One Reporter’s Experience Covering the Environment in the Heartland

RANTOUL, Ill. — Journalism is about seeking the truth. That is why I wanted to be a journalist.

After college, I eventually landed my first fulltime job as a reporter at the Rantoul Press, a small weekly newspaper in the village of Rantoul, Illinois. I believed the newspaper would look out for the best interest of its readers. I was wrong. That, perhaps, naive notion was dispelled when the newspaper’s editor and general manager decided the village’s economic interests were more important than the public health.

Reporter Bob Bajek picks up a rock by Heritage Lake in Rantoul. Heritage Lake used to be a sludge pit in Chanute’s 900 area, but it was converted into a man-made lake in the 1980s to be used for the airmen’s and later public’s recreation. This lake is by four landfills that produce chemical runoff.

I wrote a story on Aug. 28, 2013 about how Agent Orange was possibly on the now shuttered Chanute Air Force Base’s property. The story was how a former airman named Michael Glasser in the 1960s mixed the herbicides 2,4-D and 2,4,5-T into what would later be known as Agent Orange. He then buried some of it by Heritage Lake, a manmade body of water that used to be a sludge pit on the base. Today, some area residents use the lake for recreation.

Local readers gave me positive feedback on the story, saying they would never have moved to Rantoul had they known of the pollution concerns.

The following week, on Sept. 4, I wrote a followed up story for the Rantoul Press about a Restoration Advisory Board (RAB) meeting addressing the Air Force’s efforts to clean up of the skeet (munitions) range. The story also reiterated environmental concerns about Chanute, especially how chemical seepage might affect the ground water and the possibility that drums of Agent Orange might be buried at the site. Photographs of the polluted Heritage Lake (now under village control) also accompanied the story.

A day after publication, the Rantoul Press’ general manager, Tim Evans, talked to me about the Agent Orange stories. Evans, a hefty 59-year-old newspaperman, said these stories “weren’t what community newspapers were about and made the town look bad.” Evans then insisted I go with him to then village administrator Bruce Sandahl’s office “for an off the record meeting.”

Bruce Sandahl

Once there, Sandahl, a bespectacled, imposing man with a ruddy complexion and a walrus mustache, said these stories were “pure opinion and crap.” He never told me, nor did I agree, that the meeting was off the record. Sandahl also criticized a Rantoul Press report about the multi-million dollar pork plant, Rantoul Foods, indiscriminately dumping hog waste in rural Rantoul. The plant’s unsanitary disposal produced a sickeningly pungent smell that negatively impacted several nearby residents. The village and Illinois EPA took no actions against Rantoul Foods for its carelessness.

Sandahl—hired in 2008 and paid $157,196 annually, about twice as much as the going rate for town managers of Rantoul’s size — emphatically said that story was “horseshit” and damaged the community. But others believed that story prompted Rantoul Foods president James Jendruczek to announce at a public study session in August that his company would construct a $10 million rendering plant that should be completed by fall 2014. Jendruczek declined to be interviewed by the Press after the announcement, running out of the building before my editor, Dave Hinton, could ask him questions.

Village administrator Sandahl went on to say to me that “you are on one extreme by maintaining the base is severely contaminated, and the Air Force is on the other saying its perfectly fine. I believe its somewhere in the middle.” I asked him if he believed it was in the middle, wouldn’t that concern him. Sandahl snapped, swore and became agitated with me and said, “This meeting is getting nowhere.” He wanted me to see his side, but I asked, “Am I just to take your word for it? You are paid well by the village to make it look good.” Sandahl abruptly ended the meeting, and told Evans, “I will talk to you later about this” as we were leaving the office.

Throughout the meeting, Evans did not support the paper or me. He took Sandahl’s side. Evans and Sandahl are on good terms outside the office. Evans, like many local newspaper executives, is a member of Rantoul’s Chamber of Commerce.

Evans then took me to his office once again and said he did not believe Chanute had any problems and he suggested I stop putting time in the story. I said it was not affecting my productivity, and I believed there were problems at Chanute that could negatively impact Rantoul’s public health.

The general manager then rustled his hands through his thin, white hair and said, “I don’t think (publisher) Mr. (John) Foreman would’ve published that Agent Orange story.” I told Evans The News-Gazette (our sister paper) did indeed publish it on Aug. 31, but he still contended Foreman would not run it.

Meanwhile, apparently worried about the town’s image from my stories, the Rantoul Press wrote a five-part series about how Chanute’s closure 20 years ago has affected the village and surrounding community. Not one story mentioned environmental contamination. For the Oct. 30, 2013 issue, Evans wrote five glowing reports about how Rantoul’s economy was on the rise.

In the cover story, Sandahl said the Air Force has “recognized their obligations” and been good to work with. Sandahl mentioned “environmentalists need not fear contamination in property on the base, noting if something is discovered, the Air Force is responsible for cleaning it up, whether it be soil, water or structures.” Evans wrote Sandahl has “siphoned through thousands of pages of documents and has some ‘knowledge of where we’ve been, how we’re doing and where we’re going.’ ”

Another story mentioned Restoration Advisory Board member Ian Wang, co-owner and director of the Prairie Village retirement home who bought large parcels of property when Chanute closed in 1993. The story said he wanted to invest $2 million to “give the community a cultural art center/park on base.”

In November, I told Evans and Hinton about my Nov. 8 interview with Betty Panzer and her concerns that her well might be contaminated. Evans said I did not have enough for a story and decided to hold it. That article was never published.

That same week, Evans told me the Rantoul Press would never publish any story about the possibility of dioxin in the water because it would ruin the town. Evans said no newspaper or news organization would pick it up. He also said we are not supposed to be Panzer’s voice, and that this 70-year-old woman who is poor, alone and severely ill “should grow some balls and speak at the RAB board.” I told Evans she was afraid of them, but Evans dismissed that notion.

Evans went on to say, “You might have 5 or 10 percent of the truth, but I will not publish this.” He said I had to have the “whole story” and that “no one would ever publish this.”

I wrote a column for the Nov. 13th issue about how the public should attend the Nov. 21 RAB meeting and question the Air Force and Illinois EPA. Both agencies seemed to be misleading Rantoul residents about Chanute’s cleanup. I also listed my additional research on Chanute’s contaminants, how dioxin was detected in private wells in 1998, and that both entities were stonewalling me every time I asked questions.

Both Evans and my editor, Dave Hinton, read the column and wanted it to be “clarified because it was too confusing.” I did and then Evans said he would not run it. He then proceeded to write an editorial about the situation, seemingly siding with the Air Force while undercutting my previous reporting on Agent Orange.

Debra Rawlings, a former Rantoul Press reporter who once covered the RAB, is currently a RAB member. She tried to discredit me in a letter to the editor on my Sept. 4′s story about Heritage Lake and ground water contamination, writing that my story was one-sided (which is her right). She had tried to undermine a source by email to my editor a month before and had overlooked dioxin issues when she was reporting on the board. On Nov. 15, she attempted to publish a letter to the editor with some untrue statements about me and two sources, writing: “Reporter Bob Bajek is relying on information from RAB member and conspiracy theorist Doug Rokke” and “Mr. Bajek might consider that he is only as credible as his sources.”

I emailed Illinois Press Association lawyer Don Craven to explain the situation. Evans grew angry with me because “Dave (Hinton) was supposed to do it.” I told Evans and Hinton I wanted to make sure I defended myself. Craven advised Hinton to strike out Rawlings’ accusations about my sources and me. Here is her published letter.

The November RAB Meeting

A couple of days before the Nov. 21 RAB meeting, I received a phone call from Air Force spokesman Chad Starr asking me if I would be interested in meeting with Linda Geissinger, a public affairs specialist for the Air Force, and personnel from Chicago Brick & Iron to talk about environmental issues concerning Chanute after the meeting. (CB&I, formerly known as Shaw Environmental, Inc., is the contractor finishing the base’s cleanup. It has more than $3.3 billion from 35 DOD contracts.)

I told Geissinger I wanted to meet them with my editors and record the meeting. Geissinger was surprised and said she did not understand. I refused to give into her demands.

Michael Glasser, who served as an airman at Chanute in the 1960s, is 69-years-old and now lives in South Florida. He wanted to be interviewed for the November meeting on speakerphone or Skype as he was receiving chemotherapy and radiation treatment for his returning cancer and could not be cleared medically to attend. Glasser was already listed on the agenda to be interviewed about herbicide usage at Chanute. I asked the Air Force’s Paul Carroll and CB&I’s Diane Gill by email if Glasser could be put on speakerphone since the RAB was exploring potential contamination.

Chris Hill

Carroll, who speaks softly and has a Mr. Rogers demeanor, and Illinois EPA’s Chris Hill did not get back to me by email or phone. Carroll told me that Glasser would not be interviewed until the next meeting (which would be in February or May 2014). I pointed out Carroll was on speakerphone during an informational meeting about the Chanute water towers during the October governmental shutdown, but Carroll did not answer why it was possible for him to be on a phone call to the meeting but not Glasser.

At the Nov. 21 RAB meeting, Hill — a nervous, lanky man about 40 whose hair is thinning and who wears fashionable jeans at public meetings — presented an “interview” he had with Glasser on Aug. 28 and stated that during their phone conversation Glasser said, “He didn’t use Agent Orange.”

“What they are doing is using semantics,” Glasser said after the meeting. “I didn’t know I was being interviewed with Mr. Hill as it wasn’t recorded and he misrepresented me. By saying Agent Orange isn’t there is like Bill Clinton saying he didn’t have sex with that woman.”

Glasser also added how Hill told him, “We don’t look into the past; we only are concerned about the future.”

The Rantoul Press did not publish my story about the Nov. 21 RAB meeting even though the public, the Restoration Advisory Board, the Air Force and the Illinois EPA engaged in heated discussions.

At the meeting, Linda K. May, a controversial local activist from Pontiac and a Champaign County native, provided three documents that she said proves Chanute Air Force Base’s chemical usage has contaminated the public water supply.

Doug Wolfe and Linda K. May

An Illinois EPA official said during the meeting that the village’s water is tested rigorously for contaminants. The state itself does not test for dioxin and TCE in water supplies, but instead relies on private contractors.

Another concern brought up during the meeting was the wells south of Chanute that tested for dioxin and other contaminants in 1998 and 2001.

Mary Walsh, a longtime rural Rantoul resident, said she and her neighbors worry about the base’s uncontrolled contaminated ground water because of the shallow water table and nearby farms.

“Out there, we are concerned about the ground water being tested on Chanute, and how Rantoul’s water supply could have an issue,” Walsh said. “But what are we supposed to do? Check our own wells?”

It was when she was asking that question that Rantoul police entered the meeting. A police press release later said that someone at the meeting was concerned when RAB member Doug Rokke left the meeting after a heated discussion and returned with a backpack. When Rokke reached into the backpack, he was physically restrained by the police and then roughly led out the room for questioning. The action postponed the meeting for about 10 minutes.

Rokke said the police released him and apologized for detaining him. They said a man from the meeting called saying he was making threatening gestures and was reaching for a possible weapon in a backpack. Rokke showed the police his backpack. It was filled with public documents.

When the meeting resumed after the police incident, the Air Force’s Carroll did not address Walsh’s questions about contaminated ground water.

Doug Wolfe, a reporter for Decatur’s WAND-TV, asked Carroll if dioxin had been detected on base.

“Yes, sir,” said Carroll, after taking a long drink of water before the interview. “There are detections of dioxin that were found. Everything that’s regulated by the EPA safe drinking water standards must meet EPA MCL (maximum containment level) requirements. Any public water supply has to meet those requirements, and Rantoul’s does as well.”

When questioned, Bob Carson of the Illinois EPA said that he does not think there is danger to the public from Agent Orange. ”I don’t believe there are any threats here,” Carson said. “There were a number of threats that were cleaned up. That work is underway. There is ground water contamination at this base. It’s to a limited extent due to the geology here.”

Wolfe, one of Central Illinois’ top broadcast journalists, asked Carson if contaminants seeped into the Mahomet aquifer.

“I’m not aware of any of that,” Carson said. “I’ve never heard mention. Yes, the Wisconsinan, which is the upper level of glacial materials, has the contamination. Below that, I can’t speak of that.”

RAB member Denise Becnel said she realizes the community has concerns over Chanute’s chemical usage. “I am concerned that there are members of Rantoul’s community that firmly believe that the environmental condition of Chanute is not right,” Becnel said. “I don’t have a technical background. I am not saying that there is Agent Orange or other contaminants on Chanute. I absolutely don’t know one way or another. But as a RAB member, I’m saying that we have to find a way to address the pressing concerns this community has regarding Chanute’s safety.”

The RAB voted to meet semiannually instead of quarterly. Linda Geissinger after the Nov. 21, 2013 RAB meeting told me the Air Force did not want to meet “due to what happened at the meeting” and “they were going to have to punt.”

After the meeting, I asked Hill why he seemed to avoid the WAND-TV cameras and why he helped apprehend Rokke. He did not answer. Carson told me Hill was ordered not to talk to me and that I can only ask Illinois EPA spokesman Andrew Mason or himself about Illinois EPA issues. I asked if it was common procedure or a special case, and Carson said, “You have to earn it, and, boy, did you earn it.”

The Fallout From the Meeting

Tim Evans

Following the intense meeting on Nov. 21, 2013, Evans, my general manager, told me, “You were unprofessional” and “many in the community complain about your professionalism and how you act with others.”

I asked Evans to give me examples numerous times, and he said, “It doesn’t matter” each time. Hinton and Evans told me they were weary of quoting Doug Rokke and Linda K. May due to their concerns about the sources’ credibility. Some local environmental activists like May have mistakenly cited Chanute as a Superfund site, even though the Air Force prevented its final nomination to the National Priority List. Sometimes advocates offer opinions beyond their recognized expertise. Both Rokke and May were helpful to me by providing government documents and other facts, but my editors were right to question some of their assertions. I never received any complaints personally, by phone calls, texts, emails or letters about lacking professionalism. I reiterated that there were many sources who had opened up about extremely personal issues for comprehensive features.

Evans told me either to tender my resignation on Monday (Nov. 25, 2013), or there would be “other avenues” because “Dave and I won’t stand for this anymore and will put an end to it.”

On Nov. 25, I told Evans I refused to resign because I did not do anything wrong. The next day I scheduled a meeting for Dec. 3 with News-Gazette Inc. publisher John Foreman to talk about Rantoul’s water issues.

Foreman’s secretary cancelled the meeting on Dec. 2, a day before the scheduled meeting. I never had a chance to talk to Foreman.

On Dec. 3, Evans and Hinton met with me, and Evans said I was “no longer an employee of the News-Gazette family.” I asked why and who made this decision. Evans would not say why I was fired, and that “it was a decision that Dave, I, and Mr. Foreman felt needed to be made.”

The Rantoul Press finally published two stories about the Nov. 21 RAB meeting on Dec. 11, but those stories failed to mention the heated debate, the police presence or the WAND-TVcoverage. The leads in both stories were the RAB to meet twice a year and RAB working with school children.

I filed a Freedom of Information Act on Nov. 13 to the Illinois EPA and followed up on Dec. 6 with Illinois EPA’s Sharon Dawson about why the request had not been acknowledged.

Dawson replied by email on Dec. 10 stating, “We attempted to contact you via phone on 12/4 at the Rantoul Press. We were informed that you were no longer employed at the paper. Tim Evans told us that the newspaper was not interested in the information and that we could close out this FOIA request. Therefore, the Agency will not be sending a response and this request is considered to be closed.”

Later that day I re-filed the request for DCBureau.org.

On Dec. 10, I filed a FOIA with the Rantoul Police Department about who made the emergency call about Doug Rokke during the Nov. 21 RAB meeting at the Rantoul Business Center. The incident report, written by Sgt. Justin E. Bouse, revealed that Illinois EPA’s Clarence Smith made the call on the police’s administrative line. He said that the RAB meeting had a subject “becoming upset, left the meeting, went to his car, and retrieved a backpack.” The subject then came back into the meeting with the backpack. Smith said the backpack appeared to contain something “heavy” and was concerned the backpack “may contain something dangerous.”

Earlier in the meeting, RAB member Debra Rawlings read for several minutes from a prepared written statement attacking Rokke’s credibility. Rokke did not appear upset while Rawlings continually raised her voice.

Bouse continued that he approached Rokke “when he reached into the backpack.” Another male subject, Illinois EPA’s Chris Hill, moved towards Rokke and “grabbed his left side.” The meeting was called to a halt and evacuated for more than 10 minutes. The police questioned Rokke and found that his backpack “contained only papers and other documents.”

The police then physically escorted Rokke from the building, not allowing him to return to the public meeting.

Joseph Trento of DCBureau.org and I called and emailed Mason, Smith and Hill for comment about the November meeting and why they called the police on Rokke. All three did not answer their phones, and Mason twice emailed, “Illinois EPA has nothing to add.”

Traci Nally, vice president of human resources and general counsel for The News-Gazette, Inc., emailed me on Dec. 16 saying, “It has been reported to me that you are still reporting on stories from Rantoul and in particular a story regarding environmental issues at the former Chanute Air Force Base.” Nally continued by saying the email was a warning regarding my ongoing work, including that any information or photographs obtained while working for the Rantoul Press belonged to that organization. She continued, “You are instructed by this email to destroy that information whether it is now on any of your personal electronic devices (computers or cameras) or in handwritten notebooks.”

I had not talked to anyone from The News-Gazette about my work.

When I asked Starr and Geissinger through email and phone calls about the November RAB meeting, both declined to comment. Geissinger referred comments to Starr since “you’re no longer with the Rantoul Press.”

Steam Plant

On Dec. 17, the Rantoul Press reported that the economic conveyance agreement was signed by the Air Force and Rantoul so White Hall and the steam plant can both legally be transferred to the village and be demolished in late 2014 or early 2015. The steam plant will take $5.3 million to demolished and remove materials safely, while White Hall will be in the neighborhood of $12 million.

On Jan. 15, the Rantoul Press published an article that White Hall was the “third most haunted place in Illinois,” according to the Illinois Paranormal Society. Village inspector Dan Culkin said in the article that the Illinois Paranormal Society has “taken pictures inside.” Culkin did not say that anyone visiting White Hall needs to wear a respirator for safety.

Rantoul Mayor Chuck Smith fired village administrator Sandahl on Feb. 28 after five and a half years. Smith declined to give the Rantoul Press a reason for the termination, citing personnel regulations.

In a March 19 column praising Sandahl, Evans wrote, “I truly know of no other person who thought more of Rantoul’s potential than Sandahl. He had insight that others couldn’t see” and “if it wasn’t for Sandahl, we wouldn’t be talking about harvesting crops on former Air Force base property.”

Rantoul wants to use 40 acres on base property to grow food crops for private and commercial consumption starting April 1.

Editor’s Note:Bob Bajek’s boss, Rantoul Press General Manager Tim Evans, was responsible for Bajek’s dismissal from the Rantoul Press on December 3, 2013. His version of events differs from the account that Bajek provided DCBureau.org. Evans told DCBureau.org he considered Bajek a “troublemaker.” When asked why he was dismissed, Evans said, “This is a personnel matter and none of your business.” When I pressed Evans on Bajek’s assertion that he had been fired because he was pushing for Chanute Air Force Base coverage, Evans said, “It wasn’t because of Chanute.”“All that kid did was cause trouble and stir up shit… He didn’t represent our publications very well,” Evans said. While Evans refused to say precisely why Bajek was fired, he said Bajek had been a solid reporter “up until he started covering subjects other than sports. He pissed off people in town because he liked to stir stuff. He began listening to people who like to stir stuff up.”When asked about his paper’s lack of in-depth coverage of the Chanute story, Evans said that the paper did not have the resources to investigate such a complicated story. “You have to trust your community leaders on this. Bajek was talking to troublemakers, and they got him stirred up and we know their history. We were not just going to go there. It took too long to investigate this stuff. He was fired because he upset every community leader in town. They personally told me they could not trust what he wrote.” When asked for names we could contact, Evans said that was none of our business. Bajek’s immediate editor, Dave Hinton, said that Bajek’s inability to get along with people in the way he represented the paper was at the heart of his “problems.” Hinton said he was not specifically fired over the Chanute story, but Hinton was unhappy with Bajek’s reliance on two local sources on the Chanute story. Hinton said that based on his experience, they were not trustworthy. Hinton said he repeatedly warned Bajek about the sources. When asked why Bajek’s story on Agent Orange was spiked, Hinton said it was because there “was no evidence that Agent Orange was ever at Chanute.” When asked if he thought the former airman quoted in Bajek’s story was lying, Hinton said his problem was with the other sources making the claim. Hinton volunteered that neither he nor the Rantoul Press “is in the pocket of the Air Force.”  

Detroit’s Toxic Legacy – Bankrupt City Faces Environmental Challenges

Packard Plant (Library of Congress)

Sitting silent and decaying in its own polluted waste, The Packard Plant awaits a new future in post-bankruptcy Detroit. It is little more than a home for the homeless, a canvas for graffiti artists and vandals alike.

The Packard Plant  was not always so dirty and dystopic. Once it turned out millions of sedans, coupes, war weapons and paychecks. Founded in 1903, it began manufacturing its high-status cars just as Henry Ford started building mass-market cars in a nearby one-story factory.

The Packard grew to a 35-acre industrial powerhouse, revolutionizing the American economy along with Ford and other auto titans.

But as it did, so it left a legacy of lead, chrome, nickel, PCBs and other pollutants deposited only a few yards from residential neighborhoods. Tastes and economics changed, and in the 1950s The Packard’s auto assembly lines stopped, and the property slowly slid into decay. Continue reading Detroit’s Toxic Legacy – Bankrupt City Faces Environmental Challenges

More People; Fewer Resources

The UN now estimates that there will be 9.6 billion people by 2050, which is a revision upwards from their 2010 estimate of 9.3 billion. For some environmentalists, this is a scary thought. A simplistic take on natural resource use suggests that more people mean more consumption and more pollution.

Estimating global population, let alone projecting population two generations from now, is a tricky business. While some groups estimated that the world passed seven billion people on October 31, 2011, others thought that the milestone was passed in March of 2012. Even the world’s best censuses have a 1-2 percent margin of error.

World Population, Source: DSS Research

The 2050 projections have been revised upwards because of changing demographic trends in the developing world. Projections assume that global fertility rates will converge to 2.1 children per woman and a stable population. However, fertility rates have remained higher than projected in many countries, particularly in sub-Saharan Africa. Below is a chart showing the countries with the largest upward projections (as a percentage of their population).

Upward Projections, Source: New Security Beat

Accurately predicting population decades from now is difficult, but the multiple upward revisions in recent years make for a worrying trend. While growth in some countries is more or less reflecting demographers’ predictions, population growth in other countries continues to spiral upwards. Nigeria, which doesn’t even make the above chart, has had its 2050 projections revised from 289 million in 2008 to 390 million in 2010 to 440 million this year. What will the next projection be?

Most of this growth is happening in developing countries, as fertility rates have mostly stabilized in the developed world.

Population Trends, Source: Learner

As a Peace Corps volunteer in Morocco, I worked on family planning projects. Many of the women with whom I spoke struggled to access birth control on a consistent basis. What’s more, doctors often did not take the time to explain how to use birth control. One woman with whom my colleague spoke asked why the birth control pill her husband was taking wasn’t keeping her from getting pregnant.

While use of contraceptives has increased, access to birth control remains a huge barrier in many parts of the world. The United Nations Population Fund estimates that 215 million women want to delay or cease childbearing – about one in six women of reproductive age – but do not have the means to use birth control. Helping these women would be a huge win not only for them, but also for the environment.

Slowing population growth could reduce greenhouse gas emissions by as much as 1.1 billion tons per year by 2050. Family planning is an inexpensive way to reduce greenhouse gas emissions. Climate scientists normally talk about the “abatement cost” of a particular technology or behavior change, i.e. how much each ton of greenhouse gas reduced will cost. For instance, the abatement cost of solar PV was estimated at around $15-20 per ton of CO2 by McKinsey in 2009. Tom Lovejoy estimates that the abatement cost of reducing carbon emissions through family planning is $4.50 per ton. If carbon pollution is all you care about, reducing population growth through family planning is cheaper than reducing per capita greenhouse gas emissions (although both are needed).

It’s important to note, however, that despite increasing populations in developing countries, these countries are largely not responsible for historical or future greenhouse gas emissions. The United States, China, and the European Union all have relatively stable populations, but are responsible for most of global emissions. The USA’s per capita emissions was around 17.2 tons per year in 2009, while Nigeria’s was 0.6 tons per year.

Of course, impact on climate isn’t the only environmental consequence of a growing world population. The areas with the highest rates of population growth also tend to have the greatest pressures on local natural resources. Sub-Saharan Africa and South Asia are already facing challenges from water scarcity and deforestation with their existing populations. What’s more, much of this growth is happening in urban areas where infrastructure is overwhelmed by the growth explosion. Slums and urban poverty are the result.

Support for family planning and educating women – which is associated with lower fertility rates – has benefits for local populations and the earth. Giving women the tools and knowledge they need is an important goal that I think is often overlooked by many environmentalists.

Book Review: Corporation 2020

A recent TEEB for Business report estimated that the world’s 100 largest corporations do $7.3 trillion in damages each year to the global environment. These “externalized” costs are not borne by the business itself, but by society as a whole. Changing the way that corporations do business is critical to solving global environmental crises such as climate change. In the book Corporation 2020, Pavan Sukhdev presents a vision of how corporations can make this change.

Author of Corporation 2020: Pavan Sukhdev

A 1919 Michigan Court ruling formalized the role of a corporation: “A business corporation is organized and carried on primarily for the profit of the stockholders.” As long as this norm holds, corporations will continue to pursue private profit at the expense of the public good. Sukhdev writes: “According to urban legend, Willie Sutton, the immaculately dressed bank robber who robbed more than a hundred banks over a forty-year career, was once asked why he robbed banks and succinctly replied, ‘Because that’s where the money is.’” Since corporations don’t pay for pollution and other socialized costs from their activities, there is a profit motive to pursue polluting activities.

Sukhdev says that the modern corporation has four distorting characteristics: size, leverage, advertising, and lobbying. The number of “large” (greater than 0.1% of global GDP) corporations has grown from under 20 in 1970 to over 120 in 2010. Being large allows corporations to reduce transaction costs: rather than trading with other corporations, a corporation can simply redistribute resources internally. Sukhdev calls the modern corporation a “price arbitrageur par excellence” because it obtains labor, capital, and resources wherever they are cheapest to be sold wherever demand is highest.

The second characteristic, leverage, is related to size. Taking on debt allows a corporation to grow. Debt is available to larger corporations at a cheaper price, creating an advantage for large corporations while squeezing out smaller ones. When corporations with lots of debt become very large, they can be “too big to fail” because they pose a systemic risk to the economy. As we saw in the financial crisis, the government may have to prop up a failing big corporation – another benefit of size.

Save the World (photo credit Victor Grigas)

Advertising “converts wants into needs, sometimes creating new needs that are nothing more than brand desires, with no functionality.” Even though advertising makes up a relatively small part of global spending, it has an enormous impact on creating demand for consumer products. Greater consumption, in turn, puts more pressure on natural resources.

Last, corporate lobbyists persuade government to create preferential laws, regulations, taxes, and public investments; the goal is to realign public institutions to benefit private interest. For example, when the Waxman-Markey “cap-and-trade” climate change bill was being considered by Congress, energy-intensive industries spent over $100 million on public relations and hired 2,340 registered lobbyists to protect the fossil-fuel industry. A watered down version of the bill was able to pass the House, but not the Senate. Lobbying in natural resources sectors is a clear case of redistributing public goods to private interests; in the United States, mining companies are given rights to mining resources at below market rates.

When a corporation is large, it has advantages in leverage, advertising, and lobbying. This creates a positive feedback loop where the efficiencies and power of a large corporation allow it to become even larger. As a corporation grows and grows, it has (in most, but not all cases) larger and larger negative externalities. The legal structure of the modern corporation and the tools it has to make profits are incompatible with addressing environmental crises.

So what’s to be done?

Greenpeace.svg
Greenpeace.svg
A big part of Sukhdev’s message is how and why corporations voluntarily reduce the negative externalities associated with their business. One of the largest destroyers of tropical forests in the world, the Indonesian pulp and paper company APP, announced a new “no deforestation” policy. The commitment came after a long campaign by Greenpeace successfully vilified APP. APP saw that the costs to its brand name and reputation were greater than the benefits from continued deforestation. APP is one of many companies that have taken steps to reduce its environmental impact in order to improve its public image.

Asia_Pulp_&_Paper_logo
Asia_Pulp_&_Paper_logo
Other corporations are taking a more holistic perspective and starting to account for the damage they do to the environment. In 2011, PUMA, the shoe company, measured their supply chain’s impact on water, land-use change, air pollution, and climate change. These negative externalities were valued at $188 million and were concentrated early in the company’s supply chain. PUMA says it will use this information to reach its goal of reducing its impact across its supply chain by 25 percent by 2015. Measuring externalities is the first step for companies to reduce them – “you cannot manage what you do not measure.”

However, shaming companies into better behavior and improved environmental accounting tools will only get us so far. Sukhdev argues that “despite the correlations between sustainability and corporate success, endogenous change (the idea that corporations can and should drive sustainability ‘from within’ because it is good for them) may not be enough.” The raison d’etre of a corporation is to make its shareholders profits, regardless of other costs.

Sukhdev calls for a number of solutions. Ending subsidies for companies that do environmental harm is a first step towards leveling the playing field. Next, taxing goods according to the damage they do to society would discourage harmful economic activities. A coal power plant, for instance, would have to pay for the social cost of the carbon emissions (amongst other damages) associated with power production. Finally, Sukhdev makes the case that the structure and objective of a corporation needs to be completely reformed. Rather than pursuing profit for shareholders, corporations should serve the public benefit – a social corporation. Increased regulation and creative taxation can help to reduce corporations’ impact on the environment, but Sukhdev argues that current corporate model is fundamentally incompatible with sustainability.

While I mostly agree with Sukhdev, he doesn’t provide a convincing road map of how we’re to get from the shareholder, profit-driven model of the corporation to his social corporation. As Corporation 2020 recognizes, large corporations have an enormous amount of economic and political power that they are unlikely to give up voluntarily. In addition to increasing a corporation’s size, advertising and lobbying also give it immense influence. Bold leadership, both in the public and private sectors, is a good start, but won’t be enough to get to the radical changes that he is proposing. My feeling is it will require pressure from millions of people who have never heard of Sukhdev or his book.