The past decade has witnessed the emergence of a new and very serious risk to western companies operating in frontier markets—what the political scientists Margaret Keck and Kathryn Sikkink described as ”transnational advocacy networks.” The human rights movement is the paradigmatic—and most successful– example of a transnational advocacy network.
Human Rights In History
The human rights movement has demonstrated strategic brilliance in re-inventing itself at critical junctures. At the risk of presenting an overly schematic history, in my view the human rights movement has gone through three distinct phases. Up until 1989, human rights activists primarily focused on achieving liberal democratic political transitions in large swaths of the globe oppressed by authoritarian and totalitarian regimes. Once that goal was largely achieved, post-1989 human rights advocacy shifted its agenda to what was called “transitional justice” or post-conflict justice– holding accountable perpetrators of atrocities committed under these abusive regimes through the creation of war crimes tribunals and truth commissions.
The third phase began to blossom around 2002, as new and old human rights groups began to focus on economic issues. Human Rights Watch took what was then a controversial step (because until then the group had deliberately limited itself to the protection of civil and political rights, not economic rights) and produced a report on corruption in Nigeria and its impact on public service delivery in the oil-producing Rivers state. George Soros’ Open Society Institute provided the seed money for the Publish What You Pay Campaign, the Revenue Watch Institute, and Global Witness—advocacy groups which attempted to address what they claimed was the role of natural resources—and the companies that extract them—in driving conflict, corruption, and poverty. In the interest of full disclosure I worked for Revenue Watch Institute, so clearly at one point I was sympathetic to this agenda.
Successes of Conflict Resources Movement
Like the previous two phases, phase 3 of the human rights movement has already demonstrated remarkable success—if success is defined as an impact on policy. Activists drove the creation of the Extractive Industries Transparency Initiative, a voluntary initiative which creates standards and methods for extractive companies to publish what they pay to host governments and governments to disclose what they receive from companies. Activists were also instrumental in persuading the drafters of the Dodd-Frank financial reform bill to include Section 1502, which requires companies to ensure that the tin, tungsten, tantalum, and gold sourced from Central Africa is “conflict-free.” Because these minerals are used in a wide array of products, from medical devices to electronic gadgets, a broad array of companies will be affected.
But it appears that business groups are starting to fight back against the advocacy onslaught. As a former participant in the movement, I do think that western companies were slow to identify and respond to the risks posed by the natural resource advocacy movement. In the July 18 edition, the Wall Street Journal published a forceful editorial, attacking Section 1502 on the grounds that companies will simply stop sourcing from Central Africa completely, rather than attempt to comply with what they contend is an impossibly burdensome regulation.
The editorial is behind a paywall, but I’ll just quote the conclusion, which argues that the withdrawal of companies from Central Africa will be worse for the people the regulation is intended to help:
“The highest price is being paid in central Africa, where millions of people, and 16% of the Congo’s population, are dependent on small-time digging. By all accounts most of the money from central African mining goes to these artisanal miners. Soldiers and rebels do pocket some of the proceeds, and that’s a depressing reality.
But mineral operations also provide the local population with centers of commerce, with cash to pay for supplies and workers and easily traded goods. As money from the mines becomes increasingly scarce, Congo’s warlords have moved on to targeting the banana trade. Perhaps conflict-free bananas will be the next object of activist enthusiasm.
Meanwhile, the butchery continues, with recent reports of government troops raping more than 100 women and children over a three-day spree in the Congo’s South Kivu region. If all the money from minerals dries up, these killers will not shy from even more atrocious means to fund their ambitions. As for Western policy makers, Section 1502 is a useful lesson in how well-meaning attempts to “do something” in Africa unintentionally harm the innocent without touching the guilty.”
The Journal makes a compelling argument but it’s difficult to know whether this is just a threat or whether it is true that companies will stop sourcing from Central Africa rather than comply with Section 1502. I would definitely be interested in learning more from executives at potentially affected companies, so if you’re reading get in touch and I’ll buy you coffee.
Michelle Sieff's blog 