Building bridges in global community

FROM the riots at the World Trade Organisation conference in Seattle three years ago to the bloody confrontations at the Group of Eight Summit in Genoa last year, the 'anti-globalisation' brigade has made its mark. What has not caught the headlines, however, has been the efforts by multinational companies to work more closely with government, local communities and 'civil society' organisations such as CARE International and Oxfam, in tackling poverty in developing countries.

Several factors account for their move. One is fear of losing the argument about the corporate sector's global role and of finding governments imposing more development policy demands on them as a result. Asked recently why his company had become so involved with civil society groups, the former chief executive of one of the world's largest natural resource companies said: 'Because they have the capacity to destroy our business.'

Clare Short, Minister for International Development, today releases a report on co-operation between governments, businesses and aid agencies with local communities in developing countries. The report on these tri-sector partnerships examines how more than 100 multinationals worked with community groups and the World Bank on 29 pilot development projects in 20 countries. The aim was to take a hard look at the lessons to be learned.

Set up in 1998 under the name Business Partners for Development, the three-year project involved corporate giants such as Anglo-Dutch oil firm Shell, utilities group Vivendi Environnement of France and mining company Anglo American. It was mainly financed by the World Bank, Britain's Department for International Development and the companies themselves.

Shell in particular has good reason to know how much damage a company can suffer at the hands of protesters. Its reputation came under sustained fire in 1995, first from environmentalist groups such as Greenpeace because of its allegedly irresponsible handling of the disposal of the Brent Spar oil rig and when the Nigerian government executed civil-rights activist Ken Saro-Wiwa and eight colleagues.

Critics argued that, given its overwhelming economic weight in Nigeria, Shell should have done more to protect Saro-Wiwa. They attacked its insensitivity towards the environmental and social impact of drilling operations and claimed its corporate culture was contributing to the impoverishment and the denial of minimal civil rights to people living around some of the world's most profitable oil fields.

Its positive response to these challenges drew public praise two years later from Sir Geoffrey Chandler, a board member of human rights group Amnesty International, although today's report says that 'in the Niger Delta, a general lack of trust between communities and oil companies still runs deep'.

Sir Mark Moody-Stuart, chairman of Shell from 1998 until he retired last year and now chairman of Business Action for Sustainable Development, says firms cannot restrict themselves to focusing on narrow short-term issues of shareholder value. 'I believe very strongly that in the end if a corporation is perceived by society - and that includes our customers and employees - as not being a useful contributor to society, that can be a real threat to its existence,' he said. He added that multinationals cannot operate successfully in a world in which they are distrusted, not least because they need to fulfil more than formal regulatory requirements. 'They need an informal social licence to operate,' he said.

This in turn implies a relationship with local communities where they exist or a role in helping to build communities. 'For companies to get involved in community building is, of course, a very delicate issue,' he said.

But such involvement can also provide early warning of trouble, helping companies modify their corporate strategies and also to reduce threats to a particular investment from, say, vandalism or sabotage.