G. Earl Parker on Johns-Manville's Investment in Asbestos de Mexico (1980)

A three-page memo of July 3, 1980, marked "Lawyers Work Product," from G. Earl Parker, J-M's general counsel, to J. A. McKinney, F. L. Pundsack, M. Harris, H. B. Moreno and Dr. Paul Kotin, on J-M's 40 percent interest in Asbestos de Mexico, which Banco Nacional de Mexico controlled. J-M had set two goals there: a code of conduct meeting the U.S. Foreign Corrupt Practices Act, and health standards improved "to a point that we could say that no asbestos related disease was being generated." Parker reported that W. B. Reitze found progress had stopped and conditions "may be worse in some locations than two years ago," with the Villa Hermosa plant "in a deplorable state" and the Guadalajara plant "similarly bad."

What it shows

The bank had opposed health spending as "non-productive expenditures," and J-M's managers on the board had resigned after the code of conduct effort failed. Parker linked the company's legal position to its conduct abroad: "Our ability to maintain our posture in courts and before agencies and Congress that we have acted responsibly to eliminate asbestos hazards under our control will survive only if we are willing to live up to our policy pronouncements on sales." He concluded that if Asbestos de Mexico engaged in "bribery, etc." or failed to move toward compliance, J-M must consider stopping fiber sales and "the divestment of our interest." Reitze had reported on the Mexican plants three years earlier (Reitze to Moreno on visits to Asbestos de Mexico, 1977).

In Johns-Manville's chronology

Johns-Manville's own chronology of what the company knew describes this document as follows:

G. Earl Parker, in a memorandum to J.A. McKinney, F.L. Pundsack, M. Harris, H.B. Moreno, P. Kotin dated 7/3/80 re Mexico Investments, Parker describes two basic goals that Manville had undertaken at Asbestos de Mexico. On paragraph 2, Parker describes the environmental health standards that were to be improved at Asbestos de Mexico to the point that Manville could say that no asbestos related disease was being generated.

Parker states that "Bill Reitze reports that progress has stopped and that conditions may be worse in similar locations than two years ago. The Villa Hermosa plant according to Reitze, is in a deplorable state. Parker states that the Guadalahara plant is similarly bad. At the bottom of page 1 and the top of page 2, Parker describes management problems with Asbestos de Mexico. Furthermore, on the bottom of page 2, Parker states, "Nevertheless, should Asbestos de Mexico engage in bribery, etc. or fail to move aggressively toward environmental compliance, we must consider, in addition to implementing our policy on sales, the divestment of J-M interests."