The role of stakeholder dialogue: NGOs and foreign direct investments

Purpose – This paper seeks to analyse the role of stakeholder dialogue, in particular with non‐governmental organisations (NGO), in connection with a foreign direct investment. Specific emphasis is placed on the NGOs' perspective on dialogue process. Design/methodology/approach – This paper focuses on a case of a pulp mill in Uruguay. It adds to previous research by focusing on the dialogue as a process and the NGO viewpoint in the conflict. The arguments of two key NGOs headquartered in Uruguay and Argentina are analyzed with particular emphasis on how the argumentation evolves in relation to stakeholder dialogue in the case. Findings – The case consists of two entirely different dialogue processes. The first process was conducted by the investing company as information providing and consultation. Despite a more thorough process in theory, the NGO argumentation shows deep mistrust in the second process conducted by the International Finance Corporation. Therefore, it is argued that, as the degree of preparation of the investment increases and the room for alterations decreases, the possibility of achieving meaningful dialogue diminishes. Dialogue in a situation with limited room for choice occurs rather in the realm of conflict resolution and bargaining than in that of true dialogue. This, in turn, causes lack of trust towards the terms of dialogue and increases the problem of non‐participation. Originality/value – The paper contributes to knowledge on issue‐specific stakeholder dialogue. It emphasises the role of non‐participative NGOs as a key challenge in dialogue. It also adds to previous research on the formation of argumentation and expertise, and highlights the role of the International Finance Corporation as the highest expertise in the case. It also critically evaluates the preconditions for dialogue in connection with foreign direct investments.