How can we as citizens bring real pressure to bear on powerful corporations? What can we learn from corporate campaigns around the world? Here we take a look behind the scenes at the strategies activists are using worldwide in the battle against corporate power.
Getting Action: From Wall Street to…Where?
What does it take to harness the winds of change? Activism and democracy come with no guarantees – but we needn’t simply let the final results rest with fate. In between the passion these winds set loose and the results we hope they will deliver lies another ingredient – strategy.
Jim Shultz considers three universal questions of strategy for the Occupiers in our Getting Action blog.
Making Public Rules for Business and the Marketplace
We make public rules for private enterprise for many reasons, to protect producers and investors and also to protect all of us from being cheated as consumers or abused as workers and to safeguard our personal safety and the environment. Clearly, we do not need rules for everything business does, but we do need rules for some things. Here again are a set of issues which we need to understand and be able to influence.
This downloadable chapter from The Democracy Owner’s Manual is designed to help activists do just that.
Case study of success: Bechtel vs. the people of Bolivia: How the people won
The Water Revolt
In 1997 the World Bank informed Bolivia that it was making additional aid for water infrastructure conditional on the government privatizing the public water systems of two of its largest urban centers: El Alto/La Paz and the city of Cochabamba. In September 1999, in a secret process with just one bidder, Bolivia’s government turned over Cochabamba’s water to a company controlled by the California engineering giant, Bechtel.
Within a few weeks, Bechtel’s company raised water rates by an average of more than 50%, sparking a citywide rebellion that has come to be known as the Cochabamba Water Revolt. In April 2000, following a declaration of martial law by the President, the army killing of a seventeen-year-old boy (Victor Hugo Daza), and more than a hundred wounded, the citizens of Cochabamba refused to back down and Bechtel was forced to leave Bolivia.
To access the Democracy Center’s extensive archive of documentation on the Cochabamba Water Revolt, click here.
The Second Water War: the legal battle
Eighteen months later Bechtel and its co-investor, Abengoa of Spain, filed a $50 million legal demand against Bolivia before a closed-door trade court operated by the World Bank, the International Centre for Settlement of Investment Disputes (ICSID). For four years afterwards Bechtel and Abengoa found their companies and corporate leaders dogged by protest, damaging press, and public demands from five continents that they drop the case. On January 19, 2006 Bechtel and Abengoa representatives traveled to Bolivia to sign an agreement in which they abandoned the ICSID case for a token payment of 2 Bolivianos (about 30 US cents).
The immediate objective of the campaign was simple: make sure Bolivian water consumers weren’t forced to pay a multi-million dollar settlement to Bechtel. But it came with very important wider objectives, like supporting the Coordinadora de Defensa del Agua y de la Vida (The Coalition in Defense of Water and Life, the main organizing body in the mobilizations against Bechtel and for just access to water in Cochabamba) in their strategies, and drawing attention to the injustice of World Bank policies and investment treaties that allowed the Bechtel-Bolivia lawsuit to happen in the first place.
Early on, it was decided that placing all hope in winning the case in front of the World Bank tribunal was not going to be enough. According to Jim Shultz of the Democracy Center, ‘We made a strategic decision to change the venue, to the court of public opinion. That is where we, as NGOs and social movements, had more power than Bechtel. Our goal was to convince Bechtel to cave in. That was not only a more likely way to win but also a better way to win. It sends an important signal to other companies: even if you think you can win at ICSID, be prepared to have a whole other battle on your hands.’ Instead of the tribunal, where the rules are written for companies like Bechtel, the campaign tried to push the company into a space where it would have less control over the outcome.
The next step was to identify decision-makers in the company who would make the call on whether to continue the case or to drop it. Bechtel Enterprises was unlike Nestle, Nike or General Electric – it made no consumer products to boycott. As a privately held company it had no investors to pressure. So the campaign focused on Riley Bechtel, the CEO and great-grandson of the company’s founder. Campaigners used tactics such as email blasts to his personal address, and profiling him as an individual in magazine pieces. Jim Shultz says they discovered later how effective this strategy was: ‘When Bechtel settled the case for thirty cents the Bolivian negotiator told us that Riley Bechtel had personally intervened to make the case go away.’
What we can learn
making it personal
Focusing on Riley Bechtel hit home – the campaign wasn’t directed at the company in general, but at a decision-maker who had the power to drop the case.
playing to your strengths
The fight against Bechtel combined very different tactics and organizing cultures. The courage, sophistication and power of the Bolivian grassroots organizing that turned the city of Cochabamba out onto the streets forced Bechtel to leave the country. When the company tried a second time to extract money from Bolivians, an international network of activists and organizations applied pressure to the company using different strengths to force Bechtel to back down once again.
choosing the battleground
Campaigners knew that the World Bank’s trade court was not the best space to fight a multinational corporation. The tribunal was where the company was strong, and campaigners were weak – so they decided to move the battleground to a space where the company was weak.
messing with their math
Corporations overwhelmingly make decisions according to one logic – the logic of their bottom line. The campaign was able to influence that economic calculus – ratcheting up legal fees, and forcing the company to account for damage to its public reputation that could cost it contracts in the future.
seizing the moment
The second water war was part of a global upsurge in anti-globalization and anti-corporate activism, and benefited from the huge amount of attention that was paid to the water war specifically, as well as the larger political shifts in Latin America. Campaigners were able to convert this attention from media and activists into one of the campaign’s important strengths.
This is an excerpt from the Democracy Center’s guide ‘Beating Goliath: a resource for corporate campaigners’. Download the resource for free to read more about the fight against Bechtel and what we can learn from other past and current campaigns in order to be more strategic and effective when taking on corporations.