DANAKA KATOVICH Jacobin Magazine https://jacobinmag.com/2022/04/defense-contractors-human-rights-transparency-lockheed-raytheon
The boards of defense companies like Lockheed Martin and Boeing are encouraging their shareholders to vote against transparency measures. Maybe the US government shouldn’t fund companies whose profits would be harmed by the collection of human rights data?Today Lockheed Martin, the world’s largest weapons manufacturer, will host its annual shareholder meeting. Next week, Raytheon Technologies will hold its own, with Boeing, General Dynamics, and Northrop Grumman following hot on their heels.
Like most annual shareholder meetings, those in attendance are being asked to vote on a set of proposals. The boards of the respective companies suggest how they should vote and make a case for why. The boards have an obligation to help shareholders make more money from their investments; hearing their advice on proposals is part of that deal.
But what does it mean to profit from an investment in a weapons manufacturer? Raytheon CEO Greg Hayes responded to the escalation of tensions in Ukraine a few months ago by saying, “I fully expect we’re going to see some benefit from it.” The Joe Biden administration announced on April 13 that the United States would send $800 million more in military aid to Ukraine — the package includes five hundred Javelin anti-tank missiles jointly manufactured by Raytheon and Lockheed Martin. When it comes to the defense industry, we can’t separate out profits from war.
General Dynamics, the company responsible for a component of the bomb that was dropped on a school bus in Yemen killing dozens of children, is asking shareholders to vote against a proposal for the company to provide a human rights report. The proposal, if put into effect, would require General Dynamics to release a report on the company’s “human rights due diligence process to identify, assess, prevent, mitigate and remedy actual and potential human rights impacts associated with high-risk products and services, including those in conflict-related areas.” The shareholder proposal cites an Amnesty International report from 2019 that concluded that the company did not meet its human rights due diligence responsibilities. The proposal also suggests that failing on the human rights front may have “legal, financial and reputational risks” for shareholders.
The board of directors at General Dynamics suggests shareholders vote against this proposal because they don’t believe there is “additive value to an amorphous human rights report” and it would “destroy significant shareholder value.”
It also argues that the proposal attacks US foreign policy, not the company itself. The board links its company’s mission to the national security of the United States throughout its argument. Considering that half of the Pentagon budget goes directly to private companies like General Dynamics, that conflation does make a perverse amount of sense. But it’s also a deflection. For example, the board does directly take on the proposal’s concerns about war crimes in Yemen and Palestine. But it does so by deferring responsibility to the US government — which happens to sell General Dynamics products to Saudi Arabia and Israel.
Lockheed Martin shareholders will have the opportunity to vote on an identical proposal. The board’s rationale for shareholders voting against it is that the company published a human rights report in 2021 and “such a report would impose impracticable requirements on our operations and would interfere with our ability to serve our primary customers, the U.S. government and its allies.” The board doesn’t explain why a report on human rights would interfere with serving the United States government. In 2018, 70 percent of Lockheed Martin’s revenue came from the US government alone.
To strengthen its argument, Lockheed Martin’s board notes that many of the products it sells are already subject to oversight by the executive and legislative branches, which are tasked with preventing unauthorized use of weaponry. Lockheed Martin has no direct control over the failure of end-use monitoring of weaponry, but in reality weapons sold from the United States end up being hard to track once they are shipped. The form used in the initial stages of end-use monitoring by the United States government, DSP-83, does not specify which branch of a given military will use the weapons. For example, the applicant, or “end-user,” may be listed as the “Armed Forces of Saudi Arabia,” within which are several different units. Bad end-use monitoring leads to insufficient human rights data regarding weapons manufactured by US companies.
Arguments made by the boards of Lockheed Martin and General Dynamics are suggesting that paying more attention to the human rights violations carried out with their products would (1) tank stock prices for their company and (2) discredit the human rights reputation of the United States. But what they’re really asking is for shareholders to give them permission to keep ignoring the real-world consequences of the products they make and sell.
Likewise, Boeing’s shareholders were asked to vote against a proposal for Boeing to provide more transparency on its lobbying activities. The board made similar arguments to Lockheed Martin’s against human rights reports — that additional lobbying reports are unnecessary and would harm shareholders.
Lindsay Koshgarian of the National Priorities Project reported that the average taxpayer “contributed about $2,000 to the military last year.” About 45 percent of that went to corporations like Lockheed Martin, General Dynamics, Raytheon, Northrop Grumman, Boeing, and others. Lockheed Martin alone received a payout from American taxpayers last year totaling about $75 billion.
A huge portion of the US budget goes directly to weapons manufacturers, making every American who pays their taxes an involuntary stakeholder in these companies. Perhaps if human rights and lobbying reporting would harm some of the world’s biggest corporations, it is time to demand our tax dollars be invested somewhere else.