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Back | Programme Area: Markets, Business and Regulation (2000 - 2009)

Partners in Time? Business, NGOs and Sustainable Development

Historically, most relationships between the private sector and civil society have been founded upon conflict. In different sectors and geographical contexts, this pattern of business-NGO relations has recently started to change with the emergence of formal sustainable development partnerships between these long-standing adversaries.

Part 1 of this paper offers a global overview of the changing nature of business-NGO relations on sustainable development. It examines why and how such relations are changing in the 1990s, the current spectrum of business-NGO relations and how the strategic responses of business and NGOs to sustainable development have evolved. In order to illustrate how business-NGO relations in both the North and South are developing in practice, three case studies are presented on protest and partnership initiatives in the forest products, oil and sporting goods industries respectively.

The case study of the tropical timber trade highlights the myriad relations between civil society and business and the very different corporate responses to civil society and consumer pressures. It is suggested that these varied responses are partly explained by the fact that certain companies and individuals within senior management have taken a leadership role and have recognized both the ethical, commercial or competitive value of corporate environmental responsibility.

The analysis of Shell’s experience in Nigeria reveals the impact which co-ordinated global protest can have on corporate activities. This case suggests that enhanced dialogue and partnership may not be enough to improve the global image of the oil industry. The big oil companies confront serious limits in their ability to change fundamentally the environmentally damaging nature of their business and, in general, have failed to recognize the need for energy alternatives.

The case study of the attempt to eliminate the use of child labour in the manufacture of soccer balls in Pakistan outlines the politics and processes of complex multi-stakeholder North-South partnerships to promote corporate social responsibility. An important lesson from this case is the fundamental importance of corporate transparency and a willingness to accept independent monitoring. The study reveals the tensions inherent in such projects. Serious questions remain concerning the future of children whose employment is affected, the effects of such projects on exports, and the sustainability and replicability of complex multi-stakeholder projects.

The case studies are followed by a review of various typologies of business-NGO relations in the literature on conflict and partnership. None, it is argued, explains adequately the diversity of such relations and their implications for governance and global social change. Part 1 concludes with preliminary thoughts on the preconditions, interactive processes and outcomes of more collaborative relations between business and NGOs.

Part 2 presents a theory to explain the expanding role of NGOs in the promotion of corporate responsibility for sustainable development. It considers the potential for the wider replication of NGO-driven corporate environmentalism in developing countries. This is done by placing the initiatives described in Part 1 within the context of global processes, including the globalization of business, trade and finance, advances in communications technologies and new governance challenges. This leads to the development of a theory of how corporations are regulated for social and environmental goals in a globalizing economy.

It is argued that growing business responsibility for the environment is not only a rational business response to so-called “win-win” opportunities. Neither is it simply a public relations exercise, as some critics contend. Rather, companies are responding to various forms of pressure and influence from civil society organizations and movements. In other words, what is referred to in this paper as civil regulation is an increasingly important driver of corporate environmental and social responsibility.

Key points to emerge from this analysis include the following:
  • Corporate environmentalism is a political phenomenon.
  • Through the politics of both pressure and engagement, NGOs are creating the new agenda for business as much as companies are themselves.
  • The political power of NGOs is not a passing fad but an expression of a new form of consumer politics, which is the result of social, economic and cultural change.
  • By describing a continuum of protest and partnership relations between business and NGOs we can observe a new form of regulation for global business, called civil regulation.
  • Civil regulation organizations, such as the Forest Stewardship Council (FSC) and Marine Stewardship Council (MSC), will probably be replicated in other industrial sectors and come to be known as systems of global private regulation.
  • These developments rely on the sensitivities of Northern markets, and may not be transferable to countries or regions where consumer-driven market pressure is not as prevalent.
  • For the civil regulation agenda to develop in the South, and for Northern NGOs to maintain legitimacy when promoting corporate responsibility in developing countries, there must be stronger alliances between Northern and Southern NGOs.
  • Changes in the global economy mean that governments need to assume a greater role as leaders and facilitators, but they are in danger of negotiating that role away through global trade and investment agreements.

The uncertainty that surrounds the issue of corporate environmentalism suggests the need for greater international collaboration in this area.
  • Publication and ordering details
  • Pub. Date: 1 Aug 1999
    Pub. Place: Geneva
    ISSN: 1012-6511
    From: UNRISD