The company they keep

Development
Corporations
NGOs
Handing over money

© Johner Images/Alamy

‘We’re at a critical moment for the world’s children,’ warns Justin Forsyth in Save the Children’s 2013 annual report. The chief executive of the British grouping of this international NGO could not be more right. Needless wars, dispossession through climate change, the rise of ugly rightwing politics – the human toll is high. Children and women, as ever, bear the brunt.

‘We face a moment of opportunity, challenge and responsibility,’ Forsyth continues. ‘If we’re going to achieve even more impact for children, we need to work in different, innovative ways.’ Mark Goldring, Oxfam GB’s boss, echoes such sentiments: ‘Our challenge is not only to continue to do this work, but to scale it up.’ CARE International is no less ambitious, determined to focus even more efforts to empower women and girls.

Despite economic recession, these three international NGOs mustered combined funds of $3.2 billion to spend on the poor last year.1 Save the Children UK managed a 20-per-cent jump during 2012-13, bringing its income up to a record $525 million, due in part to corporate donations, up a third from 2012 to $40 million in 2013.

Partners unlimited

Corporate funding of international NGOs is nothing new. CARE USA has collaborated with Coca-Cola for three decades. ‘We are extremely grateful for the trust placed in us by compassionate donors and partners,’ says CARE in its 2013 annual report. As well as Coca-Cola, CARE counts arms manufacturers General Electric and Boeing, and clothing companies Nike and Gap, among its major donors. Oxfam, too, has embraced the corporate agenda and ‘is proud to be at the forefront of partnerships between the business sector and the NGO community’. Save the Children’s message couldn’t be clearer: ‘Teaming up with Save the Children to market a new or existing product could boost your sales, profile and customer base.’

But do such partnerships offer the win-win solution claimed by the NGOs and their corporate funders, or are there losers? Does Erinch Sahan, an Oxfam private-sector adviser, have a point when he blogs: ‘I want to believe that pursuing profits will result in a sustainable world and the end of poverty’? One such partnership involves Save the Children and pharmaceuticals giant GlaxoSmithKline (GSK). Since 2011 Save the Children has benefited from GSK’s initiative to reinvest 20 per cent of the profits it makes in the world’s least developed countries (a fraction of its global $7.5 billion profit in 2013) back into projects which strengthen healthcare infrastructure and support the research and development of child-friendly medicines. Save the Children’s website claims a million children will be helped as a result of a ‘ground-breaking’ deal signed with GSK to improve children’s health in some of the poorest countries of Africa.

'Teaming up with Save the Children to market a product could boost your sales, profile and customer base' - Save the Children’s assurance to potential corporate partners

No mention on Save the Children’s website, however, of one of GSK’s less child-friendly products – the antidepressant Paxil (Seroxat/paroxetine). In 2012 the company was fined $3 billion by the US government after pleading guilty to criminal charges, including bribing doctors and encouraging the prescription of Paxil to children, even though the drug was unsuitable and unapproved for this use.2 ‘We would never refrain from speaking out on an issue because we had a partnership with a particular company. That would clearly compromise our values,’ claims Save the Children. When contacted for a response, it admitted it was ‘aware of reports on the historic issues relating to Paxil… but our belief is that the risks are outweighed by the benefits of the partnership.’3

Oxfam’s uncompromising vision of a world where everyone has enough to eat is embodied in the high-profile ‘Behind the Brands’ campaign, which promises to ‘provide people… with the information they need to hold the Big 10 [global food and beverage producers] to account’. One such is Unilever, about whom Oxfam was, until recently, rightly critical: ‘[Unilever’s] record on land rights leaves plenty to be desired’.4 By its own Responsible Sourcing policy, Unilever will not require 80 per cent of its suppliers to consider the rights of women to land ownership until the end of 2017. In the past Greenpeace has accused Unilever of sourcing its palm oil from Indonesian suppliers whose activities included ‘tearing up areas of pristine forest then draining and burning the peatlands’.5 The company was recently fined $120 million by the European Commission for establishing a price-fixing cartel in Europe along with Proctor & Gamble.6

Yet despite all the criticism, ‘Unilever is a vocal advocate for tackling climate change and new business models that benefit poor farmers,’ according to Penny Fowler, head of Oxfam’s private sector team. ‘[W]e will continue to engage with Unilever and other companies because reducing global poverty and inequality is good for business and us all.’ Oxfam currently helps the transnational under its ‘Corporate engagement’ programme ‘to incorporate thousands of smallholder farmers into their [Unilever’s] global supply chain’. But is this really an innovative way of ending poverty or is Oxfam helping a rich company get richer at the expense of poor farmers? Paul Polman, CEO of Unilever, is in no doubt of the benefits to the company, giving thanks to ‘partners who are assisting us to deliver this new business model’.  

CARE USA similarly waxes lyrical about working with transnationals. ‘[We] believe that dynamic partnerships are critical to solving global challenges. Our partners are committed to developing and supporting socially responsible initiatives that build stronger communities in the developing world while enhancing business and development goals.’ Committed to donating 1.6 per cent of pre-tax profits to good causes, the Nike Foundation is one such partner, working ‘to unleash the unique potential of adolescent girls to end poverty for themselves and for the world’. Nike calls it ‘the girl effect’.

In 2000 a BBC documentary uncovered child labour and poor working conditions in a Cambodian factory used by Nike. The documentary focused on 7 girls as young as 12 who all worked 7 days a week, often 16 hours a day.7 Nike has been castigated the world over for its use of sweatshops since the 1990s, yet as late as 2013 Nike stated that a third of its contracted factories, or potentially 300,000 workers, still did not meet the company’s own minimum standards for worker treatment.8

Close companions

Is Nike really a ‘compassionate’ donor to be proud of, as CARE would have us believe? Or have all three NGOs become too close to big, unscrupulous corporations, preferring to mount large-scale, high-profile schemes that deliver food and medicine to the needy and greater profit margins to the transnationals, at the expense of grassroots work to tackle the endemic, structural causes of poverty?

Just how close the corporate and international charity worlds have become is evident from a look at those at the top of the NGOs. Alex Cummings is both treasurer of CARE USA and executive vice-president of Coca-Cola. Save the Children’s director of human resources, Paul Cutler, is a former employee of GSK. Oxfam trustee Dame Marjorie Scardino, a Forbes rich-lister, is a non-executive director of Nokia, an Oxfam donor. Connections to powerful political figures are close, too. Save the Children’s $200,000-a-year chief executive Justin Forsyth and Oxfam trustee David Pitt-Watson are both former advisers to New Labour’s controversial prime ministers, Tony Blair and Gordon Brown respectively. Much more worrying, however, is the accusation that large international NGOs are helping to legitimize companies like GSK, Coca-Cola, Nike and Unilever, rather than holding them to account for serious malpractice. With transnationals treating corporate social responsibility schemes as little more than a necessary expense to whitewash their reputations, do NGOs really need to get in on the act?

Ian Brown managed aid programmes for 15 years in Africa, the Middle East and Southeast Asia for Oxfam, the Mines Advisory Group and Terres des homes.

  1. CARE International had revenues of $0.7 billion, Oxfam International $0.6 billion and Save the Children International $1.9 billion.

  2. ‘Pharma overtakes arms industry to top the league of misbehaviour’, 8 July 2012, The Observer; nin.tl/gskfine

  3. Statement from Save the Children to the author, 9 October 2014.

  4. Behind the Brands, nin.tl/oxfambandj accessed on 8 October 2014. The page was updated by Oxfam and the criticism removed on 9 October 2014.

  5. ‘Palm Oil: Cooking the climate’, 8 September 2007, Greenpeace International; nin.tl/cookingclimate

  6. ‘Unilever and Proctor & Gamble in price fixing fine’, 13 April 2011, BBC News.

  7. BBC Panorama, 15 October 2000.

  8. Nike Inc; nin.tl/niketargets

Subscribe   Ethical Shop