A Taste of ‘Greenmail’

Alan Oxley, Washington Times

If there was an award for “most badly behaved protest group,” Rainforest Action Network (RAN) would be contender for the title. Now, the Berkeley-based group of activists is trying to pull U.S. business (as well as an Italian fashion house and an Indonesian paper manufacturer) down with them. Americans will need to brace themselves, because they’re about to get a taste of greenmail.

Greenmail is a dubious but common practice in which large environmental groups threaten aggressive campaigns to publicly besmirch businesses in order to coerce them to alter successful business practices that don’t fit with activists’ agenda. This unscrupulous tactic is often at the front of RAN’s playbook. Before coming stateside, the group campaigned in Europe – subjecting the fashion house Gucci to attacks over shopping bags purchased from a company that sourced its paper from Indonesia.

RAN accused the Indonesian paper manufacturer of everything from human rights violations to rainforest destruction. Even though reality didn’t match these damning accusations, Gucci caved. Turning their attention stateside, these activists recently zeroed in on General Mills’ headquarters – levying claims that the company’s purchase of palm oil (a type of vegetable oil) from Cargill is destroying rainforests in Indonesia. RAN launched a similar attack on Cargill’s own offices almost two years ago. Some Western companies – Whole Foods retailers in the U.S., Lush cosmetics in Britain, and Cadbury chocolate in New Zealand – have already succumbed to anti-palm oil campaigns and made a show by pulling the much-maligned commodity from their products.

Yet, there’s reason to suspect that caving to satisfy these demands will not only hurt U.S. business and the workers who count on them, but will also increasing poverty of millions in the developing world. Consider the facts:

Palm oil is a basic food product for the poor in the developing world. The main consumers of palm oil are not American shoppers stocking up on Wheaties or chocolate bars; they are the hundreds of millions in Asia and Africa who use it as a food staple.

Second, palm oil uses less land to produce more energy at a lower price than competing oil seeds in Europe or the Americas. That’s one of the reasons why the World Bank described oil palm in Indonesia as a most successful tool to reduce poverty. (Heck, it’s even trans fat-free.) Having already raised living standards in Southeast Asia, it can do the same thing in Africa and the equatorial Americas.

As such, by supporting palm oil producers in developing countries, Western companies like General Mills and Cargill have an opportunity to benefit the environment as well as the global economy. Together, the two companies already employ more than 60,000 people in America. Now they’re also helping support jobs for those struggling in some of the poorest parts of the world. Unless, RAN gets its way.

RAN has a history of smear campaigns against businesses. Earlier this decade they targeted Ford, publishing an advertisement that tastelessly compared the purchase of SUVs with the American troop casualties in Iraq. In the 1990s they made claims about the treatment of indigenous tribes in Malaysia for fundraising – but then didn’t pass any of the funds raised to the tribes in question. Now, they’ve set their sights on America’s food industry, creating a blacklist of Cargill and General Mills products and calling on the public deface them when displayed on supermarkets shelves.

These misapplied acts of vandalism could reduce sales and trigger job loss. (Bad news in a country where roughly 8 million jobs have been lost since the recession began.) And if these businesses are forced to give in and forfeit contracts with producers in the developing world, the ripples won’t stop at our coasts.

Indonesia has 35 million people below the poverty line. Most of the country’s population hovers just above it. Its timber and paper industry is a major employer and contributor to economic growth in Indonesia. How it is ethical to snub one of the most major commodities of such a poor country? Surely, this conflicts with the most basic value in social responsibility codes.

Neither General Mills nor Cargill (or any other responsible America business, for that matter) should have to make that choice. Though offering momentary reprieve, giving into greenmail is an unsustainable business practice. Investors ultimately reduce holdings in companies that are not focused on delivering value to shareholders.

No one comes out a winner with a bad behavior award. American companies should make it clear they’re not up for nomination.

Alan Oxley is chairman of World Growth, a U.S.-based free-market organization. He formerly served as chairman of the General Agreement on Tariffs and Trade, the predecessor to the World Trade Organization.

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