WARNING!
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Bayer is the largest seed and pesticide company in the world, due to its $63 billion Monsanto purchase. The U.S. Department of Justice (DOJ) approved the merger in 2018, with Bayer CEO Werner Baumann stating at the time that the acquisition would further their goal of creating a leading agriculture company, adding, "We want to help farmers across the world grow more nutritious food in a more sustainable way."1
All has not remained rosy, however, as Monsanto came along with a heavy liability, including 13,400 lawsuits from people who claim exposure to their glyphosate-containing Roundup herbicide caused them health problems, including cancer. Already, Bayer's been tagged with $158 million in damages, and that's just the verdict from two of the cases.
Now some are calling the takeover "disastrous,"2 a sentiment seemingly shared by many of the company's shareholders, more than half of whom voted against Baumann's actions with a strong no-confidence vote.
More Than Half of Bayer Shareholders Vote Against Management
In a September 2018 interview with Bloomberg TV, Baumann defended the massive Monsanto purchase, even as shares fell. "We are as excited as we have ever been about the combination, and there are absolutely no regrets."3 Fast forward to seven months later to Bayer's annual general meeting in Bonn, Germany, and 55.5% of shareholders voted against ratifying the management's actions.4
The vote was symbolic in nature and won't legally change anything, but stems largely from the company's plummeting market value as a result of rising legal battles over Roundup. The consensus was that replacing the CEO would only add to the chaos during an already perilous time.
"A hasty replacement of the CEO would only increase the risk of a break-up and therefore can't be in the interest of long-term oriented investors … ," top Bayer shareholder Janne Werning said.5 It's been decades since a majority of shareholders have voted against management's actions, and in 2015, a 39 percent nonapproval vote against Deutsche Bank AG co-CEO Anshu Jain led to him stepping down.6
This won't be the case for Baumann, who said he "understands shareholders' disappointment over the performance of Bayer shares since the first glyphosate verdict in August 2018" and added that "legal uncertainty has weighed on the share price."7
In response to the minority percentage of votes in favor of ratifying the actions of Bayer’s board of management, the company’s supervisory board said it would stand behind them, including in their efforts to appeal the trials concerning glyphosate.
"While we take the outcome of the vote at the annual stockholders' meeting very seriously, Bayer's supervisory board unanimously stands behind the board of management," Werner Wenning, chairman of the supervisory board, said in a news release.
"The outcome of the vote … does nonetheless show that the annual stockholders' meeting wanted to send a clear signal to the board of management that Bayer AG should bring out the company's strengths to a greater extent in the future."8
Investors had complained that Bayer was not revealing enough about its strategy for defeating upcoming lawsuits. Writing for Reuters Breakingviews, columnist Ed Cropley suggested Baumann could help to quell their concerns as follows:9
"Another option would be to tweak Baumann's pay to ensure his interests are aligned with shareholders. In 2018, his compensation was linked to the integration of the Monsanto deal and net income, allowing him to take home a 1.7 million euro [about $1.9 million] cash bonus — more than 2017 — and total compensation of 5.3 million euros [about $5.9 million].
That's in spite of a 40 percent share-price slump. Paying a greater portion of his salary in shares, and linking the bonus to the Roundup litigation, would sharpen his mind, and blunt investors' criticism."
$78 Million Verdict Is Major Blow Against Roundup
Thousands of people across the U.S. have filed lawsuits alleging that Monsanto’s (and now Bayer’s) Roundup herbicide caused them to develop cancer. In March 2015, the International Agency for Research on Cancer (IARC) determined glyphosate to be a "probable carcinogen" based on evidence showing the popular weed-killing chemical can cause Non-Hodgkin lymphoma and lung cancer in humans, along with "convincing evidence" it can also cause cancer in animals.
In August 2018, a jury ruled in favor of plaintiff Dewayne Johnson in a truly historic case against Monsanto. Johnson — the first of the cases pending against the chemical company — claimed Roundup caused his Non-Hodgkin lymphoma, and the court agreed.
Monsanto was ordered to pay $289 million in damages to Johnson, although the award was later reduced to $78 million. Bayer asked the court to throw out the judgment in April 2019, going so far as to ask for reversal of the damages awarded based on the fact that Johnson is near death. On page 87, the appeal states:10
"A jury may award future noneconomic damages only for pain and suffering that a plaintiff is reasonably certain to experience based on his 'projected life span at the time of trial' …
['[D]amages for future pain and suffering are based upon plaintiff's probable life expectancy in his or her injured condition ... [C]ompensation for pain and suffering is recompense for pain and suffering actually experienced, and to the extent that premature death terminates the pain and suffering, compensation should be terminated'] …"
Bayer Loses Second Case, and Now Third Case
In a second case, a judge ruled in favor of the plaintiff, ordering Bayer to pay more than $80 million. The jury agreed that Edwin Hardeman's repeated exposures to Roundup, which he used to kill weeds on his 56-acre property, not only played a role in his cancer diagnosis but also that the company did not warn consumers that the product carried a cancer risk.11
The case was split into two phases, with jurors first finding the chemical to have caused the cancer on purely scientific grounds and the next phase finding that Bayer is liable for damages.12 Ultimately, Hardeman was awarded $75 million in punitive damages, $5.6 million in compensatory damages and $200,000 for medical expenses.13
In a statement, Hardeman's attorneys Jennifer Moore and Aimee Wagstaff said, "… [T]he jury resoundingly held Monsanto accountable for its 40 years of corporate malfeasance and sent a message to Monsanto that it needs to change the way it does business."14
In a third before Alameda County Superior Court of California, a married couple, Alva and Alberta Pilliod, claim they both developed Non-Hodgkin lymphoma after regular use of Roundup. The jury has now awarded them $2 billion, a devastating blow to Bayer. The victoms' attorneys stated:15
"They started using Roundup in the 1970s and continued using the weed killer until only a few years ago … Alva suffers from non-Hodgkin lymphoma in his bones that spread to his pelvis and spine. He was diagnosed in 2011. Alberta was diagnosed with non-Hodgkin lymphoma brain cancer in 2015."
EPA Reaffirms Glyphosate Is Safe as Trial Continues
While court cases continue to find that glyphosate causes cancer, the U.S. Environmental Protection Agency (EPA), in their latest review of glyphosate, released a draft conclusion stating the chemical poses potential risks to mammals and birds that eat treated leaves, as well as risks to plants,16 but "no risks of concern" for people and "is not likely to be carcinogenic to humans."17
During the 60-day public comment period for the EPA's glyphosate preliminary risk assessment, many commenters disagreed with the EPA's assessment that glyphosate is safe based on IARC's 2015 finding that glyphosate is "probably carcinogenic to humans." As for why their conclusion differs from IARC's, the EPA stated:18
"EPA's cancer evaluation is more robust than IARC's evaluation. IARC's evaluation only considers data that have been published or accepted for publication in the openly available scientific literature. As a result, IARC only considered a subset of the studies included in the EPA's evaluation.
For instance, IARC only considered 8 animal carcinogenicity studies while the agency used 15 acceptable carcinogenicity studies in its evaluation. The EPA also excluded some studies that were not appropriate for determining the human carcinogenic potential of glyphosate, such as studies in non-mammalian species (i.e., worms, fish, reptiles, and plants) which IARC used in its evaluation."
However, critics, including Nathan Donley, a scientist at the Center for Biological Diversity, said the EPA relied heavily on industry-backed studies and ignored research pointing to cancer risks.19 Even the EPA stated:20
"Many commenters asserted that the EPA relies too heavily on industry-funded studies and that these studies are not accessible to the public. Commenters requested that the EPA use open literature studies to assess glyphosate and point to various open literature studies describing various human health and ecological effects."
EPA Captured by Monsanto Long Ago
In the 2018 case involving Dewayne Johnson, it was found Monsanto "acted with malice or oppression" and was responsible for "negligent failure" by not warning consumers about the carcinogenicity.21
Internal documents have revealed the EPA has colluded with Monsanto to protect the company’s interests. California's Environmental Protection Agency's Office of Environmental Health Hazard Assessment (OEHHA) also announced in 2015 that they intended to list glyphosate as a chemical known to cause cancer under Proposition 65, which requires consumer products with potential cancer-causing ingredients to bear warning labels.
Monsanto filed formal comments with OEHHA saying the plan to list glyphosate as a carcinogen should be withdrawn. When they didn't give in, Monsanto took it a step further and filed a lawsuit against OEHHA in January 2016 to stop the glyphosate/cancer classification. OEHHA filed a motion to dismiss the lawsuit, and a Fresno, California superior court judge ruled on their behalf in February 2017.
As far back as 1983, when a Monsanto study revealed an increased cancer risk in mice exposed to glyphosate, the EPA asked for further studies, but the company simply refused. They claimed the study wasn't a concern because one mouse not exposed to glyphosate also developed a tumor, and used this to support its safety.
Johnson's lawyer, Timothy Litzenburg, told Rolling Stone, "They fought over that one mouse's kidney for years, spent millions of dollars on experts, instead of just doing the test again. The EPA even offered a compromise — let's just do a kidney and liver test. Monsanto said 'no.' It's amazing how often they're able to say no to the EPA."22
Previously court-ordered unsealed documents have revealed that Monsanto scientists ghost-wrote studies to clear glyphosate's name and even hired a scientist to persuade the EPA to change its cancer classification decision on the chemical.23
Further, government email communications released through a Freedom of Information Act request showed that the EPA coordinated with Monsanto to slow its review of glyphosate.24 The draft conclusion that was finally released in April 2019 was supposed to have been published by October 2015.
Email correspondence showed Jess Rowland, who at the time was the EPA's deputy division director of the Office of Chemical Safety and Pollution Prevention and chair of the Cancer Assessment Review Committee (CARC), helped stop a glyphosate investigation by the Agency for Toxic Substances and Disease Registry (ATSDR), which is part of the U.S. Department of Health and Human Services (HHS), on Monsanto's behalf.
In an email, Monsanto regulatory affairs manager Dan Jenkins recounts a conversation he'd had with Rowland, in which Rowland said, "If I can kill this I should get a medal,"25 referring to the ATSDR investigation, which was put off for years. However, according to U.S. Right to Know, the deception runs even deeper:26
"[T]he trove of documents newly obtained from within EPA and HHS demonstrate that the assistance to Monsanto came not only from Rowland but also from even higher-level EPA officials.
Rather than encourage and assist the toxicology review of glyphosate, Monsanto and EPA officials repeatedly complained to ATSDR and HHS that such a review was unnecessarily 'duplicative' and should take a back seat to an EPA review also underway."
Glyphosate Continues To Be the Most Used Agricultural Chemical
There are many routes of exposure to this likely carcinogen, including via your drinking water and diet. In testing done by Friends of the Earth (FOE), 100 percent of oat cereal samples tested positive for residues of glyphosate.27
The average level of glyphosate in cereal samples was 360 parts per billion (ppb), which FOE noted is more than twice the level set by Environmental Working Group (EWG) scientists for lifetime cancer risk in children. Some of the cereal samples contained residues as high as 931 ppb.
As it stands, nearly 300 million pounds of glyphosate are used in the U.S. each year,28 with unknown consequences to human health — but what we know so far doesn't look good.
What's clear is that Monsanto/Bayer continues to work very hard to suppress any and all negative publicity about its golden child glyphosate, even as the truth continues to emerge. Unfortunately, Bayer's top priority continues to be appeasing its shareholders and appealing glyphosate lawsuits instead of stopping the use of this dangerous chemical.