Firestone Liberia Crisis
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Firestone Liberia Crisis






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Firestone Liberia Crisis Firestone Liberia Crisis Presentation Transcript

  • Saket Tandon (06927801) Vaibhav Jha (06927804) Aniruddha Aradhye (06927809) Bhupendra Jagdev (06927856) Class of 2006 – 2008, Master of Management, SJMSOM, IIT Bombay Firestone’s Liberia Crisis
  • History
    • Formed in 1900 with 12 employees.
    • Leading tyre suppliers in North America.
    • In early 1980s non tyre related businesses was spun off to increase valuation.
    • Sold to Bridgestone in 1988.
  • Shady History
    • FireStone 500 tread separation problem.
      • Did not co-operate with authorities in their investigations.
      • Denied all charges and blamed the customers.
      • Years of bad publicity and millions paid out to victims.
    • Clause K.
  • Liberia Crisis
    • Firestone owns largest rubber plantation in Liberia since 1926.
    • Liberia war torn because of Civil War which ended in 2003
    • Accused of
      • Abusing local workers.
      • Child Labour.
      • Breaking corresponding international laws.
      • Exploiting Liberia Resources.
  • Liberia Crisis
    • Rubber exports worth $82 M.
    • All rubber sent to BridgeStone US for manufacturing of tyre.
    • No processing, value addition or manufacturing done in Liberia.
    • Severe exploitation of a country’s resources
  • Issue
    • Around 10000 workers in plantations.
    • Daily Quotas
      • Firestone says 650 trees.
      • Workers contend it and say its actually 1100 trees – equivalent to 21 hours of work daily.
    • Inability to meet daily quotas results in halving of already low wages.
  • Child Labour
    • This forces workers to get their children and other family workers to help them in meeting quotas.
    • Children work almost 12-14 hours a day.
    • Child Education goes into thin air.
      • Schools go only upto 9 th Grade
      • School located too far away from the workers’ houses
  • Adverse working conditions
    • Tapper generates $900 monthly for the company and gets just $60.
    • Tappers forced to apply dangerous chemical treatments to plants without safety gloves, masks etc.
    • Poor housing
      • Tappers provided with houses built way back in 1920 and not renovated since.
      • No electricity, running water etc.
      • Poor educational and medical services.
      • Use of subcontractors who treat workers poorly.
    • 60% of labour is subcontracted.
      • No social benefits for them.
  • Polluting Environment
    • Chemical waste dumped into the local river without proper treatment.
      • Has lead to tough times for fishing dependent communities along the river bank.
    • No waste management or pollutant mitigation system.
      • People in closeby areas suffer from many respiratory ailments.
  • Undermining Democracy
    • Firestone leased 1 million acres of land in 1926 for 99 years at a fee of $60,000 only.
    • In 2005 it signed a new lease with new government for just $500,000.
    • Inspite of all the hue and cry from democratic forces in the country it forged the new agreement with the new government.
    • Refusal to meet the first democratically elected plantation union formed this year(2007).
  • FireStone Under Fire
    • Vehemently denies allegations.
      • Claims strict child labour policies.
        • Very poor implementation of policies
      • Claims steps to educate parents discouraging them to bring children for work.
        • Reports claim that efforts are just customary.
      • Claims the houses in ramshackles are those of refugees and not it own.
      • Claims to be renovating old houses which was impossible due to war.
        • Only few rehabilitated which are close to highway.
        • Even they lack running water, electricity.
        • Firestone managers have excellent living facilities.
      • Admits to release of reasonably safe chemicals to the local river.
  • Our Analysis
    • Lack of sound legal framework in Liberia are letting Firestone getaway with its conduct.
    • By the admission of CEO each worker has 650 trees per day quota. At 2 mins per tree its 21 hours of work!!
    • Many visuals available on net to prove poor living conditions.
  • Power Relations
    • Clause K
      • Search for own rubber source for US post World War I.
    • Rubber became largest export of Liberia. Almost all exported to US through Firestone.
    • Currently Media (specially online media) and Human Rights commission have taken up the cause.
    • Lots of lawsuits against Firestone in US courts.
  • Impact on FireStone
    • Bridgestone and Firestone both getting severely bad publicity.
      • Several online communities dedicated to the issue.
      • Lot of press reports condemning Firestone.
    • Several lawsuits filed by various renowned international human rights group (including UN groups) pending in various countries.
    • Most experts say Firestone may need to loosen its purse to settle the lawsuits.
  • Thank You
    • Questions??