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The Geography of NGO Activism against Multinational Corporations

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Sophie Hatte and Pamina Koenig

Both production and the overseas sales of multinational firms are closely watched by “advocacy” NGOs, which regularly publish enquiries revealing practices that are damaging to employees, the environment and consumers. The commitment to protect NGO resources has, however, become an important topic of public debate, as witnessed by the recent law on the duty of care of parent companies, which targets firms with more than 5,000 workers (1). While denunciation campaigns put the spotlight on the practices of some firms and might influence their behaviour, what do we know of the activities of these NGOs and the reasons why they choose this particular battle rather than another?

In this article, Hatte and Koenig analyse an original database containing all NGO campaigns against companies in the world since 2010. They highlight several remarkable facts. First of all, a small number of associations publish most of the information (2): put another way, there is a “granularity” for NGOs, just as is there is in firms’ exports. At the global level, the distribution of campaigns is strongly biased: four countries represent 60% of campaigns. Next, the share of campaigns targeting each sector is proportional to the share of the global brands of those sectors. In other words, NGOs more often target the firms that have high consumer profiles. Finally, the advocacy NGO activity is highly internationalised. On average, more than half of the campaigns target foreign companies (3). We see, nevertheless, when all countries are combined, that in 75% of the campaigns that target a foreign company, the country of action is the home country of the NGO. These figures naturally pose the question of how targets are chosen: we might think that the firms attacked are those whose actions have the most damaging consequences, independent of their nationality, their popularity, or the country affected. It seems that that is not the case. Indeed, Koenig and Hatte observe that geography plays a role in the choice of target companies: NGO internationalisation is strong, that is, they often denounce foreign companies, or actions taken by foreign companies. At the same time, the data reveal a campaign bias towards companies or actions with a close link to the NGO’s country. It is possible to quantify the effect of distance on the choice of targets and countries of the actions denounced. Estimates reveal an elasticity between the number of campaigns and the NGO–country distance of 0.2%. Put another way, for a given action in a foreign country, two NGOs of different nationality will each have a tendency to target a domestic firm, or a country close and familiar to them. The hypothesis explaining this remarkable fact suggests that the NGO, in order to maximise returns in donations and visibility, needs to capture the attention of its audience that is situated “around” it. This audience and thus potential donors, are receptive when the information received contains references to familiar things: a firm known by its products or its name, or a country that is close in cultural or historical terms.

(1) See for example: http://www.lefigaro.fr/societes/2017/02/21/20005-20170221ARTFIG00295-sous-traitance-la-loi-sur-le-devoir-de-vigilance-des-entreprises-adoptee.php
(2) The biggest French NGO in campaign terms represents 25% of the denunciations of countries in the period 2010-2015. The figure is 6% for the USA, 11% for Germany, and 21% for Mexico.
(3) In the USA, 49% of NGOs target a foreign country in their campaigns.

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Original title: “The Geography of NGO Activism against Multinational Corporations”
Published in: PSE Working Papers n°2017-17
Available at: https://hal-normandie-univ.archives-ouvertes.fr/halshs-01518148v1
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