Why dialogue is not an appropriate response to corporate power

Why dialogue is not an appropriate response to corporate power

In his 2004 report on CSR for Christian Aid, Andrew Pendleton argues that through entering into dialogue with companies, NGOs may have ‘unwittingly enhanced company images and market profiles, despite their efforts to avoid public association with the companies involved… This might not matter if it had helped secure lasting benefits to the poor.’ Dialogue has become the key way that NGOs interact with companies, while more confrontational approaches have, in some quarters, been abandoned as old-fashioned. NGOs have been flattered into thinking that a word in the right ear will limit the destructive impacts of corporations, but they often fail to challenge the power structures that make these impacts so ubiquitous and immune to reprisals. Proponents of dialogue see it as the best chance we have, faced with the reality of corporate dominance. But this is only true if other realities cannot be conceived of and brought into being. CSR is only the best that society can hope for if we do not visualise and struggle for anything more. NGOs report that it is usually companies that are the instigators of dialogue. This should ring alarm bells. Dialogue with NGOs is an issues management strategy. International PR consultant Rafael Pagan, Jr., at a 1985 address to the Tenth Public Relations World Congress, advised companies that ‘if a company opens itself up to dialogue with critics of conscience, seeks support and understanding through openness and dialogue with news media and UN staff members, and acknowledges a broad responsibility for the more remote effects of its marketing practices in the Third World, it can gain respect for its essential decency, legitimacy and usefulness’. Through dialogue with NGOs, companies are able to: fight pressure groups and manipulate the debate; assess the threat posed by NGOs and gain intelligence; delay taking action; and divert attention from more pressing issues. So can a genuine partnerships between companies and NGOs really exist and who really gains from dialogue? Partnerships between NGOs and corporations require some common ground. An organisation motivated purely by concentrating wealth in the hands of a few already rich individuals cannot have any common ground with an organisation set up to defend the social good and threatened ecosystems, particularly when those very interests are under attack from that same corporation. How can the NGO develop a relationship of trust with such an entity? A partnership requires some form of power equality, yet the corporation dwarfs the NGO both in terms of political influence and resources. The language used around CSR is highly misleading. ‘Dialogue’ suggests a free and open exchange of views. ‘Partnership’ implies equality of power relations. The term ‘stakeholder’ implies power to make a change. Dialogue meetings are often referred to as ’roundtables’ suggesting a lack of hierarchy. As with the use of the term ‘responsibility’, the positive connotations of the language mask the real power dynamics at work. Dialogue is an attractive strategy since governments are unwilling or unable to regulate corporate behaviour. But even in this regulatory vacuum, are NGOs the appropriate actors to regulate companies? Some commentators propose that NGOs’ involvement in CSR can be a kind of soft (i.e. not legally binding) regulation. Academic and CSR consultant Jem Bendell terms this ‘civil regulation’, which lies somewhere between self-regulation by business and ‘hard’ regulation by governments. But NGOs have no power to regulate or enforce, merely the power to complain and recommend. More than this, companies see NGOs as a ‘more natural fit for business than governments or citizens’. They have cultivated NGOs, but have simultaneously undermined the credibility of the NGOs by accusing them of being unaccountable and lacking transparency. This improves the image of companies, distracts and undermines NGO critics, and excuses governments from the necessity of taking action. Responsibility for regulation of corporations should rest not with the corporations themselves, nor with NGOs, but with society through a genuinely democratic process. NGOs are often identified as the representatives of civil society, and while their mandate may be progressive, it is limited. Just as NGOs cannot speak on behalf of garment workers in the South (see section on codes of conduct), so they cannot represent the broad public interest. There is no substitute for democratic control of economies and the institutions through which we meet social needs and deliver goods and services. NGOs need to be very careful in weighing up the impacts of their involvement with companies, not just for their own organisational strategy or issue, but in the wider political context. However, this simply isn’t possible for many NGOs as they are not set up to consider broader implications but to act on a narrow mandate. NGOs need to ask not simply, ‘will this engagement lead to change on our issue?’ but also, ‘will the change we can bring about by this engagement be counterbalanced by the gains the company is able to make from it, economically, politically and in terms of its public image?’ and, ‘where does our engagement leave the balance of power between corporations and society?’ The narrow mandates of NGOs also make it difficult to identify corporate power as being a common root of social and environmental problems instead of the actions of some specific unethical companies who can change. Tracey Swift from AccountAbility put it this way, ‘there is a small cadre of people working in this area who see it’s all about power. But yet we are not really working on power, as there is no funding for this sort of thing – it’s not what people want to hear’. While most NGOs would not admit that their ability to challenge corporations is compromised by their engagement with companies’ CSR initiatives, it inevitably is. NGOs have to adapt their demands to appear reasonable to the corporate mindset. This is a de-radicalising process. The kind of change to corporate power that is needed to set our global societies on an equitable and sustainable course cannot be made reasonable to the corporate mindset.
Engagement has become the de-rigeur NGO strategy, and confrontational approaches have become characterised by corporations, the media, and even some NGOs as out-moded and unsophisticated. Similarly, pragmatism and involving corporations in ‘solutions’ has become the only acceptable NGO stance, whilst serious critiques of corporate power, based on a belief that society cannot compromise with corporations in pursuing social justice, equality, and environmental sustainability, becomes unacceptable. This mirrors exactly the advice from PR guru Ronald Duchin, telling his corporate clients to ‘isolate the radicals; cultivate the idealists and educate them into becoming realists; then co- opt the realists into agreeing with industry’. This divide and rule strategy has been successful in co-opting the NGO establishment. Peter Utting argues that ‘historically, progress associated with corporate social and environmental responsibility has been driven, to a large extent, by state regulation, collective bargaining and civil society activism. Increasing reliance on voluntary initiatives may be undermining these drivers of corporate responsibility.’ Although the NGOs in dialogue may see the activists out on the streets as a necessary stick to the NGOs’ carrot, the feeling is not mutual. The ‘radicals’ feel not only isolated by NGO/corporate engagement but sold out by it. Engagement provides the cover through which companies can construct a ‘green’ identity to discredit and deflect criticism. This provides a buffer against more radical moves. A good example of this is the Roundtable on sustainable Soya, co-ordinated by WWF amongst other organisations. The initiative has undermined peasant and farmers movements fighting the expansion of soya production across Latin America to provide animal feed to Europe and China. While grassroots movements are taking action for land rights, food sovereignty and an end to corporate domination, the NGOs called for a a small decrease in destruction of the rainforests and savannahs. Latin America has recently seen successful revolts against neo-liberal politics and corporate power, such as the popular uprisings against the IMF in Argentina and the defeat of water privatisation in Cochabamba, Bolivia. In the case of the Roundtable on Sustainable Soya, as in others, the NGOs’ realpolitik creates an obstacle to the groundswell of popular counter-globalisation movements towards genuine autonomy and sustainability which NGOs should be supporting. Many NGOs are choosing what is essentially a palliative campaign strategy, one that tries to make conditions more bearable rather than solving the problem. As the world’s ecological crisis worsens, many of the organisations we’ve trusted to fight the destruction are effectively reinforcing the power of the destructive corporations. As our need for change becomes ever more urgent, and the solutions needed ever more drastic, some NGOs find themselves actually asking for less and less change.

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