Shareholder Resolutions

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Company: Kraft
Subject: Nanomaterials Product Safety
Year: 2009
Sector: Food Retail/Processing
Lead Filer: As You Sow Foundation
Outcome: Withdrawn in response to corporate disclosures and commitments

Whereas: Nanotechnology is the science of manipulating matter at the molecular scale to build structures, tools, or products, known as nanomaterials. These extremely small particles create opportunities for innovation; however the scientific community has raised serious questions about safety. The processed food industry is researching and developing the use of nanomaterials, but it is not publicly known whether such materials are used in Kraft Foods products or packaging.

The novel properties of nanomaterials offer many new opportunities for food industry applications, such as potent nutritional additives, stronger flavorings and colorings, or antibacterial ingredients for food packaging. However these same properties may also result in greater toxicity for human health and the environment. Nanoparticles ingested from food or water can pass through the intestinal walls and reach the bloodstream. Because of their small size, nanoparticles are more likely to enter cells, tissues and organs where they may interfere with normal cellular function and cause damage and cell death.

Some consumer products that incorporate nanomaterials are likely to be used by children or pregnant or nursing women. Therefore, we are particularly concerned about liability from nanotechnology in this type of consumer product, including snack foods or other products marketed to children.

Nanomaterials such as silver, titanium dioxide, zinc, and zinc oxide, have been found to be highly toxic to cells in laboratory studies. These materials are used in some nutritional supplements, food packaging, and food contact materials.

Given recent scientific findings, proponents believe companies that use nanomaterials in consumer products may face significant liability and reputational risks. The insurance giant, Swiss Re, notes that “what makes nanotechnology completely new from the point of view of insuring against risk is the unforeseeable nature of the risks it entails and the recurrent and cumulative losses it could lead to, given the new properties -- hence different behavior -- of nanotechnologically manufactured products… …[T]hese artificially manufactured nanoparticles will be traceable back to the manufacturer, which makes the establishment of liability easier than in the case of substances that are universally present ...”

Proponents believe nanomaterials are being sold to the public at large without adequate testing to ensure safety, and often without any notice or warning of their presence or potential hazard. Proponents believe that the best way to protect the public and shareholder value is to avoid producing products with nanomaterials unless they have been subject to robust evaluation for human health and environmental safety, and to label all products that contain nanomaterials.

Resolved: Shareholders request that the Board publish by October 1, 2009, at reasonable cost and excluding proprietary information, a report on Kraft Foods’ policies on the use of nanomaterials in products and packaging. This report should identify Kraft Foods product or packaging categories that currently contain nanomaterials, and discuss any initiatives or actions, aside from regulatory compliance, that management is taking to reduce or eliminate potential human health impacts.