This week in Nairobi (November 28) is an interesting conference 'Business after Conflict' to discuss, among other things, what donors can do to attract and support investment and promote conflict-sensitive business practices in places like South Sudan, Guinea, Ivory Coast.
There is much to be said. Cambridge University Press is next year publishing my book on engaging the private sector in peacebuilding, so for now just a brief thought about one practical idea for conferences like this.
Its a thought we discussed last week (November 22) in London under the umbrella of the Invest in Africa initiative. And it relates, like that initiative, to what major private investors -- not donor or host governments -- can jointly and individually do to improve the post-conflict investment regulation climate and mitigate both the perception and reality of regulatory (and other kinds of) risk in such settings.
Responsible businesses do not wish to operate in a regulatory vacuum, but some post-conflict settings will display serious weakness in regulatory institutions. In such exceptional cases there's an argument for firms helping -- by secondments of their own staff, or sponsored salaries of transitional experts, for example -- to boost the capacity of local government counterparts in (re-)creating and managing a stable regulatory climate.
In my experience, often a big mining firm entering a fragile setting will poach the best local talent to work within that firm's local offices. Yet it might make more sense for the firm to support the government's retention of such staff within the regulator, to improve the framework under which they operate.
Moreover, re-entering or interested firms can work together (and with local chambers of commerce) in such a scheme. Donors [in theory] coordinate in post-conflict settings -- so should firms, even those ostensibly competing. All probably gain from the reduced financing cost, for example, of a setting with a better reputation for regulatory capacity.
Donors and multilateral agencies -- and civil society watchdogs / capacity-builders -- would have a role to play in triangulating such relationships to avoid the risk that business will compromise its own local regulators by capturing these institutions or distorting their activities (or be seen as doing so). Secondees would avoid crowding-out local regulatory talent by gradually handing over roles.
I wrote on this in a previous post on the need to explore ways that good business can help build the environment that good
businesses find attractive:
"... Attracting good firms to risky
places is hard enough as it is ... it seems
sensible to be more flexible about firms (not just donors) ... helping host
governments with things like boosting the capacity of local regulators to
regulate in a predictable, purposeful way. In such relationships lie many points
to leverage for more responsible business conduct, and higher governance
standards by public officials."
Jo
The previous post I've quoted from is here.
See the Invest in Africa initiative (founded by Tullow Oil) here.
Sunday 25 November 2012
Sunday 18 November 2012
After the MDGs: the private sector and development
Last night I watched the latest 007 film, Skyfall. It reminded me how so many past Bond films have featured SPECTRE, the global criminal organisation plotting to wreck havoc for its own often commercial ends. In my PhD interviews with UN officials, those who had considered the role of business in their mandate at all often tended to think that the private sector was comprised mainly of SPECTRE-like entities. I found that the consequent distrust and suspicion by officials inhibited the scope for them to co-opt business in pursuit of public goals.
2013 is just around the corner, and beyond that lies 2015, such that policymaking is turning to what priority development goals should replace the 2000-2015 Millenium Development Goals (MDGs). How should these be selected and framed? Who should / will likely decide these issues? What role should / will private firms and foundations play in the process?
This past week saw the announcement of a strategic partnership between the firm I work for and the UN Global Compact. This extends our earlier collaboration with them in identifying and explaining what macro-trends will shape the corporate sustainability agenda in the short, medium and longer terms (see here).
The corporate agenda is one thing. But one theme of this blog is the influence of private firms and foundations on public policymaking, including their input into framing global development priorities and discourse. That is, the envisaged and de facto role for the private sector extends (as it does for civil society*) beyond collaborating or cooperating on the achievement of development goals; it includes contributing to decisions on what those goals should be -- even if decisions about the formal agenda are political ones for duly constituted public authorities.
One strategic factor for public policy, especially in an era of fiscal austerity, is to frame a development agenda that aligns as far as possible with commercial realities and interests (so as to ensure corporates are incentivised and on-board) while also manifesting sustainable development imperatives (so as to engender or require transformed ways of doing business more responsibly).
One strategic factor for (big) businesses with global footprints is to try and influence a development agenda that maximises the commercial opportunities inherent in concepts such as 'green growth' while mitigating the social and environmental risks to long-term profitability. Since, in theory, most firms have an interest in seeing more peaceful and prosperous societies, they have incentives to support a formal development agenda calculated to help with this larger goal.
As we did with the 2012 Rio+20 summit, I think we'll see a much larger role played by private business and foundations in the lead-up to the post-2015 development agenda. Indeed that process of policy-shaping has already begun. Many of these actors have far more resources (and in-house long-term planning capacity) than UN member state governments.
As I've written before, there are many good reasons for care when it comes to business input into policy, even if this is already far more pervasive than most policymakers admit. The corporate world is not filled with SPECTRE-like conglomerates, but nor were we all born yesterday. A healthy objectivity is needed, even if governments do not have a monopoly on virtue.
Yet if a global internet or social media firm, for example, were to start pushing for greater recognition of the role of access to information in achieving development goals, is this necessarily something to resist simply because of who happens to be driving it? If business is showing an interest in the highest level of development policymaking, this is probably a good thing. The evil genius of SPECTRE lives on in many ways in the contemporary world -- but in striving to seek and find new paths to sustainable development we should be confident and not yield too readily to unproductive superstitions about corporate influence on public policy.
Jo
* The question of whether business or business federations (eg chambers of commerce) are members of 'civil society' or a distinct other category -- for purposes of formal inputs into policymaking -- is something on which policymakers, including the UN system, have been ambivalent. I'll return to this important question in another post. Intuitively, one tends to distinguish between a non-profit foundation or federation and a corporation, even if the latter supports the former.
2013 is just around the corner, and beyond that lies 2015, such that policymaking is turning to what priority development goals should replace the 2000-2015 Millenium Development Goals (MDGs). How should these be selected and framed? Who should / will likely decide these issues? What role should / will private firms and foundations play in the process?
This past week saw the announcement of a strategic partnership between the firm I work for and the UN Global Compact. This extends our earlier collaboration with them in identifying and explaining what macro-trends will shape the corporate sustainability agenda in the short, medium and longer terms (see here).
The corporate agenda is one thing. But one theme of this blog is the influence of private firms and foundations on public policymaking, including their input into framing global development priorities and discourse. That is, the envisaged and de facto role for the private sector extends (as it does for civil society*) beyond collaborating or cooperating on the achievement of development goals; it includes contributing to decisions on what those goals should be -- even if decisions about the formal agenda are political ones for duly constituted public authorities.
One strategic factor for public policy, especially in an era of fiscal austerity, is to frame a development agenda that aligns as far as possible with commercial realities and interests (so as to ensure corporates are incentivised and on-board) while also manifesting sustainable development imperatives (so as to engender or require transformed ways of doing business more responsibly).
One strategic factor for (big) businesses with global footprints is to try and influence a development agenda that maximises the commercial opportunities inherent in concepts such as 'green growth' while mitigating the social and environmental risks to long-term profitability. Since, in theory, most firms have an interest in seeing more peaceful and prosperous societies, they have incentives to support a formal development agenda calculated to help with this larger goal.
As we did with the 2012 Rio+20 summit, I think we'll see a much larger role played by private business and foundations in the lead-up to the post-2015 development agenda. Indeed that process of policy-shaping has already begun. Many of these actors have far more resources (and in-house long-term planning capacity) than UN member state governments.
As I've written before, there are many good reasons for care when it comes to business input into policy, even if this is already far more pervasive than most policymakers admit. The corporate world is not filled with SPECTRE-like conglomerates, but nor were we all born yesterday. A healthy objectivity is needed, even if governments do not have a monopoly on virtue.
Yet if a global internet or social media firm, for example, were to start pushing for greater recognition of the role of access to information in achieving development goals, is this necessarily something to resist simply because of who happens to be driving it? If business is showing an interest in the highest level of development policymaking, this is probably a good thing. The evil genius of SPECTRE lives on in many ways in the contemporary world -- but in striving to seek and find new paths to sustainable development we should be confident and not yield too readily to unproductive superstitions about corporate influence on public policy.
Jo
* The question of whether business or business federations (eg chambers of commerce) are members of 'civil society' or a distinct other category -- for purposes of formal inputs into policymaking -- is something on which policymakers, including the UN system, have been ambivalent. I'll return to this important question in another post. Intuitively, one tends to distinguish between a non-profit foundation or federation and a corporation, even if the latter supports the former.
Sunday 11 November 2012
Social licence: the neglected dimension
In response to a recent email I've mulled over a blogpost that ponders 5-6 topics, at the interface of business and society, that might be good research topics for students.
But it is Sunday night -- so I mention only one: is there anything that large project corporates (mining and energy) operating in less-developed settings might learn, by analogy, from the experience of UN and coalition-type forces in drawing-down or exiting fragile and / or post-conflict states and situations?
Richard Caplan launched his latest edited collection Exit Strategies and Statebuilding (OUP, 2012) recently, here in Oxford. Such literature deals with statebuilding projects by foreign powers typically following armed interventions such as those in Iraq and Afghanistan. The analogy? Well I think there is scope for more research on what is involved in large extractive industry operators scaling-back or exiting certain settings, and wonder if the 'exiting statebuilding' literature holds some possible insights.
Of course the analogy has many holes, in particular because international statebuilders (at least UN-mandated multidimensional peace operations involved, at some level, in building and supporting the institutions of conflict-affected states) are exercising public authority and responsibility; firms are not doing so even though they may cooperate closely with local government officials or become de facto local public service-providers. Nevertheless, mega-projects in often remote parts of under-developed regions in Africa often become important sites for wider social and economic activity. That is, a major project does not have to reach the scale of a 'state-within-a-state (like Firestone's Harbel plantation in Liberia) to nevertheless be, or promise to be, a major developmental node in its area. This makes the winding-down of such a site a significant and challenging event for such settings.
Caplan's recent book is not the only relevant 'hook' for blogging on this now; the other is how mineral-rich, politically-fragile Guinea is still absorbing the implications of the (also recent) decision by mining giant Vale to suspend its Zogota iron ore mega-project given difficult global conditions in the sector. This project was seen as a major pillar in supporting the country's continuing post-2010 recovery from five decades of corrupt, authoritarian and arbitrary rule.
I've blogged about what might be called 'the Zogota syndrome' before -- see the tail end of this post here:
* 'No mining!' Some mining-related community protests, such as in Peru and elsewhere, can be crudely characterised as largely opposed to a mine's operation at all, where locals see or expect no net benefit.
* 'No mining?' By contrast the Zogota syndrome involves another form of problem, whereby far from opposing mining operations, communities protest because the mine is not in fact going ahead as planned, and employment and other prospects will not be met.
I see so much of the literature on corporate responsibility, mining-as-development, social license to operate, etc as focussing on two areas of social invesment: entry / exploration / start-up, and normal operations. But while there is a solid literature on regeneration and restoration activities at the end of a mine's life, a third area is relatively neglected: the considerations of strategy (and principle) involved where social and political expectations of mining-related benefits will not be met because the operation is mothballed or stalled significantly. If we're approaching the end of a commodities super-cycle, the Zogota-style ('do not go!') protest above may prove more common than the anti-mining form of social protest, raising potential reputational and other risks for firms.
What might the experiences of military and civilian contingents in exiting statebuilding operations suggest for firms exiting major projects? I look forward to reading someone's research on this!
One theme of the statebuilding literature (see Charles Call's work, for example) will be applicable: the debate on what counts as 'success' in such endeavours, thus enabling exit. Who defines success or completion -- the statebuilding authority or the 'recipient' population / government? In the mining or energy firm analogy, what a firm sees as adequate provisions for its drawdown in operations may fall far below local expectations, provoking resistance to the exit. Such 'exit-resistance' might be just as heated as the resistance often encountered to the entry or operation of such projects.
The corporate responsibility / social investment literature arguably focusses too much on the up-front questions and places too little emphasis on the back-end of projects, the exit phase; in such situations familiar questions such as the division of roles between company and host government will become particularly acute -- especially where the latter was looking to the former to provide the sort of services and opportunities that will now not be forthcoming.
Jo
But it is Sunday night -- so I mention only one: is there anything that large project corporates (mining and energy) operating in less-developed settings might learn, by analogy, from the experience of UN and coalition-type forces in drawing-down or exiting fragile and / or post-conflict states and situations?
Richard Caplan launched his latest edited collection Exit Strategies and Statebuilding (OUP, 2012) recently, here in Oxford. Such literature deals with statebuilding projects by foreign powers typically following armed interventions such as those in Iraq and Afghanistan. The analogy? Well I think there is scope for more research on what is involved in large extractive industry operators scaling-back or exiting certain settings, and wonder if the 'exiting statebuilding' literature holds some possible insights.
Of course the analogy has many holes, in particular because international statebuilders (at least UN-mandated multidimensional peace operations involved, at some level, in building and supporting the institutions of conflict-affected states) are exercising public authority and responsibility; firms are not doing so even though they may cooperate closely with local government officials or become de facto local public service-providers. Nevertheless, mega-projects in often remote parts of under-developed regions in Africa often become important sites for wider social and economic activity. That is, a major project does not have to reach the scale of a 'state-within-a-state (like Firestone's Harbel plantation in Liberia) to nevertheless be, or promise to be, a major developmental node in its area. This makes the winding-down of such a site a significant and challenging event for such settings.
Caplan's recent book is not the only relevant 'hook' for blogging on this now; the other is how mineral-rich, politically-fragile Guinea is still absorbing the implications of the (also recent) decision by mining giant Vale to suspend its Zogota iron ore mega-project given difficult global conditions in the sector. This project was seen as a major pillar in supporting the country's continuing post-2010 recovery from five decades of corrupt, authoritarian and arbitrary rule.
I've blogged about what might be called 'the Zogota syndrome' before -- see the tail end of this post here:
* 'No mining!' Some mining-related community protests, such as in Peru and elsewhere, can be crudely characterised as largely opposed to a mine's operation at all, where locals see or expect no net benefit.
* 'No mining?' By contrast the Zogota syndrome involves another form of problem, whereby far from opposing mining operations, communities protest because the mine is not in fact going ahead as planned, and employment and other prospects will not be met.
I see so much of the literature on corporate responsibility, mining-as-development, social license to operate, etc as focussing on two areas of social invesment: entry / exploration / start-up, and normal operations. But while there is a solid literature on regeneration and restoration activities at the end of a mine's life, a third area is relatively neglected: the considerations of strategy (and principle) involved where social and political expectations of mining-related benefits will not be met because the operation is mothballed or stalled significantly. If we're approaching the end of a commodities super-cycle, the Zogota-style ('do not go!') protest above may prove more common than the anti-mining form of social protest, raising potential reputational and other risks for firms.
What might the experiences of military and civilian contingents in exiting statebuilding operations suggest for firms exiting major projects? I look forward to reading someone's research on this!
One theme of the statebuilding literature (see Charles Call's work, for example) will be applicable: the debate on what counts as 'success' in such endeavours, thus enabling exit. Who defines success or completion -- the statebuilding authority or the 'recipient' population / government? In the mining or energy firm analogy, what a firm sees as adequate provisions for its drawdown in operations may fall far below local expectations, provoking resistance to the exit. Such 'exit-resistance' might be just as heated as the resistance often encountered to the entry or operation of such projects.
The corporate responsibility / social investment literature arguably focusses too much on the up-front questions and places too little emphasis on the back-end of projects, the exit phase; in such situations familiar questions such as the division of roles between company and host government will become particularly acute -- especially where the latter was looking to the former to provide the sort of services and opportunities that will now not be forthcoming.
Jo
Subscribe to:
Posts (Atom)