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Monsanto Case Study

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Monsanto’s Code of Ethics seemed to elude me for awhile. It wasn’t because they did not have it on their company website, it was because they had multiple pages on their website dedicated to their “Code of Business Conduct”, “Business Conduct” and “Code of Ethics for Chief Executives and Senior Financial Officers”. All said similar things, but it amounted to not much more than fluff, from my perspective, as their actions don't seem to coincide with those ideals. It is exactly what people hope to see when reading any company's code of ethics. Upon researching Monsanto and it's ethical issues, I have come to the conclusion that I do not believe them to be very ethical actors, or at the very least, they know how to operate in gray areas. While they do donate to charities, those donations seem to have motivation beyond altruism. To me, their donating seeds to third world nations is really only an attempt to get in to an untapped market that will eventually rely on them. The reason I believe this is because they have shown through past actions that their main goal is to control the majority of the world's GMO supply whether it is seeds or Prosilac, the hormone used to produce more milk in cows, or any other product they produce. They sued DuPont, a competitor, for trying to create their own seeds that could withstand Roundup (a Monsanto product that has all but completely saturated the marketplace). If DuPont didn't try to engineer seeds that could withstand Roundup, they literally wouldn't be able to compete as Roundup is so widely used. Their seeds would not produce crops and they wouldn't have customers. Also, the fact that their customers cannot reuse seeds from year to year shows profit motivation. Obviously, businesses rely on profit, but I feel like Monsanto has abused the power it has secured over the food supply. If their goals were simply to wipe out world hunger and to help the poor farmer make a better income, they would not sue those same farmers for reusing seed. To me this shows that Monsanto hopes to have a monopoly, or something very close to it, on the world's food supply, whether it be legitimate or manipulated through legislation.

In my research I have found multiple connections between Monsanto and US governmental regulatory agencies including the FDA and the EPA. Also, Clarence Thomas, Supreme Court Justice, was Monsanto's lawyer long before he was appointed. While the Supreme Court and the GAO has investigated these connections, they have always decided that those connections do not constitute conflicts of interest, despite the fact that many of those connections within the government have ruled in favor of Monsanto's wishes at some point or another. In fact, some of those employees worked on research for Monsanto and it's products like Prosilac, but then moved into a government position where they influenced legislation for those same products they researched. Clarence Thomas, in fact, has ruled on multiple Monsanto cases ("rBGH: How Artificial Hormones Damage the Dairy Indutry and Endanger Public Health").

Because these types of issues aren't addressed in their Code of Business Conduct, I have a hard time really believing what they are saying in those documents. Another instance of questionable ethical character is the group AFACT, American Farmers for the Advancement and Conservation of Technology. According to its website, AFACT is a “grassroots” group that was “organized by farmers frustrated by the loss of safe and valuable management tools with no scientific justification and no economic compensation” ("About Us") . Monsanto has also denied any involvement with the group in the past due to the groups pressuring the government to prohibit labels on milk saying that cows were not treated with rBST. However, the truth is, AFACT was started by agricultural marketing company Osborne & Barr Communications, which was formed in 1988 with Monsanto as it’s founding client (Kaye). Previous to co-founding O&B, Steve Barr worked for Monsanto as a marketing executive in its agricultural division and Joe Osborn oversaw Monsanto's agricultural advertising (Desloge).

The AFACT issue is one big reason why I doubt this company's belief in ethical business practices. Monsanto has denied any connection with AFACT, but it was founded by an agricultural marketing company that was founded originally by Monsanto with its two co founders being previous Monsanto employees. If Monsanto truly had no connections with AFACT, why does the AFACT website not mention it's original founders? Why does Monsanto continue to deny connections, when, with a little research, it is easy to find? In my opinion, they deny it because they have something to hide. They do not want the public knowing they funded a group that has so much power, it literally pressured the US government into not allowing companies to label their products as rBST free, without the inclusion of the FDA statement (("rBGH: How Artificial Hormones Damage the Dairy Industry and Endanger Public Health"). If they honestly believe in their products, why go so far to squash the competition? And if it is true that they aren't trying to squash the competition to gain a monopoly on the food supply, then why aren't these issues out in the open to be dealt with and squashed themselves? Transparency is a word that is seen a few times on their website and in the document “Monsanto Code of Business Conduct”, however, there are many issues that they are not addressing with transparency. To me, it seems that if, with a company this large, if they truly had no ulterior motives and they actually only cared about wiping out world hunger and helping farmers to maintain and increase profits, they would confront the many, many accusations head on, especially in the name of transparency. I think that the best way for Monsanto to squash the competitors and those who fear the implications of using GMOs, is to confront those issues head on. Instead, it seems, that they ignore the concerns of the part of the world's population that still have fears. I cannot blame those individuals as Monsanto has not only, not tried to address those fears (except by calling them 'myths' on their website), but they have sought to silence the opposition through legislative strikes. If they would simply approach those opponent's fears with reason and science, they might be able to bring some over to their side of the fence. However, with the way they seem to be handling opponents lately, I do not see many people trusting the company, myself included. Monsanto's actions towards the opposition do not scream “corporate responsibility”, instead, they react to the opposition's fears about health and environmental long term effects with responses like “There is no evidence to say that there will be long term, far reaching effects.” To me, this is not the best way to maintain a competitive advantage of something so widespread as food supply. They should be wanting to change the opposition's minds. However, due to their connections in the government, maybe they don't have to change anyone's minds. At least that would explain why they have basically ignored people's concerns about their products. Monsanto does include a section on their site where they “address” many of the concerns people state when talking about GMO products, however, they have literally labeled all of these instances as “myths” on their website and continue to skirt the issue of long term effects.

Lastly, in their 30 page document outlining their Business Code of Conduct, at the very end they include a “Waiver” section that states, “While waivers of our Code are never expected, they may be granted in certain limited instances. Any waiver of or amendment to our Code must be approved by the Monsanto Board of Directors. This includes any waiver requested by directors and executive officers including our Chief Executive Officer” ("Monsanto Code of Business Conduct"). This statement alone, occurring at the very end of a document expressing their Code of Conduct, is disconcerting, though I am sure other companies probably utilize similar waivers, though I wonder what sections of their Code of Conduct have been waived and what constituted those instances. Because actions speak louder than words, Monsanto should really seek to show that they are complying with their own Codes of Conduct. In order to gain the respect of those that are currently against the agricultural giant, they should also seek to decrease their involvement in activities that can be construed as working against competition, like lobbying the government for legislation and supporting certain political parties and candidates.

1. Does Monsanto maintain an ethical culture that can effectively respond to various stakeholders? I would have to say that Monsanto has proven itself in terms of responding to accusations, as well as dealing with issues and backlash. However, I do not believe that “ethical culture” plays a very big role in that. I believe their response to issues is done more out of wanting to keep their brand name untarnished so as to keep their majority control of the business that they are in. They have responded well to stakeholder concerns, but not to the public. When the public has expressed concerns regarding their products, Monsanto has, more or less, brushed them aside, basically responding with, “Well, you don’t have evidence that it does [produce the negative effects]”. I feel as though Agent Orange is a prime example of them seeking to quickly make profits, yet not adequately investigating their products before releasing them to the public. Also, in Monsanto vs. Geertson Seed Farms, it was found that the USDA violated environmental laws because they did not thoroughly analyze Monsanto's genetically modified alfalfa’s impacts before deciding whether or not to approve it for sale. Therefore, this case proved that the FDA's research is not infallible ("MONSANTO CO. et al. v . GEERTSON SEED FARMS et al." ).

Monsanto does contribute to charitable causes, however, I see a lot these as more of a gateway into untapped markets, especially in third world areas that are poverty stricken. They have stated that they see GE seeds as a possible answer to world hunger, so when these poverty stricken nations get on their feet, they will be customers as they will remember those who “saved them”. They have donated seed to places like Haiti, in response to the earth quake that destroyed the country. I wonder if these seeds will later be illegal to use in Haiti once Monsanto gains control of the market there.

I think if Monsanto had a strong ethical culture that a lot of the public’s concerns would have been addressed and studied, rather than Monsanto lobbying to change legislation in their favor. If their ethical culture were strong, I don’t believe that Monsanto would sue their customers for using seed again. If Monsanto is continually researching and creating new and better seeds, the demand would increase naturally, they wouldn’t have to force their customers to purchase new seed or be sued. If they truly cared about their customers being able to harvest more bushels per acre, there would be some sort of other system in place beyond resorting to third party investigations and law suits.

Monsanto claims to want to help the farmer in that they have increased their yields and thus their incomes. However, if helping the world out of starvation o helping poor farmers were TRULY at the forefront of their corporate goals, they wouldn’t 1) force farmers to buy new seeds every year, or 2) sue them when, even if it is a result of ignorance, one seed from a previous year shows up on their crop. To me, all this shows is that it is about being in control of a market that is necessary everywhere in the world. They will always have demand, but having demand isn’t enough. Monsanto wants control over the market completely, which is shown through their lawsuit against DuPont for trying to engineer seeds capable of resisting Roundup (a Monsanto product that is very widely used). This shows their need to completely control the market and not allow anyone else to compete. How can anyone compete if their seeds aren’t “Roundup Ready” when Roundup has essentially saturated the market?

They also show their true colors in fighting those companies that specifically label their milk as “not containing any artificial growth hormone”. One such example is their lawsuit against Oakhurst Dairy. Also, they vehemently fought against companies who label their dairy products as free of rBST. The grassroots organization AFACT, American Farmers for the Advancement and Conservation of Technology, pressured the government to pass laws forbidding the use of such labels. While Monsanto denies any close ties with AFACT, Lori Hoag, spokeswoman for the dairy unit of Monsanto, admitted the company did provide funds, but it goes much deeper than that. AFACT was organized, funded and launched by agricultural marketing company Osborne & Barr Communications, which was formed in 1988 with Monsanto as it’s founding client (Kaye). Previous to co-founding O&B, Steve Barr worked for Monsanto as a marketing executive in its agricultural division and Joe Osborn oversaw Monsanto's agricultural advertising (Desloge). In light of this information, I have a hard time believing Monsanto does not have ties within government regulatory agencies. In fact, there are many examples of connections between Monsanto and the FDA. One of the most glaring examples of ties to the government is Supreme Court Justice Clarence Thomas who was a Monsanto Attorney between 1976 and 1980, but has sense ruled on multiple Monsanto cases. Also, Michael Taylor is another example. He started his career working at a law firm whose client was Monsanto, but moved back and forth between Monsanto, the FDA and the USDA and has been influential in the development of Monsanto’s public policy ("rBGH: How Artificial Hormones Damage the Dairy Industry and Endanger Public Health").

One instance that reaffirms my suspicions regarding Monsanto’s ties with the government is that when Monsanto petitioned the FDA to approve their Prolisac brand that increased lactation in cows, there were a few other companies that were also petitioning the FDA for approval of the same hormone. However, the FDA only approved Monsanto’s brand of the hormone ("rBGH: How Artificial Hormones Damage the Dairy Indutry and Endanger Public Health").

To further show Monsanto’s questionable ethical nature, in Monsanto v. Percy Schmeiser, Monsanto sought hundreds of thousands of dollars in damages because one of their GM crops popped up in his crop made up of non-GMOs. "Whether Mr. Schmeiser knew of the matter or not matters not at all", said Roger Hughes, a Monsanto attorney at the time. What this case proved was that it did not matter that Schmeiser was unaware of the cross pollination, it only matter that the cross pollination happened at all. In the end he did not have to pay anything, but Monsanto was happy because it proved that they had a patent on a particular gene within a plant, even when that gene appears due to accidental cross pollination. The fact that such a big company would go after a small time farmer for hundreds of thousands of dollars for something he wasn’t even aware of shows the foundation of their ethical culture to me. They don't seem to be concerned with attracting customers (Tansey and Rajotte).

2. Compare the benefits of growing GMO seeds for crops with the potential negative consequences of using them.

I do believe that the increase in yield of crops is a good thing, but the possible long term outcomes are not yet evident to say one way or the other. Monsanto is correct in their belief that GE seeds have helped to increase the profits of farmers and can also solve world hunger issues, but without the evidence of their long term effects, can one really say it is a good thing? I would like to believe that Monsanto’s GE seeds would solve world hunger, but I believe they are more interested in flooding an untapped market than they are focused on wiping out world hunger. I feel as though their goals are strictly monetary and power-related, despite the amount of funds and seeds they donate to charitable causes. The amount of their donations is not even a drop in the bucket compared to their profits. The reason I question their motives is because of the fact that, while they say they have improved farmer’s lives, they still force them to pay more for seeds they must repurchase at the beginning of every year and they investigate and sue their very customers for small infractions that would, in any other context seem ridiculous. I just do not see how it is possible to police every seed 100% so as to not accidentally plant last year’s crop. It seems impossible to me, especially considering the amount of work and area farmers must navigate in order to turn a profit. It seems to me, that if their goals were altruistic, there would be no need to police their customers the way they do. According to their website, “A very small percentage of farmers do not honor this agreement. Monsanto does become aware, through our own actions or through third-parties, of individuals who are suspected of violating our patents and agreements” ("Why Does Monsanto Sue Farmers Who Save Seeds?"). This statement to me seems ridiculous when you consider the fact that they are referring to their repeat customers. Even more so when you consider the argument that Monsanto’s GE seed can contaminate other conventional seeds and they can cross breed.

3. How should Monsanto manage the potential harm to plant and animal life from using products such as Roundup? If it were any other company, I would suggest research and to start working on potential issues before consumers can even locate those issues. If you could find your own problems yourself and deal with them, it would be a sort of preemptive strike against the public’s complaints. However, Monsanto has shown its tendency to cover up reports of issues or to glide over problems without deeply investigating them. So I would say, the best thing they could do is hire people to find the issues and deal with them before anyone else can. However, when dealing with something like genetically modified seeds, the actual implications might not be apparent for years to come. My personal belief is that they should be 100% sure of the effects, both negative and positive, before ever introducing a product to the market. I feel this way about the pharmaceutical industry, as well, though that obviously doesn't happen considering all the medications that are subjects of lawsuits right now. In my opinion, that is the most responsible way to due business, especially when you’re seeking the entire world’s population as potential consumers. I believe, that one day they will pinpoint some negative effects of genetically modified food, whether it be the health of human beings and animals, or negative effects on the environment and ecosystems and they will have to answer for it. I cannot believe that, in trying to create products that the whole world will consistently rely on, and without long term testing, that no issues will arise given time. But, it must also be taken into account that while Monsanto maintains the most control over GE products, there are other companies that do compete, however, on a smaller scale. They will also have to deal with backlash when the time arises, but because Monsanto is the poster child for genetically engineered food, they will take the most heat and will be very deserving of it, in my opinion.

References

"About Us." It Is AFACT. AFACT. Web. 20 Oct 2013. .

"Business Conduct." Monsanto. N.p.. Web. 20 Oct 2013.

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