wfn.org | [PCUSANEWS] Jewish peace group challenges Caterpillar's Israel

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Note #8525 from PCUSA NEWS to PRESBYNEWS:

04455
October 11, 2004

Jewish peace group challenges Caterpillar's Israel business

PC(USA) backs shareholders' resolution seeking stop to demolitions

by Alexa Smith

LOUISVILLE - A Jewish group has submitted a shareholders' resolution to
Caterpillar Inc., arguing that the heavy machinery company may be risking its
reputation by continuing to sell to the Israeli army bulldozers that are used
to demolish the homes and orchards of Palestinians in the West Bank and the
Gaza Strip.

	This is the second time that Jewish Voice for Peace (JVP) has aligned
itself with Christian groups that oppose the ongoing use of Caterpillar
equipment to commit what the international community has called human rights
violations in the occupied territories, or what the shareholders' resolution
describes as "the destruction of homes, land and other properties."

	JVP is hardly a mainstream Jewish organization, but it is taking the
lead among religious and humanitarian organizations this year in filing the
shareholders' resolution. The Roman Catholic Sisters of Loretto co-signed the
resolution.

      The two groups hold only a handful of stock in Caterpillar, but they
are hoping that other religious entities will join them. The co-filers are
urging their allies to show up at Caterpillar's April 14 shareholders meeting
in Chicago to vote their proxies in support of the resolution and help create
public pressure.
The Presbyterian Church (U.S.A.) committed itself to supporting the
resolution last week, with roughly $3 million in stock as leverage.

      "This is within the normal operations of our committee," said Bill
Somplatsky-Jarman, the primary researcher for the PC(USA)'s corporate
responsibility arm and staff to the Mission Responsibility Through Investment
Committee (MRTI). "We supported this resolution last year and there is no
reason why we couldn't do so this year."
The shareholders' resolution requests Caterpillar to review whether the sale
of its equipment to the Israeli army comports with the corporation's own Code
of Worldwide Business Conduct.

      The code states that Caterpillar's commitment to success "takes into
account social, economic, political and environmental priorities." It also
promises to respond to public inquiries promptly and honestly.

	MRTI meets in New York City Nov. 4-6 to set criteria for a highly
controversial General Assembly decision to pressure corporations doing
business with Israel to rethink the ethics of profiting from the 37-year
military occupation.

      MRTI's meeting date made it impossible to meet Caterpillar's Nov. 4
filing date, preventing the church from taking a lead role in the shareholder
action.

	Caterpillar Inc. is the name most often mentioned by church leaders
as a probable target of the denomination's controversial "selective, phased
divestment" campaign, which was approved by the 216th General Assembly in
Richmond, VA, in early July.

     According to denominational officials the strategy is designed to force
companies to be better corporate citizens through dialogue, shareholders'
resolutions, and public pressure.

	Divestment is a last resort, utilized only if the earlier steps fail
to produce changes in the corporation's conduct. Only the General Assembly
can authorize divestment of stock, and even then its decision is not binding
on investors.

      MRTI's bylaws, however, permit the committee to act on human rights
matters without permission from a national body, which is why
Somplatsky-Jarman is comfortable assuring JVP and the nuns that the PC(USA)
will back the resolution when it is debated.

      He thinks other religious bodies will do the same, primarily because
there has been little resistance to the resolution within the Interfaith
Center on Corporate Responsibility (ICCR) - a New York-based interfaith
coalition of institutional investors that includes both Christians and Jews.

     Sister Valerie Heinonen of the Mercy Investment Program represents the
corporate interests of a number of orders of nuns, including the Sisters of
Loretto, who have pushed this action from the get-go. "It's an important
human rights issue. . . . That's really why we're focused on this," she told
the Presbyterian News Service (PNS) in a telephone interview from her New
York City office.

	Heinonen said Caterpillar's executive management insisted at this
year's shareholders meeting in April that the company is not in the business
of weapons production.

     The religious orders she represents were equally adamant that by selling
equipment to the Israeli Defense Forces (IDF) - through a U.S. military aid
package - Caterpillar is providing the army with weaponry.

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

	Heinonen believes - since the IDF's reasons for buying the bulldozers
are not secret - that Caterpillar's stance is morally indefensible. Moreover,
she said, the company has never condemned the army's actions.

	The resolution (read more) charges that the army's use of Caterpillar
bulldozers has to date destroyed more than 3,000 homes, hundreds of public
buildings and commercial properties, and huge tracts of agricultural land. It
says the bulldozers have uprooted hundreds of thousands of olive trees as
well as orchards of dates, prunes, lemons and oranges, causing "widespread
economic hardship and environmental degradation" in rural areas of Palestine.

	It cites documents filed by the United Nations High Commissioner on
Human Rights charging that the company needs to take measures to "guarantee
that its bulldozers are not used to commit human rights violations," or else
the company is complicit in those violations.

     Caterpillar - which generated $22 billion in revenue in 2003 - has
repeatedly maintained that it cannot "police" the use of its bulldozers in
"virtually every country of the world."  The company recently announced that
it expects 2004 revenues to increase another 12 percent and its profit
another 40 percent.

     Heinonen said corporations are unpredictable in responding to
resolutions like this one, and she noted that the current resolution asks
only for a study.
"It's very hard to predict how the board of directors will decide," she said,
adding that most boards are prone to act more rapidly on governance issues
than on matters of social concern. "Some managers have acted with a 30 or 40
percent (positive vote), but others refrained even when (support) is in the
50th or 60th percentile. It is just hard to judge."

     JVP spokeswoman Liat Weingart told PNS that while many U.S. Jews are
uncomfortable with Israeli policy in the West Bank and Gaza, none of the
major Jewish organizations criticize home demolitions. The Union for Reform
Judaism has issued statements condemning the ongoing expansion of settlements
but not home demolitions.

	"Nobody is pro-home demolitions. But the Reform movement has not
explicitly said it is anti-home demolitions. So the onus is on them," she
said.
"They've not taken responsibility for that. JVP has. The PC(USA) has. The
Reform movement needs to follow suit."

	When a similar resolution was filed last year it got little support
from stockholders - only 4 percent of their votes. But that was enough to
meet the requirements of the U.S. Securities and Exchange Commission (SEC) to
either refile or rework the measure, which the groups have done.

 It needs to garner at least 6 percent of shareholders' votes this year to
remain eligible to refile the resolution in its current form. The resolution
may be filed repeatedly if it addresses the issue from a new angle.

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