By Steve Weinstein
By Devon Maloney
By Tessa Stuart
By Alison Flowers
By Albert Samaha
By Jesse Jarnow
By Eric Tsetsi
By Raillan Brooks
In January, McCall told Newsdaythe only paper to examine parts of this proxy recordthat his votes were in line with a policy not to micromanage company executives. "I'm not going to showboat and support a lot of resolutions to show that I'm an activist," he said. Ironically, it was McCall himself, when he voted in March against the Hewlett-Packard merger with Compaq, who indirectly offered a rationale for activism while admitting that his opposition only involved a small percent of the total votes. "Some smaller funds look at the decisions made by larger funds. Often that has some influence on how other funds will vote."
ABSTAINING ON HUMAN RIGHTS
In a pattern similar to the CERES votes, Hevesi went so far as to sponsor resolutions at eight companies last year, asking that they adopt Social Accountability 8000, a set of standards for improving global working conditions. Though the standards were drawn from the United Nations Convention on the Rights of the Child and the guidelines of the UN's International Labor Organization (ILO), McCall abstained every time, including at Kmart, a company long accused of profiting from cheap overseas labor. Hevesi also sat on the Social Accountability International board, as Thompson does now and as do representatives from Dole Foods, Avon, Toys 'R' Us, and the UN Office of Project Services.
In fact, McCall abstained on 31 of the 36 human rights resolutions he voted on in 2001 (opposing four others), though his spokesman conceded that abstentions have the same effect as negative votes, and companies often note they're counted that way. McCall's policy statement, as it did on environment issues, said "the Fund does not support proposals to promote human rights outside the U.S." unless "specific actions can significantly improve a corporation's record of egregious affronts."
The only resolution he supported in 2001 condemned a transnational oil company, Unocal, after a federal judge concluded that its executives "knew that forced labor was being utilized" in the construction of a Burma pipeline before it partnered with one of the world's most repressive military governments to build it. While dismissing the case against Unocal on technical grounds, the judge also found that the company "benefited from the practice" of forced labor and from "numerous acts of violence" committed by the military to aid the project.
The resolution McCall supported called for a committee of independent directors to review ways to link executive compensation with the company's social performance, but he simultaneously abstained on another resolution that cited the Burma experience and tried to bind Unocal to a set of ILO principles similar to SA 8000. Ironically, the resolution he abstained on was backed by a higher percentage of shareholders than any other social policy resolution introduced at any company in the country, while the resolution he supported drew far less support.
Prior to the judge's ruling, McCall had abstained on similar Unocal/Burma human rights resolutions from 1997 through 2000 and voted against them from 1994 through 1996. In addition, he abstained in 2001 on resolutions at three other companies involved in the Burma project Halliburton, McDermott, and Citigroupthough all the proposals sought was a committee of independent directors to determine whether the companies had benefited from forced labor or other abuses. The McDermott resolution got the second highest vote in the country and, like the other Burma resolutions, was backed by CalPERS.
The U.S. government withdrew its ambassador and suspended aid to Burma after the junta killed thousands of pro-democracy protesters in the late '80s, banning new American investment there in 1997. The UN Special Rapporteur, the ILO, and the U.S. Department of Labor have published reports detailing Burma's human rights violations, especially in connection with the pipeline. The resolution McCall backed cited "torture, abuse of women, arbitrary executions, forced labor, forced relocations, and arbitrary arrests" in Burma, yet he has still refrained from supporting minimal reporting requirements, even at a company like McDermott, whose Web site listed Burma as its fifth largest revenue source.
Beyond Burma, McCall has either voted against or abstained on resolutions seeking reports about possible labor abuses in China by at least 10 companies. The companies included Microsoft, GE, Nike, Mattel, Nordstrom's, Lucent, AT&T, GM, Dillard Department Stores, and Boeing, and the resolutions often came up repeatedly. In recent years Microsoft and GE have alternated as the fund's largest single holding.
The comptroller also abstained on or opposed all 22 resolutions between 1993 and 1997 that attempted to get companies to examine their Mexican labor operations, particularly at maquiladoras near the border. Though "market basket" studies showed that maquiladora employees would have to work for 69 minutes to purchase five pounds of rice, as compared to 13 minutes for American workers, and 20 minutes for bananas, instead of two. McCall voted with management to block reports at GM, GE, Ford, W.R. Grace, and many other companies.
Some companieslike Johnson & Johnsoncontemptuously defended their maquiladora exploitation by telling shareholders in their opposition message that these operations "could not economically function in the U.S.," meaning that if forced to shut them down, J&J would have to "seek another country elsewhere in the world." That's precisely what many have done, reducing the number of maquiladors and the frequency of the resolutions, which were most often introduced by labor and religious organizations.