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CSR Issue Report: Private Partnerships


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Title: CSR Issue Report: Private Partnerships

CSR Issue ReportPrivate Partnerships Public
  • March 14, 2007
  • Michael Abbott
  • Jeff Denby
  • Margot Kane
  • Michael Thomas

  • Background
  • Examples of Tension and Historical Responses
  • Industry Affiliates Program
  • The Stakeholders
  • Current UC Berkeley Partnerships
  • Case Studies
  • Novartis
  • Dow Chemical
  • BP
  • Examining Student Engagement
  • Assessing Corporate Strategy
  • Recommendations
  • Questions?

  • Research universities have long collaborated with
    industry to their mutual benefit
  • Prior to 1980 research funding came primarily
    from the Federal Government.
  • Bayh Dole Act of 1980-gave universities the right
    to seek patents for discoveries
  • Financial Incentive to Seek Patents
  • Financial Incentive to Seek Private Funding

Background Continued
  • The relationship between Industry and
    Universities has been productive when
  • scholars are free to pursue and transmit basic
    knowledge through research and teaching
  • scholars have freedom of thought and expression,
  • the researcher is able to convey the results free
    of coercion.
  • The relationship becomes contentious when
  • the financial ties of researchers or their
    institutions to industry exert improper pressure
    on the design/outcome of research
  • the specific research will be used by private
    industry for an unintended or malicious purpose
  • when university stakeholders object to the
    funding because of the companys history or

Examples of the Tension
  • The death of a patient in a gene-transfer study
    at the University of Pennsylvania in Fall 1999,
    and claims that the financial ties of the
    researchers to the company that financed their
    work had biased their judgments.
  • Research on a thyroid replacement drug at the
    University of California at San Francisco was
    funded by Knoll Pharmaceuticals who had a vested
    interest in demonstrating the drugs superiority
    to generic drugs. In this case, the research
    proved the generic drug worked just as well as
    the replacement drug. For seven years, Knoll
    Pharmaceuticals successfully blocked publication
    of the research despite the researchs support by
    the Journal of the American Medical Association.
  • Researchers who defy their corporate sponsors may
    lose their funding. When one Toronto scientist
    revealed in 1998 a serious side effect of
    deferiprone, a drug for a blood disorder, her
    contract was terminated.

Examples of the Tension Continued
  • More dramatically, when a number of researchers
    concluded that Remune, an anti-AIDS therapy, was
    of little benefit to patients, the company
    funding their research, the Immune Response
    Corporation, sued the scientists in 2001 for 10
    million for damaging its business.
  • Researchers who defy their corporate sponsors may
    even lose support by the university. A highly
    visible whistle-blowing episode occurred in
    Canada in which a faculty researcher was removed
    as a principal investigator in a drug study when
    she broke a gag rule about the toxic risks to
    some of her patients. The institution denied her
    legal assistance on grounds that she had not
    obtained the approval of the administration for
    her confidential agreement with the drug company,
    an agreement which an investigator characterized
    as a very big mistake.

Examples of the Tension Continued
  • A study (published in Science and Engineering
    Ethics, II) stated that of 789 journal articles
    published that year, in 34 percent of the
    articles one or more author had a financial
    interest in the subject matter being studied.
  • Where the financial resources of an academic
    department are dominated by a corporation there
    is the potential for distorting the priorities of
    undergraduate and graduate education, and for
    compromising scientific and research openness.
  • An additional concern focuses less on research
    and teaching in a single department than on the
    ethics and academic credibility of the entire

Historical Responses to the Tension
  • In 1995 Congress passed regulations regarding
    researchers who receive grants from the National
    Science Foundation or the Public Health Service.
    The legislation has research disclosure
    requirements and financial reporting
  • University Response Most research universities
    have adopted policies-some more stringent than
    others. At Washington University in St. Louis,
    for example, there is no monetary minimum for
    reporting financial ties with a corporation that
    sponsors research, while researchers at Johns
    Hopkins University must have the approval of the
    institution before they accept a fiduciary role
    with a company, if such a position is related to
    their academic duties.
  • Professional Organizations The American Society
    for Gene Therapy and the American Society for
    Human Geneticshave called on their members not
    to own stock in any company that funds their

Industry Affiliates Program
  • Goals include
  • raising research and administration funding to
    support the centers research activities and
  • addressing unmet needs in scientific disciplines
    that may not be supported by public funding
    agencies due to programmatic changes or lack of a
    direct match (i.e., not fitting in any one
    federal programmatic funding priority)
  • fostering the development of entirely new
    applications areas in the translational research
    space, for which new graduate programs must be
    established and/or new faculty hired
  • bridging the gap between basic research performed
    at the University and the more applied, or
    translational, research necessary to create
    commercial products and services for public
  • creation and maintenance of vital private-public
    relationships that result in the future
    employment of our graduates, retention of our
    faculty and other University employees being as
    industry consultants, in donations, research
    sponsorships and collaborations, and conduct of
    clinical trials
  • opportunities for providing industry members with
    advance information about Berkeleys cutting edge
    research in fields of interest to the members
  • learning industry perspectives on possible
    commercial problems, or directions or
    applications of basic research
  • Many industry affiliates programs exist on campus
    and include some combination of the following
  • A. Emphasis on Learning about Berkeley Research
  • B. Access to Intellectual Property. 
  • C. Emphasis on Collaborative Research and Mutual

Stakeholders Interests
  • Students and Student Government
  • Faculty and Academic Departments
  • Administration
  • Industry
  • Berkeley Community
  • Statewide UC System

Case Study 1 Novartis
  • 1998-2003 funding agreement between an entire
    academic department Plant and Molecular Biology
    and Novartis, a major agricultural
    biotechnology firm (now Syngenta.)
  • 25 million (5M/year) to fund faculty and
    graduate student research and equipment.
  • Viewed as an experiment and subject to internal
    and professional external review (performed by
    UMichigan for 225,000.)

Novartis Stakeholders I
  • PMB department doubled its funding
  • Some faculty did not apply for funding through
    this deal with the devil
  • Every project proposed by faculty was funded as
    proposed lots of blue sky and overhead
  • Start-up funding for research that would later be
    more competitive for federal funding
  • Novartis very hands-off in managing relationship
  • Graduate students benefited from access to
    state-of-the-art equipment, corporate
    professional connections, and proprietary
    databases and research results
  • No discernable effect on undergraduate students
  • Joined public in fear of corrupting academic
    research learning

Novartis Stakeholders II
  • Access to creative, independent research results
    from graduate, post-doc, and faculty
  • Ability to negotiate exclusive ownership of
    patents/inventions developed through research
  • Exposure to future employees/hiring advantage in
    Bay Area
  • Only exercised four patent options and only
    retained one. (Genetic research became more
    difficult to patent.)
  • Had right to delay publications of research
    results infrequently exercised

Novartis Stakeholders III
  • UC-Berkeley exploring first major private sector
    funding as solution to fiscal instability
  • Negotiations were done secretly
  • Overhead Admin revenue stream
  • Cutting-edge PMB graduate department (previously
    declining enrollment)
  • Sentiment of distrust against biotech
    agriculture (i.e. Monsanto)
  • Distrust of nature of secretive contract
  • Fear corporate funding would skew, bias, or
    hinder research in PMB either deliberately or
    indirectly (through providing industry-specific
    equipment databases)
  • Belief that allowing one company first dibs on
    university-developed intellectual advances
    corrupted nature function of public land
    grant universities
  • Lacked understanding of both agreement and
    Novartis activities due to private nature of

The results
  • UC-Berkeley, College of Natural Resources, and
    PMB department heavily criticized for
    non-inclusive approach to deal (i.e., vegan
  • Media played polarizing role
  • University found itself in debate regarding role
    of universities, faculty, and academic
    departments in education, research, and society
    public vs. private, individual vs. communal
    diversity, etc.
  • Public advocacy also devoted energy to attacking
    Novartis and role/motives in funding PMB.
  • State Senate academic journals debated nature
    of relationship between Novartis UCB
  • Funding not renewed by Novartis, and little
    directly gained by company through faculty
  • PMB faculty often used Novartis Seed funding to
    jump to larger federal grants upon promising
  • Internal and External Reviews concluded the both
    the worst fears and the best hopes were not

Lessons learned
  • Without transparency and public disclosure, the
    worst will be made of any deal by both public and
    media (if you dont say it first, the media will
    do it for you in a way you wont like.)
  • Corporations, faculty, students, and
    administrators all have different ideas of what a
    university should embody and what roles it should
    play these differing viewpoints must be brought
    to consensus in major decisions.
  • Early and often communication on the behalf of
    all parties is essential to accurately portraying
    goals, motives, likely outcomes, etc.
  • The Novartis deal was not what the
    public/faculty/students feared, but nor was it
    what the industry hoped for. The PMB appears to
    be the only satisfied party, having received
    large amounts of unrestricted funding for 5
    years. This is not a sustainable way to partner
    with corporate!
  • Possibility that initial negative public
    attention convinced Novartis to 1) not exercise
    patent options and 2) not renew funding.
  • Meanwhile, after this experiment, UC-Berkeley has
    continued to accept major corporate funding under
    new policies and an Industry Affiliation
    Membership Program that places very specific
    limits on corporate access to intellectual
    property funding and prevents funding of entire
    programs by one corporate entity.

External Review Recommendations
  • Avoid industry agreements that involve complete
    academic units or large groups of researchers.
    (In order to not compromise diversity)
  • Reassess in a comprehensive fashion the
    implications of non-financial and institutional
    conflicts of interest.
  • Encourage broad debate early in the process of
    developing new research agendas.
  • Be attentive to the formulation of new goals when
    motivated by a disruption of patronage or by
  • Make organizations associated with UC or
    supported by institutional resources transparent
    to the public.
  • Assess institutional obligations and commitments
    to reliable production and communication of
    regulatory science.
  • Strive to educate the public on the specific
    nature of intellectual property, technology
    transfer, and the nature of institutional
  • Work to identify and prevent the masking of
    intended applications of knowledge or potential
    negative consequences of commercialization with
    the privileges implied by academic freedom.
  • Begin the difficult task of determining the role
    a public Land Grant university should play in the
    twenty-first century by re-examining core

  • Creativity, autonomy, and diversity are the
    three highest priorities/characteristics of
    universities that underlie their societal value
    and contribution. Exclusively corporate-funded
    and/or federally-funded research can compromise
    all of the above.
  • Best Quote Believe me, Berkeley professors are
    too intractable to become corporate lackeys...But
    what about elsewhere?

Case Study 2 BERC Dow ChemicalOverview
  • Berkeley Energy Resource Collaborative (BERC)
  • Inter-disciplinary student run group established
    in 2005
  • Mission BERC was established in 2005 at UC
    Berkeleys Haas School of Business to harness the
    strengths of the universitys students, faculty
    and programs across the energy and natural
    resources sectors.
  • Represents over 190 members from from the Haas
    School of Business, Lawrence Berkeley National
    Labs, the Energy Resources Group, College of
    Natural Resources, Boalt Hall School of Law, and
    the UC Energy Institute.
  • BERC accepts 50,000 from Dow Chemical to sponsor
    the UC Berkeley Energy Symposium
  • Six weeks before event, student organizers are
    made aware of a non-binding 2004 ASUC resolution
    (198) prohibiting students from accepting money
    from Dow

1. Source http//berc.berkeley.edu/about.html 2.
Source http//www.asuc.org/documentation/view.p
Case Study 2 BERC Dow ChemicalStakeholders
  • BERC
  • High quality symposium
  • Respectful of relationship with greater
  • Dow Chemical
  • Publicity for their sustainability program
  • Relationship with Haas, UC Students
  • UC Students
  • Concern for human rights issues
  • Policy Constructive Engagement or Outright
  • Administration
  • Haas Relationships with Dow
  • UCB Dept. of Chemical Engineering (500 million)
  • Affiliate Groups
  • Students for Bhopal

Case Study 2 BERC Dow ChemicalCreating a
  • Are there more options than take it or leave
  • BERC Leadership and Faculty Advisors weighed
    creative solutions
  • Create a panel or separate event to discuss human
    rights questions around Dow
  • Offer to accept half the amount (BERC had another
    donor lined up for the other half) provided that
    Dow donate the difference to a human rights
  • Dow seemed reluctant to modify their level of
  • They have dealt with this before (University of
    Texas University of Michigan) and know exactly
    what they are willing to do
  • Prepared to send representatives to campus
  • Will not consider alternate funding arrangements
    for legal reasons as cases are still pending in
    many areas
  • Barriers to negotiation
  • Dow The stakes are low take the check or dont
  • BERC The symposium is on sustainable energy, not
    human rights. This is not the right forum for
    this debate.

1. Source Interview with Jit Bhattacharya BERC
Co Chair
Case Study 2 BERC Dow ChemicalThe Final
  • At the start of the final meeting, Jit felt that
    had a vote been taken, BERC would have accepted
    the money
  • During the discussion group organizers came to
    general consensus on the following points
  • BERC represents the larger Berkeley community and
    its mission is to integrate, not alienate, the
    UC community
  • The right thing to do was to be engaged with Dow
    on a constructive basis, but the timeframe was
    too short and Dow was clear in their response
  • There was not enough transparency around why Dow
    was chosen in the first place, though time
    permitting, a case could (and should) be made to
    the University to take the money
  • BERC returned the 50,000 to Dow

1. Source Interview with Jit Bhattacharya BERC
Co Chair
Case Study 2 BERC Dow ChemicalKey Lessons
  • Credit to BERC leadership for building consensus
    and considering all the stakeholders, even those
    they may not have agreed with
  • The responsible outcome is often unclear, and a
    function of perspective and interests
  • Size of the relationship matters how would Dow
    have responded differently if the stakes were

1. Source Interview with Jit Bhattacharya BERC
Co Chair
BP-Berkeley Deal Energy Biosciences Institute
  • Deal basics
  • 500M 10-year contract with BP the largest deal
    in UC Berkeleys history
  • Partners Lawrence Berkeley National Lab and
    University of Illinois at Urbana-Champaign
  • Proprietary and Open research components
  • Programs
  • Feedstock development
  • Biomass depolymerization
  • Biofuels production
  • Fossil fuel bioprocessing and carbon
  • Socio-economic development
  • 115 earmarked for new building paid for by State
    of California and Donations

Stakeholders Interests
  • BP
  • Research into the growing, harvesting,
    processing, and distribution of biofuels
  • Improve reputation to make the company seem more
    environmentally responsible or a significant
    effort to invest in the development of real oil
  • University
  • Be on the leading edge of research
  • new resources and ability to sustain research for
    10 years
  • prestige
  • Faculty
  • Leading edge research
  • academic freedom issues
  • Students
  • Potential for graduate work
  • university corporatization
  • Public
  • Development of alternative fuels
  • Community outreach and environmental effects of a
    new building
  • The Developing World
  • Economic and social development or disaster

Potential Wins
  • New scientific discoveries leading to
    economically viable alternative fuels that have a
    positive impact on reducing climate change
  • Steve Chu (Director of LBNL) UIUC is growing
    miscanthus for the past 20 years so the idea is
    this grass grows much, much faster than the other
    types of plants we grow for food and it requires
    much less water, much less fertilizer, these are
    all good things. This is an unproved crop, even
    with simple breeding we think we can make this
    much better. Then you take that grass, and the
    primary bottleneck right now is how do you
    convert this cellulosic material into ethanol or
    into some other biofuel? Right now, it costs, and
    the estimates vary, somewhere to two,
    two-and-a-half times more than turning a starch
    like corn into ethanol.
  • Developing a successful partnership framework for
    academia, research, and industry to work together
  • Such a successful venture could serve as a model
    for future university-industry deals at other
  • Championing scientific research AND addressing
    the impending social and environmental challenges
    while partnering with for-profit industry
  • Dan Kammen (Director of the Renewable and
    Appropriate Energy Laboratory) I think one
    aspect of it is were not the easiest date, but
    were not the easiest date in a good way, in the
    sense that were going to poke and prod in not
    just the basic science but also in the systems
    and engineering and ethics and impacts and the
    whole management of biofuels. Because land
    issues, land tenure, land quality are critically
    important to sustainability, not just on an
    ecological basis but also in terms of people
    around the world, rich and poor.
  • Maybe, but how is this monitored?

  • Three big concerns
  • Process
  • Sustainability and Justice
  • Corporatization
  • Process
  • UC Berkeley did not follow the recommendations of
    the University of Michigan report that was
    developed after the Novartis debacle

  • Sustainability and Justice
  • Deforestation and displacement of traditional
  • Will labor be exploited in the developing world
    to grow energy crops?
  • Brazil 200,000 migrant workers already being
    called ethanol slaves
  • Bush signs Ethanol Alliance with Brazil but
    refuses to cut hefty import tariffs
  • Monthly wage of USD200, 12 hour shifts in heat
    above 90oF, stay in overcrowded expensive
  • 17 workers died of exhaustion in past 2 years
  • 55 increase in ethanol crop in next 6 years.
    Where will this be planted?
  • Energy and Transportation issues
  • Use an enormous amount of energy in the
    processing of Ethanol. Tropical crops have high
    energy efficiency while temperate crops such as
    corn have low efficiency and may even have a
    negative energy balance.
  • Ethanol cannot be piped, must be shipped and
  • Concern over the creation of GMOs

  • Corporatization
  • Will Academic freedom be compromised?
  • Who will control the content and research
  • There will be proprietary research conducted by
    BP that is based on the findings by university
  • From the proposal
  • The proprietary component will be carried out by
    BP personnel in a central Berkeley campus
    location under an operating lease. BP personnel
    will engage in proprietary research in the leased
    space and will have no obligation to publish
    research performed in the leased space. UCB,
    LBNL, and UIUC research personnel should be
    excluded entirely from the space in the
    performance of their university activities.
  • We envision that BP investigators will be located
    in an area of the EBI site that will allow a high
    degree of flow between personnel in the open
    and proprietary components of the EBI, but will
    also allow restriction of access as needed.
    However, we also expect that BP investigators
    will actively collaborate on open research
    questions with UCB, LBNL, and UIUC employees,
    students, and post-docs, and will have access to
    the research facilities, libraries of the
    partner institutions. The EBIs director and
    deputy director will have confidentiality
    agreements with BP.
  • Will BP exploit this partnership with respected
    institutions like UC Berkeley to improve its own
    image in a giant greenwashing initiative?
  • From The Foundation for Taxpayers and Consumer
    rights The regents should carefully scrutinize
    the proposed arrangement with BP, paying special
    attention to wording that gives the British-based
    company rights to use UC-Berkeley's name in BP's
    advertising and marketing efforts.

  • Who is in control of this research agenda and
    what is the purpose of a university?
  • Many faculty believe that a partnership with
    industry legitimizes their research because it
    directs it in such a way that is immediately
  • Steve Chu Yes, you want to train students and
    create knowledge, but you also want to solve the
    problem and the problem is how do we get onto a
    much greener path towards energy. This is why
    its so important to partner with industries at
    the beginning. If we dont do that . . . what
    happens is that you can get some scholars who go
    down there and theyre aiming for the Science
    paper, the Nature paper, and then after that
    its someone elses problem, and they may not
    know how to approach things that would scale
    properly in an industrial environment.
  • BP cannot solve all the problems associated with
    biofuels and so they want some of the research to
    be open research. BP wants to be highly
    involved in this open research but then as some
    developments look promising they would like to
    take the research proprietary. The nature of
    such proprietary research would not be revealed
    and so scientists would not know to what their
    personal work had contributed.

  • In the future, will corporate agendas shape the
    content of education?
  • Chancellor Birgeneau I think this is probably
    going to play a lead in our attempts to
    reformulate how we do undergraduate and even
    graduate education here at Berkeley. So its
    really a remarkable opportunity which will go
    well beyond a sustainable environment and may
    impact how we do education in public
  • Chancellor Birgeneau Energy first, global
    poverty second
  • Berkeley has the biggest collection of social
    scientists actively interested in the environment
    of any university in the world. It is interesting
    to note that none of these social scientists
    that are so abundant here were consulted for the
    writing of the proposal nor are any named as part
    of the management/academic team for the new EBI.

Strategic Recommendations for BP/UCB
  • Set up an academic committee that oversees the
    research and determines whether it is abiding by
    the tenets of academic freedom and if there are
    alarm bells that dictate new directions or
    potential social/environmental issues that need
    to be explored.
  • BP should not be permitted to use UC Berkeley in
    its advertising nor corporate responsibility
    promotions the conflicts of interest are too
    risky and such benefits should not be the point
    of the research partnership
  • BP and the university partners need to
    acknowledge that a real outcome of the research
    may be the conclusion that biofuels will be a
    financially profitable but neither an
    environmentally nor socially sustainable
    alternative to fossil fuels. Real and public
    discourse on the intentions for the research,
    regardless of outcome, need to be established

Strategic Recommendations Students
  • Corporate reluctance to conduct negotiations more
    publicly/transparently than industry norm earns
    the quick distrust of student population, who has
    little contact with private sector. Industry
    needs to consider student population as partner
    as well as faculty and administration.
  • University administration must acknowledge role
    and impact of students and work to fill knowledge
    gaps, include student government in developments,
    and involve likely cooperative student groups.
  • Anticipate media involvement use media to
    transparently communicate to and educate public
    about intentions of partnership.
  • Ensure student (graduate and undergrad)
    populations benefit from agreement, though
    improved access to equipment, research
    opportunity, fellowship, etc.

Strategic Recommendations Faculty
  • University should promote cross disciplinary
    representation on the proposal committees and
    department boards to ensure diversity
    independent thought research
  • Involve wider range of faculty in discussions and
    planning and eventual sharing of grant access to
    ensure better buy-in and wider range of
    applications for research (i.e. BP deal did not
    include social-environmental researchers)
  • Promote and protect faculty independence and
    autonomy and remove incentives that might overtly
    bias research direction, revelations, or results

Strategic Recommendations Corporate/University
  • Balance benefits, motives, and credibility
  • Universities have a higher level of trust and
    credibility than corporations Universitys
    interest is to have resources because of funding
  • Negotiations need to be conducted in more open
    manner that satisfies source of value
    credibility of both University and Industry.
  • Public-Private partnerships can be beneficial for
    academia and industry, but there are issues that
    need to be addressed.
  • Deal needs to be structured in such a way that
    the university retains its independence and
    credibility and the corporation provides
    resources to get what they need.
  • Stakeholders need to be engaged to a level that
    is reasonable for all sides and to an appropriate
    level. All stakeholders need to be considered
    but will not necessarily be satisfied

Sources Novartis
  • http//www.sacbee.com/static/live/news/projects/bi
  • External Review of the Collaborative Research
    Agreement between Novartis Agricultural Discovery
    Institute, Inc. and The Regents of the University
    of California.
  • http//www.berkeley.edu/news/media/releases/2004/0
  •  http//www.berkeley.edu/news/berkeleyan/2003/01/2
  • research.chance.berkeley.edu/docs/FINALIndustryAff
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