ECOLOGIA Newsletter Jul/Aug 1994 Issue #29

Non-Governmental Organizations and Western Consulting Companies: Forging Productive Relationships

Increasingly, multi-million dollar development and investment projects are planned in Eastern Europe, the Baltics and the former Soviet Union. These projects are funded by multilateral international organizations such as banks and by Western corporations. Along with Western loans and investments, large foreign consulting companies arrive. In theory, consulting companies have much to offer. Their large staffs often include an enormous variety of talented experts. This expertise can greatly enhance technical planning for and implementation of an environmental or development project. Professional consultants are also very experienced with the complex problems of political and financial management of international development projects.

However, these very strengths of consulting companies are a challenge for indigenous environmental Non Governmental Organizations (NGOs). These NGOs have established their credibility and power upon the fact that they have historically been the institution providing independent professional quality expertise. Now, quite suddenly, highly paid, professionally staffed, and technically well equipped foreign experts appear on the scene. On the one hand foreign experts and local NGO experts have much in common and may have much to gain by cooperating. Local site specific expertise is a valuable and necessary complement to a foreign perspective, just as the broader foreign experience and technologies can introduce new alternatives to local problem solvers. On the other hand, different expectations and different goals may lead to disappointments and disagreements.

The challenge for foreign consultants and indigenous NGOs is to establish meaningful and equitable working relationships. The record of such relationships in Central and Eastern Europe and the former Soviet Union at present is mixed, with some successes and some failures.

We thought it might be useful to identify some of the common types of relationships, both good and bad, so that local NGOs and Western consultants might be able to borrow elements that have worked, and to avoid unproductive patterns of collaboration.

Patterns For Successful Relationships

1. NGO Initiated Partnerships

It is possible for NGOs to start partnerships with foreign consultants. By becoming the project initiator, members of an NGO increase the chance that they will remain important decision makers. This locally initiated approach allows an NGO to define a problem or need, to identify desirable solutions, and to locate an appropriate consultant.

Project P.A.P.E.R., undertaken by ECOLOGIA and the Social Ecological Union, a Russian NGO, is an example of the NGO initiated model. Under this program the SEU identified the problem: a lack of paper for environmental publications and a general lack of environmentally friendly paper making technologies in Russia. By initiating a project to solve these two problems and by successfully obtaining funding, the SEU and ECOLOGIA were able to identify independent consultants who shared our concerns and objectives. The consultants have developed a realistic set of guidelines for providing cleaner paper making technologies in Russia and the Baltics. After a field trip to several sites in Russia and the Baltics, the consultants were sufficiently excited about realistic investment possibilities that they financed two trips to the United States by leading Russian paper making researchers. The consultants wanted their U.S. colleagues to establish better research and business contacts. One of the consultants, the editor for the pulp and paper industries trade journal, wrote a major editorial indicating that the potential for technology and business in the Former Soviet Union was exciting.

Most NGOs in the FSU and CEE do not have sufficient resources to find foreign grant money to hire their own consultants. But the editorial in Pulp and Paper Magazine quoted above clearly indicates that NGOs have a very valuable contribution to make both to their own local community and to potential foreign investors and consultants. NGOs should not hesitate to reach out and initiate projects with consulting firms. It might initially surprise a foreign consulting company if leaders of an NGO walked into their office with a project proposal. But if the proposal had a potential for attracting investments, it would be considered, just as a proposal put forward by a business.

2. Partnerships That Share Decision Making

A while ago, ECOLOGIA was contacted by a consortium of for-profit companies interested in developing and field testing an innovative environmental monitoring system in the former Soviet Union. ECOLOGIA was paid to develop a strategy for identifying sites and appropriate partners. Our corporate partners, who had never worked in the former Soviet Union, accepted our requirement that NGOs be involved from the beginning of the planning process.

ECOLOGIA assembled a project team in an industrial city ideally suited to the technical goals of the project. The team includes the mayor of the city, a leader of a local environmental NGO, the administrator of the region, the local representative to the national legislature, environmental protection officials, and the director of the city's single and dominant industry.

Together we began to outline a comprehensive plan for monitoring the environment in and around the industrial site. Long term and short term goals were formulated by local people who understand local problems. Consequently, the project, which would use foreign technology, will respond to local needs.

While ECOLOGIA has assisted this medium size city in the former Soviet Union in establishing an equal relationship with American partners, our overseas colleagues have insured that their decision making role will continue. They have offered to match the resources of the Americans with significant local contributions of technical staff, office space, laboratory support, and long term financing using local funds. These contributions are more than symbolic; they will provide much needed resources without which the project could not occur. Further, these contributions establish the "two-way" nature of the partnership.

While it is not always necessary for partners to match financial and material resources, it vastly increases the chances of maintaining an equal role in decision making when NGOs and local governments bring resources and not just requests to the negotiating table.

Unproductive Relationships

1. Co-Optation of Local Leaders in Order to Market Western Products

This is a familiar pattern. A project is initiated by a Western company that is primarily interested in marketing its particular technology. In that situation the company typically contacts an investment bank with a proposal. Either the company or the investment bank provides a consultant, and together they identify a receptive group of officials who are willing to take on debt in order to purchase the foreign technology. Local officials are often co-opted into a business partnership. Under these circumstances, consultants work for the foreign company and/or investment bank and serve its interests first. All of these problems can be avoided if an NGO is part of the decision making team from the beginning of the project.

2. The Secret Business Partnership

One common method used by foreign investors who seek to avoid public involvement in environmental policy making is for the foreign investor to form a secret business partnership with local officials, who often set up their own for profit company. Permits can then be granted and construction begun before any meaningful public participation has begun. This process began with the Moscow incinerator project which involved a group of local officials who formed ECOTEXPROM, and obtained financing by the EBRD for a "confidential" feasibility study. This project has been slowed down, in part we believe because of the public backlash against such secrecy and the EBRD's violation of its own guidelines requiring public involvement in decision making.

It is difficult for NGOs to uncover and stop secret partnerships. We must rely upon official insiders who are willing to share information with the NGO community.

3. Foreign Controlled Joint Ventures

Another strategy for avoiding true partnerships with local NGOs is for a foreign consulting company to establish a local office with some local ownership, making them minority shareholders. Then the joint venture hires away local experts by offering them employment as consultants in the largely foreign owned company. This strategy keeps the local people employed for a while, but they often do little or no real work. In some cases, the joint venture is simply used to fulfill legal requirements requiring local partners, but most of the money actually goes to the main office of the consulting company. When these individuals are no longer needed to legitimize the foreign venture, their salaries are cut back, or their positions are eliminated altogether. In the meantime, their NGO has suffered from their absence, and the removal or neutralization of their expertise.

4. The "Endless Requests for Information" Partnership

Many NGOs have had the experience of overworking their underpaid or volunteer staff to provide piles of information to a foreign consultant who often does not even offer to pay for the postage or fax expense. Typically, this short term offer of partnership is the result of a foreign consultant writing a proposal; they need local information and partners to get a grant. Though the prospect of cooperating with a foreign company can be exciting, being dropped after you have provided the information for free to someone who will be making money from it is not. The best way to avoid this trap is to get a written agreement about sharing costs, and about the purpose of the partnership, before information is exchanged. Western consulting companies have development budgets which cover their expenses involved in developing grants, or they have been given a grant for conducting a feasibility study.

5. The Name Sharing Partnership

Many Western foundations and government agencies require that a foreign partner be listed on project or grant applications. The resulting partnerships are often in name only. One of our colleagues became a partner in a large American scientific project that required a foreign partner. Our colleague received only a trip to the United States and some used computers. However, the U.S. government included him on a published list of grant recipients, and it appeared that he had received hundreds of thousands of dollars. Consequently,he received considerable attention from his colleagues who requested not only that he give up his local sources of financial support, since he must not need them any more, but also that he share the funds he was reported to have received from his American partners.

6. The Last Minute Offer

One of the most common methods of forming temporary partnerships with NGOs as consultants is the unexpected last minute offer. ECOLOGIA cannot count the times we have been contacted by business consultants, or representatives of U.S. government agencies, who are "leaving on a trip to the former Soviet Union in a few days and need names of contacts for participation in a project" In many cases the project has already been decided and the NGO is needed only to provide a citation that local citizens were involved.

ECOLOGIA doesn't arrange contacts under such circumstances, and we strongly urge our friends and colleagues not to do so, either. It is difficult for an underfinanced NGO in the FSU or CEE to turn down a request that is made to look like an offer to work with a foreign consulting company on an environmental project, especially if some possible income is offered. But clearly a last minute offer does not present the possibility of meaningful participation by a local NGO. It is a rude request for the use of its name to imply its approval of the project.

The Adversarial Relationship

We do not want to give NGOs the impression that some form of partnership is the only appropriate posture to adopt in dealing with Western consultants and companies. In reality, adversarial relationships are some of the most common forms of interaction between NGOs and environmental consultants. This form of interaction is not inherently good or bad. Adversarial relationships simply reflect the fact that environmentalists, investors and other consultants very often have fundamentally distinct interests. It is logical and reasonable for them to occasionally disagree. Much of the recent emphasis upon conflict resolution training, decision making skills, and learning to compromise in a democracy may have unintentionally drawn attention away from the fact that a well-reasoned adversarial role can be a very appropriate posture for a citizens' group operating in a democracy. It is certainly an appropriate role for an environmental NGO.

Democracy is predicated upon the assumption that there are many conflicting perspectives and interests. Democratic compromise refers to the process of reconciling substantial differences in a nonviolent manner under the direction of law and with a sense of fair play. Citizens' groups, among others, need to clearly, intelligently and compellingly articulate their disagreements and differences.

When a small community of native people confront a proposal to construct a hydroelectric dam which will inundate their village, it would be illogical and self destructive for them to contemplate working in partnership with the consulting company actively promoting the dam. Their best recourse may be to adopt an adversarial approach; to mobilize public opinion and negotiate as an independent interest group.

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