20 July 2002

BAYER AND THE UN GLOBAL COMPACT

Coalition against BAYER-dangers:
On the occasion of the UN Earth Summit in Johannesburg we present the following analysis:

BAYER and the UN Global Compact
How a major chemical and pharmaceutical company bluewashes its image

BAYER considers itself a "founding member" of the UN Global Compact, but its dedication to the Compact’s nine principles should be seen in the context of an extremely controversial corporate history. The Coalition Against BAYER-dangers (CBG) has found that BAYER has been using its "membership" in the Compact to deflect criticism by watchdog groups, without addressing the substance of the criticism. BAYER’s use of the Global Compact is a classic case of "bluewash" - using the good image of the United Nations to present a corporate humanitarian image without a commitment to changing real-world behavior.

History of Corporate Crimes

BAYER, based in Leverkusen, Germany is a major producer of chemicals, pharmaceuticals, pesticides, and plastics. The company has 120,000 employees worldwide and annual sales of some $28 billion. The U.S. is its largest market, and the company has facilities in Mexico, Brazil, South Africa, India, Thailand, China, Japan and many European countries. BAYER also has a long history of giving profits precedence over human rights and a sound environment. During the first World War the company invented Chemical Warfare ("mustard gas") and built up a "School for Chemical Warfare". BAYER was part of the conglomerate IG Farben, which worked closely with the Third Reich. IG Farben exploited several hundred thousand slave workers to build up their plant in Auschwitz, took over companies all over Europe and used human guinea pigs for pharmaceutical research. IG Farben's subsidiary Degesch manufactured Zyklon B, the poison gas used in the gas chambers. In the late 30s organophosphates (sarin, tabun) were introduced, after the war marketed by BAYER as pesticides (E605, Folidol, Nemacur, Fenthion). IG Farben's managers were convicted as war criminals at the Nuremberg Trials. After the war IG Farben was broken up into BASF, BAYER and Hoechst (now called Aventis, whose CropScience division has recently been acquired by BAYER), and the three firms still co-operate closely and exert a large influence on German and European politics.

Useless and Hazardous Pharmaceuticals

BAYER is best known for aspirin and for the antibiotic Cipro, but it has also provided many useless and dangerous medicines. In 1898 BAYER introduced Heroine as a cough medicine "without side-effects" and marketed the drug for decades in spite of the well-known dangers of addiction. Ten years ago the company admitted foreknowledge in selling HIV-tainted blood clotting products which infected around 50% of the hemophiliac community. The class action cases in the U.S. were settled for $100,000 per claimant, while in Europe the taxpayers were left with most of the bill.

Beginning in 1997 BAYER paid three of its competitors a total of $200 million to abandon efforts to bring cheaper generic versions of Cipro to the market. Last year BAYER was forced to withdraw one of its leading pharmaceutical products, the anti-cholesterol drug Baycol or Lipobay, which was linked to over 100 deaths.

BAYER was one of the pharmaceutical companies who took the South African government to court for allowing the production of cheap generic versions of HIV drugs. Last year, BAYER Corporation agreed to pay $14 million in restitution to the American government to settle charges stemming from its role in inflated claims for prescription drugs used by Medicaid patients.

Even BAYER’s flagship product, Aspirin, which is marketed as preventing heart attacks and strokes, has its problems: more Americans die from side-effects of acetyl salicylic acid than of AIDS.

Europe's #1 in Biotechnology

In October 2001 BAYER bought GM seed company Aventis CropScience for $6.4 billion. With that purchase BAYER became the leading genetically modified (GM) crop company in Europe, with more than half of the GM crop varieties up for approval for commercial use. If the European moratorium on the commercial growing of GM crops is lifted, BAYER will be set to flood Europe’s fields with GM oilseed rape and maize. In most European countries BAYER will be responsible for the majority of GM field trials over the next year. BAYER is also linked with PPL Therapeutics, the leading company in cloning.  BAYER engaged PPL to breed the sheep "Tracy". BAYER participated in founding EuropaBio, Europe‚s most important lobby group for biotechnology.

Corporate Lobbying

From the beginning of the twentieth century, BAYER formed business associations in order to increase its influence on politics and the media. In the 1920s the company began direct financing of German political parties. Several of BAYER’s managers became ministers in German governments.

Today BAYER is a member of hundreds of lobby groups tackling 'trade barriers' like environmental or health & safety laws. The European Round Table of Industrialists effectively writes big chunks of EU corporate legislation. BAYER also helped set up the Transatlantic Business Dialogue, where European and US multinationals work together to influence policy in the direction of greater liberalisation and deregulation. The World Business Council for Sustainable Development, another corporate coterie of which BAYER is part, helped 'hijack' the UN Earth Summit in Rio in 1992, and continues to promote the idea that issues like climate change are safest left in the hands of multinational corporations. Other lobby groups in which BAYER takes an active role are the International Chamber of Commerce, the Global Crop Protection Federation and the German Verband der Chemischen Industrie and Bundesverband der Deutschen Industrie. BAYER supported President Bush‚s electoral campaign with $120,000. In the last five years BAYER has handed out more than $600,000 to US politicians.

Founding Member of UN Global Compact

Two of IG Farben’s successors - BAYER and BASF - signed onto the Global Compact at its founding meeting in July 2000. BAYER advertises its co-operation with the UN broadly, for example by printing an editorial by Secretary-General Kofi Annan in its "Sustainable Development Report." The company’s website and Annual Report dedicate special section to the Global Compact.

To document its commitment to the principles of the Compact the firm presents four examples:

--Financial support for the Brazilian Abrinq Foundation for the Rights of the Child which combats child labor,
--Donations of two pharmaceutical products against sleeping sickness to the World Health Organisation,
--Launching of an initiative to control the spread of antibiotic resistance,
--Training of farm workers and small farmers in Brazil to handle pesticides appropriately.

In addition BAYER provided medicines after earthquakes in India and El Salvador and donated one million dollars and firefighting equipments to selected relief organizations following September 11.

BAYER does not publish figures on its efforts to combat child labor in Brazil or its contributions to the WHO, though these expenditures are less than $1 million each. At the same time as these fairly modest contributions, the taxes BAYER paid declined from about $1 billion in 2000 to $132 million in 2001. The tax cuts added up to more than 50 times the total philanthropic donations. Even assuming BAYER’s donations all go to wonderful causes, the public might be far better off foregoing BAYER’s contributions in favor of their paying taxes.

Case Study: Initiative "Agrovida"

BAYER is the third biggest manufacturer of herbicides globally, and dominates the insecticides market. Insecticides are responsible for the majority of pesticide poisoning in Third World countries. The World Health Organisation (WHO) annually counts 2 million pesticide poisonings with, according to the WHO, a number of unreported cases which is probably higher than 10 million. About 200,000 people per year die from pesticide poisonings.

BAYER made public promises in 1995 to withdraw its most toxic pesticides, but has yet to do so, and still sells pesticides rated by the WHO as 'extremely' or 'highly' hazardous. BAYER claims that it is the responsibility of pesticide users to take precautions - not so easy for underpaid laborers on a cash crop farm.

To "minimise the risks to humans and the environment" BAYER in Latin America has started an initiative called "Agrovida". Several thousand people in the rural farming region in southern Brazil underwent health and security training. According to BAYER "the information conveyed covered the basic concepts of integrated crop management, which is designed to optimize all of the measures needed towards sustainable farming. The crop protection part of this strategy concentrated on the safety of the user, proper storage of crop protection products, maintenance of equipment, and careful disposal of empty containers". The company admits that "the training campaign was perhaps only a small step in terms of the area it covered, but it was certainly a forward-looking step if one considers what an excellent model it could be for other regions of the world".

In the first place one may discuss if it wouldn’t be more beneficial to conduct courses for Organic Farming. Furthermore training "several thousand people" might be helpful, but the fact remains that millions of peasants in Third World countries who use BAYER‚s highly toxic products have never received any instructions. BAYER regularly breaches the UN Food and Agriculture Organisation code of conduct, which it has signed. According to this code pesticides should only be sold to trained and certified professionals who wear full protective clothing and should otherwise be taken from the market voluntarily.

Even in Agrovida’s home country of Brazil, the pesticide Baysiston, number 1 on the Brazilian market, poisoned hundreds of coffee growers, at least 30 of them fatally. The omnipresent advertising of Baysiston camouflages the risks, with many coffee growers even believing Baysiston to be a fertilizer which increases yields. The State Prosecutor who investigated the case complained about the publicity which presents the product as harmless and completely neglects potential risks. BAYER stated that they are aware of cases of contamination, but that these cases were not due to lack of information but to "inexpert use alone."

After reports in German TV and in several Brazilian papers the company put pressure on local governments and on medical doctors. The firm threatened to sue communities which intended to limit the use of Baysiston (which was done in some municipalities nevertheless). BAYER contacted hospitals so that death certificates would no longer state "pesticide poisoning" or even "Baysiston intoxication" as cause of death. Later on the company donated money to a group of doctors who would cooperate. According to the Agricultural Workers Union Baysiston poisonings continue to be daily routine but hardly ever appear in the records (full story at http://www.CBGnetwork.org).

Case Study: Antibiotics and Resistant Bacteria

BAYER is a major producer of antibiotics, including the fluoroquinolones Cipro for humans and Baytril for animals. The effectiveness of many life-saving antibiotics is, however, waning. Health experts have deemed the rise in antibiotic resistance a public health crisis. BAYER pretends to counter the problem by starting a new initiative: "BAYER has launched a global initiative to preserve the effectiveness of antibiotics. It aims to work with leading health organisations and experts to help tackle the growing threat caused by bacteria rapidly developing resistance to today's antibiotics, a serious problem affecting developing countries as well as industrialized states. Since Article 25 of the Universal Declaration of Human Rights (UDHR) states that everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, the project is perfectly in line with the Global Compact Initiative and its aims. (...) The new initiative Libra intends to help educating doctors, patients and policy makers about the need to reduce the inappropriate use of antibiotics - specifically their misuse, overuse and underuse."

But in reality BAYER’s business activities themselves are contributing to the rise of resistant bacteria: a major reason for resistence is feeding antibiotics unnecessarily to healthy farm animals to promote growth and to compensate for unsanitary conditions. The Union of Concerned Scientists estimates that 70% of all antibiotics in the U.S. are used in healthy pigs, poultry and cattle. Because fluoroquinolones are given to entire flocks indiscriminately in their drinking water, near-ideal conditions for speeding the development of resistance are created. The American Medical Association has publicly demanded a stop to the use of antibiotics in agriculture for healthy animals.

In October 2000, the US Food and Drug Administration (FDA) proposed banning fluoroquinolone antibiotics for treating poultry. FDA scientists asserted that fluoroquinolone use in chickens and turkeys has accelerated the development of fluoroquinolone-resistant Campylobacter. FDA estimates that Campylobacter contaminates up to 80 percent of broiler chickens in some supermarkets. The medical community strongly supported FDA's proposal, as did the public interest community. Abbott Laboratories, maker of one fluoroquinolone product for poultry, complied with FDA's proposal, withdrawing the product from the market.

However, BAYER Corp., the sole remaining manufacturer, has demanded a formal hearing, a process that is likely to take years to complete. Physicians fear that if the ban is delayed, and Campylobacter bacteria continue building resistance at current rates, the problem may become moot. (more information: http://www.BAYERWatch.com).

Greenwashing and the Global Compact

BAYER has a long tradition in greenwashing: the company has actively promoted terms like "crop protection" instead of "pesticides," and has embraced "Sustainable Development" and "Responsible Care." Across the world the company promotes the idea of non-binding voluntary commitments to solve environmental problems.

In the 1980s BAYER countered the emerging environmental movement by intensifying PR activities and by using the corporate slogan "BAYER forscht fuer den Umweltschutz" (BAYER researches for environmental protection). Only when a Dutch court judged it as "misleading" was the slogan was changed to "Expertise with Responsibility."

In the past year journalists or concerned citizens who addressed to the company were routinely referred to BAYER’s commitment in the Global Compact and BAYER’s inclusion in the FTSE4Good Index, set up by the London Stock Exchange and the Financial Times. The FTSE4Good Index lists companies which perform well in the areas of social standards and environmental protection. The firms are chosen according to their own publications; independent sources are not taken into account. The Coalition against BAYER-dangers (CBG), a watchdog group which has been monitoring BAYER for more than 20 years, was not contacted in advance. A request by CBG was answered by FTSE4Good: "These criteria do not cover every conceivable issue and clearly there may be issues surrounding a company that are outside the FTSE4Good criteria. If that is so, then that would not exclude them."

To illustrate the way BAYER spokesmen use the involvement in the Global Compact to counter criticism, consider the events of January 2002. The Multinational Monitor magazine from Washington D.C. put BAYER in their list of "The Ten Worst Corporations of 2001." They included the company for several reasons: BAYER’s behaviour in the anthrax crisis, when the company tried to sell overpriced antibiotics to the American government; the withdrawal of the cholesterol-reducing drug Lipobay/Baycol which had led to the death of at least 100 patients; the suit against the watchdog group, Coalition against BAYER Dangers, for maintaining a BAYERWatch.com website (the site is now used by the Campaign Against the Overuse of Antibiotics); and BAYER’s refusal to pull Baytril from the market (see above).

After reports in several German papers were published BAYER issued a statement: "BAYER rejects the accusations and defamations by the US-based Multinational Monitor in its so-called ‘negative list’ of the ‘10 worst corporations of the year 2001’". Multinational Monitor is the organ of an alliance of activist groups that have the common aim of criticizing companies. It is no coincidence that this news was published by the so-called "Coalition against BAYER-dangers" shortly before BAYER’s planned listing in the US. This presentation fits into the agitation that the Coalition against BAYER-dangers has pushed forward against BAYER and its subsidiaries for years. BAYER is one of the founding members of the UN Global Compact of UN Secretary Kofi Annan, that was started in July 2001.

In joining the Global Compact the company obliges itself to agree with and spread nine principles the UN picked in the fields of human rights, social standards and environmental protection. Last year BAYER was also chosen for the FTSE4Good Global 100 Index. In this list FTSE4Good picks companies judged to have a good record in the fields of human rights, social standards and environmental protection." Note that BAYER does not respond to any allegations but instead attacks their critics.

The Coalition against BAYER-dangers has been sued by BAYER several times. In a spectacular case, which continued for five years, the German Supreme Court ruled in favor of the watchdog group. The Coalition will continue to counter corporate greenwashing and the hijacking of the United Nations by multinational companies.

Philipp Mimkes
Coalition against BAYER-dangers
www.CBGnetwork.org
CBGnetwork@aol.com
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