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October 21, 2002
Teamsters Union Joins Boycott of World Bank Bonds
    by William Baue

The International Brotherhood of Teamsters joins six other international unions in refusing to invest in World Bank bonds.


The International Brotherhood of Teamsters, one of the largest labor unions in the world with 1.4 million members, resolved on October 3 to join the World Bank Bonds Boycott. The Teamsters' resolution characterizes the World Bank as a "principal architect and enforcer" of corporate globalization. The resolution also claims that World Bank policy has wreaked havoc on workers and the environment worldwide.

The resolution states that the World Bank requires developing countries to deregulate and eliminate barriers to foreign investment. This policy effectively pits "poor countries and workers against each other in competition to attract multinational corporations leads in a race to the bottom in wages, working conditions, environmental standards." The resolution says that this leads to the loss of approximately one million U.S. jobs annually.

The Teamsters control hundreds of millions of dollars in pension and benefits funds, some of which used to hold World Bank bonds. The resolution also serves as an advisory to the union's 521 branches worldwide, many of which handle pension and benefits funds autonomously. Boycott proponents within the Teamsters and elsewhere have been campaigning for a year and a half to get the Teamsters International Executive Board to endorse the boycott.

World Bank bonds generate 80 percent of the resources controlled by the International Bank for Reconstruction and Development (IBRD), an institution that is part of the World Bank Group.

"The attraction of IBRD (World Bank) bonds to taxable investors is that they offer international exposure with minimal credit risk," said Charles Sandmel, a Certified Financial Planner (CFP) with the First Affirmative Financial Network. "The bonds are rated triple-A by Moody's and Standard & Poor's, basically because the Bank is supported by 184 sovereign nations, because it limits debt issuance relative to the capital supplied by those countries, and because it does not forgive or reschedule delinquent loans."

The Center for Economic Justice cites this last policy as one of the primary reasons it and other grassroots organizations decided to launch the World Bank Bonds Boycott in April 2000. The Center is a nongovernmental organization that seeks to strengthen international movements that counter corporate-driven globalization and promote more just policy alternatives.

The goal of the boycott is to compel the World Bank to cancel its debt claims against poor countries. A number of experts believe that World Bank debt claims contribute significantly to keeping poor countries poor. The campaign also promotes the cessation of World Bank funding for projects that have negative environmental implications, such as dams and oil, gas, and mineral extraction.

The World Bank does not consider its practices and policies to be irresponsible.

"The World Bank's website touts the bonds as socially responsible investments," said Mr. Sandmel. "That, of course, is in the eye of the beholder."

Six other international unions, such as the Service Employees International Union (SEIU) and the International Longshore and Warehouse Union (ILWU), have joined the World Bank Bonds Boycott. Several socially responsible investment (SRI) firms, including the Calvert Group, Parnassus Investments, Pax World Funds, Trillium Asset Management, and Citizens Funds, support the boycott and do not invest in World Bank bonds.

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