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close this bookPartners in Time? Business, NGOs and Sustainable Development (UNRISD, 1999, 85 p.)
close this folderPart 1: The changing nature of business-ngo relations
close this folderNGO Responses to Sustainable Development
View the document(introduction...)
View the documentDefining NGOs
View the documentThree or Four Waves of Environmental NGOs?
View the documentFour Generations of Development NGOs
View the documentSouthern NGOs
View the documentNGO Diversity and Tension
View the documentCase Studies of Business-NGO Relations

(introduction...)

Globalization and its consequences have undermined the credibility and legitimacy of many systems and structures of governance. Is this merely about market institutions usurping the power of the state? Or does this also provide “unprecedented opportunities for the global emergence of a third sector” alliance of NGOs? (de Oliveira and Tandon, 1994:4).

As agents of civil society, NGOs are gaining greater recognition and power at the international (and, in many cases, national and local) policy levels. The growing participation of large numbers of different NGOs in United Nations conferences, meetings and other official processes confirms this trend (Krut, 1997). At the same time, many NGOs are finding themselves with growing responsibility and legitimacy as corporate watchdogs and agents of sustainable development. All NGOs, however, do not have the same global political access and recognition, nor do they all have the same opportunity or inclination to influence business behaviour either adversely via protest or positively via partnership. The global NGO movement remains exceedingly diverse, largely disorganized and quite often divided.

Defining NGOs

The common understanding about NGOs is that they are non-profit as well as non-governmental. However, “non-profit” is not an appropriate descriptor, as it could also include organizations that lobby on behalf of commercial interests, such as the International Chamber of Commerce (ICC) and other trade or industry associations. Furthermore, the non-profit tag would exclude local co-operatives that may seek to make a profit for their members and community, but which are generally considered part of civil society.

Another problem with the term NGO is that it describes a wide range of civil society groups such as people’s associations, membership organizations and service providers. It clearly encompasses a broad range of organizations in terms of size, purpose, funding base and organizational structure. Nevertheless, NGO is now widely used in academic, media and international policy circles as a general term for third-sector or civil society organizations.

Despite the enormous diversity of NGOs worldwide, a general definition of NGOs is nonetheless possible within the context of this discussion. NGOs are civil society groups that have as their primary purpose the promotion of social and/or environmental goals rather than the achievement of economic power in the marketplace or political power through the electoral process. NGOs acquire resources primarily through the “integrative power” of the citizen, whereas governments primarily do so through “threat power” and business organizations primarily through “economic power” (Korten, 1990:97).

NGOs include organizations as diverse as an international, multimillion dollar operation such as the World Wide Fund for Nature (WWF) and a local farmers’ group such as the Association of Sarva Seva Farms (ASSEFA) in India. In order to distinguish between larger NGOs and less formal, often smaller civil society organizations, we also refer to community, citizen or activist groups. Community or citizen groups indicate locality of membership and purpose. Activist groups reflect primacy of protest over service delivery or policy-level advocacy. In the 1990s, the concept of sustainable development is being embraced in different ways by a variety of NGOs, community, citizen and activist groups in the fields of environment, development and human rights.

Three or Four Waves of Environmental NGOs?

In the North, environmental NGOs have evolved toward a sustainable development orientation through three waves of environmentalism (Murphy and Bendell, 1997). The first began at the turn of the twentieth century as a residue of the Romantic Movement, which had championed a return to nature in the wake of the industrial revolution. People were primarily concerned with preserving what was “wild” or “natural”. It was a Western-centric concept of a divide between humans and nature and led to the creation of the first national parks.

The second wave in most Northern, industrialized countries began in the 1960s. Due in part to the socio-economic changes that supported a variety of new social movements at the time, this environmentalism stressed the oneness of humans and our environment. The emerging science of ecology and the Apollo pictures of the Earth in space helped create this environmental consciousness. The first major environmental campaigning groups were set up around this time and focused primarily on increasing regulation to protect people from industrial pollution.

The third wave began in the mid - to late 1980s. With increasing resources but insufficient progress at the international and national policy levels, environmental NGOs began to seek practical ways of moving forward and implementing solutions. The global environmental problematique began to be broken down into everyday issues with practical remedies. Third-wave environmentalism places increasing emphasis on market-oriented campaigns. Recently there have been calls for a fourth wave of environmentalism, particularly from Mark Dowie, who describes this fourth wave as:

... a broad-based, multi-ethnic movement that takes a long-term global view, challenges prevailing economic assumptions, promotes environmental protection as an extension of human rights, and engages in direct action when necessary (1991 - 92:90).

We accept Dowie’s suggestion that Northern environmental groups should integrate “the lessons of the grassroots” into their strategies (ibid.). However, in many respects third-wave environmentalism has already begun to adopt environmental justice and sustainability ideals and strategies, the latter including direct action, consumer boycotts, corporate dialogue and North-South NGO alliances.

Four Generations of Development NGOs

Development NGOs based in the North have also begun to embrace the sustainability agenda. Korten (1990) describes three generations of development NGO strategies. First-generation development NGOs focus on the provision of disaster reli ef and welfare - the original role of Northern NGOs such as Oxfam. Second-generation strategies focus on promoting small-scale, self-reliant community development. And third-generation strategies involve increasingly large and sophisticated NGOs “working in a catalytic, foundation-like role rather than an operational service-delivery role... facilitating... other organisations [to develop] the capacities, linkages and commitments required to address designated needs on a sustained basis” (Korten, 1987:149).

Later, we describe a natural extension of this third-generation strategy, with development NGOs beginning to influence the role of international and local businesses in the social sustainability of the South. Korten goes on to describe the need for fourth-generation NGOs, which aim to build “a critical mass of independent, decentralized initiative in support of a social vision” (1990:127). Part of this strategy is building links between different NGOs and addressing the more structural issues at the heart of social and environmental problems. Whereas third-generation NGOs “seek changes in specific policies and institutions”, Korten suggests that fourth-generation NGOs will facilitate the coming together of loosely defined networks of people and organizations to transform the institutions of global society (1990:123).

Southern NGOs

The typologies outlined above are particularly relevant for understanding the role of Northern-based NGOs in promoting sustainable development. Despite recent efforts by both development and environmental NGOs to broaden their respective agendas, for the most part they remain distinctive organizational types. For many Southern NGOs, community and activist groups, however, the division between environment and development is not so clear cut. For example, the Malaysia-based Third World Network or the Mexican Coalition on Environment and Development embrace a broader sustainable development agenda than Northern NGOs such as WWF or Oxfam. While many Southern environmental NGOs remain urban, middle-class membership organizations with limited grassroots connections, there are numerous examples of environmental NGO collaboration with peasant organizations and indigenous peoples, particularly in Latin America and Asia (Reilly, 1995; Heyzer et al., 1995).

When local Southern groups protest against their lands being acquired, or their rivers being poisoned, they are fighting for their mutual, material interests (Collinson, 1996). The environmental problems faced by peoples of developing countries often have far more severe effects on their livelihoods than for people in the North. In recent years, many Southern groups have begun to assume the language of Northern environmental NGOs and present their dilemmas in environmental terms. Martin Khor of the Third World Network captures this phenomenon well with the following comments:

Our goals in the South are about survival, humanity and dignity. And democracy. A great deal of energy has been spent in the South... in helping social movements regain their right to land and other resources, in order to promote their rights to good health and adequate nutrition, to safety, to housing, and to a sustainable environment. All these changes are necessary for both social justice and a sound environmental and development policy (1993:223).

As well as adopting the terminology of sustainable development, Southern NGOs are also fostering better links with their counterparts in both the North and other parts of the South. This is an outcome of both the information technology revolution and NGO participation in global conferences before, during and after the Earth Summit (McCoy and McCully, 1993; Krut, 1997). Information technology is also facilitating the communication of corporate abuses instantaneously via e-mail to the home countries of the international companies involved (Johnston, 1997). As a result, some Southern NGOs are also beginning to develop a new focus on market-oriented campaigns similar to the tactics of many Northern NGOs.

NGO Diversity and Tension

Notwithstanding the above comments, the global NGO movement remains extremely heterogeneous, not merely along traditional environment-development or North-South divides. Whether one compares NGOs on a global or even on a national basis, there are no doubt many more differences in NGO philosophy, purpose and strategy than there are similarities. Despite considerable and worthy efforts to promote North-South NGO alliances and the idea of a global civil society, numerous tensions between NGOs remain. NGOs worldwide face many different and potentially competing courses of action.

There is the further problem of what some describe as the “commodification” of certain NGO activities into areas such as contractual service delivery and consultancy-type work (Uphoff, 1996). If this is a growing trend, as some commentators argue, then it may have implications for business-NGO relations. As and when greater numbers of NGOs begin to think and act more commercially, to what extent will they be able to remain effective corporate watchdogs? This may not be merely a matter of co-optation. The growing commercial orientation of certain NGOs may reflect a more general blurring of the boundaries between NGOs and business, similar to the emergence of activist companies such as The Body Shop and of entrepreneurial NGOs such as ORAP in Zimbabwe. If this is the case, then perhaps closer and more collaborative relations between certain businesses and NGOs are not only desirable but also inevitable.

Many NGOs would challenge this assumption. Notwithstanding the value of closer co-operation between all three sectors of society - government, commercial and civil - there remains a need for a critical and independent NGO voice. NGO protest continues to play a vital role in mobilizing citizens to promote sustainable development through policy changes at all levels of society. Without such forms of confrontation, meaningful forms of business-NGO partnership may never come to fruition.

Case Studies of Business-NGO Relations

Academic inquiry into how NGOs influence corporate policies related to sustainable development is a relatively new venture. Scholarly debates about the potential for partnerships between business and NGOs in the South are even less common. Indeed, there is little empirical research on the nature of conflicts and alliances between NGOs and private sector companies that have led to environmentally and/or socially advantageous outcomes in both the North and the South. Instead, most research in this area focuses on the role of government in mediating conflicts between business and local communities, or on government-NGO relations. Information on direct relations between NGOs and business is largely anecdotal. In order to help fill this gap, we present three short case studies of business-NGO relations on sustainable development with examples from both the North and the South.

First, to illustrate the myriad relations between civil society and business, we provide a broad review of protest and partnership between various NGOs and companies involved in the tropical timber trade since the mid-1980s. Second, to reveal how coordinated global protest affects TNC activities in both North and South, we focus on relations between Shell and various NGOs in the 1990s. Third, to outline the politics and processes of complex multi-stakeholder North-South partnerships, we describe the Project to Eliminate Child Labour in the Pakistan Soccer Ball Industry. This case demonstrates the growing importance of environment, health and safety (EHS) standards for the many global companies that have shifted the manufacturing of finished products to factories in the South.

Planting Seeds of Change: Protesting and Partnering to Save the Tropical Rainforests2

2 This case study is based in part on previously published material (Bendell and Sullivan, 1996; Murphy, 1996; Murphy and Bendell, 1997)

Deforestation emerged as a significant international policy issue and major Northern media story in the mid-1980s (Humphreys, 1997). Since that time the rates of forest degradation have shown little evidence of slowing. Despite lengthy consultations among governments, and rising concerns from the public reaching a peak at the 1992 Earth Summit, rapid deforestation continues unabated. According to some estimates, tropical forests are disappearing at the rate of nearly 1 per cent per year, with the annual deforestation rate in the Brazilian Amazon increasing 34 per cent between 1991 and 1994 (United Nations, 1997; Serrill, 1997).

The main causes of deforestation are logging, mining, iron smelting, cattle ranching, cash cropping, dam construction, road building, housing and hotel development, shifting agriculture and fuelwood collection. This case focuses on the causes and responses to the crisis that directly involve Northern countries and their companies, and specifically the international timber trade. Robert Repetto and Malcolm Gillis argued in 1988 that commercial logging was the top agent of deforestation, and around this time it was also popularly considered to be the case.

Government and industry initiatives for rainforest protection

For much of the 1980s and 1990s, governments and various international bodies have attempted to respond to the worldwide concern about tropical deforestation. The first international instrument for tropical forests came with the 1983 International Tropical Timber Agreement (ITTA), which provides a framework for co-operation and consultation between tropical timber producers and consumers on a range of issues. In May 1991, members of the International Tropical Timber Organisation (ITTO) approved a “Year 2000 Target” for sustainable forest management. The general NGO feeling is that the ITTO has been too complacent about tropical deforestation in that it has avoided challenging “the destructive activities of the timber industry” (FoE-UK, 1992:5).

At the regional and national levels in the South, some governments have introduced new policy instruments to monitor logging company activities. The South Pacific Forum Code of Conduct for Logging of Indigenous Forests sets minimum standards for the preparation and implementation of work programmes by concession holders. Similarly, the Forestry Commission of Guyana has introduced a code of practice for the operation of natural forest concessions (Murphy, 1997b).

At the international level, the World Business Council for Sustainable Development (WBCSD) formed in 1995 by the merger of the BCSD and the WIC recently commissioned an independent study of the pulp and paper industry. The study recommended that the industry consider developing a code of conduct similar to the chemical industry’s Responsible Care, with the added feature of sector-wide monitoring of company performance (WBCSD, 1996).

The first global certification system for well-managed forests, however, was set up in 1993 by civil society working in partnership with business. This scheme, with a variety of NGO and industry members from the North and South, is called the Forest Stewardship Council (to which we will return later). The reasons why companies in the timber trade have collaborated with NGOs can only be understood by examining the role played by civil society in shaping the deforestation issue since the mid-1980s.

Civil society protest in the South

One of the major stages for deforestation and conflict in the 1980s was Amazonia. The problem was particularly acute in Brazil, where the military junta was trying to “civilize” the region by facilitating billions of dollars of subsidies and tax breaks for entrepreneurs to buy up land and “develop” the forest (Revkin, 1990). Unions of rubber tappers led the fight against cattle ranchers and loggers. Meagre rubber-tapper livelihoods were being threatened because rubber barons realized they could make more money cutting down the trees and grazing cattle. The tappers decided to stage empates, whereby chain-saw gangs were confronted and asked to leave the land they were clearing. These protests raised the attention of the international media so that “by the mid-1980s... indigenous groups and tappers were considered legitimate participants in the debate” (Dore, 1996:15).

One protester who rose to international fame was Chico Mendes, the leader of the Xapuri Rural Workers Union. He soon became a symbol of the human dimension to the deforestation issue. Furthermore, with his involvement “the authorities could no longer dismiss efforts to save the rain forests as foreigners interfering with Brazilian affairs” (Rowell, 1996a:214).

The empates worked as a tactic: by December 1988, some 3 million acres of the Amazon had been saved (Hecht and Cockburn, 1990). After one particular incident, the authorities bought out the prospective rancher so that his plans could not proceed. In revenge, the rancher ordered the killing of Mendes in December 1988. Mendes was the ninetieth rural activist to be murdered in Brazil that year (Hall, 1996). After his death, the world’s news media reverberated with headlines and leading stories on the rubber tappers and deforestation. Following the international condemnation that followed Mendes’ murder, the new civilian administration of President Sarney established a new environmental control agency (IBAMA) to promote a new environmental policy (Nossa Natureza) and set up several protected extractive reserves (ibid.).

Grassroots action by Southern unions backed up by international concern, therefore, did bring some specific successes. Indeed, the combined protests of civil society groups in tropical forest countries in the 1980s began to shape a new international policy debate. In the 1970s and 1980s cattle ranching and logging were almost universally promoted as the best way to develop tropical forest regions. By 1990 they had become a symbol of destruction.

Civil society protest in the North

With increased NGO campaigning and media coverage, the profile of environmental issues rose in most Northern countries in the late 1980s. As the struggles of indigenous peoples against tropical deforestation became known, the role of the timber trade became a key consumer concern. For example, a wooden product such as mahogany came to be associated with the murder of forest dwellers. At this time, local, largely autonomous Rainforest Action Groups (RAGs) in North America, Europe and Australia were formed.

In Great Britain, beginning in the spring of 1991, various RAGs started to take direct action against wood-product retailers. These groups organized mock chainsaw massacres outside do-it-yourself (DIY) home improvement and furniture stores, with protesters dressed as loggers graphically depicting the destruction of the world’s rainforests. Protesters distributed leaflets to customers and delivered anti-tropical timber pledges to store managers. The intention was to discourage customers from buying tropical timber products.

In 1991, local Friends of the Earth (FoE) groups in the United Kingdom built upon the initial RAG protests. On one November weekend, there were over 100 demonstrations, including 25 - 30 demonstrations outside the outlets of DIY market leader B&Q plc. Subsequently, on 11 December, FoE-UK claimed in a press release that its protests had prompted dramatic policy developments in the DIY retailers B&Q, Texas Homecare and Homebase, which were now committed to “stop selling environmentally damaging tropical rainforest timber” (FoE-UK, 1991b). The anti-DIY demonstrations proved to be highly successful and garnered considerable media and public attention. Customers began to write letters to the retailers and to confront store managers and employees with tough questions about timber sourcing. For the most part, the companies took both the protests and customer letters very seriously.

Meanwhile, WWF-International was itself beginning to turn to industry, having become disillusioned with protracted international negotiations on a global forest convention and other international policy initiatives. In 1989, WWF had already announced its own 1995 target for the world’s timber trade to be sustainable. At the 1992 Earth Summit, governments could only produce the “toothless” Non-legally Binding Authoritative Statement of Principles for a Global Consensus on the Management, Conservation and Sustainable Development of all Types of Forests. Francis Sullivan, then WWF-UK forest officer, believed “you can’t just sit back and wait for governments to agree, because this could take forever”.3 He felt certain it was right to try and work with people and companies who might be able to get things done.

3 Interview with D.F. Murphy, November 1994.

The emergence of timber industry-NGO partnerships

For the DIY trade, WWF-UK appeared to be a solution to a mounting business problem. Following WWF-UK’s “Forests Are Your Business” seminar in December 1991, 10 companies committed themselves to reaching the WWF-UK 1995 target and launched the so-called 1995 Group. The cumulative effects of different forms of environmental campaigning seemed to have firmly taken root in the private sector. The “chainstore massacre” demonstrations and resulting consumer awareness were instrumental, as was the catalytic role of WWF-UK via its forest seminars. Internally, directors of the targeted companies were worried about the public relations and commercial implications of the protests, customer letters and media coverage. Other pressures from investors, insurers and lenders were on the horizon.

To join the 1995 Group, companies had to agree to phase out (by 1995) the purchase and sale of all wood and wood products not sourced from well-managed forests. In pursuit of this target they had to provide WWF-UK with a written action programme detailing how the company would reach the target and then submit regular six-monthly reports on their progress. It soon became apparent, however, that the participating companies needed a credible system for defining good forest management and for ensuring that products were from such forests.

What was needed was a standard-setting body with a system for verifying product claims. Following 18 months of preparatory work, the Forest Stewardship Council (FSC) was launched in 1993. The founding group consisted of environmental NGOs, forest industry representatives, community forestry groups and forest product certification organizations. Both WWF-International and B&Q provided financial and logistical support, among other organizations.

The FSC mission statement commits members to “promote management of the world’s forests that is environmentally appropriate, socially beneficial and economically viable” - language consistent with the principles of sustainable development. The FSC accredits certification bodies to ensure that they adhere to FSC principles and criteria when certifying forests as well-managed, and allows them to issue the FSC logo once a chain of custody has been recorded from the forest to the company selling the end product.

By the end of 1995, commercial support for the FSC had spiralled in the UK. The WWF-UK 1995 Group had reached 47 members, accounting for about a quarter of the British consumption of wood products. Although many of the companies did not reach the 1995 target, a significant number had purchased certified timber and had specified where most if not all their timber was coming from. The Group was consequently extended with the revised target that companies would purchase wood only from certified forests by the year 2000. As of late 1997, there were over 80 members in the new “1995 Plus Group”.

Partnerships between the timber industry and NGOs are growing in other countries. There are similar timber buyers groups or business-NGO partnerships committed to the FSC in Australia, Austria, Belgium, France, the Netherlands, Sweden and the United States. The Dutch “Hart Voor Hout” initiative dates back to early 1992, and many of its developments paralleled the British experience, namely the catalytic role of protest in leading DIY retailers to seek NGO partners (Murphy, 1996).

The impetus for Northern buyer groups, of course, comes from Northern consumers, campaigners, corporations and NGOs. However, members of Southern civil society also have a voice in the process through the FSC. Representatives of NGOs, such as the Foundation of the Peoples of the South Pacific (Papua New Guinea), FUDENA (Venezuela) and SKEPHI (Indonesia) participate in the FSC as either Board representatives or members of specialist working groups. At the national level in the South, FSC working groups have been established to ensure that the global principles and criteria are adapted to the local context (e.g., Brazil, Cameroon). Although only 25 per cent of current FSC members are from the South, the organization is supporting efforts to increase this number. Furthermore a special working group on social aspects of certification is attempting to find ways in which the social performance of the FSC could be improved (Colchester, 1997).

Before partnerships between timber companies and NGOs, there was no functioning mechanism whereby consumer power in industrialized countries could be captured to promote sustainable forest management around the world. As of December 1997, 5.5 million hectares of forest had been certified worldwide.

The absence of a significant number of partnership initiatives in the South suggests that many of the driving forces behind greater responsibility in the timber industry are peculiar to Northern countries. From the above, it is apparent that NGO and consumer pressure in a Northern context often has a profound effect on corporate public image and a perceived need on the company’s part to respond positively. Collaborating with a well-known environmental NGO also promises additional benefits to those normally gained from internal environmental management initiatives (Bendell and Warner, 1996). In addition to help with getting the job done, significant public relations benefits may be gained from collaborating with NGOs. For example, the participation of WWF in the FSC scheme has helped to reassure customers that participating company claims are credible.

Criticism of timber industry-NGO partnerships

Notwithstanding the progress to date, there is considerable criticism about the role and contribution of the FSC scheme. Some have challenged the use of market mechanisms for rainforest conservation by arguing that such schemes fail to address the underlying causes of deforestation and the infringement of indigenous peoples’ land rights (Corry, 1993). Others are concerned about how commercial interests might undermine social and environmental matters in the certification process.

Criticism has also come from timber traders and producers who do not support the FSC form of certification. On a practical level, some companies argue that producer certification would be too expensive and bureaucratic to implement across the whole of the industry. Others have difficulty with the FSC in principle, suggesting that non-governmental bodies do not have the authority to “regulate” a company’s forest management practices. This, they argue, is the role of sovereign governments or inter-governmental organizations (Harris, 1996).

Some critics in government, business and civil society argue that the championing of the FSC by Northern NGOs and companies is another example of the industrialized North imposing its perception of environmental problems and remedies upon the rest of the world. Whereas the social, political and cultural contexts in many Northern countries have produced a concerned retail trade and an impetus for certification, the situation in the East and South is different.

Japan, the largest importer of tropical timber and timber products in the world, has not yet become an advocate for a sustainable timber trade. Despite the presence of a well-organized environmental movement, there has been limited Japanese NGO pressure and consumer demand for certified wood products (Wadsworth, 1996). The rise of consumer concern and business response in most other Northern countries, therefore, may just serve to shift international trade patterns, with certified timber going to Europe and North America and non-certified timber going to Japan and, increasingly, South-East Asia.

The recent moves of companies from countries such as Malaysia, Thailand and Indonesia into the tropical rainforests of Latin America, the South Pacific and the Congo basin is worrying. To illustrate, in Papua New Guinea, Malaysia’s largest logging company, Rimbunan Hijau, now controls at least 60 percent of the government’s 21.5 million-acre forestry concession area through more than 20 subsidiaries (Ito and Loftus, 1997). Despite recent attempts to introduce codes of conduct, the prospects for influencing these concessions through legal or market mechanisms appear bleak. Faced with national debt and a need to attract foreign direct investment (FDI), most governments of tropical forest countries appear to be locked into a “race to the bottom” of environmental regulation.

New tools and tactics for forest protesters

In response to the apparent inability of governments to curb the ongoing destruction of tropical forests, civil society organizations in both North and South are developing new tactics and using new tools to influence corporate behaviour (Collinson, 1996; Johnston, 1997). Many protests are aimed at the international timber, oil and mining industries. These protests differ from those in the 1980s in two significant ways. The first relates to the use of information technology and the second to a new focus on Northern markets. Together, these developments are leading to a new level of North-South co-operation in civil society.

The role of electronic information technology in Southern forest struggles first gained major significance during the Zapatista uprising in the forested Chiapas region of Mexico in 1994. Protesters could send their complaints, including those about the environmental degradation of the Lacandon Biosphere Reserve, around the world by electronic mail (e-mail). Journalists and activists on the appropriate e-mail lists thus received immediate accounts of the events unfolding: it was the first “on-line revolution” (Stea et al., 1997:218). Communication technology is also helping forge new alliances between local, national and international groups.

The second dimension to the campaigning of Southern groups is an increasing focus on Northern markets. The struggle of the Guarani and Tupinikim Indians in Brazil against the paper and pulp company Aracruz Cellulose is an example of such a strategy. The Guarani and Tupinikim Indians have been contesting the Aracruz operations on their traditional lands for many years. When the government announced that Indians could lay claim to their traditional lands there was hope that the Guarani and Tupinikim would benefit. In 1993 the executive commission of the two tribes submitted an application to annex 13,274 hectares. However, an adjustment to the law in 1996 allowed prospective logging companies to appeal against the claims of forest dwellers. Aracruz launched such an appeal and the Guarani and Tupinikim became concerned that their claim would be rejected. In response they began an international campaign to raise awareness of their cause.

In early 1997, representatives of the tribes, together with Dutch campaigner Winfred Overbeek, visited Norway and Great Britain to put their case to the customers of, and investors in, Aracruz Cellulose. In Norway, the group tried to talk with Aracruz shareholders Den Norsk Bank and the Lorentzen Group. “Den Norske Bank did not want to talk with the indigenous representatives”, explains Overbeek. Consequently, the representatives took their case to the government - the Bank’s major shareholder - and the media. Questions in parliament and reports on television and radio followed. In response, the Minister of Trade and Commerce stated that there was no way for the Norwegian Government to define how Den Norske Bank applies its money. The international campaign also included meetings with members of the WWF-UK 1995 Plus Group, the FSC-accredited Soil Association and the Paper Federation of Great Britain. The companies and organizations agreed to examine closely the decision on the demarcation of the disputed lands.

Meanwhile, in the South the benefits of establishing communication with Aracruz management seem limited. Against a history of violence - an activist for the tribes, Paulo Cesar Vinha, was murdered in 1993 - prospects for dialogue with Aracruz appear bleak. Indeed, the international campaign of the Guarani and Tupinikim appears to have generated a retaliatory public relations campaign. Aracruz has contracted Burson-Marsteller, the world’s largest public relations (PR) company, to curb growing support for their international campaign. The Aracruz response appears to be the antithesis of many other companies who are engaging constructively and openly with civil society in order to help reduce deforestation.

The seeds of change?

This case study has described varying degrees of corporate responsibility for tropical deforestation and a range of tactics employed by NGOs. It appears that some companies are either unable or unwilling to embrace environmental concerns. Further research is needed to reveal the variety of financial, political and cultural factors that enable some companies to engage NGOs and indigenous peoples on the deforestation issue while others avoid, undermine or kill their critics. For those companies that have moved forward with NGO partnerships, progress appears to have been the result of both personal and organizational commitment. The motivation of key individuals seems to be particularly significant. WWF-International’s Francis Sullivan explains:

Success has boiled down to the commitment of individuals and the support that senior management has given to those individuals.... You have some companies that are not particularly committed themselves, but you have got an individual in there who is unbelievably committed to actually getting the thing sorted out.4

4 Interview with D.F. Murphy, November 1994.

The support that these individuals have received in different companies, organizations and countries illustrates how the boundaries of corporate social and environmental responsibility have been shifting dramatically, alongside rapid developments in the tools and tactics of NGOs. We have observed the role of protest, North and South, in raising public and consumer awareness about adverse effects of tropical deforestation. At the same time, market leaders have responded to this pressure as an opportunity to maintain leadership in a changing marketplace. This in turn has cleared the way for some of the more cautious competitors to follow, thereby planting the seeds of transformation in the timber trade.

After the Shell Shock: Protest, Partnership and the Global Oil Industry5

5 This case study is based upon research conducted by D.F. Murphy for the New Academy of Business.

The oil industry is one of biggest sectors in the global economy, with an average daily production of 61.9 million barrels valued at over US$ 1 billion (Tippee, 1997).6 The 1997 Business Week Global 1000 survey of the world’s leading companies ranked Shell and Exxon first and second in profits at US$ 9.3 and US$ 7.5 billion respectively. In terms of market value, six oil companies were ranked in the top 50.

6 These are 1995 figures based upon an average crude oil price of US$ 17.24 a barrel.

The Royal Dutch Shell Group is one of the top three corporations in the world in terms of size, comprising more than 300 individual companies based in over 100 countries. Shell’s annual global turnover is in the vicinity of US$ 100 billion. Until recently, Shell had a reputation as an environmental leader dating back many decades. Even before the birth of the contemporary environmental movement in the late 1960s, Shell had begun to respond to public concerns about the environment. Early examples of company initiatives in the United Kingdom include environmental education in the 1940s and a Shell Film Unit documentary on air pollution in the 1950s, following the introduction of the British Clean Air Acts. Shell also helped launch the Keep Britain Tidy campaign in 1954.

Suddenly in the mid-1990s, Shell became the focus of two high-profile campaigns by environmental and human rights NGOs that raised serious questions about the corporation’s commitment to sustainable development. As noted earlier, the first of these confrontations came in mid-1995 when Greenpeace opposed Shell’s efforts to dump the Brent Spar oil platform in the North Atlantic. This was quickly followed by complaints about Shell Nigeria’s use of lower environmental standards in the West African country’s Delta region. The company was also accused of implicitly supporting human rights abuses given its perceived close association with the Nigerian military regime.

The fall-out from both of these episodes has had a negative impact upon the image and reputation of Shell and other companies in the global oil industry. Although the industry has long been a target of NGO and consumer campaigns, Shell’s recent experience has brought increased pressure and attention. As a result, Shell and other oil companies are scrambling to find new ways of relating to NGOs, particularly in the South. This case reviews business-NGO relations in the oil industry with a particular focus on Shell’s Nigeria experience.

Strong and aggressive criticism

The oil and gas industry has historically been among the world’s biggest polluters. Public opinion polls in the United States have for many years identified the industry as a major polluter (Erskine, 1971). Not surprisingly, the industry was also an early target of environmental campaigners in many Northern industrialized countries. In 1963, six oil companies formed one of the first industry environmental think tanks, Conservation of Clean Air and Water Western Europe (CONCAWE), largely in response to “strong and aggressive ” criticism by environmentalists and the general public about the industry’s “gross ecological negligence”. CONCAWE was designed “to establish “hard facts” [through] professional analysis of the underlying nature of the chemistry and physics involved.” CONCAWE member companies then planned to use this data “to define the steps needed to redress adverse ecological trends, mishaps and disasters” (Han Hoog, 1993:4 - 5).

Despite industry efforts to prevent environmental disasters, the oil and gas industry was implicated in at least 14 major industrial accidents (causing more than 50 deaths each) between 1970 and 1984. Of a total of more than 2,000 deaths, almost 1,500 resulted from accidents in developing countries including oil, gas, petrol and tanker explosions, offshore-rig collapses and gas pipeline fractures (Shrivastava, 1987).

In recent years, the industry has continued to face considerable public scrutiny. Both before and after the Earth Summit, the oil industry faced heavy international pressure about the impact of fossil fuel emissions on global warming. Implementation problems with the Rio climate change agreement have been linked to the political influence of oil lobby groups, such as the Global Climate Coalition and the American Petroleum Institute. Lobbying strategies include exaggerating costs of climate action, emphasizing scientific uncertainties and collaborating with governments hostile to action, such as those of the OPEC states (Newell, 1997a and 1997b). In the lead-up to the December 1997 Kyoto climate change conference, oil industry groups continued to argue against the adoption of tougher targets and regulations to reduce carbon emissions.

The idea of environmental injustice - a linkage between ecological degradation and human rights abuses - has gained worldwide attention largely as a result of the activities of oil companies such as Shell in Nigeria, British Petroleum (BP) in Colombia and Texaco in Burma. Various environmental and development NGOs, from both North and South, are working together to challenge oil companies to promote environmental justice on a variety of fronts, often via the Internet.

Shell, the Ogoni and Nigeria

Over the years Shell has faced NGO and consumer pressure over a range of social responsibility issues, most notably concerning its role in South Africa during the apartheid era. Despite considerable international protest in the 1970s and 1980s, Shell refused to pull out of its mining, chemicals and petroleum-related activities in South Africa, insisting that its employees did not suffer any racial discrimination. As noted earlier, on environmental matters the company did not face sustained and organized international protest until the Greenpeace Brent Spar campaign in 1995, which culminated in Shell’s decision to abort the deep-sea disposal of the oil platform in the face of growing political and consumer pressure in Europe. Riding the Brent Spar wave, the media then discovered a much more complex and wider environmental and human rights campaign that had been raising serious questions about Shell’s role in Nigeria since the early 1990s.

The Shell Petroleum Development Company is a joint venture between Shell (30 per cent), the majority shareholder Nigerian National Petroleum Company (NNPC; 55 per cent) and two other oil companies, Elf (10 per cent) and Agip (5 per cent). Shell Petroleum is the largest Nigerian oil and gas exploration and production company, with 92 oil fields generating one million barrels daily. The company has a 6,200-kilometre network of pipelines and flowlines spread over more than 31,000 square kilometres of the Niger River Delta. Shell employs 5,000 staff directly, including 300 non-Nigerians. According to Shell, more than half of its Nigerian staff comes from the Delta region (Shell International, 1995). Shell Nigeria’s annual oil revenue is US$ 11 billion. Nigeria’s total oil revenues account for 90 per cent of its export earnings and 80 per cent of total government revenue.

Protest begins - The origins of Shell’s recent problems in Nigeria lie in a history of considerable environmental pollution in the Niger Delta region. From 1982 - 92, 1.6 million gallons of oil were spilled from Shell’s Nigerian fields in 27 separate incidents. Of all oil spills attributed to Shell worldwide, 40 per cent happened in Nigeria. Various Niger Delta communities have experienced Shell’s gas flaring 24 hours a day for 30 years (Rowell, 1995).

Shell’s main opponent in Nigeria has been the Movement for the Survival of the Ogoni People (MOSOP), an activist NGO with the linked goals of social justice and environmental protection. The Ogoni is an ethnic group of 500,000 people living in 82 communities covering 1,000 square kilometres in the Delta region in the southeast of the country. Most Ogoni are engaged in farming and fishing, with a minority working in the oil industry either for Shell or contractor firms. Shell estimates that from 1987 - 92 it spent about US$ 2 million on the Ogoni area, about 16 per cent of the community budget for its Eastern Division’s operation. By 1993, the company was extracting up to 28,000 barrels of oil per day from Ogoniland (Rowell, 1995).

The first demonstration against Shell was staged in 1987 by the Iko community in the Andoni ethnic area of the Delta. When Shell sought protection from the Nigerian Mobile Police Force, two people were killed, some 40 homes were destroyed and more than 350 people were made homeless (Rowell, 1996b). By 1990, growing numbers of local Delta communities from various ethnic groups were demonstrating against Shell’s activities in the area. Other companies were also targeted, but Shell was singled out as the largest and most visible player in the local oil industry. Shell officials acknowledged that there were 63 protests against the company in 1990 alone. At one demonstration in Ogoniland, 80 villagers were killed by the Nigerian Mobile Police Force. The judicial inquiry which followed criticized Shell on two major counts: first for the company’s unfair acquisitions of Ogoni lands for its oil operations; and second for the environmental degradation caused and meagre compensation paid by the company to affected Ogoni communities (Goodall, 1994).

Ogoni leaders signed the “Ogoni Bill of Rights” in 1990, citing the environmental degradation and limited employment opportunities resulting from Shell’s presence in Ogoniland. The Nigerian military regime was also strongly criticized in the Ogoni manifesto. Both Shell and the Nigerian government consequently perceived both novelist Ken Saro-Wiwa and MOSOP as direct threats.

In 1991, Saro-Wiwa became MOSOP’s international spokeperson. Later that year, Ogoni leaders updated the Bill of Rights and authorized MOSOP to internationalize its campaign against the Nigerian government and oil companies operating in Nigeria (MOSOP, 1992). Meanwhile local protests against Shell and other oil companies continued.

The following year MOSOP presented its case to the United Nations Commission on Human Rights. MOSOP also officially submitted its demands to all oil companies operating in Ogoniland, including Shell, Chevron and the NNPC. The companies were asked to pay back-royalties and compensation within 30 days or cease their operations in Ogoniland. Local protests against Shell continued throughout 1992.

Ogoni campaign goes global - By 1993, the Ogoni campaign against Shell and the Nigerian government began to attract international attention. On 4 January, MOSOP organized a major rally of 300,000 people against the oil industry to celebrate the Year of Indigenous Peoples. Later that month, MOSOP was accepted as a member of the Unrepresented Nations and Peoples Organisation (UNPO). As a result, the Ogoni case received its first major media exposure with coverage by CNN, Time magazine and the British Channel 4. The latter’s “Drilling Fields” launched a series of documentaries on the tensions between Shell and the Ogoni.

Around this time, The Body Shop took the issue up as one of the company’s campaign issues, working in a loose alliance with MOSOP, Greenpeace International, and other NGOs. Various independent journalists and filmmakers also began to lend support to the Ogoni cause. The Shell-Ogoni story had gone global.

The full Shell-Ogoni story is long and complex. In the interest of brevity, the key events from 1993 - 97 are merely highlighted below:

· 1993: As the MOSOP campaign against Shell intensifies, the company decides to withdraw its staff from the Ogoni area in late January, citing intimidation, attacks and the destruction of equipment. Under the protection of Nigerian soldiers, personnel from Shell and a US subcontractor return to the area in April to begin work on a new pipeline. After Ogoni crops are destroyed, local protesters block the path of the bulldozers. Following many days of confrontation between the Ogoni and the soldiers, one person is shot dead and more than 20 are wounded. Shell finally ceases production work in Ogoniland in June. In July 1993, Ken Saro-Wiwa is elected President of MOSOP.

· 1994: In January, three major oil companies announce losses in excess of US$ 300 million during 1993 due to “unfavourable conditions in their areas of operation” (UNPO, 1995:51). They call for urgent action to resolve the situation. In April, the Nigerian military intervenes in a local conflict between the Ogoni and another ethnic group. Fifteen Ogoni people are arrested without being charged. Nigerian soldiers attack, raid and burn Ogoni villages. More than 20 people are reportedly killed. On 1 May, UNPO calls on Shell to use whatever influence it has to persuade the Nigerian government to release Ogoni prisoners. On 21 May, four traditional Ogoni elders are murdered by a mob at a local rally. Saro-Wiwa does not attend the rally. On 22 May, Saro-Wiwa and more than 50 other Ogoni men are arrested. Saro-Wiwa is accused of inciting a crowd of his supporters to kill the traditional elders. In July, Greenpeace International condemns Shell’s “misguided priorities” and public relations approach to the problems in Nigeria (1994:22).

· 1995: In January, a military tribunal begins to hear the Saro-Wiwa/Ogoni case. In August, from his jail cell, Saro-Wiwa calls on the international community to boycott Nigerian oil. Throughout the year the pressure grows on Shell to use its perceived political influence to seek the prisoners’ freedom. On 1 November, the Financial Times publishes a letter from Anita Roddick of The Body Shop calling on Shell to publicly condemn the military tribunal “for the sham that it is.” On 10 November, Saro-Wiwa and eight other Ogoni are hanged. The World Bank withdraws its loan for Shell Nigeria’s planned US$ 4.2 billion natural gas project. On 13 November, Shell announces it will proceed with the project. On 17 November, Shell organizes an informal Nigeria briefing for 35 British NGOs. Greenpeace is not invited. Global media coverage of the Saro-Wiwa execution focuses on Shell’s role and responsibilities. Shell’s response to the criticism is that “politics is the business of government and politicians” and the company “does not and should not have [political] influence” in Nigeria (NGO Task Force on Business and Industry, 1997:18).

· 1996: Shell announces new initiatives in Nigeria, including a US$ 850 million upg rade of two crude oil terminals and flow-line renovations to current standards. At Shell’s Annual General Meeting in May, the company announces that it will conduct a major international review of its Statement of General Business Principles. International protest against Shell continues, particularly via networks of linked activist Web sites on the Internet. Shell’s Internet critics range from large organizations such as Amnesty International, Sierra Club and The Body Shop to lesser known groups such as Oilwatch, Earthlife Africa, One World Online and the Public Media Centre.

· 1997: In January the World Council of Churches (WCC) publishes a report, which argues that Shell has been justifiably criticized for its operations in Ogoniland. In March, Shell releases its revised business principles, which include for the first time explicit support for human rights. Amnesty International welcomes Shell’s move but argues that it is now up to Shell to prove its commitment through practical action. In May, Shell publishes its first public report on community and environmental issues in Nigeria. The report establishes new targets, including an end to gas flaring within 10 years. Shell also launches a youth training scheme in Ogoniland. In September, the Canadian government introduces a voluntary policy initiative, the International Code of Ethics for Canadian Business, largely in response to Shell’s controversial role in Nigeria (Ross, 1997). Meanwhile, various Internet sites continue to call on Web surfers to “Boycott Shell Now” until the company stops its practice of “double standards”, and supports an independent environmental assessment of the Niger delta.

Shell continues to face considerable pressure from its critics even as it introduces new environmental and social policies and programmes. Shell has indicated that it will be placing new emphasis upon implementation procedures. One of the key lessons that Shell appears to have learned from the past few years is the need to enhance its transparency and communication with a wider range of stakeholders. Greater sensitivity to social and environmental concerns has, nevertheless, failed to stop the international protest against Shell. A remarkably diverse coalition of unions, environmental groups, human rights organizations, churches and businesses continues to single out Shell for its tacit approval of the oppressive military regime in Nigeria (Rowell, 1996b). Shell’s critics continue to demand that the company stop practising “double standards”. They typically argue that Shell’s behaviour in Nigeria would not have been tolerated in countries with stricter standards (NGO Task Force on Business and Industry, 1997).

Such criticism has not deterred Shell’s efforts to develop new relationships with other NGOs. In 1997, Shell attempted to apply the lessons learned from its Nigeria experience to a new gas project in the Camisea region of Peru. The proposed site is located in a pristine rainforest inhabited by indigenous peoples. Shell announced in May 1997 that it had signed an agreement with Red Ambiental Peruana (RAP), a social and environmental network, which empowered RAP members to monitor the social and environmental performance of the proposed project. Shell also supported an elaborate consultation exercise in the Camisea area, which aimed to increase the company’s knowledge about local environmental, social and economic issues. These moves did not, however, stop protest against the project by other NGOs and indigenous peoples’ groups both locally and globally.

Conflicting messages

The oil industry’s overall response to its critics has been mixed in recent years. Industry groups such as CONCAWE continue to believe that a rational approach is essential to the proper resolution of complex issues (CONCAWE, 1996). Underlying this argument is a belief that the industry can solve complex environmental problems if it merely gets the scientific facts right. At the same time, the industry has indicated that technically sound solutions need to be worked out in partnership with its stakeholders. However, CONCAWE fails to include NGOs in its list of the industry’s stakeholders.

Cracks are nevertheless beginning to appear in the previously unified industry front. On the issue of global warming, the world’s third largest oil company, BP, recently broke ranks. John Browne, BP’s chairman, announced in May 1997 that his company accepted that there was sufficient evidence to indicate that the burning of fossil fuels is a significant factor in climate change. BP subsequently agreed to work with the Environmental Defense Fund (EDF) to develop a voluntary emissions trading system for greenhouse gases.

BP’s new commitment to the precautionary principle7 and partnership may reveal an oil industry trying to come to terms with the new politics of sustainable development. BP’s lead on climate change came at a time when the industry and Shell were still coming to terms with the fall-out over Brent Spar and Nigeria. For its part, BP spent much of 1997 fending off accusations about its complicity in human rights abuses and environmental degradation in Colombia. This has prompted BP to initiate dialogue with a group of British development NGOs to explore issues of mutual concern regarding BP’s current activities and future projects in Colombia. As market leaders, Shell and BP have found themselves both the primary targets of organized protest and at the forefront of industry response to the growing complexity of the corporate role in sustainable development.

7 The precautionary principle upholds the validity of taking action to protect the environment even in situations where scientific evidence regarding the cause and effects of environmental degradation is inconclusive.

As Shell’s experience in Nigeria and Peru illustrates, enhanced dialogue and partnership may not be enough to improve the global image of the oil industry. Companies like Shell face a dilemma. They are in the business of extracting natural resources to meet a growing worldwide demand for energy. The opening statement on Shell’s Internet Web site makes this clear:

Everyone must have energy to live. Shell’s main business is drawing stored energy from the earth - as oil, gas and coal - and getting it in a useful form to where people want it (Shell International, 1997).

As a business argument, this seems to make good economic sense. However, it does not allow for any fundamental questioning of resource extraction, processing and transportation. There is also no recognition of the need for energy alternatives. Extracting resources and getting them to where some people want them may mean that other people and their environments are harmed in the process.

Many argue that without ongoing civil society protest, business will have little motivation or need to change. At the same time, many questions remain about how oil companies should best manage the diverse, complex and sometimes contradictory expectations of their stakeholders. Shell Group’s Chief Executive C.A.J. Herkstr offers a useful starting point:

We must remain sensitive to the evolving needs and concerns of all our stakeholders. I fully accept that, in this process, we must be prepared to engage in wider debates - including on human rights issues (1996:14).

His counterpart at BP, John Browne, offers some additional clues as to the future social and environmental agenda of the oil industry:

We need to go beyond analysis to seek solutions and to take action. It is a moment for change and for a re-thinking of corporate responsibility (1997:3).

If market leaders like Shell and BP are serious about engaging in wider debates and rethinking corporate responsibility, then perhaps a time will come when the voices of those opposed to a potential project are more clearly heard. In such cases, the most appropriate corporate response might be not to intervene at all. Whether oil companies are prepared to accept “non-intervention” as a possible solution in some cases remains to be seen.

Postscript

In July 1998, Shell announced that it would not go ahead with the Peru gas project, despite having spent US$ 250 million in exploration costs. The Economist reported that the Peruvian government and the oil companies could not resolve questions about distribution, pricing and exports. New drilling appraisals had also challenged original output forecasts. No mention was made of the possible role of civil society protest in Shell’s decision (1998a and b).

Meanwhile, the situation in Nigeria’s Delta region remains tense. In October 1998, local protesters seized two Shell helicopters, and occupied an oil rig and more than 10 oil relay stations. Local communities in Ogoni and other parts of the region continue to demand compensation from the Nigerian government, Shell and various other oil companies. MOSOP’s financial demands remain fixed at US$ 30 billion, the estimated value of Ogoni oil extracted since 1958. MOSOP also wants Shell to clean up degraded Ogoni lands. Although Shell has made overtures to individual community leaders in Ogoni, the company and MOSOP have been unable to resolve their differences. As of early 1999, Shell’s exile from Ogoni continues. Although some Shell pipelines continue to cross Ogoni territory, the company has not undertaken any drilling or gas flaring activities there since its withdrawal in 1993.

Shell’s new development strategy for Nigeria includes a planned five-year investment of US$ 8.5 billion to develop a number of large off-shore oil fields. BBC reports suggest that part of the project’s attraction is that off-shore development will be “much less prone to the disruption which has severely affected output in the Niger delta” (BBC Online, 1999).

Just Do It - Justly! The Sporting Goods Industry, NGOs, Child Labour and Global Standards8

8 This case study is based upon material published in a paper on corporate social responsibility prepared for the ILO’s Conditions of Work and Welfare Facilities Branch (Murphy, 1997a).

The business response to sustainable development requires much more than policies and programmes for environmental protection. Social sustainability concerns such as poverty, health and child welfare are also affected both positively and negatively by commercial activities. At the international policy level, sustainable development encompasses environment, health and safety (EHS) issues in the workplace. In recent years, various United Nations agencies have lent impetus to calls for enhanced corporate environmental and social policy responses in both the North and the South.

In the 1990s, the EHS practices of sporting goods companies such as Nike and Reebok, particularly in Asia, have been under attack by labour and human rights NGOs in both the North and South. For example, the “Nike Fair-Play?” Campaign has resulted in meetings between Dutch activists and Nike officials, at which the company’s representatives admitted that the monitoring of its code of conduct was unsatisfactory. Nike’s main competitor, Reebok, has also faced scrutiny, with NGO accusations and media exposabout unfair wages, health and safety violations and the use of child and forced labour in some of its supplier factories in China.

This case describes efforts by industry associations, member firms, manufacturers, United Nations agencies, NGOs and various local partners to develop strategies to prevent and eliminate the use of child labour in the production of hand-stitched soccer balls in Pakistan. The global soccer ball market is worth almost US$ 1 billion in total retail sales. Pakistan produces about 80 per cent of the world’s match-grade soccer balls.

The child labour issue

In 1992, the International Labour Organization (ILO) established its International Programme for the Elimination of Child Labour (IPEC), with the aim of working toward the progressive elimination of child labour. Through collaboration with a wide range of actors, IPEC seeks to prevent child labour, to withdraw children from hazardous work, to offer alternatives and, in the interim, to improve existing working conditions for children.

Despite “unprecedented public awareness of the problem... and broad consensus on the need to do something about it”, the ILO notes:

At the inter-governmental level, the problem of child labour has been caught up in a politically charged debate on human rights, labour standards, ethics and international trade. This partly accounts for the relatively slow progress being made towards concerted international action to tackle the problem, even in its most extreme forms (1997b:233).

As of December 1997, less than 60 countries had ratified ILO Convention 138, an international agreement that sets minimum age standards for different kinds of work.9

9 Pakistan is a signatory to three of six ILO conventions related to child labour: No. 59 on Minimum Age (Industry), No. 29 on Forced Labour and No. 105 on the Abolition of Forced Labour (ILO, 1996).

The State of the World’s Children 1997 (a UNICEF report) focuses on child labour and makes links to global corporate irresponsibility. UNICEF cites the growing impact of a liberalized global economy driven by TNCs as a major contributor to the problem of exploitative child labour. Global competitive pressure brings children into the workforce in many Southern countries. Terry Collingsworth insists that government regulation on child labour needs to be safeguarded:

The child labor issue should drive the larger struggle to regulate fundamental rights in the global economy. As nations lose their sovereign right to prohibit child labor (through stealth provisions in complex trade agreements), there must be a plan to ensure that the global economy does not force countries with reasonable child labor prohibitions to scrap those protections and offer up their children as a source of extra cheap labor in the global marketplace (1997:2).

Implementing social protection programmes on the ground, however, remains highly problematic. Despite the existence of national regulatory frameworks on child labour in many Southern countries, “the weakness of enforcement mechanisms ” remains a major obstacle to effective legal protection largely due to “the nature and scale of the problem” (ILO, 1997b:241). Monitoring the use of child labour in the large informal sector is particularly difficult.

The general United Nations message to governments and industry groups is that all extreme forms of child labour must end now. Rather than trying to stop child labour outright, consumers, companies and campaign groups are asked to “ target the intolerable” and seek to eliminate all work which is detrimental to the health, safety and future development of children (ILO, 1996, 1997a; UNICEF, 1997). The ILO estimates that some 250 million children are currently working worldwide.

A partnership response

Officially launched in February 1997, the “Project to Eliminate Child Labour in the Pakistan Soccer Ball Industry” is a multi-stakeholder collaboration that primarily involves the following organizations, some as direct partners and others as project supporters:

· Bunyad Literacy Community Council (BLCC): a Pakistani NGO that provides non-formal primary education mainly for girls and women.

· International Labour Organization (ILO): a specialized United Nations agency with a tripartite structure, which allows for representation from governments, employer organizations and worker organizations.

· Pakistan Bait-ul-Mal (PBM): an organization created by government statute which assists needy widows, orphans, people with disabilities, and the chronically ill, by providing them with assistance for education, housing and rehabilitation.

· Save the Children-UK (SCF): the United Kingdom’s largest international NGO concerned with children’s rights and welfare. SCF works in partnership with children, parents, governments, local authorities and NGOs in over 50 countries.

· Sporting Goods Manufacturers Association (SGMA): the trade association of North American manufacturers, producers and distributors of sports apparel, athletic footwear and sporting goods.

· Sialkot Chamber of Commerce and Industry (SCCI): one of Pakistan’s largest and oldest association of business enterprises, based in the Sialkot District of Punjab Province. SCCI represents local soccer ball manufacturers.

· United Nations Children’s Fund (UNICEF): a specialized United Nations agency dedicated exclusively to meet the needs of children. It works with other United Nations agencies, governments and NGOs to provide a range of health- and education-related community-based services.

· World Federation of the Sporting Goods Industry (WFSGI): the Switzerland-based association of national sporting goods manufacturers that together represent over 12,000 companies worldwide, including leading brands such as Nike, Reebok, Mitre, Adidas and Umbro.

The partnership project has four main aims:

· to prevent and progressively eliminate child labour in the manufacture or assembly of soccer balls in Sialkot District and its environs;

· to identify and remove children under the age of 14 in the manufacture or assembly of soccer balls and provide them with educational and other opportunities;

· facilitate changes in community and family attitudes to child labour, including the soccer industry; and

· to encourage the Government of Pakistan, the business community in Sialkot and other institutions to explore effective ways to eliminate child labour (quoted in SCF, 1997b:73).

Two programmes are being developed to enable project participants to achieve these goals. First, the Prevention and Monitoring Programme is a voluntary scheme open to all soccer ball manufacturers. Participating firms are expected to meet formal registration requirements concerning use of contractors, stitching locations and proof-of-age documentation for workers. Second, the Social Protection Programme is designed to provide affected children and families with educational and financial support, and to raise local awareness about child labour and the need for alternatives.

Project origins

The roots of the Pakistan project lie in the emergence of child labour as a significant political and consumer issue in Northern countries in the late 1980s and early 1990s. In 1992, US Senator Tom Harkin introduced a bill that would have placed import restrictions on products manufactured by child workers. Media coverage initially focused on large numbers of young girls employed in the Bangladesh garment industry and horrific cases of bonded child workers in the South Asian hand-woven carpet industry. One case proved to be particularly significant. Pakistani Iqbal Masih was sold into slavery in 1986, when he was only four years old, for less than US$ 16. After Masih escaped from a carpet factory in 1992 he became a champion of child workers, spoke at international labour conferences and helped close dozens of Pakistani carpet factories. Over the course of his campaign Masih received numerous death threats and in early 1995 was shot dead in his home village. Although most independent evidence suggests that Masih was not killed by carpet industry assassins, his death and the outrage that followed drew worldwide attention to child labour and, in particular, to the situation in Pakistan (Associated Press, 1995; CEP, 1995; Marcus, 1997).

The specific focus on the soccer ball industry originated in the United States in the aftermath of the locally hosted 1994 World Cup. The American Federation of Labour (AFL-CIO) had already been campaigning on the general issue of child labour since at least 1993. By focusing on child labour in the soccer ball industry, labour and consumer groups helped raise awareness about the issue with politicians, athletes, sports associations, parents, children and, perhaps most importantly, within the business community.

In early 1995, WFSGI approached SCF with a proposal to develop a labelling scheme for soccer balls, similar to the Rugmark Foundation’s labelling scheme. Established in 1994 with the support of the ILO and a group of South Asian and European NGOs, Rugmark primarily targets European and North American importers and South Asian producers of handmade carpets. The scheme certifies participating producers according to a set of labour standards and related criteria. Rugmark inspectors monitor factories on a regular basis. Child welfare NGOs are provided access to certified factories to ensure that children are not being employed.

SCF declined the WFSGI offer, due to concerns that labelling would shift the focus away from the root causes of child labour in the industry. SCF worried that such schemes were more concerned with meeting the needs of Northern consumers rather than a direct response to the problems facing child workers. SCF feared that a labelling scheme might lead to an “ethical” labelled segment of the market, aimed at niche consumers, with the same companies continuing to market unlabelled, “unethically” produced products to other consumers. This would enable a participating company to be lauded for the ethical label without implementing ethical policies for all products and activities. Furthermore, SCF expressed doubts about potential monitoring problems. Rugmark was experiencing some difficulties in this regard (Hilowitz, 1997).

Throughout 1995, the child labour story attracted increasingly attention from foreign journalists. In their efforts to get their story, some of these reporters were attacked and beaten up by local people in Sialkot, who feared the potential loss of income as a result of adverse publicity in the international media. Local manufacturers also complained that anti-child labour campaigns had an underlying agenda of promoting adult labour unions internationally.10 The news reports from Pakistan nonetheless continued to reach their intended audience, particularly in the United States.

10 Informal sector, home-based handstitching is “notoriously hard to unionise”, which may explain why many labour groups have campaigned against the use of child labour in soccer ball manufacturing (Marcus, 1997:1).

Near the end of 1995, in response to growing consumer and political pressure upon the soccer ball industry and individual companies, a new working committee within the WFSGI was established in co-operation with the International Olympic Committee (IOC). The new Committee on Ethics and Fair Trade was launched in early November at the first WFSGI conference on human rights, which was attended by representatives of the industry, United Nations agencies and NGOs. In the conference report, the new president of WFSGI, Stephen Rubin, admitted that WFSGI had been “a passive organization frightened to upset its member associations and individual member companies, lest they cease to be members”. It was time, Rubin argued, for the organization “to become proactive, to stand up and be counted”. He went on to say “it is equally important that NGOs and other public sector organizations should back us up” (WFSGI, 1996:1, 76).

In early 1996, the FoulBall Campaign was launched in the United States by the International Labor Rights Fund (ILRF). The campaign targeted soccer balls originating from Pakistan, China and Indonesia and claimed that these countries use child labourers extensively. The campaign attracted support from average citizens and policy makers alike:

[Y]outh soccer leagues in the U.S. were quick to pick up on it and join. The US Secretary of Labor, Robert Reich, was much interested in it and threw his influence into publicizing the effort, as did a number of members of the US Congress (Harvey, 1997).

By mid-1996, coinciding with the UK-hosted European Cup of Football, the British Trade Union Congress, the International Textile, Garment and Leather Workers Federation and International Confederation of Free Trade Unions launched an initiative with the Fration Internationale de Football Association (FIFA) to target the soccer ball industry. The trade unionists were attempting to raise spectator awareness and to get FIFA to phase out the use of balls produced by child labour.

Meanwhile, the FoulBall Campaign in North America was succeeding in getting its message across to the so-called soccer moms who were accompanying their children to the growing numbers of community soccer programmes. At Nike’s 1996 Annual General Meeting, Chairman Phil Knight acknowledged that the company had recently purchased a shipment of Pakistani soccer balls which were “found to have been manufactured... using child labour in horrible conditions” (Nando.net and Associated Press, 1996). In many respects, however, working conditions for most child stitchers in Sialkot were not as bad as those faced by child workers in other industries in Pakistan and elsewhere. Nonetheless, the soccer ball story continued to capture public attention largely because of its media-friendly nature (Marcus, 1997). Consequently, the sporting goods industry continued to face growing consumer and activist pressure, particularly in North America and Western Europe.

Seeking solutions

In July 1996, representatives of Mitre, one of the largest soccer ball brands, organized a visit to Pakistan and invited SCF to accompany them. This visit enabled both Mitre and SCF to develop important contacts on the ground in the Sialkot District, where the Pakistan soccer ball industry is based. In particular, SCF initiated discussions with the local industry body (SCCI) about the need for complementary efforts to ensure that children removed from work do not find themselves in more dangerous and exploitative work environments.

Mitre asked SCF to become involved in a monitoring and labelling scheme, but again SCF declined for reasons similar to those outlined above. However, SCF agreed to undertake a detailed study of the child labour issue in Sialkot. Although three other quantitative studies had already been done, few had gathered qualitative data and all lacked significant attention to the perspectives of children and their families.

During the autumn of 1996, the soccer ball industry continued to feel the pressure of the various NGO campaigns. In September, the FIFA-labour group coalition mentioned above produced a broad and ambitious code of conduct that left the industry scrambling to respond. Trade associations such as WFSGI and the Soccer Industry Council of America (SICA) were increasingly concerned about the impact of NGO pressure upon the industry’s image and the potential loss of markets. In an effort to help it find solutions to the growing storm of controversy, the WFSGI organized a conference in London in November 1996, bringing together industry representatives, many of its critics and other interested parties.

At the conference, WFSGI announced that it was committed to developing a code of conduct for the production of all sporting goods. But the code failed to address “the full range of labor rights enumerated in the FIFA code” (Harvey, 1997). WFSGI also indicated that it had reached agreement with the Pakistan-based Steering Committee on Child Labour (a joint initiative of SCCI and the All Pakistan Sporting Goods Association) to develop a programme to help eliminate the use of child labour in the soccer ball industry. Another outcome of the conference was that SCF agreed to undertake a detailed situational analysis in Sialkot, re-affirming its original commitment made during the Mitre visit.

Partnership agreement signed

Following the London conference, formal negotiations continued between WFSGI, ILO, UNICEF and SCCI in order to finalize a joint project response to the child labour issue. This culminated in the formal announcement in Atlanta on 14 February 1997 of the Project to Eliminate Child Labour in the Pakistan Soccer Ball Industry. Although the official “Partners’ Agreement to Eliminate Child Labour in the Soccer Ball Industry” was signed only by ILO, UNICEF and SCCI, SCF was invited to become a full partner on the Project Co-ordinating Committee. At the Atlanta launch, the WFSGI, SICA and Sporting Goods Manufacturers Association (SGMA) were identified as project facilitators. FIFA and the US Youth Soccer Association were listed as project supporters. FoulBall criticized the Partners Agreement as an industry attempt “to pre-empt legislation and truly independent monitoring” (ILRF, 1997:1).

After the project launch, SCF began field research in Sialkot. The major purpose of the four-week study was to provide SCF and other organizations with a reliable baseline before introducing social protection programmes to assist children displaced from football stitching. SCF decided to participate in the partnership because it was concerned that “emotive responses in the past have caused more harm than good”, with banned child labourers often “forced to take on harmful, less well paid work, including prostitution”. SCF wanted to ensure that “sustainable solutions” would be developed to help overcome poverty, a root cause of child labour (SCF, 1997a:1). In particular, SCF was worried about the loss of family income as a result of the decision to eliminate the use of child stitchers. This explains why SCF remains opposed to blanket bans on child labour. On a more strategic level, SCF’s motivation for participating in the Pakistan project was

... to use [its] experience of child labour programmes elsewhere in a constructive partnership with the private sector - a new experience for [SCF]....[SCF] also saw this as an opportunity to link work at the micro level - in Sialkot - with macro level lobbying and advocacy on corporate social responsibility, [an area of increasing involvement] in the UK (Marcus, 1997:2 - 3).

Between March and April 1997, the ILO undertook a mission to Pakistan in its capacity as lead agency on the project. One of the major ILO tasks was to finalize the Partners’ Operational Framework. The only major change to the original terms of reference concerned the issue of independent third-party monitoring in the Prevention and Monitoring Programme. In response to concerns expressed by the SCCI about third-party monitoring, the partners agreed to designate the ILO as external monitor. The SCCI was mainly concerned that the expense involved in hiring a commercial auditor would be excessive for local manufacturers to bear. The SCCI also felt that the ILO had the capacity and experience to fulfil the role. In particular, the SCCI pointed to recent ILO monitoring and verification experience in Bangladesh. Since 1995, the ILO has been working with Government of Bangladesh, UNICEF and the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) to remove underage children from BGMEA factories and to place them in appropriate education programmes.

The Partners’ Operational Framework was agreed in late June 1997. In addition to providing operational definitions, immediate objectives, long-term goals and specific project elements, the framework outlines the proposed roles of the on-the-ground partners. Furthermore, it specifies the implementation guidelines and successor arrangements for sustainability.

The overall project is being managed by the Project Co-ordinating Committee, in which the SCCI, ILO, UNICEF and SCF are represented. Project partner representatives on the ground have formed the Sialkot Implementation Team to facilitate co-ordination between the two general programme areas and individual components within these programmes.

The SCCI, ILO and participating local manufacturers are implementing the Prevention and Monitoring Programme. As noted above, the ILO is responsible for external monitoring and verification, whereas local manufacturers carry out internal monitoring. The SCCI is expected to communicate progress achieved to its members and also to raise member awareness about their roles and responsibilities in the prevention of child labour. The ILO, UNICEF, SCCI, SCF, PBM, and BLCC are implementing the Social Protection Programme. The Board of the PBM has made a commitment to assume responsibility for the continuation of the programme upon its estimated completion date in 1999.

As of December 1997, the project was under way, with SCF having formed a partnership with the National Rural Support Programme, a Pakistani NGO that will implement related social mobilization activities and a credit and savings scheme. In order to protect women’s jobs and family incomes, the SCF is also organizing groups of women stitchers into units that will be inspected by ILO-trained child labour monitors. Furthermore, the SCF has initiated a social monitoring component to provide detailed tracking of the impact of the overall programme upon local families and communities (Marcus, 1997).

More hurdles ahead

The project partners have made substantial financial and in-kind commitments to date. For organizations such as the ILO and SCF, there are important questions about their capacity to respond to demands for similar partnerships in other industrial sectors around the world. This raises concerns about both the sustainability and replicability of such elaborate and ambitious monitoring and verification schemes, not to mention the vital social protection programmes. There are also questions about the capacity of the partners in Pakistan to provide the necessary financial support for the long-term needs of the project and its beneficiaries. For local communities and industries dependent upon the preferences of global consumers, such projects bring hope for the future but leave many socio-economic and political issues unresolved. Many Pakistanis continue to challenge anti-child labour campaigns by suggesting that their underlying aim is to destroy foreign competition and protect Northern jobs. There is nevertheless a feeling among some members of the Pakistani middle class that global child labour standards are needed and that intellectual arguments to the contrary should be challenged (Marcus, 1997).

The most important lesson for other industry sectors appears to be the fundamental importance of corporate transparency and a willingness to accept independent monitoring. The credibility of the Pakistan partnership depends upon ongoing NGO support, both in the North and in Pakistan. The active role of the ILO in the monitoring programme also offers hope that United Nations agencies may be able to assume new governance roles as arbiters of global corporate standards. The SCF’s leadership on the ground and through its advocacy work at home suggests that Northern-based development NGOs can play a significant role in promoting global corporate responsibility for sustainable development.

Meanwhile, various companies within the sporting goods industry continue to face the scrutiny of civil society everywhere. Despite its support for the Pakistan initiative, Nike remains a major target of protest. When former United States Ambassador to the United Nations Andrew Young, on behalf of Good Works International, reviewed Nike factories in China, Indonesia and Viet Nam in mid-1997, his findings were mixed. Young found no evidence of “systematic abuse or mistreatment of workers”, yet he discovered that most workers knew little about their rights or Nike’s code of conduct (quoted in Himelstein, 1997:44). Furthermore, he called on the company to introduce a comprehensive third-party independent monitoring system because of the prevalence of absentee factory owners and limited Nike on-site supervisors. Although some of Young’s recommendations echo the demands of many campaign groups, the response of company critics has not been positive. Global Exchange called the report “meaningless” as it avoided any consideration of wages, “what may be the most important concern of Nike’s foreign workers” (ibid.).

In late 1997, FoulBall’s Internet Web site claimed that Nike and other industry players continued to demonstrate “foot dragging, deliberate confusion and no strong leadership” in Pakistan and elsewhere. FoulBall suggested that “only the potential for a World Cup boycott [in 1998] seems to be seriously getting the attention of the industry” (ILRF, 1997:2). At the same time, action also depends upon the on-the-ground leadership of the Pakistani industry. SCF’s Rachel Marcus (1997) has argued that long-term success will depend upon local ownership.

Despite some forward movement on the child labour issue in the Pakistan soccer ball industry, the bottom line for many critics is that Northern-based sporting goods companies continue to promote double standards. Whether one is talking about EHS standards in the workplace or wider environmental impacts, companies such as Nike continue to source goods from the South that are often produced under conditions that would be unacceptable and often illegal in most Northern countries. The end result is that people and their environments are often inadequately protected, particularly in the South. Pakistani families who depend upon their children’s income, however, remain concerned about the consequences of eliminating child labour altogether. In the words of a father of child stitchers: “It is not good for children to work, but if they don’t, how shall we live?” (quoted in SCF, 1997b:26).