wfn.org | MRTI Revamps Military-Related Investment Guidelines

[PCUSA.NEWS@pcusa.org]

4-February-1998 
98040 
 
    MRTI Revamps Military-Related Investment Guidelines 
 
    by Jerry L. Van Marter 
 
SAN FRANCISCO-Bowing to post-Cold War changes in arms spending and 
production - and to the oft-expressed desires of the Presbyterian 
Foundation - the Presbyterian Church's Mission Responsibility Through 
Investment (MRTI) Committee has revamped the church's four guidelines for 
investing in military-related corporations. 
 
    The changes - which still must go through the General Assembly Council 
and the upcoming General Assembly in Charlotte, N.C., this June - will 
reduce the number of corporations in which church-related investors will be 
advised not to hold stock.  The guidelines are not compulsory. 
 
    If approved, this will mark the third time the PC(USA)'s 
military-related investment guidelines have been modified since they were 
first instituted by the 1982 General Assembly. 
 
    The first three guidelines 
 
    *  reduce the number of divested military contractors, measured in 
       dollar volume of sales, from the top ten to the top five 
    *  reduce the number of divested corporations engaged in foreign 
       military sales from the top ten to the top five 
    *  advise divestment from all firms among the top 100 military 
       contractors who are dependent upon military contracts for more than 
       50 percent of their sales - a change from the current standard of 
       the top ten who are dependent on military contracts for more than 25 
       percent of then sales. 
 
    MRTI staffer the Rev. William Somplatsky-Jarman said the change in the 
last guideline would affect seven companies as opposed to 10 companies 
under the old rubric. 
 
    The fourth guideline - barring investment in companies that produce 
such devices of indiscriminate destruction as nuclear warheads, chemical 
and biological weapons, landmines and "assault-type" weapons for the 
civilian market - remains essentially unchanged. 
 
    It does allow for the removal of companies that produce components that 
could be used in the manufacture of landmines from the divestment list if 
they adopt a policy prohibiting such use.  Motorola has recently adopted 
such a policy. 
 
    Sue Rush of Idaho Falls, Idaho, MRTI vice chair and head of the task 
force that came up with the proposed revisions, said changes in corporate 
structures in the United States contributed to reducing the "top tens" to 
"top fives."  "With all the corporate mergers going on - such as Boeing and 
McDonnell Douglas - there is a top tier of military contractors and then a 
big drop-off," she explained. 
 
    Somplatsky-Jarman agreed.  Commenting on "raising the bar from 25 
percent to 50 percent" dependency on military contracts, he said, "This 
recognizes some of the shaking out that's going on in the defense industry, 
with some companies deciding they are going full tilt into military 
contracts and others deciding just to opt out." 
 
    Bill Lauderbach of Midland, Mich., the Presbyterian Foundation's 
representative on MRTI, praised the proposed changes.  "These changes 
answer most of the questions the Foundation has raised," he said.  "I feel 
very good going back to our board with this." 
 
    Foundation officials had criticized the guidelines as antiquated and 
difficult to interpret to the church in a post-Cold War world.  "We need to 
start talking about why we're trying to influence these companies," 
Foundation vice president and investment officer Dennis Murphy said at an 
earlier MRTI meeting. 
 
    Somplatsky-Jarman said that with the refined guidelines, "When people 
see those names, they will immediately recognize them as military 
producers." 
 
                  Shareholder resolutions authorized 
 
    With the spring corporate meeting season approaching, the committee 
reviewed and approved the filing, co-filing and proxy voting of nearly 200 
shareholder resolutions.  MRTI works ecumenically through the Interfaith 
Center on Corporate Responsibility in the filing of shareholder 
resolutions. 
 
    Of the resolutions going forward this year, 17 are new and about 175 
are being reintroduced after having received sufficient stockholder support 
in annual meetings in previous years. 
 
    The new resolutions address such issues as executive compensation 
(General Electric), pollution and toxic waste disposal (Champion Paper, 
Pinnacle West, PECO Energy, Westinghouse, Du Pont), cigarette smuggling and 
advertising (Disney, Philip Morris, Loew's, Eastman Chemical), hospital 
patient care (Columbia/HCA) and corporate governance (Time Warner, America 
West Holdings). 
 
                Dialogue held with computer chip producer 
 
    MRTI members traveled to nearby Silicon Valley to meet with corporate 
officials of Advanced Micro Devices (AMD), who referred to their company as 
"the perpetual little guy to Intel."  AMD, the second largest computer chip 
manufacturer in the world, has opened a number of production plants in 
Asia, and MRTI has filed a shareholder resolution with the company seeking 
assurances that their labor and environmental standards in those facilities 
are adequate. 
 
    MRTI requested additional information on AMD's policies and guidelines 
for its Asia (and brand-new Dresden, Germany) facilities, which AMD 
officials promised to supply.  The committee agreed to reconsider its 
decision on the shareholder resolution after it has reviewed the additional 
information. 

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