Jewish peace group challenges
Caterpillar's Israel business
PC(USA) backs shareholders' resolution
seeking stop to demolitions
by Alexa Smith,
Presbyterian News
Service
The General Assembly action last June to
call for consideration of divestment from PC(USA) investments in
Caterpillar because of their providing heavy equipment that is being used
by Israel to destroy homes in Palestine. The action produced a storm
of criticism from Jewish groups and many conservative Presbyterians.
[Get more background.] Now one of
the leading Jewish peace groups is leading the way to challenge
Caterpillar's support of Israel.
LOUISVILLE --
October 11, 2004 -- A Jewish group
has submitted a shareholders' resolution to Caterpillar Inc., arguing that
the heavy machinery company may be risking its reputation by continuing to
sell to the Israeli army bulldozers that are used to demolish the homes and
orchards of Palestinians in the West Bank and the Gaza Strip.
This is the second time that Jewish Voice
for Peace (JVP) has aligned itself with Christian groups that oppose the
ongoing use of Caterpillar equipment to commit what the international
community has called human rights violations in the occupied territories, or
what the shareholders' resolution describes as "the destruction of homes,
land and other properties."
JVP is hardly
a mainstream Jewish organization, but it is taking the lead among religious
and humanitarian organizations this year in filing the shareholders'
resolution. The Roman Catholic Sisters of Loretto co-signed the resolution.
The two groups hold only a handful of
stock in Caterpillar, but they are hoping that other religious entities will
join them. The co-filers are urging their allies to show up at Caterpillar's
April 14 shareholders meeting in Chicago to vote their proxies in support of
the resolution and help create public pressure.
The Presbyterian Church (U.S.A.) committed
itself to supporting the resolution last week, with roughly $3 million in
stock as leverage.
"This is within the normal operations of
our committee," said Bill Somplatsky-Jarman, the primary researcher for the
PC(USA)'s corporate responsibility arm and staff to the Mission
Responsibility Through Investment Committee (MRTI). "We supported this
resolution last year and there is no reason why we couldn't do so this
year."
The shareholders' resolution requests
Caterpillar to review whether the sale of its equipment to the Israeli army
comports with the corporation's own Code of Worldwide Business Conduct.
The code states that Caterpillar's
commitment to success "takes into account social, economic, political and
environmental priorities." It also promises to respond to public inquiries
promptly and honestly.
MRTI meets in
New York City Nov. 4-6 to set criteria for a highly controversial General
Assembly decision to pressure corporations doing business with Israel to
rethink the ethics of profiting from the 37-year military occupation.
MRTI's meeting
date made it impossible to meet Caterpillar's Nov. 4 filing date, preventing
the church from taking a lead role in the shareholder action.
Caterpillar Inc. is the name most often
mentioned by church leaders as a probable target of the denomination's
controversial "selective, phased divestment" campaign, which was approved by
the 216th General Assembly in Richmond, VA, in early July.
According to denominational officials the
strategy is designed to force companies to be better corporate citizens
through dialogue, shareholders' resolutions, and public pressure.
Divestment is a last resort, utilized only
if the earlier steps fail to produce changes in the corporation's conduct.
Only the General Assembly can authorize divestment of stock, and even then
its decision is not binding on investors.
MRTI's bylaws,
however, permit the committee to act on human rights matters without
permission from a national body, which is why Somplatsky-Jarman is
comfortable assuring JVP and the nuns that the PC(USA) will back the
resolution when it is debated.
He thinks other religious bodies will do
the same, primarily because there has been little resistance to the
resolution within the Interfaith Center on Corporate Responsibility (ICCR)
-- a New York-based interfaith coalition of institutional investors that
includes both Christians and Jews.
Sister Valerie Heinonen of the Mercy
Investment Program represents the corporate interests of a number of orders
of nuns, including the Sisters of Loretto, who have pushed this action from
the get-go. "It's an important human rights issue. . . . That's really why
we're focused on this," she told the Presbyterian News Service (PNS) in a
telephone interview from her New York City office.
Heinonen said
Caterpillar's executive management insisted at this year's shareholders
meeting in April that the company is not in the business of weapons
production.
The religious orders she represents were
equally adamant that by selling equipment to the Israeli Defense Forces (IDF)
-- through a U.S. military aid package -- Caterpillar is providing
the army with weaponry.
The IDF retrofits the bulldozers with
machine guns, grenade launchers, smoke projectors and armored plating.
Heinonen
believes -- since the IDF's reasons for buying the bulldozers are not secret
-- that Caterpillar's stance is morally indefensible. Moreover, she said,
the company has never condemned the army's actions.
The resolution
(read
more)
charges that the army's use of Caterpillar bulldozers has to date destroyed
more than 3,000 homes, hundreds of public buildings and commercial
properties, and huge tracts of agricultural land. It says the bulldozers
have uprooted hundreds of thousands of olive trees as well as orchards of
dates, prunes, lemons and oranges, causing "widespread economic hardship and
environmental degradation" in rural areas of Palestine.
It cites documents filed by the United
Nations High Commissioner on Human Rights charging that the company needs to
take measures to "guarantee that its bulldozers are not used to commit human
rights violations," or else the company is complicit in those violations.
Caterpillar -- which generated $22 billion
in revenue in 2003 -- has repeatedly maintained that it cannot "police" the
use of its bulldozers in "virtually every country of the world." The company
recently announced that it expects 2004 revenues to increase another 12
percent and its profit another 40 percent.
Heinonen
said corporations are unpredictable in responding to resolutions like this
one, and she noted that the current resolution asks only for a study.
"It's very hard to predict how the board
of directors will decide," she said, adding that most boards are prone to
act more rapidly on governance issues than on matters of social concern.
"Some managers have acted with a 30 or 40 percent (positive vote), but
others refrained even when (support) is in the 50th or 60th percentile. It
is just hard to judge."
JVP
spokeswoman Liat Weingart told PNS that while many U.S. Jews are
uncomfortable with Israeli policy in the West Bank and Gaza, none of the
major Jewish organizations criticize home demolitions. The Union for Reform
Judaism has issued statements condemning the ongoing expansion of
settlements but not home demolitions.
"Nobody is pro--home demolitions. But the
Reform movement has not explicitly said it is anti--home demolitions. So the
onus is on them," she said.
"They've not taken responsibility for
that. JVP has. The PC(USA) has. The Reform movement needs to follow suit."
When a similar resolution was filed last
year it got little support from stockholders -- only 4 percent of their
votes. But that was enough to meet the requirements of the U.S. Securities
and Exchange Commission (SEC) to either refile or rework the measure, which
the groups have done.
It needs to garner at least 6 percent of
shareholders' votes this year to remain eligible to refile the resolution in
its current form. The resolution may be filed repeatedly if it addresses the
issue from a new angle.
