PICTURE THIS SCENARIO: an ecologically-minded university sends a team of experts to a southern state to study the environmental effects of a proposed power plant. The study determines that if the power plant is built without the proper safeguards, it would emit dangerously high levels of sulphur dioxide. The team of experts is well aware that sulphur dioxide destroys crops, water supplies, and equipment owned by farmers in the area surrounding the proposed plant.
And when the team of experts returns to the ecologically-minded, socially-concerned university, what action does the university take? Although the evidence seems to indicate that the university should take active steps to oppose the plant, the university might do nothing.
Harvard finds itself in the midst of this environmental dispute. The University owns 561,000 shares of stock in Middle South Utilities, currently valued at $9.95 million. Arkansas Power and Light Co., a wholly-owned subsidiary of Middle South, plans to build a 2800-megawatt, coal-fired power plant on the banks of the Arkansas River.
Harvard's 561,000 shares make it the largest stockholder, but the University's holdings represent only 2 per cent of the stock. An Arkansas organizing group known as Arkansas Community Organization for Reform Now (ACORN) has asked Harvard to send a team of experts to study the power plant. The University's Subcommittee of Corporate Responsibility has consented to consider the proposal.
ACORN, for better or worse, is not just a group of hepped-up environmentalists hell-bent on saving the beauty that is Arkansas. The group describes itself as a state-wide collective of middle-and low-income families concerned with the "preservation and enhancement of the quality of life" in Arkansas. Actually, ACORN is a group of 35 different community organizations with 35 different problems. The environment is a concern for each group in the same way breathing is a concern for human beings: it's a given.
Harvard might decide to ignore ACORN's appeal for help, but that course of action is the least likely. The University has three other choices. It could bring direct pressure, as Middle South's largest stockholder, on the utility to install environmental safeguards. If the utility refuses to comply with Harvard's request, the University could dump all 561,000 shares of its stock onto the market, a move which might unnerve Middle South's board of directors.
Not-so-past history suggests that the first possibility is a pipe dream. When Harvard was asked to divest itself of Gulf Oil stock two years ago, the University said it preferred to hold onto its shares in order to maintain influence over Gulf's actions. The University could conceivably demand that AP&L; install the safeguards, but if AP&L; refuses, Harvard will lose its bluff.
Harvard's second choice is to support a proxy resolution against an ecologically-unsafe power plant. Although the University should spearhead a proxy fight anyway, if only for symbolic purposes, proxy fights are an inefficient and usually ineffective means of reform. Shareholders might care about the water and the air, but they care about money a whole lot more.
So, the University has only one choice left. It should accept ACORN's invitation to send a team of experts down to Arkansas and meet with the farmers who will be affected by the power plant.
THE UTILITY's own statements provide compelling evidence against the plant which will emit 460 tons of sulphur dioxide each day, or 13,000 tons each month. ACORN says that an iron smelter in Ontario emits 8,000 tons a month, and that vegetation within five miles of the smelter is wiped out.
Official agencies are also unsure about the power plant. The Arkansas Department of Planning has said that the plant could "possibily be the worst single source of air pollution in the world." The Arkansas Public Service Commission (PSC), which must license the proposed plant, submitted a list of 30 questions to AP&L; after it found the Environmental Impact Statement on the plant deficient.
If Harvard's team of experts sees first-hand and can confirm that the power plant will damage the crops in surrounding area, Harvard must present its findings to the Arkansas PSC. Proxy fights might be acceptable to socially-conscious but hopelessly idealistic liberals Harvard can stop the AP&L; project only by convincing the licensing body that the plant will damage crops, water supplies, equipment, and the ecological balance of the area.
Even if the PSC grants a permit to AP&L; after the proper safeguards are installed, no one can guarantee that the utility will not get its way in the end. That wonderful figment of everyone's imagination--the energy crisis--will provide AP&L; the perfect opportunity to plead for dispensation from the 1970 Clean Air standards.
And what of the villian, AP&L;? A spokesman for the utility shrugged off the statement that the plant is "the largest single source of pollution in the world." "By the time this plant is built," he said, "that statement will no longer be true." The sad thing is, he will probably be right.