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Sodexho Bows to Pressure, Announces Sale of CCA Stock

Bowing to pressure from angry U.S. and Canadian student activists, Paris based Sodexho Alliance (SA) announced plans to sell its 8 percent stake in Corrections Corporation of America, as soon as CCA completes a corporate restructuring.

But in a statement released October 9, 2000. Not With Our Money! a coalition of student activists opposed to prison profiteering, expressed skepticism about the company's pledge and called on Sodexho to divest itself of all private prison holdings (including recently acquired U.K. Detention Services and Corrections Corporation of Australia) by April 1, 2001.

SA's North American subsidiary, SodexhoMarriott Services has been the target of protests on 50 of the 500 colleges and universities where the company operates dining hails and snack shops. At four campuses State University of NY at Albany, Evergreen State College (WA), Goucher College (MD) and James Madison University (VA) the protests have cost the company lucrative dining service contracts. SA's chairman, Pierre Bellon, acknowledge the student protests in a press release announcing the company's plans to sell off CCA stock.

"Today, we face a challenge in North America over the issue of forprofit prisons," Bellon said. "A handful of activists have called into question the integrity of Sodexho Alliance and Sodexho Marriott Services with a series of baseless and inflammatory accusations..."

Bellon goes on to defend SA's private prison investments, at one point referring to prisoners as a "special needs group" and claiming that the company's "goal was to improve their living conditions, offering innovative training and work programs to help them prepare for their return to society." Nonetheless, he said, the company will sell off its CCA shares. But not immediately.

"Sodexho Alliance has obligations to its shareholders to manage its investments prudently," Bellon said, "and with CCA shares at historically low price levels, and the company in the midst of a turnaround effort under new management, now is not the right time to sell that stake. However, we commit today that once the contemplated recovery plans have been carried out by the new CCA management, Sodexho will divest its shares."

Arizona State University senior Matt May says that Bellon's announcement may be little more than a PR ploy. "I smell a rat, and not just the kind that leaves droppings in their cafeterias," says May, referring to health code violations that plagued SodexhoMarriott's SUNNY dining hails in Albany, NY.

Pari Zutshi, a junior at Hampshire College (MA), points out that Sodexho recently increased its global private prison investments by taking over 100 percent ownership of Corrections Corporation of Australia and U.K. Detention Services. "If you follow the international press," says Zutshi, "you know that Sodexho has been criticized for shortchanging asylum seekers in Britain through their voucher system and exploiting child labor at the Olympic Stadium in Australia. If that's how they treat refugees and kids, imagine what those prisons must be like."

 

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