Business

The Power of the NGO

By Dweep Chanana ⋅ May 10, 2006 ⋅  Email this post ⋅  Print This Post ⋅ Post a comment

Back in university, I had heated debates with my colleages from the US and Europe, on labor and environmental standards. As I’ve said before, I am vehemently against them. For me, they constitute at best protectionism by other means. At worst, for some it is neo-colonialism by means of the NGO.

I do not, necessarily subscribe to that last view, though I remain skeptical of ‘civil society’. As the paper ‘Global Civil Society’: A Skeptical View (opening chapter of London School of Economics 2004/05 yearbook) states:

Civil society does not act as the representative of citizens to a domestic democratic state, because citizens also vote; their democratic claims are not intermediated…even primarily by civil society organizations, but directly at the ballot box. International organizations are undemocratic and will always be that way, and international NGOs, for their part, cannot “represent” the peoples of the world and cannot substitute for democracy

The reality is that NGOs that are successful are the ones that can frame their issues within a framework acceptable to the western ‘consumer’ – the donor. From there, it is not a far stretch to believe that the choices and preferences of a tribal sitting in a remote part of the Andaman Islands will not be as important as those of someone wielding a US $1 million check.

So, what is this latest tirade about? Labor and environmental standards had been rejected by most developing nations at the WTO. The debate should be over.

Far from it. In recent years, the debate has moved into the Multinational’s corporate boardroom. First, it was Corporate Social Responsibility – a bandwagon on which everyone jumped. CSR advocacy works to advance the agenda of the established western NGO, as Nike learnt to its chagrin. Under massive negative publicity it was forced to rewrite its labor practices, not just for itself but for its entire supply chain. As a result children were laid off in developing countries – and ended up on the street. Those were the lucky ones.

It is clear that corporates have massive power over their supply chains. Now, a new weapon is being targeted at them to use that power to address social causes. Socially Responsible Investing started as a way to match financial investment with ethical values – particularly environmental concerns. But it has moved far beyond and all sorts of practices are now under the microscope. The movement is gathering momentum. In 2003, some 19% of funds in the US were linked to some SRI strategy.

The mere emergence of SRI means that the debate on corporate ethics has moved into the mainstream. Can we expect that SRI itself will go mainstream soon? It is possible, considering everyone, even the UN has joined the SRI bandwagon.

Corporates are now expected to live up to certain values. Of course, I have no problem with that. But, whose values will those be? Those of the NGOs in the west that can shout the loudest, gather the most money, and pressure the biggest companies? If so, they wield a power disproportionate to their representation in society.

More articles?

• All This “Civil Society” Talk Takes Us Nowhere, by Aziz Choudhry (Global Policy Forum)
• Global Civil Society: Not so Global, Not so Civil, Nandini Deo, Yale University.