Private actors and economic development have a role to play in conflict contexts. How far is and should this be a peacebuilding role? Do standards and certification schemes help to influence companies’ behavior? ‘Do no Harm’ entails much more than harm avoidance - but what is required for conflict sensitivity from the private sector? These questions were addressed at a workshop on 25 March, which was a second event in a FriEnt-series of workshops on “Business and Peace – It takes two to tango!”.
A substantive amount of literature on business and conflict has been developed during the last decade. Information and evidence about war economies, the resource curse and the political economy related to business and conflict is widely available. Nevertheless, a big change of the past years has been the increasing engagement with the private sector in the development field, especially in fragile and conflict-affected situations (FCAS). Globalization has led to a growing political influence of the private sector . A substantial share of public money is spent on developing the economic sector and getting private actors on board in fragile contexts – often with expectations for a specific peace dividend by businesses in FCAS.But how realistic are these expectations? Is the private sector a magic bullet for peacebuilding? To what extent do standards and certification schemes contribute to influencing company behavior and create a peace positive impact?
Although CDA and other actors have been engaged with the private sector since decades, large-scale investments in FCAS are prone to generate and intensify conflicts. Companies consequently need to be convinced to generate different impacts, make violence less likely, and reduce fragility. It is further essential to comprehend and internalise the concept of conflict sensitivity and ‘Do no Harm’. Ben Miller, CDA, emphasized that the ‘Do no Harm’-concept tends to be misunderstood as simple harm avoidance, which is far from being enough. Whereas conflict-sensitive management tools need to address the social relations amongst local communities, simple harm avoidance does not incorporate these dynamics in its approach. Harm avoidance is also insufficient to mitigate conflict, as conflict is partly driven by perceptions, which in some cases have no connection to any harm. The reality in FCAS entails impunity, corruption, and histories of violence between social groups, resulting in distrust and suspicion towards one another. These factors do not only shape perceptions but also business outcomes. Whereas responsible business conduct is centred around human rights standards (e.g. the UN Guiding Principles on Business and Human Rights/UNGP BHR) as tools for harm avoidance, more efforts are needed to generate conflict sensitivity and a peace positive impact.
To conduct business in a conflict-sensitive way, specific behaviour as well as inclusive processes and context adaption are required. A successful example of such an approach would be a Colombian energy company: the energy company was planning investments in former FARC-controlled regions but facilitated 2 years of community engagement beforehand. This demonstrates not only the possibility of a conflict-sensitive approach but also the necessity of a certain attitude, openness, inclusiveness and long-term engagement of all actors.
Four comments from different perspectives by Hannah Peters/Swedwatch, Evelyn Dietsche/Swisspeace, Sabine Dorlöchter-Sulser/Misereor and Dominik Balthasar/KfW kicked off the discussion, which centred around the following aspects:
The commentators underlined that it is not WHAT the company does but HOW it does it and how it is being perceived. Lessons learned from Liberia and Sierra Leone further revealed that efforts to accelerate economic growth without being attentive of potentially damaging impacts, such as the unequal distribution of benefits, fail to support sustainable development. Instead, they undermine the resilience of conflict-affected societies. Additionally, unexpected shutdowns of business operations negatively affect human rights and increase violence at various levels. Responsible exit strategies and extensive risk assessments for and with the local communities prior to implementing any investment projects are essential.
Another discussion point emphasised that it takes considerably more than corporate compliance with human rights standards and do no harm to create peace. Human rights principles and guidelines are relevant rules of behaviours that would have to be embedded in national legislation to effectively influence business conduct. Companies would then have to internalize them if their aim is to privatize benefits. Fragile and conflict-affected countries are however often characterized by a fundamental state and market failure. The provision of a governance structure must thus be prioritised but must not come from the private sector.
Furthermore, lessons learned with large-scale investments, including the lease of land and water for business purposes, illustrate the critical nature of this type of economic development: Even in peaceful and democratic African countries, the majority of land-based investments does not comply with international human right standards (e.g. consent or conduct of consultations). As a result, local communities and marginalised groups (e.g.pastoralists and herders or indigenous people) are left behind and end up losing their resources and livelihood. Some communities have successfully stopped land investments in the past if they could make use of strong civil society networks, social movements, and media attention to advocate for their rights. Peaceful demonstrations are however often forcefully supressed by authoritarian governments, which prioritize investments over just and sustainable economic development and durable peace.
While the scepticism about the private sector as the ‘magic bullet’ for peacebuilding was broadly shared, the answers about its role differed: some experts argued that it might be more effective to shift the peacebuilding role of companies to a state-building one. Businesses, so the argument, could be requested to support state- and institution-building as well as the rule of law and security since these areas are more in line with their commercial interests. For others, however, this approach was considered a risky endeavour and more discussion and research would be needed for its implementation.
Although conflict sensitivity remains an unknown concept to many companies, current developments show that the private sector is increasingly incorporated into the peacebuilding strategies of donors in FCAS. Further engagement is consequently needed to at least minimize potential negative impacts and influence the way business is conducted. Opportunities must be sought where companies created specific external entities for their peacebuilding activities or through cooperating with individual businesspeople in important positions within the political economy. The future of linking business and peace will thus be shaped by finding new relevant and constructive entry points for further engagement.