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The Potential of Civil Regulation for the South

Much of the evidence provided for the emergence of civil regulation as a driver of corporate responsibility for environmental protection in the South involves Northern NGOs and transnational business. Although many of the corporate responses to environmental issues have occurred as a result of protest by groups and communities in the South, the role of Northern NGOs in facilitating civil regulation has been key. We have argued that in most cases it is consumer politics in Northern industrialized markets that compels companies to take action. Therefore one must question the potential for civil regulation to be replicated in different countries, particularly for businesses involved in domestic or international trade where the market does not feature well-developed consumer politics.

There are some signs that consumer politics is beginning to penetrate parts of the non-Western world. A joint Chile/Japan project to educate Japanese consumers on the problems with the woodchip trade is one example. Another is the growth of national eco-labelling schemes in Taiwan, Japan and South Korea. These examples suggest that some progress is being made in building consumer and corporate awareness in these key markets.

However, there is much evidence to the contrary. In the case of forestry, Northern business support for the FSC has not stopped Asian companies with poor management practices from increasing their logging activities in tropical forests. The growing demand for timber in the emerging economies does not appear to be matched by growing consumer politics. Even as Northern-based companies in other sectors develop higher social and environmental standards for their operations in the South, their Asian or Latin American competitors are likely to continue to cut corners when supplying Southern markets. This means that civil regulation, as expressed through certification and labelling schemes, may merely serve to shift international trading patterns and have little affect on environmental protection or sustainable development in the South.

Despite the limited extent of consumer politics, Southern NGOs are beginning to become involved directly in civil regulation schemes (rather than contributing to Northern NGO-administered civil regulation through protest and conflict). The case of Shell approaching the Peruvian NGO RAP to monitor its operations in the Camisea region suggests that the civil regulation model is beginning to emerge in the South. At the same time, however, many other NGOs, activist groups and indigenous peoples’ organizations continue to challenge Shell’s activities in Nigeria and Peru. More research is needed on the capacity and desire of Southern NGOs to take on such monitoring roles.

More research on the business response to citizen action in South is also necessary. Charles Reilly’s review of Latin American NGOs notes “complex sets of national and international relationships” but offers no examples of formal business-NGO collaboration (1995:248). However, Brian Loveman suggests that “environmentally-focused NGOs” in Chile are more likely to “make demands upon government and nongovernmental actors (e.g. business) as a lobby... or interest group” (1995:126).

Throughout much of the South, many differences still remain between the commitment and capacity of national versus global business on environmental matters. A 1995 survey on public perceptions of economic reforms conducted by the Consumer Unity and Trust Society in India and Nepal “came across a universal opinion, not withstanding Bhopal, that TNCs are better at environmental management than domestic entrepreneurs, because of their track record and circumstances at home” (Mehta, 1997, personal communication).

This seems logical, given our argument that much of the impetus for corporate environmentalism comes from the growing strength of civil society and consumer politics in the North. Where there is limited demand for environmental responsibility in the home nation, companies are more likely to continue to behave irresponsibly. It could be said that the forest communities of Papua New Guinea and other South Pacific countries are suffering the consequences of limited environmental awareness and consumer politics in Malaysia, Indonesia and Japan.

Meanwhile, most Southern NGOs continue to have little or no experience of co-operative relations with big business, either national or global. There is also little evidence in the literature of Southern business embracing civil society as allies. Mutual prejudices will take time to overcome. Co-Chair for civil society on the Philippine Council for Sustainable Development, Nicanor Perlas, explains that:

The thawing of the lines between business and civil society is fairly recent. Bridges are still being built. Trust is still being developed. Common policy agendas are still being nurtured. It may be some time before actual partnerships emerge (Perlas, 1997, personal communication).

In a similar vein, Miguel D. de Oliveira and Rajesh Tandon believe that: “ in the countries of the South, NGOs... have so far had little contact with the emerging initiatives of corporate philanthropy” (1994:3). As and when Southern businesses expand their efforts in the areas of corporate community involvement and environmental protection, Southern NGOs and base groups may find themselves in the company of new partners.

In addition to developing collaborative relations with industry, to be effective, civil society needs to perform a watchdog role competently. However, the ability to organize, take direct action and speak loudly and freely is often not protected by government. In many countries, governments actively undermine NGO efforts to take on these roles:

The recent murders of green activists in Honduras, Columbia and even Costa Rica (a country which prides itself on its environmental awareness) are reminders that environmental campaigns can strike at the heart of political and corporate power (Collinson, 1996:1).

Without the ability to wield the “stick”, Southern NGOs and communities will not be able to realize the benefits of civil regulation. Helen Collinson argues that the main failure here is government inability or unwillingness to exercise responsible force:

One reason why Latin American environmental campaigners are more vulnerable than their fellow activists in Europe or North America is that Latin America’s democratic and judicial institutions are still weak and protesters often have limited recourse to the law (1996:1).

This reminds us that NGOs do not have the same power as governments, as they do not have a universal monopoly on the use of force. They do not have the ability to impose fines or other penalties. The power of NGOs lies in the use of the marketplace to boycott a company’s products, or affect its staff morale or investor confidence. This market power is usually limited to societies with well-organized consumer politics. It also depends on the ability of NGOs to communicate their message effectively to consumers, and this usually requires substantial resources. Where NGOs do not have sufficient financial and communications resources, they may be constrained in their capacity to use the “stick” of consumer boycotts or mobilizing dissent. This may not be only a matter of limited access to information technology. Unlike many large Northern NGOs, most Southern NGOs do not have the in-house public relations capacity to challenge slick corporate PR campaigns - such as Burson-Marsteller’s recent efforts to undermine the indigenous peoples’ campaign against Aracruz Cellulose.

It appears, then, that for Southern NGOs to become active in civil regulation they need to be linked with supportive NGOs in countries with developed consumer politics. The Shell Nigeria example also reminds us that Southern campaigning on its own is not always effective in changing corporate practices. Protests by local Delta communities against the operations of Shell began in the late 1980s. Shell’s responsibility for the plight of the Ogoni became an issue for consumer politics in the North much later. Global civil society alliances backed up by activist companies and an attentive media are also key determinants of effective NGO campaigning and civil regulation.

The need for North-South alliances between NGOs is an indication of the democratic deficit Southern civil society currently faces with civil regulation mechanisms. The cases examined in part 1 demonstrate that the power to regulate corporate activity in the South resides in the North. To influence the behaviour of global corporations or their subsidiaries, Southern civil society must make contact with Northern civil society and then persuade them of their grievances and their alternatives. Many Southern NGO campaigners argue that Northern NGOs impose solutions on them, demonstrating an approach which could be described as ethical imperialism. In order to overcome this problem, Southern NGO participation in policy development must be facilitated. This poses a logistical and financial challenge that many Northern NGOs appear reluctant to meet. However, as the civil regulation agenda develops, more questions will be asked of Northern NGOs relating to their legitimacy in negotiating on behalf of developing country communities: unlike pandas and whales, people can speak for themselves. Therefore NGOs seeking greater legitimacy for collaborative business campaigns will require greater Southern civil society input in the future.

Despite the many concerns about the limits of civil regulation outlined above, this new policy instrument holds some promise for reducing the social and ecological footprint of Northern economies on the rest of the world. Other complementary measures will no doubt be needed to regulate companies in the future, particularly those based in the South. Although many political battles may lie ahead, particularly in multilateral bodies such as the WTO, the ILO and the United Nations Commission on Sustainable Development, there is growing recognition of the need for a wider range of regulatory tools to monitor corporate performance on social and environmental matters.