Face the Facts! 10 - Securities Laws that keep Communities & Investors in the Dark are in Need of Reform
How the Global Economy Harms People and the Environment
Securities Laws That Keep Communities & Investors In The Dark Are In Need Of Reform
#10, Wednesday May 12, 1999
- Viacom hides toxic waste liability
- Smoke from a zinc smelter polluted the town of Palmerton, Pennsylvania for decades. Heavy metals killed trees and led to unusually high levels of lead in local children’s blood. Although the smelter closed in 1980, lack of adequate clean-up resulted in a legacy of environmental contamination that continues today. Viacom, the corporation responsible for this site—and many other toxic waste Superfund sites around the country—did not mention a dollar of the $100 million liability in their 1995 financial statement, keeping shareholders in the dark and the children of Palmerton in continued jeopardy. *1
- Freeport McMoRan conceals environmental destruction abroad
- American company Freeport McMoRan’s open-pit copper and gold mine in Indonesia is the world’s largest. Freeport discharges more than 200,000 tons of mining waste into a local river system every day, a practice prohibited in the US. The US Overseas Private Investment Corporation terminated Freeport’s insurance because of the mine’s environmental impacts.*2 Although Freeport’s own environmental audit cites waste disposal’s impact on the environment and recounts accidents that damaged large areas of rainforest, the company’s 1996 annual report to the Securities and Exchange Commission (SEC) states "Management also believes that its current operations have not had, and that its expanded operation will not have, a significant adverse impact on the environment."
- Investors support environmental and social disclosure
- A coalition of over 100 investors, community groups and environmental organizations are advocating for broader and deeper social and environmental disclosure requirements at the SEC. Investors believe that greater corporate disclosure promotes investor protection by enabling shareholders to make more informed analysis of the quality of company management; while community groups hope that increased transparency will spur better corporate citizenship. *3
*1 Cleaning Up in the Dark: Companies Disclose Little About the Costs of Toxic Sites. New York Times, 5/14/98.
*2 October and December 1995 letters from US Overseas Private Investment Corporation to Freeport McMoRan.
*3 See, for example, The Securities and Exchange Commission and Corporate Social Transparency. Cynthia Williams, Harvard Law Review, April 1999.
For more information contact:
(202)783-7400, Andrea Durbin ext. 209
1025 Vermont Ave., NW, Suite 300,
Washington, DC 20005
