NGO Campaigns

The protection of a brand-name targeting a high-end market provides an important incentive for companies to engage in self-regulation. Another factor inducing a firm to engage in self-regulation is being exposed to public criticism by an NGO campaign.

Textiles

To empirically assess our NGO pressure hypothesis, we first compare two firms within the textile sector. One has been subject to an NGO campaign, the other has not. Both firms, SF and TP,7 are lower-tier suppliers to big South African and international brands. SF produces specialized Nylon products (yarns, fabrics, and tapes). The other textile firm, TP, is selling finished and unfinished fabrics. As the production processes of both firms involve toxic chemicals and excessive energy consumption, their effluent waste and other emissions in particular have a potential negative environmental impact. Both companies have become the object of increased inspections and stricter environmental regulations over the past years, as the province of the Western Cape and especially the municipality of Cape Town have upgraded their environmental regulatory capacities. What sets both companies apart, however, is that SF has been constantly targeted over the past years by local, grassroots NGO protests concerning its environmental performance, while TP has not drawn the attention of NGO activists. The NGO campaigns exposing SF were predominantly organized by the local population, that is, local property owners and concerned citizens, who pointed to the air pollution and the effluents of SF as a health and environmental hazard and a factor impinging upon the value of their properties. The protests and petitions of these grassroots civil society organizations put pressure on local government to take up the issue with SF. Responding to public pressure, the company founded the Bellville South Environmental Forum. This forum developed into a council within which local residents and civic organizations negotiated with SF the step-by-step reduction of its pollution. The most pressing problems were tackled and targets for the reduction of the pollution were decided upon.

SF has developed and implemented environmental measures that are much more ambitious and detailed than those of TP. It has focused on the most critical areas of emissions reduction and effluent waste management. Thus, in the past, SF was burning coal for its energy supply and thereby contributed significantly to local air pollution. In the meantime they have systematically reduced the on-site burning of coal by changing their overall energy supply system. Similar improvements were achieved as regards the reduction of effluents. In the past, effluents were simply released into the environment. Today, SF collects its effluents and treats them until they meet the legally prescribed wastewater standards. Moreover, the company has implemented an environmental management system and started the ISO 14000 certification process. The certification process is expected to be completed within the next two years.

TP has also developed various environmental measures over the past years. It has mainly focused on energy consumption reduction; for example, it has replaced regular electric bulbs for energy-efficient neon-bulbs and introduced a switching-off-lights-and-machines policy after work. Yet, TP has not yet tackled the problems related to their biggest pollution, their highly polluting toxic effluents. According to the environmental manager, this does not appear be a priority for the top management. TP is not planning to acquire an ISO 14000 environmental certification. As a consequence, with respect to the effluents, “most of it just ends up in the sea, so we kill all our whales"8

In short, the empirical evidence confirms the “NGO campaign” hypothesis. As expected, the company targeted by NGO campaigns, SF, has introduced much stricter environmental measures than the company not targeted by such campaigns. The community forum established together with the local NGOs significantly contributed to the deploying of these measures.

Food and beverage

Assessing the hypothesis within the food and beverage industry sector points to some important qualifications of our NGO hypothesis. We selected two firms from the South African sugar industry. Tongaat Hulett and Illovo Sugar are diversified companies with a focus on agribusiness, who dominate the South African market and also maintain operations in several other countries. Both operate out of the Durban area in KwaZulu-Natal. The sugar production can be differentiated in the growing process and the milling process, both with their own very specific environmental impacts. We focus in this case study on the industrial refining process.

Tongaat Hulett and Illovo Sugar operate sugar mills in the South Durban Industrial Area. They are under extensive scrutiny by the South Durban Community Environmental Alliance (SDCEA), as sugar mining next to oil refining and paper milling constitutes the main source of pollution in this region (Alstine 2007). The SDCEA is a community-based NGO with local reach and composition. In the past, the NGO together with other local citizen groups has criticized effluents from these operations as contaminating water resources as well as impacting local air quality through the use of coal for energy generation. Both firms have responded to this intense pressure. Illovo announced the launch of a program to curb their sulfur dioxide emissions from coal-burning activities. Tongaat, in turn, established a consultative process, in which they invite affected citizens, NGOs as well as relevant government departments, to engage in an open dialogue about their environmental impact. The multistakeholder forum brings together community and government representatives in sixth-month intervals to discuss issues, such as monitoring and reporting on operations’ spills. Yet, the newly established municipal air-quality monitoring systems demonstrates that there has been no reduction in air pollution. Moreover, Illovo withdrew from plans to switch to other energy sources. Since the environmental measures taken by the two firms are clearly insufficient, SDCEA and other NGOs have resumed their protests.

The findings on the sugar sector point to an important qualification to the impact of NGO campaigns in the environmental field. While NGO campaigns might result in some immediate action by corporate actors, the measures taken might be unsustainable or result in a situation where some concessions are made, but which do not result in any fundamental improvements. One problem revealed by our case study may be that NGO campaigns do not always single out one polluter, but direct their campaigns against several firms, which reduces their leverage. Also, the local government addressing the problem has followed a coordinative approach toward polluters, which has further diminished the leverage of NGO campaigns. All in all, NGOs have not been able to summon sufficient pressure to overcome the strategic decisions of the two sugar mills to use cheap coal for energy generation. And even if they did, Illovo and Tongaat appear to have a viable exit option since they could move their production to less stringently regulated African countries, like, for example, Zambia and Malawi.

 
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