The Story of Lead Paint Continues Under Globalization

As Lynne Peeples' article in the Huffington Post shows, the tragic story of leaded paint is not over. In this latest installment, the good guys are nine organizations with shares in PPG Industries that are trying to do the right thing: put an end to the company's manufacturing and sale of leaded paints. The bad guy in the story, the maker of leaded paints, is the world's second-largest paint manufacturer, an American company called PPG Industries. PPG Industries persists in making leaded industrial paints and selling them to poor countries in the Global South: this despite overwhelming evidence that lead in paint is bad. Lead's toxic effects became known nearly three thousand years ago, making lead poisoning (plumbism) one of the first known and most widely studied occupational and environmental hazards.

More pertinently, the U.S. banned leaded paint for residential use in 1978, and in 2013, as Peeples notes, three manufacturers were found legally liable for more than $1billion in cleanup costs of leaded paint in residences in California. In this context, this company's line of leaded paints seems at best like an anachronism. This is a company, after all, that was selling its leaded house paint in Africa up until 2013. But the fact that it is being sold only as industrial paint doesn't solve the problem. As Peeples' article mentions, in contexts of poor or non-existent regulatory structures, industrial paint may well end up on homes and retail items like children's toys.

Siding with the bad guys is the U.S. Security and Exchange Commission, an agency of the US federal government. Its mandate is to enforce federal securities laws: to make sure that capitalism is done right. The good guys, the socially conscious group of shareholders, filed a shareholder proposal with the Commission asking PPG Industries to come up with a plan for the eventual phase-out of lead from all its paints. The Commission shot down the proposal. The Commission's rationale was not made clear, but it alluded to a federal rule prohibiting shareholder proposals that interfere with "ordinary business operations."

It is a sad indictment of our global economic system if poisoning children with lead is part of "ordinary business operations." There is no known safe level of lead, meaning that even a miniscule amount of lead in the human body is detrimental, especially in young children. Young children are at greatest risk of lead exposure: they are closer to the ground and inhale lead dust, and they put things in their mouths like leaded paint chips. Young children are also the most susceptible to the effects of lead. Lead in their bodies is not excreted: instead, it ends up in their maturing nervous systems and brains. Acute lead poisoning results in seizures, abdominal pain and death. Children surviving acute lead poisoning have been left blind, deaf, paralyzed, and brain damaged. Chronic lead poisoning results in a lifetime of low IQ, learning disabilities and behavioral problems.

The U.S. Security and Exchange Commission's decision to shoot down the good guys' proposal is perplexing. In a previous ruling, the Commission decided that shareholder proposals interfering with "ordinary business" ought to be excluded from shareholder meetings, but proposals relating to sufficiently significant social policy issues "would not be considered to be excludable because the proposals would transcend the day-to-day business matters and raise policy issues so significant that it would be appropriate for a shareholder vote." In its ruling against the PPG Industries shareholder proposal, the Commission is effectively arguing that the poisoning of young children in the Global South is not a significant social policy issue.

Or maybe the argument is more nuanced. The previous SEC decision explained that shareholder proposals raising social policy issues should not be subject to the "ordinary business" exclusion because social policy issues relate to corporate governance issues impacting on shareholder wealth. In other words, if the social policy issues might affect the shareholders' primary interest, the bottom line, they warrant attention.

In another sense, then, the U.S. Security and Exchange Commission's decision should not come as a surprise. Although it is a U.S. federal public agency, it is a defender of capitalism, not global health. The welfare of young children in other countries is immaterial. The moral and legal imperative is maximizing corporate profit and shareholder wealth. If shareholders are concerned about their poisoning of children in the Global South for reasons of compassion, their concern has no merit. However, if shareholders are concerned about their poisoning of children in the Global South for reasons of self-interest -- think falling stock prices and lawsuits -- then their concern is legitimate. (This raises the question of whether PPG's decision to stop selling residential lead paint in Africa in 2013 had anything to do with the California lawsuit.)

This may seem like a cynical interpretation, but there is a silver (or rather, lead) lining: although the concerned shareholders cannot stop their company's peddling of toxic leaded paint, they can still donate some of their lead-paint profits to a charitable organization that helps lead-affected brain-damaged children. Their donations would be tax-deductible and the charity would benefit financially: a win-win situation. This is global neoliberal capitalism at work. If we are to stop poisoning the world's children with lead and other toxins, we will need more than shareholder proposals. We need to find a way to make the health and well-being of all children, even those in the Global South, a matter of everyone's self-interest.