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GREENPEACE VS KIT-KAT

In 2010, Greenpeace uploaded a video to Youtube that shows an office worker opening a chocolate package Kit-Kat, from which comes an orangutan finger and begins to eat while blood stains. Its purpose was to generate awareness in the consumer about the death of orangutans caused by the felling of trees for the extraction of palm oil, one of the necessary ingredients for the manufacture of chocolate bars. As part of the campaign, the NGO also denounced Sinar Mas, the then-leading supplier of Nestlé palm oil.
The campaign went viral and Nestlé opted to ask Youtube to withdraw the video, arguing copyright infringement for the use of the chocolate logo, but by the time the video was removed, it had already gone viral. At the same time, they issued a statement denying their relationship with Sinar Mas. Both actions caused Greenpeace to start another campaign, but this time requesting a boycott against all Nestlé products. Thus, Greenpeace began to circulate the video again, but now on alternative platforms to YouTube, in addition to publishing Kit-Kat logos rewritten with the word “Killer” and images of orangutans.
Despite the fact that the censorship strategy against Greenpeace was not well received by consumers, Nestlé continued with the same strategy, threatening – for example – to block Facebook users who continued to make negative publications towards the brand. Afterwards, he asked that users who did not agree with it stop following the Kit-Kat page on Facebook and began to eliminate negative comments. Being social networks a means that can give companies the opportunity to create a more personal link with consumers, it also means a risk since it allows users to maintain greater vigilance over the actions of a company and that they can not simply censor.
Due to the elimination of comments, many users created accounts with the sole purpose of continuing to disparage Kit-Kat. In response, Kit-Kat took a confrontational attitude with users, raising a lot of controversy about how the company answered its consumers. The damage to the reputation of Kit-Kat was greater since the users evidenced the inattentive answers of the company, in addition to the environmental issue that caused the crisis initially.
Eventually, Kit-Kat gave in to the pressure. That is why, in 2013, Nestlé released a statement in which it set a series of environmental objectives to meet before 2020, among which was the use of sustainable palm oil. It is not the first time that a company is affected by GreenPeace activism, for example, in 2014 when Greenpeace launched a campaign against Lego for the trade agreements it had with Shell. Brands should not forget that social networks have made companies more vulnerable by becoming the means by which users ask them to be held accountable for their actions in an organized manner.

Do you think your company may be vulnerable to social media activism? Contact us to make a damage control and containment plan, you can write us at info@riesgospoliticos.com.mx.

 

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AIR EUROPE, A DISCRIMINATION CRISIS?

In 2013, a Spanish airline known as Air Europa had an incident with a wheelchair passenger after denying access for not carrying a passenger. The passenger Mara Zabala, of Spanish origin, complained to the employees of the airline for not allowing her to board the plane. The employees of the airline argued that, due to security policy, it was necessary for the passenger to have a companion who could assist her in case of an emergency.
Zabala, who by the way is an expert in social communication, used Twitter to denounce the company that forbade her to travel unaccompanied when other companies do. Under the hashtags “#denuncia #discapacidad #denuncia”, in a short time reached thousands of retweets, so the message of denunciation quickly gained popularity.
The tweet generated many criticisms of the company not only for denying the service to Zabala – when she had previously traveled alone with Air Europa – but also for not having facilities for people with reduced mobility that other airlines offered. The mistake of Air Europa was to ignore the damage to its image that comments on social networks were causing. The company chose to ignore the incident. The most he did was to reiterate to Zabala what his internal policy stipulated about passengers in need of additional assistance. In the absence of a communication strategy focused on mitigating the crisis, comments on social networks continued to escalate. Eventually, a problem in customer service escalated to touch a much larger issue: that of discrimination.
The problem escalated to attract the attention of Spanish legislators and, eventually, the European Commission. The Popular Party of Spain asked Air Europa to hold a meeting to discuss the incident. Given the refusal of Air Europa, the Spanish Popular Party presented the case to the European Commission through the Group of the European People’s Party.
Soon, the European Commission published a report on current legislation that allows airlines to request a passenger in a wheelchair to travel with a companion. The report stated that the legislation helps airlines benefit from forcing users with disabilities to buy another plane ticket. Based on this report, Zabala appealed to various organizations for the protection of persons with disabilities, stating that the legislation is clearly discriminatory. One of these bodies, the Spanish Committee of Representatives of Persons with Disabilities, demanded that Air Europa change its internal policy on its own initiative, since the current regulation does not guarantee them. For its part, the European Commission announced that the regulation of airlines in terms of security would be reviewed in order to address problems such as Zabala, but to date there have been no changes.
The case of Air Europa demonstrates that the omission of a problem is a problem in itself, sometimes just as damaging to reputation as making an equivocal decision about it. Starting with a tweet, the magnitude of the crisis escalated to reach the halls of national and supranational governmental instances. A strategy of silence before the problem contributed to increase the crisis since, for many users, it seemed that the company was not doing anything to solve the problem.

Do you have doubts about how to handle reputation crises? Write to info@riesgospoliticos.com.mx to provide you with the advice you need.

 

 

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HOW DOES TERRORISM IMPACT THE GLOBAL ECONOMY?

The Office of the United Nations High Commissioner for Human Rights points out that terrorism is understood to mean acts of violence directed against civilians while pursuing political or ideological objectives. Among the most shocking terrorist attacks related to Islamic extremism in the twenty-first century we can mention the attacks in New York (2001), Madrid (2004), London (2005), Paris (2015) and Brussels (2016).

The first attacks were claimed by Al-Qaeda, while the last two were carried out by Daesh . This group proclaimed itself Islamic State in 2014, when it announced the creation of the Islamic Caliphate of Iraq and Syria. Several factors contributed to the emergence and positioning of this group: the instability in Iraq following the war with the United States, which dismantled the Iraqi security forces, and the emergence of a civil war in Syria.

Daesh was characterized by disturbing the West through the publication videos where members of the group beheaded citizens of their countries, including journalists, soldiers and activists. It is considered by the United Nations responsible for abuses and violations of human rights and war crimes. Despite this, the emergence of Daesh mixes the interests of different actors in the region. On the one hand, this group identifies with the Sunni wing of Islam, aligning its struggle with that of Saudi Arabia against the Iranian Shia. Both the Saudis and the Iranians fight to maintain and expand their area of ​​influence in the Middle East. Likewise, Turkey and other peripheral countries have benefited from the illegal trade in oil, source of Daesh resources        , since they controlled the oil wells of the regions of Syria and Iraq that were under their control.

According to the Institute  for Economics & Peace , during 2018, terrorism had an impact of 10% on world GDP. In this sense, the losses in Iraq amounted to 24% of its GDP, placing it as the most affected country. Iraq is followed by Afghanistan, with losses of around 13% of its GDP, and third is Syria, with 6% of its GDP affected.

The impact of terrorism on the economy becomes more evident in developing countries. However, it affects both local markets and international markets because it creates uncertainty and, as a general rule, markets are adverse to uncertainty. Thus, foreign investment tends to be reduced in emerging countries affected by terrorism. Likewise, these attacks generate inflationary pressures, increasing the prices of consumables and raw materials, negatively impacting both exports and imports. On the other hand, globalization accentuates the affectations; for example, following the rise of Daesh ,    The oil market suffered speculation, which led to the increase in the price of oil for more than five consecutive months. In this sense, Daesh has been the terrorist group with the most economic resources in history, reaching an income of approximately 2 million euros a day thanks to illicit oil traffic, not to mention organ trafficking, kidnapping, robbery and trafficking. of archaeological pieces.

While it is true that the democratic forces of Syria, its allies and Russia have managed to recover the cities where Daesh maintained its operations centers, thereby reducing and significantly reducing its resources, the truth is that the ideology behind the terrorist group is not It has expired. That is what makes it dangerous that -for example- the United States has decided to withdraw its troops from Syria due to the supposed expiration of Daesh . It is very difficult to “win” an ideology and there is always the possibility that this group will regroup because the region is still vulnerable due to the instability that reigns in Iraq and in Syria. However, although the group has weakened, the lone wolves        they are the main threat to national security and those who can keep the ideology and goals of Daesh alive .

 

Do you need information about the consequences that terrorism can have for your company? Write to info@riesgospoliticos.com.mx to give you the advice you require.

 

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NEW SILK ROUTE, WILL CHINA DOMINATE THE WORLD?

In 2013, the President of China, Xi Jinping, presented a project that includes the development of infrastructure to facilitate the exchange of goods through land and sea corridors around the world. Currently, 80 countries participate in this project, whose official name is ” Belt and Row Initiative ” , referring to the ancient silk route used in the times of the Han Dynasty, in the first century BC. This initiative consists of the financing by the Chinese government of infrastructure around the world in exchange for political, commercial and strategic benefits.

China is the second economic power of the planet and, according to experts, it has the potential to become the most important commercial power in the world. China went from being one of the most impoverished countries in the world, after the policies of Mao Zedong “One Step Forward” and the “Great Cultural Revolution”, to be the main creditor of developing countries for the construction of infrastructure.

Among the objectives of the New Silk Road are: to facilitate regional development by eliminating barriers to trade, increase communications with neighboring countries and increase the flow of raw materials to China. To achieve these ends, we seek to create alternative maritime and land routes to those currently used, such as the Strait of Malacca and the Suez Canal, where 20% of world trade passes through.

It is estimated that this initiative could generate a market ten times greater than the United States. To fulfill this colossal goal, resources are available from the New Development Bank (composed of the BRICS countries: Brazil, Russia, India, China and South Africa), the Silk Road Fund and the Asian Investment and Infrastructure Bank (origin Chinese). Likewise, if the stated objectives are met, this initiative would add 56,000 MDD to Chinese exports and 61,000 MDD to imports, which represent 36% of world GDP, according to Euler Hermes consultancy reports . However, the International Monetary Fund warned that “resurrecting the silk route … can also lead to a problematic increase in debt, creating challenges for the balance of payments.”

One of the great advantages of these Chinese loans to finance infrastructure is that they are bilateral in nature. This allows loans, despite being more expensive, to be more advantageous and flexible compared to loans provided by multilateral institutions such as the World Bank. This makes them extremely attractive to countries that have restrictions in accessing international financial markets such as, for example, Venezuela. It is worth mentioning that, although these Chinese credits are given with fewer restrictions than others, the conditions always benefit the Chinese economy, for example, in the case of Ecuador it was stipulated that only Chinese companies would be used to develop the projects with this country.

According to Stephan Monier, Chief Investment Officer of Lombard Odier , China has found a way to acquire a central role at a global level while the United States is losing it due to the adoption of protectionist policies. Thus, this initiative has accentuated the economic rivalry between China and the United States, generating geopolitical frictions due to the capacity of influence that the Chinese government has gained in the international concert.

This new area of ​​influence is the result of the fact that, with the New Silk Road, China is reinforcing and increasing its presence in Asia and Europe, that is, places where the United States traditionally exerted influence. Likewise, China has considerably increased its presence in African countries, where it finances the construction of entire cities in, for example, Kenya, Guinea, and Ethiopia. Thus, this program has strategic implications for world politics since it could generate the legitimacy of Chinese actions, especially in the South China Sea, where there are tensions with its neighbors for their sovereignty, on the part of the international community.

There are still many elements to analyze in order to measure the degree of success of this project. However, the first steps have been taken, the world has to be prepared to take advantage of the advantages that this brings and, at the same time, protect against the threats that come with a project of this magnitude.

 

Are you interested in knowing what opportunities and risks your company has as a result of Chinese economic policies? Write to info@riesgospoliticos.com.mx to provide you with the advice you need.

 

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IS INDUSTRIAL ACTIVITY IN MEXICO LOW THREAT?

How many more pressures can the industrial activity of the country support? To the   shortage of gasoline , which has hit hard states with high industrial activity such as Jalisco, Guanajuato and Michoacán, join the strikes of the workers of the maquiladoras in Matamoros and, since January 14, teachers of section 18 of the CNTE they block railroad tracks that connect Puerto Lázaro Cárdenas with the rest of the country.

Lázaro Cárdenas is one of the most important ports in Mexico since its conditions allow the navigation of high tonnage vessels, which makes it a strategic port for the movement of products within the continent and with Asia. Recently, the port had an investment of more than 900 mp for the modernization of its facilities; In addition, companies such as Maersk – the most important Danish shipping company worldwide – have allocated millionaire resources for the construction of infrastructure that will allow them to increase and speed up their operations in the port.

However, all these efforts to put the Lázaro Cárdenas port at the technological forefront in favor of Mexico’s trade with the rest of the world are overshadowed by social conflicts that seek to sabotage their operations as a means of pressure to negotiate with the government.

Teachers of the CNTE demand salary increases. However, it is not clear if the problem belongs to the federal or state government. President López Obrador recently authorized a fund to alleviate what he has called mismanagement of resources by the state government. For his part, the governor of Michoacán, Silvano Aureoles, went to the Supreme Court of Justice to decide at what level of government he must meet the demands of the teachers.

Audits will be conducted to check if there are differences between federal contributions and payroll to teachers by the state government. The Comptroller of Michoacán, however, considers that this process will take between two and five months, with which the end of the conflict between federal and state authorities is far away and, even farther, the end of conflict with the teachers to free the railways.

It is worth noting that the true intentions of the CNTE are not clear. If it is a strategy to determine the disposition of the federal government to negotiate with union actors, or if it is a rupture between the CNTE and the government of Aureoles.

Despite the fund of one billion pesos authorized by the federal government to alleviate the discontent of teachers, the CNTE announced that it will not withdraw the blockades. If that was not enough, they joined the blockades of other education unions in Michoacán and section 22 of the CNTE began a work stoppage in Oaxaca in support of the former.

Juan Pablo Castañón, president of the Business Coordinating Council, declared that the losses amount to 1,500 million pesos per day for the blockades to the railways. Representatives of the automotive sector pointed out that the lack of supplies threatens to stop their manufacturing processes. This could have, as a side effect, workers stop receiving their wages if production stops. Likewise, there will be damages to the production chain of automobiles that are manufactured not only in Mexico, but in all those countries that depend on Mexican manufacturing to produce auto parts.

Ferromex, the largest rail transport company in the country, reported that this blockade prevents the supply of flour, corn and wheat to its customers. Could we see the shortage of cereals so important for the Mexican’s diet?

 

Do you need to be prepared for a situation of greater political risks due to social and labor conflicts in Mexico? Contact us at info@riesgospoliticos.com.mx .

 

*Note. After having reached an agreement between authorities and the teachers during the early hours of January 31, 2019, at the time of publishing this entry is waiting for teachers to remove the blockades to the railroads.

 

 

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