Pitfalls and Pipelines - Philippine Indigenous Peoples Links

Chapter 2.3: International Advocacy with Companies and Their Investors
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of shares in the corporation, especially if it was the creation
of the chair or CEO (Chief Executive Officer) before it went
public (for instance, in the case of Vedanta). 6 The majority of
shares tend to be owned by so-called institutional investors,
such as commercial and investment banks, investment and
pension funds, or, more recently, governments investing via
direct state ownership and/or Sovereign Wealth Funds.
Although this consolidation of shareholding can be seen as
a positive, as it consolidates the points of contact for advocacy,
in practice it sets up barriers to being able to put arguments
across. Professional fund managers often do not have the time
or inclination to listen to arguments from communities over
individual projects. In the case of banks they will often hold
shares in “nominal” accounts for shareholders, aggregating
large numbers of small shareholders, who cannot vote or be
contacted by a campaigner. When you see “nominee” listed
under shareholders, you can virtually write off any hope of
individual influence over what are often large shareholdings.
The other issue is that company management, or trust
fund managers, will often hide behind a “duty of care.” This
means that their prime purpose is to return “value,” i.e.,
money, to the shareholders or fundholders. This effectively
means that their motives are entirely driven by their financial
performance, as opposed to operating with a “conscience” if
a community raises ethical issues. All corporate social responsibility
should really be seen in this light, i.e., as a means for
the company to eventually make more money. Anything else
would be a neglect of their duty of care. As such arguments
to management, shareholders, investors, insurances and all
should all be couched in terms of risks to their investments; to
their “bottom line.” This is easy enough to do, as not having
a social license to operate or the potential for environmental
damage are all risks to the bottom line. They can be a risk both
directly in terms of lost revenue. They can be a risk indirectly
in terms of damage to the corporation’s reputation, which can
then affect the number of people investing, i.e., the company
share price.
Finally it is possible a company will also seek insurance for
a project. The project could be insured for a number of dif-