Making policies work

GREAT insights Magazine

Making international standards on responsible business fit for purpose and prosperity in fragile and conflict affected environments

February 2016

Nwajiaku, K. 2016. Making international standards on responsible business fit for purpose and prosperity in fragile and conflict affected environments. GREAT Insights Magazine, Volume 5, Issue 1. February 2016.

Most international standards for responsible business conduct are voluntary and place no obligation on companies and governments to implement them. With this in mind, the International Dialogue on Peacebuilding and Statebuilding together with SOMO developed a brochure which consolidates and distils those standards most relevant to conflict affected and fragile contexts.


Many standards


In December 2015, the International Dialogue on Peacebuilding and Statebuilding officially launched its brochure ‘International Standards for Responsible Business in Conflict Affected and Fragile environments’, providing a concise overview of some of the key standards that can help businesses operate responsibly in conflict-affected and fragile environments. Over the last 15 years, a plethora of international standards and guidance have mobilised governments, businesses, investors, and civil society organisations to break the link between conflict, fragility and natural resource extraction and trade, culminating in the adoption of the United Nations Guiding Principles for Business and Human Rights in 2011. Many of these standards have special relevance for conflict-affected areas, such as the Voluntary Principles on Security and Human Rights and the OECD Due Diligence Guidance for Minerals from Conflict-Affected Areas.


What’s the problem?


So, did we really need another brochure on responsible business? Well, yes. Surprisingly, many companies are often not very aware of the existence of the different guidelines. Companies may lack corporate commitment or capacity to implement international standards. Often the high risks associated with such environments and the lack of reliable and updated information about context, investment opportunities, standards and mechanisms, deter businesses and investors. At the operational level, particularly small and medium sized companies, even when they have committed themselves to observing these standards, often fall short on implementation. In conflict-affected and fragile environments, they may find it difficult to fulfil their commitments in the absence of an enabling environment.

Most international standards for responsible business conduct are voluntary and place no obligation on companies and governments to implement them. Existing guidelines and principles do not always offer the possibility of addressing wrongdoing or harm caused. Very few have a non-judicial grievance mechanism attached, with the exception of the OECD Guidelines and the IFC Performance Standards. This reduces the incentives to implement international standards, particularly in difficult environments, and undermines their effectiveness and credibility. It also means that many multinational companies continue to have a poor track record of human rights violations in fragile and conflict affected environments in particular.At national level, many governments, civil society actors, local businesses and business associations often do not have easy access to user-friendly information on international standards, making it difficult for them to bring pressure to bear for implementation.


An overall approach…


With this in mind, the International Dialogue on Peacebuilding and Statebuilding, an OECD-hosted partnership between governments of countries affected by conflict and fragility, OECD-development providers from some of the world’s richest countries, and civil society organisations collaborated with SOMO, to develop an easy-to-use brochure which consolidates and distils those standards most relevant to conflict affected and fragile contexts. It builds on the core principles of the New Deal for Engagement in Fragile States (New Deal) championed by the International Dialogue and endorsed by 40 countries and organisations in 2011, as a guide to effective engagement in conflict-affected and fragile environments. The New Deal calls on all actors, private and public, to invest in ways that tackle the root causes of conflict and to promote sustainable peace. The brochure is one step in the right direction, but standards, even if applied to the letter, can never be enough.

The International Dialogue’s approach to promoting more and better business in fragile and conflict affected environments includes working to develop bespoke guidance for investors, and facilitating sector specific public-private dialogues in country, in ways that both contribute to building trust and peace and improve collaboration for scaled up investment for job creation. In Sierra Leone, in September 2015, as recovery from the Ebola Virus Disease was just taking root, the International Dialogue, in collaboration with the World Bank/ IFC and Sierra Leone’s Up Africa! Ltd, worked with domestic private sector representatives and the Sierra Leonean Ministry of Finance and ICT, to develop a strategy for boosting entrepreneurship in the ICT sector. This work built on the unexpected boost which the Ebola crisis brought to the sector, particularly for young entrepreneurs from the diaspora. Additionally, the International Dialogue also works to amplify the voice of fragile states governments in international debates on development finance, to ensure that they are an integral part of discussions on smart aid and leveraging others sources of development finance, notably corporate taxation and domestic resource mobilisation more broadly.


…based on collaboration


The complex and often complicated relationship between peace and prosperity, conflict, and underdevelopment, has for many decades been the subject of much academic debate; but also much innovation in policy making and advocacy. Countries like Botswana have shown us that no condition is permanent and that, when managed well, resource endowment can bring economic development, which itself can create the conditions for breaking cycles of conflict. The International Dialogue’s New Deal acknowledges the critical role the private sector can play in proactively contributing to making economic development work for peace. The Tunisian’s Nobel Prize winning quartet has ably and dramatically demonstrated what can be achieved when the business community comes together with other actors as a force for building peace and trust. It also highlights the scale of the challenge before us, making this kind of collaboration now more important than ever.

About the author

GREAT_Insights_Vol5_iss1_kathryn_nwajiaku

Dr Kathryn Nwajiaku is head of the Secretariat of the International Dialogue on Peacebuilding and Statebuilding, based at the OECD, in Paris. She is grateful for inputs from Mark van Dorp, Senior Researcher at SOMO.

kathryn.nwajiaku@pbsb.org

www.pbsbdialogue.org

 


Photo: Secretary-General Ban Ki-moon (right) meets with Ouided Bouchamaoui, President of the Tunisian Confederation of Industry, Trade and Handicrafts and co-winner of the 2015 Nobel Peace Prize as a member of the Tunisian National Dialogue Quartet (United Nations Photo)

This article was published in GREAT Insights Volume 5, Issue 1 (February 2016).

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Conflict, Security and ResilienceEconomic Transformation and TradeBusiness and DevelopmentConflictFragile statesPeacebuilding

External authors

Kathryn Nwajiaku