Latin America and the Caribbean

Business and Society Review
August 1996


by Steven Malamud

Evil is no faceless stranger living in a distant neighborhood Evil has a wholesome, hometown face, with merry eyes and an open smile. Evil walks among us, wearing a mask which looks like all our faces.

-The Book of Counted Sorrows

H . B. FULLER COMPANY, a St. Paul, Minnesota-based manufacturer of adhesives, sealants and coatings for use in packaging and manufacturing, has the reputation of being a pillar of corporate social responsibility. However, this public perception is a matter of grave concern for those who have tracked the policies and actions of this corporation in Latin America for many years.

Most troubling is H.B. Fuller's inadequate response to charges that its solvent-based shoe glue was being used as a narcotic by street children in Latin America. In 1992 Fuller's board did promise to discontinue manufacturing such glue "wherever it is being abused". However, Fuller's glue is still the "drug of choice" among street children in many countries of Central America - increasingly in Nicaragua and El Salvador and still in Guatemala and Honduras where Fuller continues to sell its toxic product to cobblers and other industrial customers.

In addition, lab test show that H.B. Fuller was marketing lead-based paints in Central America as recently as 1995, as well as pentachlorophenol-based pesticides. Lead paint was banned in 1978 in the United States after studies showed that lead paint caused brain damage in children. Since 1977, the U.S. government has "vigorously opposed the use of pentachlorophenol" and warned these products "should never be used inside for any reason". In 1987 the World Health Organization warned that pentachlorophenol "is an extremely dangerous carcinogen when it is used to preserve wood for inside applications". However, in Central America, Fuller marketed its "Anti-Comejen" pentachlorophenol wood curative product to the general public at least through April 1995. The product's label did not state the active ingredient and recommended to consumers that it could be used to protect "interior and exterior wood against rot and attack by micro-organisms and insects".

At the time, no laws existed banning lead-based paints or pentachlorophenol products in many countries in Central America. Thus, what Fuller was doing in those countries was not against the law; but to knowingly produce products that have been proven harmful is not anyone's idea of ethical behavior.

At the 1996 annual meeting, shareholders of the H.B. Fuller Company, represented by the Interfaith Center for Corporate Responsibility, proposed that the corporation end sales and service to the tobacco industry. Previously, Fuller officials denied involvement in the tobacco market, even as ads were running in tobacco trade publications proclaiming: "However you say 'cigarette adhesives' H.B. Fuller understands".

The shareholders' resolution stated: "Our Company provides adhesives to the cigarette industry thus contributing, we believe, to the death of more than 1,000 people a day in this country alone, to say nothing of deaths in those countries where our adhesives are sold in the tobacco industry". It is no secret that the fastest growing market in the global tobacco industry is children.

Rian Fried, the president of Clean Yield Group, a firm which no longer buys or sells Fuller's stock, said that his company and others in the business had touted Fuller for many reasons. Fuller was a pioneer in business ethics, he said. "You wanted to be able to go to other companies and show them what Fuller was doing. It was exemplary. People had a vested interest in it", Fried said. When stories about Fuller's unresponsiveness to advocates' claims that the company's shoe glue was causing irreparable harm and death to street children, no one wanted to believe it "When the information first hit, there was disbelief......There was a very stiff wall, because Fuller represented so much good to so many people", Fried said.

To those who have sought to require this corporation to live up to its good reputation on both sides of the Rio Grande, the way Fuller has handled its issues has been as informative as the lab test results and experts' opinions that have been collected about its toxic products. Fuller has known for more than 15 years that is Resistol products were being abused by street children. However, it has refused to take meaningful steps to prevent the abuse, and has reneged on promises to remove its product from markets where it is known to be abused.

For at least four years, H.B. Fuller has told reporters and investors who inquire about the issue that the consensus among such agencies as UNICEF and the World Health Organization (WHO) is that "education and intervention can provide the only effective remedies to this issue, not product chemistry or control". Both organizations have stated that they would not take such a position. A WHO representative said such misinformation strategies were common among tobacco and liquor corporations, and added that Fuller was the first producer of a solvent based product to fraudulently use the name of the organization to legitimize marketing policies.

The Fuller case illustrates inadequacies in current socially responsible investing (SRI) screening methods SRI firms claim to rely on activists to challenge data submitted by corporations. But the Fuller example shows the industry's inability or unwillingness to test activists' claims because of fiscal constraints or self-interest. When queried, SRI research firms admit they do not effectively probe multinationals' policies outside the United States and lack rating systems to evaluate transnational operations. (About 62.5 percent of Fuller's employees are outside the United States and lack rating systems to evaluate transnational operations. (About 62.5 percent of Fuller's employees are outside the United States and at least 42 percent of its revenues are generated abroad).

In recent years, the power of the nation-state has been challenged by that of multinational corporations operating in a globalized economy. Few checks exist against the excesses of corporations that put power and profit before people. If socially responsible investing is to have real meaning, SRI researchers must understand that tough a company's policies might not be illegal, they can be unethical and an offending company should be judged accordingly. The policies and practices of multinational corporations abroad must be as important to a company profile as its domestic ones. It simply is not right that the revenue of corporations such as H.B.Fuller or SRI firms should be earned at the expense of children.

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