Paul Holmes 01 Apr 2011 // 4:17PM GMT
Did companies learn nothing from McLibel? Or have the lessons of 20 years ago simply been forgotten? The question is raised by the legal action brought by Italian stationery company Pigna against the environmental activist group Terra! The short version of the story: Terra produced a report accusing the company of sourcing products from controversial paper producer Asia Pulp & Paper. Pigna sued, claiming slander and damage to its corporate reputation. It won. The court upheld the substance of the activists’ claims, but agreed that one element of the campaign—a banner unfurled at Pigna headquarters in Rome—was inaccurate. The general outline of the case, then, is eerily similar to the McLibel case. McDonald’s, after all, won its court case—although again, the judge ruled that almost all of the charges made against the fast food company were accurate. But it turned out to be a Pyrrhic victory (something Italians should surely understand better than most) the damage to the company’s reputation was far worse as a result of the lawsuit, which brought the accusations to a far wider audience and also created the impression that the company was bullying its opponents. There’s an argument to be made that McDonald’s took a decade or more to recover from its mistake. It’s obviously too early to predict the same fate for Pigna, but social media has the potential to amplify this kind of thing and mobilize people, and the fact that the company’s products are sold primarily to kids—environmentally sensitive kids—makes it even more vulnerable. In most cases, engagement is a more effective strategy than legal action in these cases. And as long as lawyers continue to overrule public relations people in this arena, they are going to continue to ask “can we win the legal case” rather than “what’s the best approach for our reputation?” Needless to say, the former is the wrong question.
Article tagsCorporate Reputation Crisis Management NGOS Sustainability