Business and Human Rights: the Future

How powerful is a 'human rights' framing in terms of the overall 'responsible business' agenda?

Next year will be a decade since the rare unanimous endorsement by the UN Human Rights Council of the UN Guiding Principles on Business and Human Rights (UNGPs / BHR).

The UN Working Group on BHR has set up an open consultation to take stock of the impact and implementation of the UNGPs and -- in very UN-speak -- chart a 'roadmap' for the UNGPs over the next decade to 2030.

Much could be written about the UNGPs including on the extent or otherwise of their uptake over the last decade.

For one thing -- as some previous posts have hinted at, and as my next post will cover -- they really do not appear to have gained particular traction in terms of the search by governments, Big Tech, civil society and others for suitable and legitimate frameworks for the governance of responsible AI and other new technologies.

Here I will limit my observations to one impression from the consultation concept note. I wonder whether this puts too great an expectation on the transformative, emancipatory, or remedial power of 'human rights' as a vector for governance and change.

The concept note mentions the UNGPs in the context of 'sustainable development and stability' (notably climate change), rising inequalities and pervasive corruption; rapid technological change... widespread fragility, conflict and violence...'. It includes a call to embed the UNGPs more concretely in climate change and sustainability debates. It is one thing to draw attention to complex inter-linkages (e.g. the UNGPs with the SDGs), but it may be another to envisage that human rights-based approaches and arguments ought to be at the heart of the range of issues raised in the note. For one thing, business may be daunted enough by the scope of the UNGPs agenda even narrowly framed, and wary of 'responsibility creep'.

Others have written on the secular decline of 'human rights' as a powerful framework for socio-political action (e.g. Hopgood 2013, Posner 2014; Moyn 2010+; compare e.g. Sikkink 2018).

Yet one doesn't have to subscribe to the 'end-times / twilight of human rights' school to recognise that while there are obvious intersections with issues such as climate change or corporate taxation, it remains far from obvious that simply re-framing those debates in human rights terms suddenly gives them far greater urgency, appeal, traction ... it is not obvious that business (or government) actors suddenly sit up just because a familiar claim is suddenly made in human rights terms, and the contrary can be true ... 

For my part, an 'ambitious roadmap' for the UNGPs must proceed, at least in part, from a recognition that framing an issue in terms of human rights -- especially individual rights claims against the state, or business -- is not necessarily conceptually persuasive nor a panacea in advocacy / strategy terms.

In a previous (2018) post I was deliberately provocative in asking if BHR had 'lost its way': here.

There among other things I wrote this, and reading the 2020 concept note I have the same reaction, really, and will put this out there:

"Yet the question arises whether we should be a bit more strategic about what is likely to gain traction as a BHR issue, and about how widely we frame BHR, and about what we think corporations and other enterprises really have a meaningful responsibility for.

... Just how useful and effective is the 'human rights' paradigm / lexicon in shifting business (and state) behaviour around social impact? However tempting it is to invoke it in support of all manner of worthy societal campaigns, is it really that effective?"

Business and Human Rights in Verse: Poem 3

This is the 3rd in a mini-series of attempts to approach themes of 'Business and Human Rights' in verse. The 1st was 'Big Data' and the 2nd 'Supply Chain' (see previous two posts).

‘Dance the Guns to Silence’: some Business and Human Rights in verse

Dr Jolyon Ford

Associate Professor of Law, Australian National University

                                                                                                                                                November 2018

III.

Extractive

They came at night. It matters not,

What they did exactly, it does not matter.

Let us not try say what they took or did:

The gun will serve the highest bidder.

Across the valley the rotors’ throb

Tells us he comes to see the mines.

Beneath the ridge the scarred land drops

To where we sit and wait in lines.

The low hills crouch, they have given up.

The land is beaten down.

It too has learned this will only stop

When all sign of struggle is gone.

There is no dawn that brings them home,

No song of comfort sung.

They exist only if we remember them,

When all is said, and all is done.

From the camp we hear the shift bells ring,

This is not a place for dreaming.

You will not hear our voices sing,

But nor will you hear the screaming.

In this rich earth, a richer dust concealed,

Though we dig, it is not for truth.

Grass in the breeze where the scar has healed,

Mocks their futile defiant youth.

Some system did all this for gain,

And made our rivers burn.

It took our very soil away

And so our soul in turn.

And so here now we that remain

Mine the seams of lessons never learned,

Listen to the scoured land in its pain,

Wait without hope for their ghosts’ return.

                                                                                                                                 

Cambridge MA, 31 Oct. 2018

Private sector engagement: the new lazy?

Is there a chronic laziness among those who work on getting business more involved in pressing social issues?

Have we gone from largely neglecting the private sector as a development, peace and human rights actor (my 2015 book Regulating Business for Peace) to an opposite extreme, where one just adds 'engage business' and the agenda will take care of itself?

Moreover, in swinging to this position of often unreal, under-explored and under-theorised expectations, is there a tendency to avoid issues just when they become their most 'pointy' and practical?

What exactly is meant when we implore policymakers, civil society and others to 'engage' with business in meeting the sustainable development and corporate responsibility (etc) agenda?

The immediate prompt for this first blog for 2016 was my reaction to reviewing a draft article on engaging business in the prevention of mass atrocities. Like so many other participants in debates on the changing role and expectations of business in society, the author fell down (in my view) by glossing over things just as they become their most practical and important.

In that author's case, it was a repetitive, unhelpful and ultimately lazy tendency to exhort the private sector to 'contribute' to peacebuilding and conflict prevention -- but without spelling out what activities and approaches that might involve in practice (much less in specific contexts).

Now its all very well and good to invite constructive engagement by business actors (and encourage policymakers to facilitate this).

But what does it mean for a business to 'contribute' to the SDGs, to peace-making or peacebuilding, to human rights protection and promotion? What does it involve, what should they be doing more or less of, or do differently, with whom, and how? Where does the context matter so much that one cannot talk of 'engagement' or 'contribution' without couching it in the specifics of settings whose dynamics differ so much?

In a 2014 blog post I delivered a similar rant, suggesting (with apologies to EM Forster) that it is not enough to repeat the magic spell of 'engagement' as if by saying 'only connect' we will witness the flowering and flourishing of innovative, meaningful schemes and initiatives whereby business actors fulfil the roles now increasingly expected or hoped of them in relation to the sustainable development agenda.

That earlier rant is here.

Private sector engagement, partnerships for development etc are very hard. We seem afraid to be honest, as if merely repeating the exhortations to partner will do the trick. A less lazy approach that offers some concrete ideas rather than fluffy 'contributions' will help underpin the rhetoric with some more credible analysis -- and action.

Jo

Stepping back: the private sector and the SDGs

How effective will global development targets be in securing the sustained engagement of the private sector? Are expectations of the private sector's developmental role running too high?

It is October and we are somewhat past now the UN fanfare around the long-negotiated 2030 Sustainable Development Goals (SDGs) to replace to 2000-2015 MDGs.

Much has been written around the SDGs, including in relation to what is portrayed as a revolutionary recognition of the private sector's role.

In view of this mountain of opinion this post has the limited ambition of querying whether this is so (game-changing scope for private sector engagement), and a related general observation querying the utility of the SDGs as ordering principles to guide development generally.

One thing to note is that the private sector is mentioned only once in the SDGs, in Target 17.17 of Goal 17, and then only in terms of formal partnerships (which are not the only way for business to up its developmental impact, or for policymakers to harness that).

The enthusiasm around the Private Sector Forum accompanying the SDGs process and summit, and the fact that there is these days a forum for business at all, can be misleading in this sense. Unreasonable expectations around the private sector's development role feature in a number of past posts on this blog (here).

Business is not about to simply 'step up' and finance pro-poor development, and to observe this is neither to criticize business nor turn away from the scope for harnessing commercial resources in support of development targets.

We do need to do more work on what incentives might exist for firms to become more explicit in partnering for development and otherwise becoming more explicit in their developmental contributions. See this recent Gaurdian event (a summary of which is out soon).

Yet those that call for business to 'step up' on the SDGs (see here, for example) must also acknowledge the huge complexity involved in all but the most well-resourced firms in trying to track SDG-related impacts. The answer is not to say 'various tools now exist to help in this'.

This relates to a second, too-late-but-anyway reflection on the SDGs.

It comes from re-reading, if you would, the sentence above 'Target 17.17 of Goal 17'. Many have commented how a key to the MDGs' relative success was their brevity and (for a very complex subject-matter) their simplicity.

The same cannot be said of the SDGs. Quite apart from poorly-resourced states, how are major firms really going to find the development agenda a compelling phenomenon with which to engage, if it has proliferated into such detail? Yes, goals need measurable targets alongside, but I wonder whether the SDGs will sustain corporate interest in sustainable development in the way they might have had their drafters' had the grace to keep things a little simpler.

I have written / ranted before on how to sustain sustainability and problems of compliance fatigue (here).

Related to regulatory and policy proliferation is the risk that SDG-related activities (by states, by firms, by civil society) become a process of tracking and compliance-style activities, rather than strategic thinking about how to promote more peaceful and prosperous societies overall.

In 2012 I wrote this post about the ordering, motivating power of simple ideas in thoroughly transforming society (here).

I am still reading all the fallout from the SDGs summit, but my own first impression is that their ambition to be comprehensive has meant a missed opportunity to present a compelling, clear, relatively simple set of ideas for a better world.

This will surely hamper the narrower objective of engaging business in meeting these goals.

Jo 

Milton Friedman's ghost in Mombasa, 2015

The fashion at corporate responsibility summits is to mock Milton Friedman, the Chicago school economist.

I often wonder how many who do so have in fact read his late 1960s - early 70s doctrine before dismissing his famous line that '... the only social responsibility of business is to make profits...'

(Here it is in a nutshell, and by the way in its full explicit Cold War, capitalism-as-freedom context; a fair full quote would add what he did: '... so long as it stays within the rules of the game ...' engaging in free and fair competition without deceit, and compliance with the laws of the land.) 

Friedman's ghost has appeared a few times to me, in broad daylight too, here.

'Here' is downtown Mombasa, the heaving multi-ethnic port city that has long been the gateway to Kenya, and indeed to the entire east Africa region.

(Through its congested port comes everything from east Africa's oil supply to many of the small consumer goods sold by the region's ubiquitous street traders; too little that is Kenyan besides tea is exported in return -- and too much of its 'exports' consist of ivory poached for Asian markets, but that is perhaps another story ...)

In apparent contrast to Friedman's austere doctrine, we now tend to accept that 'the development challenge is no longer the preserve of government'. So reads an editorial by Kenya's deputy president in a local daily, following remarks he made at a conference in Nairobi earlier this week.

The remarks are an opportunity to reflect on what business the business community has in designing and delivering the development agenda -- globally, nationally and locally. 

There is no doubt, in my mind, that business (however we might define it) both has a significant role to play (within some important limits), and has clear interests in the development agenda succeeding.

The deputy president's remarks raise some consistent issues in topical debates on how the private sector can support development, and how supporting a vibrant private sector can have developmental dividends ... 

Some points he makes are hard to argue against. The private sector stands to benefit from developmental gains; its role goes beyond financing or co-financing projects that have development impact -- it is not just a source of resources; and so on.

And only purists will object to him using the term 'corporate social investment' (which can have a limited CSR-project meaning), where he really means a range of broader impacts that larger firms and funds can have beyond simply Friedman's approach of maximising profits while obeying the rules of the game, especially paying taxes and employee's salaries and complying with environmental and other laws.

Here in Mombasa there are initiatives, for instance, that reveal business groupings taking a more deliberate, engaged, do-not-wait-for-government approach to issues such as finding work for what Friedman called 'the hard-core unemployed'.

Yet call me a heretic, and accuse me of seeing ghosts: Friedman was not totally, as they say, 'on crack'.

In all my meetings with businesspeople here, including (in fact, especially) those with sincere longer-term developmental passion and vision, a message emerges that on its face is uncomfortable for all of us espousing a far greater explicit role for business in development.

This is the inconvenient truth that the greatest developmental impact business could have in places like this is for government to focus on allowing them to succeed as businesses. Not specifically as socially responsible or development-oriented businesses (although there's no trade-off necessary), but to succeed as law-abiding firms creating value, jobs, tax revenues, demand for better governance, and so on.

The developmental impact that a flourishing, open business sector could have in such places (within the natural resource and environmental envelope) perhaps compels one to turn from exploring alignments and partnerships (the current trend) to old-fashioned 'let tax-paying business succeed'.

The public policy issue then is far more about fostering enabling environments for core business activities, than persuading business to seek alignment with particular aspects of the development agenda. 

If so, it follows that contrary to the deputy president's (otherwise welcome) message, the role of government is not to help business identify where it can have maximum developmental impact.

Instead the role of government is to identify where it (government) can create maximum developmental impact by identifying where to help business do what business does best, while upholding the (evolving, more demanding) rules of the game ... cue Milton Friedman's famous quote.

Jo

PS -- this approach may of course assume that government has the regulatory, planning and other capacity in particular to tax business appropriately and to make use of those revenues.

Cross-sector partnerships: fashion, fuzz and focus

This post marks six months to the summit to agree the next global development agenda, to replace the 2000-2015 MDGs (Millennium Development Goals).

Discussion of the Sustainable Development Goals is filled with the significance of cross-sector partnering as the key to unlocking development potential.

By 'cross-sector' is often (if not exclusively) meant 'public-private' and so the partnering agenda is, in large part, about more proactively engaging the worlds of business and finance in the world's development.

If 2015 is the 'year of partnerships', what is at stake?

Any good contribution on this topic needs to address, at a minimum (a) what sorts of activities might be meant by the broad term 'partnership' or 'partnering'; and (b) the many assumptions that attend the rhetoric on this issue: assumptions about trust (between business and government), and about aligned incentives and adequate capacities for long-term sustained partnering.

This is vital since (as often when UN summits loom) there is a tendency towards self-reinforcing rhetoric, persistent refrains that reinforce fashions while often losing sight of opportunity costs and risks.

The fashion for cross-sector partnering risks erecting this very difficult, emerging set of practices as the development panacea without adequately theorising, testing, illustrating. 

It also risks distancing states from their development obligations by suggesting that the main vector for development requires the cooperation of business and others. Yes, collaborative development holds great promise, but development failures cannot simply be put (in future) to the failure of partnerships. These fail all the time, in many areas of life.

A blogger on this -- or any -- issue should offer variety along with some attempt at insight, opinion, information.

This is true even for an occasional (roughly fortnightly) blog like this one.

Yet when a topic is complex, surrounded by mediocre inputs, and very important, I think a blogger adds value simply by passing on something worth reading.

Of all the pieces I've read in 2015, this World Vision report perhaps best sets out the issues and meets its title's promise of 'advancing debate' -- if only by promising to help clarify what the debate is, and so separate fashion and fuzz from topics that need focus. (It follows some earlier excellent briefings from that organisation on this topic).

For the most recent thoughts on this issue on this blog, see here.

Jo

Public-Private Partnerships: Hype or Hope?

Partnering with business for development is overwhelmingly a good thing.

Disciples of partnering are making fascinating progress, as The Partnering Initiative here in Oxford shows; pilgrims of partnering are forging interesting, promising relationships -- not waiting for policy orthodoxy to lead.

However, this post questions the new-found faith in public-private partnerships (PPPs).

It makes two points about the need for caution over the current enthusiasm for PPPs as the panacea for Africa's development.

1. The first is that the developmental impact of the private sector is not limited to what businesses can do in partnership with governments, civil society, and community groups.

Strategies that put 'business' and 'pro-poor development' in the same sentence should be about far more than PPPs. There are significant ways in which the developmental impact of business activity can not only be harnessed, but unleashed, without involving any partnering of the 'PPPs for development' sort.

For instance, last week's post noted the scope for responsible private enterprise to deliver poverty-reduction without partnerships as such, but with development policies geared to foster investment and broad-based, inclusive growth in societies that currently struggle to attract or achieve that.

The problem is that the current fashion for partnering, while welcome, could obscure the 'quick wins' available from, for example, helping countries reform their business regulatory environment in ways that reduce unemployment. This stuff is hard -- but not necessarily harder than PPP-ing, and potentially far more impactful in a diffuse sense across society at large.

Of course, short of partnering it makes sense to consult business (in an appropriate and principled way) in the design of policies intended to foster inclusive, sustainable growth through unleashing the private sector.

1A. This point -- PPPs are not the sole vector of increasing the private sector's development relevance -- relates to another. An emphasis on 'partnership' can be too narrow a framing for what is really about public-private cooperation more broadly: (a) 'partnering' is not limited to formal, regulated PPPs such as infrastructure ones, but encapsulates a range of relationships aimed at development impact; (b) cross-sector cooperation and dialogue, especially where systematic, can be hugely significant without involving partnering as such.

I promised a second point of caution over current prevailing PPP-related enthusiasm!

(A precursor to that is to note that the enthusiasm for PPPs and wider partnering is in fact hardly universal across either the business or development communities).

2. The PPP hype belies the experience that partnerships are hard to generate and maintain, often controversial, not necessarily efficient or effective, and not necessarily grounded in evidence of their superior developmental impact.

I say this as an overt proponent of exploring ways to engage business in the development agenda.

For the last year, I've advised on an emerging cross-sector partnership intended to promote the partnering agenda. The difficulty in getting business, government and academic actors to work together on this discussion-about-partnering is itself instructive of the challenges of partnering-in-fact. More work needs to be done on measuring the effectiveness and opportunity-cost of PPPs (widely defined), and on conceptualising their political and policy risks and implications 

In this respect, I recommend a read of this Devex Impact blog post on partnerships, especially its first few paragraphs.

Previous posts on this site have sought to reflect on these issues, for example the hype about PPPs in Africa (here).

Jo

Business, poverty and signs of confusion

Some skepticism of policy trends promoting the private sector's role in meeting development goals is healthy.

But there is a 'but' here.

The 'but' is that skeptics risk confusing means with ends, in ways that sound stridently pro-poor but which might occlude opportunities to harness (or unleash) private enterprise, in ways that might hold far more development and empowerment potential than the aid schemes of conventional development practitioners ... 

Take the latest Gaurdian Development Digest network's email this week.

There is a post (here) that laments the shift in development aid policy towards helping promote trade, investment and the liberalisation of markets. Whatever its merits, this makes the bizarre suggestion that "globalisation has made a tiny proportion of people better off." OK, the environment has suffered and China's sprawling migrant mega-cities may be awful -- but the author is determined to ignore the evidence that China's development has lifted hundreds of millions of people out of poverty. 'Liberalisation of markets' was integral to that process.

The confusion and contradiction among these skeptics is illustrated in the same Guardian issue, which carries a post on the challenges to attracting private investment in Africa's energy sector. Without this investment, Africa cannot create jobs, electrify hospitals, light classrooms, etc.

Attracting investment of this sort has huge pro-poor developmental implications.

Aid that helps countries erect regulatory frameworks to enable this, for example, surely cannot be dismissed as 'neoliberal' as if that easy, glib label explains everything we need to know. That is lazy, self-satisfying criticism.

It follows that (for instance) shifting UK aid policy to help improve the investment climate in poorer countries is not simply a self-serving process of diverting aid towards corporate interests.

The contradiction on that one page of the Gaurdian hub suggests that some observers want development, but only by certain means. These means, for them, must not involve any possible benefit to the private sector, local or foreign. Poor people good, companies bad.

This is so short-sighted, condescending and statist that it is hard to know where to begin attacking it.

Development targets are so hard to obtain and the ends of these development goals matter. If the means to achieving them involve opening up markets in ways that foster productivity and growth and opportunity and financing, it should at least be considered. Many development types seem instinctively, almost ideologically, to reject it.

Now, development is of course a process, not just a set of outcomes.

That is, the manner of the process matters. How things are done (participation, inclusion, etc) are as important as the achievements. Otherwise, if only outcomes and targets mattered, we would all be praising Rwanda's development achievements. The reason many right-thinking people do not is because they recognise that these goals are achieved in a political context where people are not free to mobilise to express their disagreement with government policies designed to benefit them ...  

Nevertheless, the ends matter too, at least to those directly affected by stubborn poverty traps.

It follows that if altering the thrust of development practices towards facilitating the prospects for business growth, investment and job-creation holds promise for bringing whole populations out of poverty, the fact that this might create investment opportunities for private business owners is not, on its own, a reason to oppose them.

This must be so unless growth is a zero-sum gain, whereby any gain must necessarily be at someone else's expense. I'm no development economist, but intuitively that seems wrong.

Development policy cannot be reduced to market-creation, and aid spending cannot simply be about opening doors for one's home corporations to find new markets -- but the desire to avoid benefiting private sector firms cannot itself justify opposition to schemes to increase and liberalise trade and investment that might have direct and indirect pro-poor benefits.

In contemporary Africa, policies calculated to improve the business environment are not simply the manifestation of global capitalism vanquishing the interests of the poor. Nor is the UK's shift in aid policy (and others like it) simply designed to promote British industry at the expense of local people in developing countries.

The fact that these new pro-growth aid policies and related economic opportunities will be distorted by powerful, self-interested elites is a manageable risk. Otherwise we accept that 'aid' only comprises hand-outs of the old-fashioned kind, which are also manipulated politically and yet hold no promise of economic self-empowerment.

There are much wider structural issues of trade and investment that affect the prospects of emerging out of poverty: aid to help build local business and attract investment should be balanced with aid to help build the capacity of countries to engage in trade and investment negotiations on better terms.

Jo

See here for previous posts expressing caution with the tilt towards business's role in development.

What role for business in tackling inequality?

'Africa Rising' advocates boast that the sub-Saharan Africa region hosts six of the world's fastest-growing economies. Yet it also holds six of the world's most unequal societies in income terms, according to the African Development Bank.

This week Oxfam released a report on the growing wealth and/or income gap around the world.

This is ahead of the annual Davos gathering.

If the inequality gap raises serious social policy (and even security) issues for governments to respond to, what is a responsible role for the private sector on this issue?

That is, what role should organised businesses play in addressing structural income inequality in African economies, beyond their duties as taxpayer and employer? Would shifting the focus onto business (and re-framing inequality as a corporate responsibility issue) wrongly detract from the proper locus of responsibility?

That lies in the complex social contract between citizen and state. Corporates should be neither excluded nor exempt in such a debate.

I wrote on this (... here ...) almost exactly a year ago -- also ahead of Davos, also about inequality, and also unsure where exactly 'responsible business' meets 'redistributive fiscal policy'.

There have since the last Davos been many reports on how Africa's fast (average) GDP growth rates have not reduced income inequality and may have only exacerbated it (see, for example, this report and this IMF Policy Paper, both from a year ago).

However, among all the policy prescriptions and advocacy points, few offer insights into what it is business could be doing more of, or less of, other than the obvious issues (where foreign firms are concerned) around tax evasion or avoidance.

Income inequality raises serious longer-term business growth and investment strategy issues in Africa, since it affects the pace, quality and sustainability of growth (for example, of new urban middle classes)*.

This 'bottom line' element suggests that business leaders will continue to give the issue attention. In weaker governed states in Africa, that could in theory (if somewhat counter-intuitively) extend to corporate taxpayers helping to increase the capacity of their host governments to levy and distribute fair and viable corporate taxes more efficiently.

For many African economies, it is arguable that growth rather than income inequality is the priority: without the tax income from sustainable, broad-based growth these economies will struggle with distributive policies. The current focus on 'inclusive growth' need not be a simplistic 'growth and redistribution' model, which posits citizens as passive recipients; if its ideals are realised, inclusive growth is economic empowerment not wholly based on state provision of income. Firms can contribute to this through their hiring and procurement policies. 

Jo

* Oxford Analytica, 7 November 2014

'Flourishing Cities': partnering for resilience

How can effective, appropriate cross-sector partnering help in 'future proofing' the developing world cities of the future?

'Flourishing Cities' is the theme this week of our annual Challenges of Government conference at the Blavatnik School of Government here in Oxford.

From an Africa perspective (as this blog is), the conference programme speaks to the scale of urban development and human security challenges in fast-growing cities. Far from Oxford's pleasant setting, these challenges come across very vividly in the heaving expanse of cities from the Cape Flats in South Africa to Cairo.

(The Nile city was the setting of a related post a year ago now on the 'turnaround challenge' for business in mega-cities (here)).

Yet by focusing among other things on the progress of one troubled Colombian city, the conference agenda also speaks to the largely untapped potential for scaling-up dialogue and partnership between policymakers, business, civic groups (and often donors).

The evident and largely latent scope for greater cooperation and collaboration holds considerable promise for unlocking developmental bottlenecks in ways that make commercial sense for business and investors, too.

At some level, there are strong shared interests across sectors in moving beyond guarantees of minimal security so as to enable human flourishing and the attainment of basic aspirations. It goes almost without saying that business and governments share an interest and indeed an imperative in promoting more inclusive and sustainable growth and poverty-reduction; more and better education, job-creation, and productivity; greater shared prosperity and reduced inequality (of income, healthcare, security and so on); greater social cohesion and reduced radicalisation; and so on.

At this level, the case for partnering is not hard to make. Much harder is to give effect to such ideas, and to ensure that there are principles to guide the pragmatism involved in greater cooperation across sectors in meeting the development agenda.

Moreover, there is a growing shift to focus on city-level issues, from investors to development agencies. Schemes and initiatives proliferate: Rockefeller's '100 Resilient Cities', Columbia University's 'Millennium Cities' initiative; IBM's 'Smart Cities' initiative, and the list goes on. Again, the case for focusing on urban development and resilience challenges is easy to make, even if partnering is hard: finding the right incentives for sustained cooperation, the right relationship parameters, deciding who counts as 'business' or 'the private sector' in selecting partners, negotiating relationships with national- and provincial-level governments.

As the previous post on 'innovation' noted (here), there can be a tendency in using the term 'partnership' to gloss over not just how hard and entrenched development challenges can be, but also how hard, piecemeal, or political partnering can be (even if 'development' was easy!).

What we are working on at Blavatnik, among other things, is getting to the heart of the fundamental concepts around why partnering works or does not work, is appropriate or inappropriate, is embraced or resisted.

These challenges apply generically: one myth in the recent turn to city-level programmes, conferences, investment strategies (etc.) is that by descending to the supposedly more agile and adaptive city level of analysis or administration, one can by-pass some of the enduring problems of cross-sector collaboration and get more done.

This is an appealing idea -- but not necessarily a sound one.

Jo 

Africa: the use and abuse of 'innovation'

No-one wants to be heard to oppose 'innovation'.

It is not fashionable to suggest that the search for new approaches, whether in business or policy-making, can perhaps distract us from honest analysis of why conventional approaches are not working.

While the 'innovation!' cry seems everywhere at present, it is not often clear what it means to foster innovation in any field.

This is so, too, in relation to the issues often covered in this blog: the regulation of responsible business in developing societies, and the governance of public-private development cooperation.

Implicit in that call, of course, is a recognition that conventional approaches are not working. 'Old' approaches (for example, to promoting the rule of law in other societies) are often conceptually sound but face enduring barriers in practice. No amount of privileging innovation over implementation might be able to surmount these barriers. Yet the prevailing 'innovation' rhetoric can hold out the false promise that these barriers might be side-stepped altogether.

We hear a lot about the need and/or scope for innovative approaches to unlocking Africa's potential. I'll call this the 'innovation trend'.

In parallel is current rhetoric around Africa as a continent whose poorer and unemployed millions are best understood as would-be innovators and entrepreneurs. I'll call this the 'innovator trend'.

In development policy circles, the rhetoric of the innovation trend is undeniably positive. It supports a perspective that seeks potentially transformative break-throughs and short-cuts. The innovator trend is equally positive: it has an empowering intent that casts the continent's poorer people as having economic and development agency and potential, rather than as mere passive recipients or observers.

First, the 'innovator trend'. The goodwill that accompanies current portraits of the continent as full of latent 'innovators and entrepreneurs' has an unintended dark side. Many millions of Africa's rural and urban poor are not 'innovating' but simply trying to secure less precarious livelihoods; to cast them as incipient entrepreneurs is less condescending and opens the way for (self-)empowering approaches. But it can also represent a denial of the reality of poverty, and of the political context for addressing it.

I wrote on this recently in something published by the Bertha Centre for Social Innovation at the Graduate School of Business at the University of Cape Town, South Africa: here.

Turning to the 'innovation trend', it is becoming rather skewed. By 'innovation' in African development is typically these days meant technological innovation, and increasingly digital / IT tech-based innovation. The field is attended by what I think is unfounded hype about the transformative potential of IT tech-based solutions.

In particular, much of the excitement around at present is based on unsound analogies that take mobile phone sector trends in Africa and, from these, project that the continent's new dawn is not only at hand and handheld, but is less than a finger-length away. This conversation suggests that if only the right technologies and ap's could be designed and scaled-up, in development and growth terms Africa would soon join Asia, and then overtake Scandinavia... This is not helpful even if it is uplifting.

I noted (or rather, ranted) in a previous post that one cannot necessarily 'leapfrog' all development, governance and growth problems in Africa simply by waving the wand of 'innovation'. Nor are there tech-based solutions to the political, policy and governance issues that are inseparable from refashioning whole economies and societies.

Innovation vocabularies in the African development context have a negative dimension. By placing emphasis on hopes for tech-based quick-fixes to enduring developmental challenges that require conventional reform efforts, the turn to 'innovation' rhetoric might in fact represent a form of fatigue.

If so, championing innovation also smacks of a form of desperation in the face of enduring conventional bottlenecks, barriers, deficiencies and dysfunction.

I am not saying that innovation is easy, only that development is hard...

Jo

ps -- here is a previous post, reflecting on how corruption is a form of 'innovation' -- a new way around systems that are not 'working' in the eyes of some who have their own motives. How does a society capture the evident social capital that fosters innovative corruption and harness it for pro-social outcomes?

'Business for Peace'

What drives current expectations that the private sector will play a more direct role in ensuring more peaceful societies?

This week's UN Global Compact 'Business for Peace' event in Istanbul is part of a growing field, as it were.

This field is dedicated to exploring the unrealised potential for business entities, communities and actors to contribute appropriately -- in more explicit, direct or deliberate ways -- to conflict prevention, mitigation or resolution in particular situations or more generally, and especially in fragile or divided societies.

This is the topic of my forthcoming book Regulating Business for Peace by Cambridge Univ. Press. There is a big, complex and evolving research and policy agenda here. There are plenty of ways into the debate, too, from practically-minded policy prescriptions on how businesses (and their financiers, insurers, etc) can be more conflict-sensitive in their operations and supply-chains, to understanding what incentives might help to promote responsible but competitive investment in fragile states.

These issues are topical, and highly relevant in much of sub-Saharan Africa. I could blog on, book and beyond, but instead think one observation is important. Much of the 'Business for Peace' / business and peace / business and conflict debate focuses on what business actors should do more or less of or do differently, and under what circumstances. To my mind this partly misses the issue.

This focus on business responsibilities or opportunities to help promote or consolidate peace is driven by various things, and is part of a wider shift in the expectations of business in society. In large part it is driven by recognition that more can be drawn out of the peace-relevant influence, incentives, impacts and attributes of the private sector; in some ways it is driven by business leaders' own sense of the need for the private sector to be more proactive in ensuring the sorts of peaceful, prosperous societies conducive to sustainable growth.

Yet what can be lost in this focus, and at events such as Istanbul, is that the proper way to frame this issue is not 'what can business do for peace and how' but surely 'what must public policy do to maximise the scope for business to contribute to peace'.

This is really reiterating an earlier post this year: here. It also is a theme of other posts that reflect on how business has gone from being an ignored stakeholder in the development agenda, to a presumed panacea for developmental problems.

To express caution on taking 'business for peace' too far is not to deny the scope for business actors to do more to mitigate conflict risk and maximise social cohesion. It is not to bring everything back to policy or make any worthwhile initiative contingent on government action.

Instead it is to recognise that the greater focus on the role of business is no substitute for recognition that business has limited scope, incentives, legitimacy (etc) for peace-building. The growing enthusiasm for realising business's unmet peace-building potential should thus not obscure that the primary question is a public policy one; the primary responsibilities rest with governments; any failure by business to contribute more positively (or less negatively) to peace is ultimately a public policy failure.

Jo 

Sustaining sustainability: bottom lines, full circles

'Can we expect corporations to solve global problems?'

This fortnight's post relates to a panel with this title that I attended at this week's 'Global Horizons' conference hosted by Oxford Analytica.*

As they say, 'one had to be there' ... not surprisingly the panel covered a lot of ground, some of it requiring fundamental questions about the real or ideal nature of society, its well-being, and its governance. And 'how', 'why' and 'in what direction' those issues and expectations may be shifting.

The combination of Africa's serious developmental / governmental deficits and investment interest in its contemporary growth story make it a primary forum for exploring these questions (or at any rate I think so -- hence this blog!).

So anyway this post is not a report, nor attempts really to address the question (or how it was framed). It only reflects on two of the various things that struck me on the panel. These relate to the 'who' issues around sustaining sustainability.

Who: firms

First is how so many debates on business and society or corporate responsibility or the public-private divide are approached in a very limited and limiting way, by reference to 'the private sector' only as large, listed, branded Western multinational business corporations.

This is a very narrow perspective. Effective analysis of and strategies for sustainable and responsible business cannot be lazy. They must consider how incentives, inclinations and other factors vary considerably depending on sector, nationality, size, corporate form, etc. There is no one 'private sector'. Someone raised this with the panel, thankfully; it is something of a bugbear of mine, noted indeed in the very first post of this blog (2011).

Who: governments

Second, the panel question did not mention government but implicitly of course it is not asking 'what can / should corporations do about global problems', it is asking 'what can/should they do relative to governments' (or indeed relative to people acting as [free] agents, consumers and citizens in society without waiting for either governmental or business actions).

Many commentators on this topic perhaps understandably focus on what business should do and not do. True, much of what matters and can be done in sustainability terms does not require or need to wait for government. Yet there are still too many debates one goes to side-step the question of government, the governance of responsibility, the division of roles on promoting sustainability.

The panel did not (like this blog) have an Africa focus. Africa was covered in other discussion groups, on the theme of its rising consumers. Notionally, such market forces -- not state regulation -- are or will be the most sustainable drivers of business sustainability and corporate responsibility. Yet there is a risk here: trends in this area, combined with new expectations that business will directly contribute to the development agenda, are good for articulating the nature of corporations' responsibilities or abilities, but can tend in the process to obscure those of government.

Policies and politics can be a big part of the 'global problems' we're talking about. These debates tend to focus on corporate responsibility whereas inherent in the issue is delineating that by reference to the relative spheres of responsibility and action belonging to governments. (We should also ask how influence across business-government lines can shape where those lines are drawn and in whose favour).

In Africa at least, this focus on government's duties and the governance of responsibility is as important as being pragmatic and imaginative about unexplored roles for business to improve the provision and protection of public goods (see this recent post, here). Moreover, we must acknowledge how much harder it is to get business, government and civil society working together on 'global problems': it is not just a case of saying 'only connect' (I ranted about this point here).

If the optimists' case proves true (enviro, social and governance issues become fundamental business principles fully integrated into valuation and value-definition) then with a redefined 'bottom line' we will have come full circle to Milton Friedman's controversial thesis that the social responsibility of business is simply to continue to succeed.

The focus would then again be more balanced on the responsibilities of governments and indeed consumers-citizens: expecting corporations not to deepen global problems, supporting enterprising ways to solve those problems, but understanding that these are too big and complex for any one arm of society to solve alone.

Jo

ps - The panel also dwelt on how the question of business responsibility for public goods is increasingly inseparable from debates about proper forms and levels of taxation. I mention this just to free-kick an earlier post on this issue in Africa: here.

* Oxford Analytica was my previous employer.

Business and Africa's development: an agenda

Pre-Autumn Oxford, and this week a new grad student moved in next door. So this post gets nerdy on the nexus of responsible business and responsive government in African societies.

The topic is big, but if this blog's themes were translated into a research agenda, what might be some principal questions?

I try below to list 10 hypothetical thesis research topics. They are not the 10 biggest questions around 'Africa Rising' generally. Partly this reflects an implicit call on what issues relate to a public role for the private sector, and which are firmly matters for government only: this blog is not about public policy in general. Many of the issues affecting Africa's trajectory are global ones even if they have important localised impacts, from climate change to negotiations on trade barriers.

Instead the list is an exercise in indulgence were I to be one of these new post-grads choosing a topic.

You will notice that some of them are essentially diagnostic: where are we now? There's a reason for that. Working on medium- and longer-term upside scenarios for Africa's unlocked potential -- generally or by sector -- is very interesting work. There is quite a bit of it, and every few months more glossy reports. Yet the trick to such projections is basing them in accurate stock of where things are now. The paucity or unreliability of data make this no easy task -- as Morten Jerven has continued to show.

Taking stock, deciding baselines, and building scenarios requires, of course, asking the right questions. So does the task of imagining the 'upside' -- what does it comprise, what does it mean to conceptualise steady growth that is inclusive and sustainable?

Well, here are 10 topics. They are not necessarily in order of priority. They are framed brief and broad as research questions, albeit ones with a degree of abstraction (macro-level) and with a heavy policy rather than academic or conceptual dimension.

1. 'Inclusive growth': What is in fact happening to income inequality in the region's major economies -- is there any role for business on this issue in fast-changing markets, or is its social responsibility only to grow? More generally, how can tax system design in African conditions best balance private sector incentives with public goods imperatives, and how do we institutionalise appropriate public-private dialogue on tax issues?

2. 'Africapitalism': Is there any evidence of an emerging identifiable 'African' model of private enterprise with smoother edges in terms of sustainability and social + environmental impact, a model consistent with prevailing political ideas of the developmental state ... or is 'Africapitalism' just a neat phrase with no real content, in economies whose structural patterns are well entrenched?

3. 'Business and development': Policymakers valorise small and medium enterprises, but what do we really know about their impact on job-creation and poverty-reduction in Africa? Assuming we know this, what can realistically be done about financing, regulatory and other obstacles to local business creation and continuation on the continent -- how can donors, lenders and big business help?

4. 'Business for development': Related to 3, in what ways can systematically engaging bigger business in the sustainable development and inclusive growth agenda help, including by linking informal or smaller-scale actors into bigger value-chains? Why is this proving so hard? Where has rhetoric on private sector engagement yielded significant results capable of sustaining replicable models?

5. 'Innovation: nothing new?': Mobiles (and related platforms) have had a significant impact in Africa, including in ways that address or leapfrog altogether some stubborn development bottlenecks. This continues to spurn a lot of hype about Africa's 'digital lions' and the transformative potential of the internet in African economies. Yet what evidence is there about links between private consumption or public investment in / of ICTs and significant change in core areas of the economy such as agriculture? How might the internet/digital/knowledge economy prove truly transformative? Or is the current donor buzzing around innovation and ICT only going to prove a distraction from education and skills issues and from addressing some basic infrastructural, policy and regulatory barriers to growth in traditional sectors?

6. 'New investors': What evidence is there that Chinese and other investors have an inferior social or environmental footprint in Africa relative to other (Western) firms? On the basis of this, what scope still exists to shape 'new' investors' approaches in ways that promote ideals around sustainability, good governance and human rights?

7. 'Future-proofing cities': In what ways are business and governments (including sub-national governments) working together to address service-provision and other shared issues in Africa's more significant fast-growing urban areas? What can be done to scale-up some of these initiatives, and how do they relate to broader national and donor development strategies, including in terms of being coherent with rural development issues?

8. 'Public-private partnerships': What pro-development role do PPPs really have to play, what is their record of success, why is there reluctance on either side, what could be done to ensure they meet the potential often attributed to them? In particular, recent high-level summits have called for innovative public-private financing mechanisms to 'share risks while maximising financial returns alongside development impact' (a tall order ...): what models work / might work, what can be done to ensure they're taken up especially for public infrastructure funding?

9. 'Farming fundamentals': Perhaps I am biased, but it seems to me the focus on Africa's urban consumer classes, youth demographic, urban labour surplus, manufacturing potential (etc) is still wide of the main mark. That mark is agriculture, and related value-adding services and industries. What does the last decade really tell us about the scope for private investment in these (very diverse) sectors to have significant developmental impact, in particular through bringing in smallholders?

10. 'Fragility and prosperity': in what specific ways does donor and government policy towards private sector development or engagement require adaptation for countries and areas affected by fragility, conflict and violence? How do we attract reputable firms to risky places? Does major investment necessarily increase human security in fragile regions, where might it have had the opposite effect?

There are any number of other questions and re-framing of the listed ones. There it is. The potential and problems relating to Africa's women and girls mean that the listed things could benefit from a gender dimension.

Responsible policymakers and investors would be asking essentially the same questions about the nature of the continent's growth path: one question underlying all those on the list is how to foster responsibility and attention to longer-term horizons within government and business. That challenge is hardly unique to Africa.

Jo

Business and disaster response

The role of for-profit entities in humanitarian response situations raises a range of policy questions.

Much of this part of the world goes on summer holiday at this time, amid a range of confronting stories of humanitarian crisis, from Syria to South Sudan. One question is the private sector's role in preventing and responding to disasters.

This brief post offers some reading on the issue. The literature on this took off, in large part, following the 'Boxing Day' Tsunami of December 2004, given in particular the role of global logistics firms in responding to the disaster. The critical literature has a somewhat longer vintage.

The thrust of Naomi Klein's 'Shock Doctrine' (2007) is that a malevolent but mainstream strain of 'disaster capitalism' thrives on such situations.

Compare, from the same year, Binder and Witte's assessment of key trends and policy implications  in relation to business engagement in humanitarian relief.

Here now is a major report on the topic, published this month by ODI researchers.

If you prefer, see this UN news service summary of the research (here). The summary is right, I think, to focus on the pervading legacy of distrust of the private sector by humanitarian agencies and staff. It is also right to note that the search for sustainable, innovative relationships is hampered by the tendency to nominate the wrong people to front up to the private sector or aid agency (as the case may be): humanitarian groups send their fundraising officials to talk with business, while corporates assign the role to public relations officers.

If short on time, here is an op-ed media article by one of the ODI researchers.

The research tends to make insufficient distinctions between acute humanitarian emergency situations, and (longer / slower-burning) periods of post-conflict or post-disaster recovery. Many of its examples relate to situations of chronic under-development, poverty, marginalisation or vulnerability that do not amount to humanitarian emergencies. The ethical, commercial and other considerations of for-profit engagement are not the same for such settings, clearly.

Distinguishing between forms of involvement also matters: firms that respond to natural or man-made disasters (and the line between those is often blurred) may be doing so as donors, partners, contracted service-providers, pro-bono service-providers, and/or out of considerations of strategic self-interest that are not necessarily inappropriate.

Jo

Africa, 'rising powers' and responsible investment

'The private sector' covers a huge variety of actors. Debate on responsible business, and on engaging business in development, can tend to gloss over this.

The vast majority of stuff written on these topics clearly has in mind only large Western listed companies, yet seldom clearly states this focus-choice, and even then treats such entities as a fairly coherent class. 

There is not enough attention to how different industry and finance sectors have very different incentives, regulatory levers, risk-appetites (etc) in terms of responsible and/or conflict-sensitive business conduct. Within sectors too there is typically significant variation among in how different firms deal with these issues, including variation among firms of the same 'nationality': there is too little good research that demonstrates how this is so (Luke Patey's Sudans oil sector work 2005+ is an example / exception).

Likewise, as argued previously -- and despite the first-glance attractiveness of the proposition -- there is insufficient empirical basis for the assertion that listed OECD-country firms generally have a superior enviro, social and governance footprint in developing countries than Chinese and other firms.

Evidence-based arguments on such things are vital to wider strategic debates about leveling the regulatory / responsible business playing field among foreign investors in Africa. Awareness of the varying capabilities, propensities, motives etc of different business sectors and firms is a good place to start in the advocacy, design, implementation and monitoring of responsible business mechanisms.

This week I'm at a DFID-sponsored workshop of a longer-term project on mega-projects, 'new powers' (BRICS) and conflict prevention in Africa. One of the (academic) questions I think that our research must engage with is the relevance of investors' national origin, ownership (state or private), form of incorporation, etc., to their varying amenability to regulatory overtures intended to mitigate conflict risk and other social harms.

This is a link (here) to a recent paper making the somewhat contrary point, too: that from Africa's perspective it matters not whether investors are Norwegian or Nigerian, Chinese or Canadian. What matters is their capacity and inclination in fact to contribute, within what can reasonably be expected of them, to inclusive, peaceable and sustainable development.

Also this week are two similar events in London on country and corporate uptake of the UN Guiding Principles on Business and Human Rights, adopted three years ago this month. One event looks at 'due diligence' requirements. The other I'm attending and looks at the contribution of multilateral schemes to compliance with such standards in conflict-affected or at-risk areas (see #bizconflict).

Like some of the re-emerging debate on the necessity for, desirability and feasibility of an attempted negotiated treaty on (the state duty on) business's human rights responsibility, such events in the past have often (to my mind) featured well-meaning advocates who tend to speak of 'business' or 'the private sector' as some alien out-there but coherent social force rather than a dizzying array of commercial actors and interests which happen not to be governmental or non-profit. Hence the sense that advocacy and regulatory design could account more cleverly for variation by sector and other criteria.

Such events also naturally focus on Western listed privately-owned firms. But they thereby risk omitting those state-owned (and other) firms from 'rising powers' whose activities are of high significance to development in sub-Saharan Africa. When attention at such events does turn to the latter, the assumption is that Chinese and other firms have poorer records on relevant social impact and development indicators. Again, this assumption lacks a solid empirical basis.

The first step to influencing responsible business activity is to understand 'business' and how it is operating in fact -- wherever it is from.

Jo

NGOs and business: critics to capacity-builders

The promotion of responsible business practices in Africa will benefit from NGOs not just criticising firms but engaging with them along the value-chain.

Last week the deadline passed for US-listed companies whose supply chains may involve so-called 'conflict minerals' to submit certain plans to the stock exchanges regulator. These plans explain how they intend to ensure that their products will not use minerals mined in conflict-affected areas marked by force-based labour methods and serious systematic human rights abuse. For an accessible overview, see this BBC report.

That these regulations exist at all (*) is largely the result of long-running, intensive campaigning by groups such as Global Witness. Often this has involved exposing firms who know of (or unreasonably undertake no due diligence in relation to) the problematic social context of their supply-chain inputs.

In an open, democratic society where much of the aggregate of social power is wielded by private individuals and entities (and where state regulatory capacity is stretched or distracted) there must always be a place for organisations committed to critical monitoring and advocacy around corporate responsibility for enviro, social and governance impacts.

So critical advocacy, shaming and boycotting have their place. However, they do not necessarily result in solving the underlying problem.

In particular, these are strategies that tend to assume nefarious motives or indifference on the part of firms. These strategies do not account for the possibility that corporate non-compliance with responsible business standards may be a result of lack of capacity and/or understanding, not a lack of will.

In the same way, an advanced society needs a capacity and will to punish certain criminal conduct, yet acknowledges that a more constructive, problem-solving, restorative approach is needed to change behaviours. Regulatory theory tells us that the best-adapted and appropriate systems are those that not only tell or incentivise regulatees to comply, but also devote time and resources to helping them understand what counts as 'compliance' and how to achieve it (or indeed to go beyond compliance, through continuous improvement).

Of course, NGOs have for years (and increasingly in the last decade) engaged more closely with business in pursuit of shared objectives. The Aspen Institute report on the future of non-profits' ties to business pointed out the merits and drivers of this trend over a decade ago. (For a recent overview of these trends, see here and see FSG's report 'Ahead of the Curve' on the international NGO of the future, including its need to engage business more readily in achieving civic aims).

What is different, and to be welcomed, is the greater recognition by NGOs and civil society coalitions that compliance with supply-chain integrity issues is often complex, and that many firms may need advice as much as criticism. This is true, as said, of regulation generally as an activity.

The greater the degree of engagement and cooperation by a non-profit, the greater the risk (from the non-profit's perspective) of 'capture' by corporate interests, or the loss of authority credibly to assess business compliance. Where engagement is intended to help overcome obstacles to compliance, these are manageable and acceptable risks considering the nature and scale of challenges at stake, and the convergence of corporate and civil society interests in addressing these.

One recent primer in this regard is Corporate Responsibility Coalitions, co-authored by Jane Nelson, on new forms of alliance for more sustainable capitalism.

Firms across sectors and up/down supply chains are seeking alignment of responsible and sustainable practices -- and often NGOs can help catalyse these inter-firm relationships; indeed, many firms learned from their tentative relationships with civil society partners how also to reach out to ostensible competitors or other firms on shared issues.

Firms can, strictly speaking, point out that it is for the governments of developing countries to regulate social (etc) impact issues, such that compliance failures ultimately reflect the state's failure. However, such a response is unlikely to satisfy critics -- or increasingly discerning consumers, financiers and insurers, at least in the West.

Yet as an Economist article noted last year, NGO-business partnerships and collaboration is good for society (and business), but these relationships are often messy, tricky, difficult, unsatisfying.

Jo

(*) Note, the US Supreme Court recently ruled on the application of the Dodd-Frank Act in relation to the regulation of conflict minerals in US-linked firms.