Q&A: Oxfam’s Ray Offenheiser on Fear, Globalization, and Money in Politics
For nearly 20 years, Ray Offenheiser has been leading the charge as the president of Boston-based Oxfam America. Over those two decades, his group has helped respond to natural disasters, public health epidemics, and brutal conflicts. “I’ve witnessed untold tragedy,” he says. “But I’ve seen magnificent transformation at the same time.”
Recently, the charity group has shifted its focus and sharpened its teeth. Now it’s going after big brands, challenging governments, and suing the U.S. Securities and Exchange Commission.
With the Syrian refuge crises growing worse and peril on seemingly every continent, we sat down with Offenheiser for an in-depth discussion about what he fears most and whether progress is possible.
You see all types of crises emerge and unfold. What are your fears when you look out on the world right now?
I’ll speak to one briefly, which is the fear that the global humanitarian system is being stretched to an actual breaking point. We’re seeing a world in which we now have 60 million refugees. The funding of that system is extraordinarily compromised because of the scale, the number, and the variety of what you may call “Class 1” emergencies.
As an international community, we need to be stepping back and taking a look at what that actually means for the world and for this refugee population, which continues to grow and is in many cases driven by conflicts that seem intractable and unresolvable. We need to think about how we can turn it on its head—building more local capacity for response, rethinking the funding arrangements, and completely coming up with a new paradigm for how we deal with these global emergencies.
That’s quite a lot to worry about.
Well, actually, I want to talk about a different fear. One big change in the environment in which we work is the role of the private sector, and the presence of corporations in countries where historically they feared to tread. They were concerned about political stability, volatile environments, and the economic costs of working where there was limited infrastructure.
Today, that’s all changing. And one of the things we see is a process that is bringing countries into globalization in an accelerated fashion, which may not benefit the people who live in those places. This may be accelerating inequality, it may be putting at risk basic livelihoods, and it may be threatening the environment in very profound ways. What we see is a kind of David and Goliath challenge.
But aren’t we well into the process of globalization, which has been going on for decades now?
The interesting phenomena that marks this as an inflection point, maybe a historical inflection point, is that it used to be that foreign direct investment in many of the poorest countries we worked was a very small part of national budgets. Instead, the budgets were dominated by money from overseas development agencies—USAID and other donors.
But now, private foreign direct investment is dominant. Globally, foreign direct investment is 90 percent private investment and only 8 to 10 percent overseas development assistance. And that’s declining.
So what’s the David and Goliath struggle here?
The David and Goliath part is asymmetries of information and knowledge.
Let’s say a trade deal is being hatched between developing Country X and a major company. That company can bring in 20 New York lawyers and Country X maybe has a total of two trade law firms—hopefully they’re linked with the Ministry of Trade, but they may not be. Country X is at a significant disadvantage in this case.
Are there parallels here to colonialism? When the sun never set on the British empire, didn’t they stake claims to resources with similar tactics?
You could say that a lot of these same kinds of patterns happened under colonialism, but with a lot more brutality. Today, there is more consciousness on the part of companies—they know they have to be socially responsible and environmentally responsible, which wasn’t the case previously.
But what we’re seeing is that this is happening at an accelerated rate in places that haven’t had the ability to develop competencies to cope with it.
The good news is that there are vanguard companies. There’s opportunity to work with visionary leaders to build new frameworks for how the mining industry operates in remote parts of Africa or how pharmaceutical companies think about their ethical obligations.
What about the oil industry? If we think of Shell’s legacy in Nigeria, it doesn’t seem there’s any ethical or environmental or financial framework to hold them accountable.
The case of Nigeria is in some ways the exact scenario I’m describing in terms of my fear. How many Nigerias can the world really sustain? It’s not only an environmental disaster; it’s been an economic disaster for the regions where the oil has been extracted. The people who live there have not seen any benefit. And I think it’s fair to say it’s been a source of significant amounts of corruption in Nigeria.
By contrast, we’re working in Ghana, a country that has a big offshore oil strike that could probably be tapped for the next 30 years. Indigenous organizations in Ghana have been fostering a national conversation about how can we not be Nigeria.
What Nigeria didn’t have when they struck that oil are the institutions we are trying to help create in Ghana. For example, there’s the Africa Center for Energy Policy, which is a think tank of young Ghanaians who are petroleum engineers and economists that have come back to Ghana and are trying to define the policy for the petroleum sector, challenge the parliament on the royalty arrangements, and even go so far as to write a petroleum law that would require 10 percent of all oil revenues be re-invested in agriculture annually.
And you challenge oil companies more directly here in the U.S., right?
We, along with many other partners, were involved in creating a provision in the Wall Street Reform Act that requires all oil, gas, and mining companies to report all revenue transactions—be they royalties, revenue, or service flows—to and from any country. It’s required of any company that’s registered on the New York Stock Exchange, and therefore supervised by the SEC.
This was approved by Congress when the Wall Street Reform Act went through. The SEC wrote a first draft of the rule, and it was challenged by the American Petroleum Institute to water it down and kill it. That went to federal court, and the court ruled there were some issues and that a new rule had to be written.
We have since sued the SEC to re-write the rule and get it issued. That went to federal court in Boston, and it was argued by the American Petroleum Institute and our lawyers. We’re waiting now for a ruling, which will have profound implications.
The interesting thing about all of this is that the mining companies have supported us and the petroleum companies have not.
Really? I’d figure their interests would align with Big Oil and not Oxfam.
The mining companies bought the idea that transparency is in their best interest. They feel they make effective contracts with governments, they’re paying their royalties, they’re paying their taxes, and therefore they have nothing to hide.
If they can open their books and show exactly what they’re doing and who they’re paying, then the onus is shifted to governments to actually be delivering for their citizens in terms of what they’re doing with that mining revenue.
Is it maddening that the American Petroleum Institute pushes back and the SEC essentially caves?
Yes. It’s the problem with our whole political process. It’s the perfect illustration of money in politics, and the problem in Washington today of powerful special interest groups.
What are the financial stakes in this fight? How much money are you talking about with regard to these petroleum companies?
One statistic that’s been shared with me is that on an annual basis, the global petroleum industry spends $650 billion on exploration. That’s not even on production.
We estimate that there are literally hundreds of millions of dollars flowing out of Africa now that largely has to do with tax evasion and tax avoidance. If you captured a portion of that money, you could actually create a foreign aid system that’s three or four times larger than what we have now.
So 60 million refuges, conflicts, epidemics, and lawsuits—how do you process this without losing your mind?
I think I take the long view. I started this work many years ago and was working in Latin America when Latin America was rife with dictatorships, and democracy was the exception rather than the rule.
I ended up working in country after country where democratic transitions took place, and I watched an entire continent become democratic. I watched their economies go from extraordinarily unequal to less unequal to actually building middle classes in ways that were previously unthinkable. I’ve seen them industrialize and build institutions that hold governments and the private sector accountable.
I’ve witnessed untold tragedy, but I’ve seen magnificent transformation at the same time. And I believe that we can hold the moral high ground and challenge institutions irrespective of their scale or resources.
With Twitter and the ubiquity of smartphones and the ability to make social issues go viral, is getting more people to hold the moral high ground easier?
In some ways, what we’re doing is using the tools of globalization to create a system of global accountability that never existed. In other words, we’re creating 21st century organizations and institutions that are tracking 21st century corporations. And if they don’t respond, their brands may be compromised.
We’ve become very conscious of our ability to challenge a brand. Brands are in effect ephemeral and they’re value-based. So if we have a stronger value premise than a major corporate brand, we can do a lot of damage with limited resources.
You’re a mission-driven organization taking on profit-driven corporations. Isn’t it inherently easier to have a stronger value base?
It’s about finding the forums to engage in—we may have the values, but we may be totally invisible. The question is: How do you make these value challenges visible?
How do you?
Well, for decades we were working very quietly in the poorest corners of the world. And we realized we were making change very incrementally. But we weren’t changing systems, we weren’t changing structures, and we weren’t changing policies. So we were in communities on a very micro-level and that has benefit. But these communities exist as islands of wellbeing in seas of turbulence and misery.
We realized that in order to effectuate real change, we had to have a different proposition. So we began to see the issue of poverty not in terms of the absence of public goods—clinics or schools—but rather as social exclusion.
For me, poverty as an absence of public goods is easy to grasp. It seems tangible in a sense, whereas poverty as social exclusion seems more theoretical.
The absence of public goods is the symptom. It’s manifested, it’s easy to see, and therefore it’s easy to provide a kind of response to.
To make the issue of social exclusion visible when talking about it, the most obvious example is apartheid. You had a government that basically said “If you are black, you are entitled to certain access to certain public goods of a certain quality, and you are entitled to live in a particular geography. And if you stray from that, you’re in violation of all sorts of statutes.”
They legislated social exclusion in a dramatic way that was visible to the world and challenged by the world.
Are there contemporary examples?
You can go to Peru, which is two-thirds indigenous population, and see the same thing, but it’s realized in a very different and more subtle way.
Why do the indigenous communities in the Sierra not have schools? Why are three-quarters of the people working for the agrarian bank, who are supposed to be providing loans to small farmers in the mountains, living and working in the capital and not in the mountains? Why is infant morality in Lima six to eight children per 1,000 and in the Sierra it’s 150 to 200?
What are the barriers that are limiting a better deal for these marginalized populations? In Peru, it’s about institutionalized racism, or it has been historically. And that’s breaking down, but there’s a legacy. It’s not exactly apartheid in South Africa, but it manifests in a lot of the same ways.
So how would you boil all this down into a few words to describe what you truly fear?
My fear is pernicious globalization.
Questions and answers have been edited for brevity and clarity.