On Dec. 14, Greenpeace activists boarded a decommissioned French aircraft carrier in the Mediterranean Sea, saying that Paris plans to sail the ship to a shipbreaking yard in India. This, the group argues, would be a violation of the Basel Convention on the transport of hazardous wastes. The high-profile boarding came a week after activists from the same organization staged well-publicized protests outside the headquarters of computer manufacturer HP, which they alleged was also violating the Basel Convention on transboundary waste by having old computers shipped to Asia for disposal.
HP is an intriguing corporate target for an environmental activist group to choose -- in no small part because the company has been attempting to position itself as a leader in environmentally conscious electronics manufacturing. The company has announced plans to phase out some substances deemed harmful to the environment in some of its products, and to seek less-dangerous alternatives for others.
The interplay between Greenpeace and HP, then, is a multifaceted policy battleground. Whereas Greenpeace is playing one game -- designed to bring attention to the Basel Convention and to reduce the use of chemicals and trade in hazardous wastes, HP is moving knights around on several chessboards at once. In other words, while corporations frequently are the targets of social movements and policy campaigns, they also can and do participate in and manipulate the movements for their own competitive advantage -- and that is what HP appears to be attempting now.
Greenpeace: Focus on the Basel Convention
The game being played by Greenpeace is, if not simple, at least relatively straightforward. Up to this point, Greenpeace International has been heavily focused on chemicals policy, of which the group's electronic waste and shipbreaking campaigns have been two of its most visible initiatives. But even as debate over a chemicals policy for Europe dies down, the group is clearly increasing its level of activity in combating hazardous wastes and on what it calls its "toxics campaign" -- and it appears particularly intent on raising the public's awareness of the Basel Convention on hazardous wastes, as the two recent incidents involving the French carrier and HP illustrate.
Under the Basel Convention -- a treaty with 166 signatories that entered into force in 1992 -- industrialized countries cannot send materials containing hazardous chemicals to poor countries for disposal. The intent behind the treaty was to prevent what often is termed "environmental racism." However, the convention does nothing to prevent materials containing hazardous chemicals from being shipped to poor countries for recycling. Needless to say, that raises some difficult issues -- such as how to classify a ship containing dangerous materials that will be broken up and disposed of after arriving at a shipbreaking yard in a developing country. Or how to deal with electronic equipment that is accumulating in Asia and Africa, where it is beginning to look a lot like waste while in a long queue for recycling.
One of the concerns of the Greenpeace campaign is the materials computers are made of: They contain metals and chemicals that pose potential health hazards when released into the environment. Those materials usually are not liberated from the machines in ways that endanger computer users; however, there are hazards where computers are manufactured and disposed of -- particularly if some parts are being recycled. Thus, if computers are placed in a landfill, they can leach chemicals over time into the soil, creating a hazardous waste dump.
To address this problem, a group of non-governmental organizations concerned about the materials in computers began working several years ago to clean up the industry by forcing manufacturers to pay for the recycling of the computers they make. The thought was that, if the electronics industry is forced to take back its own computers and recycle them, manufacturers will have an incentive to make the devices as easily recyclable and as free of hazardous chemicals as possible. The campaign that was launched, known as the Computer Take Back Campaign (CTBC), also seeks to have the companies sign pledges saying they will not send their old products to Asia (where there is a ready market for such goods) for recycling.
It is on this point that computer maker HP has now come into Greenpeace's sights.
HP: A Game Within a Game
From industry's viewpoint, the concerns of activist groups like Greenpeace can raise a different set of concerns, as well as opportunities. While HP has come under fire for shipping waste overseas, it has -- on another front -- agreed to phase out substances that Greenpeace objects to in electronics. And its recent moves in that area point to another trend now emerging: businesses' exploitation of activist campaigns as a way of carving out competitive advantages. Companies in highly competitive industries increasingly are learning to how to benefit from, rather than merely be pressured by, public policy activist movements.
The practice of using activist campaigns against one's competitors, while increasingly visible, is not exactly new. To note one classic case, an arduous eight-year boycott against infant formula maker Nestle came to an end in 1983 when the company pledged not to engage in a number of marketing practices. Intriguingly, Nestle had never done many of the things it agreed not to do in the first place, but the list included practices on which its competitors relied. Nestle recognized that every company would have to follow the same set of rules it was agreeing to itself, so -- in the process of negotiating a code of conduct for the entire infant formula industry -- the company seized an opportunity to hobble some of its competitors as well.
Today, we are seeing similar evolutions within the electronics industry -- and the CTBC is one obvious example.
The CTBC initiative began in 2001 by placing pressure on Dell Computer Corp. to adopt a policy of voluntarily recycling its own computers. After more than three years of campaigning, Dell agreed to some of the campaign's demands and announced a new recycling program. HP quickly adopted a similar program, and IBM was next to come under scrutiny.
Emulating Nestle, Dell crafted its deal carefully: The company agreed to take back its old computers and to support state laws that would force every company in the industry to do what it was agreeing to do. On one hand, it makes sense that Dell would fight to level the playing field -- but even more significant is just how large an advantage Dell would have on that "leveled" field.
Dell rose to prominence in the late 1990s and to a leadership role in the computer industry early this decade. If all the computer makers in the industry were forced to take back every old computer sitting in someone's closet or basement, Dell, granted, would have a lot of old Dells coming back for recycling. But consider the company's history: Few of the computers it ever had sold would have been more than six years old at the time Dell agreed to the take-back deal. Consider, however, the fate of HP -- Dell's chief competitor, and the owner of Compaq's legacy. Compaq rose to prominence in the 1980s. And then there is IBM, which would be looking at 40 years' worth of computers potentially coming back for breaking and recycling (and how much of an 8086 model could feasibly be recycled?).
In essence, Dell agreed to a plan that gave it a chance to score a public relations win while sticking its chief rivals with a policy that put them at a financial disadvantage. In an industry where margins are thin, placing even a small competitive burden on a rival can yield substantial benefits.
The battle over how to handle the legacy waste issues is still being waged, but in striking a deal with Greenpeace, HP has seized the initiative over many of its competitors. Greenpeace has demanded that HP phase out the use of seven chemicals and metals that it argues are health hazards. After more than a year of discussion with (and high-profile demonstrations from) Greenpeace in Europe, the company announced on Nov. 7 that it is adopting a new environmental initiative that seeks to phase out most of these chemicals and reformulate its products globally based on the EU's recent chemicals in electronics directive, the Restriction of Hazardous Substances.
Presumably HP did not make this announcement without a plan. Not only is there public relations value in making such announcements, but the company likely has planned specific adjustments to its manufacturing process already. HP's chief advantage over competitors is time. For months before making its announcement, the company knew -- unlike some rivals -- precisely which chemicals and metals were truly at issue, and it has had an opportunity to use that period to negotiate the best deal possible with Greenpeace. Applying the Nestle model to this context, that could mean having some manufacturing substances removed from the list and others added -- thus cutting a deal that not only would work to HP's own advantage but also force certain, possibly challenging, standards on the rest of the industry.
Looking Ahead: Business Interests In Policy Formation
The business exploitation of social issues is a complex and strategic game -- and it is played in numerous industries, not just electronics companies.
The automotive industry, for example, is standing firm as a bloc in opposition to new regulations in California that demand new, higher levels of fuel efficiency in cars sold there. On the surface, this law would have much less impact on Toyota and Honda, which make a higher percentage of fuel-efficient automobiles, than on Ford and GM, which rely more heavily on sales of SUVs for profitability. One can imagine the temptation within Toyota and Honda to support the law and put their rivals at a disadvantage.
However, these two automakers appear to have concluded that the principle at issue in this law is not one that they want to endorse or deal with over the long term. With no certainty as to the mix of vehicles they will be selling in a decade, and not knowing how far the California legislature is willing to take the fuel efficiency issue, they are reluctant to support a regulatory regime that offers them tremendous benefits in the present but which has unpredictable long-term implications. Other issues may enter into this discussion as well: for instance, would Toyota and Honda actually benefit over the long term from having the major American manufacturers hobbled or bankrupt? These are significant and complex questions.
As environmental, labor and human rights groups turn to the marketplace and away from a narrow focus on government regulation, businesses will find more opportunities to carve out competitive advantages for themselves in public policy deals. Moving forward, it will be increasingly difficult to understand where public policy issues are going without understanding the financial and strategic calculus of the business players -- who can so easily be viewed as the victims of corporate market campaigns, but who also can play the system to their own advantage.
By: N. Peter Kramer
