How Far Would You Travel to Save Your Homeland?
By Holly Testa, Director, Shareowner Engagement
Small shareowners may feel powerless to have any impact on the decision-making of the enormous public corporations in which they invest. However, there are times when a few shares and a lot of teamwork can make a difference.
Here is a case where a coalition of players, including shareowners, worked together to give a voice to the Munduruku people of Brazil at the General Electric annual meeting in May. These indigenous peoples have little say in—and perhaps everything to lose from—a dam to be built in the heart of the Amazon.
That is why tribal leaders traveled for two days from the heart of the Amazon, including an initial journey by canoe, to speak to the Board of Directors and shareholders at the GE Annual Meeting in Jacksonville, Florida. They are in a battle to save their homeland from the machinations of the modern world.
The Issue: Proposed Mega Dam Will Inundate The Munduruku Homeland
Brazil's largest power utility has proposed the Sao Luiz do Tapajos dam on the Tapajos River. Hydroelectric can be a low carbon choice, but this dam's location in the Amazon poses a number of serious environmental and social concerns, including the flooding of 11.7 million hectares of Munduruku territory.
According to a report issued by Greenpeace, the indigenous peoples in the area were not consulted during the planning process. Although the dam's license was recently suspended by regulatory authorities because of failure to meet commitments made to these peoples, the Brazilian government is likely to override this decision.
Philip Fearnside, one of nine scientists commissioned by Greenpeace and an expert on the Amazon and climate change, said that "Dams are decided in Brazil with no consideration of their social and environmental impact, only financial criteria." Ironically, this project may even fail on financial criteria, as projected energy and investor goals may not be met over the course of the dam's lifetime due to escalating drought.
What Does GE Have To Do With It?
General Electric (GE) recently acquired Alstom, a French company that supplies hydroelectric turbines. Alstom supplied the turbines that powered the ill-fated Belo Monte dam in Brazil that has been plagued by corruption, fines and delays. Alstom is likely to be asked to supply turbines to this and other dam projects in the Amazon basin. With over 400 dams planned for the Amazon basin, the potential scope of this issue is enormous.
One could argue that GE's new acquisition is simply supplying parts, but Daniel Brindis of Greenpeace points out that: "São Luiz do Tapajós violates international norms on indigenous rights. The companies that have sustainability and human rights commitments that go beyond the Brazilian legal standards should apply such policies and disqualify projects like São Luiz do Tapajós on [that] basis. It is easy to ignore the reality when these projects have such big development myths behind them and take place so far away, where the people impacted are not heard"
When the Interfaith Center on Corporate Responsibility was asked for help, they canvassed the responsible investment community looking for investors who owned GE stock. The community, including First Affirmative, was able to supply a total of eight proxies. A proxy authorizes another person to attend an annual meeting in place of the shareowner. In the case of First Affirmative, our client's 12 shares were used to admit a Munduruku chief.
Chief Jairo Saw Munduruku said: “We journeyed here to speak to the leadership of GE and meet those that would consider profiting off the displacement of thousands of people from our traditional lands against our will, destroying our natural environment. The traditional population uses very well this territory. When we are forced out of our land, we lose our traditional livelihoods.”
Construction of the dam may or may not be stopped. But either way, GE management, board, and shareholders were brought face-to-face with the realities of how their corporate decisions impact communities that are out of sight, out of mind, and with little control over their fate.
To learn more about the plight of the indigenous peoples of the Amazon, click here.
First Affirmative understands that the ways we save, spend, and invest can dramatically influence both the fabric and consciousness of society. We believe that in addition to the benefits of ownership, investors bear responsibility for the impact our money has in the world. Are you making conscious decisions about the impact of your consumer purchase and investment decisions?
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Posted: May 19, 2016