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November 18, 1999
CORPORATE RIGHTS VS. HUMAN NEED
[Note: Rachel's will not be published the week of November 22.]
For many years, the potential market for baby foods and infant formula in the "developed" countries has been shrinking because birth rates have declined. Therefore, to create new demand for their products, baby food corporations have aggressively sought to "open new markets" in the Third World.
A key vehicle for "opening new markets" is advertising intended to convince women that breast-feeding their babies isn't "modern" and bottle feeding is healthier. Of course the premise of such advertising is medically false -- breast-feeding provides superior benefits compared to all synthetic substitutes. (Breast-feeding provides an infant with significant immunity against disease; it creates a strong emotional bond between mother and child; it helps prevent breast cancer in the mother, and more.) Nevertheless, many women are taken in by the false advertising; as a result, according to the United Nations Children's Fund (UNICEF), only 44% of infants in the Third World are breast-fed. (The proportion is even smaller in "developed" countries.)
Chiefly because of this false advertising, according to UNICEF, 1.5 million infants die each year because their mothers unwittingly prepare infant formula with contaminated water, causing fatal diarrhea.
During the 1970s, a world-wide grass-roots campaign focused attention on this problem, boycotting products made by Nestle, a major manufacturer of infant formula.
Partly because of the Nestle boycott, the World Health Organization (WHO) developed and published a Code on Marketing of Breast-Milk Substitutes. The WHO code prohibits words like "humanized breastmilk" and "equivalent to breastmilk." Furthermore, to protect illiterate women from being duped, the WHO code prohibits pictures on labels "that idealize the use of bottle feeding."
In 1983, Guatemala passed a law and regulations incorporating the WHO code. The goal of the Guatemalan government was to encourage new mothers (1) to breast-feed their infants and (2) to fully understand the threats to their babies of using infant formula as a substitute for breast milk. The Guatemalan law prohibited the use of labels that associated infant formula with a healthy, chubby baby; specifically, the law prohibited pictures of idealized babies on packages of baby food intended for children younger than 2 years. Furthermore, the Guatemalan law required labels to carry a statement that breast-feeding is nutritionally superior.
The law also prohibited baby food manufacturers from providing free samples of their products (if a baby starts taking free samples the mother stops lactating, thus converting mother and infant into full-time, paying customers). And finally the law prohibited baby food manufacturers from directly marketing their products to young mothers in the hospital.
The regulations went into effect in 1988 and all domestic and foreign manufacturers of baby foods -- with one notable exception -- came into compliance. Infant deaths attributable to bottle feeding declined, and UNICEF began highlighting Guatemala as a model for what works.
However, the U.S. baby food manufacturer, Gerber (motto: "Babies Are Our Business"), objected to Guatemala's new law. Although the Guatemalan Ministry of Health made numerous attempts to negotiate with Gerber, the company reportedly continued to market its infant formula directly to mothers in the hospital, and continued to give free samples to doctors and day care centers.
Most importantly Gerber refused to remove its trademark picture of a chubby, smiling baby from its product labels, and it refused to add a phrase saying breast milk was superior. In sum, Gerber thumbed its nose at Guatemalan health authorities, who were trying to protect their most vulnerable citizens, infants, against harm.
In November, 1993 -- ten years after Guatemala passed its law, and five years after its regulations went into effect -- Gerber lost its final appeal. A Guatemalan Administrative Tribunal ruled in favor of the Ministry of Health and it looked as though even Gerber would have to comply with the Guatemalan law.
But Gerber opened a new line of attack on Guatemala, arguing that the Guatemalan law was illegal under international statutes because the law was really an "expropriation of Gerber's trademark." This tactic bought Gerber some time while the World Trade Organization was being created. Then in 1995, when the WTO came into being, Gerber dropped its claim about illegal expropriation of its trademark and began threatening to challenge Guatemala before a WTO tribunal.
Within a short time, Guatemala realized it was now up against immense power and the Guatemalan government changed its law to allow Gerber to have its way. Gerber won without ever having to formally request that the U.S. take its case to the WTO. Just a few letters containing the WTO threat were sufficient.
This example illustrates another marvelous feature of the WTO -- the ease with which small, poor countries can be intimidated by transnational corporations into "opening their markets." Under WTO rules, countries must open their markets to foreign corporations and governments cannot establish, as a precondition of doing business, that their domestic laws will be respected. In effect, the WTO has given corporations a powerful new way to challenge the laws of any government (federal, state or municipal).
Many poor countries, including Guatemala, cannot afford to support a full-time delegation to monitor the WTO in Geneva, Switzerland. Nor can they maintain in-house legal expertise on fast-changing WTO rules. They could legally hire outside counsel and experts to defend themselves against a WTO challenge but the cost of such a defense would be several million dollars. Countries that know the ropes in Switzerland and have money to burn can use procedural ploys that make the WTO a very expensive arena in which to litigate. For example, one country can challenge the credentials of another country's delegation, thus prolonging the proceedings indefinitely. As Ralph Nader's organization, Public Citizen, has written, "The WTO practice of allowing rich adversaries to object to the delegations of poor countries undermines poor countries' meaningful participation in the WTO -- and makes threats of WTO challenges enormously powerful tools to forestall the adoption of public health safeguards by poor countries that need them the most."
The pharmaceutical corporations in the U.S. and Europe evidently learned an important lesson from Gerber's victory over Guatemala. The drug corporations have launched a campaign of threats against countries that are trying to make medicines more affordable and accessible to their citizens. South Africa, Thailand and India are examples.
In 1997, under the leadership of Nelson Mandela, South Africa passed a Medicines Law which has not yet taken full effect. When all the provisions of the law are implemented, it will encourage the use of low-cost generic drugs, and it will prohibit drug companies from paying bounties to doctors for prescribing particular drugs. The Medicines Law has two additional provisions that the pharmaceutical corporations find particularly distasteful:
(1) the law requires drug companies to license their products to other companies who must then pay a royalty fee to the drug's developer. Such a law encourages competition in the manufacture of new drugs, thus making modern drugs available at reduced cost.
(2) The second provision is called "parallel importing" and it allows a pharmaceutical product to be imported from several different countries simultaneously, thus taking advantage of the lowest prices available. For example the antibiotic Amoxicillin costs 50 cents per tablet in South Africa, 30 cents in New York and only 4 cents in Zimbabwe.[1,pg.114] South Africa's new law would make Amoxicillin cheaper and thus more widely available to the people of South Africa, many of whom are poor.
Transnational pharmaceutical corporations, with assistance from the Clinton/Gore administration, are now using threats of WTO action to force South Africa to repeal its Medicines Law. When AIDS activists protested the Clinton/Gore administration's role in trying to overturn South Africa's Medicines Law, a "senior Gore advisor" issued a statement defending Mr. Gore: "Obviously the Vice President's got to stick up for the commercial interests of U.S. companies." Mr. Gore is doing more than merely sticking up for U.S. corporations. U.S. State Department memos describe a "full court press," led by Mr. Gore, to force South Africa to "repeal, suspend, or terminate" its Medicines Law. As the U.S. sees it, there is simply no choice -- under WTO rules, the intellectual property rights of corporations have higher priority than human health; this is, in fact, a correct interpretation of WTO rules. However, Mr. Gore seems to recognize that his campaign against medical care for the poor in South Africa might come back to bite him. When pressed by the group ACT-UP in June 1999, Mr. Gore issued a statement denying that he was pressuring South Africa.
The South Africa case is not unique. In 1992, Thailand established a Pharmaceutical Review Board which established compulsory licensing for medicines. A firm with an exclusive patent on a critical medicine was required to license other companies to manufacture it, with royalties paid to the patent-holder. This created competition and drove down the price of critical medicines for the people of Thailand, such as Pfizer's Flucanazole, used to treat meningitis. After compulsory licensing, the cost of treatment with Flucanazole dropped from $14 per day to $1 per day in Thailand. However, the U.S. pressured Thailand relentlessly for 7 years until the Thai Pharmaceutical Review Board was formally abolished. The U.S. argued successfully that such a Board is illegal under WTO rules. Under WTO rules, corporate intellectual property rights have higher priority than human health.
For many years, India had a law making it illegal to patent a substance "intended for use, or capable of being used, as a food or as [a] medicine or drug." A WTO tribunal ruled in 1997 that India's law is illegal. Using the WTO as a battering ram, the U.S. successfully pressured India to abandon its prohibition against patenting food and pharmaceuticals.
Now W.R. Grace has filed for a U.S. patent on a pesticidal byproduct made from the Neem tree, which grows only in India. Neem has been used for centuries in India to make medicines and bio-pesticides. Indeed, the Neem tree is nicknamed "the village pharmacy." W.R. Grace claims that it has a new method of producing the pesticides that indigenous people have produced for hundreds of years. Grace now says it deserves the exclusive right to sell the products that were developed by indigenous communities -- and Grace argues that under WTO rules the government of India has an obligation to enforce Grace's patent rights.
It appears that the WTO is a nearly-perfect vehicle for extending corporate dominance into every corner of the world. But the corporations are not yet satisfied. The purpose of the WTO meeting in Seattle November 29-Dec. 3 is to consolidate and extend the WTO's power even further. To get involved, phone toll-free 1-877-STOPWTO.
MONSANTO AND THE NATURAL STEP REVISITED
[This week, for the first time, we are printing a "letter to the editor." It comes from Paul Hawken, who introduced The Natural Step [TNS] to the U.S. TNS is a set of fundamental principles for sustainability developed by Swedish scientists. During part of Mr. Hawken's tenure with The Natural Step, Kate Fish, who is both an environmentalist and an employee of Monsanto (the St. Louis, Mo., chemical and biotech giant), served as a member of the board of directors of TNS. This fact, plus press reports saying that Monsanto was embracing "sustainability" and was aligning itself with The Natural Step, left the impression in many people's minds, including mine, that Mr. Hawken believed Monsanto had undergone a praiseworthy transformation. This impression was not correct, as this letter makes clear. --Peter Montague]
by Paul Hawken*
I am writing to you concerning your recent statements in Rachel's #667. I refer to the paragraph below:
"The Four System Conditions of The Natural Step [TNS] do not answer all questions about sustainability. For example, degradation of the natural environment through the use of genetic engineering has, so far, "fallen through the cracks" of TNS thinking. This oversight has allowed Monsanto Corporation to engage in a preposterous greenwash by claiming that it has a close affinity to The Natural Step. Worse, Paul Hawken, who brought The Natural Step to the U.S., has publicly praised Monsanto for its visionary approach to business. All of this has tarnished the image of the Natural Step among U.S. environmentalists and made the whole effort suspect. This is unfortunate because TNS has real promise."
I have not praised Monsanto as visionary, and Monsanto has never had a close affinity with TNS. I hope I can improve understanding by providing more information about the Natural Step and its one-time relationship with Monsanto some years ago.
One of the difficult points to get across to people about TNS is that it is not a certifying NGO [non-governmental organization]. It does not pronounce someone green, sustainable, or not green. The Natural Step, as you point out, is a set of principles designed to create both a framework, also known as a shared mental model, of sustainability from a resource flow point of view which is based on thermodynamics. A kind of baseline, if you will, of sustainability. The second is to teach companies, municipalities, and other institutions to use a method called backcasting in order to realign their present day practices with an eventual outcome of sustainability. When that realignment is present, then the theory is that every step they take, albeit sometimes small, is one step towards sustainability. Thus the name, 'the natural step.' If a company says it uses TNS, then the function of an easily understood mental model of sustainability is that everyone can see for themselves if what they are saying is true or not. To our knowledge, no company who does not undertake to apply the principles has called itself or associated itself with the name The Natural Step. If anything, the opposite has happened as in the case of IKEA. I agree with you that if a company so did, it could pose a problem and cause damage to TNS.
The next point is that TNS does not market or sell. It does not try to reform companies. They have to do that themselves. Nor does TNS make recommendations or suggest what measures a company should undertake. TNS educates. Companies have to change themselves. And it does not judge companies. Why? Because if we judge the worst companies to be unworthy, then we are cutting off our nose. Ideally, the worst offenders would become educated and change. In practice, however, it is the opposite. Almost always, the better companies, the ones with an intelligent and receptive management, are the ones who come forward and use TNS principles to change their business practices. In the case of Monsanto, we had one of the "worst" companies come to TNS at a time when they had a brand new CEO, Bob Shapiro, and TNS was new in the U.S. Although there was skepticism at that time, the fact remains that many people in the environmental movement were hopeful that when Bob became chairman and CEO, Monsanto, after ninety years of wreaking havoc, would see the light and begin to change. Many environmentalists went to St. Louis or offsite locations at their invitation to give seminars and lectures on many aspects of sustainability. They include Dana Meadows, Bill McKibben, Amory Lovins, Bill McDonough, John Elkington, and David Korten.
I had the dubious honor, however, of trying to teach two TNS workshops that were held at Monsanto. In one, I was joined by Don Aitken, senior scientist at Union of Concerned Scientists, and the other by Susan Burns of Natural Strategies. They were a disaster. Their [Monsanto's] head scientists didn't even accept the second law of thermodynamics. They ridiculed the slides used showing System Condition #2 concerning levels of human caused toxicity in the environment. They actually defended the level of artificial substances in mother's milk. They absolutely rebelled at System Condition #4 calling it socialism at best, communism possibly. They were totally offended by TNS. It was tense, uncomfortable, confrontational, and deeply disappointing. Monsanto never even came close to associating itself with TNS. As far as I know they have never even referred to it in any literature. How did we feel? Badly.
As to my praising them as a visionary company, that would come as a shock to them. Please ask Bob Shapiro. I have told him, when asked, that Monsanto has no leadership, that it is incompetent, corrupt, and that it had completely prostituted the word sustainability. Several years ago I told them that if they tried to force GMOs [genetically modified organisms] into the marketplace, they would experience the most intense and powerful resistance they have ever seen in their history.
Going back to TNS, GMOs do not fall in the cracks of the system conditions. Randomly firing alien genes into germ plasm is just as much a violation of System Condition #3 as dropping alien organisms from a plane over an ecosystem. And much more could be said about potential allergenicity, new proteins and viruses, antibiotic markers, and the manipulative distortion of genetic flow with respect to transgenics; all of these violate System Conditions #3 and #4. None honor the diversity of living systems at a dthat are required for the evolution of life, none honor the people on earth. On the other side, the application of herbicides required in Roundup Ready Soy and Corn is a violation of all four System Conditions: it requires fossil fuels in application and manufacture; it releases human made compounds into the biosphere; and constant applications of herbicides decarbonize the soil, reducing fertility and diversity, adding to our woes with respect to greenhouse gases and climate change. Finally, in the debate over genetically modified food, we should also bear in mind that even if GMOs were benign and safe, which I do not believe, whose idea was it to have three companies, Monsanto, DuPont, and Novartis, whose origins go back to cancer-causing saccharine, gunpowder, and toxic aniline dyes respectively, strive to control 90 percent of the germ plasm that provides the world with 90 percent of its caloric intake? I don't remember anyone proposing such a stupefying idea. There was no commission, referendum, or plebiscite. It is the very opposite of biological redundancy that is at the heart of ecosystem resilience and sustainability, and it counters the principles of fairness, equity, and justice which are at the heart of System Condition #4.
What is hurting TNS is not the rumors about it and Monsanto, which cannot hurt it because they are not true. What is hurting all of us is that sustainability is still a fratricidal movement that turns on itself at the drop of a hat because we are frustrated with the constant erosion of our living systems and the continued and overwhelming corruption of our governing institutions by corporate oligarchies. In this we sometimes manifest behavior no different from the violence you see in deracinated areas of the world where people turn on each other because they feel powerless. If the sustainability movement is to succeed, which I think it will, it needs to model, as Gandhi said, what it wants the world to become. At the very heart of sustainability is respect, the unconditional respect for other human beings even if we do not agree with them. I should probably say especially if we don't agree with them. That respect must be at the very heart and foundation of sustainability or we will simply end up as another marginal movement that thinks it is right. We are beset already with those movements all around the world in their myriad forms. The promise of sustainability is not just with respect to changing our practices in regards to the earth, but also changing our practices with respect to each other. Having said that, in all and every way, we must speak truth to power and resist the tyranny of destruction, but we need to do it mindfully. I have said repeatedly and will say it again, in 99% of the cases, the only reason companies, even the so-called 'better' ones, turn towards the ideas of sustainability is because of activism, boycotts, protests, litigation, and legislation. Without those constant pressures, there would be no corporate movement towards sustainability, as small and nascent as it is.
I have always felt that true intelligence is generous. If The Natural Step made a mistake in associating itself with Monsanto, you should know that it will knowingly do that again with another company that wants to understand what sustainability is. Brian Natrass, Mary Altomare, and George Basile of The Natural Step recently did a presentation to the top management of Home Depot. A few weeks later, Home Depot announced that they would no longer sell tropical timber or products made from them. Was TNS the cause of this action? I don't think so. We should thank Randy Hayes and the Rainforest Action Network and other organizations for their years of work and activism on this issue. Did TNS play a role? We don't know, but we hope so.
Corporations like Monsanto are similar in some respects to children-at-risk in that they need to be attended to and directed. These institutions are "corporations-at-risk" and as David Korten so brilliantly points out, they are different from people. But like people, they keep getting into trouble, they commit crimes, they are recidivist, they knock the world up, don't take responsibility for their offspring, and show little respect for civic society. If we demonize people who try to change them from the inside, what does that say about us, our movement, or our future? The fact is, and this is the most difficult thing to understand for many in the environmental movement, the people inside those companies are us, just like the kids on the street in gangs are us. When we realize there is no they there, we may be able to better understand how our collective intentions are destroying our collective future. We must resist, but we must also seek to understand.
Undoubtedly, one of the ways that misunderstanding about TNS was created was because Kate Fish was on the board of TNS. Kate was a friend of TNS when she headed up an environmental NGO called Earthworks in St. Louis. She was asked to be on the board of TNS because of her environmental background, and was hired by Monsanto for the same reason. She chose to go inside and try to change the company from there. She was ignored for many years until recently. It is my understanding that people are finally listening to her because she warned them constantly of the dangers of their arrogance, intentions, and products. Although she is not on the TNS board today, activists saw her as a Monsanto 'employee' on the board. We didn't. We saw her as Kate Fish the environmentalist, just as we see Peter Senge, who is also on the TNS board, as a brilliant systems thinker, not as an employee of MIT. People are asked to be on the TNS board SANS their institutional affiliation. Nevertheless, we recognize how problematic this was for both the organization and people judging TNS.
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