Biotech News - Teflon all Over Again? - Urging Disclosure on Genetically Modified Organisms

Teflon all Over Again?

Christian Brothers Investment Services, Others Seek Support for
Dupont Shareholder Resolution Urging Disclosure on Genetically
Modified Organisms

Parallel Seen to Dupont's Teflon Debacle in Lack of Clear Safety
Findings for Food-Related Genetically Altered Agriculture, Sarbanes-
Oxley Disclosure Obligation Asserted.

Concerned that DuPont may be going down the same road that led to
its current woes surrounding Teflon, Christian Brothers Investment
Services, Inc. (CBIS) is urging DuPont investors to vote next month
in favor of a shareholder resolution calling on the company to meet
its Sarbanes-Oxley obligations to disclose any potentially material
risk or "off-balance sheet liability" that could be posed by its
manufacturing and distribution of food-related genetically modified
organisms (GMOs).

CBIS is the primary filer of the shareholder resolution to be voted
on at the DuPont annual meeting in late April 2006. A wide variety
of government, industry and scientific experts have raised concerns
about the lack of adequate testing and controls in place in relation
to the GMOs unleashed by DuPont and other firms. Recent reports also
have raised major health concerns -- including increased incidence
of allergies -- that could result from the introduction of GMOs into
agriculture and the food supply.

John K. S. Wilson, director of socially responsible investing at
Christian Brothers Investment Services, Inc., said: "We are deeply
concerned that DuPont unknowingly may be sowing the seeds of risk
for its shareholders and the general public. A major issue here is
the lack of information regarding the safety of these products. We
wish to avoid a repeat of the Teflon controversy, which was brought
about when DuPont inaccurately asserted the safety of
perfluorooctanoic acid (PFOA) over many decades. It is particularly
important that the company conduct independent assessments of GMO
products already in the market so that neither DuPont nor its
shareholders are surprised if GMOs fail to live up to DuPont's
preliminary safety and environmental claims. At a minimum, DuPont
has an obligation under Sarbanes- Oxley to start acknowledging to
its shareholders that there are valid concerns here about potential
risks."

In addition to citing recent health concerns and regulatory problems
with GMOs, the CBIS resolution states: "Disclosure of material
information is a fundamental principle of our capital markets.
Investors, their confidence in corporate bookkeeping shaken, are
starting to scrutinize other possible 'off- balance sheet'
liabilities, such as risks associated with activities harmful to
human health and the environment, that can impact long-term
shareholder value. SEC reporting requirements include disclosure of
environmental liabilities and of trends and uncertainties that the
company reasonably expects will have a material impact on revenues.
Public companies are now required to establish a system of controls
and procedures designed to ensure that financial information
required to be disclosed in SEC filings is recorded and reported in
a timely manner."

The CBIS resolution urges that DuPont's "board of directors review
and report to shareholders by the 2007 annual meeting on the
company's internal controls related to potential adverse impacts
associated with genetically modified organisms, including: reviewing
the adequacy of current post- marketing monitoring systems;
retaining an independent environmental expert to review the
effectiveness of established risk management processes; and
examining possible impact on seed product integrity."

Margaret Weber, coordinator of corporate responsibility, Adrian
Dominican Sisters and co-chair of the Water & Food Working Group of
the Interfaith Center for Corporate Responsibility (ICCR), said: "In
contrast to some assertions that genetically engineered crops are
simply the next generation of crop breeding, this process is
actually a severe interruption of the ordinary natural process of
breeding. There is no global agreement that these products
are 'substantially equivalent.' Precaution would call, at a minimum,
for post market monitoring for early detection of negative health
effects. Yet that is not possible in the United States, the largest
producer of these crops, because they are not labeled as genetically
engineered. Consumers who are highly sensitive to allergens and
public health officials have no method of monitoring health impacts."

Leslie Lowe, director of ICCR's Environmental Justice and Water &
Food Working Groups, said: "The Sarbanes-Oxley Act, passed by
Congress in 2002, requires the CEO and CFO of public companies to
certify that the companies' financial statements 'fairly present'
their financial condition and results of operations. In order to
ensure that these certifications are meaningful, Sarbanes-Oxley also
requires that companies have appropriate 'internal controls' over
their financial reporting. Moreover, the Accounting Oversight Board
has made clear that these controls should include 'monitoring and
risk assessment' of areas where, given the nature of the company's
operations, actual losses are reasonably possible."

Lowe added: "Proponents of this resolution believe it is reasonably
possible that genetically engineered (GE) products could cause
significant losses for the company. DuPont (and other biotech firms)
should, therefore, establish post-market monitoring systems for
their GE products. This would enable the company to act at the
earliest moment should problems arise and it would reassure
investors that the company actually knows whether its operations
result in adverse impacts for which the company may be liable."

In outlining the potential risks surrounding DuPont GMOs, the CBIS
resolution notes: "'Gone to Seed' [from the Union of Concerned
Scientists] reports that genetically engineered DNA is contaminating
U.S. traditional seed stocks of corn, soybeans and canola, and that
if left unchecked could disrupt agricultural trade, unfairly burden
the organic foods industry, and allow hazardous materials into the
food supply ... Insurers in Germany, the UK and elsewhere are
refusing liability coverage for genetically engineered (GE) crops,
demonstrating heightened concern about the long-term safety of GE
crops."

ABOUT THE GROUPS

Christian Brothers Investment Services, Inc.
(http://www.cbisonline.com/) manages more than $4 billion, combining
faith and finance in the responsible stewardship of Catholic
financial assets. CBIS' combination of premier institutional asset
managers, diversified product offerings, and careful risk- control
strategies constitutes a unique investment approach for Catholic
institutions and their fiduciaries. CBIS strives to integrate faith-
based values into the investment process through a disciplined
approach to socially responsible investing that includes principled
purchasing (stock screens), active ownership strategies (proxy
voting, dialogues, and shareholder resolutions) and community
investment. The firm contributes a portion of all profits to support
the Church's educational and social ministry.

For over thirty years the Interfaith Center on Corporate
Responsibility (http://www.iccr.org/) has been a leader of the
corporate social responsibility movement. ICCR's membership is an
association of 275 faith-based institutional investors, including
national denominations, religious communities, pension funds,
endowments, hospital corporations, economic development funds and
publishing companies. ICCR and its members press companies to be
socially and environmentally responsible. Each year ICCR-member
religious institutional investors sponsor over 100 shareholder
resolutions on major social and environmental issues. The combined
portfolio value of ICCR's member organizations is estimated to be
$110 billion.

Source: Christian Brothers Investment Services, Inc., New York, NY

CONTACT: Patrick Mitchell, +1-703-276-3266, or
pmitchell@hastingsgroup.com, for Christian Brothers Investment
Services, Inc.

Web site: http://www.cbisonline.com/
http://www.iccr.org/

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