Nokia as an Environmental Policy Actor: Evolution of Collaborative Corporate Political Activity in a Multinational Company

Authors


  • I am grateful for the financial support of the Finnish Environmental Cluster Research Programme and Technology Industries of Finland (YPSE Project) and the Jenny and Antti Wihuri Foundation. Parts of the study have been presented earlier and the article has benefited especially from comments by Minna Halme, Eva Heiskanen, Sylvia Karlsson, Kristine Kern, Anna Kärnä, Per Mickwitz, Johannes Stripple, Helena Valve, Steven Wolf and the anonymous JCMS referees. A draft of this article was presented at the 20th World Congress of the International Political Science Association (IPSA), Fukuoka, Japan, 2006. I would like to thank especially Professor Wyn Grant for valuable and encouraging comments on the draft. In particular, I would like to acknowledge the contribution of all the interviewees and other informants, who gave their time and insights so generously. My warmest thanks go to the Nokia Corporation for its active contribution and interest in the successful accomplishment of the YPSE project. It should be stressed, however, that the views presented here are those of the author.

Petrus Kautto
Research Programme for Environmental Policy
Finnish Environment Institute
PO Box 140, FIN-00251 Helsinki, Finland
Tel +358 20 490 2335, Fax +358 20 490 2382
email petrus.kautto@ymparisto.fi

Abstract

Although companies have been studied quite widely as political actors, the majority of this research has treated companies as a homogeneous group. This article inquires how Nokia, a multinational corporation, has anticipated legislation initiatives and how it has tried to influence policy development in interaction with industry associations and EU institutions.

Introduction

Do political institutions or multinational corporations rule the European Union? Although the impact of business on public policy has been widely recognized, studies on the direct relationships between large companies and government are still few in number (Coen and Grant, 2006, p. 14). This article sheds light on this subject by inquiring how Nokia, a multinational mobile devices corporation, has anticipated legislative initiatives and how it has tried to influence policy development in interaction with industry associations and EU institutions.

In recent years, the Commission has emphasized the competitiveness of the EU to such a degree that it has even been stated that ‘everything that cannot be Lisbonized will be terminated’ (Radaelli, 2007, p. 195). This has made the Commission more business friendly, and a highly successful company such as Nokia is an example of a desired collaborator. For its part, Nokia decided to break partly away from industry's traditional co-operation within policy-making and adopt a more proactive and collaborative approach. Instead of the challenging and attacking approaches, it has adopted more constructive strategies.

This development in the role and strategies of Nokia is analysed in three cases of environmental policy preparation: first, the preparation of the RoHS1/ WEEE Directives;2 second, the preparation of the EuP Directive;3 third, the IPP pilot project on mobile phones. These are all shifting the focus of EU environmental policies towards a product-oriented approach. In addition, this new policy field is based on more general ideas on governance (Jordan and Schout, 2006; Mayntz, 2006), opening up new opportunities for stakeholder influence on policy-making. The examination of three consecutive policy processes also enables an analysis of the evolution of more collaborative corporate political activity in the company. The article is based on a combination of different data collection methods: documentary analysis, interviews and participant observation.

Section I presents the analytical framework, which combines previous policy and organizational research. Following this, section II briefly introduces the empirical setting, Nokia and product-oriented environmental policies, as well as the methods and data used. In sections IIIV the results from three cases are presented and discussed. In the final section, Nokia's development as an active player in policy-making is discussed and conclusions are drawn for future policy-making.

I. Politics of Business and the European Commission: A Symbiosis

Although business as a political actor has been studied quite widely in the last 30 years, the majority of this research has a tendency to look at the relations between state and trade associations. In such a perspective, companies are treated as a homogeneous group (for reviews of the business and government research see, e.g. Coen and Grant, 2006; Wilson, 2006; Martin, 2000; Schneider and Tenbuecken, 2002). On the other hand, the management literature often considers the regulator as ‘an out-there stakeholder which technically and legally constrains business’ (Fineman, 1998, p. 954). However, since the beginning of the 1980s a number of studies have recognized the increasingly direct relationships between individual companies and government and ‘the multiple opportunity structures available for companies’ both in the EU and on national levels (e.g., Coen, 1997; 2005; 2007; Coen and Grant, 2006; Levy and Newell, 2005; Mazey and Richardson, 2001). As Coen and Grant (2006) point out, globalization and supranational governance structures strengthen this trend. Yet, the number of empirical studies in this area is still quite limited.

The lack of attention to individual companies by policy researchers, and to regulators by management researchers, does not mean that these fields could not provide useful tools for the study of business–government interaction. In this article, I draw especially on previous research on the interaction between policy-makers and interest groups as a symbiotic relationship (e.g., Mazey and Richardson, 2001) and on categorizations of strategic corporate responses to governmental action (McKay, 2001; Oliver, 1991). Mazey and Richardson (2001) (see also Coen and Grant, 2006, pp. 17–19) stress that the Commission typically uses interest groups and companies as sources of information, support and legitimacy. These ties have been strengthened, as the Commission has institutionalized a system for the consultation of interest groups to reduce the risks of resistance and policy failures. For their part, the interest groups and large companies seek to establish close connections to regulatory agencies. For business, this symbiotic relationship serves as a means to access information and a way of influencing the policies in order to avoid risky and unexpected changes in their environment.

In organization studies, strategic responses to governmental action by companies have been analysed by, e.g., McKay (2001) and Oliver (1991). They stress that while organizations are affected by their environments, they are also able to respond to these pressures actively. In their studies, Oliver (1991) and McKay (2001) have distinguished nine different ways of responding to external organizational pressures. These are briefly presented in Table 1. In addition to the differences in organizational responses, McKay(2001, pp. 633 and 651–2) stresses their timing (anticipatory, initial, long-term) and the use of dual strategies.

Table 1.  Forms of Organizational Responses, Distinguished by Oliver and McKay
Organizational responseEssential features
  1. Source: Oliver (1991, pp. 145–57) and McKay (2001, pp. 636–41).

AcquiescenceConscious intent to conform, for self-serving reasons
CompromiseBalancing, pacifying and bargaining
AvoidanceAttempt to prevent the need to conform to an external pressure by concealing, buffering and escaping
SafeguardingProtection of an external regulatory pressure and encouraging use of the pressure by stakeholders
Pre-emptingUsing two strategies concurrently, one within and one outside a regulation, to circumvent aspects of the regulation that constrain an organization's decision-making latitude
Time shiftingChanging the time frame either by delaying or accelerating
ReshapingModification of regulation to provide a closer fit with the organization's needs and interests
DefianceThe rejection of norms and expectations through the tactics of dismissing, challenging and attacking
ManipulationPurposeful and opportunistic application of the tactics of co-opting, influencing or controlling upon an institutional pressure

Timing of organizational responses is also emphasized by Mazey and Richardson (2001, pp. 219–20). At the beginning of the policy process, ‘the Commission official [is] sitting at his or her desk with the blank sheet of paper’ and the uncertainty on the content of the planned legislation is at its height. Thus, ‘lobbying resources allocated to [. . .] early stage of EU agenda-setting are likely to produce greater returns than resources allocated to lobbying later in the policy process’.

Finally, by so-called ‘venue shopping’, the interest groups and companies create new opportunities for lobbying (Baumgartner and Jones, 1991; Mazey and Richardson, 2001; Peters, 2001, pp. 88 and 91). The interest groups do venue shopping when they decide which government institution to lobby and into which arena they try to shift the debate over public policy. As an institutionalized form of multi-level governance, the EU system has created several new channels for corporate political action (Coen, 2005; Bouwen, 2004; Richardson, 2000). Especially the Commission has been characterized as being incredibly open for lobbying (Mazey and Richardson, 2001, p. 221). Lastly, these transitions of power between national and EU institutions have altered the relative status of interest groups and companies and increased their autonomy from national states (and from national industry associations).

According to Peters (2001, p. 81), Euro-organizations tend to function ‘more as clearing houses of national interests and organizations than as the aggregators of those interests’. For fear of alienating members, industry associations often end up in least-common-denominator positions (i.e., adopt low standards) (Martin, 2000, p. 14) or even focus only on areas where common cause already exists (i.e., avoid internally confrontational topics) (Coen and Grant, 2006, p. 23). In these circumstances, individual companies and national organizations have incentives to venue shop and lobby for their own favourite policies even after a ‘unified position’ has been formulated. As Mazey and Richardson (2001, p. 227) put it, ‘promiscuity, rather than monogamy, is more rational interest group behaviour’.

II. The Empirical Setting

Nokia and Environmental Product Policy

Nokia is the world's leading manufacturer of mobile devices, with an estimated 38 per cent share of the global device market in 2007. In all, it has approximately 112,000 employees and net sales of €51 billion (2007). In 2008, Nokia was ranked 69th in the Forbes (2008) list of the world's largest public companies, and is by far the largest European company within its industry: technology hardware and equipment. Nokia has more than 100 full-time employees working with environmental issues. It also has a Representative Office for EU Affairs in Brussels. One thing that has enabled Nokia's increasingly active role has been the growth of Nokia's environmental organization at the end of the 1990s. This was done partly in order to anticipate the forthcoming legislative requirements and it made it possible for certain persons to concentrate on the field of environmental policy-making. The case of Nokia exemplifies how a resourceful multinational company can anticipate and influence legislation under preparation and finally, since Nokia is a highly important client for many other companies in the electronics industry, its active role in the formulation of European legislation has wider significance. Moreover, participation in the formulation of legislation at a European level requires a great deal of resources, which only a few companies have at their disposal.4

The electrical and electronics industry, including Nokia, has in recent years been a target of special attention regarding environmental product policy (or integrated product policy, IPP). IPP is a new policy field, which has been developed in the EU since the end of the 1990s (see, e.g., Scheer and Rubik, 2006; Commission, 2001; 2003a). The key principle behind IPP is that products are increasingly viewed from a life-cycle perspective: environmental burdens are considered from extraction of raw materials to disposal of products. Three new directives have been approved in 2003–05 as part of the implementation of IPP, with an aim to reduce the negative environmental impacts of electrical and electronic equipment and energy-using products. The requirements of the Directives apply to the design, manufacturing and waste management of these products. They carry implications not only for the manufacturers of final products or trademark owners but also for importers, suppliers of materials, components and subassemblies and contract manufacturers, in other words the whole product supply chain. In addition to the Directives concerning the entire electrical and electronics industry, the mobile phone was selected as a target product for the first voluntary IPP pilot project exercise established by the Commission.

Methods and Data

This article focuses on the influence and organization of corporate political activity in the formation of environmental product policy in the EU. What makes this kind of study both challenging and interesting is the sensitive nature of the topic of corporate political influence for politicians and civil servants. The main question addressed is how Nokia, a multinational Finnish mobile devices corporation, has anticipated legislative initiatives and how it has tried to influence policy development in interaction with industry associations and EU institutions. The answer is sought via three case studies on: first, the preparation of RoHS / WEEE Directives; second, the preparation of the EuP Directive; and third, the IPP pilot project on mobile phones.

Several sources of data and data collection methods were utilized. The main sources of information are briefly presented in Table 2. The first two cases utilized mainly interviews and documents as their data, whereas the third drew on observation and even participation as its key data collection methods. The first case is less closely documented than the second and third, and it serves more as a background for them than as an independent study. In all cases, the interviews were recorded, transcribed and analysed thematically. In the case of the IPP pilot exercise, the meetings of the Nokia IPP pilot project group were also recorded.

Table 2.  Key Sources of Data Utilized in Three Cases
 RoHS & WEEE DirectivesEuP DirectiveIPP Pilot Exercise
  1. Source: Author's own data.

InterviewsFour (Representatives of Nokia)12 (Representatives of industry associations, ministries, Nokia, the Commission, etc.)13 (Nokia representatives, including repeated interviews with the project manager)
ObservationsA COM workshop on the EEE draft directiveNine Nokia's internal IPP Project Group meetings in 2005–06, final meeting of Nokia, COM and IPP pilot project stakeholder group in November 2007
Other dataDocuments, several shorter discussions, stories published by the environmental news service ENDS Environment DailyInternal and public documents, personal emails, several shorter discussions, stories published by the ENDS Environment DailyInternal and public documents, several shorter discussions, stories published by the ENDS Environment Daily, participation in several meetings on the IPP pilot product exercise at the Finnish Environment Institute, draft versions of reports by Nokia

III. All Those Wasted Years? The Preparation of the RoHS and WEEE Directives

The RoHS Directive restricts the use of lead, mercury, cadmium, hexavalent chromium, polybrominated biphenyls and polybrominated diphenyls in certain electrical and electronic products. The objectives of the RoHS Directive are twofold: on the one hand it is an internal market directive which aims to prevent barriers to trade and distortion of competition that may be caused by differences in national measures and regulations. On the other hand, its environmental and health objective is to ‘contribute to the protection of human health and the environmentally sound recovery and disposal of waste electrical and electronic equipment’ (RoHS Directive, Art. 1).

In the WEEE Directive, the responsibility for the waste management of discarded products has been placed on the producers (manufacturers and importers). The main objectives are to prevent the generation of electric and electronic waste and to ensure a maximum recovery of waste. Another aim is to improve the environmental performance of economic operators throughout the whole product life cycle of electrical and electronic products. The Directive is thus based on the principle of extended producer responsibility (Lindhqvist, 2000).

Originally, there were plans for only one Directive including the requirements of both the RoHS and the WEEE Directives. Throughout the whole process, these Directives were prepared in close connection to each other. Thus, they are also treated here as one case.

Nokia prepared for the RoHS requirements ever since the 1990s by first being involved in the discussions on the contents of the Directive, but especially by changing its own operations through various projects. During the years 2000–05, the products of all business groups were checked for compliance with the RoHS requirements. Nokia had, however, started proactive work in anticipation of the RoHS requirements even before this, by for example studying alternatives for lead-free soldering. The RoHS requirements have also given increasing attention to the general management of material data. Nokia has developed its own ‘Nokia Substance List’ on the substances the use of which is forbidden or restricted in the company's products. The list is based on legislative requirements (e.g. RoHS Directive) but also includes some stricter requirements set by the company itself. The list is used both internally in product development projects and in operating with subcontractors and contract manufacturers.

During the preparation of the RoHS and WEEE Directives, Nokia's corporate approach towards environmental policies was still under development. As such, there was agreement that integration of environmental issues into production and product development could reduce costs. However, there was some hesitation on the strategy towards RoHS and WEEE in the beginning. The industry associations within the field (at the time e.g., ECTEL)5 were still quite doubtful of the importance of environmental issues, and as the companies let them handle the discussions at the early stages of the preparation of the Directives, some of the moves made during the preparatory discussions with the Commission were later termed ‘dreadful mistakes’ by Nokia representatives. The industry in general has perceived the unclear requirements (Orgalime, 2006; Kautto and Kärnä, 2006) and incoherencies of implementation in the Member States as the main problems, but from Nokia's point of view the lack of incentives for front-runners has also been problematic (Sormunen, 2006).

Several years before entry into force, Nokia anticipated the requirements of the WEEE directive and improved the recycling and disassembly capacities of its products. The company has, among other things, developed take-back systems for mobile phones together with telecommunication operators (see Nokia, 2007).

In the formulation of the WEEE Directive, the Commission and the industry associations had long been in favour of a model for producer responsibility based on collective financing. Studies in the field have however shown that placing financial responsibility on producers individually is the most important precondition for the effective achievement of the objectives of producer responsibility (e.g., Tojo, 2004). An ad hoc group (see Coen, 2005; Coen and Grant, 2006, pp. 23–4) called Electronics Coalition, formed by certain major corporations (including Nokia), managed to include in the Directive the option of individual producer responsibility. However, the incoherencies of implementation in the Member States and the lack of incentives have remained a problem.

It is not possible to go into the details of RoHS and WEEE processes here, but Nokia's overall conclusion on the preparation of the Directives was that the industry's contribution and co-operation was not as proactive as it should have been. This was reflected later in the preparation of the EuP Directive and especially during the IPP pilot project. The organizational response selected by Nokia in the later phases of preparation can be characterized as reshaping, in terms of the categories distinguished by Oliver (1991, pp. 145–57) and McKay (2001, pp. 636–41). Even more important probably was that the disappointments during the process led to a distrust in defiance as a sustainable political strategy.

IV. Preparation of the EuP Directive

The EuP Directive is the first directive requiring the incorporation of environmental considerations into product development and it has been characterized as ‘a breakthrough in EU product policy’, ‘a major contribution to sustainable development’ (Commission, 2003c) and as ‘an enormous cultural change’ (ENDSEnvironment Daily, 2001). Its main aims are to ensure the free movement of energy-using products within the EU and to improve the overall environmental performance of these products and thereby protect the environment. From the point of view of environmental governance, the EuP Directive includes several interesting and new features. It uses the companies placing energy-using products on the market as ‘regulatory surrogates’, i.e. it makes them responsible for their subcontractors and their subcontractors' subcontractors (Gunningham and Sinclair, 2002; Vedung, 1997, p. 153). Besides, it utilizes what are known as the New Approach and the Global Approach (see Commission, 2000). The main idea of the New Approach is to limit legislative harmonization to essential requirements and set technical specifications in harmonized standards. The Global Approach lays down the general guidelines for conformity assessment that are used in the New Approach directives. In the case of the EuP, a crucial role in conformity assessment is given to environmental management systems and self-assessment procedures.

Like the preparation of the RoHS and WEEE Directives, the preparation of the EuP Directive was a drawn-out and complicated process (see Commission, 2003b, pp. 13–14; Commission, 2005a; Kautto, 2007). The EuP proposal itself was a merger of two initiatives: one on the impact on the environment of electrical and electronic equipment (the EEE draft directive) and the other on energy efficiency requirements for end-use equipment (the EER draft directive). Despite its clear environmental objectives, the EuP proposal was not prepared in the environmental directorate-general (DG Environment, DG ENV) of the Commission. The EEE draft directive was originally prepared by DG Enterprise (DG ENTR) and the EER draft directive by DG Energy and Transport (DG TREN). When the EuP Directive was finally approved by the Council and the Parliament in April 2005, the most crucial things remained as the Commission (COM) had proposed them. Thus, the main focus here is also the preparation in the COM. However, as the final character of the EuP will be created through the implementation measures and standards, the struggle on the content of the Directive will continue in the coming years.

Nokia's Political Activity During the Preparation

As a leading company in its field, Nokia was invited to the preparation of the EEE Directive already at the beginning of the formal consultation. It seems that Nokia was successful in attaining its objectives and it played quite an important role in the preparation, especially during the most important period, the preparation in the Commission. Of course, that does not mean that Nokia or organizations connected to it were the only important actors in the process.

Nokia was very active through the whole preparation process and Nokia representatives participated actively in the meetings and workshops organized by the Commission. In addition, it was known that Nokia's top management had good contacts with the European Commissioner for Enterprise and Information Society, Mr Erkki Liikanen, and his cabinet. These contacts to the cabinet were used by Nokia and, besides, the European industry associations and other multinationals (e.g., Electrolux, Hewlett-Packard, IBM, Intel, Philips, Sony and Sun Microsystems) co-operated with Nokia to gain access to the cabinet more easily. Bilateral meetings of Nokia and the Commission were organized especially when there were difficulties to find a consensus within industry associations.

The co-operation continued also during the co-decision procedure in the Council and the European Parliament. During the first reading in the European Parliament, the rapporteur was a Finnish MEP, Astrid Thors. At that time, her former assistant was working at the Nokia Representative Office for EU Affairs in Brussels. Thus, Nokia remained an important venue for industry associations and other large companies.

As stated earlier, interest groups and large companies pursue venue shopping when they decide which government institution they should lobby and into which arena they should try to shift the debate over public policy. Nokia selected ‘promiscuity, rather than monogamy’, as a way of lobbying (Mazey and Richardson, 2001, p. 227; Coen, 2005). But although it used several points of access, the main venue selected was EICTA (European Information, Communications and Consumer Electronics Technology Industry Associations). Within EICTA and in addition to it, Nokia had a lot of co-operation with other active multinationals. EICTA was also the main venue that Nokia used to get its messages to Orgalime (the European Federation of National Industry Associations representing the European mechanical, electrical and electronic and metal articles industries): according to an industry association representative interviewed, ‘[it is] also very active on the EICTA side, so their view comes back to the Orgalime level through a product group in EICTA’. In their direct contacts, European industry associations and Nokia skilfully utilized the competition, conflicts and bureaucratic politics within the Commission (Christiansen, 2001, p. 103) by dealing at the same time with the Commission services (the DG ENTR) and with the Cabinet of Commissioner Liikanen.

In addition to these main venues selected, Nokia made some use of the Confederation of Finnish Industry and Employers (TT) as a channel of influence to get its message to Orgalime and to the COM. Nokia also represented the Federation of Finnish Electrical and Electronics Industry (SET) in EICTA. As Finnish ministries were willing to ‘respect the Commission's right of initiative’ during the early stages of preparation, and the Council was rather like-minded with the COM, Nokia bypassed to a large extent the national-level actors in its policy-making. Considering the exceptional importance of Nokia for the Finnish national economy6 and therefore for the Finnish government, this is somewhat surprising. It reflects a difference between large and small Member States and their assessed effectiveness as lobbying arenas in European policy-making (Grant, 2000, pp. 106–15). On the other hand, there was no need to mobilize the nation-state, as the process evolved in the right direction without substantial problems.

What Issues were Disputed During the Preparation and How Did Nokia Respond to These?

From Nokia's point of view, there were four main issues at stake during the preparation of the EuP directive. The most crucial issue for Nokia and the whole industry was the legal basis of the Directive. Use of Article 175 of the Treaty establishing the European Community would have allowed the Member States to issue stricter national requirements whereas the use of Article 95 (at least in principle) means harmonization of laws. The Commission used Article 95 of the Treaty (on approximation of laws) both in the drafts and in the proposal. However, it was widely discussed during the preparation process whether Article 175 (on environment) should be the legal basis (for example, a critical analysis of the EEE draft proposal by Hunter et al., 2001, strongly opposed the use of Article 95 as the legal basis for the Directive). Later, one of the proposed amendments of the European Parliament was the use of both of these articles as the legal basis. Thus, the discussion on the right legal basis continued through the whole preparation process, but the legal basis remained unchanged. The organizational response selected by Nokia can be characterized as safeguarding. Nokia encouraged the Commission to use Article 95 as the legal basis.

Secondly, the proposed requirement for compulsory full-scale Life Cycle Assessment (LCA) was consistently opposed by Nokia.7 For years, Nokia had already worked with life-cycle assessments concerning its products. Despite this work, there were (and still are) a number of uncertainties and problems connected with the assessments. The availability of data on components and raw materials used in them varies. The available information is often so inexact that it does not, for example, reveal differences in material choices, which tend to be drowned under general informational uncertainties. The effective use of LCAs in product development is also limited by the slowness of the analysis and the complexity of the results for product designers who may not be experts in environmental issues. On this issue, the responses of Nokia were reshaping and pre-empting: it supported life-cycle thinking as a basis for environmental policy, but concurrently it opposed the requirement for full-scale LCA, as that would have remarkably constrained its decision-making latitude. Thus, the aim was to modify the proposal to provide a closer fit with its needs and interests (McKay, 2001).

The third issue of dispute was whether the requirements on large companies and small and medium-sized enterprises (SMEs) should be similar. Some associations of SMEs claimed that, for example, the requirements for management of material data were too labour intensive for SMEs and they should only pertain to large companies. Nokia strongly opposed different requirements and argued that these would make it impossible for large companies to use SMEs as their subcontractors. Here the response selected by Nokia can again be characterized as safeguarding.

Fourthly, the use of environmental management systems (EMS) in conformity assessment was widely discussed. The environmental non-governmental organizations (NGOs) opposed the use of EMS in conformity assessment in general, whereas the industry promoted the use of both EMAS8 and ISO 14001-based EMS. For some time, the Commission defended the use of EMAS as a European system. In addition to the requirements of ISO 14001, EMAS requires the undertaking of an externally verified environmental review and the publication of relevant information to the public and other interested parties. EMAS is recognized only in EU countries, whereas ISO 14001 is an international environmental management standard. Since the end of the year 2000 Nokia has had ISO 14001-based EMSs in all of its production sites. It also requires ISO 14001 from all of its subcontractors. Thus, and because it is a globally operating company, the requirement for EMAS was unacceptable for Nokia. Table 3 describes how the EMS issue was handled in two EEE draft proposals and in the final proposal by the Commission and illustrates how the industry was able to modify the requirement. Thus, the response by Nokia and EICTA was reshaping, i.e., modification of the proposals to provide a closer fit with their needs and interests.

Table 3.  The Main Passages Dealing with the use of EMS in Conformity Assessment in Two EEE Draft Proposals and in the Final Proposal for the EuP Directive by the Commission
 EMS in Conformity Assessment
  1. Source: Author's own data.

Draft EEE proposal (September 2000)EMAS and ISO 14001 not mentioned as means for presumption of conformity
Draft EEE proposal (February 2001)‘EEE designed by an organisation registered according to the Community eco-management and audit scheme[EMAS][. . .] shall be presumed to comply with the essential requirements’
Proposal for EuP (August 2003)‘If a EuP [. . .] is designed by an organisation registered in accordance with Regulation (EC) No 761/2001 of the European Parliament and of the Council [EMAS][. . .] and the design function is included within the scope of that registration, the environmental management scheme of that organisation shall be presumed to comply with the requirements [. . .]’. ‘If a EuP [. . .] is designed by an organisation having an environmental management system which includes the product design function and which is implemented in accordance with harmonized standards [ISO 14001][. . .] that environmental management system shall be presumed to comply with the corresponding requirements [. . .]’

In addition to these issues of controversy, the need for this kind of directive was also called into question during the preparation at the Commission. In public, the industry associations were in principle supportive of the preparation of the Directive, but behind the scenes also more critical stands were taken. Only a couple of months before the final proposal was issued by the Commission in August 2003, DG Enterprise was ready to consider the interruption of the preparation of the Directive. However, it seemed to be clear that in that case either DG TREN or DG ENV would prepare a directive incorporating environmental issues into the product development process. As a result, based on the discussions between EICTA and DG Enterprise, EICTA and its key members (including Nokia) assessed that it was better to have an Article 95-based directive prepared by DG ENTR than to possibly have an Article 175-based directive prepared by DG ENV. In that sense, the preparation of the proposal for the EuP Directive can be seen as an attempt to capture or hijack product-oriented environmental policy from DG ENV (ENDSEnvironment Daily, 2000; on business ‘hijacking environmentalism’ see Welford, 1997).

The EuP Directive was finally approved by the Council and the Parliament in April 2005. It turned out that the most crucial concerns of the European industry were taken into account, and in these areas of concern the Directive was in line with the proposal by the Commission. The Directive was based on Article 95 and a full-scale Life Cycle Assessment was not required. In addition, the Directive allows the use of international management standards (not only EMAS) in conformity assessment. The most important addition to the Commission proposal was made by the Parliament, which required the incorporation of a list of priority products9 for which the Commission should prepare implementing measures, and an obligation for authorities to take action if a product is not compliant with the Directive and implementing measures. Still, the lobbying resources allocated to the preparation in the Commission had produced favourable returns (Mazey and Richardson, 2001, pp. 219–20).

To summarize, Nokia utilized several parallel issue-based strategic responses during the EuP preparation: while it (together with industry associations and other large companies) successfully pre-empted and reshaped the early drafts of EEE, it at the same time assumed that the incorporation of life cycle-based environmental considerations into product development process will be required in the future. Thus, it changed its own ways of action to conform to these requirements when they come into force (for years, one of the key focus areas of Nokia's environmental strategy has been design for environment, see Nokia, 2001).

V. Making Product Policy and Building Trust: Nokia's Mobile Phones as an IPP Pilot Project

In its Communication on Integrated Product Policy (2003a, pp. 15–17), the Commission stated that it ‘will carry out a number of pilot projects to demonstrate the potential benefits of IPP in practice’. In summer 2004, the Commission announced that it would launch two pilot projects, one of which was centred on mobile phones and would be headed by Nokia (Commission, 2004; Nokia, 2004). The project started officially at the turn of 2004–05, and it was carried out in the following stages:

  • 1Analysis of the environmental impacts of the product throughout its life cycle (∼10/2004–2/2005) (Nokia, 2005a);
  • 2Identification of options to improve the environmental impact of the product (∼3–6/2005) (Nokia, 2005b);
  • 3Analysis of the potential social and economic effects of the improvement options identified at stage 2 (∼7/2005–4/2006) (Nokia, 2006);
  • 4Selection of viable options for improvement and establishment of an implementation plan (∼12/2005–5/2006);
  • 5Implementation (∼5/06–01/08) and its analysis (∼01/08).

In addition to Nokia and the Commission, the other participants in the project included Motorola, Panasonic (mobile phone manufacturers), AMD, Epson, Intel (component manufacturers), Department for Environment, Food and Rural Affairs (DEFRA, UK governmental organization), Finnish Environment Institute (SYKE) (research institute), France Telecom/Orange, Telia Sonera, Vodafone (telecom operators and retailers), Umicore (recycler), WWF (environmental NGO) and BEUC (consumer organization).10 I observed the pilot project on mobile phones through Nokia's internal project group during the first four stages. The pilot project is still under way, but conclusions can already be drawn.

For Nokia, participation in the project provided an opportunity to present the environmental work that it has carried out for years and which has been regarded as significant within the company. This has further strengthened the image of Nokia as a company with a high commitment to environmental issues11 and built trust within the Commission. Another advantage of the project has been that Nokia has had the chance to voice problems and development ideas concerning environmental regulation in the electronics sector. Since Nokia has, at the same time, shown careful consideration for environmental issues in its own operations, the critique that the company has presented has been heeded. Nokia has had several opportunities to express its views on the areas in which the WEEE and RoHS Directives ought to be revised. This action has apparently borne results, since the Commission mentioned in its Communication on the implementation of the Lisbon Strategy (simplifying regulation) these directives as ones that need to be reviewed (Commission, 2005b, p. 51).

In addition, as the organization heading the project, Nokia has been the only organization that has had a clear overall view of the material produced in the project. As the author of the reports, the company has been, at least to some extent, able to choose which issues are emphasized in them. Among these aspects have been:

  • • The problems in obtaining the information required for life cycle assessments (LCAs) and in the reliability of the available information are brought up in the chapter on the EuP Directive. Instead of full-scale LCAs for each and every product, Nokia has been able to promote the idea of life-cycle thinking or Key Environmental Performance Indicators (KEPIs, see Singhal et al., 2004) as better premises for environmental improvements.
  • • The Commission's Communication on Integrated Product Policy (2003a, p. 5) states that IPP incentives should ‘reward those companies that are innovative, forward-looking and committed to sustainable development’. Formulation of this type of policy is problematic when carried out together with industrial organizations, which are mainly interested in searching for the lowest common denominator (Martin, 2000, p. 14; Peters, 2001, p. 81). The IPP pilot project has been an opportunity to emphasize the establishment of ‘best practices and front-runners’ as a starting point for the formulation of the requirements for environmental product policies.
  • • Moreover, the pilot has been an opportunity to generally illustrate the problems of integrated product policy in the case of complex products.
  • • Last but not least, the Nokia and mobile phone industry were able to demonstrate that environmental improvements are made within the sector on a voluntary basis and that the environmental impacts of mobile phones are quite moderate in comparison to many other energy-using products (Nokia, 2005a, pp. 36–7). This was an important message because, at the time of the project, the Commission was considering which product groups should be covered by the EuP implementation measures.12

Participation in the IPP pilot project continued the proactive approach that Nokia had assumed, according to which it is better for the company to take part in influencing the contents of the requirements than to simply adjust to regulations that others have laid out, which might be less suitable for practical business operations and environmental management. Underlying Nokia's proactive role has been a shared view in the company that policy requirements should be influenced at the earliest possible stage.

Conclusions

In this article, the preparation of the RoHS and WEEE Directives, the EuP Directive and the IPP pilot exercise have been examined from the perspective of Nokia, a multinational Finnish mobile devices corporation. Nokia's activities have been largely based on co-operation with the industry within the framework of the EICTA, although in some cases Nokia's views have differed from those of many other companies. In such events, Nokia has formed ad hoc coalitions with other major corporations and organizations operating in the field. Nokia has so far been one of the few companies in the electrical and electronics industry that have lobbied for the collection of material data also beyond the scope of existing legislation, i.e., the RoHS requirements.

The RoHS, WEEE and EuP Directives and the IPP pilot exercise can be seen as part of a shift in the focus of environmental policy and management from cleaner production processes to greener products. So far this has mainly occurred through more or less voluntary initiatives of companies. However, the new directives signify the institutionalization of this development on a new level, into regulative structure (Mac, 2002, p. 262). It can undoubtedly be said that individual firms have played an essential role in the formulation of this field of public policy, especially in the cases of the EuP Directive and the IPP pilot, but also in the later stages of the WEEE Directive preparation (Mazey and Richardson, 2001; Coen and Grant, 2006, pp. 17–19).

Nokia's view of the industry's co-operation as insufficiently proactive during the RoHS and WEEE processes and the unclear requirements of these Directives was later reflected in the preparation of the EuP Directive and especially during the IPP pilot project. Instead of adopting the challenging and attacking approaches of industrial associations, Nokia adopted more constructive strategies, such as reshaping, pre-empting and, to an increasing extent, safeguarding. This has enhanced the trust in Nokia within the Commission, which is particularly important as the Commission is increasingly favouring certain groups and companies over others due to lobbying overload (Hix, 2005, p. 223; Wilson, 2006, p. 39; Coen and Grant, 2006). The collaborative approach adopted by Nokia can be expected to bring further positive results in the future and the Commission has already recognized the need to revise the RoHS and WEEE Directives. At the same time, Nokia has changed its own operations to conform to the requirements when they come into force.

A summary of the development of Nokia as an environmental policy actor is presented in Table 4. Generally, the following aspects have characterized the environmental policy-making in Nokia in the 2000s:

Table 4.  Summary of the Development of Nokia as an Environmental Policy Actor
Policy initiativeRoHS & WEEEEuPIPP
  1. Source: Author's own data.

Main venue(s)EICTA, Electronics Coalition, COMEICTA, COMCOM
Responses summarizedDefiance, reshapingReshaping, pre-empting, safeguardingSafeguarding, reshaping
Benefits and drawbacks emphasized by NokiaNo incentives for front-runners, unclear requirements in RoHS, disappointment, very labour intensiveMoves in the right direction, requirements still unclear to some extent, rather successfulThe end results still unclear to some extent, successful, rather labour intensive
  • • Proactive, anticipatory timing;
  • • Multi-level lobbying, several venues: promiscuity rather than monogamy;
  • • Selection of the Commission as the most important political institution for lobbying;
  • • Not only negative feedback: reshaping rather than defiance;
  • • Ad hoc alliances;
  • • Multi-level alliances;
  • • The importance of personal contacts in the policy-making process with the Commission.

Why, then, has Nokia adopted a positive approach towards environmental policy-making? The top management's personal commitment to the environment is certainly one reason, and it was often stressed in interviews with the environmental specialists within Nokia. Besides, the lessons learned from conflicts between environmentalists and other industrial sectors have led to risk avoidance and to the adoption of a more proactive approach. Finally, as the understanding of its relatively progressive position in environmental issues gradually grew within Nokia, environmental regulation was probably seen as one way to maintain its advantage in the competition with less advantageously positioned and smaller players within the field (Garcia-Johnson, 2000; Reinhardt, 2000).

From the perspective of environmentally oriented politicians and the environmental administration, this could mean that policy should be made and strategic alliances should increasingly be sought with individual, ‘progressive’ companies instead of industry associations that look for lowest-common-denominator solutions. The risks of this kind of collaborative policy-making should, however, be studied further.

Footnotes

  • 1

    The Directive 2002/95/EC on the Restriction of the Use of Certain Hazardous Substances in Electric and Electronic Equipment.

  • 2

    The Directive 2002/96/EC on Waste Electrical and Electronic Equipment.

  • 3

    The Directive 2005/32/EC on Establishing a Framework for the Setting of Ecodesign Requirements for Energy-Using Products.

  • 4

    According to Hix (2005, pp. 211–12), calculated from data in Greenwood (2003), there were more than 2,300 interest groups with a representative office in Brussels in 2001. Only 250 of these represented individual companies.

  • 5

    In 1999, ECTEL and eurobit merged into EICTA (European Information, Communications and Consumer Electronics Technology Industry Associations).

  • 6

    According to estimates by Ali-Yrkkö, Nokia's share of the value-added of GDP was 3.7 per cent in 2003 (Luukkonen, 2006, p. 29). For historical reasons, the economical and political position of forest-based industry is at least as strong (e.g., Paija and Palmberg, 2006).

  • 7

    LCA is used to analyse the environmental impacts of a product by collecting and evaluating quantitative data on the inputs and outputs of material, energy and waste flows associated with a product over its entire life cycle.

  • 8

    EMAS = The EU Eco-Management and Audit Scheme.

  • 9

    Heating and lighting equipment, electric motors, domestic and office appliances, consumer electronics, air conditioning and a special measure on stand-by losses.

  • 10

    Further information on the pilot project can be found at: «http://europa/eu.int/comm./environment/ipp/pilot.htm».

  • 11

    Nokia's environmental work has recently been acknowledged in several contexts, such as listings in the Dow Jones Group Sustainability Index (DJSI) since 2000 and in the FTSE4Good index on corporate responsibility. Nokia also received the Appeal of Conscience Award for corporate responsibility and commitment to environmental issues in September 2005. In 2006, Greenpeace ranked Nokia as the best environmental performer within the electronics industry (TheEconomist, 2006).

  • 12

    According to the EuP Directive, ‘priority should be given to alternative courses of action such as self-regulation by the industry where such action is likely to deliver the policy objectives faster or in a less costly manner than mandatory requirements’.

Ancillary