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Business/NGO Engagement All the Rage

There was a time when representatives of Rio Tinto and Earthwatch, BP and Fauna and Flora, would not be seen dead in the same room. But today business-NGO partnerships are commonplace. Read More

There was a time when representatives of Rio Tinto and Earthwatch, BP and Fauna and Flora, would not be seen dead in the same room. But today business-NGO partnerships are commonplace.


Businesses and NGOs sit to discuss their activities, their mutual interests and the potential for working together. They strike far-reaching legal agreements. They provide sponsorship and endorsements. They go to conferences together, presenting powerpoints together and swapping the floor like TV-news announcers.

For modern companies, NGO engagement is now akin to investor and government relations; to PR. For ethical and commercial reasons, businesses now meet NGOs half-way, discussing their practices, their policies and their point of view.

NGOs, for their part, have swapped the flak-jacket for the grey suit. They are professional, diplomatic and solicitous. Each year, they grow in stature, size and power. They appear on TV; their articles fill the editorial pages of newspapers; they drive public opinion, shaping the agenda.

So, in the past, journalists could expect a bunfight at an event like the Ethical Corporation business/NGO partnerships and engagement conference held on 22-23 February, 2005. But the anger is gone, mediated by discussion and understanding. In place of strife, companies and NGOs talk of the win-win, the mutuality of interests, the synchronous possibilities of publicity and credibility, and the supra-importance of the brand.

Previously, NGOs and companies would argue in plain view with the cameras rolling. Today, they discuss their disagreements discreetly and measuredly, behind closed doors, away from the main hall. People who work together, play together, who share secrets, do not bawl in public.

Companies have grasped the potential for heading off the opposition; for burnishing their reputations with shareholders, government and customers; for selling “ethical” products to the ethically-minded.

NGOs have realized there is the opportunity to improve their credibility, to gain access and to generate new sources of funding.

But both sides have seen the risks as well.

Companies worry that in meeting and talking and liasing they could just be wasting their time. They fear doing a lot and getting little in return (save for inevitable accusations of “greenwashing” and lip-service). In opening themselves up, they fear simply letting their guard down.

NGOs worry about getting “too close.” They fear falling out with their old-time supporters or losing their integrity. In dressing like businesspeople, eating and drinking like businesspeople, attending conferences like businesspeople, they run the hazard of becoming just like “them” — softened, co-opted and embedded.

Ethical Corporation’s conference revealed many of the benefits and threats for companies and NGOs alike. Delegates heard what has worked, and what has not; they listened to stories of culture-clashes on the one hand and of genuine friendships on the other.

Not on offer, however, were any guarantees: for every partnership that appears to deliver small victories, there are others producing headaches and frustration. Companies and NGOs have the opportunity to achieve great things together — but they can just as easily lose a whole lot at the same time.

Day One

HSBC/WWF

The opening day of the conference started, in the main hall, with a presentation from HSBC and WWF about how to drive sustainability issues to the heart of banks’ lending practices. HSBC’s Amanda Combes and WWF’s Robert Napier described how HSBC has now added the issue of sustainability to its credit and risk workshops; how the bank has developed a new credit policy for the forest industry; and, how HSBC has begun training some senior personnel in sustainability issues. They both said the most important part of this labour intensive relationship was transparency.

Greenpeace/NPower

Greenpeace and npower then presented their Juice initiative — which allows the public to buy power produced by the npower’s off-shore windfarm in North Wales. David Threlfall, from npower, said 50,000 customers had signed up, and that only 7% had left after three years.

Both organizations are equally responsible for marketing the program, though Stephen Tindale, from Greenpeace, said it did not actually “endorse” the product. He felt, however, that Juice was a good and innovative way for Greenpeace to promote the idea of wind power.

Moderator Rory Sullivan, director of investor responsibility at Insight Investment, saw a potential pitfall for Greenpeace: that it might “be seen endorsing the whole of npower’s business” (fossil fuels and all).

NGO Accountability

In between the presentations, four delegates sat for a debate on NGO accountability.

Having asked companies for years to become more accountable, NGOs are finding the situation is reversed: it is the companies that now want more disclosure.

Geraldine Peacock from the Charities Commission, which regulates NGOs in the UK, said British standards were lax compared with the US. “We don’t have good systems of accountability,” she said. “Some people say there is chaos.”

She added: “If we are going to have genuine accountability, we need a stronger Charities Commission.” Peacock wants to see a public database of NGOs that all parties can interrogate for information.

Seb Beloe, director of consultants SustainAbility, began by noting that NGOs are now global; they hold substantial resources; they are better organised than before. He agreed with the need for more accountability. But he was worried businesses may have a “hidden agenda,” that businesses were now trying to put NGOs back in “their place.”

Simon Burall, from the One World Trust, expressed concern that “the prospect of an Enron NGO is a real possibility.” He highlighted serious hurdles to greater NGO accoutability, including confusion of over what accountability is and the costs involved for NGOs with limited resources.

Burall agreed with Beloe: businesses have a hidden agenda. He said that companies had been making an effort to brand NGOs as left wing in an effort to discredit them.

Andrew Pendleton, from Christian Aid, said his organization was “falling short” of basic accountability standards. Like Burall, he said the “writing was on the wall” for non-accountable NGOs. “We cannot rely on the old adage of ‘doing well by doing good’,” he said.

RWE/Care International

After lunch, German power company RWE (Thames Water) and Care International talked about their project to develop an “easyJet model” for delivering water supplies in emerging markets. Care’s Leah Hibbin noted that governments are going to fall well short of international targets to improve global water supplies: currently one in six people worldwide have no access to supplied water. To meet the Millennium Development Goals, a minimum of 285,000 people would need to be hooked up daily to new supplies, she said.

Water development is caught in a trap: NGOs are not able to bridge the gap and governments tend to be inefficient and lack resources. Thames Water’s Christian Matossian said companies like his have little financial incentive to invest in emerging markets.

Thames and Care have formed a coalition with Unilever and WaterAid, called WSUP, to develop a new approach, which Matossian said shares the risk for all sides.

Unilever/MSC/WWF

The next speakers, consumer products giant Unilever, the Marine Stewardship Council (MSC) and WWF, discussed their partnership to create an international certification system for sustainable fisheries.

Dr Dierk Peters, from Unilever, said the company has an incentive to promote sustainable production: “If over-fishing continues, our fish business is over,” he warned. There is also a marketing incentive. Customers are demanding “to know where the food comes from,” he said. Peters said he hoped other companies would follow Unilever’s lead, if it is seen as successful.

Rupert Howes, from MSC, said the process of bringing companies into the agreement had been “agonizing,” and that some companies were continuing to dismiss the standard saying “we’re managing just fine without you.” But he said he believed it was worth it: companies were deriving a business benefit, and the value in terms of conservation had been “visible.” MSC now puts its label on 229 separate products and Sainsbury’s promises to use only MSC fish by 2010.

Asian Pulp and Paper

The timber industry provided the most combustible tale of the day, in the shape of Asia Pulp and Paper, and its disastrous “co-operation” with WWF.

Arian Ardie, who had recently left APP, explained how the partnership collapsed after the company failed to stop sourcing illegal timber within an agreed six-month timeframe. There was a lack of trust and transparency in the relationship, he explained, blaming APP for not coming clean. “[The NGO] knows more about your operations than you ever thought they did. They will find out,” he said.

APP is now in serious financial difficulties and has a poor reputation for sustainability around the world.

A Guide to Business/NGO Partnerships

Engagement guru Jonathan Wootliff was on hand to provide a more positive story from his work with one of APP’s competitors, Singapore-based April. In doing so, he offered a balanced guide to the business-NGO partnership: directives that encapsulated many of the best lessons from the conference’s opening day.

Starting from the business perspective, Wootliff said:

  1. Neglecting NGOs can hurt your business.
  2. Building trust with NGOs takes a long time.
  3. Be prepared to work with the most extreme elements (“Not everyone is nice,” he noted. “Sometimes you do not want to get up in the morning.”)
  4. Do not use meetings with NGOs for PR benefit.
  5. Involve key decision makers in the engagement process. Do not make false promises; better say, “I can’t do it.”
  6. Know what is true. Do not say something is fact if you have not checked it.
  7. NGOs can give mixed messages. Be wary.
  8. Use NGOs as verifiers. “Get them counting the lorries coming in and out of the factory.”

And, for an NGO, Wootliff suggested:

  1. Go slow. You can move too fast.
  2. Concentrate on the facts. Stick to what you can verify.
  3. Work out who in the company you should be dealing with.
  4. Find out who is in charge. Understand the hierarchy.
  5. Understand corporate culture. It is important to understand how a business works.
  6. Identify targets for the company.
  7. Be clear about commitments and agreements — for example, sign off on minutes of meetings.
  8. Provide incentives for companies to change.
  9. Accept that some of the company’s initiatives are legitimate.

Concluding his talk, Wootliff described his personal journey from being a Greenpeace activist to paid-up consultant. Five years ago, when he started, “it took me months, if not years, to see anything that they were doing that was positive,” he said.

He has endured many insults for his switching of sides, but Wootliff said he felt that he could do more by working with companies, than from the outside. “I really strongly believe that good forest management, by companies with shareholders and executives, is the only hope for high-density forests in the future,” he said.

Rainforest Alliance

Environmental NGOs are in the forefront of the move to form partnerships with companies, and it was another forestry-minded organization — the Rainforest Alliance (RA) — that came to the platform next.

Food group Kraft has been working with New York-based RA to create a “a common code for the coffee community”: a code that promotes sustainability among coffee suppliers and distributors. Chris Willie, from RA, explained that coffee was a major source of damage to worldwide ecosytems, a major employer in some of the world’s poorest countries, as well as being an industry significantly under threat from environmental damage.

Annemieke Wijn, from Kraft Foods, said the factors driving the company’s policies included a guaranteed long-term coffee supply; meeting consumer demand for “ethical” coffee; and the fact that promoting sustainability is “the right thing to do.” She admitted that the code accounted for only a tiny of fraction of Kraft’s overall coffee output (some of it was on offer during conference breaks) and only involved a few companies. But Wijn described the initiative as a useful start. “We need to work on a sector-wide code. But while we’re doing that, it’s important to get something going. This is a ‘priming the pump’ initiative.”

European Trade Union of Textiles/Nike

For the final session of the day, the European Trade Union Federation of Textiles and Nike discussed a joint project to improve conditions for textile workers in Bulgaria.

Sonya Durkin-Jones, Nike’s director of corporate of responsibility, recounted the tortuous process of bringing a range of Bulgarian stakeholders to join the program, which encourages training circles on the factory floor. Patrick Itschert, the union’s general secretary, said that if called upon he would repeat the exercise — but not without better planning and a tighter definition of what everyone hoped to acheive.

Day Two

The sessions on the conference’s second day offered more intimacy. Gone was the big-table grandstanding and the clunky PowerPoint presentations; in came smaller forums and more opportunity for discussion.

The conference split into quarters, offering four tracks of simultaneous discussion on many topics from biodiversity to community volunteering.

Anti-Corruption

In one session, Mark Pyman, of corruption watchdog Transparency International, got together with Rodney Whittaker, a lawyer from GlaxoSmithKline (GSK), to discuss their efforts to stamp out corruption at the pharmaceutical giant. Pyman talked about the advantages of an organisation like TI coming in from the outside; the disadvantage is that TI can end up providing “cover” for a company’s worst deeds. Pyman noted that three industries were responsible for the greatest volume of corruption: defence, oil and public construction. Property, power and pharmaceuticals are next on the list.

Whittaker said cutting out corruption in the pharmaceutical industry made good business sense. “It is in GSK’s interest to support TI, to have a level playing field. Generics companies in particular are paying a lot of money to get business.”

Whittaker explained how GSK had designated compliance officers for every one of its businesses. He said GSK tried to create a “a culture of integrity” through the provision of “clear rules, clearly communicated.” It is important, he added, to get management buy-in for the anti-corruption initiative to succeed. “Unless you get line people involved, you are not going to get very far,” he said.

Biodiversity

Another track, titled Biodiversity, featured partnerships in the environment arena. BP and Flower and Fauna International (FFI) discussed their relationship, which grants FFI special access to monitor some of BP’s operations. FFI’s Annelisa Grigg said NGOs needed to establish clear boundaries when working with companies. Tony Croucher, from BP, said that the company’s 15-year relationship with FFI had not always been easy. “It’s a challenge to maintain a relationship in a complex world, as both organizations have changed,” he says

Rio Tinto and Earthwatch talked about their partnership — one part of which involves Rio employees going on Earthwatch educational fellowships.

David Hillyard, from Earthwatch, was keen to point out the risks of the alliance. “Our board was extremely concerned about working with Rio Tinto nine years ago,” he said. “Some of our members wondered why an environmental NGO was working with a mining company. And that’s not something that’s gone away. Even now, we have a working group looking at this.”

The financial side of the relationship was one potential complication. “We get substantial funding from them. That creates a power relationship,” said Hillyard. “We have to ask ourselves to what extent we are responding to business needs; to what extent is it our own needs. The last thing we want to be is an apologist for a mining company,” he added. “Mission creep is an issue. It’s important that both sides focus on their own goals.”

For his part, John Hall, a manager of corporate relations at Rio Tinto, talked of the need for transparency in the relationship. Most importantly, it is important to react positively when things go wrong, he added.

Delegate Feedback

Speaking at the close of the conference, delegates had mixed reactions as to how it all went.

One participant, an academic, who did not want to be identified, said: “I’ve been to a lot of these things. You tend to get a lot of the usual suspects, the same old companies wanting to talk about their great partnerships with NGOs. You have to wonder how sincere a lot of them are.”

A representative from a leading consumer products company agreed: “A lot of people just want to pat themselves on the back for working with NGOs. The second day was more useful. People got to ask the questions they really wanted to ask.”

Another participant, from a leading NGO, said he had noticed an increase in the number of development-NGOs attending compared to previous events. “I’ve seen a lot of people from Save the Children, Oxfam and so on. They want to understand what this partnership thing is all about. Up to now, it’s mostly been environmental groups doing partnerships,” he said.

Christopher Anderson, an external relations executive at Newmont Mining, described the two days as “a landmark that couldn’t have happened three to five years ago.” Struck by the lack of government representatives in attendance, he said this pointed to the irrelevance of governments on many of the issues under discussion. “Increasingly it isn’t government but NGOs that we need to work with. The governments in many of the countries that we work are weak. NGOs — the civil society — are more of a natural fit for businesses.”

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This article has been reprinted courtesy of Ethical Corporation. It was first published on March 15, 2005.

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