Helped by international standards and protocols, Australian social and environmental campaigners have kept corporate excess in check both at home and abroad

Australian companies have a reputation for taking the maxim “rules are there to be broken” a little too literally. But companies are starting to see the value of engaging with stakeholders, while many NGOs have developed more sophisticated and diverse ways of dealing with the private sector, campaigners say.

For example, Oxfam Australia’s mining advocacy coordinator and corporate responsibility spokeswoman Serena Lillywhite sits on BHP Billiton’s corporate responsibility stakeholder forum, along with WWF. “There is certainly a greater willingness to engage directly between companies and civil society,” she says.

 “Our view is the private sector can be an important driver of economic prosperity. But of course there need to be the necessary checks and balances in place to ensure the higher standards of corporate accountability and disclosure are upheld,” Lillywhite says.

Paul Oosting, pulp mill campaigner at community-based environmental advocacy organisationthe Wilderness Society, sees a major change in the willingness of companies to engage.

“Corporations have picked up a lot of general expertise in this area, whether it is corporate social responsibility, or people in the finance sector looking into ESG issues,” he says. “It is easier for environment groups or other NGOs to have that vital conversation with companies in a meaningful way.”

In October last year the Tasmanian timber industry reached an agreement to phase out logging of native forests in a landmark deal with green groups, including the Wilderness Society. Concerted campaigning was the main trigger for the start of the negotiations, involving Japanese customers of Australian timber giant Gunns.

A campaign group whose ethos is centred on multistakeholder initiatives is the Total Environment Centre (TEC), which has been campaigning for environmental protection since 1972.

Through the Green Capital initiative TEC engages with Australian businesses, government and civil society in a discussion on corporate responsibility.

“We tackle a number of subjects; we publish proposals for action on a range of green economy areas; and we hold roundtable debates with business, which helps them and us explore these issues more widely in an interactive way,” says executive director Jeff Angel.

Targeting transparency

Oxfam Australia is working with Australian-owned companies operating abroad through the Extractive Industries Transparency Initiative, a global standard for transparency in the oil, gas and mining sector.

With commodity prices rising, Australia’s mining industry has been moving into the developing world, including its nearest neighbours Papua New Guinea and Indonesia, and increasingly Africa, where more than 300 Australian companies are active.

The importance of revenue transparency is gaining traction among foreign-owned companies, but Australian companies are lagging behind their international peers.

In the US, new legislation will have a broad impact on oil, gas and mining companies through US financial reform legislation, such as the Dodd-Frank bill signed into law in July 2010, which states that all oil, gas and mining companies must, as a stock exchange listing requirement, disclose all payments to foreign governments.

Oxfam’s Lillywhitepoints to significant progress on corporate responsibility in the mining sector – such as Rio Tinto’s work on gender equality and BHP Billiton’s disclosure of payments to foreign governments. But this encouraging trend does not, in her view, necessarily extend to smaller and medium-sized companies.

“Our experience of working with communities clearly indicates that the issue of human rights is not being addressed properly by mining companies,” she says, adding that the problem is partly poor community engagement by companies in conflict and post-conflict zones.

“The one-size-fits-all corporate responsibility practice or guideline is inadequate when operating in such diverse and difficult countries,” Lillywhite says. “We’re really beginning to see a legislative response to the issue of extractive revenue accountability and that development in the US is likely to be mirrored in Europe, and Australia, being such a mining giant, needs to respond.”

But the Oxfam campaigner is not confident that progress will be seen here. “It’s certainly something we will be calling for, to ensure the Australian regulatory environment is keeping pace with best practice occurring overseas.”

A principled approach

Many of Australia’s leading banks are signatories of the Equator Principles, a voluntary, international framework enabling capital providers to manage environmental and social impacts of project financing. But campaigners have consistently complained that the principles are frequently compromised by the incessant pursuit of profit.

Environmental campaign groups such as the Wilderness Society have claimed victory in pressuring banks to stick to the principles when providing financial backing for projects, such as Gunns’ proposed Bell Bay Pulp Mill in northern Tasmania.

The group lobbied ANZ to pull out of the project, which became a focus of protests during the 2007 federal election when both sides backed the Tasmanian government in its support for the project. In May 2008, ANZ, after commissioning an independent study of the proposal, pulled out of the deal, but declined to say why.

Consistent campaigning and perhaps Gunns’ inability to source funding elsewhere led to wholesale changes in governance, a commitment to sustainable timber practices and the resignation of chairman John Gay.

New chief executive Greg L’Estrange has said the company has been conducting ongoing and positive discussions with a range of environmental groups. The company is proposing that the mill uses nothing but plantation timber and reduces chlorine emissions by a different bleaching process. “We came to the view that embedding some of those voluntary undertakings … would be a very positive thing,” he told ABC radio in March.

The Wilderness Society’s Oosting says there appears to be a genuine desire to take the company in a new direction. Gunns is now seeking certification through the Forest Stewardship Council.

On March 10, federal environment minister Tony Burke approved the construction of the Gunns pulp mill, saying a number of changes had been made to the project to guarantee high environmental standards, including a guarantee that only plantation pine – and no native forest – would be used in the project.

Looking for a ‘front door’

Although the corporate responsibility services sector is growing fast in Australia, there are no industry bodies akin to Business in the Community in the UK, or Business for Social Responsibility in the US, to provide a focal point for companies, NGOs and the government.

“One of the most critical needs is for greater board and CEO level leadership and ownership of the corporate responsibility and sustainability agenda,” says Sarah Davidson of the responsible business practice at the not-for-profit St James Ethics Centre, which managed the Australian Corporate Responsibility Index 2003-2010.

The Queensland government’s business task force set up following the recent floods is a good example of how government and business can work together.

“Further thought needs to be given to establishing structures in Australia that support CR and sustainable development in the longer term,” Davidson says. “There needs to be a continuing dialogue between government and business leaders that isn’t simply a response to a crisis.”

Stakeholders recently consulted by Responsible Business Practice expressed a belief that there is value in formally establishing a single entry point or front door for government, business and civil society in Australia to continue to support ethical and responsible business.

NGO-corporate partnerships 

• Greening Australiahas been working with Alcoa World Alumina Australia since 1982. The partners are hoping to improve community engagement, knowledge sharing and capacity building; engage positively with staff and their families; and achieve long-term landscape and river restoration.

  Greening Australia programmes that are supported by Alcoa include: River Recovery, Breathe Easy,a carbon offsetprogramme;Make an Impact,a programme helping more than 7,000 Alcoa staff to reduce their greenhouse footprint; and Moolapio,ajoint project that sees Greening Australia working with Alcoa on a management plan for the their Point Henry Aluminium Smelter near Geelong in Victoria.

 

• In 2006, WWF and ANZ formed a three-year partnership focusing on integrating environmental considerations into business decisions.

  WWF has helped ANZ to develop four responsible lending policies in forests, water, mining and minerals, and greenhouse and energy, which incorporate internationally recognised social and environmental management standards that ANZ will work with its customers to meet.

 

• No Interest Loan Schemes(NILS) was developed by Good Shepherd Youth & Family Service nearly 30 years ago, offering small, no-interest loans for people on low incomes for the purchase of essential household goods. National Australia Bank has provided A$15m (£9m) to expand NILS across Australia, as part of its A$130m capital boost to support lending to low-income groups.

 

• Failed childcare services group ABC Learning caught the attention of social enterprise. Bailed out by (and now managed by) GoodStart Childcare Ltd, a coalition of not-for-profits such as Mission Australia, The Benevolent Society, the Brotherhood of St Laurence and Social Ventures Australia, the organisation aims to improve the education and care of Australian children.