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

HistoryFormed 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 HistoryFireStone 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 CrisisRubber 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

IssueAround 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 LabourThis 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 9th GradeSchool 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 EnvironmentChemical 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 AnalysisLack 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 RelationsClause 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??