RJR Rebuts Farmworker Arguments at Meeting

Source from:  Winston-Salem (NC) Journal 05/10/2010

Reynolds American Inc. and a group representing migrant farmworkers butted heads yesterday -- as expected -- over who's ultimately responsible for laborers' work and living conditions. The clash took place yesterday at Reynolds' annual shareholder meeting. Groups wanting to protest Reynolds' policies typically buy its shares to be able to speak at the meeting. From the tone of the nearly two-hour meeting, it's clear that neither group trusts the other's agenda and veracity. The Farm Labor Organizing Committee believes that it has to be more vocal and demanding to persuade Reynolds to use its clout to pressure its suppliers to improve conditions for the state's 30,000 tobacco farmworkers. Members inserted the issue every chance they got, particularly during the comment periods for the six shareholder proposals, which included the topics of "communicating truth" and "human rights protocols." The four shareholder-protest proposals were defeated. The group also held a protest rally outside One Park Vista that drew about 110 participants, two of whom carried a sign reading "Reynolds scum. Your time has come." Reynolds, meanwhile, has decades of experience in handling protests, which has led to regimented shareholder meetings and timed-to-the-second comment periods. Susan Ivey, the chairwoman and chief executive of Reynolds, said repeatedly that it is not the company's role to negotiate on behalf of nonReynolds workers. In February, the company's board of directors announced a "Statement on Human Rights" -- on its website -- for how it and its operating companies conduct their businesses. "It is important to note that there is an extensive foundation of U.S. laws and regulations that support human rights," Ivey said. "We do not believe it is appropriate for our operating companies to assume the regulatory and enforcement role of the federal, state and local governments." Dolores Quesenberry, a spokeswoman with the N.C. Labor Department, said "while there are some bad actors out there, we find that most farmers in North Carolina adhere to the standards. We encourage workers to report specific problems to the bureau. "As for Reynolds Tobacco, in our experience they have been very proactive when it comes to safety and health training." Several protesters and advocates labeled Reynolds' human-rights commitment as hollow. The Rev. Laura Spangler of Lloyd Presbyterian Church challenged Reynolds to take its recent pledge for more transparency about its tobacco products and extend it to its global supply chain. "Why not tell all the truth as to where forced child labor is being used by Reynolds tobacco suppliers?" Spangler asked. Other advocates said that Reynolds should be more open about who are its North Carolina suppliers so that they can be reviewed for work and living conditions. Ivey said that Reynolds is addressing the child-labor issues in what she called "Reynolds' sphere of influence." David Howard, a Reynolds spokesman, said that the company considers its supplier list as proprietary. Quesenberry said that the department does not collect information on which tobacco farmers have business relationships with a particular company. Judy Lambeth, the general counsel of Reynolds, said that the issues concerning migrant-farm labor are much larger than just what happens on tobacco farms. "FLOC is specifically targeting Reynolds as both the cause and cure for farmworker problems," Lambeth said. "But you know what? Reynolds is the wrong target. "The correct target is establishment of an effective guest-worker program through comprehensive immigration reform." Lambeth said that Reynolds declines to enter into a multiparty agreement with the group and its suppliers because Reynolds would be asked to pay additional money "purportedly for the benefit of the workers." "But what we have learned from others' experience in these multiparty agreements is that there is no guarantee that any additional money would reach or benefit workers. The main beneficiary of FLOC's multiparty agreements appears to be FLOC." Crystallizing the chasm in communication was when the shareholder protesters, led by the Rev. Carl-ton Eversley, walked out of the meeting singing "Ain't gonna let nobody turn me around," a Civil Rights-era spiritual. Eversley serves as the president of the Ministers Conference of Winston-Salem and Vicinity. The display led Ivey to call the meeting to an end before the shareholder votes were announced. Baldemar Velasquez, the president of the group, said he believes the meeting was productive. He said he regretted the timing of the song and walkout. "I would say we had a modest breakthrough," Velasquez said. "They acknowledged we have a guest-worker problem, which basically acknowledges we have an undocumented-worker problem. "We believe it is Reynolds' role, and under its sphere of influence, to require its suppliers to treat the farmworkers with dignity and proper work and living conditions." Velasquez said that his group is encouraged by recent societal, regulatory and legislative changes that have affected the tobacco industry. "We realize that those changes didn't happen overnight, but by a constant chipping away at the issues," he said. "We plan to continue to chip away so our goal will become the next real change." In other business, the board declared a quarterly cash dividend of 90 cents a share. The dividend is payable July 1 to shareholders registered June 10. Shareholders rejected a proposal requiring annual elections of board members. Of the 92.8 million shares voted by beneficial shareholders -- largely institutional investors -- 79.4 percent voted for the elimination of classified board proposal. That represented a decrease of 13.9 million votes for the proposal and increase of almost 9 million votes against from last year's vote. Of the 123.2 million shares voted by registered shareholders -- such as British American Tobacco -- less than 1 percent was in favor of the proposal. Enditem