We have received the following countermotions to items 2, 3 and 4 of the Agenda of our Annual Meeting on May 4, 2006.
Regarding Item 2 of the Agenda, shareholder Professor Dr. Rochlitz has submitted the following countermotion:
"Security program for jobs, for engaging and taking on 100% more trainees, and for retaining the know-how of older employees in the amount of 1 (one) billion euros"
The reasons stated by the shareholder are:
"The downward development of jobs at BASF AG - parallel to the development of increasing profits - must finally be broken. There must be an end to the constant reduction of employment through what is known as natural fluctuation and what is known as staff levels regulation, which amounts to a more or less elegant showing them the door. BASF must at last be opened again to young people, to more trainees. And it must not be allowed to shut off all older staff into premature retirement or into short-working programs for employees nearing retirement.
In the year in which BASF made the highest profit ever achieved, it ought, in the light of social responsibility, responsibility to the employees and to the people in the Palatinate and to society as a whole, to be the proper thing to see to it that there is a reversal of the human resources development to more jobs.
If this moral precept is not finally adhered to, BASF management and BASF shareholders should not be surprised if there are louder and louder calls in the future for the control of corporate giants like BASF to be placed in the hands of society and the employees. Such expropriation of the shareholders and deprivation of management's powers would then, however, be entirely in the sense of the German Constitution, which after all requires in Article 14 that "Property entails responsibility". Neither management, namely the Board of Executive Directors and the Supervisory Board, nor, up to now, the shareholders' Annual Meetings have discharged this responsibility. For years now, BASF has been pursuing an unconstitutional business policy. It is a question of finally breaking with this. It would be better to start it this year than to wait until French conditions compel this reversal."
Shareholder Rochlitz has also filed the following countermotion to Item 2:
"EUR 100 million should be made available from the profit retained for drawing up an alternative, sustainable business policy for the agricultural sector."
The reasons stated by the shareholder for this countermotion are as follows:
"BASF's business policy for the agricultural sector must be fundamentally reoriented. The weekly reports by Greenpeace about pesticide findings in fruit and vegetables show that conventional agriculture - also supported by BASF and its products - must no longer be pursued. It amounts to insidious damage to the health of all humans who are dependent on it. BASF's agricultural business policy must at last realize that Green Gene Technology has finally reached its limits: Following the death of test animals after they had been fed genetically modified peas (Australia), this point has been reached.
Any further research and production, etc., must be stopped. The attempt to develop a new form of botany with genetically modified plants and thus a new agriculture must be regarded as having failed. Thus it must be clear: The coexistence of agriculture involving gene technology and conventional agriculture is not only impossible but extremely dangerous."
As regards Items 3 and 4 of the Agenda, shareholder Rochlitz moves that:
"The activities of neither the Supervisory Board nor the Board of Executive Directors should be formally approved."
The reasons that the shareholder gives are:
"BASF AG is continuing its business policy against its employees undeterred. The number of permanent staff in Ludwigshafen is soon to be reduced to the 30,000 employee limit. It is true that this is not achieved by involuntary redundancies, but by using what are known as flexible human resources instruments of "human resources regulation". These include short-working programs for employees nearing retirement, severance payments, pre-retirement arrangements, business startup loans, etc., constantly associated with regulations that burden the mutual benefit funds, from whose financing, on the other hand, companies are withdrawing more and more. It is also reported that the acceptance of severance payments is being enforced in some cases by harassment-like practices.
The victims of this development are, on the one hand, the majority of the staff who increasingly have to carry a heavier work load, the trainees whose chances of being taken on when their training is finished are less and less certain, and older members of staff who would like to make their proven know-how available but are not allowed to. With this reduction of jobs, BASF has been and is one of the many protagonists who are partly responsible for the mass unemployment of more than five million people in Germany. The BASF Board of Executive Directors is also responsible for the consequences of the increasing work pressure among the workforce, such as the resulting increasing mental and physical illnesses (impairment of health), the destruction of social and family (more divorces) relationships and a possible deterioration of the safety situation in the production plants. Strictly confidential discussions with outsiders provide better information about the mood of a workforce under pressure than a telephone survey with general, superficial questions. The assent to BASF's management obtained over the phone is reminiscent of the 99.99% assent to totalitarian regimes.
Ever since 1990, BASF has been achieving its profits to a considerable extent from the cost degression resulting from the shedding of jobs. Profits also result to a further considerable extent from the reduction in tax and social security contributions.
The massive resistance of the chemical industry in Europe and the United States generated at all political levels by members of BASF's Board of Executive Directors and Supervisory Board as well as by the U.S. Administration to the new European chemicals policy (REACH: greater safety regarding chemicals) - originally indeed committed to sustainability - has been irresponsible and immoral. With this lobbying work, above all Messrs Voscherau and Strube have done the European and German chemical industries a disservice. They have torpedoed innovativeness in the direction of a truly sustainable and less dangerous chemical industry. Thus they have prevented the creation of new jobs. Their cooperation with the Bush Administration, which must be described as criminal in many fields, is also reprehensible, just as is their cooperation with the Chinese Administration with its contempt for humanity."
Administration's comments on the countermotions of shareholder Rochlitz:
BASF continues to be faced with the necessity of asserting itself successfully in global competition. A flexible work organization and personnel costs conforming to the market also serve the company in 2006 to stand up to international comparison and thus secure jobs for the future. With our products and services, we want to shape our customers' and employees' future successfully and thus grow profitably and enhance the value of our company. For us, successful entrepreneurship means combining economic success with environmental protection and exercising social responsibility. Thus our products used in agriculture to protect crops comply fully with the national registration requirements of the countries in which they are marketed. If they are used properly, there is absolutely no danger to humans or the environment. We do not consider that it makes any sense to alter the company's strategy or to redistribute the profit retained.
We emphatically reject the shareholder's accusations, particularly concerning the pursuance of an unconstitutional business policy, the responsibility for mass unemployment, adverse effects on employees' health and the alleged resistance to a sustainable chemicals policy.
Otherwise, the reasons for his countermotions - with only slight deviations in some cases - contain the same arguments that he has advanced for years at our Annual Meetings. In each case, the Annual Meeting has carried our motions with an overwhelming majority.
The Board of Executive Directors