Exporting Negligence, Research Paper Example

Background

The foregoing case looks at the ethical and legal climate surrounding the now almost century old corporation, Monsanto. More specifically, the discussion addresses the efficacy and shortcomings contained within application of constitutional law and the Uniform Commercial Code (UCC) in response to chemical technologies, the international price parity of their products (i.e. genetically altered food), and the subsequent waste dumping that results from manufacturer of the company’s product lines. A high profile company with a litigation track record incumbent to its commercial trade history, Monsanto is known for involvement in deep pockets, compensatory damage cases where hundreds of millions of dollars are penalty to damages resultant from the aforementioned activities. From a plaintiff position, Monsanto has also been active in pursuit of patent rights to its biotechnology innovations.

From the 1950s to the 1970s, Monsanto participated in gross illegal dumping of thousands of tons of toxic waste in UK landfill sites. The Environmental Agency record in the UK states that there was a thirty year pollution disaster as a result to known liability by the corporation. For instance, in 2003 unsuspecting residents near Brofiscin Quarry, were subject to toxic inhalation in response to an eruption that caused fumes to pollute the entire surrounding Cardiff region. Index of the pollutants by the British government indicated that sixty seven different toxic chemicals were released into the environment, and those included known harmful Agent Orange derivatives such as dioxins and PCBs trademarked by Monsanto. Groundwater had been affected since the 1970s, and the Agency projected clean up at that time to be approximately £100 million to adequately respond to the site in south Wales.

In the United States, Monsanto’s record is even more deleterious, and Monsanto is cited as a likely cause to contamination of at least fifty six Superfund sites across the country. The company is engaged in continuous litigation by residents adjacent to the legacy of its Superfund sites. Pollution and poisoning of the environment in general, also puts the company on the U.S. Environmental Protection Agency (EPA) radar for query and investigation on Superfund cases. For example, in 2002, an Alabama case contains evidence that Monsanto knowingly discharged mercury and PCB waste into local watershed for a period of over forty years. One year later, Monsanto agreed to pay plaintiffs a significant portion in $700 million joint and several liability case to cover damages on claims by over 20,000 Anniston residents exposed to the PCB contamination. Better known joint liability claims against Monsanto and other companies such as Dow were initiated in response to the Agent Orange defoliant used by U.S. military troops during the Vietnam War.

Switzerland’s Syngenta filed a U.S. federal lawsuit charging Monsanto with using coercive tactics to monopolize markets in 2004. Litigation between Monsanto and the Swiss chemical giant has ensued on the grounds of ‘anti-dumping’ amongst other things, and here the term is understood from a market perspective. In short, Monsanto ‘dumps’: both commercially and environmentally. Criminal action is also a sphere of legal action against the corporation, and in 2005, the U.S. Department of Justice (DOJ) filed a deferred prosecution agreement, by which Monsanto admitted guilt to violations of the Foreign Corrupt Practices Act (15 U.S.C. § 78dd-1) and falsification of accounting (15 U.S.C § 78m(b)(2) & (5)).

Within the EU market, Europeans have been resistant to the company’s infiltration of the food market. Monsanto has been warned of still fines for entering the market with its GM agricultural line; especially in regard to genetically altered foods. Traceability of risk assessment and label warnings preempt all viability of open UCC trade agreements. Cut rate prices of U.S. agricultural products like those of Monsanto’s GM are exemplary of what the EU finds suspect, and will not support regarding dumping of products not sold on the home market.  A moratorium has been in effect on new GM food crops and products in Europe since 1998. By 2006, Monsanto was ordered by the Correctional Tribunal of Carcassone, France, to pay a €15,000 fine related to their knowledge of the presence of unauthorized genetically modified seeds imported by Asgrow five years earlier. At both the domestic and international level, Monsanto’s ‘right’ to commercial agreements has been tested through the strict liability of the UCC, but more effectively through the convergence of constitutional and trade laws as they pertain to international constraints on ‘anti-dumping’, and especially on the chemical company’s post production ‘dumping’ of highly toxic wastes.

Legal Analysis

Since the Summary of the Final Act of the Uruguay Round 1986 to 1994, Agreement on Implementation of GATT Article VI (Anti-dumping), nowhere perhaps, have economic analysts been able to point to the ineffectiveness of legislative policy pertaining to international trade than in the area of anti-dumping regulations. According to the World Trade Organization (WTO), ‘if a company exports a product at a price lower than the price it normally charges on its own home market, it is said to be ‘dumping’ the product.’ According to WTO protocol, regulatory measures are the provenance of national and international jurisdictional enforcement, and not of obligation to the Organization. The position of the WTO is rather, to provide information and dissemination of case studies toward affirmation of private trade relationships, and their voluntary response to ethical practices and law abiding transactions. To this end, the ratification of various treaties since the Uruguay Accord have been subject to furtherance of those legislative interests, and amendment to existing signatory protocol with some volitional agreement to liability and oversight by member states.

The perspective of the WTO is predictably one of competitive market assessment. The mere query to into the fairness of anti-dumping is addressed through the stipulations of ratified legislative policy, and in particular the articulation of the General Agreement on Tariffs and Trade (GATT).  The foregoing essay examines the changes in the GATT’s articles on anti-dumping, and the aggregated response by national markets in regard to those constraints. In interest of furthering the discussion into the sphere of after-market trade of hazardous waste products, the discussion also contributes to the otherwise standard consideration of the Uniform Commercial Code (UCC) as ‘goods’ are defined within international trade protocol.

In 2009, the WTO Secretariat reported a marked 17% increase from 2007 in the number of anti-dumping investigations between July, 1 and December 31, 2008. According to the WTO, the Members whom reported the highest number of new investigations during the period, were India, reporting 42, followed by Brazil, reporting 16, China (11), Turkey (10), Argentina and the European Communities (9 each), Indonesia (6), Ukraine (4), Pakistan and the United States (3), Australia and Colombia (2 each), and Canada, Korea and Mexico (1 each). China was the most frequent subject of the new investigations. The most frequent products in the investigations were from the ‘base metals sector (43 initiations), the chemicals sector (22 initiations), textiles sector (19 initiations) and plastic and rubber sector (14 initiations)’ (WTO 2010).

Application of new national legislation to existing international anti-dumping measures increased by 45%  in the last two quarters of 2008, with 81 new rules reported by eleven member states. The new rule applications are resultant of investigative assessments initiated in 2007.  The annual rule advancement totaled 138 ratifications of anti-dumping measures in 2008, an increase from 197 in 2007 and 137 in 2006.

Comparatively speaking, national rule applications in 2008 were led by the United States in a reported 21 new measures during the last two quarters.  The response is consistent in most of the other countries that ranked high in anti-dumping cases, with increases in rule applications in the other countries are in most cases correlated to the number of investigations.

An exemplary case of close attention to anti-dumping protocols is found in South Africa’s legislative use of the WTO ADA (Anti-Dumping Acts) model to ‘ensure that it complies’ with its obligations. The history of South Africa’s process of rule development reveals that adequate anti-dumping measures can be fostered through the applications recommended within world trading system protocol. The iterative nature of member participation enables nations like South Africa that seek to improve their response to anti-dumping through regulatory mitigation, and can be achieved through a similar process of ADA interface with other national or regional models, as South Africa has through incorporation of rule stipulations from Australia, EU, New Zealand and the United States. The newer legislation adheres to the advancement of the Uruguay protocol, as distinguished in the DOHA Declaration on Anti-Dumping [GATT Article VI, Section 7] which outlines rules of investigation according to: 1) repeated investigations; 2) developing countries’ exports’; 3) time of determination of dumped volume; and annual reviews.

What is perhaps most interesting is consideration of how the GATT measures on anti-dumping might be interpreted in preemptive cases on trade in product waste, and especially in regard to compensatory liability post investigation of those cases in nations that rank high in number of reported anti-dumping investigations, and/or offenses on record. The Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal was negotiated under the United Nations Environment Program (UNEP) in 1988. Since the Convention was ratified in 1992, one hundred seventy two nations have become signatory to the agreement. The status of ratification by individual countries has been much slower. The list of signatories and ratifications of the Basel Protocol on Liability and Compensation (Article 29) as of March 2009 was thirteen (13) signatories – of which the United States is not party. Subsequent to the original agreement, the introduction of the financial liability protocol on December 10, 1999 stipulates that all parties signatory to the amendment:

“or each State or regional economic integration organization which ratifies, accepts, approves or formally confirms the Protocol or accedes thereto after the date of the deposit of the twentieth instrument of ratification, acceptance, approval, formal confirmation or accession, it shall enter into force on the ninetieth day after the date of deposit by such State or regional economic integration organization of its instrument of ratification, acceptance, approval, formal confirmation or accession” (Art. 29.2).

Statute related to criminal misconduct in regard to transportation of hazardous materials under Article 4 of the convention provides insight into unforeseen violations that may lead to litigation. Those projected cases resemble rules pertaining to toxic tort damage suits in the highest reporter of anti-dumping investigations, the United States.

Subsections of Article 4.h outline agreement of signatory nations to co-operate in activities with other Parties and interested organizations, directly and through the Secretariat. Those obligations include the dissemination of information on the transboundary movement of hazardous wastes and other wastes in order to improve management of such wastes and to achieve the prevention of illegal traffic. As a party to the Convention, the United States is bound to those rules, yet rejects liability in future legal actions related to those trade activities. Rationale for the decision to abstain from such an international treaty is likely resultant of U.S. jurisdictional determinants rather than a mere rejection of environmental justice.

Regardless of international pre-emption assumed under the Convention, fiscal liability in toxic torts will ultimately fall under federal statute in the United States. The U.S. often rejects agreement to obligation to commercial parties as liability may include ?joint and several liability of the State in negligence claims under U.S. Federal law. The presumption may otherwise include the United States as party to the claim if signatory to the amendment, and criminal conduct on behalf of a private party would then have the potential to obstruct justice in a liability claim that included the state, as apportionment may be considered accordingly.

As the agreement also relates to ?used goods, substantiation of warranty liability (i.e., typical criteria in trade related tortfeasor actions) is null. Pollution control standards pertaining to such goods – especially in the case where they are known to be ?hazardous (i.e. computer technologies)—should be subject to regulatory statute of the recipient nation, and under related regional and international laws, and not determined by offeror. According to the Convention, it is assumed by the United States that the shipping party must adhere to international standards of waste compliance under international law. Finally, the Common Law system in United States promotes the use of state courts in due process. States’ adherence to particular federal statute may slightly vary. In response to most charges, regardless of plaintiff’s location, defendants accused in an international criminal case would likely be reviewed at the federal level, and then reallocated to the state court where they are located for preliminary trial and later reconsidered at the federal level under appeal. Trial of complaints that include both civil and criminal tortfeasor actions that include multiple parties may be subject to variances in appeal processes and with distinct outcomes dependent upon the justice(s) decision. As we turn to similar inquiry in the nation of China, the highest ranking offender in the investigation of anti-dumping complaints, we face a new challenge that a review of the United States or other capital market nation with democratic political and legal structures cannot provide. The conclusive summary to this analysis then is furtherance of the topic on implications of China’s potential to leverage a similar response to anti-dumping activities, and attendant dissemination of this process from a command economy perspective.

Contributing Factors

From a legal standpoint, the situation is delimited by false pretenses. Consumers, governments, the public and military parties have all been negligently given false information in regard to Monsanto’s products, its market agreements and its waste disposal conduct historically. The company’s actions literally constitute ‘criminal conspiracy’ to commission civil and criminal acts of misconduct both in terms of domestic and international environmental legislative policy and industry regulatory standards. Here, the international UCC trade code is also breached through tortious gross negligence and the effect that detriment and deprivation of future benefits by the very nature of the other parties are knowingly harmed through toxic tortfeasor violations. Why would Monsanto continue to act counter to both ethical and legal expectation? Would conscious correction of risk through assessment and management of many of the company’s errors that have led to cause in fact in a range of the lawsuits within the legal record be better dealt with by strategic mitigation? Even the financial risk that is at stake, not to mention criminal accusations, might be more aptly served with such a strategy. Since the 1970s, much has been done in response to Monsanto’s role in things like Superfund, and the corporation continues to pay on future damages. From a purely commercial perspective, Monsanto’s business strategy has paid off.

Ethical Factors

The public history of endocrine disrupters is thought provoking. In light of the Monsanto pollution case, and other suits directed at similar U.S. chemical companies that paid to dump in the UK between the 1950s and 1970s, the British Broadcasting Corporation has contemptuously kept the British public abreast of imminent dangerous related to exposure to certain chemicals. Mass mediated alarms surrounding correlations between chemical ingestion and inhalants through water and air due to gross negligence on behalf of Monsanto and others, and a range of diagnosis from cancer to impotent  has centralized the public discourse over ethics in that nation, and sometimes even starting scientific fires unwittingly. In fairness, although the BBC is considered a legitimate source of information, the efficacy of the broadcast network’s extension into chemical assessment appears to outweighed even by scientific findings that support conclusion from the country’s various environmental administrations. The same can be said about mediated presence in response toxic pollution and its sources within press directed at criticism of corporations and the EPA alike. Nevertheless, we can observe how urban myths have the potential of become multi-million dollar congressional legislation, and similarly how toxic truths get shoved under the proverbial rug for decades. In short, international UCC trade agreements often have an aftermath that is not as seamless between two nations as it once was between the two private parties in a bargained for exchange. The limits of UCC responsibility cannot account adequately for the wake of future detriments and absolute loss of benefits derived from something such as gross pollution.  Mismanagement often follows mandate, and through more definitive investigation of Monsanto’s controversial cases, what may have been a valid claim on behalf of British scientists, is investigated from the American context with absolutely no reference to those sources.

So what of ethical impact drawn from the aforementioned ethical analysis of the various aspects of ethical and legal convergence taking place within lawsuits of complaint against Monsanto? Consequential theorists would argue that Monsanto’s decision making was one of utilitarian choice, predicated upon cost-benefit analysis by a corporation vested in bottom line, revenue focused decision making. Responsive to this, argues a consequential theorist, would be the position of the State, and civil and criminal charges against the entity for violation of contract, and for grievance against the environment, and subsequent harm to parties engaged with its products either by price exposure (i.e. cheaper than national markets) or literal ingestion or inhalation (or all), and exposure by parties in surrounding areas where the company has performed after market dumping of waste products through a private agreement. Punitive logic behind the consequential praxis can only truly be rendered through Jeremy Bentham’s interpretation of the Panoptican, or as Michel Foucault (1977) outlines in his work, Discipline and Punish: the Birth of the Modern Prison, where the institutional setting or architecture of the prison persists in the confinement of the individual prisoner’s mind. Here, the enforcement of law is utilitarian in the last instance.

From the perspective of a Deontological theorist, critical inquiry into Monsanto’s long-term violation of international environmental policies, for example, is of serious import. The world of ‘right and wrong’ rests most universally in policy rather than statute, as can be learnt through the global reach of international policy in comparison to the strict liability of municipal, state or federal legal statute. Policy is a moral imperative more or less, and while not outlined by ratified legal articulation at all times, policy’s often voluntary guidelines underscore the ephemeral nature of ‘natural law’ within the classical political philosophy of the early Social Contract theorist. For Monsanto, the social contract nonetheless seems to have, at least historically, been only interpreted from the position of property and economic trade and not much else, as the company’s decisions reflect a profit versus humanitarian or health perspective. Finally, the inculcation of the perspective of Humanist theories is drawn into counter position with Monsanto’s loose appropriation of deontological flexibility, through UCC and tortfeasor cases by individuals with claims of harm pertaining to the company’s gross negligence and to its lack of consideration for protection of basic individual rights like the right to environmental health.

 Recommended Corrective Action

Monsanto’s presence within the global economy is certainly complicated, if not from an ethical perspective, than a legal one. While ethical considerations of the human right to health supersede things like the right of the consumer to safety and quality at a reasonable price, Monsanto in some instances does not do the latter much less the former. Nevertheless, it is much easier for a company to shift its procedural processes and culture in general toward a more ethically driven model of decision making. Legally speaking, however, Monsanto’s actions are volitional, and therefore culpable. Applicability of distinct legal parameters (i.e. product liability negligence cases) attached to independent national markets redefines the landscape by which Monsanto must conduct itself market to market. Although the ‘global’ market is one of consideration from a strategic business point of view, legal counsel must be consulted in every case when something as toxic as chemical product parity is reviewed for export. Slipping deals under the mat, as witnessed in the Wales case, is seriously unethical, illegal and quite simply indicative of a company corrupted. Despite the persistence of international policies and their universal application on the most general terms, companies like Monsanto at times reveal to us that with the absence of strict liability at every turn, those intended to be protected by way of international legislative preemption, are merely too ‘small’ on their own in the face of the profits projected by conglomerates doing business in those contexts.

In the United States, precision within EPA regulatory legislation and enforcement of manufactured chemicals, pesticides etc. and waste disposal of those products is largely dependent upon identification of risk and thoroughness of the research on individual categories within those classifications (e.g., chemicals and pesticides v. asbestos/lead). Administrative overload is cited in programs which encompass a wide range of manufactured materials, as product lines increase annually, and chemical composition may be just slightly altered. Under-enforcement seems to be the main challenge posed to EPA officials. In cases where the regulatory history of particular materials such as asbestos – formerly utilized in public structures and later correlated with a high occurrence of lung cancer – have since been defined in terms of control and/or elimination of those materials from settings where human exposure may occur. In this case, adequate research is supported by widespread health diagnoses; correlating population prompted those regulations. Where materials are affected by mitigating factors in the environmental in which they are deployed, as is the case with pesticides, slow down of potential regulatory implementation is common. Chemical companies and agricultural proponents of certain pesticides may lobby against congressional decision making to conclusive effect with ‘Science’ on their side. The inconclusive outcomes of much of the EPA’s programmatic research activities reveal the typical escalation of costs associated in response to those concerns. Complications in the federal-to-state administration of regulations and varied adherence to those measures by states are many, and while federal pre-emption is assumed in all cases by the EPA, the Agency is often sued by states in response to omission of federal oversight where liability articulated as a condition of enforcement.

Works Cited

Agreement on Implementation of Article VI (Anti-dumping). Summary of the Final Act of the Uruguay Round 1986 to 1994. WTO. Available at: http://www.wto.org/english/docs_e/legal_e/ursum_e.htm#fAgreement

Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal (1988). Basel Convention. Available at:  http://www.basel.int/

Calamari, J.D. et al., eds. (2000). Cases and Problems of Contracts, Fourth Edition. St. Paul: Thompson West.

Diamond, J.L. et al., eds. (2000). Understanding Torts, Second Edition. San Francisco: Lexis Nexis.

Monsanto (2010). Hoovers. Retrieved at: http://www.hoovers.com

DOHA Declaration on Anti-dumping GATT Article VI, Section 7. WTO. Retrieved from: http://www.wto.org/english/tratop_e/dda_e/implem_explained_e.htm#antidumping

WTO Secretariat reports increase in new anti-dumping investigations (2009). WTO. PRESS/556, 7 May 2009. Retrieved from: http://www.wto.org/english/news_e/pres09_e/pr556_e.htm