A proposal sponsored by Father Michael Crosby of the Capuchin Order asked for Philip Morris not to purchase from farms where there is child labor. It did not pass but it is a reminder of the importance of continuing to push for the eradication of child labor, mostly driven by the low pay of tobacco workers.
Read the full text of the proposal below.
PROPOSAL 2 — ESTABLISHING PROTOCOLS REGARDING NO FURTHER PURCHASES FROM SUPPLIERS WHERE HUMAN RIGHTS AND CHILD LABOR LAWS ARE EGREGIOUSLY VIOLATED
Rev. Michael H. Crosby, OFMCap., Corporate Responsibility Office, Province of Saint Joseph of the Capuchin Order, 1015 North Ninth Street, Milwaukee, WI 53233, claiming beneficial ownership of $2,000 worth of shares, together with three co-proponents, submitted the proposal set forth below. The names, addresses and shareholdings of the co-proponents will be furnished upon request made to the Corporate Secretary.
Whereas, corporations have a responsibility to ensure their total “supply chain” is uncorrupted by practices that deny basic human rights for workers, especially corporations with global sourcing like PMI’s.
Corporations incur a reputational risk when their suppliers deny, undermine or don’t ensure workers’ basic human rights. The right to health is core in various international documents like the Universal Declaration of Human Rights (25), the Covenant on Economic, Social and Cultural Rights (Art. 12) and the ILO Convention (155).
While Philip Morris International (PMI) may not directly hire farm workers, it contracts with suppliers who do. Data shows that many U.S. farm workers are undocumented, in violation of U.S. laws. Furthermore, when our suppliers’ farm workers are not organized, their basic worker rights can be more easily violated. This becomes especially problematic when such farm workers are undocumented.
Internationally, some countries have been listed by the U.S. Department of Labor and others as in serious violation of international conventions related to forced child labor.
On August 24, 2009, Plan International (a development agency based in the UK) revealed that child laborers in Africa’s tobacco fields are slowly being poisoned because of their exposure to high levels of nicotine and tobacco dust. Many child workers, some as young as 5 years old, are being exposed to the equivalent of 36 cigarettes a day as a result of absorbing nicotine through their skin from the tobacco leaves that they handle.
The study showed that Malawi, a nation supply a significant amount of leaf for PMI products, is particularly problematic. Tobacco is Malawi’s major agricultural crop, representing over 50% of its export commodities. At least 78,000 children are working on tobacco farms in Malawi. Malawi has the highest level of child labor in southern Africa.
In 2009, the U.S. Department of Labor reported Malawi children “engaged in forced and bonded labor on tobacco plantations, alongside their families” despite Malawi law prohibiting “children between 14 and 18 years from being employed in work that could harm their health.” This egregious violation of their rights has continued, despite tobacco companies’ stated efforts to stop such exploitation. Only recently, because of international outcry, has the Malawi Government begun to honestly address this situation.
RESOLVED shareholders request the Philip Morris International Board of Directors to commit itself to create protocols ensuring it will not buy any product from suppliers who are in violation of their own countries’ laws related to laborers or who operate in countries with consistent records of human rights violations, especially vis-à-vis egregious forms of forced child labor.
Supporting Statement
This resolution’s sponsors believe PMI cannot dismiss the above problem simply by saying its suppliers report they are complying with codes covering farm workers’ basic rights. Despite attestations that laws are not being broken and that no forced child labor exists, the patterns continue. Please support this proposal to ensure our profits and dividends are not being realized by exploiting “the least” of our brothers and sisters.
The Board recommends a vote AGAINST this proposal.
The Company strictly opposes child labor and forced labor. We are committed to preventing the unlawful employment and exploitation of children and the use of forced labor in our business supply chain, including on tobacco farms and in factories that manufacture goods and materials that we purchase.
The Company’s policies and practices on child labor and forced labor are guided by its Code of Conduct. The Code of Conduct states that the Company is committed to working with external stakeholders to progressively eliminate labor abuses, requiring our affiliates and their employees to be aware of that commitment and “to be observant of and sensitive to areas where there may be child labor or forced labor problems and to work with others to address these issues.”
The Company’s policies and practices as applied to workers on tobacco farms are governed by our Good Agricultural Practices (GAP). The relevant GAP policies expressly prohibit child labor and require
our tobacco leaf suppliers and/or tobacco farmers to comply with local labor laws. Under the GAP program, the Company conducts trainings and farm audits which focus, among other things, on the prevention of child labor, worker safety and, since 2008, prevention of green tobacco sickness.
The Company’s policies against child labor and forced labor also apply to our suppliers of manufactured goods. For example, the Company requires suppliers of consumer goods such as cigarette lighters to adhere to Labor and Workplace Health & Safety Standards which contain provisions prohibiting child labor and forced labor and require compliance with laws and regulations on health and safety, work hours, and wages and benefits.
In 2010, the Company will initiate external third-party monitoring of its GAP policies and procedures on child labor, forced labor and other tobacco worker issues such as the prevention of green tobacco sickness. Reports of the third-party monitoring will be published on the Company’s Web site at www.pmi.com. External monitoring is widely recognized by institutions such as the International Labor Organization (ILO) as an important mechanism for companies to ensure the effectiveness of their labor policies and to continually improve them. This important step reflects the Company’s strong commitment to preventing labor abuses in its tobacco supply chain, and its support of transparent collaboration with governments and NGOs such as ILO.
According to the International Labor Organization’s Worst Forms of Child Labor Convention, “child labor is to a great extent caused by poverty,” and “the long-term solution lies in sustained economic growth leading to social progress, in particular poverty alleviation and universal education.” That is why, in addition to the implementation of internal policies and procedures, the Company has been and is actively working with governments, NGOs and other stakeholders to address poverty, education and other systemic causes of child labor in tobacco growing communities, including in Brazil, Colombia, Indonesia, Tanzania and Malawi.
Our efforts in Malawi in this regard long predate the recent media attention to the problem of child labor in that country. Since 2001, the Company has been a member of the Eliminating Child Labor in Tobacco (ECLT) foundation, a non-profit organization which includes among its members other tobacco companies, leaf suppliers, and labor unions. The ILO serves as an advisor to the ECLT Board. Since its founding in 2000, the ECLT has invested approximately $25 million in programs to eradicate child labor in tobacco producing regions, principally in Africa. The ECLT has been working with the Malawi government and local partners to reduce child labor in tobacco growing communities in Malawi since 2002. ECLT program elements include conducting child labor awareness programs for community leaders, farm managers and district officials; financing poverty alleviation programs which impact child labor; constructing new schools; measures which provide an incentive for parents to send children to schools; programs to support AIDS orphans working in tobacco growing; providing safe drinking water; and improving food security and conservation. The efforts of the ECLT in Malawi were acknowledged in the September 2009 U.S. Department of Labor study on child labor. PMI has also provided over $11 million in funding to Total Land Care Malawi (TLC), an NGO associated with Washington State University, to alleviate poverty and reduce child labor in Malawi. TLC’s programs currently reach nearly 4,000 villages and more than 460,000 people. Project results include supplying clean water, planting nearly 30 million trees, installation of stoves, benefiting more than 24,000 households, and construction of schools.
In summary, the Company is acting on its commitment to eliminate child labor and forced labor in tobacco growing: through existing policies and procedures; through the additional step of instituting third-party external monitoring of our labor policies in the agricultural sector; and through charitable funding to develop sustainable solutions to address the systemic causes of poverty and child labor in cooperation with governments, child labor organizations and other important stakeholders.
In contrast, simply stopping altogether our purchasing activities in a particular country will do nothing to alleviate the serious issue of child labor. In fact, it may exacerbate the underlying root cause of poverty. We believe that rather than turning away, the more appropriate response to the issues lies in the comprehensive set of actions we have taken and continue to take.
For these reasons, the Board believes this proposal is unwarranted.
Therefore, the Board urges stockholders to vote AGAINST this proposal, and proxies received by the Company will be so voted unless stockholders specify a contrary choice in their proxies.
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