Commercial actors in conflict-affected areas

Investments and Business in Southern Africa: CSR challenges and opportunities

Seminar, 20 November 2013

Commercial actors inconflict-affected areas

Diakonia ● School of Business, Economics and Law at the University of Gothenburg

School of Global Studies at the University of Gothenburg ● Church of Sweden

Niklas Hansson, Project Manager, [email protected]

Overview

• The CCDA project

• Business & development sectors: different objectives - common challenges

• Terminology

• Corporate responsibility: normative framework

• Corporate responsibility: tools

• Conclusions from the CCDA case studies



“While development assistance arena may seem far removed from that of business, the issues that arise when managing a development project and an investment project can be surprisingly similar.”

– Harvard University, Rights-Compatible Grievance Mechanisms. A Guidance Tool for

Companies and Their Stakeholders



The CCDA project

Partners • Diakonia• School of Business, Economics and Law, University of Gothenburg• School of Global Studies, University of Gothenburg• Church of Sweden

ObjectiveTo develop concepts and promote tools to encourage and enable the corporate sector to avoid negative effects on conflict, and instead strengthen positive impact.



The CCDA project

Outputs• Reports - Case studies on company impact in conflict-areas

- Conflict sensitivity in Scandinavian companies (HQ)

- Project synthesis report

• Field-consultations• Conference to share lessons learned: norms – tools - practise• Online resource www.ccda.se

Cross-cutting priorities• Experience-based and drawn from actual cases• Facilitate inter-sectorial dialogue and exchange



The CCDA project

Target group• Businesses and investors (Scandinavian and others)• Relevant government agencies, development organizations and the

research community

Relevance• Relevant for most business sectors and companies engaged in high-risk

areas



The business & development communities: different objectives - common challenges

High Level Forum on Aid Effectiveness (HLF)

HLF-1Rome, 2003

Identify needs:donor

harmonization

HLF-2Paris, 2005

ownership, alignment,

harmonization, results, mutual responsibility

HLF-3Accra, 2008

Broadening ownership

HLF-4Busan, 2011

private sector, focus on conflict-

affected & fragile states



Terminology



Terminology

Conflict-Affected and High-Risk Areas

• Conflict-affected area

• Conflict and post-conflict situations

• Conflict-prone state

• Fragile states

• Failed states

• Weak governance zones

• High-risk areas

• Transition country

• Complex environments

UN Guiding Principles apply to all countries



Terminology


…are situations in which the following conditions often prevail

“human rights violations; presence of an illegitimate or unrepresentative government; lack

of equal economic and social opportunity; systematic discrimination against parts of the

population; lack of political participation; poor management of revenues, including from

natural resources; endemic corruption; and chronic poverty with associated heightened

risks and responsibilities.”

- UN Global Compact/PRI



Terminology


Heightened risks

• Physical• Legal• Reputational• Strategic

• Operational• Financial• Ethical• Moral



Terminology

Conflict SensitivityThe ability to

• understand the context in which you operate

• understand the interaction between your intervention and the context

• act upon this understanding to avoid negative effects and maximize positive impact

‘Do no harm’ framework - key conflict sensitivity tool for the dev’t community



UN Guiding Principles on Business and Human Rights

Three pillars

• the State duty to protect against human rights abuses by business enterprises; • the corporate responsibility to respect human rights, i.e. avoid violating the

rights of others; and • the need for greater access by victims to effective remedy.




States should

• prevent, investigate, punish and compensate for human rights abuse

• encourage/ require businesses to communicate how they address human rights

• protect against human rights abuses by State-owned/controlled companies

• ensure that those affected by human rights abuse have access to effective remedy




Applies to all businesses in all countries

Businesses should

• respect human rights (Int’l Bill of HR + ILO)

• have senior level approved policies, publicly available, facilitating identification, prevention, mitigation of human rights abuses, and enable compensation

• assess impact of operations, act on findings, communicate on measures taken

• consult with affected groups and other stakeholders

• provide remedy where businesses have caused negative impact




Principle #7: Respect for human rights in conflict-affected areas

• Heightened risk of gross human rights abuses in conflict-affected areas

• States should engage with businesses at the earliest stage possible

• Special attention to gender-based and sexual violence

• Denying access to public support for businesses violating human rights

• International humanitarian law applies – in addition to human rights law



What are the limits of corporate responsibility?

Source: ‘Conflict-sensitive business practice’, International Alert



Tools for corporate responsibility and human rights monitoring

• Corporate Engagement Project (CDA)

• Red Flags initiative (International Alert/Fafo)

• Guidance on Responsible Business in conflict-affected and high-risk areas (UN/PRI)

• Conflict-Sensitive Business Practice (International Alert)

• Rights Compatible Grievance Mechanisms: A Guidance Tool for Companies and their Stakeholders

(Harvard University)

• OECD Risk Awareness Tool for MNE in Weak Governance Zones

• The swisspeace Business Conflict Check

• Guide to Human Rights Impact Assessment and Managment (IBLF/IFC/UN)

• The Global Peace Index (Institute of Economics and Peace)

• Human Rights Impact Assessment for Foreign Investment Projects (Rights and Democracy)

• BLIHR Essential Steps (Business Leaders Initiative on Human Rights)

• Human Rights Compliance Assessment (Danish Institute for Human Rights)

• Human Rights Risk Index (Maplecroft)



Case studies

Cases• DR Congo (Heineken/Bralima)• Myanmar (Total)• occupied Palestinian territory (Industrial Estates/Tunnel owners)• Colombia (Anglogold Ashanti/Continental Gold)

Commercial conflict dependent actors (CCDA) • an actor that has based its actions or adjusted them to an armed conflict in such a

way as to benefit financially from it.



Case studies

Key questions• How do the CCDAs benefit financially from the situation?• Degrees of dependency on the conflict or the conflict actors• Interaction between companies and local stakeholders, including conflict actors• Businesses’ impacts on conflicts and vice versa



Case studies

Conclusions

• Increased transparency especially important in conflict-affected areas

• Porous borders between the economic and political spheres

• Corporate responsibility may not be feasible in certain extreme situations

• Check the track-record of potential partners in more than one country

• Need for more inter-sectorial dialogue between businesses, civil society and gov’t agencies



Study on conflict sensitivity in Scandinavian companies

Key question

• What systems, policies and procedures do Scandinavian companies have in place to manage the particular

risks in high-risk areas?

Conclusions

• Companies do operate in conflict-affected areas, but sometimes low awareness on conflict context

• Most companies try to stay out of conflict areas, but if they do engage they “try to be neutral”

• Most companies mainstream human rights risk management rather than separate process

• Reluctance to share valuable experiences and lessons learned due to

1) generally low awareness level on CSR in high-risk (but vary)

2) sensitive issues



www.diakonia.sewww.ccda.se

Niklas Hansson, Project Manager, Diakonia

[email protected]



Commercial actors in conflict-affected areas

Economy & Finance

Transcript of Commercial actors in conflict-affected areas