(Organization Trends, August 2006 PDF here)
Hell-bent on preventing Western companies from launching development projects that might lift people in the third world out of poverty, Western nongovernmental organizations are hurting the people they claim to want to help.
Western nongovernmental organizations (NGOs) are using aggr essive tactics to impose an anti-globalization and anti-development agenda on desperately poor countries that need new job-producing industries to lift them out of poverty. With support from U.S. and European funding sources and activists, they have launched campaigns against multinational corporations daring to venture overseas to isolated and impoverished parts of the globe in search of new markets. Celebrities and intellectuals also weigh in to oppose commerce and foreign investment.
This article examines two case studies in overseas anti-business meddling by Western nonprofits. One looks at the coalition of NGOs and labor unions that have organized a campaign against Paxar Corporation, a U.S.-based apparel firm with investments around the world. The other examines the anti-mining campaign against Gabriel Resources, a Toronto, Canada-based mining company.
In a sense NGOs are filling a power vacuum left by the collapse of the Soviet Union. After all, without the USSR what forces are there to stoke resentment in developing countries towards the rich industrialized states?
A political and economic sea-change has taken place in the last decade and a half. The end of the Cold War has led to a more globalized economy, which is toppling trade barriers around the world. Multinational companies based in countries such as the U.S., Canada and Australia were once scorned as agents of “imperialism.” They now find themselves courted by presidents and prime ministers. The investment, training, education and technology these companies bring into developing economies is eagerly sought out — quite a shift from the 1960s, 1970s and 1980s.
But as developing countries seek out new opportunities in a global economy, some voices yearn for the old days — when foreign governments and populations feared, rather than welcomed, outside investors. It’s no surprise that some of the loudest anti-investment voices can be heard from Western NGOs whose dreams of leftist solidarity and political activism die hard.
Stitching Together An
White Plains, New York-based Paxar Corporation dominates an important niche within the apparel market. It makes clothing labels for companies around the world. As the company’s website notes, “Chances are on any given day, you are wearing a garment that has a Paxar designed label, or that was marked with a Paxar ticket or tag.” Paxar’s global operations extend as far away as Africa, the Middle East and Asia. The company had 2005 revenues of $809 million, according to its website.
Paxar has a good reputation in an apparel industry that is keenly aware that its overseas practices are in the spotlight. In April 2006 the American Apparel and Footwear Association (AAFA) praised its community outreach efforts. Paxar, according to an AAFA statement, “donated $100,000 directly and partnered with local government in Sri Lanka to assist in the aftermath of the December 2004 tsunami.” In addition, “Paxar employees provided distribution of emergency relief items and assisted with the removal of dead bodies?The corporation also built 21 homes for Buddhist and Muslim families” and found other ways to help people affected by the natural disaster.
Nonetheless, Paxar is under attack. An NGO known as the “Clean Clothes Campaign” (CCC) has set out to tarnish its reputation for no other reason than to assist activists who have decided that Paxar is an inviting target for unionization precisely because it is stable, prosperous and well-established overseas. CCC describes itself as “focused on improving working conditions in the global garment and sportswear industries.” It has chapters in nine European countries, including Austria, Belgium, France, Germany, the Netherlands, Spain, and the United Kingdom. The coalition draws on its associations with unions and church groups, and claims to work with more than 200 civil society organizations.
While based in Amsterdam, CCC has links to U.S. activist groups. For example, in 2002, it joined with the San Francisco-based Global Exchange to circulate a report blasting alleged labor abuses in factories in Indonesia connected with shoe manufacturer Nike and sporting goods maker Adidas-Salomon AG. Global Exchange helped organize the violent anti-globalization protests in Seattle in 1999. (See Organization Trends April 2004, July 2001). Other American groups that focus on imported clothing in particular include the International Labor Rights Fund, the Consumer Federation of America, the Lawyers Committee for Human Rights, and the Union of Needletrades, Industrial and Textile Employees. By targeting Western companies for alleged labor and environmental failings, they hope to win support for their overseas campaigns of political and union mobilization.
The NGO campaign against Paxar is best understood as “part of an ongoing global campaign against capitalism, based on a caricature of Western companies making huge profits from sweatshop labor, an image intended to manufacture moral outrage.” That’s according to Iain Murray, a senior fellow in international affairs at the Competitive Enterprise Institute.
CCC’s usual modus operandi, reports the Financial Times of London, is to ask “consumers in the developed countries to stop buying” products from companies it is protesting and to use the public pressure it creates to influence company policies.
Moreover, CCC’s attempts to impose closed-shop conditions on companies “goes well beyond misguided outrage into creating actual harm,” Murray says. “Nearly 2.3 million of an estimated 3 million Turkish textile workers labor in the ‘unregistered sector’ under much poorer working conditions. Forcing Paxar to lay off employees or, worse, withdraw from the country altogether does nothing to help these workers,” he says.
CCC claims Paxar has acted “unfairly” towards workers who are trying to unionize a Paxar-owned facility in Turkey. The workers, according to CCC, wish to join TEKSIF, which stands for Textile, Knitting and Clothing Industry Workers’ Union of Turkey.
CCC’s website levels a variety of charges against Paxar, including allegations that the company has “flagrantly violated Turkish law and corporate codes of conduct by: attempting to destroy trade union organizing at the company, firing worker activists, pressuring union members to renounce their membership, discrimination against union members and failing to negotiate in good faith with a trade union that was lawfully authorised to represent workers?”
Given this inflammatory language, one might expect CCC to document a long history of factory abuses or display photographs of company violence against peaceful pro-union demonstrators.
But the best that CCC can come up with is ? more accusations. The group goes so far as to accuse Paxar of saying unkind things about the union. Even worse, the campaign emphasizes, Paxar is trying to maintain the upper hand in its negotiations with the union:
“On repeated occasions, Paxar has promised to change its attitude and commence bargaining, only to renege on its commitments. Though the union authorization was granted more than six months ago and the union has since presented management with several contract proposals, and despite several meetings between the trade union and the company, thus far Paxar has failed to offer a single counter-proposal, opting instead to debate the trade union’s legitimacy and to ridicule the union in communications with brands, monitoring groups, and
worker advocates.” (Italics added.)
CCC’s problem with Paxar appears to be the company’s unwillingness to surrender to the union’s demands. It fails to supply any specific abuse or concrete allegation of misconduct or impropriety.
The CCC website suggests that TEKSIF supporters send emails and letters to Paxar executives. One paragraph in a draft letter stands out in particular–and reveals CCC’s real agenda:
“Trade union rights are internationally recognized as being essential to healthy industrial relations, and recognized by the United Nations as being fundamental human rights.”
Ironically, this argument doesn’t resonate with workers in less-developed countries. CCC’s efforts to help Indian unions organize textile workers foundered, noted the Financial Times, because non-union workers “do not appear to have developed faith in unionism as a mechanism for wage-settlement.” Perhaps that’s because workers are suspicious of international campaigns which “they feel can result in a cut in production and loss of employment.” It’s no mystery why workers who have a keen understanding of their own economic interests would steer clear of the CCC.
Tapping A Rich Vein Of Anti-Globalization Discontent
Like Paxar, the Canadian mining company Gabriel Resources has looked abroad for profitable investment opportunities. In 2000 it found one in Romania — once an economic backwater under the thumb of the tyrant Nicolae Ceaucescu, who was overthrown and executed in 1989. Today Romania is a constitutional democracy with an expanding economy that is slowly overcoming decades of bureaucratic corruption and ingrained poverty. The area that caught the mining company’s eye is known as Rosia Montana. Gabriel believes Rosia Montana, located in the rugged Apuseni region of Transylvania, could hold up to 10 million ounces of gold and nearly 50 million ounces of silver, and has entered into an agreement with Romania’s government to develop a project that everyone agrees will transform the area.
Romania–and especially the impoverished rural region of Transylvania–is still struggling with the legacy of Communist rule, and supporters of Rosia Montana believe a large-scale modern mining project can kickstart its economy. But like Paxar, Gabriel Resources has come under fire from Western-backed NGOs for investing in a poor country that welcomes its expertise and capital.
The Rosia Montana project can bring a number of important benefits to the local community, according to Alan Hill, president and CEO of Gabriel Resources. “I have developed mines all over the world,” Hill told Organization Trends in an interview. “Something that people don’t realize about mining is that it’s not about going out and hiring a lot of low-wage labor — it’s about highly-skilled labor — people with [skills that give them] purchasing power. And mining is also about upgrades to infrastructure — roads, the water supply, schools and so on. This is how a private sector initiative [like the Rosia Montana project] can bring major public benefits.”
Often the opposition to a mining project is divided into two camps, Hill explained. Members of one camp may be initially skeptical and know little about a given project, but may warm up to the project as they learn more about the benefits it will bring. But members of the other camp are far less rational and tend to be
such hardline attitudes, he observed.
Richard Young, Gabriel’s vice president and chief financial officer, stresses how much the project will benefit the people living close by. Given the high unemployment and infrastructure problems around Rosia Montana, Young said, it’s no wonder that NGO officials who actually visit the area often later change their minds about the project, which he notes is located in “a disadvantaged community.” When NGOs meet with Gabriel and learn about its commitment to “creating jobs and protecting the local environment and cultural patrimony,” they “slowly but surely come around,” Young said.
For example, in July a group of 21 Romanian NGOs completed a study tour of Rosia
Montana. Of the 21 NGOs, 18 co-signed a press release expressing support for the project, provided that it complies with all applicable laws. Two NGOs remained neutral, while one continued to oppose the project.
Like Hill, Young emphasized the open-mindedness of some NGOs versus what he termed the “inflexibility” of others. Some organizations “want to work with us” even though they may have concerns about foreign companies living up to their commitments, he said.
A leader of the anti-Rosia Montana forces is a European journalist-turned-activist named Stephanie Roth. Roth received fawning international media coverage when she helped drive a stake through the heart of a proposed Dracula theme park in Sighisoara, Transylvania. Sighisoara is the place where Vlad the Impaler, who inspired Bram Stoker’s gothic novel, Dracula, was born six centuries ago. Opponents of the park said its construction would have destroyed some old trees.
In a June 2005 interview Roth denounced the Rosia Montana
Rosia Montana mining project is top-down, it’s being forced upon the people–development as colonialism….”
A fan of colorful metaphor, Roth said Gabriel and another firm were “modern-day vampires; who in the name of progress aim to bleed Rosia Montana to death.” Roth has acknowledged the key role that foreign activists have played in the drama. “This was a synchronized initiative that attacked the issue from a lot of angles?a beautiful alliance of local, national and global organizations. It feels like we’re one big family.” For her attempts to kill the mine project, in 2005 Roth received the $125,000 Goldman Environmental Prize bestowed by the Richard & Rhoda Goldman Fund, a San Francisco-based foundation that reported assets of $369 million in 2004. Rhoda Goldman was a daughter of Walter Haas, an heir to the Levi Strauss fortune.
When she isn’t painting Gabriel Resources as a pith-hat-wearing imperialist, Roth likes to emphasize the danger she claims the Rosia Montana project poses to local farmers and archaeological sites.
Roth’s abilities as a publicist have turned the Rosia Montana mine into a cause celebre among environmentalists around the world. The most vocal Romanian NGO against the mine calls itself Alburnus Maior. This is the name of an ancient Roman settlement in the area whose archaeological remnants will be obliterated, according to mine opponents. Ironically, the Romans settled the area, in large part to mine for gold.
The NGO has used the uproar over the alleged destruction to lure funding from outside the country. The Charles Stewart Mott Foundation of Flint, Michigan, has provided funding to other anti-mining groups involved in the fight.
Amsterdam-based Friends of the Earth International has received at least $847,300 from Mott’s environmental program. Mott also provided the Environmental Partnership of Romania with $426,800 through the German Marshall Fund of the United States, which is based in Washington, D.C. In turn, the partnership provided grants to the Albamont Ecological and Mountain Tourism Club for an “educational campaign” about the mining project, according to the Mott Foundation’s website. The Boulder, Colorado-based Global Greengrants Fund, which makes grants to so-called grassroots groups worldwide, has provided at least two grants totalling $11,000 in the past three years to Alburnus Maior. Mott acknowledges on its website that it “helped seed GGF with a $500,000 grant in 2002.”
In 2002, the anti-mining forces appeared to have scored a major victory when the International Finance Corporation (IFC), an arm of the World Bank, decided not to help fund Gabriel Resources’ development plan. But the effort to block funding backfired. IFC officials became worried about how what they called “politically correct grandstanding” would affect World Bank funding of other mining projects. Moreover, they recognized that companies could always turn to private lenders that would impose fewer environmental conditions on them.
Lately, the remnants of the international left have wheeled out some of their heaviest artillery to attack Gabriel. In June 2006, American philanthropist George Soros’s Open Society Foundation weighed in against the mining project. The liberal activist’s group vowed to use “all legal and civic means to stop” the mine. (See letter above.)
The same month, English actress Vanessa Redgrave, patron saint of all fashionable causes, took it upon herself to jab at the Rosia Montana project. “Saving this area is not only a local problem, it is a European problem and one of the entire world?Our planet is dying and we have no right to destroy an ecosystem,” Redgrave declared at a Romanian film festival where she received a lifetime achievement award. Alburnus Maior was on hand to capitalize on her appearance. Its representatives presented Redgrave with a deed giving her ownership of one square metre of land on Rosia Montana, making her a symbolic citizen of the community.
Although Alburnus Maior and its Western allies won’t admit it, the Rosia Montana project enjoys strong local support. In May 2006, two trade unions and a community organization participated in a five-mile march near the would-be mine site. Marchers chanted
“mining equals jobs and welfare,” “we are the voice of the Rosia Montana locals,” and “our chance is saving mining in Rosia Montana,” reported the English-language Bucharest Daily News.
Luciana Olar, a march organizer, was even more direct. She bluntly told the Daily News: “We need jobs! We need mining! We want the voice of the Rosia Montana community to be heard, as this voice calls for investments?Until now, only the voices of the NGOs have been heard, although they have nothing to do with the problems Rosia Montana is facing.”
Rosia Montana also has received support from the Parliamentary Assembly of the Council of Europe (PACE). PACE is an advisory body comprised of representatives from elected members of European parliaments. Two PACE representatives — Eddie O’Hara, a Labour member of the British Parliament, and staff member Christopher Grayson — released a study in February 2004 that criticized efforts by foreign NGOs to undermine the Rosia Montana project. The report notes, for example, that NGO predictions of damage to culturally significant sites located around Rosia Montana “does not appear to be entirely justified.” Indeed, a Gabriel-funded archaeological research program, which promises to preserve the ancient Roman ruins and provide tourist access to them, has the enthusiastic support of the Romanian government, whose own budget for archaeology cannot begin to match the company’s.
The report also hails the gold mine project, saying it “would appear to provide an economic basis for sustainable development of the whole area with positive benefits on environmental and social as well as cultural grounds. From the cultural heritage point of view, it might be seen as an exemplary project of responsible development.” The PACE report criticizes outsiders’ attempts to interfere in the process, noting that criticism of the proposed mine is: “very much fuelled by outside bodies, presumably well-meaning but possibly counter-productively. It seems in part at least exaggerated. The supposed environmental risks do not take account of modern mining techniques and in fact the [Rosia Montana] project will help to clear up existing pollution?”
The report also takes a remarkably level-headed view of the choices facing Rosia Montana residents: “There is a need for both the mineral and the cultural resources to be exploited for the benefit of the local community.”
The trend towards freer global trade represents more than the efficient division of labor or better deals for consumers. Trade, writes the Cato Institute’s Daniel Griswold, helps bring about a better world. It is “a tool for encouraging democracy and respect for human rights in regions and countries of the world where those commodities have been the exception rather than the rule.”
So why do U.S. and western European NGOs resist this trend? One might as well ask why wolves howl at the moon. Activist groups like the Clean Clothes Campaign and Alburnus Maior no doubt have a number of motives for their actions. But their incessant attacks on trade, investment and development may have a primarily self-serving intent. It keeps the pack together.
Freelance writer Neil Maghami is a longtime observer of NGO activities.
IN SEARCH OF NGO ACCOUNTABILITY
During the tobacco wars of the late 1990s, Steven Goldstone, CEO of RJR Nabisco, memorably summed up his beleaguered industry’s position. Anti-smoking activist groups, he said, treat tobacco companies “like a Brinks truck overturned in the middle of a highway.”
The imagery aptly represents how many international NGOs (non-governmental organizations) regard private enterprise. NGOs gather at international conferences and assemblies, many of them convened by the United Nations, intent on finding mechanisms to tap into the wealth created by companies whose profit-making activities they disdain. Unfortunately, there is little scrutiny of NGOs. Demanding “stakeholder” rights greater than those of corporate shareholders, NGOs claim to represent “civil society,” “the public interest,” or some similar abstraction. However, unlike democratically-elected governments, they often represent no one but their own leaders.
What can be done to make NGOs more publicly accountable? NGOs typically argue for self-regulation. In June 2006, a group that included Amnesty International and Greenpeace International presented a so-called “Accountability Charter.” Their six-page document outlines policies that the NGOs signing it say they will voluntarily embrace. The charter has been widely heralded as a major achievement.
But there may be much less here than meets the eye. In a June 28 column for Townhall.com, public affairs expert Nick Nichols points out that it took Greenpeace “just 22 days” to break the Accountability Charter.
“The much-touted Accountability Charter states that the NGO signatories will take all possible steps to ensure that there are no links with organizations, or individuals involved in illegal or unethical practices,” Nichols wrote.
However, the column details how a Greenpeace vessel, the MV Arctic Sunrise, has a long history of illegal activities. On June 20 it landed activists on St. Kitts, a Caribbean island nation and site of a meeting of the International Whaling Commission. Ten activists subsequently were arrested following a staged incident protesting governments, including St. Kitts, which supported commercial whaling. The St. Kitts government complained that Greenpeace had demonstrated “utter contempt of its sovereign status.”
If self-regulation isn’t the answer, what about regulation by government? That’s what happens in Russia, where President Vladimir Putin’s government is trying to choke off NGOs that offend it by regulating them to death. Moscow has given itself authority to ban foreign NGOs in Russia.
Fortunately, there is a better way to make NGOs accountable: Make the activities and funding of NGOs more transparent.
Journalists should be encouraged to cover nonprofit groups with the same level of scrutiny–and skepticism–that they give to government agencies and the private sector. And nonprofits that take money from public agencies should be required to provide more detailed information on the amount and purpose of grants they receive.
Most European governments provide little public accountability for their grants to NGOs. In the U.S., however, Senator Tom Coburn of Oklahoma, a Republican, has introduced legislation to do just that. S. 2590, “The Federal Funding Accountability and Transparency Act,” co-sponsored by Senator Barack Obama, a Democrat from Illinois, Tom Carper, a Democrat from Delaware, and John McCain, a Republican from Arizona, would set up a website letting the public tap into a database listing every entity receiving federal grants and contracts. The federal government annually distributes about $300 billion to some 30,000 organizations. Modern technology makes it possible to organize and widely disseminate this information. There is no reason, besides bureaucratic inertia, why this data cannot be made available. A coalition of liberal and conservative interest groups and think tanks, including Capital Research Center, has announced support for the legislation, which also enjoys the support of the Bush administration.