Pantaleón

Reasons for Selecting Pantaleón

We chose this company because in the 1970’s Pantaleón employees went on a nine day strike that stopped production in all plants. Employees were disgruntled because top ranking members of their union were being victimized. They were also demanding better working conditions and higher compensation. Furthermore, the media accused Pantaleón of corruption because of their alleged involvement with the government in a strong anti-union movement which saw the disappearances of many union leaders. Pantaleón acknowledged there was a problem with their labor relations and worked together with their employees to improve working conditions and compensation plans. Additionally, Pantaleón also gave their employees a voice by integrating them in the businesses future plans and decision making process.

When Pantaleón faced an ethical dilemma they were quick to acknowledge the problem and find opportunities to make the situation better for all parties involved. By continuing to act this way they are able to set a strong example for other Guatemalan organizations to follow since corporate social responsibility is very limited still today.

Pantaleón’s Main Activities

The operations at Pantaleón can be divided into three main segments of activities which are agricultural, industrial, and commercial. The agricultural sector is in charge of producing and providing top quality sugar cane for its industrialization and providing efficient transportation services to employees as well as transportation for sugar cane and other products. The industrial segment is in charge of processing the sugar cane in order to produce different kinds of sugars as well as other products such as syrups and ethanol. Finally, the commercial segment is in charge of exports which are the biggest selling mechanism for the company and of domestic sales as well. Currently, Pantaleón in the largest producer in the Central American region and one of the top players in the Latin American market.

Pantaleón’s Ethical Challenges

The first challenge that Pantaleón is addressing is the environment as it is part of their philosophy to take care, maintain and preserve it. They have implemented several programs to eliminate pollution and waste from their manufacturing facilities. These programs include the installation of wet cyclical traps in their boilers to trap ash and soot particles. Also, waste from cane and mud sediments are treated and used as organic fertilizer to prevent water pollution in nearby rivers. Their clearing of sugar cane fields is based on a meteorological network that helps reduce its impact in the environment. Furthermore, a reforestation program was created five years ago and its current size is over 1,052 acres and growing each year. Pantaleón also produced 150,000 liters per day of ethanol last year and increase of over 600% from the previous years.

The second challenge became a priority after a nine day strike in the 70’s halted operations as employees were unsatisfied with their working conditions. Since then, Pantaleón has built, on their premises, living quarters, medical and orthodontic clinics, healthcare programs, and a full scale education program that is available to full time employees and their families. As for the seasonal workers, Pantaleón has created living quarters, food programs, transportation services, and recreational centers. Also, their facilities and procedures have been improved to meet the Occupational Safety and Health Administration standards to ensure the highest levels of employee safety and health standards.

Finally, since 1993 the Pantaleón Foundation (Fundación Pantaleón) was created and a significant percentage per metric ton of sugar produced is contributed. The foundation sponsors programs in the areas of health, education, community development, and the environment both in Guatemala and Nicaragua.

Pantaleón’s Ethical Credibility

After more than 150 years in business Pantaleón continues to be a leader for, not only Guatemalan, but Central American businesses. We believe that this business is really ethical because in Guatemala there is limited regulation for socially responsible practices, however they have continuously invested part of their profits on socially responsible practices. They also don’t publicize their CSR practices in order to gain a favorable public image or increase business, but other organizations and media are attracted to them because of their leadership in the issue.

Pantaleón has a code of ethics which clearly states the importance of respect towards their shareholders, managers, clients, employees, suppliers, partners, competitors, government, environment, society, church and community. It is also meant to be the base and pillar towards their behavior in any country where they invest and operate. Furthermore, it states that they will preserve and dignify the value of their brand, take care of their social license to operate, and be an example for society in order to achieve long term sustainability.

Further evidence of Pantaleón’s genuine commitment is their involvement with CentraRSE (Center for Socially Responsible Action) in Guatemala. CentraRSE is a private, non-political, and non-profit organization that aims to change business attitudes and impulse implementations of socially responsible practices. In 2007, Pantaleón received an award from CentraRSE for their outstanding working conditions.

Additionally, in 2007 the Organization of American States (OAS) awarded Pantaleón its Best Corporate Citizen of the Americas Award for their project “Visionary Schools: Building Citizenship”. The project’s goal is to promote the values of democracy and tolerance in public schools.

Future Challenges

The main future challenge that Pantaleon faces is maintaining their vision and values, especially socially responsible ones, as the company continues its rapid growth and expansion in the global market. It will be vital for them to continue acting ethically as they grow.

Improvements

There are two main things that Pantaleon can do to improve:
• Pressure their suppliers and their customers to engage into social responsible practices so that their values are reflected throughout the production and consumption chain.
• Pressure local authorities to incentivize social responsible practices through tighter regulations in the entire industry such as healthy environmental practices, and development of local communities.