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The Multinationals' Dilemma -- Gratify the Greens or Protect the Poor?

Greenpeace and other radical green groups are big on "corporate social responsibility" (CSR). What constitutes CSR, you ask? Among other things, the willingness to let the "green" agenda trump sound business practices.

Of late, the greens have taken to pressuring Western multinational companies to forswear buying paper and palm-based products from the Asian tropics. The campaign thrills Greenpeace donors, but threatens lasting harm to millions of men and women in poor nations.

Timber, paper and palm oil produced in the tropical belt are valued for their high quality and low cost. But radical greens oppose any commercial development in the tropics, which they want to preserve as pristine wilderness. And so they harass the multinationals, accusing them of razing the rainforest and destroying habitat for orangutans, tigers, and other endangered species.

The gambit works. Global food giant Nestlé recently suspended imports of palm oil from Asia. So have Unilever and Procter & Gamble.

Now retailers Wal-Mart and Carrefour are under fire for buying paper goods from the Asian region. And mega-bank HSBC is being pressured to halt economic development projects in Indonesia, Malaysia and other developing countries.

But in pressing its cause, Greenpeace willfully ignores some inconvenient, yet vitally important facts. For starters, palm oil is environmentally friendly. On a per-liter basis, palm oil production requires less energy and land-and fewer fertilizers or pesticides-than other vegetable oils.

What's more, Indonesia and Malaysia--both major palm oil and paper producers--have put 25 percent and 50 percent of their forest cover, respectively, off limits to development and established extensive wildlife protection efforts. In other words, both nations are being socially responsible.

So what's the real driver behind the anti-development campaigns led by European green groups? First, let's consider Europe's vegetable oil producers, timber producers and paper manufacturers. They don't much like competition from the Asian market.

European policymakers know protectionism is illegal, so they are trying to block imports on environmental and public relations grounds. EU member states support radical green groups which then demonize trade in foreign goods. What European policymakers and companies can't do legally in global trade courts they are trying to accomplish instead via the court of public opinion.

Western multinationals shouldn't go along with what amounts to illegal protectionism that threatens to undo the decades-long drive to open markets led by Western nations.

But there is an additional and important moral dimension at play, too. Left unchecked, the Greenpeace campaign will inflict massive economic misery on some of the world's poorest nations. Tens of millions of Asian men and women rely on the jobs and economic growth provided by their export industries. How is it socially responsible to deny a livelihood to them and their families?

Nestlé and other firms shouldn't ignore these socially irresponsible tactics. For example, in a shameless effort to alarm consumers, a recent Greenpeace-produced ad hijacks Nestlé's iconic "Kit Kat" bar (which contains palm oil) and implies that-by using palm oil-Nestle harms orangutans. But the ad is a lie. The governments where the palm oil is produced are protecting their wildlife.

Instead of quietly egging them on, European authorities should be investigating Greenpeace for possible trademark or copyright violations in its malicious and willfully misleading appropriation of Nestlé's brand. Consumer goods companies and global retailers should not let anti-business zealots manipulate those brands for political gain and the benefit of special interests.

Running a large, global business is hard work, and success takes singular focus. Great harm can result when big companies are distracted and moved "off task" by the narrow interests of activist groups and their political supporters. It is time for Western multinationals to make a stand for real economic progress and development and take a stand against the scare tactics of Greenpeace and its ilk.

James M. Roberts is Research Fellow for Economic Freedom and Growth in The Heritage Foundation's Center for International Trade and Economics.

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