United States Securities and Exchange Commission
Washington, D.C. 20549
Notice of Exempt Solicitation
Pursuant to Rule 14a-103
Name of the Registrant: Tyson Foods, Inc.
Name of persons relying on exemption: American Baptist Home
Mission Society and 12 co-filers: Adrian Dominican Sisters; Congregation of Sisters of St. Agnes; Congregation of St. Joseph, OH;
Daughters of Charity, Province of St. Louise; Dignity Health; Felician Sisters of North America; Mercy Investment Services; Portico
Benefit Services (ECLA); Sisters of Providence, Mother Joseph Province; Franciscan Sisters of Allegany, New York; Sisters of St.
Francis of Philadelphia; and Sisters of the Good Shepherd.
Address of persons relying on exemption: Investor Advocates
for Social Justice (formerly the Tri-State Coalition for Responsible Investment), 40 S. Fullerton Ave, Montclair, NJ 07042
Written materials are submitted pursuant to Rule 14a-6(g)(1)
promulgated under the Securities Exchange Act of 1934. Submission is not required of this filer under the terms of the Rule, but
is made voluntarily in the interest of public disclosure and consideration of these important issues.
The American Baptist
Home Mission Society and 12 co-filers urges stockholders to vote FOR the Shareholder Proposal
on Human Rights Due Diligence at The Tyson Foods Inc. Annual Meeting on February
6, 2020.
40 S Fullerton Ave, Montclair,
NJ 07042 ◊ 973-509-8800 ◊ info@iasj.org ◊ www.iasj.org
IMPORTANT PROXY VOTING MATERIAL
Shareholder Rebuttal to Tyson Foods on
Human Rights Due Diligence
Summary of the Proposal
This proposal asks for a report on Tyson’s human rights
due diligence process to assess, identify, prevent, mitigate, and remedy actual and potential human rights impacts in company-owned
operations and value chain. The requested report would also include information about stakeholder consultation and how Tyson tracks
the effectiveness of its efforts.
Support for this proposal is warranted and in the best interest
of shareholders because:
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Failure to conduct effective human rights due diligence may have negative
financial impacts on Tyson, such as fines, lawsuits, diminished worker attraction or retention, and loss of business opportunities.
Yet Tyson’s disclosures on human rights provide little assurance to shareholders that its existing commitments are being
effectively implemented to assess, identify, prevent, mitigate, and remedy adverse human rights impacts.
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There are human rights risks associated with Tyson’s business
activities, such as worker health and safety, discrimination, right to water, health (food safety), and forced labor.
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Tyson’s human rights-related performance and disclosures lag
behind peers.
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Arguments in Favor of the Proposal on Human Rights Due Diligence
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1.
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Tyson does not disclose information on implementation of its human rights commitments.
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In its statement of opposition to the proposal, Tyson references
its Code of Conduct, Team Member Promise and Supplier Code of Conduct it has in place, but these referenced documents do not respond
to the proposal’s request because the existence of a code is not evidence of implementation of a commitment to respect human
rights throughout its operations and business relationships. First, these codes are not Human Rights Policies and do not include
an explicit commitment to respect human rights. Second, Tyson lacks disclosure of its processes to implement human-rights related
commitments, such as who has responsibility for overseeing human rights performance and if that staff has relevant human rights
expertise, how Tyson assesses whether and where human rights risks are present in its operations or value chain, how adherence
to relevant codes are monitored and evaluated, how Tyson confirms its direct suppliers cascade expectations to sub-tier suppliers,
whether and how it consults with affected stakeholders, or how the company measures the effectiveness of such policies in managing
human rights risks. Although Tyson’s Sustainability Report and UN Global Compact Annual Report on Progress are Tyson’s
primary disclosures that cover human rights, the requested information on human rights due diligence is not included in either
report.
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2.
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Tyson faces human rights risks that may present financial or reputational risks if not adequately managed.
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The human rights impacts raised in the proposal are material
to the company and may impact its business relationships and social license to operate with its employees, suppliers, customers,
or communities. The Sustainability Accounting Standards Board (SASB) identifies water and waste management, ecological impacts,
product quality and safety, employee health and safety, and supply chain management as material for Meat, Poultry, and Dairy companies,
in which Tyson is categorized. Human rights due diligence not only protects stakeholders who may be harmed, but helps businesses
minimize expensive legal, operational, and reputational risks, which Tyson has faced in the past.1
For example, human rights due diligence can mitigate risks in
the workplace, where a history of recurrent labor rights abuses in Tyson facilities may hurt its ability to attract, hire, retain,
and maintain good employee relations. Tyson’s retention rate for 2018 was 61.3%, revealing high employee turnover.2
Protecting workers is also essential to avoiding strikes or work stoppages. With respect to suppliers, Tyson sources the majority
of its chickens, turkeys, hogs, and cattle, from contract growers, and must be able to attract and maintain contracts by treating
growers fairly, respecting environmental regulations, and consulting with community stakeholders before expanding operations. Failure
to maintain good relations could pose a risk of supply chain disruption.3
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Tyson faces human rights risks in its operations, such as the
right to safe and healthy working conditions, the right to health (linked to food quality), equality and non-discrimination, human
right to water, decent work, rights of migrant workers, and meaningful consultation with potentially affected groups.
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A recent Human Rights Watch Report on the conditions in U.S. poultry processing plants documents severe injuries, respiratory
conditions and eye irritation from repeated chemical exposure, and fear of retaliation, especially among migrant workers, in Tyson’s
Albertville, AL plant. These risks to workers are exacerbated by the demands of increased line speeds, which also contribute to
increased risks to food safety.4
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In 2019, Tyson faced a cumulative $233,548 in fines for 6 occupational health and safety violations across multiple facilities.5
The documented fear of retaliation may contribute to underreporting of injuries by workers, which Tyson does not acknowledge in
its reporting on worker injury rates.6
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Tyson facilities reportedly use labor from individuals sentenced to rehabilitation facilities, which may constitute forced
labor.7
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Tyson and its subsidiaries have faced significant fines for employment discrimination.8
In 2016, the Department of Labor ordered Tyson to pay a $1.6 million settlement in back wages and benefits following systemic hiring
discrimination, impacting 5,716 job applicants.9
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Tyson has a history of water pollution incidents at facilities resulting from poor wastewater management,10
a material issue for the company. Tyson has a poor track record on community consultation and disclosure about these impacts.11
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Tyson faces human rights risks associated with its international
expansion. Tyson acquired Keystone Foods in 2018, which includes operations in China, Malaysia, Thailand, South Korea and Australia.12
Tyson also recently purchased a 40% stake in the foods division of Grupo Vibra, a leading Brazilian poultry producer.13
In additional to potential risks associated with labor strikes, work stoppages or fines, there are documented risks of forced labor
in the Thai and Brazilian poultry industries, which may impact Tyson’s supply chain.14
Tyson is also exploring new business relationships with the Republic of Kazakhstan as well as China, following approval to export
U.S. poultry products and should have systems in place to assess and mitigate any related human rights risks.15
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Tyson faces human rights risks in its supply chain. With business
relationships with more than 11,000 “independent farmers” who may face risks around worker health and safety, discrimination,
decent work, health/food quality, and water or environmental degradation. Tyson’s Supplier Code lacks specifics about how
Tyson monitors grower compliance,16 and in its Sustainability Report, Tyson states,
“At this time, we do not screen our suppliers and contractors for human rights, including the right to exercise freedom of
association or collective bargaining.”
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Industry consolidation presents risks to small farmers, leaving them vulnerable to financial pressure, dependence on integrators
like Tyson, and unfair business relationships, as well as mistreatment, racial discrimination, and retaliation.17
This may expose Tyson to litigation risk and may harm the company’s ability to attract and maintain positive relationships
with independent farmers.
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Tyson’s land stewardship commitment does not address all of its water-related supply chain impacts.18
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Tyson sources commodities such as beef, soy, palm, and pulp/paper that present environmental and human rights risks linked
to deforestation.
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Lack of clear information about effective controls and management
systems for monitoring compliance with human rights standards or embedding human rights commitments in its operations, supply chain,
and international business presents risks of harm to Tyson’s reputation, brand, and business opportunities, and may result
in litigation, regulatory risk, and fines.
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3.
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Tyson’s existing implementation systems fall far short of meeting standards for human rights due diligence.
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Tyson has a responsibility to respect human rights. This entails
more than having a “safety culture” or “making a positive impact” where you operate, as Tyson referenced
in its opposition statement. All of its risks should be assessed, identified, and managed. Violations of human rights may occur
even as the company carries out operations in compliance with law. Investor expectations around how the company demonstrates it
meets this responsibility are increasing, yet the company does not conduct human rights impact assessments, disclose its most salient
impacts, nor does it provide adequate remedy when human rights impacts occur. The limited information Tyson discloses about its
existing management systems does not equate to human rights due diligence and is therefore inadequate for addressing human rights
risks.
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Worker health and safety committees are a step, but not enough.
Proponents appreciate that Tyson has safety committees composed of “team
members”, in place at all plants, to raise health and safety concerns to management and help implement solutions. However,
Tyson does not disclose how it measures the effectiveness of such committees in improving workplace conditions and whether these
mechanisms address all human rights risks facing workers.
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Tyson does not assess or disclose the company’s salient human
rights impacts, but uses only compliance-focused audits and supplier self-assessments. These are inadequate because they are
not specific to assessing the company’s human rights risks and are not benchmarked against international human rights standards,
as the proposal requests. Supplier self-reporting can often include inaccurate information on performance, resulting in underreporting
of noncompliance and calling into question the value and integrity of the audits.19
Tyson’s Social Compliance Program addresses labor rights in production facilities but does not identify or assess the company’s
broader human rights impacts or go beyond direct operations.20 It appears that
Tyson’s Workplace Conditions Assessment has no specific human rights criteria.21
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Tyson lacks a process to effectively remediate adverse human rights
impacts. Tyson's existing systems for addressing grievances are not sufficient for providing remedy for all potential human
rights impacts associated with the business and do not meet the effectiveness criteria of the UN Guiding Principles for grievance
mechanisms.22 Tyson has an Ethics Help Line, but it does not report on how it
provides remedy to stakeholders who use it. Tyson workers report fear of retaliation, which suggests there may be under-reporting
and this grievance mechanism is not perceived as legitimate or accessible.23
Tyson reports, “During FY2018, our Ethics Help Line received 5,379 contacts. Of the total calls, 76.8 percent were unsubstantiated
following investigation. The remaining 23.2 percent of calls were investigated and resolved.”24
The fact that three fourths of reported grievances were found to be “unsubstantiated” raises questions about the integrity
and effectiveness of the Help Line. Where human rights impacts are publicly known, such as water contamination incidents or worker
rights violations like those cited by Human Rights Watch, Tyson has not disclosed how it has made things right with these impacted
stakeholders or changed its systems to prevent such abuses from happening in the future, which may present litigation risk.
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Tyson’s lack of disclosure on these issues prevents shareholders
from assessing the extent to which Tyson is managing material human rights risks to the company.
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4.
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Tyson’s human rights-related disclosures and performance lag behind peers.
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Tyson’s human rights-related disclosures lag behind peers
in the food and beverage sector and fall far short of meeting disclosure expectations set by benchmarks widely used by investors
to assess companies on human rights.
The Corporate Human Rights Benchmark (CHRB) gave Tyson a score
of 10.2% in 2019, while the average score for the agricultural products sector is 24.2%.25 Tyson received zero points
on all five of the CHRB’s indicators for human rights due diligence, the subject of the shareholder proposal. Seven companies
in the agricultural products sector scored above 50%, and the top three companies, Unilever, Marks and Spencer Group and Kellogg,
scored above 60%.26 Leaders in the food and beverage sector like Unilever and Marks and Spencer both use the UN Guiding
Principles Reporting Framework to frame their human rights disclosures.27 The kinds of practices their disclosure demonstrates
include, for example, that Unilever works with internal and external stakeholders to identify its salient human rights issues
based on the most severe impacts to people and measures and reports on progress towards addressing each issue.28 Marks
and Spencer has a transparent and dedicated governance structure for managing human rights risks, including a Human Rights Practitioner
Committee and Human Rights and Modern Slavery Steering Committee that report to the board.29 Walmart, which accounts
for 16.9% of Tyson’s 2019 sales, scored 22.7%, suggesting Tyson may be held accountable for higher human rights standards
by customers, which it may not be able to meet. Tyson’s closest peer, Hormel Foods, received a 11.8%, scoring only slightly
above Tyson, suggesting there is an opportunity for Tyson to demonstrate leadership to address the need for improvement on human
rights disclosure across the meat and poultry sector. Tyson also received poor scores on disclosures around remedy, board responsibility
for human rights, independent human rights risk assessment, monitoring and implementation of human rights commitments, and supply
chain monitoring.
In the Ceres 2019 Feeding Ourselves Thirsty Benchmark on water-related
risks and relevant social criteria, Tyson’s overall score was 21 out of 100 points possible.30
Of the seven meat companies assessed, Tyson ranked fourth. Key metrics where Tyson received low points include zero
points for board oversight of water-related issues and for analysis of facility impacts, including evaluation of social and community
impacts of facility water use and wastewater discharge. Smithfield Foods and Hormel Foods received 38 and 28 points respectively.
For the agricultural supply chain metrics, Smithfield received three times the points Tyson did, receiving 18 out of 40 points
versus Tyson’s 6 points.31
Finally, Tyson’s human rights disclosures ranked poorly
in the 2018 KnowTheChain benchmark, receiving 12 out of 100 possible points.32
The industry average for the food and beverage sector is 30 points, with the top three companies, Unilever, Kellogg, and Coca-Cola
all receiving above 60 points. Walmart, Tyson’s largest customer, received 54 points. The meat companies assessed scored
fairly low overall, however JBS’s human rights disclosures scored significantly better than Tyson’s for the Traceability/Risk
Assessment and Remedy themes, receiving 19/100 on both indicators while Tyson received zero points for those themes.33
JBS has more robust programs in place than Tyson for assessing and mitigating forced labor risks in the supply chain.34
Tyson also received zero points for Recruitment and Monitoring. Tyson’s KnowTheChain score reveals significant
gaps in its human rights due diligence practices and disclosure.
The reports of these benchmarks further confirm that Tyson is
lagging peers on disclosure and failing to provide investors and stakeholders with relevant information needed to assess the effectiveness
of its human rights risk management systems.
Conclusion
Proponents of the proposal urge investors to vote FOR of
the Human Rights Due Diligence proposal at Tyson Foods, Inc. because:
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1.
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Tyson does not disclose information on implementation of its human rights commitments.
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2.
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Tyson faces human rights risks that may present financial or reputational risks if not adequately managed.
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3.
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Tyson’s existing implementation systems fall far short of meeting standards for human rights due diligence.
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4.
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Tyson’s human rights-related disclosures and performance lag behind peers.
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For questions regarding Tyson Foods Proposal for a report on
Human Rights Due Diligence please contact Mary Beth Gallagher, Investor Advocates for Social Justice (formerly Tri-State Coalition
for Responsible Investment), (973) 509-8800 or mbgallagher@iasj.org.
Sincerely,
Mary Beth Gallagher
Executive Director, Investor Advocates for Social Justice
Date: January 15, 2020
1 https://iasj.org/wp-content/uploads/Tri-CRI-Tyson-HRDD-Proxy-Memo-2019-FINAL.pdf
2 https://www.tysonsustainability.com/workplace
3 https://www.clarionledger.com/story/news/politics/2018/12/20/chicken-growers-slaves-own-land-look-sba-loans-big-poultry-ms/2339548002/
4 https://www.hrw.org/report/2019/09/04/when-were-dead-and-buried-our-bones-will-keep-hurting/workers-rights-under-threat;
https://www.fsis.usda.gov/wps/portal/fsis/topics/recalls-and-public-health-alerts/recall-case-archive/archive/2019/recall-034-2019-exp-release;
https://www.nbcnews.com/politics/white-house/tyson-wants-fewer-government-inspectors-one-its-beef-plants-food-n1041966;
https://www.cbsnews.com/news/tyson-chicken-recall-2019-95-tons-of-chicken-fritters-after-plastic-parts-found/
5 https://violationtracker.goodjobsfirst.org/parent/tyson-foods
6 https://www.tysonsustainability.com/workplace/health-safety
7 https://arktimes.com/arkansas-blog/2017/10/11/lawsuit-filed-over-unpaid-labor-by-drug-defendants-for-arkansas-poultry-company;
https://www.revealnews.org/blog/these-are-the-rehabs-that-make-people-work-in-chicken-plants/;
https://www.revealnews.org/article/they-thought-they-were-going-to-rehab-they-ended-up-in-chicken-plants/
8 https://violationtracker.goodjobsfirst.org/prog.php?parent=tyson-foods&order=pen_year&sort=desc
9 https://thehill.com/regulation/labor/299239-tyson-foods-to-pay-16m-to-settle-hiring-discrimination-charges
10 http://www.tysonfoods.com/media/news-releases/2017/09/tyson-poultry-inc-resolves-federal-concerns-about-2014-incident;
http://d1lge852tjjqow.cloudfront.net/CIK-0000100493/8c254ba4-9fc4-4b79-aaa1-a53bae963727.pdf; http://www.justice.gov/opa/pr/settlement-tyson-foods-address-multiple-releases-anhydrous-ammonia
11 https://abc3340.com/news/local/massive-fish-kill-in-black-warrior-river-stretches-40-miles;
http://mountaineagle.com/stories/sipsey-heritage-commission-seeking-action-against-tyson-foods-inc,20984 For example,
in June 2019 after a Tyson’s Hanceville, AL plant spilled untreated wastewater into the Black Warrior River, there was a
significant fish kill and high levels of E.coli in the water. Nearby communities noted there was insufficient communication about
the impacts of the spill on water quality on the environment and human health, negatively affecting the perception of the company
in the region.
12 https://www.tysonfoods.com/news/news-releases/2018/11/tyson-foods-completes-acquisition-keystone-foods
13 https://www.tysonfoods.com/news/news-releases/2019/8/tyson-foods-partners-grupo-vibra-continue-its-global-growth-strategy
14 http://hrn.or.jp/wpHN/wp-content/uploads/2019/06/Labour-Rights-Violations-in-the-Thai-Poultry-Industry-within-the-Supply-Chains-of-Japanese-Companies-2019-2nd-Ed.pdf
; https://www.reuters.com/article/us-brazil-slavery/brazils-chicken-catchers-are-victims-of-forced-labor-report-idUSKBN1DU2ZR
15 E.g. https://clb.org.hk/content/labour-relations-china-some-frequently-asked-questions
16 https://www.tysonfoods.com/who-we-are/our-partners/farmers
17 https://www.propublica.org/article/chicken-farmers-thought-trump-was-going-to-help-them-then-his-administration-did-the-opposite;
https://www.propublica.org/article/how-a-top-chicken-company-cut-off-black-farmers-one-by-one
18 https://www.tysonsustainability.com/environment
19 https://www.shiftproject.org/resources/publications/audit-to-innovation-advancing-human-rights-global-supply-chains/
20 https://www.tysonsustainability.com/workplace/ethics-compliance
21 https://www.tysonsustainability.com/sites/default/files/2019-07/WCA%20Sample%20Report.pdf
22 UNGP 31; https://www.shiftproject.org/resources/remedy/
23 https://www.hrw.org/report/2019/09/04/when-were-dead-and-buried-our-bones-will-keep-hurting/workers-rights-under-threat
24 https://www.tysonsustainability.com/workplace/ethics-compliance
25 https://www.corporatebenchmark.org/download-benchmark-data
26 https://www.corporatebenchmark.org/sites/default/files/2019-11/CHRB2019KeyFindingsReport.pdf
27 https://www.ungpreporting.org/database-analysis/explore-disclosures/
28 https://www.unilever.com/Images/human-rights-progress-report_tcm244-513973_en.pdf
29 https://corporate.marksandspencer.com/documents/plan-a-our-approach/mns-human-rights-report-june2017.pdf
30 https://feedingourselvesthirsty.ceres.org/company-scorecards/tyson-foods
31 https://feedingourselvesthirsty.ceres.org/company-scorecards/smithfield-foods
32 https://knowthechain.org/wp-content/plugins/ktc-benchmark/app/public/images/company_reports/2018_KTC_F_B_Scorecard_Tyson_Foods.pdf
33 https://knowthechain.org/benchmarks/comparison_tool/5/?company=117
34 https://knowthechain.org/wp-content/plugins/ktc-benchmark/app/public/images/company_reports/2018_KTC_F_B_Scorecard_JBS.pdf
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