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5:17 PM EDT, October 19, 2013
That Stephan Schmidheiny has played a huge role in environmental matters around the world over the last 37 years is not up for debate.
What is hotly contested about the Swiss industrialist-turned-philanthropist and author is whether he's rightly portrayed as a hero or a villain. And Yale University, which gave Schmidheiny an honorary doctorate in 1996, is caught in the middle — with that degree as a global political football.
In 1976, when he was 29 years old, Schmidheiny took over the Swiss Eternit Group, a business founded by his grandfather. The company had become one of Europe's largest asbestos firms, making cement products girded with the deadly mineral throughout the continent and in Brazil. Schmidheiny was 29 and a newly minted lawyer.
Within 10 years, the Italian arm of the business, with five factories, closed in bankruptcy.
After leaving Eternit, Schmidheiny, born rich and growing richer through ties to Switzerland's best known companies, turned his attention to ecologically sustainable development. He created a charity and endowed it with more than $1 billion, launched a nonprofit foundation that operates in 17 Latin American countries and founded a global business group dedicated to private-sector environmentalism.
That was the Stephan Schmidheiny that Yale feted, and not just with an honorary degree. In 2000, Schmidheiny was a keynote speaker at the centennial of the Yale School of Forestry and Environmental Studies, which also published some of his writings.
But those early years running the Swiss Eternit Group have come back to haunt him.
In 2009, Schmidheiny, by then retired from active public life, was charged with creating an environmental disaster and failing to take protective measures in Turin, Italy — a criminal case that he did not attend. Experts testified that the company had caused nearly 3,000 deaths.
Schmidheiny was convicted in 2012 and sentenced to 16 years in prison.
On June 3 of this year, an Italian appeals court upheld the environmental disaster charge against Schmidheiny, now 65, and upped the sentence to 18 years. Schmidheiny's lawyer vowed to appeal and beat back a conviction he calls "absurd."
Now the battle has reached Yale.
Asbestos victims and family members in the northern Italian city of Casale Monferrato, joined by others around the world, petitioned Yale on Sept. 25 to revoke the honorary degree — a move that would be unprecedented for Yale.
The university issued a statement in full support of Schmidheiny, and of its decision to confer the degree 17 years ago.
"Yale does not believe that the ongoing legal proceedings in Italy provide cause to reconsider" the honorary degree, spokesman Thomas Conroy said in an email.
Which picture is the real Stephan Schmidheiny? His accusers say — and the Italian courts agree — that he launched a coverup in 1976, when the dangers of asbestos were not fully known to the public. His defenders and his official biography claim he laid the groundwork for a cleanup and a transition away from the deadly industry soon after he took over the company.
If the university further investigates the case and Schmidheiny's life — as it should — it will find a remarkable story that raises questions about medical science, environmental law and politics, corporate responsibility, and, perhaps, the quest for redemption by a man who was born into a construction materials fortune and retired as an ecological philanthropist and author.
Glory And Death
After Eternit, Schmidheiny went on to become one of the world's leading advocates of sustainable development.
He founded the World Business Council for Sustainable Development, espousing a sort of free-market environmentalism. He wrote pioneering works, including "Changing Course: A Global Business Perspective on Development and the Environment" in 1992, a bestseller in which he coined the term "eco-efficiency," timed to coincide with the United Nations Earth Summit in Rio de Janeiro.
His Avina Foundation, based in Panama, helps to save valuable, sensitive tracts of land as Latin American economies expand.
"Mr. Schmidheiny is a model and a reference for thousands of leaders in the sustainability movement worldwide. He has created a number of organizations that promote sustainability in Latin America and globally," said Sean McKaughan, the Avina president.
Schmidheiny was so prominent in corporate life in his home country — at Nestlé, Swatch and ABB, among others — that he's been called the Bill Gates of Switzerland. An art collector, he also was on the chairman's board of advisers at the Museum of Modern Art in New York for several years.
And the biography on his website doesn't ignore the asbestos plants; on the contrary, it says the young Schmidheiny "immediately began to drive forward the exit from asbestos processing, which was considered to be a worldwide pioneering achievement."
That's not how they see it in Casale, in the famously scenic Piedmont region — on the Po River near the foothills of the Alps — which went on to become one of the world's tragic centers of asbestos poisoning.
Casale and the other cities and towns are not only grieving over 3,000 people who have died, according to experts who testified in the trial, of mesothelioma, lung cancer and asbestosis. They are also facing new cases, new deaths, at a rate of 50 a year in Casale alone, which has a population of about 100,000.
And the deaths are not expected to abate for years to come, as asbestos-caused cancers can take decades after exposure to emerge.
It is almost entirely traceable to the industrial plants, according to Italian epidemiologist Benedetto Terracini, who studied the effects and testified on behalf of the accusers in the trial. "The incidence rate is approximately 50 times higher than the average Italian figure," Terracini said in an email.
One reason: Asbestos contamination was not limited to the Eternit factory.
"Leftovers of the process of producing asbestos cement were generously given by the factory to residents in order to insulate their houses," Terracini said.
The company "even threw some in the river and it made white beaches for the children," said Victoria Franzinetti, a translator for the Turin court who is now working with the victims' and families' group as a volunteer. "Some of these children are now adults and they're starting to die."
The question in the case, and in the view of Yale or anyone else looking back, is not only what happened but who had what responsibility and when they had it. To Schmidheiny's accusers, he's guilty because he controlled the Swiss company that controlled the Italian company that spread asbestos after it was known that the material caused cancer.
And worst of all, the accusers say, Schmidheiny's company never issued any warnings.
The face of the suffering belongs to Romana Blasotti as much as anyone. She lost her husband, daughter, sister, grandson and cousin to mesothelioma, and is now president of the victims' and families' group AFEVA. In a recorded statement to The Courant translated by Franzinetti, Blasotti said she would like to meet Schmidheiny in person, to make him realize "how much pain he has caused."
"I'm very bitter in thinking how much time has passed since we started to fight the consequences of asbestos and how much pain we have experienced. … He didn't even have the courage to stand up in front of us in court. It is really shameful to try and paint with white your image … as a philanthropist," she said, using an Italian idiom meaning to whitewash one's past.
"When they gave him an honorary degree, the university cannot have known what he had done, but he knew."
As Schmidheiny's defense team and his supporters tell it, the court unfairly boils generations of tragedy down to the actions of two men — Schmidheiny and a co-defendant who died this year before the appeal verdict — who didn't have direct management control over the factories, and whose role lasted just a few years in the history of an asbestos business that started in 1907.
Even if Schmidheiny had controlled the Italian factories, they argue, the epidemiology studies didn't establish that the deaths happened as a result of exposure after 1976, when he took over Eternit — only that they were caused by asbestos at some point.
In a jointly issued statement, Schmidheiny's lawyer in Rome, Astolfo Di Amato, and his spokesman in Switzerland, Peter Schürmann, called the verdict "absurd" and "a travesty."
"The appellate proceedings in Turin must also be described as a politically motivated, unfair trial with massive prejudgment in the media," the statement said. "In an unprecedented campaign that lasted for years, the prosecution, organized victims' representatives, union representatives, and local media reduced the responsibility for the asbestos tragedy to Stephan Schmidheiny and the recently deceased co-defendant, Louis de Cartier, and considered their guilt as proven right from the beginning."
They say the science of asbestos was just coming clear in those years. "A technical and scientific consensus was still far off," they said in an emailed response to questions, and even so, Schmidheiny forbade the use of asbestos waste, they said — part of his plan to improve safety.
Barry Castleman, a public health expert and environmental consultant specializing in asbestos, testified in the trial that the dangers of asbestos were known to the industry in the 1930s or earlier, and were documented in studies in the 1960s. "There's no excuse for them to say that," he said in an interview, referring to the contention that the science was unclear.
Swiss Eternit Group never made a profit from its Italian holdings after 1976 and transferred the equivalent of $120 million in today's dollars to implement "safe use" in the Italian plants, Di Amato and Schürmann said.
"The dust exposure at the Italian Eternit SpA decreased drastically in compliance with the then applied international standard."
Not true at all, the accusers charge. Eternit did not dispose of the asbestos correctly even by the standards of the 1970s and '80s.
"There was so much dust you couldn't breathe. I saw my colleagues die, 20 a year, and we protested but the people who were carrying out the medical checks said that everything was all right," said Marco Molinaro, who worked in factory from 1952 to 1985, in a statement for The Courant translated by Franzinetti.
Stephan Schmidheiny himself, who was once in the top 100 list of global billionaires and is still worth $3 billion, according to Forbes, has never spoken publicly about the case. His defenders argue that Italy stands alone in charging executives with crimes — in contrast to the civil cases in virtually all other nations' judicial systems.
Italy does indeed stand alone, said Castleman, of Maryland. "Only the Italians have had the guts to actually go after the people who were responsible and take action," he said.
Crucial 1976 Meeting
The accusation that company officials failed to adequately warn workers is traced to a meeting that Schmidheiny convened in 1976 in Neuss, Germany, soon after he took control of Swiss Eternit.
By the '70s, some nations were starting to take action, including mandatory warning labels in the United States and a ban in Sweden.
Against this backdrop, the young Schmidheiny convened top managers for a three-day conference in Neuss. The subject: What to do about the new wave of alarms.
The 105-page, typewritten minutes from the meeting, the company's own internal report, offers evidence to both sides.
"Public ignorance about the hazards of asbestos was critical to the rising market for asbestos well into the 1970s, even while the medical literature accumulated an ever more threatening picture of the consequences," the report said. "The press has organized a campaign against us … political coercion is being used against the asbestos cement industry."
The report continues: "We are morally bound to safeguard the health of our workers in the asbestos cement industry. … It is important not to panic. These three days were essential for technical managers, who were shocked. The same must not happen to the workers. … The struggle against dust in the factory must be carried out as if natural, and necessary work must be carried out without too much fuss but with energy."
One appeals judge caused a stir in the Italian media by comparing the Neuss meeting to the Nazis' Wannsee Conference in 1942, where they developed the "Final Solution" to exterminate all Jews. The remark gave fuel to both sides — that Schmidheiny is monstrous, and that the appeals court judges had their minds made up from the outset.
Schmidheiny's defense says the company believed back then that asbestos could be safely managed. His online biography says he "immediately began to drive forward the exit from asbestos processing, which was considered to be a worldwide pioneering achievement." The Neuss report supports that claim, especially in Italy, which had weak asbestos rules and no product-liability lawsuits against companies — a main factor that drove American asbestos firms under.
Even his detractors agree that Schmidheiny ordered his engineers to develop alternatives to asbestos early on in his tenure. But the court, the accusers and the victims' families who delivered the petition to Yale are focusing on the part about failing to raise alarms.
Yale In The Crossfire
The petition to Yale, drafted for the Casale group by New Haven attorney Christopher Meisenkothen, appeals to the university's standing as a renowned center for asbestos research and treatment of related diseases, including mesothelioma, a cancer of the membranes in the chest and abdomen.
"I have seen Yale's exceptional work on asbestos-related disease firsthand, as many of my firm's local clients have been treated at the [Yale Occupational and Environmental Medicine] Clinic over the course of the past 30+ years and several of Yale's excellent doctors have testified as expert witnesses on behalf of asbestos victims," Meisenkothen wrote in the petition.
Revoking the degree "would certainly be in keeping with Yale's long and valued tradition of helping asbestos victims," wrote Meisenkothen, of Early, Lucarelli, Sweeney & Meisenkothen LLC, a firm specializing in asbestos work.
The petition lists 71 scientists, physicians, environment experts and authors from around the world in support, and includes the largest U.S. asbestos victims group. It was mailed and emailed to the 18 trustees of the Yale Corporation, including Yale President Peter Salovey and Connecticut's top two elected officials, Gov. Dannel P. Malloy and Lt. Gov. Nancy Wyman, who are ex-officio members.
Aside from revoking the degree, the petition asks Yale for a meeting with the trustees this fall, records of the honorary degree deliberations, and a list of Schmidheiny's donations to the university. Meisenkothen, who is working on the petition free of charge, said he has received no responses except from former Yale President Richard Levin, to say he's no longer president.
Supporters of the victims' families suspect that Schmidheiny curried favor with Yale with large donations. But Conroy, the Yale spokesman, said "there are no records of any substantial gifts to Yale" by Schmidheiny or by charities that Schmidheiny controls.
Yale has never revoked an honorary degree, and it is rare for any university to do so. Conroy, in the statement, said a Yale committee nominating Schmidheiny for the degree in 1996 took into account that he "dismantled a decades-old family asbestos processing concern."
Sean McKaughan, president of Schmidheiny's Avina Foundation, was adamant that Yale not be swayed by the Italian court case.
"I am unfamiliar with Yale's review policy, but the Italian justice system is quickly losing credibility internationally, and I am sure they are aware of that," he said. "An objective look at the evidence and the proceedings leaves little doubt that the trial has been fundamentally flawed."
An attack on the Italian justice system by Schmidheiny's supporters is expected, especially considering the judge's seemingly irresponsible comparison with the Nazis.
The legal arguments will play out for years, as the highest court in Italy considers the case, and as authorities in Brazil prepare a similar case, according to several sources. But separately, especially if Schmidheiny is found guilty after the last Italian appeal, Yale has the means, the motivation and the moral standing to conduct its own investigation on behalf of the victims, on behalf of its own reputation and on behalf of Schmidheiny.
Copyright © 2014, The Hartford Courant