World Sees U.S. Unfair Business Practices

When 770 business leaders in 143 emerging global market economies were asked to rank companies from 19 exporting countries on whether they were likely to bribe to win or retain business, U.S. firms fared poorly, but when they were asked "what governments do you principally associate with unfair business practices -- in addition to, or instead of bribery," the U.S. by a clear majority (61 percent) led the rest of the world.

The results of the International Bribe Payers Survey were recently announced by Transparency International (TI), based on in-depth interviews by the Gallup International Association.

On a scale of ten, with zero indicating very high levels of bribery and ten indicating negligible bribery, the U.S., despite operating under the tough constraints of the Foreign Corrupt Practices Act (FCPA), however weakly enforced through criminal prosecutions, registered a 6.2, tied with Germany. Chinese companies ranked the lowest with 3.1 while Swedish corporations ranked "cleanest" with 8.3.

When it came to whom they saw as corporations most likely to use their government to secure unfair business advantages for themselves, however, the respondents put U.S. diplomatic and/or political pressures, followed by commercial pressure (dumping, pricing issues), financial pressure (taxes, tariffs, custom barriers), aid with strings attached, and favors or gifts at the top of the list.

In addition, many of the respondents, particularly in Europe, believe that their bribery of foreign officials is justifiable if only to overcome the use of this "unfair" diplomatic and/or political pressure exercised by the U.S. government acting on behalf of the U.S.-based corporations, such as the U.S.' promotion of Carl O. Lindner's "banana war" with western European nations.

In a devastating January 24 New Straits Times opinion piece, the Malaysian publication notes that "it comes as no surprise that Transparency International ranks the United States Government, by a wide margin, as a country most likely to use pressures to gain unfair business advantage for its companies. What we find perplexing is why has it taken so long for international organizations like TI, supposedly devoted to curb corruption, to recognize the imperialistic ways of Uncle Sam.

"Perhaps TI, like most Western organizations, has been deeply suffused with the viewpoints of the U.S. and hence, blinded to its bullying ways. But those in the developing countries have long known that the U.S., through its status as the world's sole superpower, dollar, media and armies of scientists, financial/business executives and entrepreneurs, enjoys imperial status without the headache of keeping an empire. It has browbeaten and arm-twisted governments, organized coups, funded the opposition in countries such as Iraq and fought wars by proxy -- all in the name of keeping democracy alive or so it would like the world to believe.

"But," the publication continues, "the truth is that the U.S. Government has rendered itself as the primary vehicle for the maintenance of its economic power and the wealth of its rich, such as Bill Gates, Warren Buffet and Paul Allen whose combined wealth of US $156 billion amounts to more than the Gross National Product of the poorest 43 nations in the world."

The opinion piece points out that in Peter Gowan's The Global Gamble (London; Verso, 1999), he shows how the Dollar-Wall Street regime, which emerged in the '70s, is used to maintain the power of U.S. wealth as well as to engineer and manipulate the world economy to the advantage of mainly U.S.-based transnational corporations.

"Under the neo-liberal economic doctrine and global institutional frameworks such as the World Trade Organization and International Monetary Fund, the U.S. has ensured that these will entrench its political and economic hegemony. Just recall the Uruguay Round negotiations where the U.S. trade representative was advised by the likes of Du Pont, Monsanto, Cargill and Pfizer who then drafted the U.S. interests under the guise of benefiting mankind."

The New Strait Times also notes that "organizations like TI should look at the exploitation of the WTO's patent regime by the U.S. and her allies in the Marrakesh Agreement on TRIPs (Trade-Related Aspects of Intellectual Property Rights). The globalization of the patent regime will deprive the developing countries of the option of reverse engineering (as was done by Japan, Taiwan and Korea in their early industrialized days) and force them to depend permanently for technology on MNCs, which are mostly American, controlling more than 80 percent of the world's patents. The ridiculous patent period of 20 years in the agreement, too, will perpetuate the dependence of poor countries on the MNCs for technology. These provisions are far from transparent.

"Nor did the organizations dedicated to transparency and justice," the opinion piece concludes, "decry the passing of Article 1303 of the U.S. Trade Act which effectively ensures that in case of conflict between GATT-WTO rules and American law, the latter will prevail. But then, should the world be unduly shocked by the American violation of internationally-agreed rules? The U.S. has long flexed its muscles to do what it does not want other countries to do. And as Malaysia knows too well, the U.S. will raise the human rights bogey as manoeuvres (sic) against nations which refuse to bow to its pressures."

The Fines Keep Coming

Once again Archer Daniels Midland (ADM) has been taken to the government's woodshed and slapped with a fine.

This time ADM, "Supermarkup to the World," has agreed pay $650,000 in penalties for safety and health violations at its rail car repair plant in Decatur, Illinois, in a settlement with the Occupational Safety and Health Administration (OSHA). In December, 1998 OSHA cited the company for violating confined spaces and respiratory protection standards and for inadequate storage of flammable and combustible materials, imposing on it at the time an initial $1.6-million overall penalty.

Charged with 20 "willful" violations, meaning they were committed with "intentional disregard" or "plain indifference" to safety regulations, the corporation assigned workers, according to OSHA, to paint the inside of rail tank cars without providing the lifeline equipment needed to evacuate them in an emergency. OSHA came to investigate the charges after an ADM employee complaint that safety rules were being disregarded.

"Because the paint was flammable and potentially explosive, the danger of an accident was high," said U.S. Secretary of Labor Alexis M. Herman. No one was injured in the incidents she cited.

ADM is no stranger to OSHA, however, as the government agency has cited ADM frequently for violating rules that protect workers in confined spaces. Four ADM employees have died and six have been hospitalized in confined-space incidents at the company's Decatur plant since 1993, OSHA said. In 1996, ADM agreed to a settlement with OSHA, paying $690,500 and promising to correct workplace hazards.

In respect to the recent OSHA penalty the government agency said that ADM has also made concessions to form a vice president of safety and health post to oversee company working conditions. Although ADM, headquartered in Decatur, employs about 45 workers at the plant, it has yet to correct all the working conditions in its rail yards, but OSHA claims the company has remedied the most dangerous cases.

OSHA's standard on confined spaces requires attendants to monitor and protect employees in small places. OSHA said the inspection revealed employees working in the rail cars wore harnesses, but no attached retrieval lines.

In recent years ADM has pled guilty to conspiring with competitors to fix domestic and world prices of lysine and citric acid, an organic acid used in various foods, and paid $100 million in fines, $70 million in fines for fixing lysine prices and $30 million for doing the same in citric acid. The Justice Dept. action also resolved all of the criminal investigations of the company, including the accusation that ADM used cash payments and other illicit means to steal technology from competitors. Including civil suits related to the price-fixing matter, ADM has already paid a total of over $200 million in fines and civil settlements.

In addition, Michael Andreas, 49, former executive vice president of ADM; Terrance Wilson, 60, retired head of ADM's corn-processing unit; and former ADM biochemist Whitacre, 42 were convicted by a Chicago federal jury of conspiring with competitors to fix the price of the feed additive lysine. In addition to currently serving time in prison they were each fined $350,000. Andreas is the son of Dwayne O. Andreas, the long-time "friend" of the politically powerful and former chairman and founder of ADM.

Outsiders Seek to Scoop Up Ben & Jerry's

Reacting to the possibility of seeing one of its most venerable institutions -- Ben & Jerry's Homemade -- eaten up by an unsolicited bid by outside corporations to take over the Vermont ice cream company several grass-roots campaigns have been organized to block such a sale, reflecting the revered status that has grown up around the company.

Wall Street analysts, Ross Sneyd of the Associated Press reports, have said the most likely bidders are three of the company's main competitors -- Dreyer's Grand Ice Cream, Good Humor-Breyers and Ice Cream Partners USA, a partnership of Haagen-Dazs and Nestle.

"People who love our ice cream love he fact that there really is a Ben and there really is a Jerry," Michael Garrett, owner of four Ben & Jerry's franchises in Connecticut and New York, told Sneyd. "They don't want to see their heroes selling out." Although it would be unlikely that Garrett would lose his franchises he expressed concerned about the losing of present company's identity and warned any corporate suitors: "If by some miracle you are able to take us over, we're not changing. You have to change."

Uniting those who are fighting any outside takeover of Ben & Jerry's is the hope that the company's present board of directors will consider more than just the financial impact on its shareholders when it evaluates any such takeover bid, but also consider how a sale would affect its corporate culture, its customers and the communities where it operates.

"Ben & Jerry's was a ground breaker in raising consciousness that capital can, in fact, be caring," said Judy Wicks, owner of the renowned White Dog Cafe in Philadelphia, Pennsylvania and a long-time proponent of socially responsible business practices.

Founded in 1978 by New York friends Ben Cohen and Jerry Greenfield the company donates 7.5 percent of its pretax profits to charity, and it maintains a so-called double bottom line dedicated to earning a profit and promoting social good which also includes buying its milk from small family farms and its nuts from sustainable farms in South American rain forests. Ben & Jerry's also took the lead and is among a handful of dairy product manufacturers united in opposing the use rBGH milk in its products.

Wicks is currently helping a group calling itself the Coalition to Save Ben & Jerry's to organize nationwide rallies designed to generate support for Ben & Jerry's remaining independent. In addition, a majority of the 206 Ben & Jerry's franchise stores are encouraging customers to send postcards to the company's board members urging them to reject any takeover bid.

An independence rally was held outside the company's flagship store in Burlington, Vermont in December, and Gov. Howard Dean has practically declared the company a symbol of the state it calls home. "Ben & Jerry's is a signature company for Vermont," he said. "It is like maple syrup.

Bits and Bites

CARLOS SLIM, Mexico's richest man, reportedly has bought $90 million of stock in the Philip Morris Companies, on a day that shares of the world's largest cigarette maker and the U.S.' largest food manufacturer, traded close to a four-year low. Slim, a Philip Morris director since 1997, bought 3.9 million shares for $22.58 to $23.82 each at the end of December through an affiliate, Orient Star Holdings L.L.C., according to a Securities and Exchange filing. As of October 1999 there were 2.4 billion shares of Philip Morris outstanding. The move, according to the Bloomberg News Service, follows similar purchases of depressed shares in companies including Apple Computer Inc., CompUSA Inc. and OfficeMax Inc. that have given the 59-year-old Mr. Slim a reputation as the Warren Buffett of Latin America.

ADM AND CARGILL, INC., in formal complaints filed with the U.S. Trade Representative, have accused China of dumping citric acid used in carbonated drinks onto the U.S. market at below fair-market value, and have asked the government to impose duties of 350 percent or more. ADM ("Supermarkup to the World"), Cargill and Tate & Lyle Citric Acid Inc. have alleged that Chinese exports of citric acid and sodium citrate to the U.S. has tripled since 1996 while prices have declined consequently China's share of the U.S. market more than doubled in 1999, according to the companies.

A.V. Krebs is director of the Corporate Agribusiness Research Project, P.O. Box 2201, Everett, Washington 98203-0201; email; web site

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