 cents for logging a cubic meter of timber,” he said. “Three dollars per day is the wage of a farmworker who is required to work daily shifts of 10 hours.”

Earlier this year, the Washington, D.C.-based International Labor Rights Forum mobilized to defend a provision in the U.S. Farm Bill that would have made it more difficult to conceal labor abuses in far-flung supply chains. The provision called for establishing a voluntary certification program that would have given companies in the agricultural sector a mechanism to prove that the worst types of child and forced labor were not used in their products.

With Cargill and Archer Daniels Midland opposing the measure, labor rights advocates managed to obtain a stripped-down version of the provision. Rather than establishing a certification process, it calls for creation of a consultative group to make recommendations to the Secretary of Agriculture, who will eventually develop guidelines designed “to reduce the likelihood that agricultural products or commodities imported into the United States are produced with the use of forced labor and child labor.”

In a letter to the International Labor Rights Forum, Cargill said that it did not oppose a certification program but that the one proposed in the bill was unworkable and at odds with international efforts to “harmonize” labor standards. The company said it would rather wait for a more comprehensive plan to be put forward by industry roundtable talks spearheaded by the World Wildlife Fund (WWF). That roundtable process is extremely controversial.

Promise and Perils of Dialogue

WWF began the roundtable approach in 2004. “The goal of roundtables is to build global consensus around the key impacts of producing specific commodities,” says Jason Clay, senior vice president of market transformation at WWF. The objective of the roundtables is to establish international “sustainability” certification standards and verification methods for several agricultural commodities.

The roundtable model is increasingly drawing fire from critics around the world who say the roundtables exclude people directly affected by the transformation underway in world agriculture. While attracting heavy weights among corporations and international conservation groups, critics say handpicked local organizations are not representative of public views in countries where agribusiness is expanding. Clay says NGOs and academics are well represented at the roundtables, and “any other people who want to be part of the roundtables are invited to join as long as they sign off on the goals and objectives, which are to identify and reduce the key impacts of producing whatever that particular commodity is.”

Critics also charge WWF and other nonprofit members of the roundtables with helping companies put off substantive reforms while negotiations drag on for years. “This does take some time,” replies Clay. “The quickest standards I’ve seen come out of this are about a year and a half … but the longest ones will take five years to actually develop.”

“There is a concern on the part of NGOs that this is taking some time, but I think that the result is actually going to be far better than any other process that I’ve seen out there to date, in terms of transforming or shifting entire industries,” Clay says.

But a bigger concern is not that roundtable standards will come too slowly, but that the approach is fundamentally misguided and legitimizes unsustainable economic models. “As most of these problems are related to the quantity of production rather than the quality alone, it is per definition impossible to address them with standards and certification,” the Global Forest Coalition’s Lovera says. “A certification system can never address problems related to the quantity of production. Moreover, many problems are indirectly triggered by soy expansion.”

“By setting up or supporting the RTRS [Roundtable on Responsible Soy], NGOs like WWF help to greenwash the agribusiness corporations that are doing immense damage to people and the environment,” says Nina Holland, of the corporate watchdog organization Corporate Europe Observatory in Amsterdam.

Holland’s group is part of the Global Forest Coalition, which called on nonprofit groups to withdraw from the soy roundtable last spring, a week before the third meeting of the Roundtable on Responsible Soy (RTRS) in Buenos Aires.

“Regretfully, the large NGOs have not reacted to our call to withdraw from the roundtable,” says Lovera. “We know they have vested interests for two main reasons: products that pretend to be environmentally sustainable are more attractive for their often quite conservative and wealthy membership than the message that they have to reduce the consumption of soy and meat and their private car transport; [and] they often receive governmental and corporate donations that are linked to the requirement of expanding ‘sustainable’ production and certified products.”

Even harsher is Jorge Eduardo Rulli, leader of the Argentine Grupo de Reflexión Rural, or Group of Rural Reflection. “For me, WWF is an accomplice, an open accomplice,” says the Argentinean political figure-turned environmentalist. “They try to save high-biodiversity zones in exchange for giving up what they call the degraded forest. For us, they are like corporate suppliers, and we equate them with the corporations, in the sense that they work for them.”

Meetings of the Roundtable on Sustainable Palm Oil have also drawn public protests from organizations in developing nations, where palm cultivation has expanded rapidly in recent years, and from global allies that share their concerns about the deforestation, species extinction, and attendant environmental and human rights issues.

Last April, Greenpeace activists called the palm oil roundtable a failure as they donned furry orange orangutan suits and protested — making screeching jungle sounds and scaling Unilever office buildings in several European cities. The group singled out Unilever, one of the founding members of the palm oil roundtable, because it is a major palm oil consumer. The company says it purchases 1.6 million metric tons a year, equal to about 4 percent of world production of palm oil. Much of Unilever’s supplies come from Indonesia, where palm plantation expansion has pushed the orangutan to the brink of extinction.

A week after the orangutan protests, Unilever announced the most significant step a multinational company has ever taken on the palm oil front: Amid much fanfare, Unilever Group Chief Executive Patrick Cescau joined Greenpeace’s call for a moratorium on deforestation in Indonesia for palm oil plantations and pledged that all of the company’s supplies will be certified sustainable by 2015.

Some similar success has been achieved in the Amazon, where a soy moratorium went into effect in 2006 and was extended in June 2008 through July 2009. The moratorium prohibits the purchase of soy from newly deforested land in the Amazon, or from farmers using indentured or forced labor. But no such protection has been achieved in El Cerrado, where soy plantations continue expanding at an alarming rate, environmentalists say.

Unilever’s unexpected about-face in the wake of Greenpeace’s aggressive activism raised more doubts about the effectiveness of the congenial approach of slow-moving roundtables and industry councils.

Bunge’s Case Against Barros

Unilever, however, which sells brand-name products such as Dove soap and Knorr soups and sauces, is more vulnerable to public embarrassment than the relatively obscure commodities traders, which have been harder for activists to move.

“We call them the largest companies you’ve never heard of,” says Samulon, who says she was shocked when she first heard that Bunge was suing Judson Barros.

Though a Brazilian appeals court upheld Barros’ complaint in March, Bunge executives say they have no plans to drop the $1 million civil suits claiming moral damages against the Brazilian activist. But Barros doesn’t appear worried. The case has made him something of an environmental hero in Brazil and drawn attention to allegations against the company.

“The case is really about averting responsibility for the real issues at hand,” Samulon says. “I would look again at all the damages that Bunge has created around the world. What are they being held accountable for? They’re helping to cook the climate, converting forests into deserts and plantations. They have been associated time and again with well-documented use of slave labor. There’s a food crisis around the world and they are profiting in the interim. Talk about moral damages.”

Christine MacDonald is a freelance journalist and former media capacity building manager at Conservation International. This article is based on a chapter in her book Green, Inc.: An Environmental Insider Reveals How a Good Cause Has Gone Bad (2008).

The Corporate Conservation Model

The largest environmental groups have increasingly styled themselves on the model of multinational companies. They have posh offices, large expense accounts and high salaries for top executives. The top-paid conservationist, Wildlife Conservation Society president Steven Sanderson, rakes in more than $825,000 a year, according to his group’s 2006 tax return. The groups use business operating practices and jargon; they call their top official the CEO.

Adept at corporate speak and philosophy, they “contract” with local NGOs to work in large conservation “markets” like Botswana or Brazil and call their donors “customers.” Field offices are usually located in the most fashionable business districts in the countries where they work. Just as an employee at the IBM offices in São Paulo makes a much lower salary than her or his counterpart in the United States, the conservation field staff makes much less money than their U.S. colleagues. But the jobs are far better than those at the local organizations that act just like “suppliers” and “outsourcers.”

This business model has generated tensions. “CI talks so much about poverty alleviation and treating people fairly but we are paid less than the poverty line,” remarks one of CI’s contract workers in Papua New Guinea. “They do not care about us.”

Asked about the issue, Joy Gaddy, Conservation International vice president for human resources says, “As a nonprofit, CI strives to pay our employees fair and equitable wages. In Papua New Guinea, as in other countries, the pay scale is based on what other organizations pay for similar positions. We update this periodically, based on cost-of-living changes and market equity. In addition, we have a generous benefits package that includes private healthcare and retirement.”      

- C.M.

Explaining the Roundtable on Responsible Soy

Jan Maarten Dros, coordinator of the sustainable agri-commodities program with the Dutch fair trade organization Solidaridad, is one of the criteria working group members of the Roundtable on Responsible Soy (RTRS).

Multinational Monitor: How do you respond to the claim that the RTRS negotiations have helped the soy industry to greenwash its image?

Jan Maarten Dros: The impacts of soy production and expansion are too urgent to sit and wait until RTRS negotiations have delivered a standard and verification protocol.

Several soy producers, traders, industry associations and soy processers have acted in the meantime — under pressure or with help from NGOs, or by themselves — to change their production practice, investment or sourcing policies. Others have not, but that does not mean they have gained environmental (or social) credibility just by joining the RTRS. RTRS members commit to improve their practice and members that don’t perform will lose — not gain — credibility.

The approach chosen by RTRS to develop a standard for responsible soy (a 25-member, multisectoral working group representing eight countries with three working languages and two rounds of public consultation) gives everybody the opportunity to provide input. In order for a standard on a bulk commodity like soy to work in practice, it is important to have big producers, traders and processors on board. RTRS started off slowly, but will come up with this standard by May 2009.

MM: How did the nonprofit RTRS members respond to the Global Forest Coalition’s call to withdraw from the soy roundtable?

Dros: The nonprofit members were aware of GFC’s position before their call. It is important that civil society groups closely monitor the impact of big agricultural sectors such as the soy sector, and publicly denounce negative impacts anywhere these occur.  However, just raising protest has proven not to be enough to curb the negative impacts of agricultural expansion. Parallel strategies are required.

Therefore, Solidaridad feels that it is also necessary for civil society to work with producers, industry and financial institutions to change their behavior and, in the specific case of RTRS, to establish a global voluntary standard for soy production for areas where governments are unable to ensure legal compliance.

MM: Some critics say the RTRS is misguided because many of the problems with soy monoculture are triggered by the expanding acreage under cultivation, and production standards cannot address this problem.

Dros: RTRS is not a panacea to resolve all problems in and around the soy production chain.

If Americans, Europeans and Asians would reduce meat intake, there would be no need to expand soy acreage. RTRS cannot do more than provide rules on how and where this soy is produced, and get as many as possible producers and buyers of soy to adopt these rules, and be transparent about this. In the currently non-transparent commodity markets, this is quite revolutionary.

As the current rate of soy demand growth is higher than the increase in per hectare productivity, additional acreage for soy will be needed somewhere. A key factor to ensure any expansion does not affect key social and environmental values is proper land use planning, in which the role of governments is obvious.

The RTRS can contribute, however, by only certifying soy that is planted in accordance with land use planning rules, or by refusing certification of soy coming from certain high value areas or ecosystems. In this way, certification can contribute to discouraging the planting of soy in vulnerable habitats.




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