Bridging the Stakeholder Gap: NGO Partnerships and CSR in Brazil

by Arlita MacNamee

Arlita MacNamee, MES 2007, was (like Chantal Brundage, above) a dynamic part of the incoming class of Sept. 2004 which formed the “Business & Environment Collective” 2004-2006 at FES. Focused on both planning and business, she developed expertise in a wide variety of realms—including green building, community development, and urban design. Arlita spent time in Brazil working on the Sisters Watershed Project, co-directed by Ellie Perkins, and has subsequently remained in Brazil to work with Instituto Sangari, a science education-oriented NGO.

Corporate Social Responsibility is often described as a movement in its infancy in Latin America, but is slowly transforming from a few isolated examples of responsible companies into a broader social movement, in which civil society plays a major role. In South America, Brazil is leading the way in CSR, through leadership and a hand-full of visionary companies.1 While corporations around the world learn to walk the walk of CSR, Brazilian firms like Petrobras, are winning awards for their efforts, and seeing their investment in community and environment reflected in their strong financial performance. In the Petrobras case, identifying the opportunity in NGO partnerships has strengthened their stakeholder relationships and brought value to the reputation of Brazil’s largest oil and gas company.

Several theories on creating a CSR unique for Latin America identify the alleviation of poverty as the single most important contribution of the private sector. The business case for investing in low income areas is simple; improving the standard of living for those living in poverty provides access to necessary goods and services, while creating new un-tapped markets for business. In practice, corporations cannot expect immediate financial reward from their contribution; however investment in the areas where the company operates facilitates local economic growth where it is most needed.

According to Estrella Peinado-Vara, of the Inter-American Development Bank, several Latin American cases demonstrate that “the solution to a business problem has been found in a socially responsible approach where the company has taken into account previously excluded customers as stakeholders, improving their standard of living, providing access to products and services and contributing to the sustainable development of communities.” 2 This stakeholder dialogue, which includes members of low income communities, poses a difficult challenge to corporations that are beginning to follow a path of sustainability. In some cases, success in stakeholder relations was made possible through partnering with organizations that have proven competency in this area.

Petrobras approached the Ecoar (“echo”) Institute for Citizenship in 2000. The Instituto Ecoar para a Cidadania is a non-profit, civil association. It was formed by professionals, academics, and environmentalists that gathered after the ECO-92, with the intent to continue discussions on pressing environmental issues and to collaborate in the construction of a sustainable society in balance with nature. Petrobras needed a partner that had strength in community activities and outreach projects. Ecoar had developed a unique methodology for bringing various stakeholders together and experience in working closely with the members of marginalized communities and favelas. 3

The Ecoar methodology is based on the 1992 Rio Summit, and builds community projects following the guidelines of Agenda 21. Under this methodology, leaders from the community are sought out and trained by Ecoar, and all decisions from project design and team formation to implementation of a project are decided upon collectively. The result has been extremely positive for Ecoar, such that they are solicited to share their knowledge with fellow NGOs and with other corporations that are following the Petrobras example.

Today, Ecoar has worked with Petrobras on many projects, all of which designed to achieve sustainability targets within the company and to integrate the company into its surrounding society and environment. In Rio de Janeiro, Petrobras has allocated a CSR committee and is working with its neighbor, Rio’s largest favela, to create an organized network for ongoing dialogue with community representatives. The result? Petrobras has reduced their social, environmental, and economic risks, through educational workshops and through continuing to incorporate the objectives of the community in their decision making process. Together, Petrobras, Ecoar, and the favela community are seeing changes as they work to build a safer and healthier community.

In the big picture, projects like this have led Petrobras to address the social and environmental impacts of its operations throughout Brazil and Argentina. Armed with the tools like Ecoar, Petrobras is setting an example for its domestic competitors and sending a global message that Latin America is meeting the challenges of CSR. In an era where Latin America is making powerful strides toward the left in addressing its economic and social problems, this growing acceptance of CSR can be seen as a significant byproduct of forged partnership between new social movements, business and civil society.

References:

[1] Balch, Oliver. “Latin America: CR in Brazil and Argentina- Next door but worlds apart” The Ethical Corporation. http://www.ethicalcorp.com/content.asp?ContentID=4108

2 Peinado-Vara, Estrella. “Corporate Social Responsibility in Latin America.” Green Leaf Publishing. P.3

http://www.greenleaf-publishing.com/pdfs/jcc21peinado.pdf

3 Favela: A favela is a Brazilian shantytown or slum, primarily on the hills and marginal areas of major cities.

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