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close this bookPartners in Time? Business, NGOs and Sustainable Development (UNRISD, 1999, 85 p.)
close this folderPart 2: Toward civil regulation
View the documentIntroduction
View the documentThe Political Dimensions of Corporate Environmentalism
View the documentNGOs and the Politics of Pressure in a Globalizing Economy
View the documentFrom Producer Politics to Consumer Politics
View the documentBeyond Legal Versus Self-Compliance
Open this folder and view contentsThe Case for Civil Regulation
View the documentThe Potential of Civil Regulation for the South
Open this folder and view contentsGovernmental Policy Frameworks for Civil Regulation

NGOs and the Politics of Pressure in a Globalizing Economy

The increasing size, notoriety and apparent uncontrollability of transnational corporations (TNCs) coupled with the spread of information technology are leading to a new NGO-driven politics of pressure. In recent years NGOs, in both the North and South, have focused increasingly on the activities of TNCs and the sensitivities of consumers to ethical concerns. This development is the result of a number of factors, which we describe below.

The first dynamic is the emergence of the global economy and the perceived decline in the role of the nation state. The 1990s have seen the rapid development of global money markets. Private investment in the developing world spiralled from 44 billion dollars in 1990 to over 167 billion dollars in 1995 (World Bank, 1996). During the same period, official development assistance (ODA) fell slightly, to a total of 59 billion by 1995 (OECD-DAC, 1996). Today private money is influencing the levels of environmental protection in the South as much as, if not more than, ODA.

From an environmental perspective, how the hundreds of billions of private capital are spent matters far more than how the few billion dollars of official assistance devoted to environmental investments gets dispensed (Esty and Gentry, 1997:2).

The globalization of trade and finance may be proceeding apace, but the globalization of governance is not. As capital and industry become increasingly large and mobile, the power of many national governments to set their own policy agenda has weakened (Korten, 1995; Camilleri and Falk, 1992). In a global market, if a TNC does not favour the policies of a particular government it may choose to locate elsewhere, particularly if the country in question has a relatively small internal market. These types of investment decisions by TNCs are increasingly important, as they control 33 per cent of the world’s productive assets (UNRISD, 1995). If the international money markets anticipate a withdrawal by a number of TNCs, then confidence in a country’s economic performance and therefore its currency may decline, leading to an economic downturn. Consequently governments have been involved in a process of competitive deregulation.

The second dynamic relates to the role that some major corporations are beginning to assume in the psyche of people in developed and developing countries. With global expansion, certain brands have become well known throughout the world. A brand image is an aggregate of the thoughts customers or investors associate with a particular company symbol, from a product logo to a stock market listing. Brand image has become so important that changes to it can have significant effects on company profitability or value. Environmental and social issues hold both positive and negative potentials for companies with global brand images. Meanwhile, many NGOs carry public opinion with them on environmental and social issues, which means they have the ability to affect corporate brand image in these areas.

A third dynamic is the development in telecommunications and information technology. The types of protests described in part 1 remind us that information dissemination is crucial in allowing the development of NGO pressure politics. Global access to computers, fax machines, modems, satellite communications, solar powered battery packs and hand-held video cameras has provided many civil society groups with greater knowledge, voice and power. Although the vast majority of the world’s poor and powerless do not have direct access to information technology, growing numbers of NGOs and activist groups do. The flow of information around the world during political uprisings and following the disappearances or murders of notable campaigners lends added political weight to these events. “Thanks to cyberspace, absolute control over information access is no longer possible” and atrocities can no longer be covered up easily (Johnston, 1997:336). Gramsci (1988) argued that “hegemonic power” is maintained as much by manufacturing consent through the media as it is by coercion or force. Absolute control over information is one of the keys to controlling thought and behaviour, as information influences and shapes cultural belief systems and legitimizes political authority. Fr om this perspective, the communications revolution is fundamental to the power of civil society.

In the North, lack of government capacity and will to effect change, coupled with the iconic nature of major corporations and the communications revolution, are providing NGOs with added reasons to focus on corporate practice. This change in strategy is part of “third wave environmentalism” for environmental NGOs and the social market movement for development NGOs (Murphy and Bendell, 1997).

In the South, NGOs have also begun to focus on the market. There are similar reasons for this change in focus. First, in many countries progress through lobbying their own governments has been difficult, whether they are democratic or not. The pressures of foreign debt and structural adjustment programmes often limit the scope of governments to act on ethical issues such as environmental protection and fair pay. Second, intergovernmental agencies have been slow to act, disillusioning groups in the South in the same way as is happening in the North. Third, Northern NGOs have begun to reach out to Southern groups and involve them in new market-oriented campaigns. For example, the World Development Movement in the United Kingdom often sponsors and organizes visits by Southern campaigners. These initiatives are facilitated by the communications technologies mentioned above.

Focusing on corporations and the market is also natural to many Southern campaigners. Many are fighting for economic justice as well as environmental justice, and have identified the activities of certain corporations as the problem from the outset. The MOSOP campaign against Shell in Nigeria is one example of a Southern movement that linked environmental degradation, economic hardship and social exclusion as negative outcomes of irresponsible business behaviour. This presentation allowed the campaign to appeal to activists, as well as Shell’s customers and investors, in Europe. The focus on markets is also illustrated by the international campaign of the Tupinikim and Guarani. Fearing that the Brazilian government would be swayed by the financial pressures and opportunities associated with a decision on Aracruz Cellulose access to indigenous lands, the Indians have appealed to European markets for support.

Given increasing concern with and ability to affect market behaviour, civil society organizations have developed a number of tools to change corporate policy. This is leading to new forms of market-oriented activity by NGOs, activist and community groups. Consequently there is now a wider spectrum of relations between companies and NGOs, from direct action protest to dialogue and partnership.

One of the best known market-oriented NGO tactics is the corporate boycott. Boycotts of sports goods companies such a s Nike, timber retailers such as B&Q and oil companies such as Shell have prompted companies to take seriously the ethical concerns of the public. Growing NGO support for ethical investment, where investments are screened against social and environmental criteria, is also a form of systematic boycotting of “unethical” company shares. Although these tactics have worldwide implications, they do not appear to be a viable option for NGOs in countries where consumer and investment power is less influential.

A second confrontational tactic of NGOs is direct action protest, where groups deliberately sabotage the commercial operations of a company. In the South, the forest peoples of the Oriente in Ecuador have, on numerous occasions, blocked the building of new roads by the oil company ARCO (Collinson, 1996). In the North, activist attendance at annual shareholder meetings to demonstrate or table controversial motions is another form of direct action protest, which has affected companies such as Shell.

A third tactic is collaboration, as evidenced in the partnership initiatives described above, in the oil, timber and sports goods industries. Similar partnerships are developing in other industry sectors, relating to other social or environmental problems. In 1996 WWF-International launched a partnership with Unilever Corporation, the world’s largest buyer of frozen fish, to create economic incentives within the seafood industry for sustainable fishing throughout the world. The new Marine Stewardship Council (MSC) is the result of their endeavours. The Fairtrade Foundation, a coalition of international development, consumer and fair trade organizations, has launched a pilot project to work with British companies to develop codes of practice to guide relationships with their Southern suppliers. These partnerships differ from previous collaborations based on corporate charity, as the NGOs are helping business with internal operational issues. NGOs are increasingly involved in the development of systems which imply civil regulation; these include multi-stakeholder agreed and independently verified codes of conduct for ethical business practice, such as the Forest Stewardship Council (FSC) system.

With a variety of campaigning tools at their disposal, NGOs - North and South - are creating a new politics of pressure to which business must respond. In her review of the state of the environment and human rights at the end of the millennium, Barbara Rose Johnston concludes that:

Perhaps the strongest evidence of progressive political change is found in the informal “civic organization” sector, where the ability to organize, communicate, create networks, and form coalitions has meant the emergence of a political force whose power and impact cannot be overstated (1997:332).

The emergence of this new political force demands more analysis so we might understand the true extent of its power and impact. A comparison with the characteristics of political movements in the past may throw some light on the subject.