2009-11-03 - Most Environmentally And Socially Controversial Companies In September And October 2009
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Most Environmentally and Socially Controversial Companies in September and October 2009 Zurich, November 3, 2009 / Karen Reiner
According to the reputational risk radar RepRisk, the most environmentally and socially controversial companies in September and October 2009 were: Vedanta, Chevron, Nestle, Shell, Red Industries, Bhushan Power & Steel, ExxonMobil, Beef Products, Greater Omaha Packing Company, Lone Star Beef Processors, and Cargill. Companies on the list have been severely criticized by the world’s media, governmental organizations and NGOs for issues including human rights abuses, severe environmental violations, impacts on local communities, corruption and bribery, and breaches of labor and health and safety standards. Rankings are based on the Reputational Risk Index (RRI), as measured by RepRisk in September and October of this year. The RRI is directly derived from the negative press captured by RepRisk and its calculation is strictly rule-based. RepRisk does not measure a firm's overall reputation. Instead, by capturing criticism, RepRisk computes a firm's exposure to controversy and therefore provides an indicator for reputational risk. RepRisk is used by asset owners and asset managers, commercial and investment bankers, supply chain managers, and corporate responsibility experts.
© ECOFACT AG 2009, all rights reserved RepRisk® is a registered trademark of ECOFACT AG
Page 1 of 10
The Reputational Risk Index (RRI) ranges from zero (lowest) to 100 (highest) and its calculation is based on the reach of news sources, the frequency and timing of news, as well as its content, i.e. severity and novelty of the issues addressed. The RRI is an indicator of a company's exposure to controversial issues and allows an initial assessment of risks that are attached to investments and business relationships. It also allows the exposure of an entity to be compared with that of its peers, and permits risk trends to be tracked over time. The following pages provide a summary of the criticism to which the most controversial companies have been exposed, as well as the environmental and social issues that have been associated with these companies. The company’s ranking from the previous month is shown in brackets. In addition to the regular list, the September-October focus area will be on the utilities sector and its top five most environmentally and socially controversial companies. Please refer to page 10 for more details on methodology.
© ECOFACT AG 2009, all rights reserved RepRisk® is a registered trademark of ECOFACT AG
Page 2 of 10
Vedanta Resources PLC, Rank 1 [12] Vedanta faced strong criticism and protests from locals over its subsidiary, Sterlite Industries' proposed opencast bauxite mine in Orissa, India. The company was criticized by the British government following the release of a report by the UK National Contact Point in relation to this project. The report accused Vedanta of violating OECD Guidelines for Multinational Enterprises by failing to respect the rights of, and properly consult, the 8,000-strong Dongria Kondh tribe, an indigenous group directly affected by the mine. It is alleged the project would destroy their sacred mountain, involve forced relocations, be detrimental to their traditional culture, and pollute rivers and forests. Also in India, the company faced allegations that it used intimidation tactics to suppress opposition to its proposed Vedanta University. One local organization in Bhubaneswar has opposed the project for the past three years and plans to intensify its campaign, claiming that the project will displace hundreds of people. Furthermore, a subsidiary of Sterlite Industries, Bharat Aluminium (Balco), came under fire when a 250 meter high chimney collapsed at its power plant killing 36 employees, injuring 7 more, and leaving over 100 workers missing in the rubble. Local officials attributed the accident to poor construction work by contractors and stated Balco did not have the proper permission to build the chimney. India’s Serious Fraud Investigation Office has announced that it is to investigate Sesa Goa and Sesa Industries, both subsidiaries of Vedanta Resoures, for financial irregularities dating back to 2003.
Top three issues: 1. Impacts on Communities 2. Local Participation Issues
3. Health and Safety Issues
© ECOFACT AG 2009, all rights reserved RepRisk® is a registered trademark of ECOFACT AG
Page 3 of 10
Chevron Corp, Rank 2 [6] Chevron has been under continued media scrutiny over the ongoing 16-year-old case in which indigenous communities accuse Chevron’s Texaco petroleum facilities, acquired in 2001, of harming the environment and their health. In 2008, a court expert said Chevron should pay USD 27 billion in environmental damages and USD 8 billion in restitution. The company was further accused of fabricating bribery allegations about the case judge in order to delay or annul the trial. Chevron has come under fire for alleged complicity in systematic human rights abuses by Myanmar's authoritarian regime with claims that its Yadana Gas Pipeline has generated approximately USD 4.83 billion for the government. In Canada, Chevron's 20 percent stake in the Albian Sands Mine was highlighted when Greenpeace activists staged a blockade that stopped production there. The NGO claims the mine contributes to greenhouse gas emissions and boreal forest destruction. In the US, Chevron along with several other companies, was fined for violating the Clean Water Act. It allegedly built a jet fuel tank at San Francisco International Airport without an adequate secondary containment which could have resulted in a major oil spill in the bay.
Top three issues: 1. Impacts on Ecosystems/ Landscapes 2. Impacts on Communities 3. Human Rights Abuses and Corporate Complicity
© ECOFACT AG 2009, all rights reserved RepRisk® is a registered trademark of ECOFACT AG
Page 4 of 10
Nestle SA, Rank 3 [990] Trade unions in Norway accused Nestle of engaging in a systematic pattern of human rights abuses. These include the company's alleged insistence on excluding the negotiation of wages from collective bargaining, most recently in Indonesia and India. They called this a 'clear violation of ILO Conventions'. It was further reported that in Indonesia, Nestle coerces new employees into joining a company-approved union. In Zimbabwe, a campaign for an international boycott of Nestle was established after reports that its subsidiary, Nestle Zimbabwe, purchased milk from dairy farms belonging to President Mugabe's wife. These farms were allegedly seized from white farmers in a campaign of violence prior to 2004. In the UK, Nestle was among a group of companies ordered to pay up to GBP 300,000 to families of workers who died from asbestos-related diseases. Greenpeace China released a report claiming Nestle was one of 18 multinational companies that had failed to comply with a new Chinese environmental regulation. In China and India, Nestle was targeted for selling food containing GM ingredients, particularly baby food, which it was claimed poses a serious threat to biodiversity and human health. In the US, Nestle cookie dough is believed to have been responsible for the latest E. coli outbreak that sickened 80 people across 31 states, leaving some victims suffering paralysis or in a critical condition.
Top three issues: 1. Freedom of Association and Collective Bargaining 2. Products (Health and Environmental Issues)
3. Impacts on Communities
© ECOFACT AG 2009, all rights reserved RepRisk® is a registered trademark of ECOFACT AG
Page 5 of 10
Royal Dutch Shell PLC, Rank 4 [7] Opponents of plans by Shell Offshore to drill exploratory wells in the Beaufort Sea have expressed concern about the risks of drilling in Arctic conditions including the clean-up of potential spills and the impact on the polar bear population. In California, 343 residents sued the Shell Oil Company for allegedly contaminating their neighborhood with cancer-causing benzene. The lawsuit involved a local Shell tank farm which it was claimed can be linked to 4 deaths. The Sinopec-Kuwait Oil USD 9 billion oil refinery project, in which Shell was named as an investor, will allegedly be moved to a new site on an island near Zhanjiang due to protests by residents and environmentalists concerned about air pollution in Guangzhou and nearby Hong Kong. In Canada, Greenpeace staged a blockade that stopped production at Shell's Albian Sands Mine, claiming it contributes to greenhouse gas emissions and boreal forest destruction. Shell Chemical Yabucoa was penalized twice for violations of the Clean Water Act in the US related to pollutants released, and failure to maintain deep ocean outfall equipment at its petrochemical facility in Puerto Rico.
Top three issues: 1. Impacts on Ecosystems/ Landscapes 2. Local Pollution 3. Impacts on Communities
Red Industries, Rank 5 [New Entry] The UK Environment Agency has allegedly found the presence of cyanide in a sewer used by Red Industries. According to the Agency, the pollution which extended 30 miles, killed thousands of fish in the River Trent. Locals and farmers have been advised to stay away and also to keep livestock well away from the banks of the river. The company has been banned from discharging any more industrial waste into the sewage system and may face criminal prosecution.
Top three issues: 1. Local Pollution 2. Impacts on Ecosystems/ Landscapes
3. Impacts on Communities
© ECOFACT AG 2009, all rights reserved RepRisk® is a registered trademark of ECOFACT AG
Page 6 of 10
Bhushan Power & Steel Ltd, Rank 6 [New Entry] Bhushan Power & Steel is one of several mining and steel companies facing fierce local opposition to projects in India. It has struggled to secure land; in September 2008, three of its land surveyors were beaten up and had their faces smeared with cow dung by villagers for conducting a land survey in Jharkhand for the company's proposed steel and power projects. The company will also begin production at its new plant in Orissa in the next few months, having acquired land there in 2005. Alleged impacts of such projects include forced relocation, the destruction of homes and local cultures, and the destruction and pollution of forests and rivers.
Top three issues: 1. Impacts on Communities 2. Local Participation Issues 3. Impacts on Ecosystems/ Landscapes
ExxonMobil Corp, Rank 7 [2] ExxonMobil was found guilty in a US federal court of contaminating water wells in New York City with the gasoline additive MTBE which was banned in New York State in 2004. The company was found liable for trespass, public disturbance, negligence, and for failing to warn about the possible dangers of nerve damage and cancer associated with MTBE. It has been ordered to pay USD 104.7 million in damages. Also in the US, a district court dismissed a long-running lawsuit against ExxonMobil on the basis that the Indonesian claimants were non-resident aliens. The Indonesian villagers were trying to have Exxon held liable for the alleged torture, murder, rape and kidnapping of local residents by its security forces between 1999 and 2001. Similarly, another lawsuit filed by Alaskan Inupiat Eskimos against ExxonMobil and other energy companies was dismissed. The plaintiffs had accused the companies of having contributed to global warming through greenhouse gas emissions, thereby diminishing the sea ice protecting their village.
Top three issues: 1. Local Pollution 2. Impacts on Ecosystems/ Landscapes
3. Human Rights Abuses and Corporate Complicity
© ECOFACT AG 2009, all rights reserved RepRisk® is a registered trademark of ECOFACT AG
Page 7 of 10
Beef Products Inc. [New Entry], Greater Omaha Packing Company Inc [New Entry], Lone Star Beef Processors [New Entry], Cargill [690], Rank 8 Cargill, which reportedly sources its mince from Beef Products Inc., Greater Omaha Packing Company, and Lone Star Beef Processors, has been accused of producing and selling ground beef products tainted by E.coli. It was alleged that Cargill has repeatedly violated its own meat handling safety procedures. Contaminated meat had previously been found at Beef Products Inc. in 2006 and 2008, whilst at Greater Omaha Packing workers sued the company claiming it did not pay for the time needed to clean contaminants off knives and other gear. [Graph shown corresponds to Beef Products Inc., Greater Omaha Packing Company, and Lone Star Beef Processors]
Top three issues: 1. Products (Health and Environmental Issues) 2. Health and Safety Issues
3. Supply Chain Issues
© ECOFACT AG 2009, all rights reserved RepRisk® is a registered trademark of ECOFACT AG
Page 8 of 10
Most Environmentally and Socially Controversial Companies in September and October 2009: Utilities Sector Top Five Companies:
Top Three Issues:
1. Bhushan Power & Steel Ltd
1.
Global Pollution (Including Climate Change)
2. E.ON AG
2.
Impacts on Communities
3. Ayrshire Power Ltd
3.
Impacts on Ecosystems/ Landscapes
4. Hydro One Inc. 5. RusHydro
Bhushan Power & Steel Ltd, Rank 1 Please refer to main section of report – Rank 6
E.ON AG, Rank 2 E.ON has faced several protests against projects across Europe including a campaign against its Ratclliffe-onSoar power plant for allegedly being the biggest producer of CO2 emissions in Britain, and action by Finnish citizens against the company's plans for a new nuclear power plant. E.ON announced a three year delay of its Kingsnorth Power Plant after a massive anti-coal campaign by environmentalists, and also faced criticism due to E.ON Ruhrgas' plans for the Norddeutsche Erdgasleitung in Germany which would reportedly pass under a dense residential area. In Germany, a court ruled E.ON must halt the construction of a coal-fired power plant in Datteln, Westphalia due to carbon dioxide emission concerns.
Ayrshire Power Ltd, Rank 3 Environmental groups have campaigned against the proposed Hunterston Power Plant, a joint venture by Ayrshire Power and Peel Energy. They claim that the Scottish government did not follow European guidelines regarding planning and consultation processes, that the project will destroy important animal habitats, and that the clean coal technology the plant plans to use is neither technologically nor economically viable as yet. Dong Energy recently announced it will pull out of the project.
Hydro One Inc., Rank 4 Hydro One has been fined USD 175,000 after it pleaded guilty to breaches of the Canadian Occupational Health and Safety Act leading to the death of a worker in Ontario. It allegedly failed to provide written procedures for, and to conduct, correct rescue operations. The company must also pay a 25 percent victims surcharge to a provincial government for a fund to assist victims.
RusHydro, Rank 5 RusHydro’s Evenkijskaya Dam Project has been halted by Evenk region officials who cited inadequacy of project documentation. It was alleged that the project would have displaced up to 8,000 local residents due to the flooding of five villages and possibly of underground nuclear waste storage zones, and would negatively impact on the environment. Furthermore, an investigation into the cause of the August 17, 2009 disaster at the Sayano-Shushenskaya Hydropower Plant in which 75 people were killed has named six persons allegedly responsible for failing to ensure proper safety measures were in place. These include the former general manager of RusHydro.
© ECOFACT AG 2009, all rights reserved RepRisk® is a registered trademark of ECOFACT AG
Page 9 of 10
Methodology RepRisk objectively monitors the level of criticism to which a company is exposed. All data is collected and processed by a strictly rule-based approach; it is not the result of an assessment, rating or verdict from our analysts. The "Most Environmentally and Socially Controversial Companies" report was compiled using information from the RepRisk database, which consists of negative news on companies’ environmental and social performance. The RepRisk database currently covers more than 11,000 companies and holds news from thousands of sources, ranging from commercial newspapers and on-line media to NGO websites, blogs and newsletters. Once the negative news has been identified with advanced search algorithms and analyzed for its novelty, relevance and severity, risk analysts enter it into the database and link it to the companies in question. No news is entered twice unless it has been escalated to a more influential source or higher-profile media outlet. This helps to ensure the balanced and objective rating and weighting of the negative news, and thus the company’s RRI. The RRI measures the risk to a company’s reputation, not its actual reputation in general. Each report is compiled by taking the ten most criticized companies in our database of more than 11,000 companies. For more information about the "Most Environmentally and Socially Controversial Companies" report, please contact Karen Reiner at [email protected], tel: +41 44 350 6060, or visit our websites: www.reprisk.com or www.ecofact.com.
RepRisk® RepRisk is a web-based tool that provides insights into environmental and social issues that present financial and reputational risks to a bank, company, or investment portfolio. It facilitates the identification and assessment of controversial issues associated with specific companies and business relationships. RepRisk's assessment of the environmental and social performance of a company is based on the company's activities in the field as observed by independent third parties, and is not derived from information provided by the company itself. Every day, RepRisk captures the reactions of print media, more than 650 NGO websites and newsletters, news websites, blogs and other online sources on controversial issues relevant to financial institutions, other companies, and projects. In addition to capturing news related to companies and projects already covered by RepRisk, approximately five new controversial companies and projects are identified and entered into the database every day. RepRisk covers controversial issues ranging from employee and community relations to resource availability and efficiency, environmental footprint and product portfolio-related risks. In particular, it addresses all of the principles of the UN Global Compact. For a closer look at working with RepRisk, please see the video tutorial: www.reprisk.com/reprisktutorials
ECOFACT ECOFACT is a leading provider of reputational, environmental and social risk management solutions in the financial industry. ECOFACT is based in Zurich and leverages a global network of sector and issue specialists. Our client base consists of asset managers, pension funds, commercial and investment banks, the leading development banks, insurance companies, and governmental agencies. ECOFACT AG was founded in 1998 as a spin-off from a leading Swiss bank and is a fully independent corporation. © ECOFACT AG 2009, all rights reserved RepRisk® is a registered trademark of ECOFACT AG
Page 10 of 10
According to the reputational risk radar RepRisk, the most environmentally and socially controversial companies in September and October 2009 were: Vedanta, Chevron, Nestle, Shell, Red Industries, Bhushan Power & Steel, ExxonMobil, Beef Products, Greater Omaha Packing Company, Lone Star Beef Processors, and Cargill. Companies on the list have been severely criticized by the world’s media, governmental organizations and NGOs for issues including human rights abuses, severe environmental violations, impacts on local communities, corruption and bribery, and breaches of labor and health and safety standards. Rankings are based on the Reputational Risk Index (RRI), as measured by RepRisk in September and October of this year. The RRI is directly derived from the negative press captured by RepRisk and its calculation is strictly rule-based. RepRisk does not measure a firm's overall reputation. Instead, by capturing criticism, RepRisk computes a firm's exposure to controversy and therefore provides an indicator for reputational risk. RepRisk is used by asset owners and asset managers, commercial and investment bankers, supply chain managers, and corporate responsibility experts.
© ECOFACT AG 2009, all rights reserved RepRisk® is a registered trademark of ECOFACT AG
Page 1 of 10
The Reputational Risk Index (RRI) ranges from zero (lowest) to 100 (highest) and its calculation is based on the reach of news sources, the frequency and timing of news, as well as its content, i.e. severity and novelty of the issues addressed. The RRI is an indicator of a company's exposure to controversial issues and allows an initial assessment of risks that are attached to investments and business relationships. It also allows the exposure of an entity to be compared with that of its peers, and permits risk trends to be tracked over time. The following pages provide a summary of the criticism to which the most controversial companies have been exposed, as well as the environmental and social issues that have been associated with these companies. The company’s ranking from the previous month is shown in brackets. In addition to the regular list, the September-October focus area will be on the utilities sector and its top five most environmentally and socially controversial companies. Please refer to page 10 for more details on methodology.
© ECOFACT AG 2009, all rights reserved RepRisk® is a registered trademark of ECOFACT AG
Page 2 of 10
Vedanta Resources PLC, Rank 1 [12] Vedanta faced strong criticism and protests from locals over its subsidiary, Sterlite Industries' proposed opencast bauxite mine in Orissa, India. The company was criticized by the British government following the release of a report by the UK National Contact Point in relation to this project. The report accused Vedanta of violating OECD Guidelines for Multinational Enterprises by failing to respect the rights of, and properly consult, the 8,000-strong Dongria Kondh tribe, an indigenous group directly affected by the mine. It is alleged the project would destroy their sacred mountain, involve forced relocations, be detrimental to their traditional culture, and pollute rivers and forests. Also in India, the company faced allegations that it used intimidation tactics to suppress opposition to its proposed Vedanta University. One local organization in Bhubaneswar has opposed the project for the past three years and plans to intensify its campaign, claiming that the project will displace hundreds of people. Furthermore, a subsidiary of Sterlite Industries, Bharat Aluminium (Balco), came under fire when a 250 meter high chimney collapsed at its power plant killing 36 employees, injuring 7 more, and leaving over 100 workers missing in the rubble. Local officials attributed the accident to poor construction work by contractors and stated Balco did not have the proper permission to build the chimney. India’s Serious Fraud Investigation Office has announced that it is to investigate Sesa Goa and Sesa Industries, both subsidiaries of Vedanta Resoures, for financial irregularities dating back to 2003.
Top three issues: 1. Impacts on Communities 2. Local Participation Issues
3. Health and Safety Issues
© ECOFACT AG 2009, all rights reserved RepRisk® is a registered trademark of ECOFACT AG
Page 3 of 10
Chevron Corp, Rank 2 [6] Chevron has been under continued media scrutiny over the ongoing 16-year-old case in which indigenous communities accuse Chevron’s Texaco petroleum facilities, acquired in 2001, of harming the environment and their health. In 2008, a court expert said Chevron should pay USD 27 billion in environmental damages and USD 8 billion in restitution. The company was further accused of fabricating bribery allegations about the case judge in order to delay or annul the trial. Chevron has come under fire for alleged complicity in systematic human rights abuses by Myanmar's authoritarian regime with claims that its Yadana Gas Pipeline has generated approximately USD 4.83 billion for the government. In Canada, Chevron's 20 percent stake in the Albian Sands Mine was highlighted when Greenpeace activists staged a blockade that stopped production there. The NGO claims the mine contributes to greenhouse gas emissions and boreal forest destruction. In the US, Chevron along with several other companies, was fined for violating the Clean Water Act. It allegedly built a jet fuel tank at San Francisco International Airport without an adequate secondary containment which could have resulted in a major oil spill in the bay.
Top three issues: 1. Impacts on Ecosystems/ Landscapes 2. Impacts on Communities 3. Human Rights Abuses and Corporate Complicity
© ECOFACT AG 2009, all rights reserved RepRisk® is a registered trademark of ECOFACT AG
Page 4 of 10
Nestle SA, Rank 3 [990] Trade unions in Norway accused Nestle of engaging in a systematic pattern of human rights abuses. These include the company's alleged insistence on excluding the negotiation of wages from collective bargaining, most recently in Indonesia and India. They called this a 'clear violation of ILO Conventions'. It was further reported that in Indonesia, Nestle coerces new employees into joining a company-approved union. In Zimbabwe, a campaign for an international boycott of Nestle was established after reports that its subsidiary, Nestle Zimbabwe, purchased milk from dairy farms belonging to President Mugabe's wife. These farms were allegedly seized from white farmers in a campaign of violence prior to 2004. In the UK, Nestle was among a group of companies ordered to pay up to GBP 300,000 to families of workers who died from asbestos-related diseases. Greenpeace China released a report claiming Nestle was one of 18 multinational companies that had failed to comply with a new Chinese environmental regulation. In China and India, Nestle was targeted for selling food containing GM ingredients, particularly baby food, which it was claimed poses a serious threat to biodiversity and human health. In the US, Nestle cookie dough is believed to have been responsible for the latest E. coli outbreak that sickened 80 people across 31 states, leaving some victims suffering paralysis or in a critical condition.
Top three issues: 1. Freedom of Association and Collective Bargaining 2. Products (Health and Environmental Issues)
3. Impacts on Communities
© ECOFACT AG 2009, all rights reserved RepRisk® is a registered trademark of ECOFACT AG
Page 5 of 10
Royal Dutch Shell PLC, Rank 4 [7] Opponents of plans by Shell Offshore to drill exploratory wells in the Beaufort Sea have expressed concern about the risks of drilling in Arctic conditions including the clean-up of potential spills and the impact on the polar bear population. In California, 343 residents sued the Shell Oil Company for allegedly contaminating their neighborhood with cancer-causing benzene. The lawsuit involved a local Shell tank farm which it was claimed can be linked to 4 deaths. The Sinopec-Kuwait Oil USD 9 billion oil refinery project, in which Shell was named as an investor, will allegedly be moved to a new site on an island near Zhanjiang due to protests by residents and environmentalists concerned about air pollution in Guangzhou and nearby Hong Kong. In Canada, Greenpeace staged a blockade that stopped production at Shell's Albian Sands Mine, claiming it contributes to greenhouse gas emissions and boreal forest destruction. Shell Chemical Yabucoa was penalized twice for violations of the Clean Water Act in the US related to pollutants released, and failure to maintain deep ocean outfall equipment at its petrochemical facility in Puerto Rico.
Top three issues: 1. Impacts on Ecosystems/ Landscapes 2. Local Pollution 3. Impacts on Communities
Red Industries, Rank 5 [New Entry] The UK Environment Agency has allegedly found the presence of cyanide in a sewer used by Red Industries. According to the Agency, the pollution which extended 30 miles, killed thousands of fish in the River Trent. Locals and farmers have been advised to stay away and also to keep livestock well away from the banks of the river. The company has been banned from discharging any more industrial waste into the sewage system and may face criminal prosecution.
Top three issues: 1. Local Pollution 2. Impacts on Ecosystems/ Landscapes
3. Impacts on Communities
© ECOFACT AG 2009, all rights reserved RepRisk® is a registered trademark of ECOFACT AG
Page 6 of 10
Bhushan Power & Steel Ltd, Rank 6 [New Entry] Bhushan Power & Steel is one of several mining and steel companies facing fierce local opposition to projects in India. It has struggled to secure land; in September 2008, three of its land surveyors were beaten up and had their faces smeared with cow dung by villagers for conducting a land survey in Jharkhand for the company's proposed steel and power projects. The company will also begin production at its new plant in Orissa in the next few months, having acquired land there in 2005. Alleged impacts of such projects include forced relocation, the destruction of homes and local cultures, and the destruction and pollution of forests and rivers.
Top three issues: 1. Impacts on Communities 2. Local Participation Issues 3. Impacts on Ecosystems/ Landscapes
ExxonMobil Corp, Rank 7 [2] ExxonMobil was found guilty in a US federal court of contaminating water wells in New York City with the gasoline additive MTBE which was banned in New York State in 2004. The company was found liable for trespass, public disturbance, negligence, and for failing to warn about the possible dangers of nerve damage and cancer associated with MTBE. It has been ordered to pay USD 104.7 million in damages. Also in the US, a district court dismissed a long-running lawsuit against ExxonMobil on the basis that the Indonesian claimants were non-resident aliens. The Indonesian villagers were trying to have Exxon held liable for the alleged torture, murder, rape and kidnapping of local residents by its security forces between 1999 and 2001. Similarly, another lawsuit filed by Alaskan Inupiat Eskimos against ExxonMobil and other energy companies was dismissed. The plaintiffs had accused the companies of having contributed to global warming through greenhouse gas emissions, thereby diminishing the sea ice protecting their village.
Top three issues: 1. Local Pollution 2. Impacts on Ecosystems/ Landscapes
3. Human Rights Abuses and Corporate Complicity
© ECOFACT AG 2009, all rights reserved RepRisk® is a registered trademark of ECOFACT AG
Page 7 of 10
Beef Products Inc. [New Entry], Greater Omaha Packing Company Inc [New Entry], Lone Star Beef Processors [New Entry], Cargill [690], Rank 8 Cargill, which reportedly sources its mince from Beef Products Inc., Greater Omaha Packing Company, and Lone Star Beef Processors, has been accused of producing and selling ground beef products tainted by E.coli. It was alleged that Cargill has repeatedly violated its own meat handling safety procedures. Contaminated meat had previously been found at Beef Products Inc. in 2006 and 2008, whilst at Greater Omaha Packing workers sued the company claiming it did not pay for the time needed to clean contaminants off knives and other gear. [Graph shown corresponds to Beef Products Inc., Greater Omaha Packing Company, and Lone Star Beef Processors]
Top three issues: 1. Products (Health and Environmental Issues) 2. Health and Safety Issues
3. Supply Chain Issues
© ECOFACT AG 2009, all rights reserved RepRisk® is a registered trademark of ECOFACT AG
Page 8 of 10
Most Environmentally and Socially Controversial Companies in September and October 2009: Utilities Sector Top Five Companies:
Top Three Issues:
1. Bhushan Power & Steel Ltd
1.
Global Pollution (Including Climate Change)
2. E.ON AG
2.
Impacts on Communities
3. Ayrshire Power Ltd
3.
Impacts on Ecosystems/ Landscapes
4. Hydro One Inc. 5. RusHydro
Bhushan Power & Steel Ltd, Rank 1 Please refer to main section of report – Rank 6
E.ON AG, Rank 2 E.ON has faced several protests against projects across Europe including a campaign against its Ratclliffe-onSoar power plant for allegedly being the biggest producer of CO2 emissions in Britain, and action by Finnish citizens against the company's plans for a new nuclear power plant. E.ON announced a three year delay of its Kingsnorth Power Plant after a massive anti-coal campaign by environmentalists, and also faced criticism due to E.ON Ruhrgas' plans for the Norddeutsche Erdgasleitung in Germany which would reportedly pass under a dense residential area. In Germany, a court ruled E.ON must halt the construction of a coal-fired power plant in Datteln, Westphalia due to carbon dioxide emission concerns.
Ayrshire Power Ltd, Rank 3 Environmental groups have campaigned against the proposed Hunterston Power Plant, a joint venture by Ayrshire Power and Peel Energy. They claim that the Scottish government did not follow European guidelines regarding planning and consultation processes, that the project will destroy important animal habitats, and that the clean coal technology the plant plans to use is neither technologically nor economically viable as yet. Dong Energy recently announced it will pull out of the project.
Hydro One Inc., Rank 4 Hydro One has been fined USD 175,000 after it pleaded guilty to breaches of the Canadian Occupational Health and Safety Act leading to the death of a worker in Ontario. It allegedly failed to provide written procedures for, and to conduct, correct rescue operations. The company must also pay a 25 percent victims surcharge to a provincial government for a fund to assist victims.
RusHydro, Rank 5 RusHydro’s Evenkijskaya Dam Project has been halted by Evenk region officials who cited inadequacy of project documentation. It was alleged that the project would have displaced up to 8,000 local residents due to the flooding of five villages and possibly of underground nuclear waste storage zones, and would negatively impact on the environment. Furthermore, an investigation into the cause of the August 17, 2009 disaster at the Sayano-Shushenskaya Hydropower Plant in which 75 people were killed has named six persons allegedly responsible for failing to ensure proper safety measures were in place. These include the former general manager of RusHydro.
© ECOFACT AG 2009, all rights reserved RepRisk® is a registered trademark of ECOFACT AG
Page 9 of 10
Methodology RepRisk objectively monitors the level of criticism to which a company is exposed. All data is collected and processed by a strictly rule-based approach; it is not the result of an assessment, rating or verdict from our analysts. The "Most Environmentally and Socially Controversial Companies" report was compiled using information from the RepRisk database, which consists of negative news on companies’ environmental and social performance. The RepRisk database currently covers more than 11,000 companies and holds news from thousands of sources, ranging from commercial newspapers and on-line media to NGO websites, blogs and newsletters. Once the negative news has been identified with advanced search algorithms and analyzed for its novelty, relevance and severity, risk analysts enter it into the database and link it to the companies in question. No news is entered twice unless it has been escalated to a more influential source or higher-profile media outlet. This helps to ensure the balanced and objective rating and weighting of the negative news, and thus the company’s RRI. The RRI measures the risk to a company’s reputation, not its actual reputation in general. Each report is compiled by taking the ten most criticized companies in our database of more than 11,000 companies. For more information about the "Most Environmentally and Socially Controversial Companies" report, please contact Karen Reiner at [email protected], tel: +41 44 350 6060, or visit our websites: www.reprisk.com or www.ecofact.com.
RepRisk® RepRisk is a web-based tool that provides insights into environmental and social issues that present financial and reputational risks to a bank, company, or investment portfolio. It facilitates the identification and assessment of controversial issues associated with specific companies and business relationships. RepRisk's assessment of the environmental and social performance of a company is based on the company's activities in the field as observed by independent third parties, and is not derived from information provided by the company itself. Every day, RepRisk captures the reactions of print media, more than 650 NGO websites and newsletters, news websites, blogs and other online sources on controversial issues relevant to financial institutions, other companies, and projects. In addition to capturing news related to companies and projects already covered by RepRisk, approximately five new controversial companies and projects are identified and entered into the database every day. RepRisk covers controversial issues ranging from employee and community relations to resource availability and efficiency, environmental footprint and product portfolio-related risks. In particular, it addresses all of the principles of the UN Global Compact. For a closer look at working with RepRisk, please see the video tutorial: www.reprisk.com/reprisktutorials
ECOFACT ECOFACT is a leading provider of reputational, environmental and social risk management solutions in the financial industry. ECOFACT is based in Zurich and leverages a global network of sector and issue specialists. Our client base consists of asset managers, pension funds, commercial and investment banks, the leading development banks, insurance companies, and governmental agencies. ECOFACT AG was founded in 1998 as a spin-off from a leading Swiss bank and is a fully independent corporation. © ECOFACT AG 2009, all rights reserved RepRisk® is a registered trademark of ECOFACT AG
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