HII has been filing resolutions at Monsanto (MON) for at least two decades on issues of dangerous pesticides sold overseas, genetically modified organisms (GMOs), environmental sustainability, climate change, and on many corporate governance issues, including Proxy Access, which was adopted by MON shareholders. This year, our resolution has been re-filed raising the issue again of the danger of glyphosate-based herbicides sold by MON (“Roundup”), comprising almost half of the company’s revenue, which in March 2015 was classified by the International Agency for Research on Cancer of the World Health Organization (WHO) as “probably carcinogenic.” The resolution calls for the MON board to prepare a report for shareholders assessing the effectiveness and risks associated with MON’s policies intended to control glyphosate pollution and food contamination, while also quantifying the financial risks of continuing to produce and sell the product while proposed bans and restrictions world-wide are enacted.
On September 4, 2015, the California Environmental Protection Agency’s Office of Environmental Health Hazard Assessment (OEHHA) announced that it intended to list glyphosate as a chemical known to the State to cause cancer in accordance with the Safe Drinking Water and Toxic Enforcement Act of 1986 (Proposition 65). On January 21, 2016, Monsanto filed a lawsuit against OEHHA to keep it from listing glyphosate, pursuant to Proposition 65, as a chemical causing cancer. OEHHA filed a motion on January 27, 2016 to dismiss Monsanto’s lawsuit, a motion that will be heard on January 27, 2017.
While our resolution only received about 5% of the preliminary shareholder vote and we will not be able to re-file it next year (the SEC Rules require that a resubmitted resolution needs to gain at least 6% the second year to be re-filed the third year), Fresno County Superior Court Judge Kristi Kapetan on January 27, 2017 dismissed MON’s lawsuit challenging the constitutionality of the California OEHHA plans to list glyphosate as a possible cancer threat pursuant to Proposition 65.
Shareholder Resolution 2017
“Report on Glyphosate”
Whereas, Roundup and other glyphosate-based herbicides and herbicide-resistant crop businesses have recently been responsible for almost half of our revenues, but in fiscal 2015 became one of the primary contributors to a 5% decrease in our net sales;
Whereas, an increasing number of independent studies assessing glyphosate’s toxicity, Roundup’s active ingredient, associate it with cancer, birth defects, kidney disease, and hormone disruption, causing international concern about its safety;
Whereas, in usage, the herbicides become pervasive pollutants in the environment and contaminants in the food supply;
Whereas, actions by government and nongovernmental entities continue to escalate, now with nearly 40 countries proposing restrictions or bans on glyphosate-based products, including our genetically-modified crops engineered to resist glyphosate;
Whereas, in June, 2016, the European Commission deferred the reauthorization of glyphosate until the European Chemicals Agency in Helsinki issues a scientific safety assessment; in July, 2016, Member states in the 28 nation bloc backed a proposal by the Commission to limit usage of weed killer glyphosate, including an outright ban on a co-formulant in Roundup;
Whereas, following the critical 2014 United States Government Accountability Office report, the Food and Drug Administration announced plans to begin measuring the presence of glyphosate residue in consumer staples; private companies have already begun testing and reporting glyphosate found in common products like bread and oatmeal; and some cities, states, and Agencies are considering banning glyphosate products on public lands;
Whereas, Glyphosate use has grown exponentially in the past two decades, and the United States Geological Survey estimated agricultural use of glyphosate in 2014, the most recent year available, at a high of nearly 300 million pounds;
Therefore, Be it Resolved, Shareholders request the Monsanto board prepare a report to be made available by July 31, 2017 at reasonable expense and omitting proprietary information, assessing the effectiveness and risks associated with the company’s policy responses to public policy developments intended to control pollution and food contamination from glyphosate, including but not limited to the impact of recent reclassification of glyphosate as “probably carcinogenic,” and quantifying potential material financial risks or operational impacts on the Company in the event that proposed bans and restrictions world-wide are enacted.
Our Company’s entire revenue stream is almost based on one product which, until recently, has enjoyed a measure of regulatory leniency. The March 2015 reclassification by the International Agency for Research on Cancer of the World Health Organization of glyphosate as “probably carcinogenic to humans” resulted in new testing and reporting procedures, and results of these tests and other pending legislative actions, may substantially increase overall legal and financial risk, damaging our company’s name brand and corporate reputation.