Theme 1: The Role of Business in Advancing Peace Through Commerce

Peace
41

I have been doing work with a number of companies in the extractive industry over the past year helping them in their community engagement and “social investment” programs. I have been very heartened to see the number of companies that are highly conscious of their responsibilities to play a positive role in the countries/communities in which they operate. Because many of them are aware that they are not development experts (a lot of the employees are engineers), they have reached out to development consulting firms like mine to provide assistance in helping them implement better development practices for more sustainable outcomes.

On another note, I have recently read Shell’s guidelines for example in applying a “conflict lens” to every operational decision that they make in order to evaluate it for whether that decision contributes to peace or to conflict. It is quite an impressive piece that they have put together - although the challenge of course lies in disseminating and implementing these guidelines/policies at the ground level.

42

Hello Everyone,
Going back to the question that Virginia presented at the end of her comment about business interests directly engaged with politics , I believe that this has to be addressed because government and politicians cannot intervene directly in the process of promoting peace through business. Government’s role should be to facilitate the people with the necessary tools such as a better education, improve technology, among other things so that business do not exploit these people by sending them to sweat shops (or similar places), but working with them to promote a better environment of peace at the workplace which can then be carried onto each of the employees’ homes.

But the question remains whether government is engaging with business interests. The answer is yes. In some developing countries, especially in Latin America, leaders are forcing national and foreign companies to be socially active, and that part of their profits should directly go to the less fortunate because it is the right thing to do and because there is a sense of moral responsability to do this. But since when does a person starts a company to do something more than make something of themselves and put food on their families’ table. Government cannot force businesses to promote and sustain peace by threatening them and forcing them to give a share of their profits and their wealth to less fortunate or otherwise the government will take over the company by nationalizing it and kicking out foreign and local investors. The role of the government should be to promote and sustain peace through its people by improving the quality of lives, and only then will businesses be forced by their own managers, employees, etc. to contribute for sustainable peace.

43

Your question is an important one. Do we want business interested directly engaged in politics and diplomacy? It is certainly risky (made clear by the ever-present example in history classes of the “military-industrial complex” contributing to the onset of war). But the truth is it already happens. Businesses have lobbyists to pressure government in a variety of ways. Businesses can harness this power and influence to facilitate discussion. Reading the article that Sean posted about CBM in South Africa, the conclusion (pg9) has specific examples worth noting:

"In situations of conflict where the parties did not even talk,
South African business (in its above mentioned collective form)
played the role of an ‘honest broker’. When small
business delegations with trusted and credible people could carry
indirect messages to and fro between the parties - to get some form
of communication started, business acted as informal honest
brokers. A slightly different situation was when business leaders
played the role of ‘shuttle diplomats’ and helped to
bring the Inkatha Freedom Party into the 1994 elections.

The managerial and organisational capacity of business opened the
doors for it to play a ‘secretariat’ or organisational
role in the 1991 peace process. This was also carried to a formal
role for business (and the rest of civil society) in the
implementing of the Peace Accord.

An unusual role for (even South African) business was when CBM
played a facilitating role to bring constitutional experts into a
non-threatening situation to consider and explore possibilities
around the powers of regions and the national government.
These possibilities were presented to the parties separately and
played a decisive role in the eventual consensus. "

It should be taken on a case-by-case basis, and perhaps not something around which to develop an entire peacebuilding strategy. However, it making us feel a bit wary does not mean we should write off such efforts when they start.

44

I’d like to draw attention to the UN Global Compact, another example of business interests aligning with “the goals of the international community.”

The UN Global Compact is a strategic policy initiative for businesses that are committed to aligning their operations and strategies with ten universally accepted principles in the areas of human rights, labour, environment and anti-corruption. By doing so, business, as a primary agent driving globalization, can help ensure that markets, commerce, technology and finance advance in ways that benefit economies and societies everywhere.

The ten principles are listed here:

The UNGC website has a section on “Issue Leadership.” The issues are:

Human Rights
Labour Standards
Environment
Anti-Corruption
Partnerships for Development
Business and Peace
Financial Markets

It is encouraging, for our discussion, to see “Business and Peace” on the list! Many of the examples are likely about responsible investment, conflict impact assessment, and risk management. I have not found any highlighting cases where business(es) had more active involvement in peace negotiations, for instance. However, getting the topic on such lists and recognized as important is important in itself.

45

I’m so glad that Graham and Kaitlyn brought in the subject o government into this discussion. I work with senior government officials and mililitary leaders primarily from the Asia-Pacific Region. Most of them see that their countries’ security, stability, and sustainable peace depend on their ability to solve the issue of poverty and inequalities. Most of them have no idea about the business community. There are hardly any dialog taking place between most of these officials and the business community. We need to bring policy and decision makers from these countries into our discussions so that they could be aware of this movement occuring outside of the governments.

46

Andres I think you have made some good points here. Business struggles with knowing why engaging in peace is in the best interests of their corporation. It is our role to develop compelling research which relates to their bottom line as to why they should engage in peace. Most companies still only see CSR in terms of their narrow self interest and by showing that there is a quantifable relationship between peace, the size of their markets and their bottom line then they are more likely to work with governments and other institutions to enable the conditions that will improve their business interests.

47

Stephanine the UN Global Compact does some very good work. We worked with them recently to frame some questions to their members regardinging peace. These questions were aimed at the “C” level within the corporations and there were three answers that were particularly interesting. 80% of respondents thought that the size of their markets increased with increasing peacefulness, 79% thought that their costs decreased with increasing peacefulness but only 13% know of any information that helped them in making decisions around peace. This points to the need for civil society to develop information, in terms that is relevant to their businesses, that can help them make informed decisions that match their gut feelings.

48

Its nice to see several key ideas emerge. Sean bringing to the table about business’s busy-ness influence that could be postive or negative in bringing about peace. I think this goes into the concept of positive busy-ness; realizing there are activities that higher opportunitity costs in a longer run in terms of destructive forces as developing social exclusion, overly structured societies and the waste of limited resources for short-term gain.

Stephanie’s input on small business and politics is interesting. I; from the standpoint of small business owner - beleive that business must engage in the political process - for the sake of survivability. SME are part of the community - and are much more embedded in social fabric compared to MNCs -not matter what level of CSR they are attmepting - this is a double edged sword that could be used for positive or negative change - as some of the examples presented have shown.

Lastly I would to tow out a conceptual curve ball. Economics is not about money - its about resources - money is a convenient vehile of utility (stroing some determined value). all communities have resource basis that must be properly stewarded - for all members to benefit. To often we have promoted the idea that by having money you have value - every member has value in a community; it is up to leaders (business, political, community) to help the community understand and engage people in activities that create local wealth (along the lines that Adam Smith exposed in his writtings) that include the value that everyone can contribute (rights and responsibilites) and of stewardship - replenishing nature not for just for end consumption but becuse it has value - I believe that this will also help in the end product of peace -

49

Hi Steve

Let me give an example of what I mean when I say that your analysis seems to contradict itself - take two countries on your Global Peace Index - Mozambique and USA

According to your 2008 Index Mozambique has a high state of peace while the USA has a low state of peace. Now according to your assertion that should indicate that Mozambique has a much higher per capita income than the USA and that kids in Mozambique spend much more time in school than their USA counterparts. Both of these assertions would obvious be false in this specific case. Equally so the Ease of Doing Business Index and Business Competitive Index for these two countries would suggest that they do not fit the model.

This leads me to ask:

Is the USA / Mozambique example simply an exception to the rule?

Really trying to understand.

Sean

50

Well said - I absolutely agree.

51

Well said Odjada.

I am sure that Shell (and others) dont set out to create conflict in the Niger Delta - but the fact is that they have become a contributing factor.

Oil has a particularly bad reputation for creating conflict - esp in Africa - and it worries me that so many African countries are finding oil.

52

Thanks Victoria: it is always so helpful to discuss from practical experience rather than theory. It is indeed encouraging to hear about the initiatives of the extractive industry. And in particular of Shell’s conflict lens - would iy be possible to get us any more info on that?

53

There is a comment by Victoria further down this conversation that refers to Shell: Below is an extract from her comment:

“On another note, I have recently read Shell’s guidelines for example in applying a “conflict lens” to every operational decision that they make in order to evaluate it for whether that decision contributes to peace or to conflict. It is quite an impressive piece that they have put together - although the challenge of course lies in disseminating and implementing these guidelines/policies at the ground level.”

If anyone has access to these guidelines - please post a link

54

Ok I have found the document online - I will post some extracts from it later today. The link to the document is: www.ipieca.org/activities/social/downloads/publications/conflict_gu…

55

Ok I have found the document online - I will post some extracts from it later today. The link to the document is: www.ipieca.org/activities/social/downloads/publications/conflict_gu…

56

Victoria mentioned the “Conflict Lens” that Shell was using - I am not sure if I found the exact tool that she was talking about but I have found something. You can download the whole PDF at www.ipieca.org/activities/social/downloads/publications/conflict_gu…

Below is an extract of the relevant section:

A ‘conflict lens’ requires that all operational decisions (hiring, compensation, security, etc.) should be considered in the light of six questions related to impacts that increase or decrease the likelihood for conflict. In the following framework, these six main questions are supported by examples that can either increase the likelihood of conflict © or the likelihood of stability/peace §.

Conflict lens

1. Rewards destructive (not neccessarily violent) or contructive behaviour?
• Do more peaceful communities get more benefits § than ‘difficult’ ones ©?
• Is there a more immediate response to letters/complaints § or to threats/closedowns ©?
• Are communities visited also informally § or only when there is a need ©?

2. Conveys disrespect, or respect, for stakeholders?
• Do communities perceive that all promises are followed through § or not ©?
• Do stakeholders know about the long-term corporate benefits § or do they feel they benefit more from a short-term approach based on conflict ©?
• Are communities involved in decisions that affect their lives § or not ©?
• Are grievances handled through dialogue § or, ultimately, with security back-up ©?
• Is there maximum transparency about company policies and practices § or not ©?

3. Increases or decreases security (quality of life)?
• Economic: positive § or negative © impact on livelihoods, e.g. due to spills?
• Political: increased § or decreased © conflict over leadership?
• Environmental: decreased § or increased © pollution?
• Environmental: increased § or decreased © availability of scarce resources?
• Physical: increased safety § or increased criminality or insecurity ©?
• Social/cultural/psychological: increased § or decreased © capacity of local people to deal with changing norms and values (e.g. prostitution, alcoholism, migration)?

4. Contributes to inter-group fragmentation or cohesion?
• Are benefits distributed in an inclusive § or exclusive © manner (e.g. host communities)?
• Is the hiring policy seen as fair § or seen as favouring certain groups ©?
• Does the company know that community representatives enjoy popular support § or not ©?
• Do all land owners/users receive the same level of compensation § or do the more vocal or powerful ones receive more ©?

5. Increases or decreases the capacity/willingness of authorities to provide services?
• Does the company effectively lobby to have social services provided § (e.g. through a tripartite partnership approach) or does it effectively substitute for government services ©?

6. Increases or decreases the capacity of the authorities to commit violence?
• Do authorities use revenues for civil purposes § or for warfare ©?
• Does the company abstain from (materially) supporting one party to the conflict § or not ©?

If answer to any question is © redesign relevant operational policy or procedure

57

This is a very important point, Rowan. Local value and wealth is not just about injecting money into a community or helping it “grow” money.

A small example: The reason I need/want money is to purchase goods and services I need to ensure a good quality of life for my family. But if I can achieve the same end (i.e. obtain those resources) in other ways, that would be just as acceptable. An example would be helping villagers in an area isolated from local markets because of conflict grow home and/or community gardens. They will be able to feed their families even when they cannot travel to market to buy food or sell goods in exchange for money with which to buy food. If they can feed their families, they will be less likely to take up arms.

58

Let me give you another example:

I have lived in South Africa most of my life and travel to Rwanda for work on a regular basis. According to the 2008 Global Peace Index Rwanda (76) is more peaceful than South Africa (116) - I would agree.

But according to the CIA World factbook the 2008 GDP per capita for Rwanda was $900 while in South Africa it was $10 400. And the average time in school for a Rwandan kid was 8 years and for a South African it was 13.

I remain concerned that the Global Peace Index modeling may be too simplistic or at least that the averaging of statistics dramatically skews the findings.

59

Thank you for posting this excerpt, Sean.

So far, we have differentiated between two main kinds of businesses: (1) multinational/foreign companies, and (2) domestic private sector companies.

We have also begun discussing the difference between not fueling conflict and actively promoting peace.

Furthermore, we have brought up how businesses can contribute to peace indirectly (e.g. by providing employment, including marginalized groups, respecting human rights) as well as directly (e.g. by facilitating negotiations). We’ve touched upon the appropriateness of businesses becoming directly involved in “politics” or conflict resolution as well.

One other dimension to look at is how businesses integrate their contributions into their operations. I see three main structures:

  1. Being a “social business” as defined by Muhammad Yunus in Creating a World Without Poverty: Social Business and the Future of Capitalism (the mission of the business is a social goal and any profit made is invested into the business in order to expand and further that goal)

  2. Fully integrating its contributions into its everyday operations and decision-making (Shell’s ‘conflict lens’ might be an example)

  3. And perhaps the most common (though arguably not as powerful): establishing a “CSR unit” to organize social programs, charity events, donations, etc.

What a world it would be if all businesses were of the first kind! But even Yunus does not think that is realistic, and he in fact points out we need both social businesses and the “regular” kind. I would, however, be interested in reading more examples of (2). Typical CSR activities are great but definitely not enough and, as many have iterated here before, are “the first to go” when a company is cutting costs.

60

Thanks, Steve. Civil society must indeed develop information “in business language” so that companies are able to see how they will benefit from contributing to peace and to enable them to develop contributions wisely.

Do you have any examples we can learn from where civil society and businesses connected in such an exchange of information? Civil society publishes reports frequently. But getting these reports to businesses, especially domestic ones, is challenging. There is definitely a gap there. Conferences and workshops help but often businesses are not well represented, and it is the businesses that the conference should seek to inform! Studies and reports are not useful if they are only shared amongst academics. Additionally, conferences and workshops are tremendous expenses, especially for SMEs and companies in developing countries. This eConference itself is one good example, and I hope participants will be surveyed so that we can know how well-represented businesses were. Any others?