Does Nestlé care? Consumers want to know

Nestle says, “The impact that we have locally has the potential to be felt internationally; the ideas that you bring to life today could shape our future”.  I couldn’t agree more.  The impact Nestle has internationally can also, of course, be felt locally.

Nearly half the entire Rohingya population in Rakhine state has been either murdered or expelled in what is the 21st Century’s most glaring case of ethnic cleansing; it is increasingly difficult to not characterize what is happening in Myanmar as a full-blown genocide.  Nestle is one of the biggest companies in the world, even without its significant investment in Myanmar, they possess the kind of global influence that could potentially persuade the regime in Yangon to not only halt its pogroms in Rakhine, but indeed, to reverse its policy of repression against the Rohingya.

It is absolutely essential for the most powerful players in the international business community to back up the United Nations’ and the Advisory Commission on Rakhine State’s recommendations for resolving the crisis in Myanmar if they are ever going to bear fruit.  We cannot talk about powerful players without talking about Nestle, the largest foods company on Earth.  Any word from Nestle weighs heavily on the scales of policy-making, not only in Myanmar, but around the world.  Their silence is just as significant.

When major companies like Nestle do not take a stand against genocide, it is interpreted by the regime as permission; and it will be interpreted by consumers as either indifference at best, or actual complicity and collusion at worst.

Nestle has been admirably responsive to public grievances in many instances, such as the recent campaign by Greenpeace over the company’s use of palm oil from Sinar Mas.  They took many steps to address the concerns; steps that no doubt came at a considerable expense for Nestle.

Condemning genocide costs nothing.

What Nestle stands to lose by speaking out is negligible compared to what they stand to lose by their silence; and indeed, to what they stand to gain by taking a stand.  The people in the Southeast Asian region care tremendously about the Rohingya issue; tempers are running high as the pogroms continue while the international community seems to remain largely ineffectual.  A “Day of Anger” has been announced for November 5th, with protests planned in Malaysia and around the world.  But directionless outrage and frustration can lead to very negative and even destructive consequences.  It is time for the global business leaders like Nestle to take the lead in reining in the Myanmar regime by letting them know that multinational corporations and foreign investors do not approve, and will not tolerate the crimes against humanity being perpetrated against the Rohingya.

It is time for Nestle and other leading companies to align themselves with the call for peace and justice in Rakhine.  It is time for Nestle to declare that “We Are All Rohingya Now”.

Using corporate logic for social change

It is not really viable for society to impose accountability on some powerful institutions and not on others.  That is the basic issue with corporations.  But the onus of responsibility for imposing accountability, of course, is not going to fall upon the institutions themselves; it has to be undertaken by the people.  Just as it is the case with democratic government, if you want to impose accountability, you have to turn up at the polling booth and vote; we also have to actually utilize the existing mechanisms for imposing accountability on institutions of private power.  For corporations, that means utilizing market forces; it means, in fact, becoming a force in the market.

The completely transparent and binary decision-making process of companies makes this very straightforward. They are concerned with whether a policy is profitable or unprofitable, and no one, ultimately, determines whether a policy will be profitable or unprofitable except consumers.  This is entirely our responsibility. Companies learn from our behaviour and they follow whatever the market tells them; they have to.

It is possible for us to create a new dynamic whereby companies will actually compete with each other to be more responsive to public demands on how they use their political influence, if the market rewards them for this responsiveness; if it is actually more profitable to be responsive, and if ignoring demands leads to financial loss.

Major corporations have no problem whatsoever pressuring governments for legislative changes if they believe laws are detrimental to their business interests; they are not the least bit reluctant to push for laws and policies that they believe will make it easier and more profitable for their companies to operate; and more often than not, they get what they want.  So there is no question about whether or not corporations have the power to affect change when their own interests are at stake; they do it all the time.  Our challenge is to create a scenario in which what we want companies to do for us is also something they will want to do because it benefits them.

Corporate giants affirming support for Rohingya

An ongoing military operation in Rakhine state which the government claims targets militants, but which has caused at least 30% of the Rohingya civilian population to flee the country, and left possibly thousands dead; is raising ethical questions about foreign investment in a country accused of committing genocide.

The #WeAreAllRohingyaNow Campaign, an initiative by independent activists around the world, has been highlighting the role of the international business community in contributing to a solution to the crisis. “If you compare the world news coverage of Myanmar and the reporting in the business press, you would think they are talking about two different countries,” says Jamila Hanan, the campaign’s director.  “On the one hand, the United Nations is saying that Myanmar presents a textbook case of ethnic cleansing, and the Security Council is condemning the scorched-earth policy of the army; and on the other hand, Myanmar is being touted as a great destination for foreign investment, with no reluctance being expressed about mass killings, gang-rapes, and the displacement of hundreds of thousands of innocent people. Investors are increasingly going to have to take a stand on this issue unless they want their brands to be associated with crimes against humanity.”

#WeAreAllRohingyaNow has been reaching out to multinational corporations invested in Myanmar and urging them to publicly commit to the protection of the Rohingya, often referred to as “the world’s most persecuted minority”, and to endorse United Nations recommendations for resolving the crisis.

The first company to respond to their call was Unilever, the third largest consumer goods company in the world.  “CEO Paul Polman replied to us immediately, and after a brief social media campaign, Unilever did indeed publicly affirm its support for the Rohingya,” Hanan explains.  “After a much longer campaign, we were able to help Norwegian telecom company Telenor, also a major investor in Myanmar, understand the urgency of the issue, and they too pledged their commitment to the human rights of the Rohingya”.

The campaign’s strategy seems to be turning the tide in favour of a business-led effort to end the genocide.  On Saturday, Paul Polman joined the #WeAreAllRohingyaNow hashtag on Twitter, in a tweet emphasizing the importance of reviving empathy in international relations, and presumably, in business as well.  As major corporations are beginning to doubt the wisdom of doing business amidst ongoing ethnic cleansing, even governments are becoming more sensitive about pursuing trade agreements with Myanmar.  On 14 September, the European Parliament Committee on International Trade decided to postpone indefinitely its visit to Myanmar due to the deteriorating human rights situation in the country. The Chair of the Committee, Bernd Lange said in a press statement “It is clear that under these conditions, the ratification of an investment agreement with Myanmar is not possible”.

“Rakhine state holds much of Myanmar’s untapped resources,” says Shahid Bolsen, the Campaign’s chief strategist.  “It is going to be extremely difficult for investors to benefit from the development of those resources without being regarded as complicit in the crimes of the army; particularly since there are development plans in precisely those areas where massacres are taking place.  Furthermore, even companies that have no direct interests in Rakhine state are, nevertheless, starting to be viewed as enablers of the army’s crackdown because the regime is facing no economic backlash from investors, which seems to embolden the government to defy international criticism”.

The government in Yangon still believes that its iron-fisted policy in Rakhine state will not alienate investors.  U Aung Naing Oo, director-general of Directorate of Investment and Company Administration said on Friday, “Ongoing conflicts do not have an impact on foreign investment, so we have nothing to worry about”.  However, his further contention that businessmen “care more about their business opportunities” than about human rights violations and political repression, seems to run counter to what was expressed by Paul Polman when he tweeted, “We have forgotten how to rescue each other. Human empathy is key to our survival”

The #WeAreAllRohingyaNow Campaign has highlighted the role of the private sector in resolving the crisis in Myanmar, and more and more companies are likely to follow the moral leadership of giants like Unilever and Telenor to use their considerable influence to stop what many observers are calling the 21st Century’s worst full-blown genocide.

Corporate Social Responsibility and Genocide

On August 25th, 2017, the government of Myanmar launched a large-scale military operation in Rakhine state ostensibly to combat a small group of Rohingya militants.  By all accounts, however, the Rohingya civilian population has suffered what amounts to collective punishment as the army pursues a scorched earth policy throughout the area; burning entire villages, and displacing hundreds of thousands of innocent people, and some estimates of the casualties run as high as 3,000 civilian deaths.

Collective punishment is a war crime, and many observers characterize Myanmar’s severe persecution of the Rohingya as ethnic cleansing.  The Rohingya population in Rakhine state has been reduced by approximately 30% in the less than 3 weeks since the military operation began.  It is difficult to not view what is happening as full-blown genocide.

Yet, multinational corporations and foreign investors from all over the world continue to flock to Myanmar hoping to benefit from that country’s untapped resources, many of which are found in precisely the same areas where military atrocities are taking place.  Indeed, the government in Yangon announced plans to build a Special Economic Zone in Maungdaw township, even as Rohingya inhabitants were being driven out, and their homes being burnt to the ground.

Does the international business community approve of what is happening in Rakhine?  Are they satisfied to extract oil and gas and minerals from Rakhine’s soil covered in Rohingya blood? Will they develop tourist resorts tomorrow on the beaches where today thousands of displaced families are huddled fearing for their lives?  Can they, in good conscience, erect their factories and warehouses and office buildings on land from which innocent Rohingya have been driven out by horrific violence? When every dollar of investment they pump into Myanmar inoculates the government from censure, how can the international business community avoid the charge of willing complicity with genocide?

We call upon major corporations and investors to display moral leadership in this time of urgent need; to refuse partnership with a government actively engaged in ethnic cleansing, and to use their considerable influence to turn the regime away from the path of genocide.

We say to those companies investing in Myanmar: Do not let your brand become associated with war crimes; do not let your company become complicit in crimes against humanity; do not let your shareholders become accomplices to genocide.    In Myanmar today, the price of profitability is innocent blood, and no business should be willing to pay that price.

The Economic Case for Human Rights

Imagine a scenario. You are walking along the street and you see a couple with a small child. A man comes up to the family and begins verbally abusing them. You do nothing. The man then becomes physically aggressive, slaps and punches the husband and father and knocks him to the ground. You do nothing. The man pulls out a knife. You do nothing. In front of your eyes, the attacker slits the other man’s throat and kills him. You still do nothing. The man takes the knife to the child, and you do nothing. He then attacks the woman, rapes and murders her while you just stand there. Now, obviously, this level of apathy and inaction would be contemptible. We might understand it if it was due to extreme fear or disorientation, but it would still be reprehensible. But let’s imagine that you weren’t afraid. In fact, let’s imagine that you are yourself a powerful, well-trained, experienced fighter with absolutely superior skills, who could easily have subdued the attacker; but you consciously chose not to do so.

Let’s imagine that the reason for your inaction was because you wanted to transact some sort of business with the man who was attacking the family, and you thought that if you intervened, you might lose this opportunity. Let that sink in. You made a deliberate decision to stand back and allow a horrific crime to take place, one which you had the power to prevent, because you wanted to do business with the attacker. In this type of scenario, I think we can all agree that you would be diagnosed as an extreme sociopath.

Well, this scenario is, in a nutshell, what is happening today with corporate power in states where human rights abuses are rampant. Tremendously powerful entities are standing back, saying nothing, doing nothing, even claiming that they have no responsibility to act, while atrocities are being committed in front of their eyes; all because they do not want to disrupt their existing or potential profitability. In some ways, indeed, they allow these atrocities to continue precisely because they may themselves create opportunities.

Any discussion about human rights is necessarily a discussion about the distribution and use of power. That should be self-evident. Advocating human rights means checking the abuse of power, and it means demanding a distribution of power; or at least demanding accountability of power; to ensure that people will be safe from oppression and persecution.

Well, we are living in an era in which extreme power is highly concentrated in the hands of very few people. It is concentrated in the hands of people who are not elected into power, and cannot be voted out of power. It is concentrated in the hands of people who exist beyond the pale of democratic accountability. And it is concentrated in the hands of people who are dedicated exclusively (and legally) to use their power to serve their own private interests.

In the context of this high concentration of private, unaccountable power, how can we campaign for human rights? It seems clear enough that the conventional method of merely lobbying governments or institutions like the United Nations has become obsolete. What amounts to a sort of reconfiguration of the old imperial model has emerged, with governments comprising a tier of management that is subordinate to corporate power. That is not to say that governments are irrelevant; far from it. They play a crucial role in the consolidation of power by corporations, and their enrichment. If you go down the list of the top companies on the Fortune 500 list, you will find very few that have succeeded without massive government subsidies and support. So government matters, but its primary function is as a subordinate instrument to private power.

We can lobby government, but we cannot equal the level of influence over policy wielded by multinationals. That is just a fact. Government is largely incapable at this point of defying corporate economic pressure. Again, we can look at Greece. We can, in fact, look at almost any military coup that has taken place in the last 50 or 60 years, anywhere in the world, and we will see that it was carried out under the auspices of big business, and for their interests. Consider Egypt, for instance. The overthrow of Mohammad Mursi was a Neoliberal coup, which was followed up by rapid and extreme capitulation with the demands of the International Monetary Fund, against the wishes of the population, and against their better interests.

The Anti-Globalisation movement of the 1990s and early 2000s fought against corporate influence over government. They wanted business out of politics. But this movement failed, and it was bound to fail. It is an unrealistic goal. Multinational corporations are not going away, and their power is not about to dissolve. We have to be practical about this. The transfer of power has happened, and it is simply not feasible to reverse it; at least not yet. We have to reconcile ourselves with the reality of a new set of power dynamics in the world today.

It seems to me that the only way forward is to address ourselves directly to corporate power. We have to lift the corporate veil, and expose to the light of day that corporations are political entities, and we have to deal with them as such. We do not have to abolish corporate influence (which, anyway, we can’t) we have to, in short, democratize corporate influence. This is going to be the only way, now and in the future, that we can successfully improve the state of human rights; indeed, it is the only way that we can re-establish any semblance of democracy.

So, how can this be possible? How can we impose accountability upon corporations? How can we lobby and persuade them to use their unparalleled influence for the greater good of society when they are legally and exclusively dedicated to the interests of no one except their shareholders? It seems to be an intractable conundrum. But it isn’t; not at all.

When you begin to recognize corporations as political entities, you also begin to realize that their stakeholders; their workers, their customers, and everyone impacted by them or who contributes in any way, directly or indirectly, to their profitability; are also political players. Just like voters, just like political parties, just like political action committees, and so on. We are all members of corporate constituencies. Rather than party affiliation, we offer brand loyalty. Rather than political insignias, we wear logos. Rather than campaign contributions, we offer consumer purchases. Everything we do, and everything they spend billions of dollars in advertising and marketing to make us do, empowers corporations to pursue their political agendas. We have the right to expect our interests to be reflected in how they use their power. Our consumption, our brand loyalty, our labor, should earn us the right to representation when these companies pursue political agendas, and we should have a say in what they do with the power we have given them.

The Only Winning Business Strategy for Telenor Digi

Telenor’s company in Malaysia, Digi, has just released their report for the second financial quarter of 2017. Despite the expected spin the company attempts with the results, the numbers are grim. Revenues are down, net profit is down, share price is down, and shareholder dividends are the lowest they have ever been. Digi, and Telenor, are struggling to adapt to the Southeast Asian market, and they are floundering. We can debate the factors that have led to the decline of the business, but at the end of the day, there is only one conclusion: poor strategic management.

The #WeAreAllRohingyaNow Campaign has been reaching out to Telenor for months now, advising them that their stubborn silence on the issue of ethnic cleansing in Myanmar is alienating customers in Malaysia and throughout the region. We submit that any company must consider the mood of consumers, and respect their values and concerns. They must consider the impact their political stances (or lack thereof) have on their appeal in the market. Telenor seems to be determined to ignore this. Conventional financial advisors also tend to overlook public sentiment as a factor in evaluating the attractiveness of a company for investors. This is a serious mistake. Public opinion cannot be disregarded.

It can be argued, of course, that Telenor’s decline in Malaysia has nothing to do with the Rohingya issue; but that is missing the point. Telenor’s business in Malaysia IS in decline, and there is no sign of improvement. The first quarter of 2017 was worse than the first quarter of 2016; and the second quarter is even worse than the first quarter. Telenor is obligated to increase market share, revenues, profitability, share value, and dividends. They are failing to meet these obligations with what is becoming reliable consistency.

They need to do something to turn this around.

Their best option in this regard would be for them to tap into the broad public sentiment for the Rohingya issue. Whatever the cause of their decline; making a positive public statement in support of the Rohingya and for the implementation of UN recommendations could win them droves of new customers in Malaysia who would appreciate the company taking a moral stance that reflects their own concerns and values. The #WeAreAllRohingyaNow Campaign would gladly encourage the public to embrace Digi if Telenor issued such a statement.

No matter how you look at it, the only winning strategy for any company is to align itself with the issues their consumer constituency cares about. We sincerely advise and encourage Telenor to finally come out against the genocide in Myanmar, and endear themselves to consumers in the regional market so they can begin to find their way out of the downward spiral of dwindling profits that, otherwise, appears irreversible.