Monitor | By Peter Ford | July 11, 2003
When Global Exchange
decided to make Starbucks sell "fair trade" coffee,
the nongovernmental organization campaigning for more
thoughtful and fairer ways of running the world
economy planned dramatic demonstrations outside the
chain's outlets nationwide.
Within days of the
first televised protest, Starbucks executives were
visiting the group in San Francisco to discuss how
they could offer consumers coffee made from beans
grown under more humane conditions, and sold at more
remunerative prices for poverty-stricken growers.
Today, Global Exchange
and Starbucks work together to make "fair trade" a
The deal is one in
what a new report on the future of NGOs calls "early
tremors" that "represent warning signs of seismic
shifts" in the way increasingly powerful NGOs are
With a turnover
approaching $1 trillion a year, according to one
study, and a reservoir of public trust much deeper
than either governments or business enjoys, the
international NGO sector could become "amongst the
most influential institutions of the 21st century," in
the words of John Elkington, coauthor of the study
published by SustainAbility, a British consultancy
And signs indicate
that many leaders in the field are "moving beyond a
culture of criticism to one of engagement with
business and other partners in a search for solutions"
says Gavin Power, a spokesman for the UN Global
Compact, which helped draw up the report.
But the shift, spurred
by recognition of the power of market forces, is
risky, the study warns. NGOs that have earned
international credibility as watchdogs could be in
danger of becoming lapdogs. Businesses that have
concentrated on the short-term bottom line have now to
focus on long-term prospects. Both sides have to ally
themselves with people they once treated as enemies.
"We had to
psychologically shift gears" in discussions with
Starbucks, recalls Kevin Danaher, a cofounder of
Global Exchange. Instead of confronting a corporation,
and shaming it, "we were saying 'We want to help you.'
The rewards are
tempting, both for NGOs to inculcate their human
values in the business world, and companies looking to
grow their economic value. "Successful companies plan
for the long haul," says Mokhethi Moshoeshoe, who runs
the African Institute of Corporate Citizenship in
Johannesburg. "If you are not acceptable in the
communities where you operate, your business will fail
and shareholders will not be happy."
report, "The 21st Century NGO: In the Market for
Change," points to cases where NGO cooperation with
business has had mutual benefit. Amnesty
International's section in Norway helped train
employees of Statoil to spot and resolve human rights
issues in the oil company's third-world operations,
for example. In the Canadian province of Alberta,
energy companies and NGOs work from the outset of
every project on limiting environmental damage, giving
NGOs a decisive say in planning, while the companies
have an easier time with regulatory authorities.
"Greenpeace is a
company's best ally," said John Passacantando, an
official with the NGO at a business conference last
year. The group can help "bring companies into port
before the storm."
NGOs that set
themselves the task of civilizing capitalism through
markets seek to hold that system in check in a world
where globalization is weakening the grip of
Raymond van Ermen, who
once lobbied European Union officials for stricter
environmental safeguards, found the process "long and
difficult." Though regulations are still needed, he
says, the European Partners for the Environment, a
firm he runs from Brussels, sets up "a fast track to
influence the market" by working directly with
business leaders,trade unions, and NGO activists. "In
the last two or three years, we have seen impressive
changes in the way stakeholders can influence the
business agenda," he says.
A similar trend is
evident in the way antiglobalization protesters - so
violently visible in Seattle or Genoa - are shifting
their approach to promote "alternative globalization."
Rather than demanding an end to this historical
process, they are seeking to shape it by globalizing
labor rights and high environmental standards. But
government regulations are still important to sanction
companies that don't take the ethical bait NGO's
offer, say some NGO activists, and noisy campaigns
have a place alongside quiet persuasion.
The prospect of a
public campaign can be just what a company needs to
heed an NGO's complaints, says Mr. Danaher. "We tell
them we know how to make their lives miserable but
we'd rather not," he explains. "If they want us to go
bother some other company, they just have to do the
And NGO negotiators in
suits find their job easier if they seem to be
struggling to make their voice of reason heard over
the cacophony of protest in the street. "Inside or
outside, we are all on the same side," Danaher says.
carrot-and-stick tactics that Danaher employs, the
nature of NGOs' long-term relationship with
corporations is at stake. In many cases, says Mr.
Moshoeshoe, that relationship goes little further than
philanthropy. Huge companies that treat workers
appallingly and devastate the environment "outsource
their conscience," he scoffs, by donating money to
"Our work is to make
the business case for corporate social responsibility
- if a business is to be sustainable it needs to
integrate social and environmental issues into its
structure," he says.
That attitude is
gaining ground, says Seb Beloe, a coauthor of the
report. Ratings agencies are springing up that measure
companies' financial performance as well as a "triple
bottom line," which takes account of their social and
environmental record, as well as their profit margins.
Though only a few hundred companies have drawn up
"triple bottom lines" so far, that is "massively more
than a few years ago," he says.
And on the other side
of the activist-corporation divide, a matching change
of mood points to some new directions. "Instead of
just railing at capitalism," advocates Danaher, "let's
see if we can't use some market savvy."