Monsanto: Corporate Rap Sheet
Once a controversial chemical company, Monsanto remade itself into an even more controversial agricultural biotechnology corporation that holds a dominant position in both herbicides and genetically engineered seeds. Identified more closely than any other company with the effort to introduce genetically modified organisms (GMOs) into the food supply, Monsanto has been the target of ongoing campaigns for more than 20 years.
Despite been labeled “Mutanto” and a purveyor of Frankenfoods, Monsanto has not backed down. It has made aggressive use not only of marketing and public relations, but also the courts, where it has frequently brought suits against farmers it claimed were not following the company’s strict rules on how its products can and cannot be used. Some of those cases have gone all the way to the U.S. Supreme Court, which in 2013 strongly affirmed Monsanto’s patent rights. The company also has friends in Congress, which passed what critics call a Monsanto Protection Act limiting the ability of federal courts to halt the sale of genetically engineered seeds deemed to pose a health risk.
Starting with Saccharin
The original company named Monsanto was created in St. Louis in 1901 by John Queeny to produce the artificial sweetener saccharin, which was otherwise available only from Germany. The operation took off and soon expanded to other products such as caffeine, vanillin, aspirin, synthetic rubber and synthetic fibers (the latter would later include AstroTurf). After the Second World War, it moved into herbicides, using Western-themed brand names such as Ramrod, Lasso and later Roundup.
In 1985 the company purchased drug house G.D. Searle, which brought with it the artificial sweetener aspartame (sold under the name NutraSweet) as well as a spate of lawsuits charging that it ignored evidence of the harmful effects caused by its Copper-7 intrauterine contraceptive device. (In 1988 a federal jury found the company negligent and awarded $8.75 million in damages.) Despite being approved by the U.S. Food and Drug Administration, aspartame was believed by many to have harmful health effects.
During the 1980s Monsanto sold off many of its long-standing industrial chemical businesses and decided to focus on agricultural biotechnology. It initially focused on developing crops that would not be damaged when the company’s herbicide Roundup was applied to kill weeds.
Monsanto’s first genetically engineered product was a growth hormone, bovine somatotropin (BST, sold under the name Posilac), used to stimulate higher rates of milk production in dairy cows. It was approved by the FDA in 1993 and went on sale the following year. The move sparked widespread protests, prompting some large grocery chains to seek to avoid milk from farms using the hormone.
Undeterred, Monsanto increased its bet on biotechnology, acquiring a 49.9 percent stake in Calgene, which was at the center of controversy over its introduction of a genetically modified tomato called Flavr Savr (Monsanto later bought the rest of the company). Also in 1995, Monsanto received approval for a bioengineered potato. The company then introduced genetically modified cotton seed and Roundup Ready soybeans. In the late 1990s Monsanto solidified its position in the seed business with the acquisition of DeKalb Genetics as well as the foreign seed operations of Cargill.
During this period Monsanto negotiated a merger with drugmaker American Home Products, but the deal collapsed in a dispute over control. Monsanto did, however, proceed with a complicated corporate reorganization. It announced plans to spin off the remainder of its old chemical business into a company called Solutia (which later filed for bankruptcy as a result of legal settlements relating to PCBs); the sweetener business was also sold off. The agriculture and pharmaceuticals businesses merged with Pharmacia & Upjohn in 2000, with the combined company taking the name Pharmacia.
Pharmacia then spun off the agricultural business as the new Monsanto (the rest of the company was acquired by Pfizer). During the following years Monsanto focused on the seed business, purchasing regional firms as well as the large fruit and vegetable seed company Seminis; it later bought the large cotton seed company Delta and Pine Land as well.
The restructuring did not change the fact that there was growing opposition to GMOs, especially in Europe. In the U.S. there were calls for at least labeling genetically modified foods, though they were long resisted by the Food and Drug Administration. In 2000 the Wall Street Journal reported that McDonald’s was quietly telling its french-fry suppliers to stop using Monsanto’s GMO potatoes because of concern about a backlash from customers, while big food processors such as Kraft shunned bioengineered corn after some inadvertently ended up in some of its taco shells. More than 1,000 poor farmers stormed and occupied a Monsanto plant in Brazil. A 2001 article in the New York Times described the state of the GMO industry as a “debacle.” That same year, Monsanto quietly discontinued its genetically modified potato in the face of price resistance from farmers.
Monsanto, nonetheless, pushed ahead with new products such as GMO wheat despite strong farmer resistance in places such as North Dakota. It also continued to prosper from the sale of its Roundup herbicide, which had become the all-time best-selling agricultural chemical product (though the product’s reputation took a hit with reports that its use was contributing to the spread of herbicide-resistant weeds).
In 2002 Monsanto and Aventis CropScience revealed that some of their GMO canola seeds that had not yet been approved for use in the United States might have found their way to farmers’ fields. The following year Monsanto received federal approval for GMO corn that was resistant to corn rootworm, a leading agricultural pest (though there were later reports questioning its effectiveness).
The Bush Administration sought to assist Monsanto and the rest of the GMO industry with the 2003 filing of a World Trade Organization action against the European moratorium against their products. Bush himself charged that the ban had discouraged third world governments from approving the technology and thereby exacerbated world hunger. (The ban was later lifted for some crops.)
Also in 2003, the U.S. Department of Agriculture announced that Monsanto and its research partners had in 2001 paid $63,000 in fines for previously undisclosed violations relating to the testing of genetically modified crops.
In 2004 Monsanto bowed to worldwide protests and finally abandoned its GMO wheat project. The company also ran into problems with its genetically engineered alfalfa. In 2007 a federal judge in San Francisco ordered the company to suspend sales of the crop because the USDA had approved it without conducting an environmental impact assessment. This was the first time a court had ever taken such an action. Monsanto appealed the case all the way to the U.S. Supreme Court, which in 2010 ruled in the company’s favor.
In the meantime, Monsanto was able to dampen the impact of the anti-GMO movement by focusing on seeds used for crops that would serve as agricultural or industrial inputs rather than those for produce that would end up directly on people’s plates. In 2008 it sold its controversial Posilac dairy growth hormone.
In 2010 the Environmental Protection Agency announced that Monsanto would pay a $2.5 million penalty for selling mislabeled bags of genetically engineered cotton seed.
In 2011, amid accusations that GMO crops, together with their pesticides and herbicides, were playing a role in the decline of honeybee populations, Monsanto acquired a company called Beeologics, which was doing cutting-edge research on the problem. There have been reports linking Monsanto’s Roundup to a decrease in the population of Monarch butterflies.
The company has also had to contend with repeated efforts to require labeling of GMO foods. It was buoyed by the defeat of a 2012 California ballot measurement on the issue which Monsanto and other agribusiness and food corporations spent some $46 million to oppose. But in 2013 Whole Foods became the first major grocery chain to require the labeling of all GMO foods sold in its stores.
The anti-GMO movement has been gathering new steam with actions such as the March Against Monsanto protests that were held in 52 countries and more than 400 cities in May 2013. Monsanto has been under heightened scrutiny because of the revelation that the company’s unapproved GMO wheat was found growing on a farm in Oregon. Monsanto denied responsibility and claimed that sabotage was probably involved. The company is now being sued over the matter.
Disputes with Farmers and Processors
When Monsanto introduced its first genetically modified seeds in the 1990s, it forced farmers to sign contracts prohibiting them from continuing the traditional practice of saving some of the seeds from a harvest for planting the following season. To make sure farmers were compelled to purchase a new supply of the GMO seeds for every season, the company made sure it had the right to inspect and monitor the fields of its customers. It also brought lawsuits against farmers it claimed violated the company’s policies.
Monsanto then reinforced its control by developing seeds that would beget sterile progeny. Dubbed the Terminator by critics, this patent was designed to make it impossible for farmers to save seeds and thus make them totally dependent on proprietary seeds. In the face of strong opposition, the company discontinued the product in 1999.
Later that year, however, a group of famers in the U.S. and France filed a class action lawsuit against Monsanto, alleging that the company had failed to test its GMO seeds adequately and thus had defrauded farmers when it told them that the seeds were safe. They also accused the company of antitrust violations because of its dominant position in the GMO seed market and because of its requirement that farmers “license” its seeds rather than buying them outright. (In 2003 a federal judge denied class-action status to the suit.)
Monsanto kept up its own legal offensive against farmers accused of using its patented seeds without permission. In 2001 a Canadian court awarded damages to Monsanto from a Saskatchewan farmer because some of the company’s GMO canola plants were found growing in his fields, apparently as a result of pollen that had been blown onto his land from nearby farms. The Canadian Supreme Court later upheld the ruling against the farmer, Percy Schmeiser.
In 2003 Monsanto sued a small milk producer in Maine for supposedly disparaging its Posilac artificial growth hormone by labeling its products as being free of the substance. The case was settled out of court.
In 2007 Monsanto sued Indiana farmer Vernon Bowman, who had supplemented the patented seeds he purchased from the company with additional seeds purchased from a local grain elevator that turned out to include some produced with Monsanto technology. The company won a judgment against Bowman, who appealed the case. The matter eventually made its way to the U.S. Supreme Court, which in May 2013 ruled that Bowman had violated Monsanto’s patent and that farmers needed to pay the company every time they used its genetically modified soybeans.
In 2012 a French court found Monsanto guilty of chemical poisoning of a farmer who reported suffering neurological problems after using one of the company’s herbicides.
Lobbying, Public Relations and the Revolving Door
When faced with opposition to its products and policies, Monsanto has not hesitated to enlist high-powered assistance from the federal government. In the late 1990s it got members of the Clinton Administration to lobby against possible European restrictions on GMOs. In Washington it made use of former U.S. Senators Dennis DeConcini and John Chaffee to promote its interests on issues ranging from patents to taxes. And it made frequent use of the revolving door by hiring former federal bureaucrats to joint its army of lobbyists and flacks. Among those were Carol Tucker Foreman, who had served both as assistant secretary of agriculture during the Carter Administration and as executive director of the Consumer Federation of America. Foreman, however, later returned to the CFA and became more critical of Monsanto and other GMO companies.
As criticism of “Frankenfoods” grew in the late 1990s, Monsanto and other biotech companies devoted tens of millions of dollars to make their case, forming front groups such as the Alliance for Better Foods.
A 2001 New York Times investigation found that Monsanto had exerted a great deal of control over the federal regulation of its biotech activities, first pushing for greater oversight in the 1980s as a way to reassure the public of the safety of GMOs and later insisting on weaker rules so that it could get its products to market more quickly.
Monsanto’s influence has been strong in both Republic and Democratic Administrations, including the Obama Administration. For example, in 2010 Michael R. Taylor, a former Monsanto executive and a corporate lawyer who once represented the company, became the FDA’s deputy commissioner for foods, making him the country’s food safety czar.
In 2013 Congress passed an agricultural appropriations bill that contained a provision, which critics dubbed the Monsanto Protection Act, restricting the ability of federal courts to stop the sale of GMO seeds deemed to pose a health risk.
Controversies in India
Monsanto’s introduction of genetically engineered Bt cotton in India has been linked to the serious deterioration of conditions for small farmers in the country. Critics such as Dr. Vandana Shiva have charged that the company is responsible for a growth in the number of suicides among such farmers.
A 2012 report by the Fair Labor Association and the India Committee of the Netherlands linked Monsanto and other Western seed companies to the payment of subminimum wages to agricultural laborers, especially women, and to the use of child labor.
Monsanto was one of the manufacturers of the devastating defoliant Agent Orange used by U.S. troops during the Vietnam War. Along with the vast number of deaths and suffering it caused, Agent Orange was linked to environmental issues. The deforestation upset the ecological balance of many areas, and the lingering dioxin in soil and water caused ongoing contamination of the food chain.
The use of the defoliant also had repercussions back in the United States. The manufacturers found themselves targeted by thousands of lawsuits filed by Vietnam veterans who charged that the dioxin in Agent Orange had caused liver damage, nervous disorders, birth defects, and other health problems. The litigation was settled out of court in 1984 with the creation of a $180 million fund.
In 2004 the Vietnam Association for Victims of Agent Orange (VAVA) filed a lawsuit in federal court against the manufacturers on behalf of Vietnamese victims. The case was dismissed the following year and the dismissal was upheld in 2007.
Other Environmental and Workplace Safety Issues
In 1929 Monsanto introduced polychlorinated biphenyls (PCBs), chemicals that were adopted for a wide range of consumer and industrial products. Although there was evidence as early as the 1930s that PCBs had harmful health effects, Monsanto kept producing them until the late 1970s, by which time they were recognized to be carcinogenic and were being banned by the Environmental Protection Agency.
In 1986 a federal jury in Galveston, Texas found Monsanto guilty of negligence and ordered the company to pay $108 million to the family of a worker who died from leukemia after being exposed to benzene while working at a Monsanto chemical plant. Monsanto had refused to pay workers compensation to the family, insisting that the disease was not work-related. The award was later overturned and the family settled with Monsanto for $6 million.
In 1987 a state court jury found Monsanto liable for failing to warn the residents of Sturgeon, Missouri about the risks of a 1979 train accident that spilled chemicals including a small quantity of dioxin. The residents were granted more than $16 million in damages, but the award was later overturned.
In 1988 Monsanto agreed to pay $1.5 million to settle a lawsuit that had been brought by a group of workers who charged that their exposure to a rubber additive at the company’s plant in Nitro, West Virginia caused them to contract a rare form of bladder cancer.
In 2003 Monsanto (which retained liability for some liability matters relating to its old chemical businesses), along with Solutia and Pfizer (which had acquired Pharmacia), agreed to pay some $700 million to settle a lawsuit over the dumping of PCBs in Anniston, Alabama.
In 2007 The Guardian reported that it had obtained evidence that dozens of dangerous chemicals related to dioxins, Agent Orange and PCBs were leaking from an unlined quarry in Britain that was among various landfills in the country believed to have been used as dump sites for contractors working for Monsanto decades earlier.
In 2005 the U.S. Justice Department announced that Monsanto had agreed to pay penalties totaling $1.5 million to resolve criminal and civil charges that it violated the Foreign Corrupt Practices Act through illegal payments to government officials in Indonesia.
In 1984 Monsanto lost an antitrust dispute with its distributor Spray-Rite, which Monsanto had sought to prevent from selling its herbicides at less than its suggested price. It appealed the case all the way to the U.S. Supreme Court, which upheld the award and thus in effect found Monsanto guilty of price fixing.
A 2004 investigation by the New York Times found that during the 1990s Monsanto executives met repeatedly with their counterparts from competitor Pioneer Hi-Bred International and agreed to charge higher prices for genetically modified seeds in what seemed to be a case of price-fixing. The companies acknowledged that the meetings took place but claims they were legitimate negotiations about licensing arrangements.
In 2010 Monsanto disclosed that the U.S. Justice Department had formally demanded information on its herbicide-resistant soybean seed business as part of an investigation into anti-competitive practices. To make itself less of a target, Monsanto decided to let patents on its bioengineered farm seeds expire without a fight. This would make it easier for rivals to produce cheap knockoffs, yet Monsanto expected to maintain its market dominance by introducing new patented versions of the seeds. The Justice Department notified Monsanto in 2012 that it was ending the investigation.
In 1996 Monsanto and Chevron Chemical agreed to pay a total of $18.25 million to settle an age, race and disability discrimination suit that had been brought by a group of workers who were terminated after Chevron sold its Ortho Consumer Products business to Monsanto.