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Business Ethics &

Corporate Governance

Monsanto Unethical Practices

in the Environmental Domain

Lagan Mongia | 116

Naina Agarwal | 121

Sahil Avi Kapoor |136

Shilpi Srivastav | 141

Shreya Chowdhury | 144

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Introduction to the Organization

Monsanto is a Fortune 500 multi-national company headquartered at St. Louis, Missouri in the

United States. Monsanto calls itself a “sustainable agricultural company” and seeks to deliver

agricultural products to support farmers across the world. It is a publicly traded company engaged

in the agrochemical and agricultural biotechnology industry.

Globally, Monsanto has around 21,000 employees as well as 404 facilities across 66 countries.

The total revenue of Monsanto in 2013 was US$ 14.861 billion.

Monsanto was founded by John Francis Queeny who was an experienced professional in the

pharmaceutical industry in the year 1901. The company initially manufactured vanillin, caffeine

and saccharine which is an artificial sweetener. The very first product to be produced by Monsanto

was saccharine. Prominent achievements by Monsanto include a cutting edge research on

“catalytic asymmetric hydrogenation” as well as the mass production of “light emitting diodes

(LEDS)” and being the very first company to do so. Earlier, Monsanto used to manufacture some

products which were controversial in nature. Some of these are “DDT, PCBs, Agent Orange and

recombinant bovine somatotropin (bovine growth hormone).”

The products Monsanto has currently ventured into are agricultural and vegetable seeds, crop

protection chemicals which include herbicides and pesticides as well as plant biotechnology traits.

Monsanto is a leading producer of the herbicide glyphosate that is sold under the brand “Roundup”

which is used to kill weeds. It is also a leader in genetically engineered seeds which are modified

to have resistance against herbicides like glyphosate. Monsanto calls these seeds “Roundup

Ready”. Monsanto manufactures Seeds for vegetables, fruits, soybeans, corn and cotton.

Monsanto has acquired several companies and also ventured into mergers and acquisitions during

its journey of becoming the principal seed grossing company worldwide and leading to the

concentration of its focus on biotechnology. In 1985, Monsanto purchased “G. D. Searle &

Company” and made their aspartame business a distinct subsidiary by the name of “NutraSweet”.

In 1996, it acquired “Agracetus”, forty percent of “DeKalb Genetics Corporation” and a majority

stake in “Calgene”. In the January of 1997, they purchased “Holden’s Foundation Seeds” and

because of this business deal, went on to become the biggest American producer of “foundation

corn”. Following this, in April, they purchased the residual shares of “Calgene”. In 1999,

NutraSweet as well as two other companies were sold off. In the December of 1999, they merged

with “Pharmacia & Upjohn”.

In the year 2000, the “original Monsanto” ventured into a merger deal and altered its name to

“Pharmacia Corporation”. It is today known as “Pharmacia LLC”. Under this deal, it was settled

that “Pharmacia” would be indemnified against any liabilities that may occur against “Solutia”.

Monsanto, through a subsidiary, acquired “Channel Bio Corp” in 2004. In 2005, they acquired

“Emergent Genetics” and its brands of cotton and purchased “Seminis”, a vegetable seed producer.

Further, in 2006 Monsanto’s ASI subsidiary acquired a couple of local seed firms which included

“Diener Seeds”, “Sieben Hybrids”, “Kruger Seed Company”, “Trisler Seed Farms”, “Gold

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Country Seed Inc.”, “Heritage Seeds” and the seed sales and marketing unit of “Campbell Seed”.

Monsanto concluded its purchase of “Delta & Pine Land Company” in 2007 which is a big breeder

of cotton seeds. To get approval for this deal, Monsanto had to divest its “Stoneville” and

“NextGen” cotton business. They also exited the “pig breeding” business in this year. “De Ruiter

Seeds”, which is a Dutch seed company, was purchased in 2008. In 2011, Monsanto acquired

“Divergence Inc”, which is a private biotechnology research and development company. In 2012,

Monsanto purchased “Precision Planting Inc” which was engaged in producing computer software

and hardware which would help farmers carry out accurate planting for increased productivity and

yield. Monsanto purchased “Climate Corp” in 2012 to use their local weather forecasting system

for better weather information.

Monsanto was among the first companies which was able to be able modify a plant cell genetically

as well as the first corporation to be able to carry out field trials of genetically modified crops in

1983 and 1987 respectively. They were the company which initiated the usage of the

biotechnological industry business model to the field of agriculture.

Monsanto has also been the recipient of several awards with the most recent being in 2013 wherein

Monsanto was named among the "100 Best Corporate Citizens" list made by the “CR Magazine”.

Also, Robert Fraley, a Monsanto executive, won the “World Food Prize” for "breakthrough

achievements in founding, developing, and applying modern agricultural biotechnology” in 2013

as well.

Introduction the Industry

The Agrochemical Industry

It is estimated that by 2018, the global agrochemicals’ industry will reach $242,757.8 million by

2018 with a CAGR of 3.6% till the year 2018. The market value of the agrochemical industry in

the year 2013 was $203,567.6 million approximately. The drivers of this industry which are

producing incremental opportunities for companies in this field are:

Rapid increase in population leading to in turn rise in demand for food

Higher awareness among consumers about the advantages of using pesticides, herbicides,

fertilizers etc in production of crops

Development of advanced technology to increase the yield as well as productivity of farms

Rising government incentives in this area

In the global market for agrochemicals, the Asia Pacific is dominating and is expected to continue

to do so in the near future due to the increasing demand for food crops coming from countries like

India and China. However, it is expected that overall the industry will grow moderately till 2019.

The rapidly increasing demand from the emerging economies of the Asia Pacific is expected to

contribute to the rising demand in this industry. Currently, the pesticides segment is growing at a

faster rate as compared to fertilizers.

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Leading agrochemical companies globally based on the revenue parameter in 2013

Agricultural Biotechnology Industry

The value of the agricultural biotechnology market globally was specified to be US$ 15,300

million in the year 2012. It is anticipated that this industry will reach US$ 28,694 million

approximately by the year 2019. The CAGR at which it is estimated to grow is 9.5% till 2019.

The drivers for growth in this industry are:

Significant increase in demand for production of food due to the rapidly growing

population

Depletion of the usual resources leading to a growth in demand for bio - fuels

The largest application of this industry was seen in terms of “transgenic crops” or “genetically

modified crops. “Synthetic biology-enabled products” contributed to a small part of the total

market share in the year 2012.

Further, North America dominated this industry and it held 32.5% of the total market share in the

year 2012. The production in Europe is less because of strict restrictions and regulations as well

as consumer opposition. However, the usage of GM crops is high and these are imported from US

and Brazil.

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It is estimated that the market in Asia Pacific will have a value of USD 7,810.5 million by 2019.

The drivers of the Asia Pacific market are growing demand for food in the Asian continent as well

as rapid industrialization. There will be a focus on production of “transgenic crops” on a large

scale. The demand for such crops is predicted to grow at 9.6% CAGR till the year 2019.

Overall, there seems to be a high degree of consolidation in this industry as can be seen if we look

at the market share in the year 2012. The top three players account for 48% of the market in 2012.

The key players in the Agricultural Biotechnology industry are:

Genetically Modified Crops Industry

Crops which have been genetically modified or engineered are known as GM crops. The

techniques applied on these crops aim to make them resistant to various pesticides or develop a

tolerance against specified pests which affect the crops.

The major six players who are the primary companies in the GM crops industry are:

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Globally, the crops which are extensively consumed as genetically modified crops are corn and

soybean. The main driver for this is the increasing demand for animal feed which is an effect of

the rise in meat consumption across the globe. The “transgenic corn” market is estimated to grow

at a CAGR of 9.6 % till 2019. In 2012, crops like alfalfa, sugar beet, rapeseed and potato

contributed to 10.9% of the revenue share.

There is a concern of concentration in the genetically modified seeds industry and the focus is on

Monsanto. In the US., more that 90% of the soybeans planted and more than 80% of the corn

cultivated every year can be attributed to “Monsanto” which can been seen as heavy concentration

and control.

The Environmental Controversy | Case Introduction

“More than 2 million people recently participated in the “March against Monsanto.” The march

was emulated in various cities around the globe. The protestors demanded a reassurance from

their governments pertaining to consumer protection and safe food to eat. Demands of having

genetically modified seeds tagged and branded clearly were also made.”

The above is an abridged version of an article in The Tribune headlined, “Why Do We March?”

Why are genetically modified seeds such a big contention in the modern world? As is obvious, it

is extremely difficult to ascertain the ill-effects of releasing a new organism into a sterile

environment. The far reaching effects of such an addition are extremely difficult to predict, and

extremely careful analysis to mitigate the associated risk is required. In the USA, the major

governmental organization overlooking the safety of the release of genetically modified or

engineered organisms into the environment is the Environmental Protection Agency. The agency

works in allegiance with the Animal and Plant Health Inspection service to make sure that

genetically modified crops are safe to grow as well as eat.

Monsanto’s ‘Roundup’ brand of herbicides is its flagship in the agrochemical business. These

herbicides, along with the company’s other glyphosate products are used for varied weed control

programs as part of extensive modern agricultural practices across the world. The group “March

against Monsanto” claims that former Monsanto executives occupy influential roles in the

American Food and Drug Administration (FDA) and thus, an obvious conflict of interest arises.

The group believes that Monsanto since long has been a major benefactor of unjustified subsidies

and favoritism. In fact, the US Congress in 2013 even passed the Monsanto Protection Act stating

“ban courts from halting the sale of Monsanto’s genetically-modified seeds.”

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The case talks about the harmful effects of Monsanto’s flagship product, RoundUp as well as its

widely marketed and sold RoundUp Ready GM Seeds.

Monsanto and the Curious Case of RoundUp

The Roundup herbicides are known to be of a broad spectrum and non-selective functional nature.

The herbicide as marketed by Monsanto, is supposed to be of low toxicity to mammals and other

animals. It is also promised to have nonvolatile behaviour to water and sunlight.

Recent studies, although, have resulted in a major controversy embroiled around the active

ingredient, glyphosate, in the Monsanto Roundup herbicide. This herbicide is lavishly sprayed and

doused over genetically modified or engineered crops of various variety. This is primarily because

these GM crops are designed to have high toleration limits of such chemicals, contained in

herbicides and pesticides.

The major problems that environmentalists, scientists and academicians have found in the

Roundup herbicides are:

Nutritional Deficiency

Toxicity

In 2009, a French court ruled against Monsanto for falsely advertising Roundup herbicides as

environmentally fit for usage non contaminant. In fact, scientists claim that glyphosate is a major

cause of multiple chronic diseases that are widespread and prevalent across the globe.

The diseases caused directly and indirectly by glyphosate, include but are not limited to:

ALS

Infertility

Depression

Parkinson’s Disease

Inflammatory Bowel Disease

Chronic Diarrhea

Sclerosis

Heart Diseases

Autism

Skin and internal allergies

Obesity

Harmful Effects of Roundup

Monsanto maintains that their brand of herbicides is extremely safe for humans, crops as well as

animals. Scientists, on the other hand have reported to have glyphosate residues in commonly

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consumed food, primarily in genetically modified crops such as wheat, sugar, soy and corn. In

fact, Roundup was found to be even magnify the harmful effects of various other food borne

residues such as chemicals and toxins that alter or adversely affect general bodily functions that

cause diseases. In a shocking finding, various bacteria present in our digestive system are a key

ingredient of Roundup.

Monsanto, on the other hand, puts forward the theory that Roundup kills weeds using the

biochemical action mechanism, called the shikimate pathway. The pathway is absent in all animals

and thereof, the herbicide doesn’t cause any kind of harm to them. The point of contention, though,

is that the Shikimate is present in various bacteria and thus in turn creates drastic irregularities in

the human as well as animal bodily systems. Bacteria is known to be present in the human body in

a 10:1 ratio with cells. Thus, for each cell in our body, there are 10 varieties of microbes, and each

one of them possess the shikimate pathway. Each one of these microbes responds to the action

mechanism of glyphosate. The chemical causes disruption and harm to the bacteria’s lifecycle in

extremely vigorous ways. Moreover, the cycle of destruction accedes to another level as

glyphosate not only affects bacteria, it preferentially attacks the beneficial bacteria in our systems,

giving birth to millions of pathogens. This leaves our body to contend and deal with excessive

toxic produced by the said pathogen substances. With time, our bodily systems are bound to lose

out on this ongoing struggles, thus, pushing us towards a permanent inflammation followed by a

chronic and extremely stressful disease.

The Toxic Effects

Research has led scientists to ascertain the way glyphosate inhibits a certain CYP enzymes that

catalyze and supplement each and every oxidation process pertaining to organic substances in our

systems. It is the function of the CYP enzymes to neutralize any xenobiotic or chemical substances

that are harmful for the organism in question, but still present in the biological space through

ingested or digested foods. By hindering the above process, glyphosate disallows detoxification of

these xenobiotic, thus, magnifying and severely enhancing the harm caused by environmental toxic

compounds that we are exposed to on a daily basis.

In fact, the aforementioned interference pertaining to CYP largely supplements the synthesis of

aromatic amino acids by bacteria in our digestive systems. This is largely the reason why Roundup

causes long term consequences and conditions such as gastro diseases, diabetes, cardio vascular

complications, infertility in both men and women, cancer, autism as well as Alzheimer’s. Each of

these diseases are directly connected to the disrupted function of CYP enzymes caused by

glyphosate.

Connection with Autism

Scientists have found major correlations between the growing use of glyphosate on genetically

engineered crops and the increasing rates of autism. The very fact that autism has been growing

rapidly across the world points to an environmental cause for the damage. Researchers fail to

explain any other reason or explanation for this fast a mutation in the human gene set.

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Glyphosate’s relation to autism can be explained using the following research theories:

1. Bacteria Imbalances in the Digestive system (Food allergy, gluten intolerance etc.)

2. Disruption in metabolism due to sulfur deficiency

There are certain microbes present in the human systemic body that counter the growth and

fostering of glyphosate. These microbes, in the process, produce ammonia. Doctors have

corroborated high ammonia levels in the blood stream of children suffering from autism. Increased

presence of ammonia has also been observed in blood tests of Alzheimer patients. Moreover,

ammonia is known to cause inflammation in the human brain and nervous system.

Apart from ammonia, genetically engineered crops, especially corn, contain large amounts of

formaldehyde. The formaldehyde contained in such crops is about 200 times the amount known to

be harmful and toxic for animals. Formaldehyde is a known cause for cancer which it causes

through the destruction of DNA.

Thus, glyphosate certainly has a wide range of harmful health effects on humans as well as other

animals. So much so, that this is the major factor and cause of a number of modern illnesses such

as autism.

A brief summary of these ill effects follows:

Major Nutritional deficiencies

Disruption in the biosynthetic process of aromatic amino acids

Increased exposure to a variety of toxins, including glyphosate and formaldehyde.

Sulfate deficiency caused due to restriction of sulfur metabolism and transmission.

Systemic toxicity caused by significantly high malfunction of microbial function all over

the body.

Imbalances in gut bacteria leading to a variety of digestive complications such as

inflammation, leaky gut, lactose or gluten intolerance.

Synthesis of ammonia which is known to cause brain inflammation associated with chronic

diseases such as autism and Alzheimer’s disease

The Poisonous Food

The Biotech industry at large, and its leader Monsanto, in particular, have managed to turn food

that we all ingest into active toxic, no less than poison. In the above report, we have mainly talked

about RoundUp, whereas, the fact is that even the genetic alteration of crops poses extremely

potent health hazards. Thus, with the penetration of genetically engineered crops rising rapidly,

glyphosate is just one side of the health hazard coin.

Following are the major concerns regarding genetically modified crops or Roundup – Ready crops:

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1. Herbicide Resistance

Crops that are resistant to RoundUp have a major basic problem, that of giving birth to weeds that

are also herbicide resistant or glyphosate tolerant. Moreover, the increasing reliance of farmers on

RoundUp is a great concern as the use of genetically altered seeds then becomes more or less

ubiquitous. The giant ragweed and various other varieties of weeds have become largely tolerant

of glyphosate, defeating the very purpose of RoundUp that is produced to counter the growth of

the same weeds. The complimentary nature of Monsanto’s GM seed and RoundUp is an example

of corporate exploitation. Using RoundUp resistant seeds are a pre requisite if farmers are to use

RoundUp herbicide, which anyway is only increasing the resistance of the said weeds to the brand

of herbicide.

2. Seed Contamination

Another potent concern about genetically modified crops and in particular RoundUp resistant

crops is seed contamination. The RoundUp ready genes present in these seeds have made their

way into the food cycle, thereby making it impossible to grow organic or non-modified seeds in

the future. A Greenpeace report has been known to clearly state that it has become absolutely

impossible for farmers to grow non engineered canola oil seeds in most parts of Canada.

3. Risk Assessment

A rising concern around genetically altered crops in general, and RoundUp Ready crops in

particular, is the truth that agro-scientists are most frequently unable to gauge what the true effect

of these agro chemicals is on the environment before sanctioning their safety for use. Another issue

stems from the fact that altering a single component gene of the crop doesn’t affect only one

function in perfect isolation. An alteration of widespread magnitude can be expected in the

functional behaviour of such genes and thus could be passed on to occur in organism consuming

the same.

4. Big Business

Most organizations, industry experts, scientists and the public deride Monsanto for the reason that

they are in the GM crops and the Biotech business for the sole objective of bug profit and revenue,

without any thought towards the environment. The genetically altered crops sold by Monsanto,

require the farmers to also purchase and eventually rely on the herbicide RoundUp for use in their

farms, a double edged profit laden sword. Monsanto, on the other hand, believe and propagate the

fact that they are in the business to end world hunger and for larger good of humanity. They widely

endorse the belief that the company is stepping up to situation of food shortage and thus are not,

as described by the others, in it only for the profit.

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5. Terminator Seeds

Roundup Ready seeds possess a "terminator technology;" seeds that are grown for a second

generation are sterile. Thus, farmers necessarily must GM seeds from Monsanto each year if they

wish to continue growing their crops. Quite obviously, there have been various instances of

backlash wherein, terminator technology is seen as restricting and preventing farmers from reusing

seeds, necessarily requiring them to make new purchases each year and rely on the newest strain

of RoundUp ready seeds. Seen as a petty business tactic to sell more each year, the strategy and

technology is defended by Monsanto. The company argues that this done to restrict the spread of

glyphosate resistance and tolerance to the next yield and to other species.

6. Lack of Increased Yield

Monsanto, stays consistent on its brand identity that it is making an effort to counter world hunger

and food shortage problems. However, there is hardly any evidence that RoundUp ready seeds

lead to a significantly higher yield than the non-genetically engineered varieties. A 2208 report

from the New Soil Association also explicitly states that there was hardly a difference between the

gross yields of genetically modified crops and the non-modified ones. Giving Monsanto the benefit

of doubt, realistically however most varieties of GM seeds are widely used not for the higher yield,

but for their herbicide and pesticide resistant nature. The question however rings clear, do we even

need crops that are herbicide resistant only or would we be better off with seeds that genuinely

increase yield besides this quality. A wide section of Monsanto’s critics also go on to say that

RoundUp ready crops are of no real benefit to the farmer or to the public, but only to Monsanto

itself. There is hardly any viable benefit to the consumer, but a significantly high and attractive

reward for the company. Farmers aren’t only forced to, in the process, buy Monsanto’s RoundUp

Ready seeds each year, but also the RoundUp herbicide.

7. Allergies

The genetic modification involves introducing new DNA into the food cycle, thus, also introducing

new allergens. This issue is further magnified when it involves transgenic organisms, that is, in

which genes from one seed is added to another and vice versa. As example of the same could be

soya beans genetically added with Brazil nuts. These soya beans were then found to cause severe

allergies to people originally allergic to Brazil nuts. Thus, in effect, because the consumer is

unaware that the soya bean contains Brazil nuts’ DNA as well, he/ she won’t know that it should

be avoided.

Conclusion

Convinced of the aforementioned wide ranging ill effects of Monsanto products, the “March

against Monsanto” advocates:

Buying only organic food

boycotting Monsanto

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repeal of the Monsanto Protection Act and its harmful provisions;

independent and detailed research on the effects of genetically engineered seeds on human

health;

holding Monsanto accountable;

Monsanto, despite being the world’s largest GMO seed producer has a lot to deal with. It’s

understood to be profiting at the expense of environmental and human health. Some also allege

that it wants to control the global food cycle and patent all food crops.

Till the time Monsanto as well as the governments of the world don’t come clear on the lack of

transparency regarding labeling of GM food and the influence of large corporations in basic food

regulations, their practices shall continue to be seen in a shadow of doubt.

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References

Company Description; Monsanto Company Website; Retrieved from:

http://www.monsanto.com/whoweare/pages/default.aspx

Company History; Monsanto Company Website; Retrieved from:

http://www.monsanto.com/whoweare/pages/monsanto-history.aspx

PR Newswire Report; “Global Agricultural Biotechnology Market”; Retrieved from:

http://finance.yahoo.com/news/global-agricultural-biotechnology-market-expected-

153200852.html

Genetic Engineering Companies; Retrieved from:

http://www.biofortified.org/resources/genetic-engineering-companies/

“Revenue of Top 10 Global Agrochemical Companies in 2013; Retrieved from:

http://www.statista.com/statistics/257489/revenue-of-top-agrochemical-companies-

worldwide-2011/

“Agrochemical Market worth $242.8 Billion by 2018”; Retrieved from:

http://www.marketsandmarkets.com/PressReleases/agrochemical-market.asp

Round Up Product Description; Monsanto Company Website; Retrieved from:

http://www.monsanto.com/global/au/products/pages/roundup.aspx

Dr. Marcola, “Monsanto’s Roundup Herbicide May Be The Most Important Factor in

Development of Autism and other Chronic Disease; Marcola Articles; Retrieved from:

http://articles.mercola.com/sites/articles/archive/2013/06/09/monsanto-roundup-

herbicide.aspx

Stephen Lendman, “Monsanto’s GM Killer Seeds: Profits above Human Health; Centre

for Research on Globalization; Retrieved from: http://www.globalresearch.ca/monsantos-

gmo-killer-seeds-profits-above-human-health/5336399