Pepsico, Philip Morris Face Human Rights Resolutions

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By Che Odom

March 23 — Shareholders of a handful of companies, including Pepsico Inc., may be voting on a new human rights proposal submitted by the AFL-CIO Reserve Fund this year that urges corporations to enter mediation to remedy violations.

The labor pension fund submitted the proposal at Oreo cookies-maker Mondelez International Inc. and Pepsico for refusing to participate in a mediation system established by the Organisation for Economic Cooperation and Development (OECD), Brandon Rees, the AFL-CIO's deputy director of investment, said March 23 at the Council of Institutional Investors' annual meeting in Washington.

The resolution was also submitted to a number of tobacco companies, including Reynolds American Inc., Philip Morris International Inc. and Altria Group Inc., where human rights violations in the supply chain are especially difficult to remedy, Rees said.

The resolution urges companies to agree to participate in mediation of any alleged human rights violations if requested by certain governmental agencies identified by the OECD. It calls for the companies to mediate disputes involving, among other things, freedom of association and collective bargaining, the elimination of forced or compulsory labor, child labor and discrimination.

The companies didn't return messages by Bloomberg BNA seeking comment. However, some have recommended that shareholders vote against the resolution, and Mondelez tried unsuccessfully to get approval from the Securities and Exchange Commission staff to exclude the measure from its proxy.

Reynolds said in its proxy materials that it agrees with the AFL-CIO that the supply chain could benefit from “an effective and expeditious dispute resolution mechanism” and that the company would continue to pursue such an approach. “However, the specific mechanism proposed by the proponent is not well suited to the needs of growers and their employees,” the company said.

Related Resolutions

The California Province of the Society of Jesus and the National Center for Public Policy Research also have filed human rights proposals with a number of companies this year.

The Jesuits, which submitted a proposal to GEO Group, and the Center, which targeted Apple Inc. and General Electric Inc., ask shareholders to support a request that directors commission an independent human rights report for shareholders.

The three companies recommended that stockholders vote against the measures.

The GEO Group said in its proxy that security, privacy and other concerns make such a report “premature and inappropriate,” but said it would “undertake to study the matter further.”

Apple said in its proxy that commissioning a report wouldn't be a “productive use of company resources.” Its shareholders overwhelmingly rejected the resolution at last month's annual meeting.

GE, which will hold its annual meeting April 27, said it works with “local partners to strengthen human rights” where it does business.

To contact the reporter on this story: Che Odom in Washington at codom@bna.com

To contact the editor responsible for this story: Yin Wilczek at ywilczek@bna.com