High profile campaigns such as those directed at Shell and Nike have shown that NGOs can turn corporate unethical behaviour into a cost which business is keen to avoid. Where is this process heading? Are campaigners unwittingly assisting multinationals to consolidate their market share? Are campaigners improving conditions for multinational employees whilst having minimal impact on workers in export enterprises in developing countries?

A recent New Economic Foundation report examines three possible scenarios of the effects globalisation might have on corporate governance and accountability:

• 'Oasis' looks at what will happen if there is sustained improvement in labour standards for workers in the narrow pipelines that feed high-value products to socially conscious, high-income consumers.
• 'Desert' envisages the failure of campaigners to strengthen and enforce regulation.
• 'Mecca' dreams of a future where labour standards in global and national supply chains continue to improve over time.

The scenarios, their associated pathways and the campaigning strategies they suggest are intended to add strategic coherence to a sector currently marked by a plethora of uncoordinated initiatives and codes of practice. The study, prepared in consultation with an extensive range of people involved in ethical trade, presents evidence that:

• Western consumers are increasingly willing to reward companies perceived as ethical.
• Partnerships between civil society organisations and the business community deteriorate in effectiveness over time as bureaucratisation and political inertia set in.
• Funding for challenge-based campaigning, central to ongoing promotion of public regulation and enforcement, is declining.
• The growing importance of non-western markets casts doubt on whether civil regulation aimed at multinationals can be sustained.
• The deepening symbiotic relationship between major NGOs (concerned, like corporations, with their brand image) and the business community dramatically reduces the space for more radical civil society actors.

Source(s):
'Ethical Trade Futures' by Simon Zadek, New Economics Foundation, 2000

Funded by: New Economics Foundation

id21 Research Highlight: 2 May 2001

Further Information:
Simon Zadek
New Economics Foundation
Cinnamon House
6-8 Cole Street
London SE1 4YH
UK

Tel: +44 (0)20 7407 7447
Fax: +44 (0) 20 7407 6473
Contact the contributor: zadek@sci.com

New Economics Foundation, UK

Zadek.net

Other related links:
CSGR features research on the effects globalisation might have on corporate governance and accountability

ETI promotes good practice in the implementation of codes of labour practice

NRET is a comprehensive site on ethical trade

Sweatshop Watch features reports on the Nike campaign

SA8000 are baseline standards on which many audits are being based

Clean Clothes Campaign aims to improve working conditions in the garment industry worldwide