A PROPOSAL TO CREATE A
SOCIAL-ENVIRONMENTAL IMPACT STATEMENT
FOR MAJOR MULTINATIONAL CORPORATIONS

EXECUTIVE SUMMARY

All commercial goods, from orange juice to running shoes to automobiles and houses, are created by extracting materials from the environment, and disposed of by being returned to the environment. Along with the benefits these products bring, there are costs as well. The activities which create these goods not only do environmental damage, but also take a human toll, particularly amongst the poor people of the world who are a ready source of labor, and often have little protection from hazardous working conditions or blatant exploitation.

In an increasingly globalized and complex economy, products may travel an enormous geographical and cultural distance before arriving at the point of final consumption. In the process, information about the environmental and social costs of any given product is lost in the myriad transactions that bring it to market. Similarly, knowledge of the ultimate environmental fate of products is lost as these products are dispersed through consumer society.

As a simple example, Procter and Gamble distributes Citrus Hill brand orange juice. [Note: P&G stopped distributing Citrus Hill juice in 1992.] The oranges come from Florida farms and are picked largely by itinerant workers. However, P&G neither operates the farms nor buys directly from the farmers. Instead, the oranges are purchased from a broker who serves as a middle-man and who, unlike P&G, operates out of the public eye. P&G has no direct knowledge of the environmental or worker conditions at these farms, including issues such as pesticide safety, hazardous working conditions, drinking water contamination, health benefits, and so on. The corporation that markets the orange juice is divorced from the actual conditions making their product possible. Even when journalists revealed illegal, widespread abuse of itinerant workers, Procter and Gamble can disclaim any responsibility for those conditions.

The buyer-seller chain of custody is not always so readily linked. Along the Thai-Cambodia border, thousands of small scale saw mills have sprung up in order to circumvent a U.N sponsored ban on exporting raw logs from Cambodia, a lucrative commercial activity largely controlled by soldiers of the Khmer Rouge. The ban notwithstanding, the forests are being depleted while the coffers of the Khmer Rouge grow larger. Reports tell of environmental destruction and human coercion on a massive scale.

Where does this timber end up? No one knows for sure, though it certainly enters the world market place. Perhaps it goes to Japan, where it becomes shipping crates for goods being exported to the U.S. and elsewhere. At present, it is nearly impossible to track these materials. Though the social and environmental costs are large, the downstream recipients of this lumber in Japan and the U.S. are isolated from all unpleasant knowledge of where and how the lumber originates.

My proposal is that the manufacturers of major commercial goods should regularly prepare an SEIS -- a Social and Environmental Impact Statement -- and make this document widely available to the public. The SEIS would require manufacturers to trace the development of their goods from the point of initial extraction (from a farm, oil well, forest, mine, etc.) to the point of ultimate disposal. The SEIS would provide an assessment of (1) the environmental implications of the extraction, manufacture, use and disposal of the goods and (2) the social implications of a company's activity, especially the conditions of the people whose efforts make the activity possible.

Like the federal Environmental Impact Statement on which it is modelled, the SEIS would not follow a prescribed, rigid format. Instead, corporations would be given general guidance as to the types of issues to be addressed and criteria to determine which products require an SEIS. I envision that the SEIS's will evolve over the years as companies receive feedback on their reports from a public actively concerned about, and involved with, social and environmental issues.

The SEIS can launch a revolutionary new era of conscientious business practices around the world. The SEIS will make it much more difficult for companies and for our society to hide environmental or human exploitation, or to hide from the knowledge of it. The SEIS creates a chain of awareness and responsibility that extends from laborers in the Third World to consumers in the First World, and uses the international reach of large corporations to gather and disseminate the needed information about their products and services.

The SEIS process creates a presumption that corporations have a responsibility to understand the impacts of their operations, and a requirement to make their understanding explicit and public in the SEIS report. Although companies would not be required to do anything to their operations other than report to the public, the SEIS creates powerful incentives for making corporate operations more environmentally and socially benign. An increased awareness within the company of the impacts of their operations, and the power of casting a public spotlight on these impacts, can motivate improvements in a way that is beyond the reach of individual laws, treaties or social policies.

In essence, the SEIS creates an "invisible heart" to guide the invisible hand of economics, using information and public accountability as tools to guard against marketplace failures of conscience.

A PROPOSAL TO CREATE A CORPORATE
SOCIAL ENVIRONMENTAL IMPACT STATEMENT

David Sarokin
The Public Data Project
3734 Appleton Street NW
Washington, DC 20016
202-363-5856

A single large corporation pumps billions of dollars each year into the global economy in the course of its business, be it automobiles, energy, financial services, medicine, information, food or the thousands of other activities that companies engage in. These dollars, in turn, are the economic fuel for millions of diverse activities all over the world. A company that, say, cans peas and nothing else, directly or indirectly supports the activities of farmers in Central America, pesticide manufacturers in New Jersey, iron miners in Brazil, steel manufacturers in Pennsylvania, commodity brokers in several countries, and transportation services over a large segment of the planet, in addition to the providers of computers, phones, financial and marketing services, paper, furniture, machinery and so on that are necessary for the pea canning process to happen.

The advantages of all this economic action are well known. Not only do consumers get peas at a fair market price, but new wealth is created in the process.

But there are disadvantages as well. To invent a worst case example, the peas are grown on clear-cut tropical rain forest land, the farms are contaminating drinking water supplies with fertilizer, farm workers are being poisoned with pesticides, and the profits are reaped in by just a few powerful land- owners who use their wealth to help support a violently repressive government. The iron mines leach thousands of tons of acid pollutants into once-pristine mountain streams, and the steel mill has a disastrous record of violating environmental and worker safety laws. The cans themselves are produced in a factory that hires illegal aliens at below-minimum wage, offering nothing in the way of worker benefits.

If this scenario seems far-fetched, we need only remind ourselves of several unusually public incidents of recent memory: twenty-five workers died in a fire at a North Carolina chicken- processing plant owned by Imperial Food Products because the exit doors were chained shut; a worker at a Film Recovery Systems plant died from cyanide poisoning, with the company executives eventually found guilty of murder; Peabody Coal was sanctioned for tampering with the results of safety tests necessary to protect coal miners; back to back explosions in the petrochemical plants along the Gulf of Mexico claimed dozens of lives.

Anyone who eats chicken, takes photographs, turns on a light bulb, or drives a car may have been relying on products supplied by these criminally-negligent enterprises. Any company buying products from these facilities provides fairly direct support for their activities.

These are rare examples of companies that can be held directly responsible for the devastation they caused. More often, intolerable conditions are apparent even when corporate responsibilities are not. Take the case of Procter and Gamble, which until 1992 distributed Citrus Hill brand orange juice.

The oranges come from Florida farms and are picked largely by itinerant workers. However, P&G neither operates the farms nor buys directly from the farmers. Instead, the oranges are purchased from a broker who serves as a middle-man and who, unlike P&G, operates out of the public eye. P&G has no direct knowledge of the environmental or worker conditions at these farms.

Yet, as a recent piece of television investigative journalism revealed, worker conditions at some of the orange groves are little better than indentured servitude. Migrant workers live on the farms in abysmal conditions, without even a bare minimum of comfort, sanitation or dignity. Yet, they must pay their employer for room and board an amount in excess of their salaries! In a viscous cycle, each worker becomes deeper in debt to the landlords, some of whom refuse to return the workers' "green cards" until the debt is paid off. The arrangement is patently illegal, as are the living and working conditions, yet local authorities appear to wink at the situation.

IS ANYONE RESPONSIBLE?

Who bears responsibility for this? Procter and Gamble, the corporation that markets the orange juice is divorced from the actual conditions making their product possible, and can disclaim any responsibility for those conditions. By staying at arms length, by keeping ignorant of the circumstances of production, the company avoids ever having to consider whether or not they bear any responsibility for the working conditions of the orange pickers.

Mistreatment of workers is not the only social cost associated with economic activity. The environment suffers as well. We have all been made aware that there are links between our everyday lifestyle and diverse issues such as deforestation, holes in the ozone, aimless garbage barges, and the fate of the spotted owl. But not all environmental links are so evident. How many people are aware that DisneyWorld has been fined for hazardous waste violations, or that Ocean Spray Cranberries pleaded guilty to polluting the Nemasket River in Massachusetts, or that environmental officials are seeking a $6 million fine against CBS Inc. (the same company that exposed the conditions of the orange pickers) for water pollution in Pennsylvania, prompting the state's Secretary of the Environment to remark that "...no corporation... however big and powerful, can... break environmental laws with impunity".

These examples are all from U.S. operations. It takes little stretch of the imagination to suppose that conditions in many other countries are far worse than they are in the United States, even when the actual facts are hard to come by. Along the Thai-Cambodia border, thousands of small scale saw mills have sprung up in order to circumvent a U.N sponsored ban on exporting raw logs from Cambodia, a lucrative commercial activity largely controlled by soldiers of the Khmer Rouge. Stories circulate of massive destruction of the forests and of brutal coercion by the Khmer Rouge soldiers, but in truth, it is difficult to come by any reliable information. But one thing is clear: the U.N. ban notwithstanding, the fragile forests are being depleted while the coffers of the Khmer Rouge grow larger. One-fifth of Cambodia's tropical hardwood forest has already vanished; a UN officials predicts that in 5 or 10 years, "...there will be nothing left."

Where does the Cambodian timber end up? No one knows for sure, though much of it certainly enters the world market place. Perhaps it goes to Japan, where it becomes shipping crates for goods being exported to the U.S. and elsewhere. At present, it is nearly impossible to track these materials. Though the social and environmental costs are large, the downstream recipients of this lumber in Japan, the U.S. and elsewhere are isolated from all unpleasant knowledge of where and how the lumber originates.

Rarely does this veil of obscurity fall away enough to allow a public glimpse of the true impact of global commerce. Investigative reporters revealed what Newsweek called "China's Ugly Export Secret: Prison Labor." The "ugly secret" wasn't just China's, however, because the low-cost goods made by Chinese convicts (whose ranks were swelled by the Tiananmen Square crackdown) are exported to well-known companies in the U.S. and elsewhere. Products made by what one observer termed "slave labor" include a well-known brand of running shoes, flashlights, hardware, and boxes for Seagram's wine coolers; Chinese convicts even harvested grapes for French wine-maker Remy et Associes. Other journalists have asserted that clothing is manufactured for Wal-Mart in Bangladesh sweatshops by children as young nine.

When confronted with the truth of the matter, most companies claim ignorance of the actual circumstances of production, along with a very limited sense of responsibility for activities not under direct corporate control. But even if companies want to know more, the information can be difficult to come by. In tracking the Chinese prison labor story, for instance, Newsweek reported a typical chain from manufacturer to consumer:

"U.S. companies often place orders with Hong Kong buying agents for goods made in China. These agents make deals with an official Chinese shipper, who then contacts a Chinese supplier. The Chinese supplier farms out parts of the deal to subcontractors--and prisons usually come up with the lowest bid... it's hard for the buyer to determine which goods came from where."

Another observer of global trading put it more directly: "How can you know what's happening in Bangladesh when everyone between here and there has reason to lie?"

There is absolutely nothing remarkable about these stories; human suffering and environmental damage are an integral part of millions of commercial activities around the globe, activities which make possible much of the material comforts of modern life. For the most part, these impacts are summarily and conveniently ignored. The important issues of business are ones of cost, convenience and market share; international commerce rarely cares to know more than this, and turns a blind eye to horrendous violations of human rights, worker safety and environmental protection.

For the most part, governments have taken the responsibility for oversight of economic activities, to insure that human or environmental outrages are minimized. Yet, no government can eliminate all problems and many governments -- through failure of will, lack of resources, bureaucratic ineptitude or outright collusion with economic interests -- barely make a dent in horrendous social and environmental problems.

A small handful of companies have decided they have a responsibility to do more. Levi Strauss created standards of conduct for its suppliers, and after reviewing all 600 of them around the world, dropped about 30 suppliers, exacted reforms from 120 others, and pulled out of doing business in Myanmar due to the persistent human-rights abuses of that government. Phillips-Van Heusen has adopted broad codes of responsibility for its suppliers; Reebok is working on a human rights policy. H.J Heinz announced that it would only use "dolphin safe" tuna for its Star-Kist label, and other tuna suppliers have done the same; McDonald's will not use cattle raised on cleared rain-forest land. Dow Chemical asks all its suppliers to conform not only to local environmental law, but to often more exacting U.S. standards.

INFORMATION AS THE KEY TO INCREASING CORPORATE RESPONSIBILITY

How can other corporations be prompted to do more?

Experience in the United States has demonstrated time and again that the best adjunct to government oversight is active involvement of the public. On the few occasions when disaster or happenstance or a reporter's curiosity make plain the details of environmental or social depravation, public response is often vocal, outraged and insistent that changes be made. Whether the issue is mistreatment of non-union migrant grape pickers, dolphins killed in the gigantic nets used by tuna fishermen, investments in South Africa that are seen as supporting apartheid, or the safety of chemical plants handling Bhopal-type toxics, public pressure can bring about dramatic changes in government controls and in the practices of private enterprise.

This is especially true in environmental affairs, where the law of the land actively promotes worker and citizen "right-to-know" about toxic pollution, and gives citizens the tools to effectively act as a check and balance not only on industry, but on the governmental bodies charged with keeping an eye on industrial pollution. The initial strategy for oversight -- government watches industry -- is greatly strengthened with a new strategy: the public keeps an eye on government watching industry.

But the public cannot express concerns over problems which are invisible. Only the social and environmental impacts that see the light of day can be assessed by a public that cares deeply about such things. Information is the key to involvement; an informed citizenry is best able to exercise responsibility for the state of the world we live in.

There are several practical problems in giving the public the means to become involved in the types of problems described above:

How can the average citizen learn about the impacts of economic activities? In a world as diverse as ours, how could anyone ever wade through masses of information even if it were to become available?

How can any one government act to assure public oversight in a global economy that is increasingly beyond the reach of any one nation?

How can public involvement be increased even while respecting a corporation's need to run a competitive business and preserve proprietary information?

In two important areas, these questions have already been answered.

Public corporations in the U.S. must prepare an annual report to keep the public apprised of its financial status. The reports are designed to condense multitudes of data down to a manageable size, to present information of value to both a lay audience and to financial professionals, to provide uniformity of information in a very non-uniform world, and to cover domestic as well as overseas operations.

Some economic activities must prepare Environmental Impact Statements to assess the impacts of the proposed action (a dam or highway, for instance), examine alternative actions, and explore means of mitigating any serious impacts that are identified.

The corporate Annual Report, combined with the Environmental Impact Statement, is an ideal model for providing social and environmental information to the public. Pooling these two models of reporting on economic activities, I propose creation of a corporate Social/Environmental Impact Statement -- the SEIS.

CREATING AN SEIS

The SEIS would be a periodic report that would be prepared by the largest corporations operating in the U.S., would be freely available to the public, and would provide perspective on the environmental impact of corporate operations, as well as the social impacts to workers and communities. These impacts would be assessed over the entire life-cycle of the corporation's products, from the moment materials are extracted from the Earth to their ultimate disposal by the end consumer.

The key feature of the SEIS is that it casts a broad net well beyond the activities directly under a corporation's control; the impacts considered in the SEIS include those stemming from the multitudes of suppliers that make a company's activities possible, as well as considering the fate of company products after they are sold.

In Box A (below), I suggest language for the types of impacts which should be included in an SEIS. Briefly, they include the impacts of extracting, transporting, and transforming major raw materials, and of the production, testing, use and disposal of consumer products. Consideration would also be given to impacts on the environment and health of ecosystems as well as animal, worker and community welfare,

The SEIS is not meant to be a rigid document. Corporations would have tremendous flexibility in creating the report, and in deciding on significant impacts and the types of information and level of details to provide. At the same time, mechanisms would be in place to provide powerful incentives to create a thorough and credible SEIS report.

What would be gained by requiring companies to prepare an SEIS? I believe these simple reporting requirements can accomplish a revolution, in the very best sense of the word. The SEIS will instill an international corporate conscience, one that extends far beyond the current sense of "corporate responsibility" or "good corporate citizenship". The SEIS will create a vastly increased awareness of the ills associated with economic activity. Beyond awareness, it also creates powerful incentives for minimizing the negative consequences of doing business.

A NATIONAL PROGRAM WITH AN INTERNATIONAL REACH

The potential reach of the SEIS is stunning. Modern corporations do business in every corner of the globe. The SEIS from Nike, Inc. would need to cover worker conditions at its plants in China, Malaysia, Thailand, Taiwan and Indonesia, where workers must labor two months before earning enough to buy a pair of the shoes they are making. Union Carbide's SEIS would report on environmental releases at its facilities in Brazil, Zimbabwe and about 30 other countries. Grand Metropolitan, owner of Green Giant, Burger King, Haagen Dazs, Alpo and many other well-known brand names, would presumably report on the impacts of moving operations from Watsonville, California to Irapuato, Mexico.

But beyond the directly-owned operations lies the true reach of the SEIS. Nike would report not only on conditions at their supply plants, but on their main manufacturing materials: what is the source of their rubber, glue, and leather used in manufacturing, of the machinery for manufacture and the wood for shipping crates; what steps have they taken to satisfy themselves that their purchases of these materials are not supporting the insupportable?

Coca Cola, which prides its status as the "world's most global enterprise" uses untold quantities of glass, aluminum and paper for packaging, and sugar, spices, cola nuts, cacao, and other ingredients for its ubiquitous brew; the company might possibly create the world's most comprehensive SEIS.

The issues which will be uncovered and reported will often be serious ones, of a life and death nature. Amoco would report on conditions in and around its operations in Myanmar, reputed by the Center for Constitutional Rights to be supported by "a campaign of terror" waged by the Burmese military (use of the military to protect foreign oil investments is not uncommon -- 10% of the Columbian army is earmarked for protection of BP oil fields). Companies manufacturing pots and pans out of aluminum and copper will need to trace the impacts of their purchases back to bauxite mines in Jamaica and Guyana and copper mines in Irian Jaya and Papua New Guinea--the latter was the world's largest copper mining operation until it was shut down in 1989 due to an armed revolt by natives angry at the mine owners for being dispossessed from tribal lands.

Manufacturers of pesticides will need to consider the impact of their products on farmworkers. Banana farm workers in Santa Lucia routinely handle pesticides made by DuPont, Mobil, Monsanto, ICI and other multinational chemical companies, but are ill-trained at safe handling of these dangerous chemicals, and rarely aware of the need to take adequate measures to protect themselves. Workers at a banana plantation in Costa Rica are suing Standard Fruit (a subsidiary of Dole), Dow and Shell Oil, charging that exposure to pesticides caused the workers to become sterile.

Who knows how many companies will uncover, in the course of preparing their SEIS, direct links to Chinese prison camps, Khmer-Rouge lumber operations, exploitation of child labor, clear-cutting of the rain forest, or other insupportable activities? I suspect the answer is that, if companies prepare their SEIS seriously, almost all will uncover links to activities that, upon finding the light of day, will no longer be tenable.

The broad breadth of coverage of the SEIS is essential. Governments have no direct authority to influence economic activities that take place outside their own borders. Nor do they have the authority to directly collect information from foreign sources. But a government can insist that its domestic businesses make it their business to be aware of the consequences of their activities, and to make such information public. What the power of government cannot directly mandate, the power of the marketplace can bring into being. Especially at a time when the size and stature of multinational corporations rivals that of individual countries, it is both necessary and fair to require of these corporations this type of reporting.

HOW WOULD THE SEIS PROGRAM WORK?

A nationally mandated SEIS program would need to clearly identify which companies were required to report, and how often an SEIS is to be prepared. What's more, the program would need to insure that the SEIS reports that companies prepare are credible and thorough.

For starters, the requirement to prepare an SEIS should apply to U.S. companies with total revenues of five billion dollars a year or more. This would mean that, initially, about 250-300 U.S. companies would be required to report. This is a small number of companies, but a substantial piece of the world's overall economic activity -- the Top 300 American firms represent about 4 trillion dollars of annual sales. As the SEIS program matures, the threshold could be lowered to include additional companies.

Non-U.S. companies with more than one billion dollars in sales in the U.S. would also be required to prepare an SEIS as a condition of continued access to the U.S. market.

The SEIS reports would bear a certifying statement as to the accuracy and thoroughness of the report which would be signed by a senior executive of the company. The report would be made widely available; companies would actively distribute them at their facilities and to communities most affected by their operations, as well as to the general public upon request. A copy of the SEIS report would also be filed with a federal government body -- an SEIS Review Board -- charged with overseeing the SEIS program.

The Review Board would have two basic tasks:

1. Reviewing the SEIS reports that have been submitted.

2. Identifying companies that have failed to submit a required SEIS.

For reports that have been submitted, the Review Board would classify each SEIS as either satisfactory or not, depending on the Board's review (in terms of how well the report meets the intent of the SEIS language in Box A) as well as their review of any public comments received on the report. A finding of "satisfactory" would mean that companies have five years before they would be required to submit an updated SEIS. Companies whose reports were found lacking would be required to resubmit their report within a year, and to continue to do so until the report is satisfactory.

The process provides a considerable incentive for companies to do the job right in preparing their SEIS -- an official "stamp of approval" for the report and a five year grace period before an update is due.

What of the companies who fail to report all together? What sort of penalty would be imposed?

My proposal is that there be no official penalty for failing to submit an SEIS report. The SEIS program is entirely predicated on public involvement -- on the presumption that the public has a desire to learn of these impacts and a willingness to exercise its power in the political arena and economic marketplace in order to discourage practices leading to undesirable impacts. This exercise of public power will extend to SEIS non-reporters by means of negative publicity, shareholder dissatisfaction, and consumer response. The SEIS program can only be effective if the public is willing to exercise this sort of involvement. Without it, government sanctions would carry little meaning.

THE GLOBAL IMPACT OF THE SEIS PROCESS

What will be the result of this report-writing? Only 300 or so reports would be created but, as I said above, I believe they will bring about profound and beneficial changes in the practices of businesses around the world. The SEIS has the potential to better the lives of millions of workers, benefit communities, and improve the environment at local, regional and planetary scales.

The process of having General Motors, AT&T, Grand Metropolitan, J. C. Penney, Safeway and others prepare a public report on the impacts of their operations will -- by its very nature -- restructure corporate priorities, not only for the companies themselves, but for the expansive web of businesses which are suppliers to and customers of these corporate giants.

By casting a spotlight on impacts that were formerly invisible, the SEIS process makes it a business priority to "do the right thing"; indeed, this is the driving force behind the whole SEIS concept.

Consider the position of a CEO who must sign a certification statement to the effect that "I have reviewed the operations of my company from top to bottom, and have identified the key social and environmental impacts of our business, as well as the steps we are taking to mitigate any negative impacts." This is a positive statement of corporate awareness, and is very different from the conventional stance, which can be characterized as "we just weren't aware..." that our shoes were made by Chinese prisoners, that are toys are made by eleven year old girls who have dropped out of school, that our suppliers are apartheid/unsafe/polluters/clear-cutters/dolphin-killers/baby seal-clubbers/union-busters, or whatever the state of affairs might be. The SEIS greatly lessens the viability of the explanation that "we just didn't know."

The CEO has an enormous incentive to create a thorough SEIS report. The report will likely be scrutinized by not only the general public, but by company employees, stockholders, representatives of organized labor, groups representing particular social causes, domestic and foreign governments and the media. Should a company employee or investigative journalist or anyone else uncover a significant impact of corporate activities that was omitted from the SEIS, it raises a very public question of Why did the company not report this? and creates, at the very least, the appearance of an attempt at covering-up. Any temptation to under-investigate or understate impacts is counter-balanced by this potential at being discovered as being at best, unable, or at worst, unwilling to provide a thorough report.

The CEO also has an enormous incentive to go beyond mere reporting of impact to mitigation -- taking positive steps to eliminate or at least reduce the most severe impacts. Few companies will be willing to publicly reveal that they contribute to the clear-cutting of tropical rain forests, pollution of coral reefs, or the poisoning of farm workers without taking dramatic steps to better their practices and the practices of their suppliers and customers.

Business decisions have long been guided by the invisible hand of economics, responding to prices, supplies and consumer preferences. But the guiding hand was soulless; unaware of and uncaring about the consequences of business activity. The SEIS creates a new conscience in the marketplace, an invisible heart, if you will, to insure that the hand of economics is unclenched, so that it can go about its business with a gentle touch.

END OF REPORT

BOX A

Language requiring a Social/Environmental Impact Statement, which would apply only to the largest of corporations, might read as follows:

Businesses shall periodically prepare a Social/Environmental Impact Statement (SEIS). The SEIS will address issues of societal importance, including the impacts of company operations on workers, on communities, and on the quality of the environment, locally, regionally and globally. The report shall include the impacts of operations directly owned by the business, or with which the business is directly involved. It shall also include the impacts of major materials required for the business' functioning irrespective of whether or not such materials are supplied by company-owned facilities. The impacts to be reported on can be both negative and positive, but the report should also include impacts even if their value is difficult or impossible to assess.

More specifically, the SEIS will trace the flow of major materials throughout their life cycle, and will report on the impacts of: material extraction from the earth, including mining, drilling, logging, fishing, farming, hunting, animal husbandry, and the use of water, soil, rock and atmospheric gases; material transportation; all stages of processing and manufacture; product testing; intermediate and ultimate consumer use; material disposal.

The impacts to be considered include, but are not limited to: impacts to all environmental media (air, water and land) at all stages of material life cycle; ecosystem impacts; impacts on animal welfare; impacts on workers at all stages of material life cycle, including health and safety, adequacy of wages, opportunities for betterment, and an assessment of the status of adherence to basic principles of human rights; impacts on communities at all stages of material life cycle including impacts on basic services such as water, education, housing and health care, population movement and possible dislocations, cultural impacts, especially through introduction of unfamiliar technologies, crops, foods, and people, and impact on the local economy.

Businesses that consider some or all of their operations to be essentially non-material in nature (for example, financial services or communications) will report on the impacts of the materials which make their services possible as well as the impacts of the activities which their services make possible.

In the case where companies are acquiring materials from other companies that have already prepared an SEIS, the purchasing company may reference the SEIS of the supplier company as long as the purchasing company certifies that it is satisfied with the coverage and detail of the supplier's SEIS. For instance, a car manufacturer buying tires need not include a life cycle assessment of tires in its SEIS, but can simply incorporate the tire manufacturer's SEIS by reference, if the company is satisfied that necessary information is already adequately covered in the SEIS prepared by the tire manufacturer.

END OF BOX A