MRTI recommends denouncement of Caterpillar, Inc. for corporate irresponsibility in Israel/Palestine

Committee encouraged by dialogue with many other corporations

November 9, 2009

CINCINNATI

CINCINNATI At its Nov. 6 meeting here, the Presbyterian Church (U.S.A.)’s Mission Responsibility Through Investment (MRTI) committee issued a recommendation that the denomination’s General Assembly denounce Caterpillar, Inc. for profiting from the use of its products for non-peaceful purposes in the Israeli/Palestinian conflict.

The Assembly — the denomination’s highest governing body — meets July 3-10, 2010, in Minneapolis.

The recommendation reads in part, “On the basis of Christian principles and as a matter of social witness, the  219th General Assembly strongly denounces Caterpillar’s continued profit-making from non-peaceful uses of a number of its products.”

The recommendation comes after four years of what MRTI called limited engagement with little or no progress between the corporation and MRTI and its ecumenical partners seeking just peace in the Middle East.

“The committee and its ecumenical partners have been working faithfully to engage Caterpillar with very minimal success,” said the Rev. Brian Ellison, chair of MRTI. “The committee finds that Caterpillar remains unwilling to accept any responsibility for the non-peaceful use of the products it sells, from which it continues to profit.  The General Assembly has said that it finds such a position unacceptable.”

Background information included with the recommendation details some of the ways Caterpillar has produced, sold and profited from equipment that has been and is used for non-peaceful activities in Israel/Palestine.

The statement also affirms several positive ways the company acts as a global citizen but says Caterpillar’s conduct regarding Israel/Palestine “undermines Caterpillar’s own stated  commitment to human rights and positive global citizenship.”

The recommendation is a new step in MRTI’s process of “corporate engagement,” which ordinarily includes dialogue, shareholder resolutions and proxy voting.. Divestment of stock in a particular company is only recommended after all other options have been exhausted.

“This recommendation represents, I believe, something new, something different,” Ellison said. “We’ve never asked the assembly to say with us that what Caterpillar is doing is wrong.”

By taking the unorthodox step of recommending that the GA denounce Caterpillar, members of the committee said they hope MRTI will continue to fulfill its role as a public witness — something a divestment recommendation might not allow. “It would be our hope that making such a decision [as this] would change the tenor of the discussion,” Ellison said.

The recommendation will first go to the General Assembly Mission Council (GAMC) of the PC(USA) in February. The council will then decide whether to forward it to the Assembly, where the recommendation would go through the GA committee process for vetting before being sent to the full Assembly for a vote.

Noushin Framke, a member of the MRTI subcommittee that drafted the recommendation, said she was initially hesitant about proposing the recommendation. After six years of seeking more substantive talks with Caterpillar, she said she wondered if the committee should take more definitive action.

But Framke said she thinks that having the GA look at the facts gathered by MRTI and then making a statement will be more powerful in stopping human rights violations in Israel/Palestine.

“I think if we take the report to GA and let the GA decide based on the will of our report, then I think that’s a stronger statement,” she said.

MRTI knows that Caterpillar knows it is doing wrong and that it seems to have no remorse, said committee member Joanne Rodriguez. She encouraged MRTI to take a stand and make sure its voice is heard.

“There’s so much work being put into this and it doesn’t seem to be having the positive impact we want it to make,” she said.

Committee member Liz Letzler praised the recommendation, saying it’s important to be patient and wise. She also called on Presbyterians employed by Caterpillar to acknowledge the negative things about the company’s business practices.

The recommendation isn’t saying that Caterpillar is a bad company — it’s saying that some of its practices are bad, said committee member Bill Saint. Although divestment is still an option, the denouncement is an extra step, he said.

“It has the capacity of letting us be faithful to our principles without dividing the body of Christ,” he said. 

MRTI’s work with Caterpillar began after the 216th GA (2004) passed an overture calling for initiating the process of phased, selective divestment in companies doing business in Israel/Palestine that may be contributing to violence rather than peace in the region. The 2006 Assembly changed the emphasis of the effort from divestment to corporate engagement.

In 2005, the committee identified five companies — including Caterpillar — that contributed to obstacles to a just peace in the area. MRTI has had successful engagement with the four other companies; ITT, United Technologies, Citigroup and Motorola. MRTI said all have made significant changes to their business practices in Israel/Palestine and continue to be open to dialogue with MRTI and its ecumenical partners.

During and prior to the committee’s deliberations, members received and discussed input from many Presbyterians, including representatives of Great Rivers Presbytery (where Caterpillar is located), the Israel/Palestine Mission Network, and member of the Middle East Study Committee created by the 2008 General Assembly. 

In other business, MRTI sub-groups met with executives of Fifth Third Bank and Procter & Gamble, both based in Cincinnati.

The members who met with Fifth Third talked with representatives about loss-mitigation loans and practices.

“Fifth Third was very helpful and answered our questions with what seemed to be frankness and straightforward responses. They seem to be taken a leadership role in this area, and for that we are thankful,” said committee member the Rev. Terry Alexander. “They shared with us a five-year program of their e-business that goes to low-income areas and works with nonprofits to help people understand financial literacy and loss mitigation. It appears Fifth Third is working hard to reach people who are tending to default to work out a new plan where possible.”

The Procter & Gamble group met with Jack McAneny, associate director for external relations at P&G. McAneny participated in a positive discussion about P&G’s corporate sustainability program. One of its flagship programs, “Learn, Live and Thrive,” educates children and youth on how to be responsible global citizens and good stewards of the earth’s resources.

MRTI also approved a new communication plan, updated its committee procedures and condensed its 2009-10 work plan.

MRTI is a 12-member committee elected by the General Assembly. It includes representatives chosen by the relevant mission, investment and financial agencies of the PC(USA), including the General Assembly Mission Council, Board of Pensions, Presbyterian Foundation, Advocacy Committee for Racial Ethnic Concerns, Advocacy Committee for Women’s Concerns, and the Advisory Committee on Social Witness Policy.

Download the 2010 recommendation to the GAMC

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