Business after conflict

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.