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Tuesday, Aug. 23, 2011

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HMS Astute arrives at its base at Faslane, Scotland, in 2009. The British Navy's entire nuclear submarine fleet is powered by reactors manufactured by Rolls-Royce PLC. AP PHOTO

THE ZEIT GIST

Peace Boat-Rolls Royce talks lay bare ethical minefield

Failed deal between defense firm, antiwar group highlights dilemmas facing NGOs in race for donations


By DREUX RICHARD
Special to The Japan Times

Convinced the recovery in Tohoku will result in the birth of widespread corporate philanthropy in Japan, in the same way the 1995 Great Hanshin Earthquake prompted the proliferation of volunteerism, Peace Boat director Tatsuya Yoshioka spent a day in June shepherding a busload of businesspeople on a tour of Ishinomaki neighborhoods hit hardest by the March 11 tsunami. They'd travelled north from Tokyo for a weekend of volunteering under the auspices of the American Chamber of Commerce in Japan, many of whose members share a similar vision for importing corporate social responsibility (CSR) to Japan.

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Partners in peace?: A Peace Boat volunteer crew sent to Ishinomaki, Miyagi Prefecture, by IBM Corp. clears mud and debris from a residence. DREUX RICHARD PHOTOS

If Yoshioka's hunch is right, Peace Boat would stand to benefit immensely. They have emerged as the leader amongst a small group of Japan-based global nonprofits whose flexible, survivor-centered operations have allowed them to step in where a troublingly bureaucratic recovery apparatus has faltered, stranding more than ¥95 billion intended for victims in Red Cross and government coffers. If corporate donations begin flowing toward these groups, Peace Boat could receive the lion's share.

Yoshioka has invited corporate volunteer groups to Ishinomaki, Miyagi Prefecture, hoping donations will follow. Morgan Stanley, Denso and IBM have sent groups, among many others, but despite ongoing efforts to court donations from these companies, Peace Boat has managed to extract only a scant few. Recently-hired CSR officer Alice Brennan was nonetheless optimistic when we last spoke in late July, as the media spotlight was just beginning to focus on the enormous amount of money intended for survivors that had yet to be distributed.

"Our press coverage has been making us appear more trustworthy," she said, citing a recent piece in The Economist. Establishing legitimacy is important for Peace Boat, which is not registered as a nonprofit in Japan, where relevant statutes have long needed an overhaul. "Before, we kept hearing 'We already donated to the Japanese Red Cross,' but that's changing," she told me. "There's a sense the Red Cross hasn't met certain expectations about how donations would be used, or how quickly. People think we're safer than the Red Cross now."

Shortly thereafter I spoke at length with a Japanese Red Cross official who, on the condition of anonymity, offered a range of candid opinions about the implications of pitting smaller nonprofits against larger relief organizations in a competition for corporate dollars, and about the role groups such as Peace Boat play in the recovery.

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Tatsuya Yoshioka (left) and Charles Lent discuss the possibility of logistics corporations providing expertise for the relief effort's warehousing operations in Ishinomaki. DEUX RICHARD PHOTO

"Good will and cooperation are crucial in disaster areas," he said. "It's been proven time and again they're more important than how much money is flowing in. If chasing corporate money puts groups like Peace Boat at odds with the bureaucracies in play, we will have sold out an invaluable resource at a very cheap price, and the only winners will be the companies that make off with their glorified PR, which is, let's be honest, what CSR is really all about."

The quid pro quo underlying potential CSR contributions to organizations like Peace Boat is compelling — Japan's tightly controlled disaster recovery doesn't have the scent of profiteering that came to characterize relief efforts in New Orleans and Haiti — but that hasn't made contributing to the recovery in Japan an easy PR victory. Both Microsoft and Mediacorp have suffered public backlash for 3/11-related promotional campaigns. Microsoft tried to entice people to re-tweet a promotional message about its Bing search engine by promising every tweet would result in a donation to earthquake victims. Mediacorp played up the large broadcast audiences the disaster in Japan was drawing, in an email that urged advertisers to purchase slots that coincided with their coverage.

Groups like Peace Boat offer an opening through which American-style, corporate-sponsored reconstruction work can be funneled, and the PR benefits reaped without controversy. Ostensibly, their access to the disaster area and its untapped public relations resources is enough to make them an attractive CSR partner. But corporate fundraising is a fierce competition for a limited pool of resources.

ACCJ trip attendee Charles Lent, formerly in human resources and internal communication at German software company SAP, put it most succinctly: "Corporations aren't volunteers. If you go to a corporation and say, 'What can you do for us?' they'll say, 'Huh? Nothing.' You have to go them and say, 'What do you need?' and then figure out a way to give it to them better, cheaper and faster than anyone else."

Smaller NPOs seeking an edge increasingly do so by highlighting what makes them different from their larger counterparts, who are now associated with the recovery's frustratingly sluggish pace. The results will ring familiar to observers of the American nonprofit community: a blurry collage of urgent truth and dubious sensationalism, and a predictable stew of organizational agendas bubbling beneath the surface.

During the ACCJ trip, both Peace Boat and another independent organization that met with participants, OGA for Aid (operating out of Minamisanriku), were guilty of grossly mischaracterizing elements of the government's recovery programs. Angela Ortiz, OGA's operations manager, even went so far as to claim that survivors leaving the shelters in favor of temporary housing were subject to the revocation of all their governmental support. When trip participants later expressed their resulting outrage to Peace Boat officials, no effort was made to correct this false impression.

"I'm surprised they got it so wrong," said my source at the Red Cross, "and it's an incredibly problematic kind of equivocation. It not only distracts from the actual problems we need to solve, but does so in a really pernicious way, with half-truths and distortions that can take a long time for someone who isn't an expert to parse. But when a donor, or a journalist, or volunteer finds out their sympathies have been subjected to manipulation, it decreases the likelihood they'll make a long term commitment to contributing, and it's that lasting attention to the region, which is tremendously difficult to secure, that's most important."

If not for the possibility of an extremely generous donation from Rolls-Royce Group PLC, Peace Boat and Yoshioka might have navigated the most critical phase of the recovery effort without facing an acid test of their shifting priorities.

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Peace Boat director Tatsuya Yoshioka at his organization's headquarters in Takadanobaba, Tokyo.

According to a version of events offered by a source at Peace Boat and corroborated by others familiar with the negotiations, Rolls, a major defense contractor, engaged in a dialogue with Peace Boat about a possible donation that would have dwarfed all but one of the others the group had received toward the Tohoku relief effort. Peace Boat developed an exhaustive proposal for the project the donation would fund: a global boat trip much like dozens of others the group has organized over its 28-year history, but this time offered to youth affected by the nuclear disaster in Fukushima, with a cost that Peace Boat literature estimated at roughly $781,000. "The students would take part in a special learning program onboard, and in activities with Rolls-Royce staff in the countries they visit," reads a later version of the same proposal pitched to other organizations, viewable on the Norwegian Chamber of Commerce Japan's website at the time this story went to press.

During the negotiations, Rolls-Royce made clear they wanted their brand name to feature prominently in the project. Yoshioka, new to the world of corporate giving, apparently took this as a joke. His staff had to convince him Rolls was serious.

Peace Boat's mission includes a strong world peace component, and Yoshioka was on the verge of allowing a major global defense contractor to become a highly visible underwriter of its activities. Furthermore, Rolls was allegedly looking to make their donation in conjunction with a partner they preferred not to disclose. Some at Peace Boat suspected the partner had nuclear ties and might even have been seeking to soften the PR blow dealt to them by the disaster at Fukushima. Rolls-Royce itself manufactures reactors for nuclear submarines and is a big player in the nuclear energy business. Was Peace Boat ready to launch the Rolls-Royce Nuclear Cruise for Fukushima Youth, and to swallow the absurdity it presented?

Yoshioka allegedly weighed the matter for some time before ultimately deciding to pursue the donation. Rolls-Royce considered Peace Boat's proposal until the last minute, then declined to fund it. It was a disappointing outcome for Yoshioka and Peace Boat, whose willingness to compromise some of their core values went unrewarded. They have since tried to keep the failed negotiations under wraps.

"That was a complete mistake," Yoshioka told The Japan Times. "We never knew about their relationship with the military industry and also their relationship with producing nuclear reactors — at all. If we'd known that, we'd have deleted that company's name from our list."

Yoshioka also stressed that talks with Rolls-Royce arose when he sent project ideas to "many companies" on the aforementioned list of prospective donors, a version of events that contradicts the story reported by sources familiar with the negotiations, who said Rolls-Royce's interest in donating resulted in a proposal tailored directly to their potential contribution.

Information on Rolls-Royce's military ties figures prominently in all of Rolls-Royce Group's literature, as well as on its Wikipedia page and the majority of Google results related to the firm.

Rolls-Royce, reached via their Tokyo office, refused to comment for this story, offering only that they "decided not to fund this proposal for many reasons."

Alice Brennan was candid about the changes in organizational culture the Rolls-Royce negotiations hinted at — changes she felt Peace Boat will have to undergo if it wants to compete for corporate donations of that size. "I'm trying to make things less bleeding-heart here — more cynical, really," she told me. "We're willing to do a lot of what corporations want, whatever that may be. We're just going to have to make a lot of compromises to make this work."

In Japan, where there is neither a tradition of corporate philanthropy nor a high density of nonprofit organizations, the gray area these sentiments navigate is still unfamiliar. As organizations such as Peace Boat grow increasingly frustrated with the pace of the recovery and turn to corporate donors to fund their own, more nimble efforts, the few Japan-based groups operating in the disaster area are quickly coming to resemble their American counterparts in fundraising agenda and technique. "It can look a lot like a scramble for influence and prestige," said the Red Cross source. "Less about speeding the recovery than garden-variety organizational opportunism."

Peace Boat, however, has been a driving force behind the ongoing transformation of Ishinomaki from one of Japan's worst-hit cities into a model of recovery. In a city where 44,000 of 128,000 houses were destroyed and another 34,000 were damaged beyond repair, Peace Boat has built a bustling center of cleanup activity by acting on individual requests made by survivors, either directly to Peace Boat or to local agencies with which the group coordinates. Given the tremendous good will this work has generated in Ishinomaki, it's difficult to dismiss the likelihood that a better-funded Peace Boat would spell a quicker recovery anywhere a similar model could be deployed.

From Peace Boat's central kitchen in downtown Ishinomaki, Yasuhiro Ueshima has been directing cleanup operations in the city for months. He has grown closely acquainted with the layers of bureaucracy Peace Boat's operations get squeezed between. A kitchen car requested to facilitate the delivery of hot meals was held up indefinitely while authorities decided what to do with it when it was no longer needed. Plans to rehabilitate entire neighborhoods gathered dust while Ueshima waited for whispers about the city's plans for its worst-affected areas. "We'd love to pick up the pace," he told me. "But we can't fully orchestrate things right now with the severely limited information we have."

The CSR proposals Peace Boat offered the businesspeople on ACCJ's trip to Ishinomaki demonstrated a critical comprehension of the niche they fill. One submission concerned the assembly and distribution of supplemental aid kits to families moving into government-provided temporary housing in Onagawa, a town in Miyagi Prefecture. Another proposed refurbishing several local kitchens for use in extending Peace Boat's successful food security and meal delivery operations to outlying areas of Ishinomaki. The proposals were ambitious, costly and vague, but they were also canny in how they favored uncomplicated projects that nonetheless filled gaps larger organizations might leave behind.

Stories of guerrilla-style relief operations stepping in to fill these gaps have abounded since the disaster, but Peace Boat's relative wealth of disaster intervention experience has enabled them to flirt with financial and volunteer resources usually reserved for larger organizations, and to date they've sent well over 3,000 volunteers to Tohoku. But now, with the potential for major corporate donations to reshape the way Japanese nonprofits contribute to the recovery, the stakes for Peace Boat have never been so high.

Thus far, they've struggled with the learning curve, and that's resulted in some odd choices. "That kitchen car would have been the perfect thing to pitch," Charles Lent told me, arguing it was a quantifiable, small expenditure that a food company would likely have found appealing from a CSR perspective. He found the notion of selling a proposal for a nuclear disaster victims' boat tour to a company with nuclear interests much less comprehensible, and speculates that the odd conflict of interest it presented, far from being the asset Peace Boat perceived it to be, may have been the proposal's greatest liability. "You have to understand your donor community," Lent said. "Until Peace Boat can do that, they're shooting in the dark."

Brennan and other Peace Boat staff have been constantly reworking their fundraising proposals. Submissions were at first alarmingly absent of chronological or financial benchmarks, but now appear more polished and exhaustive. They recently succeeded in securing additional funding for the central kitchen through the British Chamber of Commerce in Japan, a triumph they hope reflects increased fundraising competence.

For their part, the business community has failed to help Japanese nonprofits learn what it takes to get a CSR proposal funded. During the ACCJ trip, organizer Patricia Robinson frequently articulated a sentiment widely shared by those in the business community who want to foment a recovery-driven CSR revolution in Japan: It's simply a matter of getting the word out and introducing the idea to the Japanese business community, where it's still unfamiliar.

But in reality, there are a plethora of practical complications a successful CSR proposal must navigate before it gets funded, and Japanese nonprofits rarely possess the expertise needed to avoid running afoul of them. Upper management vets new nonprofit partners. Human resources departments must approve any allocation of work hours. In both cases, a single concerned manager can wield veto power. Proposals need to be submitted at a time that makes sense given the annual allocation of funds. Most fundamentally, proposals need to be structured so they appear relatively risk-free and provide excellent cost-benefit.

"It's not always the best proposal that gets funded. It's a very particular kind of proposal," said Lent, who enlightened me about the temperamental corporate machinery CSR involves while his peers on the ACCJ trip largely ignored these complications. He also explained that a proposal's "repeatability," or the sense that the organization pitching it is deft enough to implement it smoothly, is paramount. The term arose in many of my subsequent conversations with officials at multinational companies that have contributed to Japan's recovery, often in the context of concerns about whether organizations such as Peace Boat can really deliver.

Afew weeks after the trip, Lent accompanied fellow attendee Maryanne Buechner to Peace Boat's headquarters for a consultation with Brennan and Yoshioka's wife, Rachel Armstrong, about crafting successful CSR proposals. According to Lent, Buechner offered to come back regularly, volunteering her time to help train some of Peace Boat's staff.

"They really seemed more interested in having us do the work for them. They weren't ready to spend the time it would have taken to learn how to do things for themselves," he said. "We didn't hear back from them much after that."

In a meeting with the president of the Ishinomaki Junior Council (which coordinates NGO efforts in the city) arranged by Peace Boat for those who took the ACCJ's trip, the council president expressed similar hopes that much of the work necessary to generate capital could be taken up by concerned businesspeople. If NGO leaders are unwilling or unable to do the complicated work courting corporate donations requires, that bodes poorly for their ability to implement major, corporate-funded recovery projects and calls into question the sincerity of their commitment to altering the relationship between corporations and charitable work in Japan.

"For Peace Boat, this is and should be a golden era for their organization," said the source at Japan Red Cross. "There's a severe need for the kind of improvised volunteer services they facilitate, and the whole world is paying attention to how well they're meeting that need. They can ride the momentum they'll gain from their participation in the recovery effort for decades.

"But that doesn't mean that shoveling money into their kind of operation will dramatically impact the pace of recovery. Long-term success, where disaster areas become real cities and towns again, depends on a lot more than how many meals you serve or how many houses you clean. It's like anything else in life: Money turns out to be a great distraction from what matters most."

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