The power of the consumer boycott is turning some major corporations into unlikely champions of a new form of political bargaining.
Not so long ago, eating a biscuit or chocolate bar, or applying lipstick, meant, in all likelihood, that you were helping to deforest entire tropical landscapes. Today, just as unwittingly, you may instead be helping to drive a social and political revolution that is redefining the rules of international corporate behaviour and even giving democracy a passing fillip.
At the centre of what was an emerging environmental crisis and has now become a benchmark for people power, is palm oil.
It sounds innocuous enough but this simple agricultural product, mostly from South-East Asia, has become the focal point for a new tier of global governance, or rule making. Palm oil continues to catch nation states by surprise with its capacity to break through political inertia or corporate intransigence by harnessing – or threatening to harness – the power of the world’s consumers.
It is a phenomenon still running its course and an enthralling spectacle for political scientist Associate Professor Helen Nesadurai from the School of Arts and Social Sciences at Monash University’s Sunway campus, near Kuala Lumpur. Malaysia is one of the largest producers of palm oil, giving Associate Professor Nesadurai a front-row seat to this seismic shift in the way non-governmental communities, often working with corporations, are setting rules that were once the province of corporate and political privilege.
Associate Professor Nesadurai, who also collaborates with scholars from the University of Warwick in the UK (which has a formal alliance with Monash) and has consulted for the Association of Southeast Asian Nations secretariat and the Asian Development Bank, researches the politics and political economy of governance by non-state, civil society groups and private firms. She sees the possibilities of a new world order – a grassroots democracy at work – although it is not without its tensions and has a long way to go, especially in South-East Asia.
The story began unfolding during the 1990s, when oil palm quickly began replacing other, less productive oil crops. Whole rainforest ecosystems were cleared for plantations of oil palm, from which the oil became a staple ingredient for manufactured foods and products such as cosmetics. Forests were bulldozed, and so were the livelihoods of traditional communities reliant on forest plants, animals and waterways.
“I came to this issue because of my interest in land conflicts, and the seeming impossibility of resolving these conflicts when governments are complicit in the conflict,” Associate Professor Nesadurai says.
This complicity came from the fact that, by the early 2000s, palm oil was pouring billions of dollars into the economies of countries such as Malaysia and Indonesia. Local community and indigenous interests were lost in the shadow of this unprecedented agricultural and industrial development. But then a remarkable thing happened.
Prominent NGOs Oxfam and WWF moved in, ready and willing to unleash the weapon feared most by global companies: the consumer boycott. The NGOs used this to bring palm oil companies to the negotiating table, along with global traders, retailers, bankers, investors and representatives of affected communities.
In 2004, the Roundtable on Sustainable Palm Oil (RSPO) was created, laying down new rules for environmental management and protection of traditional landholders’ rights – rules agreed to in a process that largely sidelined governments.
Associate Professor Nesadurai has since observed this paradigm being played out through similar ‘roundtables’ establishing new tiers of non-state governance in other areas afflicted by over-exploitation, such as forests and fisheries.
“Some of this non-state governance began before the RSPO, when industries realised the need to self-regulate, either to respond to a community backlash or to pre-empt a community – consumer – reaction,” Associate Professor Nesadurai says. “But the palm oil roundtable has become the most illuminating case study of how communities whose rights might otherwise be overridden are being empowered.
“Governments in this part of the world are having to balance a development agenda with a sustainability and social-justice agenda. It is difficult and they don’t like being overridden by arrangements made at the NGO level.”
But Associate Professor Nesadurai says international firms clearly fear consumer pressure. While they could hide behind less onerous government rules, most are abiding by the more stringent environmental and land acquisition rules introduced at the NGO level.
“It might only be because it gives the companies a nice label, and they might happily abandon their agreements, given the chance … but the NGOs are watching.”
As a consequence of the palm oil roundtable, private companies are required to engage with communities and land owners, particularly indigenous land owners, before any new plantations are developed. Companies are obliged to find out if there are prior land claims, regardless of what the government has said. This led to one company in Indonesia having to return 1000 hectares to a local community.
In another instance, a row over the NGO push to prohibit palm oil plantations on peat land (which many companies already had in their land bank) led the Indonesian Palm Oil Industry Group to leave the roundtable. This highlighted the danger of a roundtable collapsing if trade-offs cannot be negotiated.
Compromise is the key but, ironically, it is also why the roundtables attract scepticism, because the NGOs also have to bend. In North America and Europe, regulatory systems imposed by the private sector and NGOs raise in some people’s minds a question of trust: is it just ‘greenwashing’, an environmental veneer that masks unsustainable practices?
Associate Professor Nesadurai says an intriguing element in what she observes is that NGOs derive their authority from the moral goals they espouse. This gives them the critical linchpin role that is hard for opponents to counter.
“Governments and private companies don’t really like them, but are having to work with them because of the way they have positioned themselves as the point of connection for all parties.”
The roundtables break deadlocks and achieve progress because everybody involved has a voice.
But Associate Professor Nesadurai says that the main danger to this new, dynamic and inclusive approach could be its success; that it might spawn its own bureaucracies. “It could become very tangled, which is why its evolution is fascinating to study.”
