by Vittorio De Filippis
"ETHICAL INVESTING" ISN'T ALWAYS the paradise people
imagine it is, and the values it defends aren't always
universal ones. Let's take an example.
The story took place on Tuesday in a large Paris
restaurant, at the Regular Meeting of Imerys (formerly
Imetal). In front of a room full of shareholders, the
chairman of the French Group, the world leader in
processing minerals, reported on 1999 earnings. Higher
profits, successful foreign growth policies.The
shareholders were reassured about the future, and the
question-answer period began. However, when Jyrki Raina
took the floor, unease set in. Raina was wearing a
business suit, but he was actually the representative of
the American trade union Icem (International Federation
of Trade Unions of Chemical, Energy and Allied Industries
Workers). He came to speak on behalf of his federation,
but also on behalf of an American pension fund company,
Walden Asset Management. Raina started by apologizing for
his American accent before proceeding: I represent Walden
Assets Management, a holder of a portion of your shares,
and a company involved in ethical investing. Mr.
Chairman, why is your company involved in anti-union
practices in the United States, while at the same time
your company is improving its relationship with trade
unions in Europe? Don't you agree that these practices
are morally reprehensible, and that they could affect
stock market values if a solution is not found soon?
Shareholders shudder. Aren't they living through an
episode from the mini-revolution that is shaking French
capitalism? After the United States and Great Britain,
France has gained from "socially responsible investing."
or "ethical investing," which is a new form of pressure
placed on management of companies. It's a new field,
which still has trouble benefiting from a long period
of experience. Ethical investing is theoretically an
attractive idea that occasionally shows its limitations.
This was the case on that day.
In the spring of 1999, Imerys (which was still known as
Imetal) announced the acquisition of English China Clay
PLC (ECC), a multinational specializing in processing
minerals. ECC owns a stone grinding plant in Alabama,
which employs 280 non-union salaried workers. Only 200
meters away from the plant, Imerys owns another
production site, Georgie Marble; 120 people work there,
and they are all unionized.
Conflict. Quite logically, Imerys united these two
plants, but it's only there that the unification quickly
turned into a dispute between the local representatives
of the strong trade union, PACE (Paper, Allied
Industrial, Chemical and Energy Workers Union),
affiliated with ICEM, and the management of the new
company. Imerys then claimed that the two facilities are
a single site, and that PACE no longer represents the
majority in the new plant. The American management team,
holding fast to this argument, therefore refused to
recognize PACE. "In fact, Imerys is challenging the right
of workers to o unionize. This French multinational went
so far as to offer strikebreaking services. Local
management has held obligatory meetings for the salaried
employees in which it shows anti-union films, issuing
threats with regard to our sympathizers, and showing
favoritism to our opponents," explains Joe Drexler of
PACE, who traveled from the United States in order to
defend the cause of his union. "That's untrue," responds
Patrick Dubert, Director for [acronym DRH] of Imerys. "We
have never sought to intimidate the salaried employees in
the United States. We simply wanted to institute a type
of representation that respects American law at the risk
of challenging local practices that aren't always
democratic."
In fact, in order to obtain a new union mandate, PACE
always hoped that company management would recognize the
American system of the authorization card. Across the
Atlantic, the custom is that a trade union can became the
sole and exclusive representative of employees simply by
receiving a wide majority of signatures during the
collection of authorization cards. "These union practices
are affected by a certain amount of pressure. This is
because the unions don't hesitate to go door-to-door to
the homes of salaried employees to get signatures. That's
not very democratic," explains a French salaried Imerys
employee who is starting to understand the complexities
and differences between American and Europeans trade
union movements.
Anonymity. On the Tuesday before the Meeting, the
investors already knew this history. They found details
on the Web at www.imerys-workers.org. Others, notably
financial analysts, did not remain indifferent to the
Raina's representations. Jacques F., who prefers to
remain anonymous, comments: "Analysts increasingly look
at the social conduct of companies, even if the question
still remains somewhat taboo within their profession. In
the case of Imerys, however, you can see that the idea of
ethical investment is different. This is what a Fund like
Walden Asset Management considers ethical in the United
States, that is, the possibility of a single
representative union in a company, and, moreover, with no
elections, something which is inconceivable here. So
where are good company ethics, here in Europe or in the
United States?" The debate is not over at Imerys, because
the two sides are supposed to be meeting in a few days.