The Business Ethics Blog

Should we celebrate when a powerful NGO convinces a powerful corporation to change its mind on something?

Here’s an example. Greenpeace recently… um, persuaded Mattel to stop using packaging sourced from companies that contribute to deforestation in Indonesia. (See the story by Angelina Chapin: Greenpeace wins battle with Mattel.) Mattel is a major toymaker, selling millions of products wrapped in cardboard, so the company’s decisions on where to get that cardboard stand to have a significant environmental impact. And Greenpeace managed to get the company to change its ways.

I suspect — but only suspect — that this is a good thing. I don’t know much about the facts of this particular case, but I think generally it’s good that there are well-intentioned nongovernmental organizations (NGOs) like Greenpeace working hard to get companies to think twice about the environmental impact of their business practices.

But it’s not always a good thing when NGOs badger and cajole a big company. Consider, for example, another case involving Greenpeace, namely the battle over the dismantling and disposal of the massive Brent Spar oil-storage buoy in the mid-90s. In that case, Greepeace launched a global campaign to pressure Shell, owner of the Brent Spar, to dispose of the floating oil-storage facility in a way that contradicted the company’s own environmental impact assessment. Greenpeace later changed its mind and apologized, but it was too late: Shell’s original disposal plan had already been scrapped, and the company’s share price damaged. In other words, Greenpeace had bullied Shell into doing the wrong thing.

Now most people are generally not very worried about major corporations, or large institutions of any kind, being bullied. And it’s easy enough to understand why. We’re usually more worried about corporations having too much power, rather than too little. But to uniformly celebrate victories of NGOs over corporations is to assume that NGOs are always right. And that’s a mistake. It’s also a mistake to assume that NGOs are in any important sense democratic, or automatically representative of the public interest.

Now this point must not be mistaken for a general critique of NGOs. There are many good NGOs out there, doing invaluable work. It’s just a reminder that the leaders of NGOs are not elected representatives, but rather self-appointed defenders of what they see as the public good. (I’ve written about how to assess NGO legitimacy before.)

Think of it this way. Companies sometimes do dumb things, and sometimes they do unethical things. There are lots of ways that can happen. Sometimes it’s due to flawed internal decision-making processes. Sometimes it’s a blind focus on profits or on expanding market share. Sometimes they do bad things in response to poorly-constructed regulations, or pressure from governments. And sometimes they’re bullied by other organizations, including NGOs.

And when a major corporation is bullied into making a bad decision, that bad decision can have enormous implications. So we should all watch with a careful eye when lobby groups, whether corporate or populist, attempt to use powerful non-democratic means to get their way.