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Note #8444 from PCUSA NEWS to PRESBYNEWS:

Nuns squeeze Caterpillar
04342
August 2, 2004

Nuns squeeze Caterpillar

PC(USA) isn't only group studying bulldozer sales to Israel

by Alexa Smith

LOUISVILLE - Sister Valerie Heinonen spent last night on the telephone.

In a conference call with members of five other orders of Roman Catholic
nuns.  And with a caller from Jewish Voice for Peace (JVP), a grassroots
organization based in San Francisco.

The topic was a resolution to be presented to Caterpillar Inc., questioning
the morality of its sales of bulldozers to the Israel Defense Forces (IDF).

The exact language hasn't been nailed down. And it isn't clear yet who will
submit the shareholder resolution.

But someone will.

That's why Heinonen was heartened by news that the Presbyterian Church (USA)
is researching its policies and setting criteria to begin a selective, phased
divestment of stock in Israel-related companies whose practices hinder
peacemaking efforts.

If the PC(USA) follows through, it could make a difference. The Presbyterian
Foundation's $1.5 billion portfolio includes 36,900 shares of stock in
Caterpillar - worth $2.7 million. And the Board of Pensions has 200 shares of
Caterpillar in its $6 billion portfolio.

When Heinonen's group challenged Caterpillar during a stockholders' meeting
last year, its resolution got very little support - 4 percent of the vote.
But that was enough to meet the requirements of the U.S. Securities and
Exchange Commission (SEC) to either re-file or re-work the measure, which
asked Caterpillar's board of directors to study whether the company is
risking its reputation by continuing to sell bulldozers to the IDF.

The IDF uses the machines to destroy the homes and orchards of Palestinian
civilians in the West Bank and in Gaza.

The resolution will need to garner at least 6 percent of shareholders' votes
this year to remain eligible for re-filing.

"It's hard to know if we'll reach 6 percent. But that really won't stop us
from going back," Heinonen says in a telephone interview from her New York
City office.

She notes that there are other ways to get a hearing: by making a
human-rights case, questioning executive compensation, challenging
regulations.

The nuns Heinonen represents started taking peace delegations to El Salvador,
Nicaragua and Guatemala in the 1980s. Now they're traveling to Israel,
Palestine and Iraq. And they don't like what they see.

The group's 2004 resolution questions whether Caterpillar is abiding by its
own code of worldwide business conduct. It says the firm's 60-ton bulldozers
have been used to destroy hundreds of thousands of olive trees and orchards
and to render 50,000 men, women and children homeless.

The IDF retrofits the bulldozers with machine guns, grenade launchers, smoke
projectors and armored plating.

This handful of religious orders isn't Caterpillar's only critic. There are a
number of other campaigns - visit www.stopcat.org for details - to stop
Caterpillar sales to the IDF.

The opposition got better organized when an armored bulldozer made by
Caterpillar crushed and killed Rachel Corrie, a young woman from the United
States who stood in front of the machine in an effort to keep it from
demolishing a Palestinian house in March 2003. The IDF driver said he didn't
see her, although, according to the international humanitarian group Human
Rights Watch (HRW), she was wearing an orange vest and speaking through a
bullhorn.

Caterpillar says it can't be held responsible for what buyers do with the
more than two million Caterpillar machines and engines in use around the
world. "We have neither the legal right nor the means to police individual
use of that equipment," it says in an official corporate statement on
Caterpillar's Middle East sales.

Kelly Wojda, of Caterpillar's corporate public affairs office in Peoria, IL,
confirmed that its bulldozers are bought by the U.S. government and sent to
Israel through the U.S. Foreign Military Sales Program, part of the U.S.
foreign-aid package to Israel.

Wojda would not say how many bulldozers the government buys and what they
cost. She said Caterpillar's financial statements are compiled regionally,
not nationally, so product sales data are available only at the regional
level.

"Middle East peace won't come through businesses like ours," she said in an
interview with the Presbyterian News Service. "We've got sympathy for the
issues, but this is not the best way to go about making changes."

The company's official statement says comment on political conflict is "best
left to government leaders who have the ability to impact action and advance
the peace process."

Jewish Voice for Peace disagrees, arguing that, if the U.S. government didn't
enable the occupation, it couldn't last.

"The occupation has to end before progress for peace can be truly realized,"
says Mitchell Plitnick, the organization's spokesperson. "You have to
recognize that there's a great imbalance of power here."

Last year, JVP argued that Caterpillar contributes to that imbalance and
could withdraw from the Pentagon program.

The Investor Responsibility Research Center  (IRRC) in Washington, DC, which
analyzed the shareholder resolution submitted by Heinonen's group and the
company's response, says the bulldozers are used for a variety of purposes,
military and nonmilitary.

Its report says that the "most contentious" issues are the razing of
Palestinian homes built without proper permits; the destruction of homes for
security purposes; clearing tracts of land near outposts and security
checkpoints; and destroying homes as a collective punishment for the families
of suspected Palestinian militants.

The IRRC report notes that bulldozers, some equipped for combat, also have
been used in military offensives to destroy buildings militants might use for
cover and to destroy bombs that would otherwise be used in attacks on Israeli
troops.

They bulldozers also have been used to clear land for the new 425-mile
separation barrier that Israel says is necessary to stop terrorist attacks.
And Palestinian orchards have been demolished to ensure that militants cannot
use them for cover. (See related story: Taking stock of taking stock -
http://www.pcusa.org/pcnews/2004/04341.htm)

Human Rights Watch condemned as excessive the use of the bulldozers in a
controversial raid on Jenin, a town in an area the IDF targeted after a
number of Israeli soldiers were killed there. The IDF used the bulldozers to
widen alleys to allow vehicles to pass through a refugee camp, and residents
told HRW that the IDF destroyed some homes while people were still inside. It
documented the case of one paralyzed man who was buried alive by an IDF
bulldozer.

In its 2004 report, the IRRC said there is still a question whether
Caterpillar abides by its code of worldwide business conduct. It said
Caterpillar seems to acknowledge that "the company has no system for
enforcing the code, whether or not it disagrees with how the equipment is
being used."

The IRRC noted that, if shareholders voted to uphold the 2004 action, the
company might face a damaging financial response from Israel and its U.S.
allies.

Meg Voorhes of the IRRC says the shareholder resolutions do not seem to be
gaining momentum. Last year's action by Mercy Investment and the Sisters of
Loretto was the first to bring the issue before Caterpillar shareholders.

Heinonen told the Presbyterian News Service that the sisters are committed to
justice and peace work, particularly to causes like this one that impact
women and children. "This is a way for us to say: We need to be looking at
other ways than war to solve our international problems," she said.

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