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E. coli crisis illuminates need for full corporate accountability for private food-processing companies

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As the E. coli crisis at XL Foods in southeastern Alberta clearly illustrates, food safety is too important a topic to be shrouded in the secrecy associated with privately held corporations.

This lesson ought not to be forgotten if XL Foods happens to be sold to a publicly traded company in the fire sale its parent company now appears to be organizing.

It is time for Canadians to talk seriously about the need to increase transparency and accountability among privately held companies that receive public subsidies or do work that has an impact on the nation's wellbeing -- and this obviously includes food-processing corporations on both counts.

The idea of providing financial and additional critical information to the public is anathema to Big Business, which values its ability to hide its financial shenanigans and corner cutting from the public behind a curtain of proprietary necessity and competition. It's a commentary on the anti-public state of affairs in this country that at first any suggestion like this is sure to be treated as highly eccentric.

But when the health of literally millions of Canadians depends on the way these corporations operate their businesses, it is truly outrageous that companies like Nilsson Brothers Inc. and its XL Foods subsidiary can carry on largely without public scrutiny on the basis of obsolete, self-serving and unjustified corporate legal entitlements.

Naturally, if this idea were to become a real threat, a plethora of corporate meat puppets would soon rush to the TV studios to decry such interference in the "private" affairs of their principals. They would plead the necessity of keeping their corporate bosses' practices a strict secret on the grounds it is they who are taking the risks. The only problem with this argument, of course, is that it is un-inspected baloney!

As we have seen in the XL Foods E. coli crisis and the food contamination crises that preceded it, it is not at all only corporate owners who take the risks. First there are literally millions of Canadians young and old who eat the food these places process, the thousands of workers, farmers, contractors and entrepreneurs who depend on them for their livings, the reputation of other Canadian businesses at home and abroad, and the taxpayers who subsidize and underwrite their operations through tax breaks, grants, interest-free loans and other outright subsidies. Yet if they are privately owned, they are required to provide virtually no meaningful information about their operations to the public or any government agency.

The public interest is clearly not served by allowing corporations that impact the public interest to operate in secrecy, and the competitive advantages to those companies that do not sell their shares on the market are wildly exaggerated. After all, public reporting requirements do not seem to be a particular competitive disadvantage for many well-run publicly traded companies.

Opponents of this kind of thing would no doubt complain that such a radical step would impact their ability to sell to foreign investors. But foreign investors don’t have a history of doing much more than stripping the Canadian firms they buy of their assets and resources and shipping money out of the country. So how is that in the public interest?

Why make them report financial numbers, you ask? Because the finances of a company -- particularly the comparison of profits to revenue -- tell the story not only of the efficiency of the company, but its willingness to cut corners in ways that can impact the health, even the survival, of citizens who are otherwise defenceless against such corporate activities.

In effect, major food processing companies, whatever their legal ownership structure may be, are public institutions about which citizens need and deserve transparency and accountability. Since it is axiomatic that they will never provide such information willingly, it needs to be imposed on them by legislation.

Concerns about entrepreneurs and other small businesses being caught in the net of such "red tape," necessary and justified though it may be, can be dealt with at the stroke of a pen by setting a reasonable size under which companies would not be required to report -- say, eight or nine employees.

At the very least, no company ought to be allowed to bid or file for government contracts, subsidies or bailouts without committing to full financial disclosure to ensure transparency and accountability for the taxpayers who are paying the freight and, in the case of food processors, taking a direct risk.

The same must apply to foreign corporations that decide to do business in fields that affect national security, which from a common sense perspective includes food safety.

After all, as they say, "one of the hallmarks of a stable and mature democracy is financial transparency and accountability in institutions that serve the public." What institutions serving the public are more essential than corporations that are literally serving up our food?

The stakes (and nowadays the steaks too, sad to say) are simply too high not to demand this level of reporting by all parts of the corporate sector, regardless of its ownership structure.

This post also appears on David Climenhaga's blog, Alberta Diary.

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