Big business doesn't want to rule the world, it only wants us to be nice

Multinational capitalism has been badly mauled by people who refuse to be eaten quietly
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I once saw the late Sir Harold Lever choking on his soup. He was laughing too much. Somebody had asked him about the threat to the Wilson government from "capitalist tigers".

Rich, clever and very funny, Sir Harold served in several Labour governments as a minister but, above all, as a contact man with the world of business. "Tigers, indeed!" he spluttered. "If only you knew them! More like a bunch of nervous old pussy-cats!"

Like most good lines, this was true only up to a point. The orthodoxy then was that big businessmen were ruthless, aggressive carnivores. But this is not quite right.

Carnivores, certainly - the greed for raw profit is infinite. But the animal here is more like a jackal than a tiger. The prey has to be either dead or helpless. Big corporations are increasingly nervous about a full- scale fight with a victim who screams, kicks and summons the world's public conscience to its support. Especially in the developing countries, multinational capitalism has been badly mauled in recent years by people who refuse to be eaten quietly. Concern has grown multinational too. Mining tycoons and sport-shoe giants alike have nightmares about what Greenpeace, Amnesty, the Rainforest Action Network and the rest can do to their profits.

Once the reaction would have been to fight back, dirtily if necessary. The agitator down in the coolie lines could be made to vanish, with a few dollars paid to the local police. The team of do-gooders could be denied visas, with a fatter sum of dollars paid to the local Ministry of the Interior. That is no longer an option. The 1985 sinking of the Rainbow Warrior at Auckland by French agents brought the total of Greenpeace supporters from 1 million to 5 million in four years and marked a turning point. Today, the line taught in business schools is very different.

Thuggery is out. "Ethical auditing" is in. Felling rain forests, exploiting child labour, scalping inhabited islands for minerals or financing dictatorships are not just wrong but bad for business. International oil companies have learned to prate about a "licence to operate". This means not just a piece of paper signed by the state, but public consent - "a social mandate" for what the corporations are doing which comes both from the local population and from the world-wide NGOs.

A striking example of this new fashion is the report No Hiding Place: Business and the Politics of Pressure, which appeared last week. It analyses recent collisions between business and moral pressure groups, and concludes that business is being outpunched by the NGOs. It says it is high time that big corporations learned to open dialogue with the less extreme pressure groups, to share some of their concerns and to accept that companies are not responsible only to their shareholders.

It's intriguing - and significant - that this report comes from Control Risks Group. Until now, this outfit has maintained a secretive profile as a "security and crisis management consultancy", combating kidnappings, ransoms, international fraud and handling risk assessment. Staffed in part by SAS and Intelligence veterans, its latest British headlines came when its agents caught a Co-Op director handing secret documents to the corporate raider Andrew Regan.

Control Risks undertakes risk-assessment for companies concerned about operating in corrupt and violent parts of the world, from Russia to Brazil. Now it is bursting into the new "ethics for business" market. Kidnapping is one obvious kind of risk. But terrible publicity can be an even bigger risk.

Much of the report is taken up by a study of the pressure groups and how they work. The NGOs are not treated as "the enemy", but described with real respect. Their methods are daring and effective, and they have switched their pressure from governments and government agencies - increasingly seen as ineffective regulators - to private business. There are curious parallels between the two sides. Neither group is "accountable" in any public sense. And companies and NGOs alike tend to be based in Europe or North America, laying both open to charges of "imperialism" - the first for exploiting in the name of profit, the second for trying to deny poor countries the right to use their resources as they choose.

Retail companies have proved the most vulnerable. Christian Aid exposed the vile pay and conditions of sport-shoe makers in Thailand and the Philippines, forcing Reebok and Nike to guarantee minimal working standards. A coalition of pressure groups managed to end Gap operations in Salvador, where workers were paid 18 cents for shirts sold at $20. The "Free Burma Campaign" in America obliged PepsiCo, Heineken and Carlsberg to withdraw from Burma.

These were companies defeated by the threat of consumer boycotts in their "home" countries. But mining and oil companies, who do not sell directly to the public, have been tougher. Freeport McMoRan defied protests over its great gold and copper mine at Grasberg, in Irian Jaya (Indonesia), although accused of massive pollution, of bullying and deporting the indigenous Amungme people, and of furnishing transport and supplies for the repressive Indonesian army. In 1995, however, Rio Tinto Zinc (RTZ) bought 18 per cent of Freeport, bringing with it "Partizans" - a small NGO devoted to the merciless scrutiny of RTZ operations. The Grasberg scandal spread through the world's media. Freeport, though still truculent, has agreed to spend money on repairing environmental damage and quadrupling the number of locally hired employees.

Better-known conflicts analysed in this report include the two famous catastrophes for Shell's good name. These were the 1995 hi-jack of the Brent Spar oil platform by Greenpeace, and the outrage over Shell's operations in the Ogoniland region of Nigeria - culminating in the execution of Ken Saro-Wiwa in 1994. In both cases, Shell failed to grasp how the world had changed. Over Brent Spar, the company did not realise that the argument had moved from the platform itself to the principle of using the ocean as a tip. In Nigeria, wooden insistence on the virtues of "constructive engagement" (hanging on in there) left Shell looking like the accomplice of a world pariah.

Two questions remain. The first, important to Mr Robin Cook and his new "ethical dimension" in foreign policy, asks: where are governments in all this? There is a puzzle here. On the one hand, governments are less willing to interfere with private capitalism than they once were. This has left the vacuum into which the NGOs have expanded. On the other, governments are still all-powerful when they want to be. Shell's defeat over Brent Spar was ensured when the German and Dutch governments joined the campaign against it.

This suggests that if Mr Cook really intends to terrorise big business out of using child labour, planet-wrecking or helping tyrants to crush their subjects, he can succeed. In saying that deals struck with dictators are bad for business, he is hitting exactly the "ethical auditing" note which is now so fashionable.

The second question, though, is whether all this ethics is more than a fad. Surely capitalism could turn on Greenpeace or Christian Aid and smash them if it wanted to. Well, yes and no. The muscle and dirty-tricks capacity are there. But the will is not.

Businessmen don't want to rule the world. They just want governments to govern in a pro-business way. They also hanker to be loved and stroked. They are puzzled that the world has become so nasty about them, and will do almost anything to win back favour. From fat tiger-cats to nervous old pussies? It's a change to be encouraged.