Tax scam / Bayer deaths / PhRMA lobbyist goes to BIO (24/6/2004)

As well as drug biotech firm AstraZeneca (and Syngenta was, of course, partly spun out of Zeneca's ag and biotech unit) another firm implicated in the tax scam described in item 1 is medical care company Fresenius which also has a biotech drug arm - see: KPMG tax shelter drew major U.S. firms (Reuters June 16, 2004) http://www.msnbc.msn.com/id/5223296/

1.Biotech firms implicated in tax avoidance scam
2.Make Bayer Accountable for Deaths of Peruvian Children
3.PhRMA lobbyist and former Pentagon man becomes Exec. Director for BIO's Food and Ag section

1.Biotech firms implicated in tax avoidance scam

From Private Eye no 1109 25 Jun-8Jul 2004

WHY was Jon Symonds, chief financial officer of drugs giant AstraZeneca so worried about the government's threat earlier this year to "name and shame" companies engaged in tax avoidance?

After all Mr Symonds is co-chairman, with Dave Hartnett, the "business friendly" head of tax policy at the Inland Revenue, of the Revenue's extremely "business friendly" Business Tax Forum, and is always keen to make elear that business leaders work closely with government in stamping out tax avoidance.

So why did he tell the Financial Times on 2 April that "naming and shaming is not going to be very constructive"? Here's a clue. In a case currently before the courts in the US, tax avoidance specialists KPMG refused to disclose the names of the purchasers of a complex but very lucrative tax avoidance scheme called the "contested liability acceleration scheme". This seam "saved" rich taxpayers $1.7bn in tax (and brought a handy $20m in fees to KPMG).

The judges decided that KPMG had taken steps "designed to hide its tax shelter activities", and ordered the firm to disclose the names of its lucky clients that bought into the scheme. KPMG has now done so. The list of the "named and shamed" consists of 29 of the richest corporations in the world. Top of the list'? Er, yes: AstraZeneca plc.

2.PAN International to Kofi Annan: Make Bayer Accountable for Deaths of Peruvian Children
Pesticide Action Network (PAN) Asia and the Pacific, Press Release
June 24, 2004

Pesticide Action Network Asian and the Pacific has called on UN Secretary General Kofi Annan, to demand that German agro-chemical corporation, Bayer AG, assumes responsibility for the fatal poisonings of 24 children in Peru in 1999. The call comes on the occasion of the "Global Compact Leaders Summit" at United Nations headquarters in New York today, which will discuss better corporate practices in human rights, labour and the environment

Similar letters of concern were issued from PAN regional centers in the U.S., UK, Germany, Chile and Senegal, as well as PAN partners globally. The letters were in support of an appeal for justice from families of the deceased children.

"We are seriously concerned about the corporate links forged between the UN agencies and multinational companies, especially companies like Bayer" comments PAN AP executive director, Sarojeni V. Rengam. "It is also sadly ironic that our calls for justice for the children and community of Tauccamarca comes at the time when the United Nations Environment Programme announced a €1 million (euro) yearly partnership with Bayer AG to support the agency’s global strategy to involve young people in environmental issues". Asserts Rengam, "to add insult to injury the partnership is set to unfold over a six-year period, with activities and events that includes the annual ‘Tunza’ international conferences for children and youth!" "Tunza" is a Kiswahili word meaning to ‘treat with care or affection’, and the initiative aims to engage young people in UNEP’s work, increasing their participation in sustainable development issues.

Small farmers from the community of Tauccamarca en Cuzco, Peru, lost 24 of their sons and daughters (children of school age), when they were accidentally poisoned by an organophosphate pesticide called "Folidol," that is, ethyl or methyl parathion in October 22, 1999. Since 1999, the villagers of Tauccamarca have sought justice in the courts of Cuzco and Lima, demanding that the Peruvian government and the company Bayer, be held accountable and responsible for the tragic deaths of the children.

"We believe that not only the legal system of our country, but also respected institutions like the United Nations that work hand in hand with companies like Bayer to encourage them to improve their practices in countries of the south like Peru, should demand that the company that is legally responsible for the poison that killed our children assume its responsibilities. The fact that we are poor people, living in a poor country, should not allow these international companies to trample our rights" states the recent letter from Victoriano Huarayo T., a representative of the families of the poisoned children of Tauccamarca, to the offices of UN Secretary General Annan.

A nine-month investigation by the Peruvian Congressional Subcommittee—formed in response to an appeal made by the parents of the deceased children and of eighteen other children who were also poisoned but survived—concluded that there was significant evidence of criminal responsibility on the part of the Bayer. The subcommittee also found administrative and criminal responsibility on the part of the Peruvian Ministry of Agriculture. The report recommended that the government and Bayer indemnify the families of the dead children. Initial medical analysis had indicated that several of the surviving children will suffer significant long-term health and developmental problems as a result of the poisoning.

The Tauccamarca families believe that Bayer should have taken steps to prevent the foreseeable misuse of this extremely toxic product given the well known socioeconomic conditions in the Peruvian countryside that make so-called "safe use" virtually impossible. Because Bayer took no reasonable steps to warn or protect users—for illiterate users the labeling and packaging provide no indication of the danger of the product—it did not exercise reasonable care to prevent the foreseeable misuse of this deadly pesticide.

Headquartered in Germany, the agrochemical company Bayer has been the registered owner of Folidol in Peru, and a principle Peruvian importer and distributor of both methyl and ethyl parathion. Bayer is a founding member of the United Nations Global Compact.

In fact, this tragedy was the subject of an earlier letter sent to the office of the Secretary General Annan in August 2002, on the occasion of the World Summit for Sustainable Development. At the time, the families had appealed to Annan to exclude Bayer from the UN Global Compact, based on the company’s actions and inactions with regard to the children's deaths and poisonings.

The Global Compact Leaders Summit on June 24 in New York has been advertised as "a unique and historic opportunity to bring intensified international focus and increased momentum to the Secretary-General's leadership challenge for global society". As a member of the Global Compact, Bayer claims that it "has undertaken to work to the best of its ability to ensure communication and observance of the nine principles selected by the U.N. in the areas of human rights, social standards and the environment." According to its own Principles of Corporate Policy and those of the chemical industry's international Responsible Care initiative, the company also claims to be, "committed to conducting its operations not only in compliance with the law of each country where it operates, but also according to globally accepted ethical principles…Our work is to benefit mankind; our innovations contribute to the welfare of many people in many countries".

The letters from PAN International expressed support for the villagers of Tauccamarca, and questioned the relevancy of the Global Compact, and the role of the United Nations in fostering relations with companies like Bayer who have clearly violated the basic human rights of the people of Peru, and specifically the families of Tauccamarca."We call on the UN to demand that Bayer, which is legally responsible for the poison that killed their children, to assume its responsibilities", state the letters from PAN. PAN centers have also asserted that, "Unless the UN Global Compact proves its relevancy by taking measures to ensure corporate accountability, it will prove itself redundant. As a voluntary agreement, it only serves as a mere public relations exercise of member companies rather than actually contributing to ethical business and adherence of its principles".

For further information contact:

Sarojeni V. Rengam, Executive Director, Pesticide Action Network (PAN) Asia and the Pacific, Penang, Malaysia. Tel: +604 657 0271/ +604 656 0381 Email: [email protected], [email protected]

Notes to Editors and Journalists:

1) The Global Compact sets forth nine guiding principles that focus on human rights, labour standards and concern for the environment. Companies subscribing to the principles are encouraged to make clear statements of support and to submit an annual report that includes concrete examples of "good practices" for other firms to emulate. See: http://www.unglobalcompact.org/

2) For recent letter from Mr. Victoriano Huarayo Torres (representing the families of the twenty-four children to Kofi Annan), see PAN AP website: http://www.panap.net

3) Bayer widely promoted its methyl parathion formulation, know as "Folidol", throughout Peru, targeting its marketing on use in Andean crops cultivated primarily by small farmers, the great majority of whom speak Quechua only and are illiterate. Bayer packaged Folidol, a white powder that resembles powdered milk and has no strong chemical odor, in small plastic bags, labeled in Spanish and displaying a picture of vegetables. The labels provided no understandable safety Information, such as pictograms, for the majority of users in these remote villages, and little indication of the danger of the product. Source: The Tragedy of Tauccamarca: A Human Rights Perspestive on Pesticide Poisoining Deaths of 24 Children in the Peruvian Andes, Erika Rosenthal, JD, MSL. Int. Journal of Environmental Health 2003; 9:53-58.

4) "UN environment agency teams up with Bayer AG to help young people, News Story from the UN News Centre. http://www.un.org/apps/news/story.asp?NewsID=11101&Cr=environment&Cr1= (Accessed on June 24, 2004).

3.BIO Announces New Food and Ag Executive Director

WASHINGTON, D.C. (June 22, 2004) -- Carl B. Feldbaum, President of the Biotechnology Industry Organization (BIO) today announced that Sean Darragh has been selected for the newly-created position of Executive Director for BIO's Food and Agriculture section.

"With the growth of biotechnology in agriculture, food, animals and plant-made pharmaceuticals, along with the consolidation of the Council of Biotechnology Information and its communications programs into BIO, our food and ag section has expanded at a rate and scope that required increased, strategic management of multiple programs.  Sean Darragh has both the skills and breadth of experience to lead our member companies’ efforts to usher in this new technology with its broad range of benefits," Feldbaum stated.

The new Executive Director, who comes on board August 9, reports to the BIO President and is accountable to the BIO Food and Agriculture Section Governing Body (FASGB). He will direct the diplomatic, legislative, regulatory and communications strategy for the Food and Ag Section as well as manage the day-to-day operations, budget and staff.

Darragh has most recently been Deputy Vice President of International Affairs at the Pharmaceutical Research and Manufacturers of America (PhRMA) where he led advocacy, alliance development and public affairs initiatives in the United States and abroad on intellectual property, WTO matters, tariff and non-tariff barriers and customs issues.

Prior to PhRMA, Sean served in a number of senior positions at the U.S. government.  They include: Principal Deputy Assistant Secretary of  Defense at the Pentagon, where he oversaw export policies into Latin America, Principal Negotiator at the Office of U.S. Trade Representative where he managed the agricultural and life sciences division, Senior Advisor  to the Deputy Secretary of the Treasury  and Director for Global Issues and Multilateral Affairs on the National Security Council staff.

During his time in the U.S. Army,  Darragh commanded two artillery batteries. He is a graduate of U.S. Army Ranger School, Air Assault School and Airborne School.  He earned an M.A.L.D. in International Affairs from Tufts University and a B. S. in Engineering from the United States Military Academy at West Point.

"Biotechnology in the food and agriculture sector will continue to be a vital area of innovation contributing to health,  environmental, and economic benefits for consumers everywhere," Darragh stated, "but with any new technology, the industry faces regulatory hurdles, trade barriers and communications challenges. It’s a full agenda, and one that I look forward to taking on. I am delighted to have the opportunity to play this leadership role at BIO."

"We are very pleased to have Sean Darragh in this new position," said BIO FASGB Chairman Richard Hamilton of Ceres, Inc. "Sean brings a wealth of knowledge and experience in agricultural policy and international trade as well as industry association experience. We look forward to having Sean spearhead our efforts to enhance public understanding of agricultural biotechnology, promote science-based regulation and to provide an intellectual property framework that encourages and rewards innovation."

Pete Siggelko, Vice Chairman of the BIO FASGB and Dow AgroSciences Global Leader  added, “Sean’s range of experience in the life sciences area combined with his global perspective and past work with the Office of the U.S. Trade Representative and U.S. Department of the Treasury will help us take the necessary steps to take our organization to the next level.”

Feldbaum also praised Jim Leslie of Kincannon & Reed of Vienna, Va. who helped conduct the nationwide search for the new position.

BIO represents more than 1,000 biotechnology companies, academic institutions, state biotechnology centers and related organizations in all 50 U.S. states and 33 other nations. BIO members are involved in the research and development of health-care, agricultural, industrial and environmental biotechnology products.

For Immediate Release 6/22/04
Contact: Dan Eramian, Lisa Dry 202-962-9200

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