Bayer gets message on industry practices

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This article was published 27/06/2020 (2106 days ago), so information in it may no longer be current.

Imagine buying a house that you’ve always had your eye on only to learn that some seemingly fixable flaws were actually masking a much more deep-rooted problem.

That’s the situation Bayer CropScience found itself in shortly after sealing its US$63 billion takeover bid for rival life-science company Monsanto in 2018.

It became clear early on that the Monsanto brand was not among the assets Bayer planned to keep. Monsanto, also dubbed “Mon-Satan,” had become synonymous with just about every issue activists have with modern agriculture: corporate control, GMOs, pesticide use, rising cancer rates, gut health — and the list goes on.

Bayer knew there were allegations that glyphosate, the active ingredient in weed-killer Roundup and dozens of generic products sold to farmers and property managers, caused cancer. There were even a few lawsuits on the books.

But no one in the know anticipated that the courts would agree with the plaintiffs.

After all, with the exception of a controversial 2015 recommendation by the International Agency for Research on Cancer (IARC) that glyphosate should be categorized as a “probable carcinogen,” public health agencies have consistently said it’s safe if used as directed.

Those lawsuits were largely viewed as nuisance claims in the same category as people suing a restaurant for serving coffee hot enough to cause a burn if it spilled.

That’s not the way it played out.

Juries in three separate cases ruled in favour of the plaintiffs, which opened the floodgates on new claims, now numbering 125,000 and counting.

“In 2019 alone, plaintiffs’ attorneys and their surrogates spent an estimated $100 million on TV ads attacking Roundup and recruiting plaintiffs — which caused a surge in the number of plaintiffs filing cases,” Bayer CEO Werner Baumann told an investors’ call this week.

Bayer saw its share values drop precipitously in the aftermath of each ruling and as of this week shares were sitting 29 per cent below their value before the takeover. Appeals can take years to wind their way through the courts and the costs of litigation, settlements and declining investor confidence were mounting.

Bayer also inherited a new litigation nightmare related to the development of crops that could tolerate in-season applications of the herbicide dicamba, Monsanto’s response to the rising number of weeds that have developed resistance to glyphosate.

Previously, dicamba was applied before crops were growing. Changing to in-crop use worked fine for farmers growing tolerant crops — but not so well for their neighbours growing traditional crops and orchards in surrounding fields. The first damage claim to hit the courts ruled in favour of the plaintiff earlier this year.

Bayer blinked.

This week it announced a US$10-billion-plus settlement that prevents most of the pending litigation in the U.S. from ever reaching court and assigns the task of reviewing glyphosate safety to a scientific committee agreed to by parties on both sides of the debate. The settlement doesn’t apply to any Canadian cases.

Bayer still plans to continue appeals of those early jury findings, but hopes now to be able to get back to its core focus of providing solutions for farmers.

Based on what we know today, this isn’t about the safety of these crop-protection herbicides. There are many other products we expose ourselves to daily that are of much greater risk to our health and wellbeing.

It is, however, about public trust. The courts ensure the rules are enforced fairly, but they are not designed to make the rules. Regulation by jury is never a good idea.

“If you kind of step back, what we’re doing here is, in essence, we’re paying an awful lot of money to take the discussion about the safety of glyphosate out of the courtroom and actually put it back in the scientific and regulatory arena, because that’s where it belongs,” Liam Condon, president of the Bayer’s crop science division, told journalists following the announcement.

The message recent rulings have sent is that the regulatory system and industry practices must not only be fair, they must also be seen to be fair. This week’s announcement and Bayer’s previous commitment to greater transparency suggests it got the message.

Laura Rance is vice-president of content for Glacier FarmMedia. She can be reached at lrance@farmmedia.com