Healing Our World: Weekly Comment

By Jackie Alan Giuliano, Ph.D.

Who Really Pays for Corporate Abuses?

And a merchant said, Speak to us of Buying and Selling,
And he answered and said:
To you the earth yields her fruit,
and you shall not want if you but know how to fill your hands.
It is in exchanging the gifts of the earth that you shall find abundance and be satisfied.
Yet unless the exchange be in love and kindly justice,
it will lead some to greed and others to hunger.
-- Kahlil Gibran from "The Prophet"

Corporations are often found responsible for grievous environmental and social injustices. Lives are lost, ecosystems destroyed, and racism and sexism flourish in many corporate environments. Yet the only punishment our system usually assigns is the payment of a fine. Does this approach do anything to deter the illegal behavior or do the industries simply consider it another cost of doing business?

When individuals commits a crime, they usually go to prison, and the rest of their lives are affected. A corporation, considered a legal entity by the courts of the world thereby protecting its officers, is asked to pay a fine and continue on with business. Rarely are the leaders of that business imprisoned, fired, or penalized in any way. While the individuals who caused the violations are sometimes – not always – fired, there is little assurance that the behavior that caused the abuse won’t happen again.

Emergency spill response crew works to douse fire from the Mega Borg oil tanker spill of 5.1 million gallons of oil 60 nautical miles off Galveston, Texas on June 8, 1990. (Photo courtesy NOAA)

Fines, penalties, and settlements are reported in annual reports to shareholders and presented as just another cost of doing business. The reports always minimize the actions, usually attributing them to over zealous limits on various forms of pollution.

For example, Pacific Gas and Electric Corporation’s (PG&E) year 2000 environmental report says that the company had “a total of 404 releases to the environment and permit exceedances.”

Approximately 30 percent of these releases occurred because the company exceeded air pollution permit emission limits, and 16 percent involved water pollution permit limit violations.

The report minimizes these events by saying, “Other releases were spill events reportable under numerous local, state and federal ‘emergency’ release reporting requirements, which typically have low thresholds and mandate the reporting of most releases to the environment.”

Just another year of good business.

Even the most egregious polluters are rarely shut down. Most say that a hefty fine is the way to punish a business. But is this really true when the money comes from the company bank accounts and the individuals who are responsible for the actions walk away free?

At least fines levied by a government agency or a guilty verdict in a court case get public exposure and are recorded in the company’s history. Out of court settlements are the most frustrating outcomes. They result in a few victims getting some money, but the settlements come with a high price of a different kind, usually the promise of silence by the victims and no admission of guilt by the perpetrator.

One of the worst examples of such a settlement happened in Cancer Alley, an area in Louisiana that is impacted by more accumulated toxic waste than most places in the country. In the late 1980s, the entire town of Geismar, Louisiana - with a population that is poor and African-American - was moved two miles down the road because of toxic fallout from the neighboring chemical plant. Two miles!

Of course it didn't help the victims, but you did not hear about this on the evening news, nor will you. Each member of the community signed an agreement, in exchange for $2,000, saying they would never talk about the situation. This is common practice in out of court settlements between major polluters and people who are just trying to live their lives in small communities.

B.F. Goodrich was the company causing the fallout at that time. They sold the plant soon after the townspeople were moved, and the new owners did not feel they had to abide by the previous agreements with the surrounding community.

The gasoline pipeline explosion near Bellingham, Washington sparked a fireball that killed three young men. (Photo courtesy Olympic Pipeline)

This terrifying occurrence is not an isolated incidence. Over the last 15 years, 35 people have been killed, 246 have been injured, and countless acres polluted from underground pipeline accidents.

The company responsible for the Bellingham pipeline explosion, Olympic Pipeline Company, is currently under federal investigation. So far, the company has been fined $7.9 million by the Washington State Department of Ecology and $3 million by the U.S. Office of Pipeline Safety. Companies usually appeal the fines and then negotiate a reduced amount.

The pipeline companies last month settled a civil suit from the families of the two boys for $75 million. Unfortunately, the families settled the suit without it coming to trial. This netted a considerable amount of money, but the agreement for the settlement includes no admission of guilt by the companies.

The general belief that punishing criminal companies financially deters future crimes needs re-examination. A company worth billions won’t feel much pain from the loss of tens of millions of dollars.

In this case, criminal indictments have been brought against the company owners, but this is rare. Most of the time, CEOs and company presidents continue earning their multi-million dollar salaries even if their companies are convicted of wrongdoing.

Just last year, Equilon, the company that owned Olympic Pipeline at the time of the explosion, agreed to pay $45 million to the families of six men killed in a 1998 explosion at the Equilon Puget Sound Refining Plant. State officials have said this accident was entirely preventable.

The company continues to do business today and has been acquired by Shell Oil.

This week, the Atlantic Richfield Company was ordered to pay $5 million in damages to two Sikh brothers who were discriminated against by employees of ARCO. These two men deserved justice, and they are now very rich, but was justice served? ARCO’s daily profit is about $8 million, so this lawsuit cost them about five hours of earnings. Discrimination comes from deep within an organization and its people, not from its bank accounts.

EPA technician samples a stream for contaminants (Photo courtesy EPA)

Our culture seems to place little value on life itself, whether it be human or animal. We obscenely torture animals in the name of profitable food production and it is considered a cost of doing business that 6,000 people each year die from tainted meat products.

Human life has so little value that it is acceptable that 120,000 children die worldwide each year just from diarrhea from bad drinking water. And the U.S. Federal Aviation Administration will not force an airline to implement a safety feature unless the cost of doing so is less than the cost of paying a wrongful death lawsuit to survivors of the passenger that could be killed. Average lawsuit = $3.4 million = 1 human life.

Forget the fines and out of court settlements. Criminal companies need to be shut down, their profits distributed among the victims and the agencies responsible for cleaning up their mess. Otherwise, who really pays?

RESOURCES

1. The only way companies will be held accountable is if we take action. Polish your activist skills with the Activist Handbook at: http://protest.net/activists_handbook/

2. Learn about scores of opportunities to make your voice heard at: http://www.workingforchange.com/activism/index.cfm

3. Learn more about the Cancer Alley victims – past and present – at the Witness for the Future website at: http://www.witnesstothefuture.com/main.html.
Get the videotape of this powerful story at: http://www.videoproject.net/WITNESS_TO_THE_FUTURE.html
Show it to your family and friends or give it to a teacher.

4. Use your dollar as a potent tool to let a company know how you feel. Each time you spend money for a product, you are telling the company that you support their actions and their policies. Check out Coop America's Boycott Action News at: http://www.coopamerica.org/boycotts/index.html

5. Keep an eye on the conservative efforts to undo the progress that has been made from the Conservative Caucus website at: http://www.conservativeusa.org/

6. Keep track of corporate abuses through Corporate Watch at: http://www.corpwatch.org/

7. Filter your media intake through Fairness and Accuracy in Reporting at: http://www.fair.org/

8. Change your food choices with the help of EarthSave at: http://www.earthsave.org/

9. Find out who your Congressional representatives are and e-mail them. Demand that corporations and their officers be held accountable for their abuses. If you know your Zip code, you can find them at: http://www.visi.com/juan/congress/ziptoit.html

{Jackie Alan Giuliano, Ph.D. is a writer and teacher in Seattle and the author of "Healing Our World", A Journey from the Darkness Into the Light," available at: http://www.xlibris.com/HealingOurWorld.htmlor your local bookstore. Please send your thoughts, comments, and visions to him at: jackie@healingourworld.com and visit his website at: http://www.healingourworld.com}