Firestone's Liberia Crisis

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Information about Firestone's Liberia Crisis

Published on November 15, 2007

Author: Epicurean

Source: slideshare.net

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Firestone's Liberia Crisis. Course Project for Management of International Business

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.

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.

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.

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

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.

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

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.

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.

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 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.

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.

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.

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.

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.

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