Monsanto Business Practice in Indonesia

You may have seen articles or stories claiming Monsanto engaged in improper activities in Indonesia. The truth is that Monsanto did act incorrectly in Indonesia between 1997 and 2002. This involved a series of illegal or questionable payments totaling at least $700,000 made to various Indonesian government officials during that time period. These payments were financed, in part, through unauthorized, improperly documented and inflated sales of Monsanto’s pesticide products in Indonesia. During this period, the Indonesian affiliates violated the accounting policies, controls and procedures of Monsanto.

Monsanto became aware of financial irregularities in its Indonesian affiliates in 2001. Monsanto began an internal investigation, which continued at the direction of the board of directors. The company voluntarily notified the U.S. Securities and Exchange Commission (SEC) and the U.S. Department of Justice (DOJ) of the results of this investigation and disclosed the books, records and compliance irregularities involving the Indonesian affiliates. Subsequent governmental investigations revealed a $50,000 payment to an Indonesian official that the company’s investigation did not uncover. Monsanto updated its disclosures as this additional information was developed and cooperated with both the SEC and DOJ throughout their investigations.

It was Monsanto’s responsibility to make sure these improprieties never happened in the first place. We failed to do so, and we take full responsibility for this failure.

In agreements with DOJ and SEC, Monsanto paid $1.5 million in fines for violations of the Foreign Corrupt Practices Act (FCPA). We also agreed to a binding commitment with DOJ to refrain from further violations of the FCPA. All employees responsible for these actions were terminated and we corrected our accounting of the transactions. We also put an improved company-wide Integrity/business conduct program into action which is fully supported by our board and executive team and which is monitored by both internal and external audits.

If you look on the Monsanto Pledge Web site we say that “Integrity is the foundation for all that we do.” We know that it is easy to make statements like this and that we are judged by our actions. While our actions in Indonesia certainly did not support this statement, at Monsanto we took a hard look at ourselves and at what had transpired, and in response decided to fashion what we believe to be a best-practices FCPA compliance program. We ask that you judge us not only by what occurred in the past, but also by our commitment to maintaining and improving our integrity in the future.