This section highlights the thinking and innovative, informal method which led to a US$480 million withdrawal of financing from a private bank to the Finnish paper pulp mill, Botnia.

The Logic of a Rights-Based Framework

When the term “rights based approach” came into use in development and human rights circles in the mid 2000s, many people did not really understood what it meant. Including those people in the midst of the debate.

As people such as Mary Robinson, former President of Ireland, and then head of the Office of the High Commission on Human Rights, brought the “rights based approach” to the forefront of the discussion, many human rights organizations began to develop concepts and tools to address and define “rights based” advocacy. With “human rights” at the foundation of the discussion, these definitions aimed essentially at two things:

  1. that in any given situation, no human rights are violated, and
  2. that the full and progressive realization of human rights are promoted

These two principles, or objectives, underline much of the “rights based” advocacy discussion.

We’d like to take this framework a bit further, however, and speak more generically about “a rights based approach to development”, examining rights in a more conceptual manner., This is how we approached the Pulp Mill case from the beginning, and we have found that such an approach is indeed more opportune for general advocacy situations. As such, we can break from the boundaries of “human rights” per se, and include in our advocacy many other codified (or informal) quasi rights, or even simply, perceived rights which may not formally exist anywhere.

The rights based approach is grounded in a framework that has very specific interrelated parts.

First of all, there is a right, which may be formally classified (such as the right to life or the right to health) or not (it can merely be a perceived right, such as, I have the right to the parking space in front of my home or, I have the right to decide if you build a factory next to my child’s school)

Second, there is a right holder, which is simply the person or group of persons, which have that right. It may be for example, a community, a group of persons, an ethnic group, or an entire population (as in the case of human rights). It is presumed that those persons can claim (or exercise) their rights.

Third, there is some party (a State, police, judge, etc.) which is obliged to guarantee those rights. Ideally this would be an independent party, but in some cases the grievance mechanism is provided by an internal actor which represents the perpetrator of the violation. Internal corporate grievance mechanisms have been criticized for this typical conflict of interest.

And finally, that there is some mechanism, some forum, or other channel for the right holder to exercise her/his right. This could take the form of a grievance mechanism, a court system, or any other complaint filing system. We often speak of this dimension as “access to justice”. It can be formal and binding, it can be formal but non-binding, or it can be completely informal.

In traditional advocacy circles, particularly ones that are led by lawyers, we tend to steer advocacy towards the “formal”, “legal”, or “binding” mechanisms that are available, such as local or national courts, regional human rights tribunals, etc.. This is because we tend to think that legal action is the most effective way to get binding results. The other implication in this line of thinking is that non-binding voluntary mechanisms, such as the World Bank Inspection Panel, the CAO of the IFC, the National Contact Points of the OECD Guidelines, or even a private company grievance mechanism, are ineffective precisely because they are non-binding. This traditional line of thinking presumes that these mechanisms are not taken seriously, or that they “have no teeth” to force or enforce any sort of action to right a wrong that has been committed.

While this might be true in many circumstances, this line of thinking misses the central point in the rights based approach. It misses the potential for change which is grounded, not in the formality of the framework, but in the very structure of the approach itself, irrespective of whether it is binding or non-binding. If the rights based approach is functioning correctly the right will be guaranteed to the right holder, regardless of whether the mechanism, or the rules that govern it, is legally binding or not. The right holder likely does not care about the formality of the system, as long as they have continual access to their rights.

Let’s illustrate this point with an example from the Pulp Mill Case.

Virtual Justice and Rights Based Advocacy

Early in the advocacy, we discovered that ING Group was considering financing the Finnish mill, Botnia to the tune of US$480 million. ING Group is a signatory to the Equator Principles, a set of voluntary (non-binding) social and environmental financial standards, which encourage banks to invest responsibly. The Equator Principles essentially copy the World Bank’s IFC Performance Standards. Unfortunately, to date the Equator Principles have not developed any grievance mechanisms or procedure for filing a complaint against banks in non-compliance. There isn’t even a centralized complaints reception address. The principles are merely guidance for banks to take into consideration as they see fit and according to the internal procedures which they themselves are free to develop or not. None of the banks at that time, including ING, had any procedure in place to handle complaints.

We had already filed a complaint to the IFC’s Compliance Advisory Ombudsman (CAO), and had received a favorable report from the CAO, which basically said that Botnia and IFC had failed to comply with the IFC’s Performance Standards and that the project needed to be revised. Since the Equator Principles mirror the IFC Performance Standards (then called Safeguard Polices), it seemed logical to presume that the project was also not in compliance with the Equator Principles, and if ING went forward with the investment, it would be in violation of these as well.

We brought together our lawyers and interns, and carried out an assessment of what could be done to compel ING adhere to the Equator Principles. The result was exactly what we expected. Formally, there was nothing possible, there was no complaint procedure, there was no place to present a complaint, there was no guidance whatsoever by ING, or by the Equator Principles Secretariat, as to what one could do when confronted with a violation of the Equator Principles.

Our thinking however focused on the logic of “the rights based” framework. If we looked at the formal elements mentioned above (a set of rights, a rights holder, a rights guarantor, and mechanism) it appeared that only two of the elements were present in the case at hand: the rights which were the Equator Principles, and the rights holders- the affected community. It would seem that without a formal complaint mechanism, and with no guarantor, there was little to be done.

Wrong.

Any random onlooker could see the circumstances of the case and immediately understand the injustice occurring. The logic is impeccable. There is a set of rights, there are rights holders, and there is even a body acting as a judge (the CAO) saying that a violation has occurred. The only problem is that without a formal complaint mechanism there is no procedure to remedy the violation. Our general impulse as an NGO would be to discard this course of action on violation of the Equator Principles because of this key missing element.

In the logic of a rights based framework, however, we can and should consider the informal dimensions of the situation.

A key question is who is the actor responsible for compliance in this case? While Botnia and the IFC are the actors that should be complying with the social and environmental standards set out by the IFC, and by national and international law, it is in fact ING that has promised to uphold the Equator Principles which are designed to promote responsible investment.

If we are to bring any sort of case (formal or informal) for violations of the Equator Principles, it is actually ING that is the responsible party. The CAO is telling us that the project is in violation of the IFC safeguards. Because the Equator Principles mirror the IFC’s safeguards, by transitive property, ING, in supporting Botnia, would be knowingly supporting a project that is violating the Equator Principles. But where is the complaint mechanism?

The complaint mechanism is virtual. To the uninformed public, it would be illogical to presume that there is no complaint mechanism. When we, as an informed civil society organization working on development finance, first learned about the Equator Principles we were surprised to learn that there was none. We were also surprised to learn that ING (and for that matter any of the Equator Principles banks) failed to offer a complaint mechanism or procedure of their own. The public could only have the same perception.

We hence decided to utilize the likely public opinion of what the rights based approach should be to our favor. We drafted a document, largely modeled on the CAO complaint (which is formal) and named it something that sounded formal, and looked formal, catering to what any ordinary person concerned with responsible investment would logically presume existed.

We called it:

“Equator Principles Compliance Complaint”. A snapshot of the cover is reproduced below.

 

The entire document can be found here.

So let’s continue now to follow the logic of the rights based approach. We have the right (the Equator Principles), we have the right holder (the Community/NGO), we now have a complaint mechanism (the Equator Principles Compliance Complaint), we have a responsible party (ING), but we don’t have a formal independent actor to hear our complaint (although to some extent we are extending the reach of the CAO by transitive association).

Our thinking at the time was to identify who precisely would hold it against ING Group that they were violating the Equator Principles? That is, who could pass judgment which might affect ING in terms of their reputation, their image, their ethic, etc. Since we could not hold ING legally accountable for holding to their commitment (we’re still working on studying this other dimension), there must be a way to leverage influence over ING to force the bank to keep to their promise of investing responsibly.

Here’s the list of actors that we came up which might have some leverage over ING, and which, depending on their reaction, could sway ING’s project staff away from investing in the project:

  • The Dutch Media;
  • Shareholders of ING Stock;
  • Credit or stock exchange rating agencies which help determine NGO stock value or “sustainability score”;
  • ING’s customers;
  • The Dutch Government (if they supported ING in any way) – recall that the Dutch government sits on the Board of Executive Directors of the World Bank, and that the World Bank’s own CAO is claiming the project violates bank safeguards;
  • Members of ING’s Board of Directors;
  • Executive staff at ING, who are above the project staff making the finance decision;
  • Family and friends of ING staff supporting the project;
  • Rival private banks signing the Equator Principles;
  • Environmental NGOs in the Netherlands (or Europe more generally).

 

Building your Virtual Advocacy Database and Picking your Targets

After devising this list in a brainstorming session at CEDHA, we set out to obtain as many email addresses of the identified actors as we could.

Emails for Dutch media outlets were not difficult to obtain. We identified general email addresses for each media outlet and, where possible, specific addresses for the journalists who typically wrote about finance or development issues. Sometimes it was necessary to guess at the email addresses of these journalists through logical deduction, such by as taking a first initial and last name and adding @institution.com etc.

We used similar guesses to build our database for Board Members of financial institutions, or executive/project staff. After some trial and error, such attempts and efforts begin to provide useful results. The database builds, and before you know it, you may have several hundred emails to work with.

As to more sensitive information, such as names and emails of family members, friends, and clients of key individuals at the banks, (we even considered at one point canvassing the internet in search of hackers that could obtain internal company email databases) there are clearly some ethical and even legal boundaries to consider. While in the end we did not act on such ideas, the point to be made is that one needs to be creative, and open-minded in terms of defining and contacting a set of actors who could make a difference in leveraging a corporate decision such as this one.

We can think of this sort of contact database research as defining the drivers of influence. These are people, or groups of people, that, could influence the course of a project through their opinion of, or reaction to information they obtain. These agents can in fact be more influential than the formal mechanisms available to induce change.

Imagine, for example, that through a legal complaint the largest penalty you can obtain is a fine of US$10,000. In a project such as the Botnia mill, which costs on the order of US$1.2 billion, paying a fine of US$10,000 is merely a grain of sand on the beach for the company at fault. On the other hand, pressure from the Finnish stock market, from family members of the executives, or from Finnish media which might jeopardize the future capacity of the company to receive investments from the State through its Export Credit Agency, might be a much more effective deterrent than traditional legal action.

 

Where’s the beef? – What sorts of penalties are at available in non-formal actions?

Whereas in a formal, legally based complaint, the foreseeable penalties are clear from the start (generally in the form of some financial or permit-related penalty), the outcomes and consequences of non-formal rights based advocacy are far less tangible. This does not necessarily mean that they will be any less significant or material.

Further to this last reflection, to gain more effectiveness in our advocacy, we need to dissociate the institutional from the personal. We tend to see our advocacy only from an institutional perspective. We think of investment projects as carried out by institutions  such as the World Bank (IFC in the case of the pulp mills), Botnia (the company), ING, Nordea and Calyon (the private financial banks) or Finnvera (the State Export Credit Agency). However we must remember that these institutions are composed of human beings- people who have normal lives and relatable motivations. Some of these people simply go through the day to day activities they are mandated to do while others are on career paths, aiming to rise professionally and economically. Human ambition, greed, prestige, and honor are all elements that drive these actors to do the things that they do. Risks to any of these factors can have serious effects on the way in which these people might behave under pressure, especially pressure that calls their judgment and capacity into question. This is a reality behind any and every development problem out there, and yet for the most part, we fail to think about this reality in our advocacy efforts.

Imagine that you are a project investment officer at the World Bank’s International Finance Corporation (IFC) which is about make a critical decision about moving forward with a billion dollar investment decision in a very sensitive international project. You, Mr. Johan Smith (for hypothetical example), are a mid-level project staff person, with ample room to advance in your career. You are the main person responsible for the project’s public relations in Uruguay, which is where the investment is to take place. You live in Washington DC, in a nice apartment, with a fair salary and are moving up at IFC, maybe you hope one day to become Department Head. Your yearly performance review is about to come up, and your future with IFC will depend on your personal performance. Now consider the various consequences to your world if one of the following three headlines ran in a local newspaper in Washington DC:

a)      World Bank to Finance Controversial Pulp Mill project in Uruguay

b)      IFC slammed by local community for not conducting proper consultation.

c)      IFC head of Environment and Sustainability, Mr. Johan Smith criticized for violating national laws in pulp mill scandal.

These three possible headlines are typical of NGO press releases about controversial development projects. Example (a) is professional and essentially neutral. For Mr. Johan Smith, the apparition of this is largely inoffensive, and might even help him show how he is carrying out due diligence to ensure that IFC makes a wise decision about the investment.

Example (b) is a bit more worrisome as Mr. Smith’s area of responsibility is in question. He will surely have to contact his superiors to explain the situation.

Example (c) is far more troubling. Mr. Smith is attacked directly, with the article undermining his personal credibility and professional integrity. He will surely feel extremely uncomfortable about having to answer to the accusations presented.

Now what if conversely, we ran these articles in Argentina or in Uruguay, where the case was actually occurring? Do you think that Mr. Smith would be concerned if an article appeared in a local newspaper in the town of Fray Bentos, with a readership of 1,500 people, nearly 12,000 kilometers away? What if the story ran in a national newspaper in Argentina, with a far more extensive readership base but still confined to Argentina and Uruguay?

What would the difference be for Mr. Smith if the article ran in a local newspaper in Washington DC (such as the Washington Post), or in a national newspaper (like the New York Times), or in an international newspaper, like the Wall Street Journal or Financial Times? Surely that would depend on how important a global discussion forum like the financial times was for Mr. Smith’s career. If he was on a career path which could eventually make him head of IFC a story in the Financial Times about his incompetence, would have a significant impact on how Mr. Green would work on this case from this point on.

Consider too to the effect on Mr. Green if we sent the press release to all of his colleagues at IFC, many of which might be persons vying for his job or that don’t care much for him and his very ambitious career path? What if instead (or in addition) we sent the release to members of the Board of Directors of IFC, further exemplifying how Mr. Green has failed to comply with the Bank’s own due diligence.

This is precisely what we did during the Pulp Mill case. We developed an extensive list of IFC and other World Bank staff emails and sent them regular information about IFC project staff incompetence. We made a point to highlight each and every fumbled step along the way in an effort to showcase IFC mistakes, errors of judgment, and due diligence failures to the persons that could make important decisions about how the World Bank moved forward. We also aimed at equal level colleagues in order to show how specific persons made bad decisions or botched due diligence, placing the IFC in a highly questionable situation.

The point here is that the same bit of news can have a wide variety of affects and incite an extremely diverse set of reactions depending on how it is framed and to whom it is sent. Hence, a financial penalty or a court order, may not actually be the most effective way to gain leverage over an actor you wish to influence.

 

Understand what drives your target.

We also need to make a distinction in terms of who our target actor is. Of course we would all like to think that all individual corporate actors are measured by the same bar of excellence and social responsibility, this is, however simply not the case. Understanding this in our advocacy is critical to get the bearings and strategy set correctly.

Consider, for example, a few different actors in this case, and how each would/did react to different advocacy strategies. It is important to consider what drives each of these actors and what is at stake for each. It is critical to understand is that each actor has VERY different drivers and if the message or strategy used for each is the same (which it should never be), you can expect it to have varying levels of influence on each. This is where the importance of carrying out a proper analysis of the circumstances of your case comes into play.

a)      Erkki Varis                  -  CEO of Botnia

b)      Marko Janhunen          -  Director of CSR and Public Affairs at Botnia

c)      Carlos Faroppa            -  CEO Botnia Uruguay

d)     Lars Thunnel               -  Executive Vice President of IFC

e)      Rachel Kyte                -  Head of Social and Environmental Sustainability at IFC

f)       Dimitris Tsitsiragos     -  Task Manager of the Botnia Loan at IFC

g)      Knut Rorbakken         -  Group CSR Officer Nordea

h)      Jorma Immonen          -  Head of the Finnish NCP

i)        Paula Lehtomaki         -  Minister of Trade and Foreign Development, Finland,

j)        Board Member            -  Board of Executive Directors at the World Bank

k)      Board Member            -  Any given Board Member of ING

 

a) the high flyers – CEOs

In the case of the high level actors (a), (c) and (d), Mr. Lars Thunnel (Executive Vice President of IFC), Carlos Faroppa (CEO Botnia Uruguay) and Erkki Varis, (Botnia overall CEO), we should first consider what can be expected of each from those stakeholders that will hold them accountable for their performance. Generally speaking, CEO’s don’t win brownie points with their shareholders for improvements in sustainability. These actors are held accountable in a way that is very different from, say, the heads of Corporate Social Responsibility (CSR) or Environment, where certainly attention to sustainable development is highly prized.

CEOs, on the other hand, are recognized and rewarded for making money and getting past barriers to making money. This concept is called the Fiduciary Duty, and it is literally a rule which states that the purpose of the corporation (and as such, the primary job of the CEOs) is simply to make money for shareholders. This is a golden rule which unfortunately sets the standard for the CSR game, and little can be done about it until our societies decide to change their deeply engrained benchmarks for success. In the words of Lars Thunnel himself, when speaking before the World Bank’s Board of Executive Directors, “we’re a bank, and if we had to stop each time a local community complained we’d never give out any loans”. Whether or not we agree with this statement, whether or not we like this attitude, whether or not we think that this is “wrong or right”, it remains the case that this is the attitude most CEO’s have with regards to the companies they run. We cannot expect sympathy or engagement from corporate CEOs, or VPs of agencies like the World Bank, when our objectives work against this principle, and our advocacy must adjust accordingly. Our limited engagement towards these individuals must be aimed at coming between their institution and the other institutions which they may needed favors from.In the case of Erkki Varis, this meant getting between Botnia and Finnvera and ING/Calyon/Nordea (the Finnish Export Credit Agency and private banks considering giving Botnia loans), as well as between the IFC and the Executive Board of Directors of the World Bank (which had to vote on whether IFC and MIGA would give a loan to Botnia).

 

b) Fast Climbers / Upper Management

The situation is very different for other actors of the list. Consider for example, (e) and (i), Rachel Kyte (then head of Environment and Sustainable Development at IFC) or Paula Lehtomaki, Minister of Trade and Foreign Development. These two actors are highly influential in a case like this one due to the fact that they have enormous influence over the operational decisions involved in the case. In the Pulp Mill Case specifically, Rachel Kyte had hands-on control over the choices IFC made, and also enormous leverage over the day to day operations managed by project staff. Paula Lehtomaki had a great deal of influence over the formal apparatus of the State of Finland (both through the Finnish NCP and Finnvera, the Export Credit Agency). In both cases, these were/are women with very successful professional and political careers who are likely to be big players in future scenarios in their own spheres of work. These are the type of actors which will be measured by their peers higher up in the command chain (of which there are few) in terms of how they manage extremely sensitive situations such as this one. Cases like the Pulp Mill case can make or break careers such as these, and this should be carefully considered when devising advocacy strategies. Unlike their superiors (CEOs or VPs) people at this level on the corporate ladder are more prone to criticism in their handling of cases, but they are also less responsible for blunders in the operational aspects of the company, for which the lowly underlings are likely to take the fall.

In some cases, where conflicts have gotten extremely out of hand, such as in the BP oil spill, this last analysis may be distorted somewhat, and the responsibility chain for on-the-ground issues may actually go all the way to the top of the command chain. It would make an interesting debate to consider just how much anyone in the sphere of BP’s decision makers actually held Tony Hayward, former CEO, accountable for environmental consequences, as opposed to his responsibility for BP’s financial position as a result of the spill. Generally however, the higher up you go in the command chain, the more removed the staff are from direct responsibility over due diligence matters, and the more they are concerned with greater policy issues.

 

c) Public Officials

A word of mention is also in order for actors such as (h), Jorma Immonen, who headed the National Contact Point of the Finnish Government, responsible for receiving and reviewing complaints filed against Finnish companies by stakeholders affected by a company’s failure to adhere to the OECD Guidelines for Multinational Enterprises. In the case of actors such as Immonen,  we are essentially dealing with a State bureaucrat, and typically a bureaucrat working for a foreign relations department of a State. These are actors that generally originate from a career in the public service- in the case of the NCPs largely derivative from foreign relations. For the most part, these actors are not career-driven. Your case will not necessarily change their career path, no matter how controversial it is. They will likely stick to the books and follow procedure, since that is what they are trained to do. Furthermore, it is typical that the NCP offices, (which theoretically should be neutral bystanders in disputes, as they are tasked with the responsibility of mediating between conflicting parties) are located within departments which also carry out investment promotion. As such they are likely allies of the company in question.

This was the case, for example, in the Pulp Mill case, in which the Finnish government intended to provide financing to Botnia through Finnvera, the State’s Export Credit Agency. We decided that attacks on the character, competence, or other professional ineptitudes of the NCP and its staff were probably not going to have the sort of influence over the objectives we wished to achieve.

Over all, and in terms of leverage over state officials, we cannot point to specific instances or individuals which made a key difference in this case. However, some influence was possible that led to access to other forums which would have been otherwise unavailable. If we had to pin point the most significant moments of leverage over Finnish public officials during the several years of advocacy spent on this case we would highlight the following:

  1. Gaining access to meet with the Finish Embassy in Buenos Aires (which resulted directly from filing the OECD Complaint in Finland) – we presume the Finnish Ambassador finally felt obliged to meet with the community, and probably feared reprimand if he did not;
  2. Physical meeting at the NCP office, together with the Company in Finland (first time the company agreed to meet), with state authorities present. This was also a direct result of the OECD Complaint;
  3. Meeting with Paula Lehtomaki in Finland at her office, as a result of the large media attention we were getting as per our visit to Helsinki for the NCP meeting;

 

d) Program Staff

We next consider those actors associated with, or responsible for, project implementation. In this case we are considering, (b) (f) and (g), Marko Janhunen (Director of CSR and Public Affairs at Botnia), Dimitris Tsitisagos (Task Manager or “program officer” at IFC), and Knut Rorbakken (Group CSR Officer at Nordea).

These three actors are in direct line of fire for errors that the company or institution might commit. They are responsible for the design and day to day operations of their respective organizations. The Pulp Mill Case centered around failure to comply with due-diligence in an IFC Sponsored project. Keep in mind, we constructed the case around a Bank’s due diligence, and not around the company’s “on-the-ground” due diligence. This was due to the conclusion that our best point of access to justice, from a rights bases perspective, was in terms of the financing the company needed to develop the project. For this reason the target individual is not the person at Botnia that designed the project, but rather the finance officer at the inter-governmental bank (IFC) who was responsible for designing and ensuring social and environmental compliance with safeguards.

Thus, since the focus was not on the on-the-ground operations of the company, (which would have led us to some manager or staff person within the company in Uruguay), we chose to engage higher up, with a public affairs officer at the company headquarters in Finland.

The choice of target individual to engage in your advocacy needs to be based on the objective of the strategy. In the Pulp Mill Case, the community was not seeking a “change of technology” in the project. The community wanted the company to leave outright, which implied that no negotiation with a project manager, or staff person designing elements of technology, was ever going to help us achieve our objectives.

Pressing project staff is useful only to the extent that the staff has any influence over the elements we are seeking to impact. For instance, if we are seeking to ensure that a consultation is held in a community then focusing on project staff of the company, or of an institution like IFC which has considerable influence over its clients’ due diligence compliance, may be a good strategy. However, focusing advocacy on a program officer when a project has already been approved in an effort to have that project canceled or suspended is likely to be a waste of time and resources.

 

e) Board Members

We now turn to (j) and (k), the various Board Members of the companies and institutions that govern the target of our advocacy. In the Pulp Mill Case, we are speaking, for example, of the World Bank’s Executive Board of Directors, the Boards of private institutions such as ING, Calyon, Nordea, or Botnia, etc.

To what extent can we expect to influence these somewhat removed bodies  and how much influence will these actors have over our case?

First of all, it is typical that Board Members of any institution are largely uninformed about the day to day activities of the institutions they oversee. Generally, Boards meet a few times a year to review and vote on general strategy issues. They might wade through points of operational controversy which need guidance and direction. Sometimes, as in the case of the World Bank’s Executive Board of Directors, they may vote yes or no on a specific set of projects or loans. However, generally speaking, Board members are not very well informed, nor do they know much about the actual content of the work they are overseeing.

In this regard, any information about a case which is given to a board member willing to read it can be a significant contribution to their knowledge (or even the knowledge of the board more generally) about what is actually going on on the ground in the case. One should keep in mind that in many instances, a document or press release sent to a board member providing alternative information about a project they have direct control over, may be the only alternative bit of information they ever receive.

In the case of the Pulp Mills, the information we systematically sent to the Executive Directors Board of the World Bank, was practically the only criticism of the IFC’s work that the Board ever directly received. We should further stress that this is in contrast to the regular flow of pro-project information that the board members received from IFC throughout the evolution of the project. This latter dimension of pro-project influence delivered by IFC to its own board is further magnified by the positive relationship that management has with the board. If we understand that most recommendations by IFC and the other agencies of the Bank are rubber stamped for approval by the board, then we should presume that the board is likely to take information from IFC at face value with little to no criticism or in depth consideration. This is even further magnified by the relatively shallow capacity of executive board staff (who are generally low level staff in the foreign ministry or finance ministry of their respective countries). One might presume that Executive Board members and their staff at an institution as prestigious as the World Bank would be of top caliber, but frankly, that is far from the case. In another, later case, for example, we spoke to one advisor to an Executive Director of an industrialized country who, in the heat of a debate about whether to grant free prior and informed consent to indigenous communities did not know what the initials FPIC (Free Prior and Informed Consent) stood for. This blatant incompetency of a high level advisor in the Board exemplifies the fact that we cannot always assume that competent officials hold these positions. It’s important to remember that these are the same staff who are tasked with voting yes or no on the approval of major development loans.

Another aspect we should consider about the role and functioning of the Executive Directors Board at the World Bank is the fact that in most cases these individuals are largely unknown in their own countries. Although it may seem that they hold high and very prestigious positions, in reality they are almost never in the public eye. For the most part their roll consists of signing approvals for loans to developing countries and clients. Because most of these projects are largely “going to happen”, and because of their deference to the Bank’s management team, the actual role and influence of the Board members is small or completely irrelevant.

This situation changes, however, when the project or loan that the board will vote on becomes politically charged. This might be the case for a loan in a contaminating industry or sector, such as the recent US$ 3.75 billion loan to South Africa for coal production, or it may occur when the loan might involve the Bank with the goings on of a country that involved in some relevant political issue at the international level. Countries like Venezuela, Bolivia, Iran, (or Argentina during the Kirchner administration) would be examples of such risky loan prospects. It’s in such cases where World Bank politics become relevant and where a board opinion—or the opinion of a particular board member—becomes important. However, ironically, in these cases the decision is not actually in the hands of that board member, but rather, it depends on the current leanings of the foreign ministry for the country that she/he represents.

What does this mean for our advocacy?  Let’s consider the various opinions and dynamics of various board members at the height of the Pulp Mill case. We see from the analysis of these that in the end the Board members, in a personal capacity, were largely irrelevant to the decisions that were finally taken.

Positions of some of the Board Members throughout the case:

  • Japan and Italy. Both made similar comments in bilateral meetings we held with the Executive Directors (EDs) and/or staff at the time, indicating that they could have intervened before the case became political, but now that it had become so, they would vote only by instruction from their foreign ministries.
  • Russia. The Russian ED criticized the IFC for systematically botching public consultations, but indicated that politics would prevail in this case, and they would vote accordingly.
  • USA. We had a constructive dialogue with the USA ED who showed concern for IFC’s mishandling of due diligence, but at the moment of the actual decision, that decision was deferred to the State Department who voted against the will of Argentina because then President Nestor Kirchner sided with Hugo Chavez and Venezuela’s entry into the UN Security Council.
  • European Directors: These generally vote in a block. Finland was an official supporter of Botnia, the pulp mill company, and happened to preside EU at the time. The Europeans took sides with IFC and Botnia. We should note that several European countries had a bone to pick with Argentina, for Kirchner’s decision to default on onerous debt obligations to private bond holders;
  • Uruguay. Uruguay was furious at the time of the decision, since small countries sit with larger countries and have to defer their vote to rotating seats. At the moment of the decision Argentina, which staunchly opposed the investment, voted on behalf of Uruguay against the project. At one point a fist fight ensued between the former Argentine ED and the Uruguayan ED over the matter.

So returning to the question of how to properly set the advocacy strategy vis a vis a board of directors, such as the Bank’s Executive Directors or a private board. We should know first of all, just how politically relevant the case is. If it is too relevant, it is likely that the board member’s opinion will be nearly irrelevant and that the decision of what position to take will be a top down instruction to the board member from his or her respective country of representation. In that case, attention to a home country foreign ministry might have more influence than engaging a board member.

If the issue is not politically charged then engagement with the board might be more useful, particularly to help orient and alert the board to due diligence issues which might still be corrected.

In the case of the World Bank’s board, for instance, board members often vote yes or no (generally yes) on a long list of projects which they know absolutely nothing about. This rubber stamp type vote is based on the confidence that the Board members have in the functioning of the various World Banks agency management and project staff. Unless projects are generating some sort of conflictive debate, they more or less go through the motions of a board vote and are approved simply because one of the Bank’s agencies has recommended approval. It is for this reason that the Bank rarely ever actually votes in the traditional sense. Projects are simply approved in groups without debate or any serious revision.

If the board in questions belongs to a private company obviously the dynamics are somewhat different from those at the World Bank, although the personal level of engagement of a board member to day to day operations will probably be similar. In either case, the importance assigned to board member influence and expected outcomes of advocacy efforts directed at the board should be realistic and not over-stated.

 

Targeting/shaping Institutional vs. Individual Advocacy

A key point to be drawn from this section is the importance of distinguishing advocacy before an institution vs. advocacy that might be before an institution, but that is targeted directly or indirectly at an individual.

Traditionally, we’ll target advocacy to an institution, because somehow we find that it is more formal, more organizes, more conventional, more easily manageable, and because, in essence, that is perhaps how it should be. The World Bank should offer legitimate channels for filing complaints and as an institution, the Bank should not only receive those complaints, but the institution should take the necessary measures to correct the errors or omissions that it has committed, In practice however, nothing is so clean and cut, Behind the rules, regulations, procedures, and due diligence, are people with attitudes, with careers, with ambitions, and so forth, and generally, complaints are not treated institutionally with the merit they deserve, even if the complaint mechanisms such as the CAO or the Inspection Panel carry out their own due diligence, and even if they indeed find irregularities. This was precisely the case with the Botnia Pulp Mill case. IFC largely ignored the CAO findings in our favor, and steamrolled ahead with the Botnia project.

As such, the formal mechanisms, in the best of circumstances, can be frustrating at best, rarely providing justice for affected communities. For this reason, targeting advocacy at a personal level might have more direct and effective results, mobilizing actors in ways that institutionally targeted advocacy simply cannot achieve.

 

Material Substance

The importance of ensuring material substance, always conducting your work in a professional manner, the right timing and simply, common sense, are all critical to the success of any advocacy strategy.

Your advocacy must be based on a legitimate claim. It must stem from the logic of the actual events- of the wrong that has been committed, even if no formally established code or right has been violated.

Sometimes we want to believe that our cause is legitimate but, while we may have a good point, our adversary may have just as good an opposing point. Just because we think our cause is a good one, does not mean that in more general terms, it is. Take, for example, the parking space example. While we might feel that we have a right to a parking space in front of our home, in fact we do not and we must tolerate that others may use that space. Arguing over a right that is not formally established will only be as successful as the degree to which the general public supports our claim.

In the Pulp Mill Case, much of the lore and public outrage was about the eventual contamination that the two pulp mills would bring to the local population and the border river (the Río Uruguay). However, when we met for the first time with the community we advised strongly that they be careful about constructing their case around this “contamination” argument, for several reasons:

1)      Pulp mills (particularly modern ones) generally operate under a legal framework, and with fairly modern technology. While there were serious doubts early on that Botnia and ENCE would be using the best available technology, we assumed that since they were still in the design phase, the design of the plants could be easily modified and adapted to conform to legal guidelines. This would ultimately debunk the claim that the mills were illegal and undermine our case, should it be based solely on this claim. And, in fact, this is what occurred. Botnia redesigned its plans (ENCE had abandoned the project by that time) so that their plant would be polluting only within legal limits, and its construction would not violate any laws. This significantly weakened the position of the community that Botnia should not be allowed to operate  because they contaminated the environment. While it’s true that pulp mills, no matter how modern and no matter what technology they use, do contaminate their surrounding environments, society has decided to tolerate this contamination, within limits, because society wants paper. We permit the existence of pulp mills, despite the  pollution inherent in the industry, and thus, any argument against the “contamination” of the mill would ultimately fail;

2)      As we saw it, the central issue which should be the focus of the advocacy was the “urban planning decision” which determined the placement of the mills. We found this siting to be absolutely incompatible with the lifestyle and livelihoods of the local communities, which were oriented toward ecotourism. This seemed to be a more viable and rational approach, centering the discussion on “social license”- which the company would NEVER obtain – rather than on technical legalities. Choosing “social license” over “technical design” as the central focus of the advocacy strategy would guarantee that the problem could not be resolved in the court of the company, and that the only viable solution would be to move the mills, which is ultimately what the community wanted;

3)      The other dimension of the case, in parallel to the environmental aspect, which became extremely significant in creating a short term impasse, was the associated intergovernmental finance being offered to the mills by the World Bank. We realized that if the project became financially not viable, the companies might decide to relocate to a less controversial site. Hence we looked at the due diligence of the financing process, as established by the IFC. Here we found clear violations of IFC’s Social and Environmental Safeguards which opened the door for a short to medium term advocacy strategy: stop the money.

We felt that it was important to distinguish and clearly differentiate between the perceived “environmental” issues (which, while very sensitive in terms of public opinion, we understood ultimately to be a parking space issue which would necessarily come out in favor the companies), and the issue of the incompatibility of the mills with the livelihoods of the community members, where we knew we had a much stronger case.

We stress the importance of this “material substance” analysis as fundamental to ensuring that you are building a case which has a logical construct, and which in the end will not fall to pieces because of a faulty central presumption.

 

The Importance of Professionalism

Much very legitimate advocacy is ignored or taken lightly by decision makers because it fails to reflect professionalism in the manner in which it is executed. As with anything in life, portraying seriousness and professionalism in your work demonstrates to those around you the importance and legitimacy of the messages you are trying to convey.

Attention to detail, punctuality, following through with commitments, complying with deadlines, and even the format and clarity of presentation go a long way to transmitting the importance and accuracy of your message to all of the actors you are trying to convince.

One of the central issues we generally contend with as NGOs in our advocacy work is lack of credibility in our scientific assertions. Science professionals that work for the corporate sector or at international organizations generally question our information because it is undocumented, not-cited academically, or is based on hearsay conjecture. We should always be careful to cite our quotes, document our information, and give appropriate sources where information may be technical. And we should make the effort to gain credible and legitimate support from experts on the topics which we are covering. For example, if we say that a certain river is polluted we should be able to substantiate this claim through the opinion of a professional that is an expert in water quality, or by citing a study by a credible academic institution that has published information about the river.

When engaging with an adversary, be it a company, a state official, a staff person at an intergovernmental organization, etc., we should always be respectful and professional in our demeanor, serious in our communication, and not waste time on unfounded accusations or attacks which lead only to impasse and conflict.

One advocate who assisted us with our OECD Guidelines Complaints, used to have the habit of walking into meetings with NCPs in Bermuda shorts, t-shirts and flip flops. Ultimately however, he was forced to drop this tactic because he found that he was not taken seriously by the people he needed to convince. In the end, the “rebellious” approach didn’t work in this environment. We do not necessarily discard such an approach in other contexts, but we do make the point that professionalism and seriousness are generally more effective in facilitating constructive dialogue and advancing towards a solution.

 

Timing is Everything.

This may be an old cliché but well worth repeating here.

The strategy developed in the Pulp Mill case was all about timing. When we began our intervention there was no mill- it was just a plan that needed funding from some large banks.

This presented some serious questions about what the focus of our main advocacy strategy should be.

The “environmental contamination” angle, which the community held fast to, presented a serious legal problem in the case of the complaint filed by Argentina against Uruguay at the International Court of Justice seeking an injunction order to freeze construction of the mills. Obtaining an injunction order requires the existence of “imminent danger”. In the Pulp Mill case the initial argument was that people would die or get ill and that the environment would be irreversibly damaged if the mills were permitted to operate. Unfortunately this does not constitute “imminent danger”. This, on the contrary, is pending danger that may occur at some unidentified time in the future. For this reason, we opposed the filing of this complaint against Uruguay at the Hague, and we made this clear before the Foreign Relations Legal Team of Argentina. President Nestor Kirchner of Argentina, under great pressure from the community and a few environmental organizations such as FARN (Fundacion Ambiente y Recursos Naturales) and Foro Ecologísta (now M’Bigua), decided to file the case against Uruguay. The injunction order was rejected by the ICJ precisely for its failure to prove imminent danger.

What seemed most pressing at the time was to stop the project from moving forward, as opposed to simply bringing the eventual environmental contamination within legal limits. We presumed the company and the IFC would ultimately meet these limits anyway, but for the community we represented no amount of contamination would be acceptable. Understanding that the critical financing needed for the construction of the mills had not yet materialized we chose to act on this factor. Like any project, if the money is not there, the project cannot go forward. There were only a few months left before the board of the World Bank would vote on the loans requested by Botnia and ENCE. We knew that there were significant problems with the loan documents and holes in the due diligence of the companies and IFC. Our strategy thus focused on complicating the process of getting the loan documents and due diligence in order to go to the board. We knew that if we could delay this process indefinitely, the chances of a Board vote would be low, particularly with one country (Argentina) staunchly opposed to the loan.

In the end, we were able to stall the World Bank Executive Directors Board vote some 18 months. This drove ENCE, which did not have the financing to begin construction without the IFC funds, to the ultimate decision of moving its mill away from the border river and the Argentinian community- a partial victory!

Botnia however, was much more obstinate. They showed absolute disregard for the concerns of the community, and the problems with their own financing due diligence, and confident (as we were) that they would eventually get their design paperwork and legalities in order, they went ahead with construction of their mill. They were able to wait out the financing from the IFC, which they did ultimately receive.

In the Pulp Mill case, timing worked both with us and against us. The advocacy strategy focused around the financing of the project gained traction because the timing was right. Had the mill already existed, our actions on due diligence aimed at blocking financing by private (ING, Nordea, Calyon, BBVA), and public institutions (IFC, Finnvera, ICO, CESCE) would have been largely useless. However, the advocacy strategy focused on the eventual contamination that the mills would eventually cause failed because the timing was wrong.

 

Employ Common Sense at Every Step

Perhaps one of the most obvious, yet largely ignored elements of designing and choosing an advocacy strategy is using common sense.

Think about the natural and logical paths that your case might follow. Play out the various likely scenarios in your mind, and try to anticipate the various circumstances that may be generated, and plan your advocacy accordingly. Don’t waste time on actions that don’t get to the heart of the matter, or that ultimately do not address or modify the conditions of the case in ways that are central to your objectives.

The Pulp Mill case offered some rather obvious and logical factors which had to be central to the design of our advocacy strategy:

  • Pulp Mills contaminate but are legal;
  • The Pulp Mill industry will defend itself;
  • The consulting firms that work to assess impact will also defend the industry standard;
  • Without money the mills cannot be built;
  • The World Bank facilitates financing and opens the money gate for others to invest;
  • The Argentine community is unanimously against the mills and will not ever give social license to the mills;
  • The Uruguayan community is for the most part in favor of the mills;
  • The Uruguayan community is likely to make this a “nationalistic” issue against Argentina;
  • The mills are in Uruguay (not in Argentina);
  • The Finnish company Botnia is stubborn, culturally insensitive, and refuses to engage in modifying its design and/or location;
  • The Finnish company is economically strong and does not depend on global finance;
  • The Spanish company ENCE is more culturally sensitive;
  • The Spanish company is not so economically sound and depends on global finance to move forward;
  • The Finnish government is presiding the EU at the time of the Board Vote.
  • The Argentine President is not on good terms with Europe or with the USA at the time of the World Bank Board vote;
  • The ICJ is unlikely to grant an injunction order without imminent danger, and is even less likely to rule for a site relocation if contamination is not already occurring;

These are just a few characteristics that we knew about before launching, or learned about during the early stages of, our advocacy. The logical and common sense conclusions that we could guess for each of these factors played out as could be expected. In retrospect, there were really no surprises on any of these points. We could alter the various scenarios in many small ways, but the essence of the circumstances and their likely outcomes would not change considerably. To design a strategy assuming otherwise would be fatal. But perhaps the most important point is that assuming these likely outcomes beforehand goes a long way to building a more effective advocacy strategy.