By Alan Cowell
New York TimesDecember 18, 2000
De Beers, the global diamond giant, has a payroll of more than 20,000 people in about 20 countries. It operates from imposing offices in Johannesburg and London and, in the first half of this year, sold diamonds that totaled $3.4 billion in value. Global Witness, a seven-year-old not-for-profit advocacy group, employs 14 people in two countries. It operates from offices cluttered with computers and the odd bicycle in what used to be a spectacles factory on a nondescript residential street in North London. It runs on a budget of about $800,000 a year. On the surface, the two organizations might seem unequal foes. Yet, in the last two years, Global Witness, a member of a fast-growing network of bodies known as nongovernmental organizations, has been at the forefront of a largely successful campaign to turn De Beers' corporate strategy around, pressing the multinational colossus into a reversal of its attitude toward so-called conflict diamonds to cast itself these days as the champion of a cleaned-up world diamond trade.
Indeed, for the first time this year, De Beers began certifying the provenance of its diamonds, offering a written guarantee that they do not come from areas where they fuel insurrection. The campaign and its fruits, though, go beyond diamonds, because they reinforce one of the most striking effects of the globalization that has been under way since the end of the cold war. Increasingly, with multinational corporations gathering unparalleled power as the standard-bearers of freewheeling capitalism in many countries, more powerful than the governments themselves they are being held to account by shoestring advocacy groups like Global Witness that have filled the vacuum created by the end of the ideological contest between East and West, between capitalism and socialism.
De Beers is not alone in acknowledging the power of the nongovernmental organizations. This year, both the United Nations and the World Economic Forum in Davos, Switzerland, recognized the organizations' role, conferring a new legitimacy as many corporations move from confrontation to at least the appearance of cooperation with them.
De Beers, for instance, has given one board-level executive, Andrew Coxon, responsibility for dealing with the organizations. And significantly, the World Economic Forum has increased the number of nongovernmental organizations known as NGOs that are invited to next year's glittery gathering in Davos. There, a central theme will be "bridging the global divide," a debate that acknowledges the role of the NGOs as champions of the world's have-nots as they press their case onto the global corporate agenda. The issues they are championing vary from the environment to food safety, from the oil business to mining to financial services. But for many companies, the clamor of nongovernmental organizations' pressing businesses to assume social and other responsibilities as part of their corporate mission can seem almost deafening. "They are part of the 21st-century economic landscape," said Andrew Lamont, a spokesman for De Beers.
Indeed, businesses like BP Amoco, the world's third-largest oil company, have taken those demands a step further, weaving them into the corporate image of an environmental pioneer.
Of course, for many casual observers, nongovernmental organizations are associated with the rowdy protests at the gatherings of such international institutions as the World Bank, the International Monetary Fund and the World Trade Organization over the last year in Seattle and Prague. Far from projecting an image of noble intentions, the protesters have seemed to some to be more intent on wrecking McDonald's or Starbucks outlets, venting their rage at the perceived emblems of globalized business and subordinating private property rights to the dictates of direct action. One group, Friends of the Earth, routinely tears up fields of experimental genetically modified crops. Another, Greenpeace, developed the hallmark tactic of boarding vessels at sea to advertise its protests.
But beyond that, linked by the Internet and a sense of shared objectives, nongovernmental organizations are building networks of influence as the representatives of what they term the "civil society," acting essentially as self-appointed watchdogs on dubious corporate behavior.
"We look for the white underbelly of the dragon," said Patrick Alley, the director of Global Witness. Once that "underbelly" has been identified be it to establish the role of diamonds in fueling African conflict or the status of oil companies in the same conflicts "we use the media as a tool to illuminate the target so that the company, decision makers and the public know that there's an issue," he said. Similar tactics have been used to protest the labor practices involved in the manufacture of Nike shoes and the environmental impact of Royal/Dutch Shell's oil operations in Nigeria, forcing both companies into reappraisals of their public posture on labor rights and the environment. Indeed, as corporations consolidate in quest of economies of scale, there is some evidence that advocacy groups are seeking the same sort of power through the politics of scale.
Just last month, 263 consumer advocacy groups, grouped as Consumers International, gathered in Durban, South Africa, to press for changes in the World Trade Organization, the World Bank and other international financial groups and to advocate "social justice and consumer protection in the global market." The sectors and issues selected as targets, according to a statement, included e- commerce, food safety, corporate responsibility, pharmaceuticals, tobacco, financial markets and health care. And while corporations are generally able to deploy vastly greater resources in public relations, litigation, lobbying and advertising and are often skilled at co-opting adversaries, "it's not such an unequal power relationship," an executive from a London- based international mining corporation said.
"You can be an $8 billion company or whatever," he continued. "But in the court of public opinion, the nongovernmental organizations start with more credibility than businesses." Not only that, the push for corporate responsibility has received the imprimatur of the United Nations the biggest nongovernmental organization of them all. Almost two years ago, Kofi Annan, the United Nations secretary general, warned that suspicion of the globalized economy made it "fragile and vulnerable to backlash from all the -isms of our post-cold-war world: protectionism, populism, ethnic chauvinism, fanaticism and terrorism." And in July, more than 50 corporations very few of them American joined with nongovernmental organizations to sign a United Nations global compact to promote high standards on human rights, the environment and labor practices among transnational corporations.
"Business has to accept that it has to demonstrate that it can deliver responsibly," Mark Moody-Stuart, the head of Royal Dutch/Shell, a signer of the compact, said in remarks published at the end of the meeting. Yet the relationship between these organizations and business is less evident.
In using the term "civil society" to denote their purported following, nongovernmental organizations, as some see it, are assuming a mandate that has not been granted by any democratic or representative process of accountability. In parts of Africa, nongovernmental organizations involved in relief work have been accused of prolonging rather than ending wars and of acting as surrogates for their governments back home . The question of legitimacy is important because, as not-for-profit organizations, many of these groups need to promote their own credentials in seeking financing from foundations and charitable trusts. "If people think you are a charlatan," said Mr. Alley at Global Witness, "then your life expectancy is short, and rightly so."
But the question arises: who watches the watchdogs?
That question has not been adequately answered. Activists like Mr. Alley, for instance, say that NGOs themselves should be as accountable to the public as corporations are to their shareholders. But such is the breadth and complexity of the NGOs ranging from local, village- level groups in the developing world to well- financed groups like Oxfam, one of the best- endowed charities that there are no general standards of transparency. Even tactically, the NGO umbrella covers movements from politically active advocacy groups to the looser and sometimes violence-prone organizations that staged the protests in Seattle and Prague groups that might lose most of their impact and support by accepting restraints.
Similarly, though, the NGOs themselves face a quandary: their strength lies, essentially, in their freedom to act outside formal strictures. And, as soon as they are drawn into formal alliances with more strait-laced, formal bodies, they risk being enfeebled. And corporations can be adept at manipulating what some of them depict as a new partnership using advocacy groups to shield themselves from the protests against globalization. When the United Nations global compact was signed, some nonparticipating advocacy groups accused the United Nations of providing organizations with a kind of political cover without being able to force them to change corporate practices.
Some nongovernmental organizations remain wary of the corporations they deal with, sensing that their interlocutors may be only too ready to use private dialogue as a means of stifling public debate, or of co- opting their adversaries. Yet, whether the assessment is cynical or not, the publicly offered wisdom among some executives these days is that in a globalized era, the range of stakeholders in any corporate venture has broadened far beyond just the stockholders to encompass advocates for a range of human rights and environmental and labor issues.
Profit, therefore, these executives argue, must be coupled to corporate responsibility to avoid protests that would do far more damage to business. That may be no more than lip service, but it also acknowledges a shift in the way that labor unions, advocacy groups and grass- roots organizations are able to articulate demands and grievances. "Businesses do not do this sort of thing out of a lack of self-interest, but perhaps out of philanthropic self-interest," a mining company executive said. And sometimes, corporate interests overlap with those of their challengers.
By publicly supporting the campaign against conflict diamonds, for instance, De Beers strengthened its position in the far more valuable market for clean diamonds. "They used the campaign to their advantage," Mr. Alley at Global Witness said. "If business can operate more responsibly, and make more money, that's ideal."
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