Stephan Schmidheiny: Saint or Sinner?

Published by MAC on 2009-11-09
Source: Forbes, Ibasecretariat.org

Stephan Schmidheiny: Saint or Sinner?

by Laurie Kazan-Allen, Coordinator of the International Ban Asbestos Secretariat (IBAS)
http://www.ibasecretariat.org
26 October 2009

From an article which appeared in Forbes Magazine on October 5, 2009 "The Bill Gates of Switzerland,"1 it would appear that Stephan Schmidheiny is a truly great man, a philanthropist and a visionary whose life is dedicated to promoting causes such as sustainable development, wealth creation and human dignity. Other Schmidheiny priorities, according to his website, include: liberty, democracy, equality and social responsibility. Wow, I bet this guy can walk on water too.2

And yet the wealth which underpins Schmidheiny's philanthropy comes from the commercial exploitation of deadly asbestos. In Eternit factories owned by the Swiss billionaire's family and at workplaces where Eternit asbestos products were used, hazardous occupational exposures were a daily occurrence, as a consequence of which many workers contracted fatal diseases. People like Don Lee Henderson got mesothelioma having worked with Eternit asbestos materials in California. According to Mr. Henderson's attorney, Oakland-based Steven Kazan, when a unanimous jury found for the claimant, the Eternit subsidiary which supplied these products was put into bankruptcy to avoid paying the $2.5 million judgment.3 In Brazil, men who worked alongside Schmidheiny at the Eternit asbestos-cement factory in Osasco have also died; a personal appeal made to his former workmate by João Francisco Grabenweger was never answered.

ABREA, the Brazilian Association which represents the asbestos-exposed, expressed the feelings of many former Eternit workers in a letter to Forbes which remains unacknowledged and unpublished. ABREA's President Eliezer João de Souza pointed out that if the Journalist Tatiana Serafin had asked them, ABREA members:

"could have told Serafin their opinion of Schmidheiny's philanthropy. They could have told her how he and his family's company exposed them to an acknowledged carcinogen and then upped sticks and left town. The fact that people who worked at the factory are dying does not seem to affect the members of the family which owned Eternit at the time these workers were exposed to asbestos. Indeed when questioned about Eternit's attitude to Osasco's dying workers at a medical workshop on asbestos cancer in Switzerland in 2004, a long-standing Eternit representative replied that the injured should look to their government as the company had no obligation to them."4

In light of Schmidheiny's upcoming trial in Turin for his alleged role in exposing thousands of Italians to Eternit asbestos,5 the appearance of the glowing commentary in Forbes would seem quite fortuitous: a coincidence or part of the well-honed Schmidheiny public relations machine?

Taking a democratic and pro-active stance on the controversy created by the Forbes piece on Schmidheiny, ABREA has decided to hold a public debate on November 14, 2009 on the subject: Stephan Schmidheiny: Saint or Sinner? As ABREA President de Souza said in his letter to Ms. Serafin, a place will be reserved for her in the front row.

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1 Serafin T. The Bill Gates Of Switzerland. Forbes Magazine. October 5, 2009. http://www.forbes.com/forbes/2009/1005/creative-giving-philanthrophy-bill-gates-of-switzerland.html

2 http://www.stephanschmidheiny.net/

3 Letter by Steven Kazan to Forbes. October 5, 2009. http://www.kazanlawblog.com/

4 ABREA & IBAS Joint letter to Forbes. October 13, 2009.
Kazan-Allen L. Secrecy and Subterfuge in Switzerland. October 5, 2004. http://ibasecretariat.org/lka_sec_sub_switz.php

5 http://en.wikipedia.org/wiki/Stephan_Schmidheiny

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The Bill Gates Of Switzerland

Tatiana Serafin, Forbes Asia Magazine

5 October 2009

Roberto Laureano da Rocha lives on the outskirts of São Paulo, Brazil in the impoverished Calmon Viana neighborhood, where most residents make a living as waste pickers, scrounging for aluminum cans and cardboard. Over the years, while hunting through trash, he was taunted and doused with water. He occasionally traded his "breadwinner"--the cart used to haul cans from the trash dump to the scrap dealer--for alcohol. When you're surrounded by garbage, he says through an interpreter, "you tend to think of yourself as part of that waste."

But five years ago Da Rocha began working with the Avina Foundation, which he was introduced to through a waste cooperative. Now, at 35, he heads the co-op and has transformed his shack into a two-story home for his family of four. Co-ops typically raise waste pickers' take by 20%, but Da Rocha wants even more for his members. He wants the co-op to own its own recycling plant and has traveled to Europe (on Avina's dime) to talk to waste management companies and charitable funders about why help for waste pickers should be included in any scheme to reduce carbon emissions.

Avina was founded 15 years ago by one of the world's least known and most foresighted philanthropists, Swiss billionaire Stephan Schmidheiny, 61. He was early on the sustainable-development bandwagon; in the early 1980s his forestry company GrupoNueva planted fast-growing trees on abandoned farmland in Concepción, Chile. He was also ahead of most do-gooders in aiming to help the poor by boosting their entrepreneurial efforts rather than by handing them welfare.

In 2003 Schmidheiny placed $1 billion in business assets, including GrupoNueva, into a charitable trust, which uses up to $30 million of profits annually to help entrepreneurs across both Central and South America. That gift puts him among 14 living donors, including Bill Gates and Warren Buffett, who have given $1 billion or more away. Schmidheiny, who has houses in Costa Rica and in Hurden in his home country, divides his time between managing his remaining $2.5 billion and working on environmental and charitable projects.

In contrast with Gates and Buffett, Schmidheiny avoids the press, but he reluctantly agreed to take a few e-mailed questions from forbes. "I think I am more typical of the self-made entrepreneur," he tells us. Perhaps, but he's also the fourth generation of a Swiss industrial dynasty. He says he considered becoming a missionary but instead studied law and worked around the globe for his family's Eternit Group, which manufactured a line of construction products that had begun in 1903 with asbestos-reinforced cement. At age 29 he was called home to run the business and faced growing environmental and health concerns over asbestos. He had filters installed at Eternit factories to reduce dust in the air, beefed up employee training and began to move the company away from asbestos-based products. He notes that he himself was exposed to the mineral while working in his early 20s hauling sacks as a shift foreman at Eternit in Brazil.

At 37 Schmidheiny inherited the Eternit Group. Within a decade he had sold off most of it and diversified into other ventures, including GrupoNueva and the then ailing watch firm Swatch. (He sold off his Swatch shares after it recovered.)

"My group was heading toward bankruptcy as a consequence of the combined effects of asbestos-related problems and a major slump in construction markets. Thus I built my group virtually from scratch," he writes. He opines that going through the wrenching process of selling off a firm started by his grandfather made it easier for him "to give away a substantial part of my wealth at a relatively young age." Schmidheiny has two children; his son is involved with his charity.

Schmidheiny's Latin American focus grew from his own business and environmental interests in the region. In the 1980s he began making speeches on corporate environmental responsibility and later became an advisor to Maurice F. Strong, head of the UN's 1991 Rio de Janeiro Earth Summit. At that summit Schmidheiny founded the Business Council for Sustainable Development, drawing in the chiefs of Alcoa, DuPont, Mitsubishi, Nippon Steel and Volkswagen, among others.

Separately he teamed up with Peter Fuchs, then heading the International Committee of the Red Cross, to launch the Avina Foundation. It has made $400 million in grants to date.

Sean McKaughan, who now heads a staff of 120 at Avina, says that South America is a good laboratory for the entrepreneurial approach to reducing poverty. Nearly a third of Brazil's and almost two-thirds of tiny Honduras' populations live in poverty. But Latin America still has enough prosperity to give it a GDP per capita of $4,800, six times the number for sub-Saharan Africa. "Latin America is not important because it is the neediest case in the hospital; it is important because this is where you will find the cure for cancer," says McKaughan. "Here we generate ideas that are applicable to Africa and Asia."

The push to organize Latin America's estimated 3 million waste pickers into co-ops is one example of Avina's approach. So far it has spent $4 million on that effort.

Avina aims to make its projects self-supporting. For example, in 2003 it made a $50,000 grant to a Paraguayan nonprofit, the San Francisco Agricultural School, which trains rural entrepreneurs. At the coed boarding school 165 Paraguayan high schoolers study traditional subjects while running a dairy, a yogurt factory, a chicken coop, an organic garden, a rural hotel and a roadside store. Profits from these ventures have covered the school's $300,000 annual operating cost since 2007.

Today the school boasts graduates like Jorge Guerrero, one of 19 children from a poor farming family in the hills of Paraguay. He started his own organic farming business to help pay for his university studies and is thinking of opening a coconut-oil business after he graduates next year. "My final goal is to create a big business that will generate many jobs and contribute to my country's social development," says Guerrero, 22. It wouldn't hurt if he became wealthy in the process.

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EXTERNAL LINKS:

Associação Brasileira dos Expostos ao Amianto - ABREA
http://www.abrea.com.br/

Asbestos Victims Families Casale
http://asbestosinthedock.ning.com/

A documentary on the working conditions in the Casale Monferrato Eternit plant in 1924
http://torino.repubblica.it/multimedia/home/5427329

World Asbestos Report
http://worldasbestosreport.org