March 15, 2006
An Update on Smithfield Foods’ Vicious Anti-Unionism in North Carolina
The United Food and Commercial Workers International union (UFCW) filed a charge over the summer with the National Labor Relations Board (NLRB) saying the Smithfield Foods Company violated the National Labor Relations Act by retaliating against two workers for complaining about unsafe production speed. They worked at a hog processing plant in Tar Heel in Bladen County along the Cape Fear River in southeastern North Carolina. The NLRB has also again upheld charges from the previous two union elections and a violent cleaning contractor dispute. The plant was found to be relatively unsafe in a recent Department of Labor safety inspection.
These are the latest charges against the plant, the largest in the world (a 560,000 square foot facility on an 160 acre campus), killing about 34,000 pigs a day (33 a minute). It employs about 5500 to 6000 workers, mostly Latinos (60% of the workforce according to UFCW estimates), blacks (30-35%), and Lumbee native people and whites. It is located in an area with 6% unemployment with Smithfield wages starting at $8.10 dollars an hour, plus benefits, versus the average area wage of $5-6 dollars. Up to 20% of the workers start as temporary workers through Labor Ready for half a year, and thus lack benefits and earn less (from Amnesty International’s Amnesty Magazine). There is also 100% yearly turnover in its workforce. A former supervisor says managers don’t follow time clocks and cheat workers out of pay (Amnesty Magazine). UFCW workers at 19 Smithfield plants have higher wages. In April 2003 average meatpacking hourly wages (not including poultry, which is much lower) were $11.59 dollars for killing and $12.71 dollars for processing, versus the average manufacturing wage of $15.58 dollars (see www.reapinc.org). Wages in the industry fell a lot when processors were merged in the 80’s. Smithfield was given millions of dollars of tax breaks by the State to locate here (www.135steward.org).
Smithfield Packing, Inc. is owned by Smithfield Foods, Inc., which operates globally and is the largest pork packer. It is vertically integrated, meaning it controls the process from hog breeding through pork brand distribution –
“control over [its] pork products from squeal to meal,” as Smithfield Packing’s President Lewis Little puts it.
63% of pork is processed by the top 5 companies. On average out of every dollar spent by consumers on pork in 1999, 25% went to farmers and 16% to processors, which may be different now that integration has increased (Rural Migration News). Its gross profit in the fiscal year ending May 1, 2005 was $11 billion dollars and it can kill and process 97,600 pigs a day. On average it has yielded 26% annual compounded rate of return to its investors since 1975. It has about 51,290 employees.
UFCW has 1.4 million North American members, of which about 250,000 are in meatpacking and food processing. About 80% of the Company is unionized in the USA. The Union points out that Smithfield is adding 200 union jobs in its Farmland Foods unit in Denison, Iowa and John Morrell & Company plant in Sioux Falls, South Dakota, while denying the right to unionize to Tar Heel workers.
The current Tar Heel unionization campaign started in 2002. UFCW says that although most Smithfield plants are unionized the Company is more opposed to a union here because if a strike occurred the plant would not be able to house or re-ship all the pigs it receives daily. UFCW has been trying to unionize the plant periodically since 1994, two years after its opening.
UFCW says that during the 1997 campaign the Company told black workers that a union would replace them with Latinos and told Latinos that they would be reported to immigration by blacks. This was done in four trailers brought in for the meetings. Smithfield threatened to decrease wages and benefits if the plant unionized and spied upon, harassed, and fired union proponents. UFCW believes this has stopped but Company meetings are still held separately by race. The majority of workers were black in 1996 but today Latinos are the majority. Organizer Jeff Green told Human Rights Watch (HRW) that it was basically impossible to reach Latino workers because they were afraid of losing their jobs. UFCW reaches out by offering an immigration lawyer’s services in the area and supporting events such as the Immigrant Workers Freedom Ride event in Fayetteville last year. Just before the election someone spray painted “Nigger go home” on UFCW’s office trailer.
Sherri Buffkin, former supervisor, testified to the NLRB that she was also told to increase racial tensions by telling Latinos they would be replaced by pro-union blacks. The plant was segregated, with black workers on the kill floor and Latinos in cut and conversion departments. She was told to fire union supporters, did so, and then was told to lie to the NLRB or be fired herself. The Company claims that her pro-Smithfield affidavits are accurate and that she lied in her testimony. The NLRB found 11 workers were unjustly fired. Smithfield says that only 11 workers out of the 16,000 who left between 1993 and 1997 claim unjust firings (Rural Migration News). Overtime was not given to pro-union workers and rules were selectively enforced.
During the second NLRB unionization election, in August 1997, the local Sheriff deputies and deputized plant security (the plant has more than a dozen officers) were there in riot gear. After UFCW lost the vote (by 63%), Union organizers say managers rioted, racially insulting, beating, and arresting a pro-union worker and a union organizer. UFCW sued the plant for intimidation. Smithfield was found guilty of discouraging unionization by threatening to close, threatening pay and benefit cuts if a union was formed, and by spying upon, harassing, intimidating, disciplining, firing pro-union workers, and generally threatening retaliation. Smithfield lawyers and witnesses were found guilty of lying in court proceedings.
In 2002 Chief of Security Danny Priest, also a Sheriff deputy, was found guilty of violating the Ku Klux Klan Act of 1871 during the 1997 election. He was fined $755,000 dollars in damages by a jury, later overturned on a technicality by the Fourth Circuit of Appeals, one of the most reactionary courts in the country. Some other Company Police who were involved are still employed as Bladen County Sheriff deputies. Smithfield Foods is being sued after a Company Police officer shot a man when off-duty. The lawsuit claims Smithfield was negligent to have given the defendant a gun because he had fatally shot a suspect while working as a public police officer. About 45 prisoners who work at the plant were forced, along with the other employees, to hear anti-union lectures, but the Company, the local prison, and the State Attorney General Mike Easley (Democrat), now Governor, have prevented legal Union access to these workers up to today.
In 2000 the plant became the only meatpacking plant in the US with an on-site prison. At least 90 workers have been detained since 2000. While most had their charges dropped, they still had to pay lawyer and court costs, UFCW says. Smithfield let its Special Police Force status lapse, so now it can only detain people until a deputy comes to make a formal arrest.
Every night about 250 workers, from QSI, Inc., are needed to clean the plant. Workers claimed they were being photographed while working. Workers were fired for trying to leave without following safety rules. Sometimes they were rehired. Later there was a dispute between Smithfield’s Safety Department staff and the other management over non-compliance with safety rules. A walkout in November 2003 resulted in an agreement with middle management to pay workers a dollar more an hour, rehire workers, and stop interference by the three safety staff. Upper management and Smithfield refused to allow this and wanted about 7 leading workers fired. Workers protested and tried to walkout. Company police said the INS was outside, attempted to put a worker in a trash-can, and locked workers in to stop them. Those who left were illegally fired after being assaulted (Independently Weekly, July 20, 2005). UFCW says that two workers, husband and wife, were publicly arrested to intimidate others, falsely charged with trying to burn a trash can, and held for seven hours, during which they couldn’t contact their children. In April 2005 Smithfield and its cleaning contractor QSI, Inc. were found guilty by the NLRB of violating workers’ rights by physical assault, threatening violence, improper arrest of a worker, and threatening arrest by immigration authorities. In August 2005 the NC Democratic Party called upon Smithfield to stop using Company police, act lawfully, and to not intimidate and attack its workers.
In 2000 and 2005 HRW published special reports stating that Smithfield violates its workers’ rights (see www.smithfieldjustice.org). The report, whose author is also connected to UFCW, accuses the plant of requiring cutting work too close to other employees, lengthy hours, and poor training. The North Carolina Council of Churches denounced Smithfield for coming to the State so it can treat workers poorly and pay less. Other supportive groups are the National Baptists Convention USA, the A. Phillip Randolph Institute, the NAACP, National Black Caucus of State Legislators, Asian Pacific Labor Association of Legislators, Coalition of Black Trade Unionists, LACLA, United Latinos of the UFCW, the Coalition of Labor Union Women, and local North Carolina groups.
In 2004 Webb Patterson Communications, whose president is Republican, was brought in to dialogue with local leaders, officially to listen to their concerns and recommend changes. A community paper was launched, with anti-union articles on half of the first edition’s 12 pages. It covers a four-county area where Smithfield workers live, leading UFCW to suspect Company backing (March 2004 Witness UFCW newsletter). UFCW distributes The Truth/La Verdad in the plant.
In 2000 an NLRB administrative law judge ordered a new election, which Smithfield appealed. In 2004 the NLRB ordered an election, which Smithfield appealed to the US Circuit Court of Appeals. The NLRB was told to review its findings. Still the NLRB, including Bush appointees, unanimously upheld the previous administrative law judge ruling regarding the 1994 and 1997 campaigns. This included findings that 10 workers were wrongfully fired, workers were paid more to spy (one worker says she was paid 50% more and didn’t have to work) and point out Union supporters to Company consultants, Smithfield confiscated literature, prevented workers from advocating for unionization, and brought in Sheriff deputies in riot gear when the Reverend Jesse Jackson and other religious people were leafleting workers. The 10 workers can get their jobs back and back wages (The Agribusiness Examiner, January 19, 2005).
In December 2005 the NLRB rejected the 2000 decision by an NLRB administrative law judge about how the new union election was to be conducted. Originally the election was ordered held away from the plant and union organizers were to be let into the plant, which were extraordinary orders from the NLRB. Smithfield is still appealing to the Fourth Circuit Court of Appeals, according to Executive Vice President and Senior Advisor to the Chair of Smithfield Foods, Richard J.M. Poulson, to “review the finding” of violations and “to reconsider the remedies, which we still believe unfairly allow the union to interfere in our employees’ freedom of choice” (Agribusiness Center, January 3, 2005) A new election would require 30% of the workforce to sign cards, but that is difficult because of turnover. According to the recent HRW report, CEO Joseph Luter III thinks the NLRB is so biased as to actually be part of UFCW.
Retaliation for a Spontaneous Safety Protest
In March 2005 about 80 workers, most of the workers on three loins de-boning production lines, spontaneously decided to halt work to protest unsafe line speed. These lines worked cutting pork loins from bones. At that speed workers were killing and processing up to 2000 pigs an hour, requiring the workers to use their knives too fast for safety. They went to human resources to demand either slower speed or the hiring of additional workers. The Company reduced the number of lines, later causing unsafe crowding according to UFCW. June 23rd two involved workers were suspended, allegedly in retaliation for March - Angel Santos Muriel was fired and Jesus Munoz Marquez is indefinitely suspended.
UFCW has an online campaign demanding that Angel and Jesus be reinstated at ufcwaction.org/campaign/reinstate_workers/ and encourages the public to ask Smithfield to respect workers’ rights. The charge will either be dismissed or it will issue a complaint if Smithfield does not settle the charge. If the complaint is not settled then there will be a trial under an administrative judge.
In the spring of 2005 the NC Department of Labor inspected the plant and fined the Company $23,514 dollars for 45 major violations and 9 lesser violations. The violations included emergency exits that were not fully accessible, raised cutting platforms without guard rails, lack of safety goggles for employee protection from strong chemicals, a worker who was repairing a running machine, improper shielding of saws, and workers risking exposure to disease while washing gloves. The Department and the Company thought these were good results for a large plant, while Lane Compa, a Cornell professor and author of the 2005 HRW report, and the UFCW believe the plant could be safer. Smithfield emphasizes that the violations were not called “willful” and that many were resolved quickly (Raleigh News&Observer). In the past there have been violations, such as an impeded exit.
OSHA found that a worker who died in November 2003 was killed in part because of poor training and “lack of accountability.” In general Smithfield workers have complained about production speed, work station designs that cause strain, poor training, improper treatment at the in-plant clinics, and routine denial of workers’ compensation (according to UFCW’s pamphlet The Case Against Smithfield).
Smithfield says that in the past few years there has been a 31% decline in workplace injuries and a State Labor Department letter pointed out that there are fewer ergonomic injuries. Jackie Nowell, Director of UFCW’s occupational and health office finds it suspicious that in 2002 Smithfield claimed only 425 injuries in Tar Heel, 50% less than the national average. Workers receive unused workers’ compensation as bonuses at the end of the year, and if they do claim compensation for injuries they are allegedly often then investigated for immigration violations. The health insurance is also too expensive for many, at $17 dollars a year (Amnesty Magazine). On the other hand, Compa says these injuries are not well-regulated and are hidden by business. The Company’s Code of Business Conduct says “Smithfield is committed to ensuring the well-being of our workers,” neighbors, and environment, and expects the Code and laws to be followed (www.smithfieldfoods.com).
Things are the Same in Wilson, North Carolina
Smithfield’s Tar Heel activities were repeated in the first half of 1999 in Wilson when UFCW tried to unionize a factory that processes ham for retail (see the HRW report). According to HRW, 25-30% of the workers are single mothers who use government welfare programs. Management told these workers that the Union would make them strike, sacrificing their government assistance. At least one worker was offered unspecified benefits if she supported management. Neutral workers were given anti-union lectures without the presence of union supporters. In January 2000 the NLRB agreed that Smithfield made threats that unionization would result in closure of the plant, layoffs, or more discipline, and that it would be useless to unionize. Workers were questioned about their views, spied upon, and prohibited from discussing their current salaries. Five workers were fired for being union supporters. Before the vote Smithfield invited the mayor of Wilson and two city council members on to the premises (which union organizers were barred from), where they passed out anti-union leaflets. These Wilson County Right to Work Committee leaflets said past plant closings were caused by union organizing and they pointed out that Wilson County had 11% unemployment. Right to work means a unionized shop cannot force new workers to join the union.
The Union and supporters have held Justice @ Smithfield events in Atlanta, Georgia, Raleigh, Fayetteville, Durham, Chapel Hill, Winston-Salem, Greensboro, Orlando, Florida, and elsewhere. UFCW provides speakers and its video Witness, Justice @ Smithfield. For more information see www.smithfieldjustice.org (email: Smithfield@ufcw.org). UFCW encourages people to contact:
Joseph W. Luter, III
CEO and Chairman of the Board
Smithfield Foods, Inc.
200 Commerce Street
Smithfield, Virginia 23430
or 757-365-3000 or firstname.lastname@example.org.
2. Green Monopoly Capitalism? Environmentalism at Smithfield Foods.
Lately Smithfield Foods, a huge meat producing corporation known for severe violations of its employees’ rights in North Carolina, seems to have turned over a new, ‘green leaf’, winning several awards for improving its operations. A Company web page says that it’s “highest priorities are safe food, the humane treatment of our animals and environmental stewardship” and that it wants to move “well beyond compliance in stewardship responsibilities.”
Previously Smithfield was allowed to regulate itself in North Carolina after violating the Clean Water Act (CWA) about 7,000 times along the Pagan River in Virginia and fined $12.6 million dollars, one of the biggest CWA penalties ever imposed (later reduced to $600,000 dollars). Smithfield says it was not at fault in the violations and that the Pagan River was not impacted. Since citizens groups and the Federal government forced the Company to send its waste to a municipal treatment plant, instead of into the River, water quality has improved according to the State. In 2000 an environmental compliance committee was created by the Company. Later the former director of Virginia’s Department of Environmental Quality, Dennis Treacy, was hired as Vice President of Environmental, Community, and Government Affairs in late 2001. Speaking of Human Rights Watch’s (HRW) recent labor issues report he told The Virginian-Pilot that
“We look at it as outdated, with no attempt to reflect what goes on there today. It has changed dramatically in that time”
and he has criticized Smithfield’s environmental critics as well.
In 2005 Smithfield was praised by the Hampton Roads Sanitation District for having no major violations, waste spills, or out of date regulatory paperwork. The Company received 8 awards from the State for going beyond various Virginian and Federal environmental laws in spring 2005.
In 2004 and August 2005 three Smithfield shareholders sponsored a shareholder resolution requiring the Company to compile a yearly report on the environmental impact of hog farms it owns and contracts with. These shareholders are Amalgamated Bank (owned by the union UNITE-HERE, the only US bank of its kind) with 26,204 shares, the Nathan Cummings Foundation with 23,200 shares, and the Sierra Club, with 220 shares. Management believes its annual report on the hog farms it owns, a third of its 2250 pig suppliers, is good enough. It alleges that more reporting would be a burden on contract farms. The three shareholders say the current reporting is good, but not enough and that environmental liabilities will hurt profits in the long run. In 2004 20% of shareholders supported the proposal and 10% abstained. In 2005 about 1 in 4 voted for the resolution.
Last summer the Tar Heel plant was certified as meeting the International Organization for Standardization’s ISO 14001 standard in the summer of 2004 and planned to have most of its plants complying by the end of 2004. ISO 14001 certification means that a company is verified as having studied and implemented procedures to manage its affect on the environment in a range of areas. This is the first large meat processing plant to earn the certification. Smithfield uses the Internet to make it easier for other businesses to follow Tar Heel’s example. The EPA praises the effort, and the American Meat Institute’s related industry environmental stewardship goals.
In 2001 the Company’s hog breeding subsidiary, Murphy-Brown, LLC, was the first livestock company to earn an ISO certification. This effort involved 700 employees at 150 facilities. Now all Company hog farms have ISO certification. Murphy-Brown also developed an Integrated Land Management Program, which Smithfield describes as conserving wildlife and environmental values while also managing livestock operations. In 2003 Murphy-Brown and the government of North Carolina jointly created a free online program to help livestock growers implement an Environmental Management System (EMS) similar to Murphy-Brown’s ISO certified EMS. The Tar Heel plant’s EMS unit won the Company’s President’s Award for exceptional environmental management in 2004.
In 2004 the Environmental Protection Agency praised Smithfield’s efforts. The EPA’s Chesapeake Bay program gave an award for excellence to subsidiary Gwaltney of Smithfield. This was in recognition of Gwaltney’s wastewater treatment improvements that reduced nutrient pollution of waterways and saved 10,000 gallons of water a year. In September Gwaltney of Smithfield, Gwaltney of Portsmouth, and Smithfield Transportation received silver environmental excellence awards for large manufacturers from the Governor of Virginia, and Smithfield packing won a bronze award. November 4, 2005 48 Smithfield facilities were recognized for excellence in environmental management by an industry group, the American Meat Institute. This was out of 147 facilities recognized in four categories. Smithfield, including the Tar Heel facility, received all of the highest level awards given, 38 in all, and 10 in the second highest category.
Large-scale hog farming puts tens of thousands of tons of excess nutrients into waterways, resulting in fish kills from eutrophication, encouraging the poisonous Pfisteria dinoflagellate microorganism, causing air pollution, and polluting wells. Smithfield claims that factory hog farming does not pollute the environment significantly, as an example citing the very high quality of the Black River in North Carolina. According to the Company, storing hog waste in open lagoons and spraying waste on fields is not an environmental threat. The problem is that these systems pollute when used too intensively. For example, in 2002 Smithfield was fined $10,373.96 dollars for buying pigs from a prohibited hog farm, which was prohibited because it broke State environmental regulations. Smithfield said it violated the prohibition accidentally. During the very wet spring and summer of 2003 Murphy-Brown had to continuously operate waste disposal equipment when conditions were better for spreading the slurry. Smithfield does not say how likely a waste spill was. Continuous operation is now their standard procedure. This could be because the operations are becoming too large to use the old waste disposal system.
Nonetheless, since 2000 Smithfield has supported research at NC State University by donating $15 million dollars to develop economically feasible alternative waste disposal systems, and as of 2004 two met the Company’s “technical performance criteria” (from the Company website). There are 14 pilot projects currently, and a report will be released December 2005. The Virginian-Pilot points out that this support is part of a $65 million dollar settlement in 2000 after contamination by hog farms during the 1999 Hurricane Floyd disaster.
Because of the economics of hog farming and the giant size of hog buyers such as Smithfield Foods, small growers are pushed out of the business unless they contract with a large corporation and enlarge their operations. In 1983 there were 24,000 hog farmers in North Carolina, growing 2 million pigs, while in 1997 only 4,000 growers remained. In 1997 there were 10 million pigs in North Carolina versus a human population of 7 million. This is more than can be killed and processed within the State. There are fears that small growers will vanish in eastern Europe also as Smithfield grows there.
Iowa has a law preventing corporations from owning or managing livestock to protect independent livestock farmers but Smithfield has worn the State down and now has a loophole for itself. In 1999 Iowa tried to prevent Smithfield from buying Murphy Family Farm, the second largest American hog grower and later claimed Smithfield was trying to circumvent the law through a fake sale. In 2002 Smithfield sued Iowa to repeal the law. The State lost the suit, but the case was to be reconsidered this March following changes to the law to keep it from violating the Federal regulation of interstate commerce.
September 16th Iowa agreed to allow Smithfield to violate the law for a decade in return for several concessions. Smithfield agreed to a contract producers’ bill of rights making contracts public, allowing associations, allowing contractors’ liens, and protecting whistleblowers. Collective bargaining is allowed and Smithfield agrees to negotiate in good faith. The Company is prohibited from retaliating for exercise of these provisions, requiring additional capital investment over what is in a contract unless compensation is given, and requiring binding arbitration of contract disputes. According to Company Executive Vice President and Advisor to the Chair of Smithfield Foods, Inc. Richard J.M. Poulson
“Smithfield growers already have those rights. We do not mistrust our farmers”.
(Iowa Farmer Today, September 21, 2005).
Smithfield is prohibited from finishing pigs for slaughter itself in Iowa for the next 5 years and it has to buy 25% of the pigs it kills in Iowa from independent Iowa farmers and it will keep these plants open with 90 day notice of closure. $100,000 dollars will be given each year to Iowa State University for 10 years to train producers in good environmental practices and another $100,000 dollars per year to fund grants to improve Iowa hog farming. Producers can enforce this contract in court for damages (see www.cnmpwatch.com). Iowa Senator Tom Harkin (D) cast the decision as necessary, because the Federal government has been lax on enforcing interstate commerce laws such as anti-trust laws and the Packers and Stockyard Act. Poulson told the Iowa Farmer Today that
“Frankly, a good settlement is more satisfying than a court decision. We have to do this together”
(September 21 article).
Smithfield is a meatpacking company and so it draws fire for factory farming and how it treats its livestock. The Company has an Animal Welfare Policy and Animal Welfare Management system to ensure that animals’ “basic needs” are provided, as well as keeping them safe, comfortable and healthy” (Company animal welfare Q & A webpage). It created a formal policy following increasing concern by shareholders, consumers, regulators, and the public, it says. It denies that animal welfare was worse before the Policy. The Management System is audited by Stan Curtis (University of Illinois) and Temple Grandin (University of Colorado), as well as by the US Department of Agriculture’s Process Verified program. Smithfield claims this is a model policy for the industry. The Company does not take responsibility for how its animals are treated by contractors “hired by others to transport their animals to our plants,” but will help euthanize animals if asked.
Recently 513 pigs died from the heat at a Murphy-Brown hog farm in southeastern Virginia after a storm caused a blackout. Pigs only sweat through their nostrils, so they are very heat sensitive, and Smithfield’s breed of hogs might be extremely sensitive. People for the Ethical Treatment of Animals (PETA) publicized the deaths after being informed by an employee. A nearby plant serving Murphy-Brown has fans that come on a certain temperature and curtains if there is no electricity. The farmer interviewed by The Virginian-Pilot of Norfolk said
“The pigs are in close confinement. They have enough room to turn around and maybe lie down. But they cannot take stress. They’re babied.”
PETA wants documents on Smithfield’s pre-slaughter handling to be released. It refuses to release information but says that it acts lawfully. According to Robert F. Kennedy Jr., pigs use fat on their backs to regulate temperature, but Smithfield has engineered pigs with very little fat to increase profit, leaving the pigs very temperature sensitive. He says this has “drastically diminished the quality” and requires adding liquid to cook the resulting pork (reprinted on Animal Welfare Institute website www.awionline.org).
Medical Antibiotics in Food
Working with Environmental Defense, the Sierra Club, Physicians for Social Responsibility, and other groups, Smithfield has agreed to reduce the use of medical antibiotics in raising pork for food service company Compass Group North America, Inc.. Antibiotics are fed to livestock to increase growth and control disease, but this reduces their medical effectiveness because bacteria evolve resistance to the drugs. Smithfield now reports the quantity of feed antibiotics bought per pound of pork sold to consumers and was previously reducing antibiotic use. Medical antibiotics will not be used for promoting growth in hogs and antibiotic use will be reduced further.
Large-scale meat processing has increased food-borne disease by 300% in the USA and 500% in Britain (ecomall.com, January 2004). In 2003 a study conducted by a sociologist at NC State University found that Americans trust small family farms and American products, and say they would pay more for food grown in the US and with sustainable practices (The Agribusiness Examiner, report available at sa.ncsu.edu/global-food).
Smithfield mainly packages pork, but it also has poultry and now beef operations. It formed a 50% partnership with Contigroup Companies, Inc. in feedlots. Contigroup is also the second biggest American pork producer. In October 2004 it bought cattle feedlots from ConAgra Foods, Inc. and earlier bought two beef processors. Pork sales benefited from the recent Canadian mad cow disease discoveries (see Alliance! October 2004). According to Company President and Chief Operating Officer Larry Pope, beef is open to profitable vertical integration, although maybe not as much integration as pork, while chicken is not very profitable, so Smithfield won’t expand there (interview in The National Provisioner). By increasing control of beef from the raising of cattle to processing, it could improve safety according to the Top Producer.
In 2004 the Company gave politicians $117,720 dollars (from institutional sources and employees), second only to the American Meat Institute for contributions from this industry. Smithfield itself cannot give donations, but employees can give $2000 dollars per candidate or $5000 to a political action committee (which can give that amount to a candidate). Smithfield’s 2004 donations were mostly to Republicans, about seven times more money than to Democrats, with a focus on what the The Virginian-Pilot calls “regional lawmakers,” and Midwestern politicians, especially “those with ties to agribusiness” and from places with Smithfield facilities.
Environmental regulations, livestock feed imports, and biodiesel were concerns of Company lobbying. $32,500 dollars were given to House candidates, the most, $9000 dollars to House Speaker Dennis Hastert (R-IL). The only House Democrat to receive funding was Charles W. Stenholm, (D-TX), the highest Democrat on the House Agriculture Committee. In Senate elections $32,000 dollars were given to Republicans. The highest amount, $9000 dollars was given to Christopher S. “Kit” Bond (R-MO), chairman of the subcommittee overseeing the EPA and a Senate Agriculture Committee member. Conservative Rep. Richard Burr (R-NC), who was elected Senator in that election, received $5000 dollars. His relatively conservative Democratic challenger, Erskine Bowles, received $2000 dollars, as did Democrats Evan Bayh in Indiana and Ben Nelson of Nebraska. In the 1996 election Governor Jim Hunt (D) received the most pork industry money.
When the plant was first proposed the director of the state Division of Environmental Management opposed its being sited in the Cape Fear River basin but Governor James Martin (R ) waived an environmental impact statement and let it be built. State legislator Cynthia Watson (a Republican from Duplin County) criticized Smithfield – then the Company spent up to $510,000 dollars a week for two years and got her voted out of office.
Smithfield Expansion in Poland and Romania
CEO and Chairman Joseph W. Luter III calls eastern Europe, especially Poland, Romania, and Ukraine the future “Iowa of Europe” and Europe’s “bread basket” for food production with the post-Cold War reunion of eastern and western Europe. The Company plans to focus on international expansion, especially in Poland and Romania. In the fiscal year 2004 Smithfield only made 8.4% of its sales internationally, but that is 22% above the previous year (The Virginian-Pilot). It sold its Canadian unit, but continues to operate in Mexico (two joint operations with Morson), Brazil, the UK, France (Jean Caby Group), Spain (Campofrio), Poland (Animex, producer of Krakus and Morliny ham), Romania, and China (AFG China). France and Spain are currently the largest foreign operations. UFCW has begun responding to the transnational nature of Smithfield by organizing a meeting of unions from North America, France, and Spain in Paris in mid-October. They plan to organize more regular consultations. A Solidarnosc union Meat Packing Division delegation visited Tar Heel in 2004. Many of the French and Polish facilities are organized.
Smithfield controls 5% of Polish production with 29 farms producing 1.3 million pigs a year (Chicago Tribune). Poles eat 84.3 pounds of pork a year per capita, the most in Europe and higher than the American figure of 64.9 pounds. Animex is Smithfield’s main Polish subsidiary, a former state company founded in 1951 and bought by Smithfield in 1999. It has 5000 workers, about $410 million dollars in sales, and sold 432 million pounds on meat in fiscal year 2004.
Poland was Smithfield’s main focus for the last five years, but now it plans to invest $800 million dollars in Romanian expansions and $55 million dollars in contracts with Romanian hog and feed producers (the Daily News of Newport, Virginia). Romania has cheap land and grain costs, very low wages, weak environmental laws, high corruption, and it is scheduled to join the EU in 2007, making sales to western Europe easier (Poland joined in 2004). Luter says Romania is appealing because unlike Poland
“there is no developed hog industry,” so “You don’t have that constituency…that is frightened of efficiencies and our lower costs” (The National Provisioner);
It’s American rivals are also lacking. In 2004 Smithfield bought Comtim Group SRL, a small vertically integrated Romanian company growing 200,000 pigs a year and owning two processing plants, for $83 million dollars. It also acquired a 50% share in a local distribution firm owning a cold storage facility and a Danube River port. It wants to be able to process 6 million pigs a year within a decade. An Illinois farmer and President of the American Corn Growers Association touring Romania for a farm out-contractor told the Journal Star of Peoria that
“there’s something wrong with wiping out the local infrastructure to get rid of competition,” which he says the Company did here by closing small processing plants. “It’s the small producer that will be hurt,” he said, referring to Romanian small peasant production, similar to the “highly fragmented” state of Polish agriculture, as Smithfield’s Polish Operations webpage describes it.
Luter told The Virginian-Pilot “It’s a golden opportunity, and we’re going to be extremely aggressive.”
Poland may offer a vision of Romanian hog farming’s future under Smithfield’s influence. Many Poles worry that Smithfield will proletarianize or drive off family farmers. Of Poland’s two million farms, the EU says only 3% are profitable, and up to date machinery is mainly limited to former state farms. The EU’s European Bank for Reconstruction and Development finds that Smithfield is complying with EU laws in Poland and the Bank is working with two Polish banks to loan $100 million dollars to Animex.
Smithfield counters the argument of proletarianization by saying that its 8 Polish processors buy 70% of their animals from independent sources and that hog prices are higher than ever while a government agronomist says cheap labor and low wages mean small growers have the advantage (Fortune International (European Edition). The Company says contract hog farmers potentially get a bonus of “up to 13% higher than the base price for leaner, higher yielding hogs.” Smithfield says it is helping modernize and improve efficiency in Polish agriculture and has created 41 “buying stations” where about “14,000 smaller farmers can readily market their hogs.”
According to Robert F. Kennedy, Jr. the small slaughterhouses of Poland’s West Pomerania region have been driven out of business and the slaughterhouses the Company owns will not handle hogs from small farmers. Suppliers receive payment within two weeks from delivery, while before Smithfield farmers usually received payment 30 to 60 days later. The Company itself receives payment from sales up to 30 to 45 days after selling. It also says it is committed to Poland, not pulling out after initial losses from Animex, now having more than $240 million dollars at risk in Poland, and having saved Animex’s 7810 plus jobs. In Wolsztyn four farmers were tried for alleged Luddite resistance - trying to torch a neighboring Smithfield contractor’s farm.
As Smithfield pursues its globalization plan, there continue to be allegations of polluting and unsafe activities at its eastern European facilities. “An underutilized collective farm” in Wieckowice, in West Pomerania west of Warsaw, was acquired as a hog breeding farm. 12,000 to 17,000 pigs were brought in, under cover of darkness. The plant is only permitted 500 pigs and 500 cows according to Kennedy. The resulting hill of manure (Kennedy says it was 150 meters long, 4 m high, and 50 m wide, which Smithfield covered while he was there) polluted the groundwater and a local swimming area, and caused vomiting and fainting at a school 40 or 100 yards away. Smithfield says its complies with EU waste disposal regulations.
Near another plant people also got rashes from the fumes. Management ignored the local government’s orders to move the pile for 6 months. In Sedziny a facility with a permit for 1000 cattle had 4500 pigs instead. Health spas in Polczyn Zdroj, which has been there for four centuries, and Goldap are being affected by Smithfield pollution. The Wieckowice facility once employed 100 (in a village of 700 people), but only 10 when it was privatized (which was before Smithfield bought it). The village now has 40% unemployment. One resident is a night guard, but the local owners are unknown. Three Animex farms near Goldat employed 60 when they were bought, but now employ 7 after automation. The Company offered about $2500 dollars to buy new windows for the Wieckowice school, but this was refused. Allegedly the woman who was mayor for 35 years resigned after intimidation. After protests the number of pigs was reduced, the pigs were given straw bedding (instead of having no bedding at all), and a veterinarian was put in charge. The Company denies it gave in to pressure and villagers still feel the farm is too big.
Robert F. Kennedy, Jr. and others snuck into a new farm in Szczecenik in northeast Poland and found bad conditions. Kennedy says the 5000 pigs there had little space and no straw flooring. 20 dead pigs were in a bin that had been empty the night before. Cement waste storage pools had overflown into a frozen lake. Treacy denies this and the Company is sueing Kennedy for slander in a Polish court. The plant is required to employee 10 locals and instead employs none, but 44 had worked there prior to the open Polish counterrevolution (see Robert Kennedy Jr. article at www.awionline.org). In the spring of 2005 there was a scandal after workers at the processing plant Constar SA of Starachowice were filmed scrapping mold off sausages to be sold by retailers.
A recent Agricultural Ministry survey found that all 14 Smithfield facilities and the two owned by subsidiaries were in violation of veterinary, health, or construction laws. Kennedy says the Polish national government supports the Company and that any fines that are imposed are on the level of “a few hundred dollars.” The mayor of Wierzchowo, about one hundred miles north of Wieckowice permitted two large facilities after his wife was given about $4000 dollars to do the environmental impact study. In one town the governor did not permit Smithfield’s facility, but was overridden by the environmental ministry.
Thanks to Poland’s small farming, it has 50,000 pairs of endangered white storks, 25% of the population, many of them nesting on farm building roofs. This is more than remain in Western Europe, for example only 6 pairs remain in Denmark. Other species are probably also benefited by, or can survive, traditional Polish practices.
Smithfield has made improvements, which should be applauded. But can it all around and always be socially and environmentally responsible - while also maximizing investor profits - as it is required to do by law and by the hard laws of capitalist relations? Can it safeguard the environment and health at all of its facilities, foreign and domestic, while sometimes violently oppressing workers, juicing politics with contributions, and using its huge profits to lobby against community demands and independent government regulation?
As Karl Marx pointed out in Capital, the need for profit drives business in general to try to bypass any laws diminishing that profit, especially if those profits are large. It is the purpose of a corporation to make profit, and while might be a good steward of the environment if it is profitable or inexpensive and good for public relations, it is not meant or designed for conservation.
For more background on how Smithfield illustrates monopoly capitalism, see the Alliance! article available online at www.allianceml.com/paper/2004/Carolinas.html.