New Internationalist

Think Globally, Act Locally.

Issue 160

new internationalist
issue 160 - June 1986

Think globally,
act locally
It may seem as if big companies can
get away with murder. But Coca-Cola, Nestlé,
Distillers and Barclays Bank would tell you that
ordinary folks have forced them to stop in their
tracks. Martin Stott describes how it's done.

'WE never forget you have a choice' intones the jingle for a well-known airline. But do consumers ever remember? Common-sense often tells us that people very rarely make major changes in their buying habits, and that consumer boycotts rarely - if ever - show results. But a recent series of successful actions throughout the world has shown that boycotts do work. Consumers are waking up to the fact that they do have a choice, and are starting to put their pocketbooks where their politics are.

Perhaps the most famous consumer boycott was that of Californian grapes, in support of the campaigns by the United Farmworkers of America for decent wages for Hispanic workers in the vineyards of Southern California in the 1970s. That campaign, carried on throughout the US, led to the passing of a law protecting farmworkers' rights, backed up by an Agricultural Labour Relations Board in 1975.

Publicity makes or breaks a successful boycott. A campaign gains impact only when a large number of people hear about it. Publicity is also a vital part of broader aims, which can include lowering share prices. Nearly all the major companies that are the target of boycotts are quoted on the I stock market. Adverse reports will affect their share prices. Teams of researchers are employed to study the news about quoted companies. Companies usually concede to a boycott's demands rather than let their share prices fall.

The manufacturers of Thalidomide, Distillers, conceded to the adverse publicity associated with a boycott of their whisky by consumers and - eventually - by some supermarket chains. They settled the case on terms much more favourable to the victims than those that they had offered previously.

Numerous other companies with high profiles have been stung by consumer boycotts over the past decade. Most spectacular have been the cases of Coca-Cola and Nestlé. Coke's dispute started in their Guatemalan subsidiary when police death squads killed eight leaders of the Coca-Cola workers' union (STEGAC) in 1976.

Provoked into action, the International Union of Food and Allied Workers (IUF) organized a worldwide production and consumer boycott of Coke. The campaign was particularly effective in Spain, the US and Scandinavia. It forced Coke's Atlanta-based management to agree to accept responsibility for their franchise holders' future action. They agreed to transfer ownership, to recognise STEGAC and to ensure that agreements with the union were binding.

The deal was one of the first ever recorded between a multinational company and an international trade union federation. But it didn't last. During the early 1980s, the local franchise holders ran down production of the unionised plant, moving production to two other non-unionised plants. They intended to declare the operation bankrupt - and then start up again with a new name and a more docile workforce. This is exactly what happened in February 1984. The boycott was immediately re-activated by the TUF, with the support of 70 unions in 33 countries. A series of church-sponsored shareholder resolutions were sent to Coca Cola's annual general meeting in the US demanding a clause protecting employees' human rights in franchise agreements.

The resolution failed, but the publicity worked. Coke, a major sponsor of the 1984 Olympics, were anxious to wind up the dispute before the Games opened. As Bob Ramsay of IUF said: 'The publicity hurt the most. They live on their name. Anything that damages their image will cost them money.' The union's victory included an agreement guaranteeing union recognition, reinstatement of workers, transfer of the franchise to a company with the resources to keep it open, and $250,000 compensation from the US parent company.

Nestlé, a Swiss-based multinational, refused to abide by World Health Organization guidelines on the sale of powdered milk for babies in the Third World. In order to stop it indirectly causing the death of thousands of infants - through infection of milk, water or bottles - the NI initiated a boycott of its products. The Nestlé boycott continued for several years through the early 1980s and involved a large number of church-based development agencies and medical groups. It generated enormous publicity and was eventually successful.

The rapid improvements in communications technology have enabled people to watch the violence in South Africa nightly on their TV screens. They have also gained the ability to shift their money and purchasing power around more quickly. These changes have led to recent boycotts becoming more sophisticated. They increasingly involve more than just the refusal to buy particular goods.

A disinvestment and boycott strategy has been seen as part of a broader strategy to defeat apartheid, and has involved pressurising banks to end loans to South Africa. Chase Manhattan, Chemical Bank and Wells Fargo no longer make either private or public loans to South Africa. In Britain this campaign has concentrated on Barclays Bank because of its South Africa links. Over $8 billion of accounts have been withdrawn from the bank since the boycott campaign was started in 1972 by Third World First and NI, amongst others, including Oxfam, UK.

Other strategies have been developed and refined for the companies involved in the nuclear fuel cycle and the arms race. The Anti-Nuclear Campaign's Consumer Boycott in the UK encouraged people to withhold 11 per cent of their electricity bills (the proportion generated by nuclear power), causing administrative chaos. Other contractors involved in the construction of Cruise missile bases, such as Tarmac, have been identified. Some local authorities refuse to use their services.

Consumer choice has a positive dimension too, since goods and services can be purchased from organizations with progressive policies. 'Campaign Coffee' from Tanzania was marketed as the positive alternative to Nescafé during the Nestlé boycott. Purchasing Nicaraguan coffee is now seen as a positive statement of opposition to US economic sanctions against that country. Friends of the Earth (UK) recommend particular furniture manufacturers who use wood which has been responsibly harvested: the forest in which it grew will not be destroyed by logging.

The whole idea of the positive use of consumer power has also spawned a number of trading organizations, including Twin Trading and Traidcraft in the UK and Co-op America in the US. Various socially responsible investments have sprung up in recent years, providing a positive alternative to the multinational banks. Working Assets in San Francisco, Calverts in Washington and more recently the Friends Provident Unit Trust, the Ecology Building Society and the Mercury Provident Society in the UK support ethical initiatives and allow investors to decide who benefits by their savings.

Consumer power now has two prongs: say no to unethical corporate activities, and choose to back the positive alternative.

Martin Stott's book Spilling the Beans: a style guide to the New Age is being published by Fontana in the UK in September.

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