Penal System

While 2019 saw several proposals raising concerns about corporate connections to controversies about U.S. immigration and similar concerns about the U.S. penal system, these concerns in 2020 seems to be folded into a larger framing about a perceived need for better human rights policies and implementation in general, as discussed in the sections above. There are, though, four proposals about reporting on prison labor and corporate supply chains and one on prisoner and detainee deaths that has been withdrawn.

Prisoner labor: NorthStar Asset Management filed resolutions asking for reports at Costco Wholesale, continuing its reform efforts there from earlier, as well as at Home Depot and TJX:

  • NorthStar withdrew at Costco after the company agreed to more disclosure about supply chain prison labor, although Costco also had challenged the proposal at the SEC saying it was moot. A very similar proposal in 2019 earned 28.7 percent support. In 2018, a proposal asking for a policy on supply chain prison labor received 4.8 percent; despite the low vote the company adopted a new policy on the subject that year.

  • Home Depot contends at the SEC that a resolution seeking an annual report “summarizing the extent of known usage of prison labor in the company’s supply chain” concerns ordinary business. A similar resolution received 30.3 percent support last year.

  • TJX has challenged a proposal asking for an annual report “assessing the effectiveness of current company policies for preventing prison labor in the company’s supply chain.” The company is arguing at the SEC that this is ordinary business since it addresses supplier relationships and also workplace safety and working conditions. A similar proposal earned 37.6 percent in 2019, up from 7.7 percent in 2018. Negotiations surrounding the proposal caused management to update the Vendor Code of Conduct to more explicitly prohibit forced or voluntary prison labor.

The Nathan Cummings Foundation has filed a proposal for the first time at ExxonMobil that addresses the issue. The SEC has yet to respond to Exxon’s challenge that it is moot. The proposal seeks

a policy committing the Company to take steps to address the use of prison and unpaid diversion program labor in its operations and supply chain. In doing so, ExxonMobil might consider surveying suppliers in order to identify sources of unpaid diversion program labor in its supply chain, reporting to shareholders on these findings and developing additional criteria or guidelines for suppliers and operators regarding the use of prison and diversion program labor.

Advocacy Position
Mary Baudouin
Bryan Pham
Pat Zerega

A TALE OF TWO PRISONS: HUMAN RIGHTS FOR INMATES AND DETAINEES

MARY BAUDOUIN
Provincial Assistant for Social Ministries for the Jesuits of the US Central and Southern Province

BRYAN PHAM
SJ, JD, USA West Province Society of Jesus

PAT ZEREGA
Senior Director of Shareholder Advocacy, Mercy Investment Services

At the turn of this century, the United States saw increased use of private prisons because of more incarceration, aging local prisons, and a belief that contracting private prisons was cheaper. Cities, counties, and states began to contract with the private sector to handle their inmates. At the same time, the industry began consolidating, and CoreCivic (formerly Corrections Corporation of America) and GEO Group dominated the field. The faith community, with a long history of prison chaplaincy, was concerned with what they saw in these facilities. Reports included untrained and limited staff, problems with health care and food, inability to meet families, and an increase in violence. Faith-based organizations such as Wespath and the Presbyterian Church (USA) began to exclude private prisons from their investments.

The proposal asserts that goods made by prisoners can post risks to the company, reputational and financial, and states, “Diversion program labor does not fall under the 13th amendment exemption. Participants in these programs have not been convicted of any crime. According to recent reports by the Center for Investigative Reporting, diversion programs have supplied unpaid and involuntary labor to corporations, including ExxonMobil.” Nathan Cummings Foundation says this violates the company policy and asserts the company should carefully review its policies. In its challenge to the proposal at the SEC, Exxon noted the allegation is that patients from a drug rehabilitation program were sent to work at a company refinery, but it says its investigation of the matter found no documentation to prove it.

Deaths: Inmate rights advocate Alex Friedmann had a new resolution this year about prisoner and detainee deaths, at CoreCivic, but he withdrew it after an SEC challenge that argued it could not be implemented and concerned ordinary business since it would micromanage the business. The proponent has filed other detailed proposals in the past about prisoner and detainee rights, but this is a new formulation. It sought annual reports that would include information on:

  1. The, number of prisoners/detainees who died while housed at or assigned to the company’s facilities during the previous calendar year;

  2. The name of each of the prisoners/detainees described in section 1, above;

  3. The date of death for each of the prisoners/detainees described in section 1, above;

  4. The name of the facility where each death of the prisoners/detainees described in section 1, above, occurred;

  5. When known to the Company, the cause of death for each of the prisoners/detainees described in section 1, above; and

  6. What actions the Company has taken or plans to take to reduce the number of deaths in its facilities. The annual reports described

    above shall be posted on the Company’s website to reduce costs to shareholders.