Fighting from inside capitalism

Last week I joined Jan Flora to a meeting in Des Moines called the “Midwest Meat Roundtable”. It was organized by the Interfaith Center on Corporate Responsibility (ICCR). ICCR is a nationwide consortium of faith based intentional investors, such as the Adrian Dominican Sisters from Michigan or the United Methodist Church in Illinois.

The meeting brought together a very wide range of civil society organizations, faith based as well as non-faith based. All are concerned with one or another damaging aspect of the agro-industry. Here I was in a room with people whose life task is the “fight against factory farms”. A fight of David against Goliath. “I have been in the fight for 20 years” is how some would introduce themselves. Or, “I fought Tyson for years, we took them to court, but two anonymous jury decisions were stolen from us.”

The government was not present. It seems again, that the public sector is not regarded as an ally in these issues. The effect of the Bush Administration has been devastating, remarked one of the participants. Less and less regulation, and an ever stronger intertwining of corporate and political interests through for example campaign financing. “Industrial Ag has split and damaged our communities”. And families; one of the participants told how the intended establishment of a CFO by one family member had ruined family relationships for years. “People live alongside each other in small communities and go to church together.” To cope, “they tend not to talk about it.”

A CFO is short for Confined Feeding Operation. There are other terms as well like Concentrated Animal Feeding Operation, which essentially mean the same. For example, Indiana government defines a CFO as:

“as any animal feeding operation engaged in the confined feeding of at least 300 cattle, or 600 swine or sheep, or 30,000 fowl, such as chickens, turkeys or other poultry.”

However, usually CFO’s contain far more animals than the minimal used for this definition. I have seen feedlots on our way to Denver which contained thousands of cattle, much like this image.

The problems with Industrial Ag are multiple, social as well as environmental and can fill many blogs. What was unique to this meeting was presence of organizations who work towards change from the inside, from their position as shareholder in for example the large meat processing companies. This means that inside and outside tactics can be combined to reach more effect. The inside – shareholder – tactic can be used if one has some minimum amount of shares held over a certain period. Intentional investors then go to file a resolution, which has to be done usually 6 months before a shareholder meeting.

Resolutions are around 500 words requests asking two things: show us data on e.g. air emissions, and, please adopt our proposed change/principles. The company then, has three options. They can do nothing, so that the resolution will be on the ballot at the shareholders meeting. Second, they can challenge it before a committee (SCC) and plea for their interest by saying that it is ordinary business or that they already implemented some. And thirdly, they can start negotiations to see how they can get the filer of the resolution to withdraw it.

 

It is a sensitive game. The intentional investor wants to end up at the negotiation table for dialogue, preferably even before filing a resolution. Usually, companies don’t like resolutions to be flagged up, and they will try to prevent them from being on the ballot. If they appear on the ballot anyway, and a resolution receives more than 10% of the shareholders votes, this means a victory for the intentional investor because there is a big chance that the issue will get more attention the next year. As you can tell, it is a slow and tedious process. And, it can only be done with those corporate businesses which are not privately held – like one of the biggest; Tyson, where the family will always vote as a block.