PANEL DISCUSSION ON CORPORATE
RESPONSIBILITY
“Business Legitimacy and Reconstruction in Zones of Conflict”
Dr. Malaika Culverwell
Senior Research Fellow -Corporate Responsibility/ Royal Institute of International Affairs (Chatham House)
United Nations - Department of Economic and Social Affairs
10 October 2003
Private Sector in Conflict Zones
PRIVATE SECTOR CAN:
 exacerbate tensions & contribute to downward
spiral of insecurity.
 contribute to peace-building and reconstruction
KEY:
 Transparency
 Inclusivity
 Accountability
• In routine business activities at micro
and macro level
• For extractive, but more importantly
infrastructure, power, transportation &
financial sectors
2
Policy Approaches for Engaging Business
1. NORMATIVE
 ‘Naming & shaming’; advocacy campaigns e.g. “Conflict Diamonds”
 Can work - but for recognisable brands
2. COERCIVE
 Regulatory regimes that sanction prohibited behaviour
 Difficult - different levels of regulation, incentives for evasion, depends
upon state co-operation
3. INSTRUMENTAL
 Positive inducements that reward constructive industry practices
 At company level - doesn’t go far enough? Multistakeholder level - is too
context specific to be generic eg. “Chad/Cameroon Pipeline Agreement”.
”
3
Profiteering & Opportunism by
Both Business & Government?
IN IRAQ:
ENVIRONMENT
Lack of
reconstruction
GOV’T
Strongest perception
of illegitimacy,
profiteering and
corruption rests within
the administration
Insecurity
BUSINESS
Fear that subcontracting
and hiring practices by
business will exacerbate
pre-existing tensions.
4
A Role for Responsible Business
BUSINESS
Confer legitimacy
National & Int’l Level
Earn legitimacy
•Bidding process
•Awarding contracts
Community
Level
Accountable
Inclusive
• Hiring &
Transparent
sub-contracting
5
Inclusivity
 Requires:
 an integration of local ethnicities, tribes, religions & business
networks.
 Recommended:
 a simple formal dialogue with firm’s Iraqi employees and their families.
 A neutral third party facilitator to manage the process
Accountability
 Requires:
 independent scrutiny of civil society
 Recommended:
 civil society capacity building
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Transparency
 Requires:
 companies to be cautious with respect to working with elites from
previous state institutions.
 Companies to insist on free and open competition with respect to
tendering process for reconstruction contracts & sub-contracts
 Recommended:
 Companies, with civil society help build the credibility of political
institutions of the nascent new Iraqi state
 Companies seek inter-sectoral collective action to influence free
and open competition with respect to reconstruction contracts &
subcontracts
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Conclusion
 Responsible companies need courage, stamina and a longterm view to attend to issues of “inclusivity”, “accountability”
and “transparency” .
 Companies can initiate efforts but will need the support of
neutral third party mediators, NGOs, IOs and legitimate
political institutions
 In all the complexity of post-conflict Iraq, business should
not loose sight of the fact that the greatest risk management
tool at its disposal is its contribution to the winning of the
peace.
8