Bridges or Walls?

Making Our Choices on Private Sector Engagement

A Deliberation Guide
For Action Against Poverty

_________________________

Canadian Council for

International Co-operation

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This guide was prepared by the Canadian Council for International Co-operation (CCIC) with the financial support
of the International Development Research Centre (IDRC) and the Canadian International Development Agency
(CIDA). CCIC has a membership of 100 voluntary organizations committed to achieving global development in a
peaceful and healthy environment, with social justice, human dignity, and participation for all.

Acknowledgements

Many people contributed to the development of this guide, both within and outside the CCIC. A special thanks goes
to those who took part in a focus group and others who reviewed various drafts:

• Ed Cuylits, Canadian Executive Services Overseas

• Julie Delahanty, Rural Advancement Foundation International
• Athena Dionela, Philippine Development Assistance Program
• Tim Draimin, TIDES Foundation Canada
• Janice Hamilton, Manitoba Council for International Cooperation
• Molly Kane, Inter Pares
• Christopher Johnson, Canadian Cooperative Association
• Ann Thomson, Unitarian Service Committee Canada

Thanks are also extended to CCIC staff members Alain Roy, Brian Tomlinson, and Gauri Sreenivasan for their
review of the document.

The authors of this guide take sole credit for any errors or misrepresentations.

Project Development Team:

Jacquie Dale, Anne Buchanan, Andrea Paula Botto, Mary O’Neill

Project Coordinator: Jacquie Dale

Writer/ Researcher: Mary O’Neill
Administrative Assistant: Linda Brassard

© Copyright February 2001

Canadian Council for International Co-operation

This guide may be photocopied freely for use in non-profit workshops and forums. Additional copies may be ordered
from CCIC at:
1 Nicholas Street, Suite 300
Ottawa, Ontario K1N 7B7
Tel: (613) 241-7007 ext 300 (Publications Unit)
Fax: (613) 241-5302

Web site: www.web.net/ccic-ccci

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Preface
Deliberation as an organizational tool

Those familiar with the term “deliberative dialogue” likely know it as a method of citizen
engagement—a way of involving the public in discussion of issues that matter to them. But as a
constructive method for working through difficult choices, deliberation has a lot to offer
organizations exploring issues on which there are competing internal views.

Deliberative dialogue is more directed than a discussion, but less confrontational than a debate.
With the aid of a moderator, participants explore values and assumptions that underlie different
views, with the aim of identifying what is shared or common to all. This “common ground” then
forms a base from which to develop an action plan—one more likely to enjoy a broad base of
support within an organization.

Deliberation is not just an opportunity for people to express their views or try to change other
people’s minds. It involves people stepping beyond their own beliefs, to explore what course of
action is best for the organization as a whole. The objective isn’t for someone to win: the
objective is to make sound decisions. People who have taken part in deliberation say that it helps
them learn about and better understand complex issues, and gives them a new respect and
understanding for others’ points of view.

In the context of private sector engagement, it is important that deliberation be followed by a

case-by-case review of specific engagements with the private sector. The deliberation will assist
in bringing to the surface general attitudes about strategies and limits on involvement with the
private sector. But each potential engagement presents its own unique set of variables: The issues
will change, the firms will differ, and the sectoral landscape will have to be re-evaluated. Action
plans must be viewed through a lens of “due diligence” to ensure they are consistent with the
rules of transparency and accountability, and that organizational integrity is maintained.

The purpose of this guide

On the surface, the topic of NGO - private sector engagement may seem daunting or distant to
some. The term itself seems more abstract than the everyday ways in which our organizations
work with or against private sector firms in our efforts to end poverty. This guide provides
background on the topic of NGO - private sector engagement based on real-world experiences of
dozens of NGOs. It also provides a choice framework on which the deliberation will be based.

Reading this guide before taking part in a deliberation may help in focusing your thoughts, but it
is not an essential first step. The starting point for any deliberation is our own experiences and
values. The moderator of the deliberation will help participants share their opinions, concerns
and values. Nobody needs to be an expert.

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Sustaining our focus on poverty
CCIC’s work on private sector engagement is consistent with the aim of our In Common
campaign to focus attention and action on the elimination of poverty. CCIC coordinates the In
Common campaign on behalf of over 100 organizations, working on the frontlines of social
justice, humanitarian aid, economic and democratic development—both in Canada and in the
developing world. CCIC members share the conviction that ending poverty is a moral imperative
and a practical possibility.

The In Common campaign acknowledges poverty to be a human construct, a function of our

individual and collective choices. It recognizes the increasingly significant role corporations play
in all our lives. Accordingly, as part of a 10 Point Agenda to End Poverty, CCIC advocates the
promotion of individual and corporate social responsibility.

In all of the choices reflected in this deliberation guide, the underlying assumption is that our
members’ engagements with the private sector—and the difficult choices they must work
through--are guided by their efforts to end poverty.

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Introduction
Among NGOs working to end poverty, the question of whether and how to engage the private
sector is fraught with difficulty: Should we be working with or against corporations? Will the
process of engagement change us or them? If we choose not to engage, do we miss a valuable
opportunity to extend our influence into an area that touches people’s daily lives?

Views on private sector engagement are shaped to no small degree by our fundamental
understanding of the root causes of poverty, the kinds of social change needed to end it, and how
social change takes place. These understandings vary widely, both among development
organizations and within them.

From January to June 2000, CCIC hosted a Learning Circle on the topic of NGO - private sector
engagement with participants from both North and South. The Learning Circle was a cooperative
effort, aimed at increasing our shared knowledge on this critical issue to improve the
effectiveness of our work against poverty. While participants held diverse views, and had vastly
different experiences in their work vis-a-vis the private sector, they shared a common
commitment to social justice and poverty eradication.

This deliberation guide builds upon the experience and insights of this group, and aims to
involve the wider NGO community in analysing how our interactions with the private sector may
support--or detract from--our broader efforts. One of the key observations of the Learning Circle
was that NGOs must consider not just the internal tensions their engagements may pose: They
must equally take into account the impact of their choices on the broader NGO community and,
in particular, on stakeholders.

There is no one path of engagement that is right for all organizations. Indeed, even for a given
organization, the forms of engagement that are appropriate may shift over time. Organizations
must look to the particulars of their goals, their shared values, and the current context in which
they operate to determine the right path. Across the voluntary sector, there may be a need for
strategic alliances among NGOs undertaking different forms of engagement in pursuit of a
shared goal. At a minimum, engagements should be approached with an awareness of what
others across the voluntary sector are doing with regard to specific companies or sectors, to
ensure that our efforts do not undermine those of others working for social justice.

Defining private sector engagement

Within this guide, the term “engagement” encompasses the wide range of interactions between
NGOs and the private sector. The Learning Circle focused on three different “modes of
engagement”: advocacy, dialogue and cooperation. The choices reflected in this guide cut across
these three modes, as deliberation is based on underlying values or beliefs rather than strategies.
Specific forms of engagement detailed within the deliberation choices include: a range of
advocacy efforts; support for fair trade and other forms of socially responsible entreprise;
development of for-profit entities within the voluntary sector; dialogue with corporations;
fundraising; sponsorship; and cooperation or strategic alliance.

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For some, any engagement implies an effort to affect corporate behaviour or the framework
within which corporations operate. For others, engagement is a more neutral form of interaction,
an effort to find common purpose with the private sector. Regardless of intent, it should be
recognised that engagement is inherently a two-way street, an exercise that, when honestly
pursued, can change both parties.

It is also important to bear in mind that there is no single, monolithic “private sector” any more
than there is a uniform voluntary sector. Many equate the term private sector with large
corporations, but this term also embraces the smallest micro-enterprises, worker owned
cooperatives, farmers, fishers, crafts people and others self-employed. Even corporations vary
greatly in terms of size, ownership and accountability: They may be privately held firms, or
publicly traded on the stock market, effectively controlled by thousands of large and small
investors. Some share a genuine commitment to social values, and have integrated them into
their business principles.

All of these factors, and the sector of economic activity they engage in are directly relevant to
their impact on local communities and their role in the larger economy. By and large, it is large
transnational corporations that are of greatest concern to the NGO community, because of their
direct impact on the lives of the poor, and their power to influence the rules of global trade and
investment.

Shaping our choices on engagement

Several converging trends lend urgency to the need for NGOs to clarify their positions on private
sector engagement and work to ensure their interactions with the private sector support rather
than detract from the goal of ending poverty.

Growing wealth, growing disparity

For many NGOs, a key factor is the increasing power and concentration of transnational
corporations. Whether we view the private sector with enthusiasm or trepidation, we cannot
ignore the dominant role corporations play in today’s globalized economy. When we compare
company sales figures and national GDP, 51 of the world’s 100 largest economies are
corporations; only 49 are countries. 1

While aggregate global wealth is increasing, our current path of development is widening the gap
between rich and poor. In 1960, the richest fifth of the world’s population had 30 times the
average income of the poorest fifth. By 1995, they had 82 times more. 2

Multinationals today have unprecedented influence on national governments, international trade

bodies, and multilateral institutions, such as the World Bank, various UN agencies, and the IMF.
This growing corporate power dovetails with increased trade liberalization. In both North and
South, the preconditions to increasing trade and investment involve cutting regulations and
diminishing the role of national governments in protecting local industries and public goods and
services. The net effect is that nations are less self-sufficient, more vulnerable to the vaguaries of
global supply and demand, and have a drastically limited “safety net” for their people.

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To counter these impacts, some NGOs are working to change the rules of the game: by
pressuring corporations directly; advocating for regulatory change, or by promoting different
forms of fair trade and investment.

Revenue diversification
Meanwhile, a decade of deficit reduction has meant cuts in government support for international
development aid. As a result, NGOs have faced increased pressures to find alternative sources of
revenue. While the last federal budget saw a slight increase in foreign aid, from 1991 to 2000 it
fell from 0.49% of GNP to only 0.26%-- a far cry from the target of 0.7% endorsed at the UN. 4

The drastic cuts felt by Canadian development NGOs in the mid-90s left a profound sense of
vulnerability with regard to reliance on government funding. Some organizations survived these
cuts by diversifying their revenue base through increased fundraising—including corporate
fundraising by some--and the development of for-profit arms which work much like private
sector firms.

The push for partnership

NGOs also increasingly find themselves sought out as “partners” by private sector firms engaged
in aspects of development work or in economic activity that has impacts on developing
communities. Such partnerships may be sought for a variety of reasons.

In some instances, donors such as the World Bank, some of the UN agencies and government aid
agencies encourage partnerships between NGOs and the private sector. The World Bank’s
Business Partners for Development, for example, brings together private firms, NGOs and
government authorities in “sectoral clusters”, studying and promoting examples of tri-sector
partnership.

In other instances, individual companies are motivated by public relations interests to seek
relationships with NGOs as a way of improving corporate image or deflecting criticism.

As a consequence, many voluntary organizations find themselves working alongside private

sector firms in carrying out aspects of their programming or in exploring solutions to
development challenges.

Business with a heart?

While trends in Canada lag behind those in Europe and the United States, some believe that
growth in the corporate social responsibility movement extends hope that economic activity can
be carried out on more socially just terms. In the US in 1999, over $2 trillion was invested in a
socially responsible manner—either through screened portfolios, shareholder advocacy or
community investing. This accounted for 13% of all professionally managed investment in the
US.5

Canadian NGOs are working to promote fair trade in a number of commodities, including coffee,
tea, sugar, and bananas, and to improve labour standards in the toy and apparel industries. Fair
trade represents a tiny but growing segment of overall commodity trade. In the Netherlands and

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Germany, fairly traded coffee now accounts for roughly 2% of all coffee sales.6 Transfair
Canada, a fair trade labelling body, is aiming for 1% of the Canadian coffee market. 7

Other NGOs have themselves become Alternative Trade Organizations (ATOs), importing and
selling crafts sold directly from producers. Annual ATO sales worldwide exceed $200 million.8

Using trade and investment levers to achieve social and environmental goals represents a new
frontier for many NGOs, one that challenges our assumptions about the role of NGOs and the
profit motivation of the private sector.

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Choices
This deliberation takes as its starting point three choices that reflect the most common
approaches to engaging with the private sector on an agenda to end poverty. These choices have
been deliberately shaped in terms of values and beliefs rather than strategies of engagement to
ensure discussion will go beyond questions of tactics. These choices have been extrapolated from
a variety of sources, including the documentation and findings of the CCIC Learning Circle, an
extensive literature survey, a focus group of members conducted by CCIC and the input of
reviewers.

Although each approach has been articulated as a “choice”, these options should not be seen as
mutually exclusive. In the real world, they coexist simultaneously both within organizations, and
across the sector as a whole. They might more accurately be described as points on a continuum,
with elements of one combining at times with elements of another within a given campaign. As
some reviewers and Learning Circle participants pointed out, one approach is at times necessary
to create the right conditions for a subsequent approach to succeed.

1. Some people feel that NGOs and the private sector complement each other, and that
both are vital to ending poverty. They feel business can bring economic benefits to poor
communities, by creating jobs and transferring technology. They also see the wealth
generated by the private sector as a means of reducing reliance on government or
international donor financing for development assistance. While acknowledging a gulf in
values and organizational culture between sectors, these people emphasize working with the
private sector as a complement to the strengths of NGOs.

2. Some people say that we must take steps to control the tendency of our profit driven
economic system to cause poverty. In the context of globalized trade and investment, they
site the increasing power of corporations and decline in government regulation as factors
contributing to increased inequity. They believe the interests of corporations are
fundamentally incompatible with the interests of the poor. In this view, corporate behaviour
can only be changed by regulation and direct pressure; little hope is seen for changing
corporate attitudes and values.

3. Some people believe there is potential to build an ethical value base within the private
sector. These people feel that principles of social justice can be integrated into the market.
They emphasize the emerging focus on a “triple bottom line” among business—a concern for
social and environmental impacts, along with economic performance. Proponents of this
view argue that one way to end poverty is to pioneer and promote new forms of socially
responsible enterprise, creating momentum for increased consumer and investor demand for
goods and services that sustain rather than undermine communities.

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Choice 1: Use complementary strengths
View: NGOs and the private sector have different but complementary roles to play in ensuring
that economic activity translates into a pattern of development that benefits all. The private
sector is instrumental in creating employment and economic growth and therefore has a direct
impact on the lives of the poor. NGOs have expertise in working to strengthen communities to
ensure that the poorest benefit. Ending poverty will require massive mobilization and
coordination so we need to work together and learn from each other.

Broad remedy: End poverty through a collaborative effort, combining the best of private and
voluntary sector methods and resources.

Examples of engagement:
• Collaborate on project-based partnerships to deliver aid and development programming
where areas of expertise are complementary.
• Participate in sectoral councils/ forums that draw upon private, public and voluntary sector
expertise in developing “best practices” and formulating joint responses to development
challenges.
• Conduct community impact assessments or facilitate community consultation processes
related to planned corporate activity.
• Draw on private sector expertise and resources in developing micro-entreprise projects in
communities.
• Engage in reciprocal skills transfers between NGOs and private sector firms.
• Raise funds from the private sector through sponsorships and donations, and utilize these
funds to support a range of anti-poverty projects and programs.
• Engage in affinity relationships or social marketing campaigns with private sector firms to
expand the reach of public fundraising and outreach.

Light a Fire Under the Powers that Be was a six-month national public education campaign conducted in 1993
by the Body Shop Canada and Campaign 2000. Its goals were to raise awareness of the issue of child poverty in
Canada, to urge people to demand government action, and to raise public awareness of and funds for local
community services for families and children. 80,000 postcards distributed through Body Shop outlets were sent to
politicians, and over $30,000 in revenue from tee-shirt sales were channeled to community organizations. Body Shop
staff also took part in public education sessions and were encouraged to volunteer in the community.
Source: CCIC, Common Interests: Exploring opportunities for NGO-Private Sector Collaboration, May 1996

Partners in Change
In 1995, the development NGO ActionAid India set up Partners in Change (PiC) as an arm’s length organization to
explore corporate partnerships as a weapon against poverty. In addition to promoting corporate social responsibility,
PiC has worked at the local level on building partnerships between individual companies and NGOs or communities
involved in social development. Among the pairings facilitated by PiC was a relationship between the luxury Tata
Hotel Group and Katha Khazana, an NGO working with Delhi’s poor on vocational training and income generation. As
part of an overall community involvement initiative, and to improve staff training skills, Tata offered the services of two
hotel chefs as trainers in a bakery unit set up by Katha as an income source for women. With professional level
training, women’s income from the bakery more than tripled.
Source: ActionAid, GoodBusiness: evaluating the impact of business-community partnerships, November, 1999

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Voices in support…
1. Tackling poverty includes creating jobs in developing countries. Who is better positioned to
do that than the private sector—both local firms, and where applicable, transnational firms
that can transfer essential skills, technology and resources. What companies lack is
sensitivity to the needs of the poor: We should work with private sector firms to ensure
human rights are respected, the environment is protected, and communities benefit.

2. Corporations and NGOs differ considerably in their strengths and their style of operating.
There are some areas, such as financial management and long-term planning, where we could
learn from them. Likewise, the voluntary sector tends to be strong in areas such as
cooperative working relations and building community ties that some companies would like
to improve on. We can learn from each other.

3. Social change comes gradually—one person at a time. In working with private sector
partners, we educate them about our aims. We have seen both company owners and
employees become active volunteers with our organization. By working with us, individuals
come to better understand the need for our work, and to share our values. We can’t build
public support by turning our back on entire sectors.

4. We have to be pragmatic: Funding for international development is limited and the needs are
great. Relying upon governments and international donor agencies alone makes our work
vulnerable. We need a diversified funding base to ensure autonomy and long-term survival.
We can also reach a wider Canadian audience with our message if we work with companies
that people deal with everyday.

…Voices in opposition
1. Any form of collaboration with the private sector poses the danger of co-optation. Our power
as civil society actors depends heavily on our legitimacy so it is critical that we do nothing to
compromise it. NGOs just don’t have the resources to fully investigate each potential
corporate “partner” so the safest route is to steer clear of them.

2. The actual amount of corporate support for international development is miniscule. So it’s
not worth our time and energy, and the risk of compromising our principles and reputations.

3. By collaborating with a company we lend legitimacy to its operations. This could put us in
the position of undermining community resistance, where there is a conflict with the
company.

4. The market rewards companies that maximize profits and minimize costs, and they do this by
any means they can, within legal confines. Large corporations are actively seeking to loosen
these boundaries, so our focus has to be on regulation.

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Choice 2: Make and enforce fair rules
View: Poverty is magnified by a market driven economic system that places corporate profit
above human needs. Globalization is increasing inequity and social exclusion as the rules that
protect culture, the environment, public services, labour standards and human rights are
weakened to attract investment. The private sector—particularly transnational corporations--has
become powerful to the extent of undermining democratic governance. Corporate values and
behaviors are shaped around the maximization of profit. We are unlikely to achieve a meaningful
change in corporate values, but we can impose change on corporate behaviour, both through
direct pressure, and through regulation.

Broad remedy: End poverty by enforcing a system of marketplace regulation based on social
and environmental needs, rather than corporate interests, and by confronting individual
corporations that violate human rights, labour and social standards and the environment.

Examples of engagement:
• Challenge growth of unregulated free trade by lobbying national governments, international
trade bodies and other international fora.
• Advocate that governments reassert their regulatory role and pursue policies that support
sustainable human development.
• Engage both the public and private sector in dialogue to advance an agenda of regulatory
reform based on social and environmental needs.
• Target irresponsible corporations through boycotts or other forms of consumer action that
can damage brand name reputations.
• Target irresponsible corporations through divestment campaigns which encourage investors
to withdraw financial capital.
• Build community capacity to understand the impacts of corporate activity and to defend local
interests.

RAFI promotes "Seed Sovereignty"

As part of its ongoing work to protect farmers from corporate seed monopolies, the Rural Advancement Foundation
International (RAFI) challenges the legitimacy of patents and genetic modification of seeds and other life forms. Of
particular concern are seed sterilization technologies (dubbed “Terminator” seeds by RAFI) that would prevent
farmers from planting new crops from harvested seed. As part of its “Terminate Terminator Technology” campaign,
RAFI has conducted a letter-writing campaign targeting more than 550 ministers and senior officials responsible for
agriculture, environment, and patent offices in 140 countries. The letters ask cabinet officers to assert national
sovereignty over their seed supply and to ban the seed sterilization technology outright. The letters also ask ministers
to reject individual seed sterilization patents pending within their jurisdiction.
Source: RAFI www.rafi.org action updates

No Sweat
In November 2000, a coalition of Canadian unions and NGOs launched “No Sweat”--a public education campaign to
raise awareness of sweatshop labour practices, and encourage schools and other institutions to adopt ethical
purchasing and procurement policies for their licensed apparel. The campaign calls upon institutional purchasers
(schools, universities, municipalities, etc.) to adopt a code of conduct that would compel supplier companies to fully
disclose the labour practices of their clothing manufacturers. In 1999, Students against Sweatshops successfully
lobbied the University of Toronto to adopt a purchasing code for its licensed wear.
Sources: Macquila Solidarity Network www.maquilasolidarity.org and Oxfam Canada: www.oxfam.ca

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Voices in support…
1. We have to tackle poverty at its roots—and these include the growing inequities caused by
market liberalization and structural adjustment programs that are forced upon poor nations to
“bring them in line” with the global market. We have to use all means we can to pressure
both companies themselves, and those who govern the framework within which they operate
to ensure that trade and investment promote human development, not undermine it.

2. If you want to affect corporate behaviour, you have to speak a language corporations
understand. Confrontation can play an important role in getting public—and corporate—
attention. These tactics can strengthen our hand, and that of others in the NGO sector, in
other strategies to promote social justice.

3. There is a great gulf in values between NGOs and the private sector. Our motives and
methods are irreconcilable. Our engagements should be limited to advocating on behalf of
the poor, using confrontation and dialogue as needed to empower the marginalized.

4. Governments grant corporations a license to operate. This gives governments both the means
and the duty to review corporate activity in terms of how it is contributing to society. When
regulators turn a blind eye to corporate exploitation, we need to remind them of their duty.

…Voices in opposition
1. This kind of change is a long-term process. It is important to bring these critiques forward,
but the poor need more immediate solutions. By placing ourselves in a confrontational mode,
we forego opportunities to work constructively with businesses that have the resources—and
sometimes the will—to create meaningful livelihoods for people.

2. This view only sees the private sector as a source of poverty. It doesn’t recognise its role in
helping to end poverty, by creating jobs and investment in developing countries.

3. By pushing an agenda of confrontation, we may hurt those we claim to work on behalf of.
Boycotts and divestment campaigns may be intended to penalize corporate rogues. But in the
process, workers in these companies may lose their jobs. By imposing northern standards of
what we consider fair working conditions on developing nations, we remove their greatest
competitive advantage.

4. Confronting corporations provokes only a short-term change in corporate behaviour. To

effect meaningful and lasting change, we need to relate on more positive terms. In the long-
term, we achieve more through dialogue and cooperation.

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Choice 3: Build a value base within the system
View: There has traditionally been little incentive for corporations to contribute to ending
poverty other than through charitable donations. One of the by-products of globalization,
however, is an increasingly informed public that has come to expect more from corporations. A
small but growing number of companies are incorporating ethical principles into their corporate
practices. We can help to build a value base within the private sector, if we can demonstrate that
serving social and environmental needs is compatible with the financial “bottom line”.

Broad remedy: End poverty by developing fair and sustainable forms of trade and investment
and building consumer and investor support for socially responsible enterprises.

Examples of engagement:
• Develop tools for evaluating the economic, social and environmental impacts of corporate
behavior.
• Work with private sector firms and trade unions to develop effective codes of practice that
must be respected by enterprises that seek a “responsible” label.
• Establish fair trade enterprises that see profits flowing back to producers and their
communities.
• Work with southern partners to establish micro-credit operations that extend small-scale
loans to the poor on manageable terms.
• Encourage consumers to buy fair trade products.
• Actively invest in socially responsible forms of enterprise.
• Practice and encourage support for shareholder action as a means to influence corporate
decision-making.
• Encourage others to invest in socially responsible ways.
• Encourage legislation that includes incentives for corporate social responsibility.
• Diversify NGO revenue sources by creating “for-profit” arms.

Ethical Trading Initiative (ETI) Base Code

The UK-based ETI—a joint initiative involving unions, NGOs and private sector companies with the support of the UK
Department of International Development-- developed a code of labour practice which must be adopted by member
companies. Adoption of the code commits members to respect nine basic principles, which include freedom of
association and the right to collective bargaining, payment of a living wage and a ban on recruitment of child labour.
Source: Ethical Trading Initiative Web site www.eti.org.uk

TransFair Canada
TransFair Canada, a not-for-profit company created by a number of NGOs, licenses the use of the TransFair
International seal in Canada to commercial suppliers of coffee, tea, cocoa, sugar and honey who meet TransFair’s
conditions. Promoting fair trade coffee is TransFair Canada’s current focus. Over 60% of coffee is produced by small
family farmers, who bear the brunt of unstable world prices for coffee beans. By certifying coffee that has been
bought through cooperatives which pay a fair price at source, TransFair contributes to a sustainable livelihood for
producers.
Source: Transfair Canada Web site: www.transfair.ca

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Voices in support…
1. This is a positive approach to ending poverty—one that helps to close the value gap between
the private sector and the voluntary sector. Creating consumer demand for fair trade goods
and ethical investment choices gives companies a positive incentive to behave responsibly.
And change is more likely to be lasting when it is not forced.

2. Pioneering new forms of socially responsible trade and investment gives us an immediate
way to work against poverty. By helping to market fair trade goods, we see the benefits
flowing directly back to the producers and their communities.

3. This approach leaves room to experiment and evolve in our search for ways to end poverty.
We’re not confined by strict definitions or boundaries around the private and voluntary
sectors. It leaves room for NGOs to diversify revenue or engage in private sector activity,
and it allows that some corporations may genuinely share a concern for social justice.

4. Working in the marketplace, on terms that fit with our values, helps us diversify our funding
base. We also learn valuable lessons in business management which can strengthen our
organization in other ways.

…Voices in opposition
1. Fair trade and socially responsible investment are exciting prospects, but they represent just a
sliver of overall economic activity. There are huge barriers to these becoming mainstream
options. It doesn’t really make much difference if StarBucks offers a fair trade coffee option
to its customers, if 95% of its business is selling coffee bought at world market prices.

2. This approach lets some corporations wrap themselves in an ethical banner, without making a
fundamental difference to the way business is done.

3. This approach does nothing to deal with the immediate harm done by irresponsible
corporations and the impacts of free trade. The poor today are struggling with declining
income support programs, abysmal living and working conditions, and damage to their
environment. We can’t wait for a new economic order to evolve.

4. By venturing into the for-profit sector, we’ll lose sight of what makes us distinct as NGOs.
Civil society must not be diverted from our social justice goals and we have to preserve our
own inclusive ways of working. These are just not compatible with working within the
marketplace.

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References
More detail on the findings of the CCIC Learning Circle on NGO Engagement with the Private
Sector on an Agenda to end Poverty can be found on the CCIC web site (http://fly.web.net/ccic/)
or by contacting Andrea Paula Botto (abotto@ccic.ca)or Brian Tomlinson (btomlinson@ccic.ca)
of the CCIC policy team.

1. Institute for Policy Studies, “Top 200: The Rise of Corporate Global Power”, Sarah Anderson
and John Cavanagh, December 4, 2000
2. United Nations Development Programme, Human Development Report 1998
3. World Bank International Finance Corporation, Paths out of Poverty: The Role of Private
Enterprise in Developing Countries, 2000
4. Canadian Council for International Cooperation, “Renewing Canadian Aid: an In Common
and CCIC Fact Sheet”, October, 2000
5. Social Investment Forum, “Socially Responsible Investing In U.S. Tops Two Trillion Dollar
Mark”, press release, November 4, 1999
6. New Internationalist, “Fair Trade—Small Change, Big Difference”, David Ransom, April
2000.
7. Bob Thompson, Transfair Canada, Ottawa’s CBO Morning radio interview on fair trade
coffee, September 15, 2000
8. New Internationalist, April 2000, op cit

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