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December 11, 2006

Marriott Combats Child Sexual Exploitation
    by Bill Baue

Shareowner engagement by Boston Common Asset Management and the First Swedish National Pension Fund prompts Marriott to explicitly address child sex tourism in its human rights policy.

SocialFunds.com -- In 1999, Costa Rican courts sentenced a man to eight years in prison for aggravated pimping of minors in a child sex tourism (CST) network that included receptionists at the San José Marriott (ticker: MAR), according to a shareowner resolution filed late last year with the company. The filers--a cross-Atlantic coalition of Boston Common Asset Management and the First Swedish National Pension Fund (Första AP-fonden)--withdrew the resolution early this year when Marriott agreed to dialogue.

"Companies do not want to see a resolution on their ballot that raises the issue of child sexual exploitation because it is such an egregious violation of children's human rights," said David Schilling, program director on human rights at the Interfaith Center on Corporate Responsibility (ICCR). ICCR, a coalition of 275 faith-based institutional investors and socially responsible investing (SRI) firms that conduct shareowner activism with companies, is coordinating a broader campaign with travel and tourism companies on the issue.

Last week, the filers announced the results of their engagement--Marriott revised its Human Rights Policy to explicitly address the sexual exploitation of children.

"It's fantastic that Marriott is making a commitment to address the sexual exploitation of children--trafficking in children has become a globalized industry," said David Batstone, author of Not For Sale: The Return of the Global Slave Trade and How We Can Fight It (HarperSF, February 2007). "Kids get moved across country borders so they can be more easily controlled, and sexual predators are traveling long distances to take advantage of defenseless children."

"The reason I am enthused about this corporate commitment is that most major hotel chains have dragged their feet to make a public stand against sex trafficking--it's almost as if they are afraid to draw too much attention to the crisis, and thereby be identified as a site of exploitation," Mr. Batstone told SocialFunds.com. "Their silence, however, is damning, as we will never offer serious resistance to sex trafficking if the tourist industry does not get involved in a major way--it's that simple, and urgent."

The Swedish fund had been trying to engage Marriott on CST since 2002 with no response.

"Once the resolution was filed, Marriott was extremely responsive--by the time we met with them in March, they had formed a Human Rights Task Force of nine high-ranking executives and done a great deal of work internally," said Lauren Compere, Boston Common's director of shareholder advocacy. Boston Common answered the Swedish fund's call for a partner versed in US shareowner engagement approaches after hitting a brick wall with Marriott. "The pension funds in Europe have a conventions-based approach--they generally look at potential violators of international codes and norms, and Marriott fit the bill because of the Costa Rica case."

Carlson Hotels and Accor Hotels demonstrate industry best practice by adopting the Code of Conduct for the Protection of Children from Sexual Exploitation in Travel & Tourism (or "the Code.") The Code contains six elements, including establishing an ethical policy on CST, training personnel, requiring suppliers to repudiate CST, providing travelers information warning against CST, and reporting annually on code implementation.

"Marriott is a core holding for us, and we know the company has never adopted a 'off the shelf' code of conduct," Ms. Compere told SocialFunds.com. "Implementing the Code was our first ask, but we came to realize the company was going to make the policy their own, so we pushed as hard as possible to make sure they incorporated elements of the Code into their policy."

At the first meeting, Ms. Compere also asked what Marriott was doing on the ground to combat CST, and the task force members did not know.

"One of the first things the task force did was send out an inquiry to their global operations seeking active models and initiatives to base their response on," said Ms. Compere.

As a result, Marriott partnered with nongovernmental organizations (NGOs) combating CST both locally and globally--a strength of Marriott's policy, according to Rev. Schilling of ICCR.

Other strengths include educational elements, according to Mr. Batstone. For example, Marriott is now training employees to recognize warning signs of potential CST activity. Marriott is also now including a brochure on CST developed by the United Nations World Tourism Organization in the 20 million pre-arrival messages it sends guests globally every year.

"Its weakness, on the other hand, is that it does not set up clear channels for monitoring and
reporting trafficking abuses," said Mr. Batstone. "It could go a step further to offer employee
training in the protocol for reporting sex trafficking first to the public justice system."

"Taken in isolation, corporate policies like the one that Marriott has developed in partnership with NGOs will not deliver the total solution to child slavery, but each advance in policy and public awareness builds an environment wherein kidnapping children from their homes and forcing them to heinous acts will not be tolerated," he added.

ICCR has launched a campaign to address CST by sending letters to a number of tourist industry companies.

"In June, at our annual shareholder meeting, there was a real outpouring of interest for advocacy work on the commercial sexual exploitation of children," Rev. Schilling told SocialFunds.com. "We learned through our engagement with Marriott that we could have a real impact and a quick turnaround on this issue, and we anticipate that being the case with other travel companies."

"We want to address this in a systematic way giving companies--whether it's hotels such as Hilton or Starwood or cruise lines such as Royal Caribbean or Carnival--opportunities to respond," said Rev. Schilling. "If there's no response or if the response is insufficient, then we would move forward with a shareholder resolution."

© SRI World Group, Inc. All Rights Reserved.

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