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Business and NGOs in the

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By David F. Murphy, PhD
New Academy of Business


September 1998

This paper was prepared for Partners for Development Summit, United Nations Conference on Trade and Development, Lyon, France November 9-12, 1998


Thirty years ago Richard Gardner and Max Millikan published a book entitled The Global Partnership Although the authors acknowledged the utopian nature of "the concept of global partnership to abolish poverty", they insisted that such a partnership was in the making and provided "one of the notable victories for international co-operation." Gardner and Millikan also expressed optimism about the role of United Nations agencies in promoting international development and identified nation states as the other major global players of the day. Remarkably their book failed to recognise any explicit role for either business or non-governmental organisations (NGOs) in the global partnership process. The international community in 1968 had also not seriously begun to address sustainability. The global partnership agenda then focused on the role of the UN in economic and social development, multilateral technical assistance and the need for a world development plan, and virtually ignored issues such as environmental conservation, biodiversity and the livelihoods of indigenous peoples.

Twenty-five years later, in marked contrast, the official post-Rio guide to Agenda 21 offered a much more inclusive vision of partnership. The Global Partnership for Environment and Development emphasised sustainable development themes that link the economic, the environmental and the social. Examples included: fostering growth with sustainability, sustainable living, efficient resource use, and people's participation and responsibility. The new universal partnership for sustainable development called for at Rio grew out of a recognition that international co-operation needed more than traditional forms of foreign aid. Key was the assertion that global partnership would only be effective if based upon "new levels of co-operation between all key sectors of society and Government."

Looking back over the past three decades, it would be easy to dismiss recent efforts to promote partnership for sustainable development as another in a long line of international policy failures. Despite a seemingly endless array of conference documents, commission reports and legally-binding conventions - from Stockholm to Brandt and from Brundtland to Rio and beyond - we still seem far from finding solutions to many global-local problems in the economic, social and environmental arenas. Poverty, inequality, human rights abuses and ecological destruction continue to plague the planet. However, consider the frame of the debate and the policy actors in 1968 versus 1998. Whereas then partnership appeared to be the exclusive domain of the UN, other multilateral bodies and their member governments, it now officially embraces a spectrum of major groups: business, NGOs, indigenous peoples, trade unions, local authorities, youth groups, women's organisations, farmers and the scientific community.

A new emphasis upon multi-stakeholder collaboration on the part of governments, UN agencies, business and civil society has meant that the post-Rio period has been characterised by a growing array of partnership stories. This article provides a general overview of the development and implementation of partnerships for sustainable development with a particular emphasis upon the changing nature of relations between business and environmental NGOs. Examples are offered of business-NGO partnership in various sectoral and geographic contexts.

A New Era of Partnership

As demonstrated above, partnership is not a particularly new idea. Historically, partnership has primarily referred to a profit-making business relationship between two or more people where the partners jointly provide the financial capital and share both control and profits. In recent years, the notion of partnership has also entered into common usage as a neutral term to describe a romantic relationship between two individuals (i.e., the partners). Indeed partnership is evolving from a legalistic business concept to a more general inter-personal and inter-organisational idea. As we approach the new millennium, partnership is emerging as a powerful organising principle for people and organisations throughout the world. Despite ongoing conflict within nations and many regional and global tensions, there is growing evidence that we are entering a new era of partnership.

Researchers in different disciplines have uncovered innovative forms of partnership and collaboration in a range of organisational settings. In the face of upheavals associated with economic and technological change, businesses are increasingly adopting collaborative strategies such as joint ventures and research and development consortia with academic institutions and other companies. In a related vein, companies are also entering into partnerships with suppliers (or strategic alliances with competitors) to improve product quality, reduce costs, enhance customer service, develop new technology, minimise risks and to improve competitive position.

The new era of collaboration has also seen the rise of public-private partnerships. In the aftermath of privatisation and deregulation in the 1980s, local governments in many Northern industrialised countries began to increasingly work in partnership with private sector interests. Researchers at the University of Bristol recently noted that public-private partnerships have become "the most acceptable and required form of local governance" and predicted that this trend will continue well into the 21st century.

The idea of partnership has also permeated the NGO sector. Since at least the mid-1980s, NGOs working in different sectors and geographical regions increasingly refer to each other as partners. In the age of information technology and international conferences, NGO coalitions, networks and alliances have grown considerably. The emergence of a global civil society based upon partnership principles is now considered as one of the real hopes to democratise the global political economy.

The trends noted above were important building blocks for the idea of partnership for sustainable development. However it was not until after the 1987 publication of Our Common Future and the lead up to the 1992 Rio Conference that sustainable development began to be widely recognised as new way of looking at global environmental, social and economic problems. As a policy idea, sustainable development attempts to bring diverse perspectives together in order to discuss differences and identify shared interests. Sustainable development therefore has the potential to promote dialogue, debate, disagreement and sometimes partnership between a spectrum of groups, organisations and individuals. This in turn offers the possibility of implementing joint responses to complex problems from the global to the local level.

In the 1990s, partnership for sustainable development has shifted from idea to action with numerous examples emerging from around the world. Despite a long history of confrontation between industrial developers, local communities, environmental NGOs and governments, the natural environment has become one of the main arenas for partnership in recent years. The shift from protest to partnership has been most pronounced in the area of business-NGO relations.

Business-NGO Partnerships

Partnership is not the first word that comes to mind when one thinks about businesses and NGOs. Over the past three decades, most relationships between the private sector and civil society have been founded upon conflict. In different sectors and geographical settings, this pattern of business-NGO relations started to change in the early 1990s with the emergence of partnerships between these long-standing adversaries. Although most business-NGO partnerships to date have appeared in the North, many of these initiatives have significant implications for the South in that many promote international business and trading standards. Furthermore there is some indication that southern-based companies and NGOs are beginning to collaborate, albeit to a much lesser extent than their northern counterparts. Explanations for this transformation range from the perceived and actual decline in the regulatory role of the nation state in the face of globalisation to the consequent rise of market-oriented NGO and consumer protest aimed at making business more accountable for its adverse social and environmental impacts. Others suggest that some businesses and NGOs are beginning to find common ground around the concept of sustainable development in order to find solutions to global-local problems which inter-governmental processes are failing to resolve.

In many cases, NGO protest and other forms of campaigning have forced business to the negotiating table. For example, the high-profile 1995 Greenpeace-Shell confrontation over the deep-sea disposal of the Brent Spar oil platform eventually led Shell-UK to engage the Environment Council, a British NGO, to facilitate a series of European-wide dialogue forums. These events brought Shell officials face-to-face with a wide range of NGOs and other stakeholders to discuss alternative disposal options for the Brent Spar. By late 1996, Shell-UK's Chief Executive Chris Fay had recognised that his company "had no option but to pursue the goal of sustainable development."

An earlier example in the forestry sector also highlights the role of NGO campaigns in facilitating partnership. When lobbying in the early 1990s failed to produce effective global and national regulation of forest management practices, NGOs recognised the need to deal more directly with business. Their tools included both protest and partnership. NGO rainforest campaigns targeted retailers and traders of forest products in Europe, North America and Australia. Tactics included demonstrations outside stores and leafleting customers, as well as dialogue with company managers. This eventually led to the establishment of the Forest Stewardship Council (FSC) in 1993. The FSC is an independent, non-profit NGO that is essentially a partnership between timber and other wood-product users and traders, and environmental and human rights groups that supports environmentally appropriate, socially beneficial and economically viable management of the world's forests. Based in Mexico, the FSC oversees the independent evaluation and certification of well managed forests based upon social and environmental principles and criteria endorsed by the FSC membership. For example, the principle on environmental impacts states that "forest management shall conserve biological diversity and its associated values, water resources, soils and unique and fragile ecosystems and landscapes, and, by so doing, maintain the ecological functions and integrity of the forest." Other FSC principles cover areas such as indigenous peoples' rights, community relations and workers' rights.

The FSC is backed up by various national-level partnerships between the World Wide Fund for Nature (WWF), other NGOs and groups of companies that buy and sell forest products (so-called buyers groups) in various European countries, North America and Australia. Similar partnerships are about to be launched in Japan and Brazil.

The success of the FSC model led to the establishment in 1996 of the Marine Stewardship Council (MSC) which resulted from a conservation partnership between WWF and Unilever. Consistent with the idea of partnership for sustainable development, the two organisations launched the MSC to promote economic incentives for sustainable fishing that would "ensure the long-term viability of global fish populations and the health of the marine ecosystems on which they depend." Building upon FSC efforts to protect forest biodiversity, the MSC subsequently recognised that a sustainable fishery is one that "maintains, and seeks to maximise, ecological health and abundance [and] maintains the diversity, structure and function of the ecosystem on which it depends as well as the quality of its habitat, minimising adverse effects."

To date, there appears to be greater evidence of business-NGO partnerships in the North than in the South. Whereas there has been a longer history of business-NGO relations and consumer politics in the North, Miguel de Oliveira and Rajeesh Tandon note that most NGOs in the South initially "allied themselves with popular movements to oppose the state, while for all practical purposes, ignoring the market and its institutions." In the face of globalisation and state deregulation, however, southern NGOs are beginning to recognise the need to more directly influence and in some cases collaborate with business. For example, the South Korean NGO Citizens Alliance for Consumer Protection (CACP) organises high-profile media events aimed at getting large corporations to sign agreements related to cleaner production, energy efficiency and other environmental matters. In Brazil, the Environmental Institute (OIA) has facilitated co-operation between NGOs, local authorities, community associations and various companies on the Biomass Nutrient Recycling Project. One outcome of this project was the development of the Petropolis Waste Water Treatment Plant as a commercial venture of OIA. Costa Rica's National Biodiversity Institute (INBio, an NGO) has collaborated with the American pharmaceutical company Merck on bioprospecting in order to value and conserve biodiversity through the use of biotechnology. However, in this case serious questions have been raised about the extent to which the partnership has taken full account of the interests of all relevant stakeholders. Most business-NGO partnerships face similar challenges in their efforts to gain wider legitimacy.

A different Southern partnership model emerged from Pakistan's soccer ball industry in 1997, bringing together the Sialkot Chamber of Commerce and Industry, local manufacturers, Save the Children-UK, Pakistani NGOs, UNICEF and the International Labour Organisation (ILO). This social development partnership aims to prevent and eliminate the use of child labour in the production of hand-stitched soccer balls in Pakistan. Two programmes are being developed to enable the project participants to achieve this goal. First, the Prevention and Monitoring Programme is a voluntary scheme open to all manufacturers of soccer balls. Participating manufacturers are expected to meet a number of formal registration requirements concerning use of contractors, stitching locations and proof-of-age documentation for workers. Second, the Social Protection Programme is designed to provide affected children, women and their families with educational and financial support, and to raise local awareness about child labour and the need for alternatives.

Partnership Processes

The idea of business-NGO partnership for sustainable development is a relatively new phenomenon. Many of the examples noted above have only recently begun to develop specific project activities. Nonetheless it is possible to identify a number of emerging trends in business-NGO partnership processes. It is also worth noting that this experience is equally relevant for UN agencies, governments and other groups that facilitate or participate in partnerships.

Partnership between business and NGOs appears to be at odds with their respective societal goals and roles. The paradox of business-NGO partnership is inevitable given that its brings together the apparently competing agendas of business and NGOs. As a social and political process, the development and implementation of such partnerships necessarily embodies paradox. The challenge facing partnering organisations is not to try to resolve paradoxes but rather how best to manage them and learn from the experience. The partners need to acknowledge each other's differences and work with them and against them simultaneously.

The partners therefore need a capacity and willingness to cope with diverse perspectives and paradoxical goals throughout the process. Sustainable development entails negotiation between economic, social and environmental interests which may be problematic. Developing and implementing partnership goals usually involves a lengthy, difficult and exceedingly complex process. Given that this is largely uncharted territory for both business and NGOs, much of the details of implementation usually have to be worked out as they go along. Flexibility enables partners to adapt targets and operational guidelines as circumstances change. The global dimension of many business-NGO partnerships and the multiple layers and tangents of most company supply chains and industrial processes increases the unpredictable nature of the process. At the same time, the partners may face considerable opposition from many within industry and the NGO movement. Such opposition often forces the partners to revisit issues such as stakeholder legitimacy and ground rules throughout the process in order to strengthen external support for the partnership.

Power is a central feature of all social processes, however it assumes a different form and role in partnership. Shared power emerges from a collaborative process where business and NGOs recognise each other's legitimacy and authority to define problems and propose solutions. The NGO partner needs to find positive ways for the business partner to respond to environmental and social development problems. Erik-Jan Schipper, of Intergamma, a Dutch retailer of wood products explains:

The NGOs are not telling us what we shouldn't do but are discussing with us what we could do for the environment. They think with us and they see where our problems lie and what we can do about it and what we can't do, and what we are trying to do.

Although power differentials between participants often remain, the partners need some degree of countervailing power in order for partnership to happen. That is to say, they must be to a certain extent dependent on each other. Despite the dominant economic power position of business, the NGO movement embodies both the moral power of the stick (via protest) and the convening power of the carrot (via partnership) which both induce business to collaborate. In the face of protest, business needs to work with credible NGO partners to help solve commercial, environmental and social problems. In the face of globalisation, NGOs need to work with committed business partners to promote sustainable development. With much of the relationship founded on mutual trust, the partners also depend on each other's commitment to achieving shared and individual goals. Together business and NGOs are better able to understand problems and find solutions. This also enables them to build broader support for the partnership's goals and activities.

On a basic level, personal contact is the critical element that makes business-NGO partnerships happen and produce results. A recent study on business-environmental NGO partnership by John Elkington of SustainAbility found that:

Productive cross-fertilisation of ideas, understanding the other side's perspective, and sharpening one's own arguments are all cited as potential benefits to both sides.

This is similar to the biological concept of mutual symbiosis with business and NGOs intimately coexisting and both benefiting from the relationship. The agents of this mutual symbiosis are the individual and organisational commitments of the participants. In particular, it is the presence of dynamic and committed partnership champions that enables business and NGOs to seek symbiotic relationships. A WWF representative in the British FSC and buyers group process noted that "success boiled down to the commitment of individuals and the support that senior management has given to those individuals." Research on environmental partnerships in the USA by Fredrick Long and Matthew Arnold found that champions "not only maintain momentum, they also build morale and promote team bonding." In addition to being "convinced that what they are doing is important", partnership participants "must feel a bond to each other that "is almost as strong as the bond they have to their organisations."

Without a commitment to mutual symbiosis it seems unlikely, that NGO campaigners and business managers would be able to see each other as people rather than as caricatures of their respective media images. Given that partnership development depends so heavily upon intimate association between motivated individuals, partnership survival may ultimately be threatened by this dependency. Partnership therefore requires much more than the personal commitment and the influence of individuals. It needs to be institutionalised via some form of referent structure such as the FSC or buyers groups which recognises personal commitments and their relationship to organisational roles and responsibilities without stifling the creative dynamics of intimate association between individuals.

While there are many within the global NGO movement who continue to view any form of business-NGO collaboration with deep suspicion, others see improved relations with the private sector as a necessary tactic in trying to change unsustainable and unjust business behaviour. Notwithstanding the value of closer co-operation between all three sectors of society - government, business and NGO - there remains a need for a critical and independent NGO voice in the policy arena. NGO protest continues to play a vital role in mobilising citizens to promote sustainable development through policy changes at all levels of society. As noted earlier, conflict is often an important precursor to (and sometimes an ongoing feature of) meaningful forms of business-NGO partnership.

Partnership Futures

We seem to have entered into a new world of partnership where even the most unlikely forms of collaboration may now be possible. In the face of substantial pressure from environmentalists about its promotion of genetically modified organisms (GMOs), Monsanto has recently taken out full page advertisements in The Economist and other prominent publications which invite readers to consult Greenpeace and Friends of the Earth websites for alternative views about the potential risks of GMOs. Some may dismiss this as merely a new public relations strategy, but such unprecedented corporate responses provide further evidence of a repositioning of business-NGO relations from discord to dialogue.

Partnership holds considerable promise as an organising principle for more just, equitable and sustainable world futures. Although this article focuses on the business-NGO partnership phenomenon, many of the lessons learnt to date from this experience is also of value to UN agencies, national governments, local authorities, indigenous peoples and other groups everywhere that are seeking new partners. In a world where so many complex social, economic and environmental issues remain unresolved, there remains a need for more inclusive and participatory problem-solving models founded upon partnership.

Business-NGO partnerships may represent such an alternative, yet they embody both paradox and potential. The idea of partnership between a multi-billion dollar global corporation and a poor, marginalised local community group in the South is at odds with the enormous power differentials and divergent interests inherent in such a relationship. On the other hand, when larger NGOs establish new collaborative relationships with business, there appears to be greater scope for shared power and control. Such NGOs increasingly need to work with business in order to realise their organisational goals in a globalised economy. Their business partners need credible independent guidance in order to respond appropriately to concerns about the social and environmental impacts of their products and production processes. More than ever, marginalised people and their environments depend upon the efforts of non-state actors alongside those of governments and UN agencies to develop sustainable and just alternatives.

David F Murphy © September 1998
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FAIR USE NOTICE: This page contains copyrighted material the use of which has not been specifically authorized by the copyright owner. Global Policy Forum distributes this material without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. We believe this constitutes a fair use of any such copyrighted material as provided for in 17 U.S.C ß 107. If you wish to use copyrighted material from this site for purposes of your own that go beyond fair use, you must obtain permission from the copyright owner.