Sister Susan Mika Interview, Part 1 of 2

DT: My name is David Todd. I'm here for the Conservation History Association of Texas. We're in San Antonio, Texas and it's April 17 year 2002. And we have the good fortune to be interviewing Sister Susan Mika, who's a nun with the Benedictine Order. And she's been involved in a number of areas but they include corporate reform, especially using the shareholder resolution process to try and press companies to be more environmentally responsible and also to take care of their workers in a better way than they have. And I wanted to take this chance to thank you for spending some time with us.1:53 - 2198

SM: You're welcome. It's my pleasure.DT: Good. I'd like to start this interview with a question about your childhood and if there was a time-an instance where you can say that your interest in the environment or in protecting public health might have started. If there was a family member or a friend that might have gotten you interested or something you initiated yourself.2:18 - 2198

SM: I think I've always been interested in the outdoors. I like to camp. I like to go out and be in-with nature. I've also been a photographer it seems like all my life; taking pictures of different situations and when I came upon something that wasn't-didn't seem like it was right it just there-there-it just got under my skin, I guess. And so as I begin then, later in life, to work on these things I would remember, "Oh, yes remember when you saw this or you saw that and you didn't really agree what with was really going on but maybe as a young child you couldn't really articulate this wasn't right or this wasn't what you thought it should be." So I-I just have some of those kinds of early memories of later being able to recognize, "Oh, oh, okay, that's what that was." Whether it was pollution or it was, you know, something wrong with the water or something wrong with the air or that type of thing. My dad was in the service so we lived everywhere for the twenty years that he was in the army and so you do get to see a lot of different things while you're traveling in the world. That's for sure.DT: Can you tell me when you decided to join the Order was there anything of the public health nature, that lead you to be involved in that? Or was it more of a purely spiritual decision on your part?3:49 - 2198

SM: Well I think the call comes from God so it's kind of a hard thing to really explain in that sense. And I felt drawn to the Benedictine Sisters. I had met them when I was in grade school and I attended one of the schools where they taught before we moved back to France. And that's how I began to know a little bit about the Sisters and then gradually over time learned what they stood for and was attracted to their mission. And in the early days, mainly you either chose to be a nurse or you chose to be a teacher. There weren't so many opportunities as there are today. And so I was drawn more to teaching and then got involved with students. And my field is English; that I was teaching language arts, religion, psychology, sociology and those types of things. So I've 4:48 - 2198always tried to weave into my classes kind a holistic look at whatever it is; whether it's looking at health, looking at ourselves, looking at our spiritual side. So that it's not just all in little compartments. So for me, it's very important that we see it as a holistic type of approach to life, rather than just say, "Well, today I'm an environmentalist and tomorrow I'm not." Or, "Today I'm a teacher and tomorrow I'm not." I-I just don't see it that way and I've tried to integrate my life so that it is seen as a more holistic-you know in a holistic way.DT: I understand that one of your early positions, after being ordained, was to join the Socially Responsible Investment Coalition. And I was wondering how that became part of your mission as a Benedictine nun.5:39 - 2198

SM: Well, in 1982 I had the opportunity to interview for this job. At that time it was called Texas Coalition Res-for Responsible Investment. And now it's changed its focus, not just on Texas, but to our whole region, and it-so it is called today Socially Responsible Investment Coalition. And when I heard the type of work that was being done there-I was-it was-it start up position-I was expected to start up the organization-but it would be part of the Interfaith Center on Corporate Responsibility in New York as kind of a regional branch. And when I heard of the type of work that it was, I said, "Well, that would be a challenge to me and I would like to try it." So, I took 6:26 - 2198that position in 1982 as the Executive Director of the Texas Coalition for Responsible Investment.

And immediately people said, "Go to the border and try to find out what is going on at the U.S./Mexico border." Some did not know exactly what was going on, but there were reports coming out at that time about problems with the factories, which were called the maquiladoras. And so as part of that ministry, then, I began traveling to the border to try to meet with groups, with workers, with activists that were along the U.S./Mexico border and to see what was really happening. And so I did that for about eight years. And as part of that ministry I also realized that we just in the church sector, in the religious sector, needed to reach out beyond ourselves. Because we had a certain 7:18 - 2198perspective that we went to the border with; but we didn't have all the tools, we didn't have all the research, we didn't have all of the other things that some of the other groups had.

So as part of my work, then, in 1988, I went to the Texas AFL/CIO and I asked them if we could work together because I had heard that they were trying to set up a task force that would be looking at the maquiladoras. In those days it was called Twin Plant Task Force, because many people actually believed that there were twin plants. And so-so I went to the Texas AFL/CIO and asked if we could start working together.

And then about a year later in June of 1989, I helped to host a conference called Problemas Sin Fronteras, which means Problems Without Borders, in Brownsville and Matamoros. 8:10 - 2198And so for four days we had people coming together from the unions, from churches, from environmental groups, grass roots groups, workers groups, women's groups; whoever wanted to come together to try and see if we wanted to work together. And so as a result of that conference, then, we formed a loose alliance which then became the Coalition for Justice in the Maquiladoras within the next timeframe as we tried to put the structure together for what we were wanting to do.8:38 - 2198DT: Maybe we can back up just a little bit. You mentioned your work with Texas (?)...SM: Yes.DT: ... I guess it's what it was originally called and then later called the Socially Responsible Investment Coalition. Can you describe what some of the tools were that you were developing there, the shareholder resolution process...SM: Sure.DT: ...and maybe give us some examples of some of the companies you worked with either on the border, like the maquiladoras, or elsewhere.9:09 - 2198

SM: Sure. That-in that job I really researched a gamut of things people wanted to talk about or to confront the companies with or go and dialogue with the companies. And so some of the examples would be on nuclear power. We wrote resolutions and took those both to Houston Industries which had the South Texas Nuclear Project and also the Comanche Peak Project which was under Texas Utilities. And I'll never forget the day that that resolution hit the press. For the next four days, day and night, my telephone rang off the wall. People could not believe that Sisters were involved in trying to raise the question of safety and construction at the South Texas Nuclear Project. And we were 10:04 - 2198asking for a halt to construction until the safety could be determined.

And so, I still remember when we actually-it-it came to a vote, I think we got about 7% of the vote which was quite high in-in those days because that was in the early eighties. It's quite high even today, but, nevertheless, we needed 3% of the vote of the shareholders for a first year resolution to continue. So we received that and then, you know, continued to dialogue with the company about that issue. That was just one issue, you know, around the environment. In-in those days, the project was still just being built, and so, the-the, you know, there was a lot of questions about that construction and really, you know, then later, we raised questions about nuclear waste. And things, too, like where would the 10:56 - 2198waste going to be stored. And there was one official at the company that kept talking about putting it in space. And then after the Challenger explosion, he never said that again. And we could never get that from the company in writing; that-that that was an option that they seriously considered. DT: Could you discuss a little bit about Comanche Peak [nuclear power plant]? You said that you were involved in a shareholder action there.11:23 - 2198

SM: I toured the Comanche Peak as part of-a-at one point in time, you know, to try understand better that whole nuclear technology and that type of thing. And, again, we were raising questions of the safety and also the storage and-and-and of the nuclear waste with Texas Utilities. Then we moved on to raise other questions with them around environmental concerns in just trying to understand what their policies were and are and looking at-at some of those kinds of specific concerns to utility companies.11:58 - 2198DT: Maybe you can describe some of the concerns that you found with nuclear energy and with the waste cycle that is related to nuclear power.12:09 - 2198

SM: The main question is where is that waste going to be stored for the long term. And that's still a question today when you see that even in 2002 there's-that-that nuclear waste still has not been moved off site from those plants. In the early '80s, there was the absolute surety that some high level facility would be in place by the mid '90s or '90s for sure. And now we're already into the 2000s and that-that waste facility still is not in operation. So I think just the concern about that high level nuclear radioactive waste that has a half life of thousands and thousands of years.12:58 - 2198DT: And when you brought up these concerns with the corporate management and, as well, with your fellow shareholders, what was the reaction? You said that some of the public called and were stunned that the Benedictine Order would raise these issues. But what was management's reaction? What were some of the other owners (inaudible)?13:22 - 2198

SM: Well, I think that management always has to look at the shareholders as owners of the company and then if you've gone through the proper channels, like through the Securities And Exchange Commission with a Stockholder Resolution, that has to be respected under all of the rules of the Securities and Exchange Commission which were basically set up in 1934 and have come forward. So, you have to have the resolution to the company by a certain date, which they put in their proxy materials. You have to have it within 500 words. You have to have it follow certain criteria that the Securities and 14:03 - 2198Exchange Commission has set up. And then there's a review process so the companies can ask for a review of the staff and then also of senior level of the Securities and Exchange personnel to see if whether or not they have to put these resolutions on the corporate ballot. To give you an example, we raised the question of maquiladora wages in-for almost nine years; from 1990 to 99. With-in a direct way with the corporate management of many of the Fortune 500 companies that have these factories. And then as part of a reform in 1990-I believe it was in 1999-the Securities and Exchange Commission ruled that maquiladora wages were ordinary business and that they would not appear on proxy statements anymore.14:56 - 2198DT: Well, maybe you can discuss a little bit more about the SEC's position. I mean, I guess that essentially there's supposed to be a referee between the shareholders and the management. But do you find that they follow a pretty moderate course or do they prefer one side or the other?15:18 - 2198

SM: Well, companies mostly, I would say, try to get Stockholder Resolutions off the ballot if there's any way to do so. Because they-the company management are encouraging the shareholders to vote against those propositions. And so rather than have them on the ballot they try to get them off the ballot. So that they appeal to the Securities and Exchange Commission, their lawyers write a response saying why they think they can exclude it, then, we've been very fortunate to have a lawyer through the Interfaith Center on Corporate Responsibility that then writes a response back to the SEC and-it's a back and forth sometimes-and then a determination will be made. And then if you still want to challenge their determination, you still have a chance to do that; to ask for their-like th-their staff makes a decision and you can ask for senior staff or-I'm not sure if 16:18 - 2198I'm saying that correctly-but there's one higher level of appeal there. So, but all of this takes time, all of this takes energy, all of this takes money. So, you know, you have to weigh it against everything there as to, you know, what will be achieved.

For instance, with Cooper Industries in the 2002 proxy season, we filed a resolution with them asking them for a Sustainability Report. And in that, we were asking them, "Well, what is your definition of sustainability and how do you look at the triple bottom line; which would be financial, social and environmental concerns?" So that you're-often times you're just getting the financial concerns but you're not looking at the social or the environmental. 17:04 - 2198And so we're encouraging companies to look at this in an integrated way. So, for instance, then, when we filled the resolution, they went to the Securities and Exchange Commission and said, "Look. It's the same set of stockholders that we had last year. Their resolution didn't get enough when they were asking for global standards. We-we needed 10% because it was a third year resolution; we got 9.6. And, so, the company was asking to exclude it on that basis. Well, the Securities and Exchange Commission looked at it and ruled that it was a different resolution. It was not asking for a global code of-of conduct for the company or global standards. That it was a Sustainability Report; which is different than asking the company, "What standards to you have across all your factories no matter where they are in the world?" So, as a result of that, then, Cooper Industries did have to put that on the 2002 proxy ballot for all the shareholders to vote on. We received at extraordinary vote of 21.85%. We needed 3% because it was the first year that we introduced it. And it was just an-an amazing vote that we received in-in April of 2002 on that resolution.18:21 - 2198DT: You talked about-one of the starting points for a shareholder resolution is being able to clear a number of thresholds and, you know, the substance of the filing, the length of it and what kind of business it's related to. I understand that one of the principle criteria is that you own stock in the company. And I was wondering if you could talk about the choice that the Order and that you've made to press these issues from within as an owner, knowing that it must be distasteful to own some of these companies that are doing things that offend you. Yet, I guess you feel like you have more leverage as an owner rather than somebody that's on the outside who might have the right to picket, but wouldn't really have a direct ability to negotiate with management.19:16 - 2198

SM: I believe that-ther-there's questions for every company. So, I start with that premise "they're not perfect, I'm not perfect." So, I feel like there are questions for every company in the Fortune 500 and then those that aren't in the Fortune 500. But many of the Fortune 500 are the ones that own the maquiladoras. And so, as a result of that, then in the mid '80s I had asked the Benedictine Sisters if we could buy a few shares in a number of companies. So many groups have like a code by which they have their investments, or investment guidelines, whatever they would want to call it.

And so, like, for instance, General Motors was-it's-it's high on the defense contractors list at that 20:04 - 2198time. And so I s-and we don't usually own those stocks. So I asked the Sisters if we could make an exception because General Motors was the largest foreign employer in Mexico at that time; well, and it still is. At that time they had about 75,000 employees. And so we bought some shares in General Motors so we could be at the table as on owner of the company and not just as a consumer. Like, for instance, if we bought their cars or we used, you know, their car radios or whatever that all would be. So it-it's a way, it's a tool that some of the religious groups had and that's what we brought to the table, then, like when we started forming these coalitions. Because some groups bring their 20:46 - 2198knowledge; some groups are workers in these factories. They were able to tell us, "Well, this is what is really happening in those factories." Other groups bring other areas of influence. For instance like with General Motors; the unions in the United States and Canada, I mean, and the workers in Mexico, they're all working for the same company. So, again, you've got some commonalities there. And so in looking at that, we did buy some shares in a number of companies so that we would be able to raise those questions.

When the Securities and Exchange Commission first started this in 1934, you could own one share for any length of time and be able to raise a question. And, then-when-in the mid '80s, or so, that was raised to one thousand dollars that you had to hold of the shares 21:33 - 2198for one year. And in the mid '80s, when Ronald Reagan was President, the Securities and Exchange Commission tried to set in motion some tighter regulations on that. There were some articles in, like, for instance, Multi-National Monitor and other magazines, that were saying that the companies were putting a lot of pressure on the President to try to get these pesky shareholders of their backs. So this was one way that this happened, that to tighten up, that you had to own the stock for a year before you could file a formal 22:20 - 2198Stockholder Resolution. And that you had to hold a thousand dollars worth. So, if you were a gadfly, then you couldn't just be a gadfly with a do-you know, with one share, kind of thing. Well, the religious groups are not gadflies in any sense of that word. And so, you know, but it just meant that you had to follow those rules. Then in the 19'90s, there was another push to try to tighten the rules. And at that time, the minimum then was raised to two thousand dollars, still for one year. And in both of those instances, in the '80s and in the '90s, the-the push to try to raise those minimum levels failed.

And I have to say it was through the efforts of the Interfaith Center on Corporate Responsibility, all of us working together to try to say to the Securities Exchange 23:09 - 2198Commission, to say to Congress, I mean, "We have a right to raise these questions." And Congress actually passed a law in 1998 that-that companies should be more friendly to shareholders. So in-when all of this was going on, we worked with those legislators, then, to try and say, you know, to show how that law-what-what the intent of that law was verses what the companies were trying to say about raising the thresholds.

This second time, that-in-in this second decade of trying to change that, the Securities and Exchange Commission wanted to raise the levels to 8% for the first year, 15% to the second year and 30% to the third year; which would virtually eliminate most resolutions 24:00 - 2198because sometimes it's hard for us to get 3% in the first year. But that failed. So it's still 3% in the first year, 6% the second year and then-the third year and any year after that, 10%. You have to get-receive 10% of the shareholders voting with you. DT: Maybe you can wind back time a little bit to explain some of the roots of the ICCR and Interfaith Center for Corporate Responsibility and maybe explain-as I understood it-a lot of it grew out of many communities of faith concerned about South Africa and the press for divestment. Can you explain how this all grew up, maybe before you got involved, but what the longer history of it is?24:47 - 2198

SM: The Interfaith Center on Corporate Responsibility started in 1971 and just celebrated, in 2001, thirty years of-of this type of work. It did start over the Episcopal Church filing a shareholder resolution on South Africa. And it was with General Motors. And the-actually, Leon Sullivan was on the Board of General Motors at that time, and as I understand it at the shareholder meeting he got down off of the podium where the Board of Directors were sitting to speak to the shareholders to say that they should vote for that resolution. Very interesting; I've never heard that happen in any other meeting. But that was the first foray into this whole area. And the Interfaith Center is-has a 25:41 - 2198number of Catholic groups, both men and women's orders; some dioceses, some pension funds, hospital systems and then some of the mainline Protestant groups, churches in there, and several rabbinical pension funds. And I think we're about 275 members at this point. And so it continues strong, in-in the sense of after thirty-one years doing this work and continuing to raise questions in any way that the member groups can. ICCR, the Interfaith Center on Corporate Responsibility, doesn't own the stock, per say, but it's the member groups that own the stock. And they facilitate the work, in that sense, of all of us working together on these companies. 26:30 - 2198DT: Well, taking the long view from 1971 forward, how do you think this shareholder resolution process has evolved over the intervening years?26:44 - 2198

SM: Well, it-it-when I first came to ICCR in-around 1982, it-it was amazing because many groups were filing resolutions with the companies and the companies didn't want to dialogue or they didn't want to talk about the issue. And now, when we file a resolution often time the company does want to get into a dialogue about the issue or to see what we're thinking and that. So now, I think that you have to be much more versed in whatever the issue is and be able to go in depth with the company with the resolution that you're filing. And so, we look for expertise, you know, people to help us; to raise the questions. We've tried to educate ourselves on all of these issues. And so, as a 27:36 - 2198result of that, often times people are point persons for a specific issue; whether it's on genetically modified foods or climate change or the maquiladoras and in pollution or nuclear power or a-any of the EEO issues. I mean, just-there's-there's so much that we try to raise with the companies that we sometimes just have to step back and say, "We're going to focus on one particular area," because some of these companies are involved in so m-many areas.28:05 - 2198DT: And when you get into negotiations with these companies, do you find very different mind sets or do find commonalities...28:14 - 2198SM: Yes.DT: ...between the, sort of, religious community and the more business, bottom line management?28:24 - 2198

SM: If we file a Stockholder Resolution, it's almost an immediate-many, many companies take it very negatively and they say, "Well, why us?" or "What-what's wrong?" or, you know, "Are we the worst?" That type of thing. And it's-it's a reaction. And so, but sometimes, like for instance, with Cooper Industries, they had not met with us for four years and it took me five years before that to be able to get into their maquiladoras. And for, you know, they took me into two of their plants. So you can see how some of this is just really over the long term because we're just trying to get the issues 29:05 - 2198out there. And so, at the annual meeting in 2002 with Cooper Industries, I knew we must have gotten a good vote because the CEO already announced-even before the vote was announced-that they were going to meet with us. So I knew that we must have gotten a really good vote on this resolution. So, sometimes it-it takes a resolution or it takes a good vote to get the company back to the table.29:29 - 2198DT: Okay. In regard to the other shareholders, you know, it's a very unusual thing-as I understand it-to get 10%, and certainly 21%, as you did in this latest Cooper vote. Why is it that the votes tend to be so lopsided in favor of the management when you're bring up what seems like, you know, very reasonable questions?29:56 - 2198

SM: Most people don't vote their own proxies. If they own, like, 401K funds, like for their retirement; those are basically voted with management, unless you have a very progressive socially responsible mutual fund, perhaps, that you have your 401K with. Most of the banks, most of the big institutions that hold these shares would be voting with management. That's just their practice.

So, for instance, in-I want to say in about 1999 or the year 2000, the Domini Social Equity Fund was the first all stock mutual fund to post on their website how they voted their proxies. And since their call for that, several others of the Socially Responsible Investment Funds now put on their websites how 30:52 - 2198they're voting their proxies and they actually have guidelines. But I don't know that any of the, you know, Fidelities or the Vanguards or any of those are letting anybody know how they vote their proxies. So we assume they're voting with management because we don't know that they're not, in other words. I don't know if that makes sense. Do you know what I'm saying? So the large vote that-against these resolutions or-or for a board of directors; all come from those kinds of accounts.31:25 - 2198DT: Large mutual funds, pension funds. Do they feel that it's their fiduciary duty to vote with management? 31:34 - 2198

SM: I can't answer for them. I mean, we feel like it's their fiduciary responsibility to respond to us. And so, if I had any funds in those types of funds, I would be raising those questions. And I encourage people to do that because that's the only way it's going to change is public pressure.DT: Do you think that there is a fiduciary argument to be made for voting for these resolutions in terms of a company, for instance, having large environmental liabilities that aren't well disclosed and aren't really well managed being a negative effect on a company's future?32:14 - 2198

SM: That's what we were saying in our Sustainability Report because by integrating the financial, the social and the environmental, then you begin to see what the true costs are; to society, the true cost to the company, the true cost to us as the shareholders and really to our world. I mean, I'm-I'm really very strong on that. And, I mean, that's a theme, I think, throughout these last twenty years of my life as-as I've looked around to try to see how are we going to have a sustainable planet for those seven generations that the Native Americans talk about in making decisions, you know, based on what's going to happen seven generations out. We don't have that. Right now, like for instance, in this 32:58 - 2198world that I'm working in, the companies are looking at their next three months and they're declaring their profit dividend and they can't really work, often times, or talk or see beyond that, which is very concerning. I mean, when you look out-even seven years, much less seven generations-what's going to happen? And so, that's been a theme in my life of trying to raise those questions.

You know, whether it's like, for instance, in a situation like Panna Maria where the-the, you know, the strip mining going on there and-and, you know, Chevron-we had people that had stock in Chevron and went to the Chevron meeting to say, you know, "What's happening in this small town in Texas?" And the Sister that went, she said they didn't even know where Panna 33:45 - 2198Maria was. They had to get out a map and try to find it the next day. I mean, you know, so it's a way of educating corporate America, really, about what is really happening in the trenches; what is really happening in the little towns; what's really happening in these factories where the things that we're wearing today are being made. You know, to try to say, it-it-it isn't sustainable, often times, the way it is now. And so how are we going to change or how is corporate America going to change and all of that just so that we will be sustainable and have a planet for the long term. I mean, at this point in time we can't live on Venus, we can't live on Mars, so this really is the only planet that we have.

And I know we have the sign in the background, The Sacred Earth, and, I mean, that's a 34:36 - 2198television show that I do each week. And, I mean, that is so-it's so, you know, it's so important because that's all we have. You know, we don't have another place to live. So, I just think it's really important, you know, that we look at those kinds of questions; and for the long term, because if we pollute everything that we have, then how can we unpolluted it. You know, whether we're talking about Los Angeles or we're talking about the border or Mexico City or, you know, wherever. What are we going to do if we can't live in those areas at some point in the future?35:11 - 2198DT: You mentioned Panna Maria, which I understand is a small town in Karnes County...SM: Karnes County.DT: ...southeast of San Antonio where there've been some yellow cake mining and milling operations and also radio active waste disposal. Can you talk about your personal connection with that town and what the issues have been there?35:37 - 2198

SM: Well, the-my father is from there and my grandmother and grandfather lived all their married lives across from the church there in Panna Maria. It's a very small little town; and the church, the hall, a couple of houses, a-a gas station, a little country store and little school. And-so I got involved in that situation because of the mining questions and the health of the people there and seeing illnesses and water being contaminated and certainly one area-one road, one country road there right by the plant where people up and down that road died of esophageal cancers and cancers that you don't just-don't just-aren't normal. I mean, you know, in the sense of like, you know, they ingested 36:29 - 2198whatever was coming from that mining.

And so, just-at that time Chevron owned that plant and so we found one of the Order of Sisters, Sisters of Divine Providence, owns some shares in Chevron, and we asked them if they would go to the meeting, to the annual meeting, and tell the shareholders what was going on there. And then as a result of that, then, we did have some meetings with the company, in Panna Maria, at the mining site and raising the questions.

And then, shortly thereafter, within maybe a year, they sold that plant to someone else and it wasn't a publicly held company. And so we lost the leverage of the-the shareholders had in being able to raise that question. (Inaudible)

So this is some of the things that happen to us sometimes as-a-as we get to close to the 37:29 - 2198truth. Sometimes companies decide then that they're going to sell off that plant or that area or withdraw. We've seen in the maquiladora industry-we've had a number of the companies spin off their maquiladoras into their own company and, so then the liability is at an arms length from that company. We've had that happen with AT&T sold off Lucent Technologies. General Motors spun off Delphi and then the latest one is now Ford spun off Visteon.38:04 - 2198DT: And you think part of this effort is to, I guess, diversify their liabilities but also to insulate these operations against shareholder concerns and resolutions?38:16 - 2198

SM: No. I'm not saying-I'm not saying that it insulates them against shareholder concerns because then usually if you own the parent company then you get shares in the spin off, or a few. Like, for instance, in Visteon, we received, I think, a hundred and forty-three-I-I-I think we received thirteen shares which is worth about a hundred and forty-three dollars. So in the 19-in the 2002 proxy season, we filed a resolution with them along with some other groups that owned more shares than we did to try and ask them about their global code of conduct. So, we-you still have access but, nevertheless, you have to then form a dialogue with another whole set of people.

For instance, like 39:01 - 2198when Delphi spun off from General Motors, for all those years, General Motors had done all of the PR, all of the HR, Human Resources, the Public Relations; all of these things for that company. Then all of a sudden, they're forced to stand of their own two feet and they have to get all of that in order. And so, then when you're asking them the questions, they're like, "We're a new company," you know. "We're just trying to get started." And so, then, you have to build another relationship with the people in that set of management. Because like, for instance, with General Motors. We had been meeting with General Motors for about nine years. So we knew the people at General Motors that were in charge of these areas that related to the maquiladoras. Then all of sudden in the-in the 39:45 - 2198year ten we have to form a new relationship with new people that are in the Delphi Company because they're the ones now that are being raised up to top level management in a new company.DT: Given the difficulties of pressing forward the shareholder resolution and, you know, whether it's just with an existing company or the double efforts of trying to deal an entirely new company that might be spun off, why have investors, like you, decided to go this route rather than say the political route of trying to press your elected officials or agency officials to change laws and regulations governing these companies?40:31 - 2198

SM: We do both. It wouldn't be that we're doing one or the other. I mean, we're-for instance, when the North American Free Trade Agreement, NAFTA, was being debated in the early '90s, we were involved in having many journalists come to the border areas; they wanted to found out for themselves what was going on there. Many reporters, many legislative aides, many legislators themselves-for instance, at one point in time, a whole delegation of women came from Congress. It was small put-because we're still working on getting more women in Congress, but, nevertheless, they came together and wanted to see what was going on at the border. So, and-and-and, you know, many of us testified a-a-before congressional committees. We took workers to those hearings. That's-41:19 - 2198that kind of thing is still going on wherever it's possible.

In April of 2002, there were some workers that went to-before some congressional aides and congressional legislators about a-a case that's still going-right now, it's called the Custom Trim Auto Trim Case; where workers have been severely-their health has been severely damaged by working in this plant. And what they were making is, like, you know, on your steering wheel you have like a-on-on luxury cars that steering wheel cover with all of the-the lacing and-and-that. And they have to stretch that leather so that it goes over that. And they have to use solvents and glues and then-if-if it's not exactly right they have to take it all apart and-and-and get it right, kind of thing. And so, I mean, there's many, many instances in that plant of pr-problems of carpal tunnel syndrome 42:19 - 2198with, you know, just problems, you know, because of the stretching and, you know, hands and-actually workers, after a period of working in there, they-they are used up.

And that's a thing that we've seen, you know, with the maquiladoras; wanting to have very young people working in those factories. Usually those workers are sixteen to twenty-five years old and after that they're considered to be used up for their work life in that kind of an environment. And it's very difficult to get people that are in their thirties into the plants if they haven't already, you know, had a job, and that type of thing. I mean, I know your-you don't want to believe this, but it is true. And-I, you know, I mean, I say this often times to young people because, you know, when I'm talking to 43:05 - 2198high schoolers, those are the people that are in those plants working and making all these things that we enjoy or that we buy or that are parts of a car or parts of, you know, whatever it is; a stereo or painting our cassettes that go in our cameras that we're filming with. You know, whatever all those things are; somebody's making those things. And at what cost to their health and to, you know, their long term health and that type of thing. So, there's-there's so much that we could say I don't know; I mean, we don't have enough time to cover everything but just, you know, there are so many issues around this. And some of this is more covert now, because we revealed so much in the early '90s; around the NAFTA debate and that type of thing.

At that point in time there was an organization called the National Toxics Campaign. And when we came together as a 43:55 - 2198coalition, that was one of the things-I had stood over some of those ditches and s-you know, had the headaches and smelled it; it looks black, it looks this, you know, it was discolored. I couldn't say what it was. But when the National Toxics Campaign came in, and they put out a-a report, they went from site to site and then they said, "Okay. Well, this is what's in this site." So that's where, for instance, with the Stepan Chemical Company, in the ditch behind their factory in Matamoros there was xylene at 6,000 times the acceptable levels for U.S. receiving waters. A little ways over, in Matamoros, there, in-in the same industrial park area, at the General Motors Romir plant where they were painting our fenders so that they're the same colors as our cars. They were putting that, you know, xylene, and different things, in-methylene chloride-in holes in the floor 44:55 - 2198that went out then into the ditch. And at one ditch there, we found, or the National Toxics Campaign, found methylene chloride at 215,000 times the acceptable levels for U.S. receiving waters. And once we put that out there, General Motors came down on us very harshly. They tried to, you know-in every public forum to discredit that; but on that day that that test happened that's what was in that water. And if anything, because they had to take it and they had the samples and they went from border city to border city and then back to their laboratory in the East, I mean, it could have diluted if anything. I mean, you know, so there were definitely a lot of things happening in those areas that companies-once we started calling those chemicals by name we became the threat.

And then, 45:54 - 2198actually, there were threats made against us. In 1993, by the Matamoros Maquiladora Association-every city has their own Maquiladora Association-and we found out that the Maquiladora Association went to the city council in Matamoros and called for a government investigation of six of us by name. And, of course, it was all of us that were very active. And so what we did is we let everyone know in the coalition, at that time, what was happening so that if anything happened to any of us, that action would be taken. Because we knew that we were at risk; I mean, we couldn't stop the work and we couldn't stop speaking out. But there was this damper to try and-and not have people be speaking especially about the effects of NAFTA and, you know, what was happening 46:50 - 2198with the pollution and that type of thing.

And actually they put the progressive lab-labor leader in Matamoros in jail for, gosh, from January of 1993 until October of '93. He was under house arrest in Mexico City because he had called for a strike in the early days of-of January of 1993 because of the working conditions. And so, he was arrested and then sort of-he wasn't in very good health and so they took him to Mexico City and near a hospital and that type of thing. But he was not released until after NAFTA was passed.47:28 - 2198DT: Maybe you can help set the scene a little bit. Could you explain why there are twin plants and, I guess later, the maquiladora industry and where they are and what they typically do? And I think that would help explain it to people who may not be as familiar with it.48:01 - 2198

SM: Okay. It's just-there's so much-there's just-okay, I'll try to not be too excited. It's just like, oh my God. Okay. The Border Industrial Program, it's called BIP, started in 1965. And this was a program to have supposedly this twin plant idea. Really there are no twin plants. The labor intensive plant is in Mexico and the warehouse is on the United States side of the border, which might employ maybe five, ten employees in a warehouse; verses a labor intensive situation were you have perhaps hundreds of thousand of people even on a shift, in that sense. It started in 1965 because in 1964 the Bracero Program ended and there was unrest at the border. And any time that there's 48:56 - 2198unrest at the border something has to happen. In the Bracero Program, that men, mainly men, came across into the United States for the jobs. And then were free to go back. Now in this program, it didn't turn out to be mostly the men that got the jobs but rather the women. And so at the beginning that also caused some unrest and kind of a shift in trying to adjust. But the jobs were in Mexico so people were not coming across into the United States for the jobs.

And as we see it, many of the people that were-desired for the jobs, were young women because they-they had another whole life outside of the plant; which often times was to do everything in the house, also, to make the household run, 49:48 - 2198and work forty-five to forty-eight hours, you know, in the factory. So you're not-you don't have a lot of other time, to perhaps, talk about, you know, joining a union, learning your rights, you know, being anything more-learning anything more to be, you know, more of a leader, you know, in your team-that type of thing. And so when you're sixteen and if it's your first job, and some of these workers were even younger than that, you don't really know what your rights are. You may not even know what your responsibilities are. And so, the first time that I went a workers meeting, they-that's what they were talking about. They were showing through, like a skit; okay if your supervisor comes and says, you know, "You need to do such and such" and this isn't part 50:33 - 2198of your work, how do you say "no" to your supervisor? Because usually your supervisor was a male. And so, you know, just all of this-like to be able to stand up and say, "Well, if I don't do the work that I'm doing, I'm not going to get my production bonus because I'm not going to make my quota." So, it-it's a very interesting thing and it could be just like saying, like, "I want you to sweep this over here." And it's not part of your work because you're making widgets or you're making pieces of a computer or you're making, you know, parts of an airbag or whatever it is that you're doing. But you're not going to make enough if you have to go and spend ten minutes doing something else. So, I-I learned from that that we all have to-better know what are our responsibilities and what are our rights.

And Mexican labor law is very strong. It's just not enforced all the time 51:23 - 2198and people don't know what their rights are under the labor law. And in 2000 there is a-a move under foot to try to dilute Mexican labor law, to make it even more attractive for people-for companies to be able to come into Mexico. So we're always up against all of those kinds of things that are out there, also. As we have this race to the bottom of where we're looking at, you know; who's got the cheapest wages; who's got the most lax environmental rules; who's got the least enforcement on some of these areas.51:56 - 2198DT: Is that what is appealing to a lot of American corporations? Is it the fact that they can go five miles across the border and benefit from cheaper labor and looser environmental regulations? Is that the chief rational? I'm curious why the Bracero Program, and then later the PIB and Maquiladora Program, was so appealing? Because maybe you could also say just how quickly these have burgeoned; the growth of the maquiladoras.52:34 - 2198

SM: The maquiladoras have grown. In 2000, before the recession, they-there was about 1.3 million workers in the maquiladora industry across the border areas. And now, of course, they're-they're going South, even in Mexico. And beyond into Honduras, Nicaragua, El Salvador as-continue to look for lower wages and, you know, a little bit further away from environmental, you know, oversight and that type of thing. With the recession in 2002 I would say that there's, probably still, about a million workers. But about two to three hundred thousand jobs were lost with the U.S. recession. And the reason of that is because these two countries are so tied together with production.

You were asking about why a company would want to go? Okay. Well in the NAFTA debate 53:40 - 2198in the early '90s, we were saying we need to look at the three countries that are trying to go into this debate-into this treaty, or whatever they want to call it-together, agreement. Okay. Canada had higher wages than the United States. Before they settled, a-they went into a-a-a free trade agreement in 1988 and it went into effect in '89. And then by 1990, they had already lost 500,000 jobs. And so, when you look at that type of displacement, many of those jobs went across the northern border of the United States. So, for instance, if Canada was paying thirteen dollars an hour and then in the northern border of the United States you could pay nine dollars an hour, those companies went and it wasn't that far. Okay, then when NAFTA was being debated, we were talking about 54:36 - 2198Mexico as an underdeveloped country, the U.S. was a developed country, Canada was a developed country, if you were honest. Okay, Mexico said, "No, we're developing. We're a developing country. You're developed and Canada is developed." Okay, this made a very big difference because you don't start with the same premise if you're developing or if you're underdeveloped.

And one of the main areas that we kept talking about was the wages; because there's such a chasm between the wages. And in 1994, a colleague of ours, Sister Ruth Rosenbaum, did the first Purchasing Power Index Study. And we called it a Market Basket Study in those days. What it showed-I just felt like I was kicked in the stomach when I saw the results the first time, because I had been 55:32 - 2198severely criticized during the NAFTA debate for saying that the wage differential was ten times different, you know, from the United States to Mexico. And most people were saying, "Oh, Susan, you're just exaggerating," and on and on. Well, in that Market Basket Study that she did with General Motors workers; because, of course, that was the largest foreign employer in Mexico, so we had a number of the wage stubs from those workers. What it showed basically, was, that the workers-and remember this is before the peso devaluation-those workers were getting a dollar six an hour for their work; assembly work, entry line assembly work. Okay. In the-in the UAW, United Auto Workers Contract, for the same period of time that we collected the wages, which was the end of 1993 and that first month or two of '94, the UAW Contract called for entry level 56:34 - 2198maquil-entry level assembly work for a salary of eighteen dollars and six cents, plus benefits; eighteen dollars and six cents in contrast to paying a dollar six. I mean, it was far beyond what I even imagined could be happening.

So when-when you have that kind of a contrast-and I say before the peso devaluation because at the end of 1994, the peso went into freefall. Of course, you know, this was after NAFTA was passed and, you know, all of this because they kept it buoyed up by, you know, Mexican savings during that t-time of the d-that NAFTA was being debated. And then after that, then, you know, after NAFTA was passed then let it go into freefall. So, you know, at the end of 1994 it went from three thousand to six thousand and today it's right around nine thousand. So, that just gives you some idea of the massive devaluation.57:34 - 2198DT: Well, explain this to me; the American corporations then had an advantage in terms of saving a great deal on wages by moving their plants south of the border, either from Canada to the U.S. or from the U.S. to Mexico and then they could move their products back across the border northward without paying a tax. Is that right?58:04 - 2198SM: Right. DT: There's no tariff.SM: Right.DT: Right. Was there also an environmental cost / benefit for companies to move slightly south of the border?58:16 - 2198

SM: Yes, basically NAFTA provides for free movement of capital but not free movement of anything else; especially people. So, our-our, you know-our-our northern border and southern border of the United States are more militarized than ever. I mean, at some point, you used to be able to get into to Canada without, like, a passport. Now they really prefer that you have a passport. And, I mean, we hear stories all the time about what's happening, you know, with the border patrol and, you know, the long lines at the border, our southern border.

As far as the environmental concerns, right before-58:54 - 2198right as NAFTA was being debated, at that time the Mexican equivalent of the EPA, the Environmental Protection Agency, was called SEDUE. And so SEDUE hired a number of extra persons to inspect plants, especially the maquiladoras and, you know, write up things and that type of thing. They didn't have any money to pay them. So after a month, I mean of, working for free, I mean, people just left those jobs. But it was an attempt to try to say, "We're doing our part." 59:23 - 2198DT: Can you give us some examples of how you tried to press for environmental improvements in some of these maquiladora plants? You mentioned Stepan before and I think there was another company called Alcoa that had plants within the maquiladora zone that you worked on.59:44 - 2198

SM: Stepan Chemical is based in-right outside of Chicago, in Northfield, Illinois. And they have a plant at the border, in Matamoros, and once the National Toxics Campaign revealed this high level of xylene at the-in the-in the ditch behind the Stepan Chemical factory. Actually, we-we were raising questions with them on a number of areas, but again, all environmental. But that just solidified the fact that, I mean, they were dumping that to-that xylene right out into a ditch that was in a-in a-right-right near a colonia railroad track and that type of thing. So, we met with them a number of times. We actually produced a whole video on the Stepan Chemical situation. 1:00:41 - 2198And a colleague of ours, Ed Fagan, who is with the AFL/CIO, actually videotaped people from Stepan putting-dumping stuff-like foamy white stuff that had fumes and everything into the ground all day this one day when he was outside in the colonia, just filming them doing this. And so, of course, we were trying to find out, well, what is that? You know what-what's happening. Because on-they-they have these shallow ponds on the-on-on the land there, right by the factory. And they covered them up and then they tried to plant grass. And it just never would take. And, so, finally-and they planted oleanders along the edge where the fence was with the colonia. And every week they 1:01:40 - 2198would go out and they would pull out the dead oleanders and put in new ones. And you could see-even if you went there today-you could see how, on a certain side of the plant where it's not polluted, the oleanders are huge bushes now. And even further along the fence line, were there wasn't so much pollution, the oleanders grew. But this one area, were there was so much pollution, then the-they just continually took them out and replanted them. And finally they had to bring in a massive amount of top soil because this is a huge area. I want to say it's like a soccer field or something like that. It's a very big 1:02:19 - 2198area. They had to bring in dirt in order then, finally, for top soil-for anything to grow because it's just so polluted beneath that. So we've always said that-I mean, they say they've spent nine hundred thousand...