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7-Business: US shareholder organisations demand a GE moratorium



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TITLE:  Corporate America faces GM onslaught
        Shareholders demand a ban
SOURCE: The Guardian, by Roger Cowe
DATE:   December 20, 1999

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Corporate America faces GM onslaught
Shareholders demand a ban

A concerted shareholder campaign against genetically modified (GM) foods is about to hit corporate America with a flood of resolutions at company meetings demanding a moratorium until proper testing has been done. Shareholder groups have initially targeted 24 companies operating throughout the food chain, including household names such as Coca-Cola, Heinz, the US Safeway chain and McDonald's, as well as Monsanto, the life science group at the centre of the controversy because of its GM soya. European groups are also under pressure, including Diageo, the Pillsbury and Burger King group.

Shareholders have submitted resolutions for these companies' annual meetings in the spring, demanding that they stop marketing or distributing GM products until long-term safety testing has ruled out harm to humans, animals, or the environment. Pending complete withdrawal, they demand labelling of food products so that consumers can avoid GM ingredients if they wish.

The campaign is being co-ordinated by the Interfaith Center on Corporate Responsibility (ICCR), an umbrella body for 275 religious and other groups which claims to control $100bn of shares in US companies. The ICCR has led a number of successful shareholder campaigns, including withdrawal from South Africa, action against tobacco products and pressure for companies to adopt environmental policies.

Ariane van Buren, ICCR's director of energy and environmental programmes, said opposition to GM foods was growing strongly in the US, fed by success in Europe. "The action in Europe has been a very important precedent", she said. "This is going to grow and companies need to think it through." She said an attempt to have the resolutions ruled out of order was a routine blocking tactic, but was unlikely to succeed because shareholders could demonstrate they had a right to know company policies in this area.

The campaign has cited decisions to exclude GM ingredients by Sainsbury and Tesco as well as the UK arms of fast food chains McDonald's, Burger King and Kentucky Fried Chicken. In a letter to chief executives of the targeted companies, the campaigners quote these examples and ask: "How does this company plan to respond to popular challenges to the production, use or sale of genetically modified food?" They raise questions of health and safety, loss of control over seeds by farmers, consumers' right to know what is in their food, and fears about the long term ecological impact of genetic modifications.

In a supporting statement to the resolution demanding a moratorium, the groups raise the financial risk to companies which persevere with GM products. They say: "Our company should take a leadership position in delaying market adoption of genetically engineered crops and foods. Failure to do so could leave our company financially liable."

Ms van Buren said companies usually tried to reach agreement before the annual meeting with shareholders backing such resolutions. But she believes that most US companies still do not understand the power of consumer resistance and will be unlikely to offer big enough concessions to satisfy shareholders. "There's a good chance we are not going to get an offer which is significant enough. They have been caught off guard - even now. They are surprised at the shareholder reaction. I can't believe they are so naive."

The targeted companies include life science groups American Home Products, Dow Chemical and Du Pont, the food ingredients company Archer Daniels Midland, consumer products groups General Mills, PepsiCo, Philip Morris, Quaker Oats, and Sara Lee. European groups in the firing line in addition to Diageo include Hoechst, Novartis, Rhone Poulenc and Schering. 



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