Outlawing eco-based secondary boycotts

A secondary boycott is an attempt to influence the actions of one business by exerting pressure on another related business through the market place. An example was when environmental groups pressured the ANZ Bank to withhold finance for a pulp mill proposed by one of its customers, Gunns Ltd, on the grounds that the development would allegedly have serious environmental impacts.

Under the Competition and Consumer Affairs Act 2010 (the Act) secondary boycotts of Australian companies aimed at restricting company trading are - with two exceptions – outlawed, and targetted companies can expect the ACCC and the courts to protect them. However, the Act currently allows secondary boycotts that are either designed to protect consumers, or are substantially related to environmental protection.

Last month, the new Federal Government signalled its intent to amend the Act to remove the exemption that allows secondary boycotts related to environmental protection. Companies that have been targetted by boycotts allowed under this exemption have long complained that the lack of accountability afforded by the Act has effectively given eNGOs a licence to unfairly denigrate them through sensationally false or misleading environmental claims.

The announcement of the proposed amendment of the Act was predicably decried by eNGOs for whom inciting market-place boycotts has latterly become a key weapon for disabling Australian resource use industries, particularly those involved in forestry. Greens political leaders, Christine Milne and Nick McKim, were also critical of the move labelling it as a draconian attack on the democratic right of free speech. However, it is pertinent to ask whether it is more appropriate to describe it as an attempt to restore the integrity of free speech?

Arguably, the Australian eNGOs most heavily involved in inciting secondary eco-boycotts are Greenpeace, the Wilderness Society, Markets for Change, and GetUp! The most active of these is Markets for Change (MFC) which was launched in 2010 under the direction of former Wilderness Society National Forests Campaigner, Tim Birch, and with four international Greenpeace operatives occupying positions on its Board.

With a budget of $1.7 million in its first year, MFC was sufficiently well-resourced to begin prosecuting an operational methodology modelled on overseas campaigns to boycott or discredit companies to achieve environmental agendas – a form of eco-activism that is often referred to as 'brandmailing' in the USA.

MFC describes itself as"a market-focussed eNGO with a mission to drive responsible industry practices through an informed public and market place" In order to achieve this it "investigates and exposes the companies and products driving environmental destruction, creating the impetus for retailers to adopt environmentally and socially responsible procurement policies….." This includes travelling overseas to give retailers first-hand perceptions of Australian resource use practices.

In a media release responding to the Government's intention to review the Act in relation to eco-based secondary boycotts, MFC's CEO, Peg Putt, dismissed the notion that her group does anything other than simply report the truth about the origins of Australian forest products and that this is sufficient for customers to demand better environmental credentials in the products they buy.

Ms Putt went on to cite two examples where MFC had driven positive market place change. One of these was where they "successfully established relationships in Japan and the UK with customer companies of Ta Ann Tasmania, and were able to give precise chain of custody advice about where the logs came from in the high conservation value forests of Tasmania. The customer companies had been misled into believing they were buying 'eco' wood from plantations."

Finally, Ms Putt strongly disagreed with the notion of making groups like MFC more accountable for the messages they spread in the marketplace: "Trying to gag us is swimming against the tide of public concern over the social and environmental characteristics of the product they buy and seeks to muzzle us in the same way as the Gunns 20 court case also sought, unsuccessfully, to muzzle forest campaigners."

Her reference to the Gunns 20 court case signifies an intention to follow the same pattern of saturating the media space with the notion that forcing eNGOs to be accountable is contradictory to the fundamental right of free speech. This worked well against Gunns because a large, and alledgedly bullying corporation is an easy target for the media; because Gunns' brief of evidence against the defendants was poorly conceived and executed; and because it was harder to link so many individual defendantsto the existence of a concerted and well organised campaign to trash a company's reputation.

In this case though, a quick glance at MFC's website is all that's needed to show it to be an entity specifically established to damage the reputation and restrict the trade of targetted companies unless they comply with their demands. Their website also contains various campaign reports that can be readily examined to gauge the veracity of the environmental claims being used to incite consumer boycotts.