It’s great to be accidentally topical. In the week that Save the Children had to fend off allegations of letting corporate funding influence its campaigns, here’s Oxfam America’s Chris Jochnick (@cjochnick) suggesting a way to accept money (in this case from extractive industries) while staying demonstrably independent
Oxfam was recently approached by a major mining company to help it implement “free prior and informed consent” (FPIC). The company 
(rightly) anticipated that it would face future conflict if it didn’t earn community support for its project. It needed an organization with the expertise, credibility and relationships to help it manage this process.
For Oxfam, this was a great opportunity – our local partners would have likely supported it, we’ve been championing FPIC for many years, and here was a chance to help implement it in a credible, robust manner with an influential actor. We turned it down – in no small part because of the expense. The company would have been happy to cover our costs, but we couldn’t accept payment. Our campaigning around extractive industries makes it impossible to take money from oil or mining companies.
It’s a common story. As a general rule, donors won’t pay for corporate advocacy or engagement (see interesting breakdown on human rights funding here); and credible advocates won’t take money from company targets. Community groups lack funds to engage with companies meaningfully, and better-resourced NGOs are loath to deploy scarce funds to advise or mediate around conflicts. Those companies out to make good faith efforts to address complex challenges will lack for credible partners and intermediaries (a common lament). The result: watchdogs stick to “naming and shaming”; companies hire consultants; problems fester.
This situation is only getting worse. Companies seeking resources, markets and cheap labor are moving aggressively into poorly-governed countries, exacerbating conflicts and raising a host of new challenges. Efforts to address this “governance gap” have led to a dizzying array of voluntary and global standards, capped by the UN Guiding Principles on Business and Human Rights (with 1700 people attending the most recent UN Business and Human Rights Forum), but oversight is lacking and funding for these initiatives is woeful.
Multi-stakeholder initiatives (MSIs) bring companies and advocates together (e.g. the Fair Labor Association, the Roundtable on Responsible Palm Oil, the Global Network Initiative), but these initiatives are not aimed at funding watchdogs, and, not surprisingly, they struggle to attract and engage advocates. Oxfam recently dropped out of a large MSI targeting oil and mining companies (the Voluntary Principles on Security and Human Rights) in good part because we couldn’t justify the use of staff resources in a process that lacked adequate accountability measures. Other large NGOs — Amnesty International, Human Rights Watch, Human Rights First – have similar dilemmas; smaller watchdogs – local NGOs, community groups, social movements face even more significant hurdles and are rarely present.
Companies recognize that their bottom line and reputations rely on getting out front of conflicts and have increasingly recognized and adopted human rights commitments. Implementation is now high on everyone’s agenda and watchdogs and stakeholders need to be in that mix. Companies are willing to pay for it. So how do we tap ready and willing corporate largesse for a field that is starving for resources?
A genuine solution to this problem – a “Watchdog Fund” – would have to meet four conditions:
- Garner corporate funds. In theory, the Fund could be subsidized by a small tax on companies in high risk industries. For governments truly intent on addressing conflict and corruption, underwriting civil society engagement makes eminent sense (though may raise additional issues for watchdogs). Recent legislation in India requiring companies to devote 2% of net profits to corporate social responsibility offers a possible model (interesting blog analyzing it); but in reality, we are still a ways off. In lieu of that, companies will have to be sufficiently incentivized to fund watchdogs. Many companies will have an interest in stronger civil society groups to address complex problems, help level the playing field and advise on novel issues. Companies commonly pay for the right to participate in MSIs that aim to raise standards and bolster transparency/accountability (however weakly) and companies are willing to partner with (and pay for) credible stakeholders. The challenge would be to attract investments in an independent fund, over which companies might have some loose call on services. That’s probably easiest with a handful of companies working on a particular challenge like FPIC or human rights grievance mechanisms (there are many such platforms already bringing companies together).
- Designate funding for credible watchdogs. There is no shortage of good environmental, development and even human rights-minded NGOs ready to take funds from any company; but by definition, these groups are too beholden to the companies to serve as credible watchdogs or intermediaries. The Fund would need to target a more “radical”/independent mix of organizations, prepared to work on some particular challenge involving contributing companies.
- Define a set of “transformative” activities. The Fund would need to focus on activities that currently go unfunded and that get to the root of complex problems. In particular, the Fund should empower marginalized stakeholders (capacity-building, rights awareness, logistical support for engagement) and foster accountability (transparency initiatives, implementation of rights, oversight processes). It might also fund ‘learning by doing’ experimentation – in complex systems, we often don’t know the answers in advance.
- Attract willing watchdogs. This constitutes the main challenge. Credible watchdogs will tend to be suspicious of anything that benefits (or is paid for by) a corporate adversary. For good reason, watchdogs would assume the Fund is aimed at coopting stakeholders and quelling legitimate protests. Green-washing, dividing and conquering, bribing adversaries are familiar approaches of companies operating in conflict environments. Watchdogs will assume similar shenanigans from the Fund and will be reluctant to risk their reputation and credibility by taking part. However, even the most radical organizations take money from foundations with ties to Wall Street and watchdog organizations have willingly joined initiatives funded and driven by company interests (e.g. the various MSIs above).
The key is credible independence – in fact and perception. The Fund would need to be managed in such a way as to convince watchdogs that the financial backers – the company targets – were not influencing the designation of funding. To that end, the Fund would need some kind of a third party institution to control the funds, with credible leadership (e.g. watchdogs on the board), decision-making independent of company donors, no single company representing more than X% of funds, etc.
For a Fund to attract both companies and advocates remains a stretch; but both the demand and opportunity for it grows. The global funding universe for corporate watchdogs could be easily doubled by tapping corporate funds; and forward-leaning companies would be well-served by the investment. A foundation looking to leverage its own funding in this area could do worse than designate some modest funds to exploring the possibilities.