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New mantra for reformers: Don't sue.

By G. Jeffrey MacDonaldCorrespondent of The Christian Science Monitor / August 16, 2004



When Denny Larson wants to harness the power of law to keep oil companies honest, he sometimes leaves his legal files at home and visits a Louisiana neighborhood with a bunch of buckets.

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Residents living downwind from the state's many refineries use the special data-gathering buckets as backyard tools for measuring air quality. When toxic chemicals show up in a sample, the so-called "Bucket Brigade" might have evidence of illegal pollution, sometimes enough to trigger a government investigation and hefty fines.

The approach of Mr. Larson's army might be unique, but his foot soldiers are not alone in using the law creatively to make companies behave ethically. Reforms stemming from corporate scandals of recent years have made the law an increasingly flexible and far-reaching tool for ordinary investors, employees, and consumers who want ethical accountability but don't necessarily have the time, money, or desire to sue.

"It's using the environment the law has created," says Damon Silvers, an attorney with the AFL-CIO. "There are some things you can do that are free or cost very little and, if you have something real, can be very effective."

Among the more pungent examples of using the law without suing:

Pennsylvania's grass-roots movement against corporate hog farms. At least a dozen townships in recent years became so worried about the threatened stench of large hog operations that they passed ordinances restricting where new ones could set up shop or barring them altogether. The legal rationale: The waste they would generate could contaminate groundwater.

So far, attempts to override the local codes at the state level have failed, and the townships' basic legal tactic seems to be working.

"The regulatory regime was actually created to shield corporations from the individual, giving the impression of oversight while actually letting them do what they want," says Mary Zepernick, cofounder of the Program on Corporations, Law and Democracy, a grass-roots corporate watchdog group. By using township ordinances, opponents have forestalled the farms. But "real change can only happen on another level," she adds.

Sometimes, scandals provide the impetus for new legal tools that can lead to change.

In response to public outrage over Enron and other instances of corporate fraud, Congress has passed new legislation meant to increase public access to corporate information. Citizens exercising these access rights can help spur ethical behavior inside corporate cultures, observers say, without necessarily mounting a costly legal battle.

One potential pressure point: shareholder resolutions. This year, investors are bringing 1,126 policy proposals to vote at corporate annual meetings, up from 802 in 2002, according to the Investor Responsibility Research Center.

Another pressure point: federal regulators.

Since news of the scandals broke two years ago, thousands of people have called the Securities and Exchange Commission with tips on corporate misbehavior. As investors take advantage of their new rights under the law, regulators can no longer be aloof, says Tracey Rembert, director of shareholder activism for the Social Investment Forum. "I think it's had a profound effect on the SEC because they're not used to hearing from individuals."

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