Last year CARE USA decided not to take money from Monsanto. But CARE is currently sitting round a table with Shell, BP Amoco and other extraction companies. Why? For Will Day, Director of CARE International UK (CI UK), the challenge is to make multinationals part of the solution and not part of the problem. Caroline Hartnell talked to him about their approach to engagement with the corporate sector.
Following a decision to actively pursue corporate relationships – a strategy Day believes will enable it to further its own mission – CI UK is engaged in a range of relationships with companies, from the traditional to the non-traditional.
Traditional philanthropic relationships
At the ‘traditional philanthropy’ end of the spectrum, there are companies that have held ‘evening events in lovely places’ where they offer to introduce new people to CARE’s work. ‘That is quite an old-fashioned way for companies to operate but plenty still do. They gain value from it in terms of the links they make and the image they portray. We gain the support from it.’
The relationship with Starbucks also falls into the ‘philanthropic’ category. Starbucks is one of many companies that has a strategy of actively funding development work in parts of the world where the company has a particular interest. Starbucks’ relationship with CARE USA goes right back to when the company was still making losses in its early start-up days in Seattle. As the company began to establish itself in the UK, it was natural for the relationship with the CARE family to be extended. ‘They source their materials in poor countries, and they are discussing working with us here in the UK to support development work in coffee-growing countries. The interesting thing for us is that this is not us going cap in hand to a company with a proposal and asking for money. It is the company making a conscious decision that this is part of its chosen approach to doing business.’
Relationships based on mutual interest
Then there are relationships where there is a rather clearer mutual interest on the part of the company and the charity. CI UK is currently engaged with three or four Internet companies which are clearly looking to generate traffic for their business and to promote an image of a caring, concerned global organization. One example is Beenz, at http://www.beenz.com.
Beenz is a loyalty device: if you visit certain sites on the Internet, you will be awarded Beenz. The aim is to encourage surfers to visit or re-visit sites. One option for spending Beenz is to support CI UK. For the last few months Beenz have been supporting their response to the Orissa cyclone, and now Mozambique. At the moments the amounts involved are ‘modest’, but both parties are confident that the number of people collecting Beenz will grow exponentially.
‘This is a clear example of significant mutual benefit. We receive coverage on a medium that we think is increasingly important, and members of the global public are given a chance to donate to our work. And it meets the company’s objectives as well.’
What about ‘nasty’ companies?
When it comes to ‘nasty’ companies, companies that have traditionally been seen as part of the problem, Day concedes that the extent to which any NGO should engage at any level is a pressing debate. ‘I would defend to the hilt NGOs’ right to march up and down on the pavement outside head offices and protest against their activities.’
CI UK has of course got the standard set of corporate guidelines as to what companies it will and will not engage with – ‘We are not in the business of talking to people who make landmines or export weapons, tobacco companies, etc’ – but marching up and down is not their way. Equally, they is not prepared to take money from anyone that offers.
About a year ago, CARE USA was approached by Monsanto, which was interested in funding microenterprise programmes in poor countries. Genetic modification wasn’t anything like the issue in the US that it was in Europe and the UK at the time – American agriculture had been churning out GM maize and other GM crops for a long time.
As part of an international organization, CARE USA let it be known that it had had an approach from Monsanto, and sought the views of other CAREs. ‘We started sending them the cuttings from the British press at the time, and expressing the very firm view that a financial relationship with Monsanto would be wrong – and damaging. It would be difficult to justify here. Our German, Austrian, French and other European colleagues were entirely in agreement with that.’
Saying No to Monsanto
The next step was for the President of CARE USA to contact the Chief Executive of Monsanto, making it clear that there were ‘some issues that we need to sort out’. CARE International was invited to their head office in St Louis, and Will Day was invited to represent Europe. When asked about their worries and concerns, Day was careful to take his stand on ground he was sure of. Although there were major public concerns about the health implications of GM products, ‘We said, we are not scientists, and we don’t feel equipped to go into that. Nor are we environmentalists. It would have been very easy to get emotive about GM food, Frankenstein food. There were others far more competent to do that.’
CARE International may not be an organization of scientists or environmentalists, but it has great experience in its own area. ‘Our debate was over the interests of subsistence farmers, who are part of our constituency. We did feel concerned that they were producing a product and introducing it into very vulnerable, unsophisticated marketplaces.
‘The basis of most of Monsanto’s business is that they invest huge amounts of money in research, which they then recoup by selling their expensively developed seed. When farmers couldn’t afford the seed, they would lend them the money to buy it. Like many hybrid seeds, modification potentially involves "terminator" technology, which means that seed has to be purchased on an annual basis, whereas most subsistence farmers rely on saving seed.
‘So it wasn’t rocket science to see that an understanding of microenterprise could have facilitated any company selling its product at a time of year when farmers might not be able to afford to buy it.’
Not that CARE International has a problem with credit: ‘We offer credit around the world.’ But the problem was the company selling a product that farmers didn’t actually need, especially as their own governments were unlikely to be able to resist the blandishments of a big, powerful genetic lobby.
The Monsanto response was that people would only buy their product if they wanted it.
At which point Day brought up the case of breast-milk substitutes, where ‘millions of women in poor countries were persuaded to buy infant formula that they didn’t need and couldn’t afford because they were told that it was the modern way to bring up their children’.
A Code of Conduct is not a solution, Day told Monsanto. ‘You need to be able to produce what people need rather than a Code of Conduct. Your job is to sell the products, your people in the field will be measured by the amount of seed they sell, and they will be persuasive in convincing farmers that this is the modern way to farm.
‘We said, thank you very much Monsanto, we think there is almost certainly something in this technology which is of value, but we think it is being driven into marketplaces where it shouldn’t be, for profit. We are not squeamish about profit but we can’t associate ourselves with it because the risks are high. So we said no.’
Day refuses to describe Monsanto as a ‘nasty’ company, but he feels this was the right decision.
Business Partners for Development
Very much at the innovative end of the scale of company–NGO relationships is the World Bank BPD initiative. CARE International’s involvement in the Natural Resources Cluster (see box) involves having a relationship with a number of companies with ‘the patchiest historical reputations’ – Shell, BP Amoco, Anglo American, Rio Tinto. But with BPD there is no question of taking anybody’s money.
The starting point for BPD is hard reality. A mine or an oil field is going to have an environmental and social impact on the local area. The aim of BPD is to bring together companies, local administrations and local people and their representatives to work out the best way forward.
He cites the example of the Copper Belt in Zambia (although it is not in fact a BPD focus project). The Copper Belt, now up for sale, used to be a nationalized industry, ZCCM — Zambian Consolidated Copper Mines. As a nationalized industry ZCCM was responsible for housing, employment, health, education, roads – ‘You name it, it was de facto the State. Any company buying it will inherit a level of social expectation of it which is based on a world that is past. Companies are not, in theory or in practice, responsible for all these kinds of social goods.’
But someone has to provide these things. The question is who. The issue for BPD, then, is to help determine the relative roles of the local authority, which can easily be marginalized, the communities themselves and the company. ‘Establishing who is responsible for what is an absolutely key global issue at the moment. The retreat of the state is not just a British phenomenon, it is happening all over the world.’
And what role, if any, should NGOs have in establishing the ground rules? Day is adamant that an international NGO such as CARE International cannot represent the community as such – ‘it’s just an NGO’. But it can facilitate civil society’s presence at the table, if not as equals – ‘the disproportion of power is significant in these things’ — then as valid participants in the discussion and debate.
The BPD model can be seen as an alternative to the scenario where a company ‘goes to a back room and cooks up a community development plan and then presents it as a fait accompli. It’s not a recipe for complete disaster, but it is much less robust and much less likely to reflect real needs.’
Making the business case
In order for it to work, a sound business case has to be made. ‘It may cost socially aware Company A 10–15 per cent more to open a mine than Company B, which doesn’t bother with any of this, and the end result is that Company B is more profitable than Company A. It’s a very hard one to sell.’
The examples of Shell in Nigeria and BP in Colombia come in here. No one would deny that their international public reputation has been damaged, but Day points out they have also suffered downturns, risk to staff, higher insurance premiums, all things which have an actual cost to the business. ‘We need to argue that you can lower the risk to your investment by a better understanding of the social context in which you operate and by forging a soundly based relationship with people locally – not based on "Let’s stick a satellite dish on the roof", which might buy six weeks of goodwill but no more if you aren’t addressing long-term needs.’
He illustrates the ‘satellite dish mentality’ with a story of a coal mine manager in Kalimantan, Indonesia. ‘Around the gates of the mine quite a large shanty settlement had sprung up; people migrated towards it because they felt it might offer opportunities.
‘As this community grew, he knew that he had some sort of responsibility towards it, but he didn’t know quite what to do. Every now and then he would stop and walk around this very sordid place. He noticed that a lot of the children had burns. He asked why this was and he was told that the housing was very cheap, that people cooked on open fires and babies wandered into them. He said, that’s terrible and avoidable. Would you like a fire engine? They said, fantastic, great.
‘So he organized an old fire engine and they built a little fire station and trained people to be volunteer firemen. They had an opening ceremony and it was very splendid. Within a month the fire engine was up in the hills pumping clean water, to bring it back for drinking. The fire station had been turned into a shop, and the uniforms cut up and used for other things.
‘If he’d offered a hot air balloon they’d have said, that’s just what we need, because the guy might not ask again. You could always use the hot air balloon for knicker lining or something.
‘What we in BPD try to do is say look, you can get social issues right in a way that is of genuine value and reduce your risks at the same time.’
Opposition within CARE?
At Board level there is considerable support for BPD, but there are inevitably those within the organization ‘who are properly questioning why we are bothering to talk to these people’. It seems that the questions are most likely to come from somebody at the field level. ‘If you are sitting in a country which has large mineral reserves and you see big companies come in and exploit them, you are going to ask questions. Surely these people are part of the problem, not part of the solution?’
While this may be understandable on the part of people in the field, Day also sees a degree of hypocrisy here. ‘These companies are exploiting the mineral resources that we all use on a daily basis. You drive your car and then throw it at the oil company. We see BPD as a grown-up way of recognizing reality.’ Day sees the choice facing NGOs in stark terms: ‘To go back to the Copper Belt in Zambia, we cannot ignore the fact that the impact of its sale to the private sector is going to be profound. It’s almost an economy being sold. Do we sit back and simply watch it? Or do we say, these are very serious issues and we as NGOs do have an understanding of social issues. CARE International’s livelihoods approach is based on a recognition that what people most need is the means to achieve a livelihood. If the coal mine manager in Indonesia had understood this, he would not have offered those people around the outside of his mine a fire engine.’
Day returns to Zambia for an example of the sort of NGO expertise he is talking about. Over the next few years CARE Zambia will be delivering clean water to 8 per cent of the population of Zambia, in a way that leaves behind a self-financing, self-replacing system. ‘That kind of NGO experience on that sort of scale is why the private sector, the World Bank and others are looking over the hedge and saying, that’s interesting, how do you manage to do that? Those guys are almost certainly better at pipes and pumps and water than we are, but we are absolutely confident that we have a better grasp of how to work with communities to deliver what people need in a way that they need it and at a level that they can afford it.’
And what would happen if one of the BPD companies wanted CARE International to run one of its social programmes, which obviously would involve them taking money? Day explains that such a decision would be taken locally. CARE International has a very decentralized structure. There are 10 members of CARE International fundraising in their domestic environment and 65 country offices to which this money flows. A decision involving Zambia would thus be taken by CARE Zambia. CI UK would never take money and then impose it on country officers against their will.
Day describes BPD as an experiment. Is it one that can fail? Day’s answer is a simple one: ‘If BPD doesn’t add value, then one has to question it.’
CARE International UK
CI UK is a relief and development agency working in 35 countries. It is part of the worldwide CARE International confederation, which each year creates new opportunities for over 30 million of the world’s poorest people. Whether supporting primary health care, community development in poor city neighbourhoods or small-scale businesses, programmes aim to promote positive and lasting change and to avoid long-term dependency. CI UK also provides emergency relief supplies, food and shelter for victims of natural disasters, wars and conflicts.