The critical need for law reform to regulate the abusive practices of transnational corporations: the illustrative case.

Author:Wines, William A.

"And Daddy won't you take me back to Muhlenburg County Down by the Green River where Paradise lay? Well I'm sorry my son, but you're too late in asking Mr. Peabody's coal train(1) has hauled it away. ... "Then the coal company came with the World's largest shovel and they tortured the timber and stripped all the land. Well, they dug for their coal till the land was forsaken, Then they wrote it all down as the progress of man." -"Paradise" by John Prine[C] 1971. PART I. BOISE CASCADE IN PERSPECTIVE.


Power(2) is something we all understand and respect, but none more than timber barons and loggers. Whether dealing with chain saws or skidders, lobbyists or legislatures, loggers, timber barons, and lumber companies know, appreciate, and wield power. Power influences the timber industry just as it does labor relations, politics and many other areas of human affairs. But the concept of brute strength and raw power is central to the work and myths(3) of loggers in ways unlike most other occupations with the possible exceptions of mining, fire fighting, and police work; areas also associated with maleness and male dominance and, of course, violence.(4)

In 1991, we wrote "a better model is needed to describe ethical behavior, particularly when applied to the use of power to resolve conflict in cross-cultural situations...."(5) Professor Werhane has articulated a six-question protocol for analyzing the social responsibility of a set of activities on the part of multinational corporations.(6) One of the fears repeatedly voiced about transnational corporations ("TNCs")(7) is that they may prove to be above the law.(8) This article will look at that concern as well as attempt to apply the Werhane protocol to Boise Cascade Corporation's ("BCC") actions over time and in different locales. We will attempt to determine whether a practice and a pattern emerged in BCC dealings with labor, in the environment, and with communities in which it operates. We will also address power inequities in labor relations where some observers have suggested that the power equation is central.(9)

Supposedly fifteen transnational corporations are engaged in logging in Mexico.(10) Our selection of BCC as the subject of our inquiry does not imply nor is it meant to suggest that BCC is somehow better or worse in its foreign operations than any of its competitors. In fact, this piece is premised upon the assumption that in many, many respects BCC is representative of transnational corporations that are engaged in extractive industries around the world. A spokesman for BCC says it most simply: "Alls [sic] we do is go in and take out the logs.(11) Somehow, we do not find it that simple. In some ways, injecting millions of dollars into a dirt-poor,(12) corrupt,(13) and violence-saturated State(14) in Mexico and then disclaiming all responsibility for the destruction and deaths that follow seems insensitive, irresponsible and morally indefensible.(15)

A Chronology.

What do Council, Idaho, International Falls, Minnesota, and Papanoa, State of Guerrero, Mexico have in common? They have all experienced the arrogance and greed of BCC. In the Falls Council, unions were destroyed along with some temporary housing; an established mill was closed; and in Guerrero, the introduction of huge sums of money for timber further aggravated a destabilized countryside in which seventeen unarmed environmental protesters were shot dead in June 1995 and dozens of others have since disappeared, been executed or murdered.(16) BCC meanwhile enjoyed near record profits in 1995(17). Although profits set record highs, employment in the timber industry in Idaho peaked in 1979 and has declined ever since, according to Idaho Department of Employment figures. The impact of increased mechanization coupled with mill closures has been devastating on the small mill towns.(18)

In an attempt to avoid any public accounting, BCC has attempted to demonize the environmental movement, a journalist who explored the Mexican operation, and the Sierra Club. Remember Commodore Vanderbilt? "What do I care about the law? Haint I got the power?"(19) Welcome to the Robber Barons, Part II, with a polished veneer of civilization courtesy of a staff of public relations types and highly paid corporate lawyers. Enter the so-called "Spin Doctors;" otherwise, nothing much has changed in the sequel.

Why is BCC doing business in Mexico and preparing to do even more business in places like Chile, Malaysia, New Zealand and the former U.S.S.R.? The answer to that question varies with whom you ask. For the record, BCC says it is not after cheap labor but that timber supplies in the U.S. are inadequate for its needs. It blames environmentalists and restrictions on timber sales from federal lands and postures as a local Idaho business interested in the "Idaho way of life."(20) A large neon sign at the Boise Airport declares "Welcome to Our Home" from Boise Cascade Corporation: mildly humorous for a Delaware Corporation that has gone transnational.(21) Besides on the theme of jobs or environment, Idahoans have elected some of the most extreme anti-environmentalists in Congress: people such as Helen Chenoweth,(22) Mike Crapo,(23) Larry Craig,(24) and Dirk Kempthorne(25) who surf the crest of timber, cattle and mining PAC campaign money.

On June 6, 1996, John Ross, poet, journalist, and prize-winning author, came to Boise, Idaho to present his findings in a talk entitled "Boise Cascade Corporation, Political Turmoil & Logging in Mexico's Sierra Madre." In a response that was unseemly as well as uncalled for, BCC's CEO George Harrad(26) pulled out his big stick and attempted to silence all coverage of the event by local media as well as telephone the president of Boise State University in a futile attempt to get the talk canceled.(27) Such an approach is heavy-handed even by BCC standards and out of all proportion to what was happening. Yet, in 1989 when the dispute with the building trades at International Falls was really hot, BCC leaned on the Minneapolis Star-Tribune to get it to refuse to publish a paid advertisement from the Minnesota AFL-CIO.(28) This refusal prompted a news conference and picketing by the AFL-CIO.(29) Wherever BCC does business there seems to be an inevitable pattern and practice of use and abuse of its vast economic power.

In November 1996, our graduate research assistant (GA) attempted to get permission to access the BCC library and gather background information on the company's early history.(30) The GA first contacted the corporate librarian and asked if it would be possible to conduct research at the facility. In the past, BCC had been very cooperative in allowing students from Idaho universities research access to its library. The librarian indicated that she would have to look into this possibility and call him back. The GA left several voice messages for the librarian, but his calls were not returned. Three weeks passed and the GA initiated another contact with the librarian, who indicated that the GA would need to gain permission from the corporate legal department to use the BCC library, an odd arrangement; but he did. The legal department granted permission by phone, and the GA let the librarian know this. The librarian then indicated that she would have to check on this and call him back. On November 18th, the librarian left a message for the GA indicating that BCC was no longer allowing students to use the library and said that under no circumstance could he get historical data on BCC from them.(31)

BCC has "circled the wagons." Is BCC afraid someone might find something incriminating? Could there still be a smoking gun from the June 1995 Aguas Blancas massacre in the BCC archives? John Ross declared that his search had not turned up a smoking gun.(32) Did BCC violate the Foreign Corrupt Practices Act by slipping cash to then Governor Ruben Figuerro? Who are the undisclosed principals in the holding company that owns the mills in Guerrero?(33) Could it include Mexican political powers? Such speculation may not be as far-fetched as it seems.

To analyze the possibilities, we need to examine the corporate culture in which senior BCC officers act and react and speculate on how that culture influences their attitudes and ideologies.

Corporate Climate at BCC and Interactions with Local Citizens.

BCC sits in an ultra-modern headquarters office on One Jefferson Square a few blocks west of the state capitol in Boise, Idaho, an inter-mountain right-to-work state that one political scientist compared to a third world country.(34) Some Idahoans are backward and proud of it; their paragon of success is multi-billionaire J. R. Simplot,(35) a crusty twentieth century captain of industry with an eighth grade education who made his fortune in the potato processing business through some legendary escapades, including activities that earned him a six-year ban from trading on the New York Mercantile Exchange and fines for federal income tax evasion.(36) Incidentally, "old J.R." -- as Simplot is sometimes known in Boise -- increased his holdings in BCC by approximately 30 million dollars in December, 1995.(37)

Labor strife is nothing new to BCC, and neither is a management style that has an "in-your-face" approach to labor relations. In 1978 in the Pacific Northwest, the Association of Western Pulp and Paper Workers struck BCC and other mills over economic issues.(38) For the first time in the modern era, BCC and several other producers continued to operate their mills. In 1980 in Rumsford, Maine, BCC took a strike over economic issues and continued to operate its mill.(39) Michael Harrington, Director of Labor Relations for BCC declared of this decision: "Labor has a right to strike. We have a right to operate our mill."(40) Four years later in DeRidder, Louisiana, BCC provoked a strike over work rules by bringing to the table an entirely new labor agenda and continued to...

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