Shareholders demand ethics committee for Monsanto
An investment house has filed a shareowner resolution calling for an independent ethics committee to keep tabs on Monsanto after the biotech giant was forced to pay US$1.5million to federal authorities following allegations of corruption in Indonesia.The resolution was filed by Harrington Investments Inc and asks for independent directors to ensure compliance with the company's internal standards, as outlined in the Monsanto Pledge and its Code of Business Conduct which requires employees to show an 'unwavering commitment to integrity'.
Harrington's resolution uses the case study of Monsanto's activities in Indonesia and breaches of the USA's Foreign Corrupt Practices Act.
The company eventually reached a settlement of US$1.5 million with the Department of Justice and Securities and Exchange Commission after it emerged a US$50,000 bribe had been paid to an official from the Indonesian Ministry of the Environment to repeal a decree blocking market entry for genetically modified crops.
The following investigation revealed a further US$700,000 'illegal or questionable' payments had been made to Indonesian officials by the company.
John Harrington, CEO of socially responsible investment firm Harrington Investments said the episode in 2001 showed Monsanto management could not be trusted to follow the pledge or business code.
The pledge outlines the importance of 'honesty, decency, consistency and courage' while the code says: "Earning that reputation means more than observing the letter of the law. It means doing what is right even when we are faced with situations not governed by any specific law or regulation.
"Sometimes the right thing to do is not clear, but at Monsanto our job is to seek and find the right answer in every business situation."
By Sam Bond