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Caterpillar’s instransigence: Read the new MRTI Report

Editor’s note: Here is a copy of the recently released report by the Presbyterian Church (USA)’s Mission Responsibility Through Investment (MRTI) Committee. It summarizes a recent meeting between Caterpillar and representatives of the Presbyterian Church (USA) and the United Methodist Church. Both churches are considering whether to divest from Caterpillar. This report documents Caterpillar’s intransigence and unwillingness to compromise. Corporate engagement has not worked. the time to divest is now.

MRTI holds long-sought meeting with Caterpillar

‘A positive meeting’ but no change in company activities foreseen

APRIL 25, 2012

LOUISVILLE

Members of the Committee on Mission Responsibility Through Investment (MRTI) met last week with representatives of Caterpillar as part of the committee’s ongoing corporate engagement efforts. The engagement, directed by the 2004 General Assembly and reaffirmed in 2006, 2008 and 2010, sought to encourage the company “to confine their business activity solely to peaceful pursuits” in Israel/Palestine. Because the dialogues with Caterpillar and two other companies—Hewlett-Packard and Motorola Solutions—have not been successful, MRTI has recommended that the company be placed on the General Assembly Divestment List.

“It was a positive meeting, conducted with a cordial spirit and with clarity on all sides,” said Brian Ellison, a pastor from Kansas City, Mo., who chairs MRTI. “But it also made clear that the church and the company have two different perspectives, and that no amount of dialogue is going to change the company’s business decision to continue selling products whose use the General Assembly has deemed a roadblock to peace in Israel/Palestine.”

Caterpillar, which had not met with Presbyterians since 2009, acknowledged receiving invitations to meet, most recently in April 2011, and apologized for not responding sooner. Last week’s meeting came in response to Presbyterians concerned about MRTI’s pending recommendations to the General Assembly, encouraging Caterpillar to respond to MRTI’s invitation. Two representatives of the United Methodist Church’s General Board of Church and Society, which is bringing similar recommendations to that denomination’s General Conference this month, were also present.

At the conclusion of the meeting, representatives of both Caterpillar and MRTI noted that there were still considerable differences between their two positions, and there was no suggestion that future dialogue between Caterpillar and MRTI would change this.

In the dialogue, MRTI members reiterated the Assembly’s concerns, notably the use of Caterpillar’s products for the demolition of Palestinian civilian homes, the destruction of agricultural lands, the building of (Israeli) settlements in the occupied Palestinian territories (which are deemed illegal under international law), the construction of Israeli-only roads and the building of the separation barrier on Palestinian land.

Jim Dugan, chief corporate spokesperson and Caterpillar’s lead representative, outlined the company’s views and responded to numerous specific questions. He expressed compassion for all persons affected by the Israeli-Palestinian conflict and expressed hope for a political and diplomatic resolution.

Mr. Dugan said that the bulk of his company’s sales of D9 bulldozers directly to Israel come through the Foreign Military Sales program of the U.S. government.   The company is obligated to fulfill government contracts, he said, but he did not know the details of Caterpillar’s contracts, including how often the terms are negotiated or when they are next up for renewal. In response to MRTI’s observation that Caterpillar’s dealer in Israel also sells a variety of Caterpillar equipment to the Israeli government, as well as to contractors who do work for the government, Mr. Dugan said he was not aware whether the company’s dealer in Israel does this, but that it was possible. He reiterated the company’s position, stated in previous dialogues, that the company does not take responsibility for its dealers’ actions, and that the company’s Worldwide Code of Conduct is binding only on the company’s employees.

Asked by MRTI members about the company’s 2010 directive given to its dealers not to sell military equipment to Iran, Mr. Dugan said that the company determined selling to Iran posed a “business risk.” In contrast, Mr. Dugan said, such a directive regarding sales to Israel for what the Presbyterian Church regards as “non-peaceful pursuits” could amount to a “boycott” in violation of American anti-boycott legislation. MRTI representatives suggested they had a different interpretation of the anti-boycott law, believing it applied to situations where foreign governments applied pressure not to buy from Israel, rather than shareholders applied pressure not to sell certain products for certain uses to Israel. Mr. Dugan said he could not be specific but that he would not be stating this as the company’s position if senior management did not believe that such a decision would pose a serious business risk by potentially violating the legislation. He said the church and the company would have to “agree to disagree on this.”

MRTI members also provided several specific steps the company could consider taking to demonstrate possible progress in responding to the church’s concerns, including taking steps so that its products would not be sold for specific non-peaceful purposes. Mr. Dugan said he did not think the company would likely take any public stands or make policy changes specific to Israel/Palestine because the conflict “is better and best resolved in the political arena” rather than through corporate activity. He also said he was not aware of any cases, and did not foresee any, where the company would use its political influence to address Israel/Palestine human rights issues as they have done, for example, with the North American Free Trade Agreement or on transportation legislation.

Ellison said that although the MRTI members were very grateful for the frankness and positive nature of the discussion, the committee’s recommendations, which were approved by the General Assembly Mission Council in February, will remain unchanged. They will be on the agenda of the 220th General Assembly when it convenes in Pittsburgh in June.

“We are certainly glad we had the meeting,” Ellison said. “But if anything, it only solidified our understanding that the company and the church are simply in different places on these matters. So long as the General Assembly policy condemns these particular practices as roadblocks to peace, and so long as Caterpillar continues to profit from them, it appears that we will be at an impasse—and no amount of future engagement is likely to change that.”

Original Link: http://www.rabbisletter.org/caterpillars-instransigence-read-the-new-mrti-report/

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