Business, Peacebuilding and Sustainable Development

Jason Miklian, Rina Alluri, John Elias Katsos, Rina M. Alluri

• Publisher: Routledge
• Year: 2019
• eBook ISBN: 9780429614668
• Topic: Business
• Subtopic: Business General
• Index: Business

The intersection of business, peace and sustainable development is becoming an increasingly powerful space, and is already beginning to show the capability to drive major global change. This book deciphers how different forms of corporate engagement in the pursuit of peace and development have different impacts and outcomes. It looks specifically at how the private sector can better deliver peace contributions in fragile, violent and conflict settings and then at the deeper consequences of this agenda upon businesses, governments, international institutions and not least the local communities that are presumed to be the beneficiaries of such actions. It is the first book to compile the state-of-the-field in one place and is therefore an essential guide for students, researchers, policy-makers and practitioners on the role of business in peace.

Without cross-disciplinary engagement, it is hard to identify where the cutting edge truly lies, and how to take the topic forward in a more systematic manner. This edited book brings together thought leaders in the field and pulls disparate strands together from business ethics, management, international relations, peace and conflict studies in order to better understand how businesses can contribute to peacebuilding and sustainable development.

Before businesses take a deeper role in the most complicated and risky elements of sustainable development, we need to be able to better explain what works, why it works, and what effective business efforts for peace and development mean for the multilateral institutional frameworks. This book does just that.

PART I

Theoretical underpinnings

1

BUSINESS AND PEACE

A need for new questions and systems perspectives

Brian Ganson

The roots of the mobilization of business for peace

Numerous international initiatives provide evidence of the persistent attention paid over the past decades to the potential for private sector roles in peacemaking and peacebuilding – that is, ‘the range of activities that are undertaken by non-state groups explicitly to end violent conflict and establish the conditions for lasting peace’ (Anderson and Olson, 2003, p. 8). Already in 2002, an International Labour Organization (ILO) report could note that, ‘The private sector is increasingly being seen as an important partner on conflict prevention, and resolution’ (Muia, 2003, p. 2). The Rev. Leon Sullivan and United Nations Secretary General Kofi Annan had, in 1999, announced the Global Sullivan Principles to ‘advance the culture of peace,’ (Tully, 2005, p. 174), building on the 1977 Sullivan principles for ethically conducting business and promoting positive change in apartheid South Africa; the UN Global Compact held its first multi-stakeholder dialogue on ‘The Role of the Private Sector in Zones of Conflict’ in 2001 (Shoji, 2012, p. 139). Since then, any number of analyses, guidance notes, and multi-stakeholder platforms supported by the World Bank Group, World Trade Organization, ILO, OECD, various UN agencies, and private initiatives such as the Business for Peace Foundation have posited that business can, in the words of the UN Global Compact’s 2010 Guidance on Responsible Business in Conflict-affected and High-risk Areas, ‘make a positive long-lasting contribution to peace and development’ (UNGC and PRI, 2010, p. 2).

To some extent, business and peace is simply a special case of long-standing international discourse and policy concerning the role of the private sector within development broadly construed. In the contemporary period, the International Finance Corporation of the World Bank Group was founded in 1956 on the ‘firm conviction that the most promising future for the less developed countries was the establishing of good private industry’ (Tenney and Salda, 2014, p. 119). Over time, this perceived value in the mere presence of a robust private sector shifted towards advocacy for a more intentional role by business in development, shaped by a period of exploration of private sector solutions to problems which had seemed difficult or impossible for public sector actors to solve. By the time we arrive at the Busan Partnership for Effective Development Cooperation, for example, established by representatives of developing and developed countries at the fourth High-Level Forum on Aid Effectiveness in 2011, international policy articulated ‘the central role of the private sector in advancing innovation, creating wealth, income and jobs, mobilising domestic resources and in turn contributing to poverty reduction’ (Busan High Level Forum on Aid Effectiveness: Proceedings, 2011, p. 25). The Partnership therefore commits ‘to enable the participation of the private sector in the design and implementation of development policies and strategies to foster sustainable growth and poverty reduction’ (Ibid., p. 26).

More pronounced focus on the private sector and peace emerged in part from a period of reflection on the world’s civil wars, and on the challenges (and sometimes abject failure) of international policy and practice towards post-conflict stabilization and peacebuilding. A relatively large number of studies explored the intersection of the private sector, development and peace (e.g. Collier and Sambanis, 2002; Guimond, 2007; Naudé, 2007; Shankelman, 2007). These often advance prescriptions for the better harnessing of the private sector for post-conflict development (e.g. Aaronson et al., 2008; Bagwitz et al., 2008; Banfield, 2007; Collier, 2006; Ersenkal and Wolf Fellow, 2007; Gündüz and Klein, 2008; Hudon and Seibel, 2007; IFC/FIAS-GTZ-BMZ, 2008; SEEP, 2007; Spilsbury and Byrne, 2007; Stabilization Unit, 2008a; USAID, 2009; USAID, 2007). A subsequent wave of scholarship underlined that fragile and conflict-affected states were not meeting any of the Millennium Development Goals, punctuated by the World Bank’s review of the link between conflict and development in its World Development Report 2011: Conflict, Security and Development (World Bank, 2011). In the wake of these and other works,

MNCs and state-owned firms alike have increasingly been drawn into the discussion as the UN, World Bank and other international organizations have reported on success stories of public-private partnerships worldwide that try to stimulate peaceful development through poverty reduction, socio-economic growth, and security provision.

(Miklian and Schouten, 2014)

As evidenced by the 2011 World Development Report’s unabashedly positive view on private sector contributions to ‘security, justice and jobs’ (World Bank, 2011, p. xii) in fragile and conflict-affected contexts, arguments for the proposition that the private sector is an under-utilized development and peacebuilding actor are strongly influenced by the liberal economic tradition. As early as 1884, the political economist John Stuart Mill claimed that ‘it is commerce which is rapidly rendering war obsolete, by strengthening and multiplying the personal interests which are in natural opposition to it’ (Mill, 1848, p. 582). Thomas Friedman captured the contemporary reincarnation of this thinking in his 1990 Golden Arches Theory of Conflict Prevention – ‘No two countries that both had McDonald’s had fought a war against each other since each got its McDonald’s’ (Friedman, 1990, p. 248) – updated in 2005 to the Dell Theory of Conflict Prevention – ‘No two countries that are both part of a major global supply chain, like Dell’s, will ever fight a war against each other as long as they are both part of the same global supply chain’ (Friedman, 2005, p. 421). Thus, much of the business and peace rhetoric tends to take as axiomatic, as asserts the Freedom of Investment process – an intergovernmental forum on investment policy hosted since 2006 by the OECD Investment Committee – that ‘international investment spurs prosperity and economic development’ (OECD, 2014), and thereby contributes to peace.

Even the concept of business as an intentional actor for peace is not particularly new. Wharton Business School professor Howard V. Perlmutter, writing during the great post-war expansion of the multinational enterprise in the 1960s, named ‘the senior executives engaged in building the geocentric enterprise … the most important social architects of the last third of the twentieth century.’ They offered ‘an institutional and supra-national framework which could conceivably make war less likely, on the assumption that bombing customers, suppliers and employees is in nobody’s interest’ (Perlmutter, 1969, pp. 9–10). The first issue of the Journal of World Business, in 1966, similarly argued that business is an unmatched force for peace (Brown, 1966, p. 6). Within this worldview, as asserts the UN Global Compact’s Business for Peace platform, there is ‘effectively no contradiction between maximized long-term financial performance and positive contributions to peace and development’ (UNGC and PRI, 2010, p. 6), positioning business as a natural peacebuilding actor. At least between those inclined to view the private sector favorably, we can therefore trace a fair amount of continuity in perceptions about business and peace across the decades, if not centuries.

What may be distinctive in contemporary discourse, however, may be the focus by traditional peacebuilding actors – including the United Nations agencies, defense actors, and international non-governmental organizations – on mobilizing private sector actors as peacebuilders. As enshrined in the UN Global Compact, businesses should be committed to ‘peace’ and incorporate conflict sensitivity into their day-to-day business practices (UNGC and PRI, 2010). In the US,

the Defense Department’s 2010 Quadrennial Defense Review (QDR), the State Department’s inaugural Quadrennial Diplomacy and Development Review (QDDR), and the 2010 U.S. National Security Strategy (NSS) acknowledge the importance of according the business sector a major role in solving strategic challenges and fostering peace; leveraging the core competencies of the private sector in problem solving; tapping the business sector’s ingenuity and innovation in both processes and outcomes; using public-private partnerships as vehicles to institutionalize anticorruption measures; and providing tangible peace dividends, such as jobs, income, wealth, and services.

(Forrer, Fort and Gilpin, 2012)

Businesses operating in fragile environments are now expected to become full ‘partners in broader peacemaking and peacebuilding assessment, planning and execution’. (Ganson, 2014, p. 128).

Any number of initiatives by traditional peacebuilding actors then attempt to put these principles into action. International Alert, for example, works with companies under the belief that ‘they can help a country turn its back on conflict, and move towards lasting peace’ (International Alert, 2005). An entire literature is emerging around the ‘business case’ for more constructive engagement of companies in fragile and conflict-prone environments (e.g. Franks et al., 2014; Goulbourne, 2003; Henisz, Dorobantu, and Nartey, 2014) in an attempt to motivate business contributions to peaceful development, and it is probably safe to say that attempts to create public–private partnerships to address pressing issues related to conflict and peace are now the norm rather than the exception within UN agencies. In perhaps the most prominent call to action, UN Secretary General Ban Ki-Moon launched the United Nations Global Compact ‘Business for Peace’ platform, aiming to ‘mobilize high-level corporate leadership to advance peaceful development through actions at the global and local levels’ (UNGC, 2013b, p. 41).

A menu of roles for business in peace

If the assertion is made that international businesses can and should be called upon as peacebuilders, then the question arises as to how they can do so. There are a growing number of meta-studies of the literature of business and peace, resulting in a variety of maps of the arguments made for how business does, could or should advance peace in what is now a substantial body of academic and policy work. For example:

• Most recently, Miklian (2017) documents widespread assertions that (1) economic engagement facilitates a peace dividend; (2) encouraging local development facilitates local capacities for peace; (3) importing international norms improves democratic accountability; (4) firms can constrain the drivers or root causes of conflict; and (5) undertaking direct diplomatic efforts with conflict actors builds and/or makes peace. He explores how ‘motivational drivers for deeper and more comprehensive business engagements into peace and justice arenas’ (Ibid., p. xx), the ways in which ‘businesses integrate peacebuilding within their corporate structures’ (Ibid., p. xx), and understanding of ‘what constitutes a ‘peace contribution’ by business’ (Ibid., p. xx) impact upon business-peacebuilding trends.
• Oetzel et al. (2010) ‘focused on specific ways companies can actively engage in conflict reduction including promoting economic development, the rule of law, and principles of external valuation, contributing to a sense of community, and engaging in track-two diplomacy and conflict sensitive practices’ (Oetzel et al., 2010, p. 351). Their survey notes that ‘the argument arising out of the literature is not that businesses should promote peace, but that … ethical businesses already are conducting actions that contribute to peace’ and that, to be more effective peacebuilders, ‘they may not have to radically transform their practices as much as one might think when first hearing about a connection between business and peace’ (Ibid., p. 352).
• In between, a number of other works attempt to survey and make sense of business and peace within and across fields (e.g. Andersson, Evers, and Sjostedt, 2011; Forrer, Fort and Gilpin, 2012; Forrer and Katsos, 2015; Fort, 2015; Katsos, 2016).

From these and other treatments of business and peace, we can distill commonly promoted arguments about business as an intentional peacebuilding actor, relating these to three dynamics of conflict and peace presumed to be crucial to peacemaking and peacebuilding efforts:

• Socio-economic dynamics, particularly as these are influenced by the resources available for peaceful development (as well as their distribution across different groups in society), and those available to conflict actors;
• Socio-political dynamics, including state-society relations, relationships between different groups in society, and the institutions through which these are mediated;
• Peacemaking dynamics, or the processes by which peace is pursued and agreed to.

We explore later in this chapter the ways in which these propositions are directly and indirectly contested and qualified in the academic and policy literature – ultimately raising serious doubts as to their general applicability – but state and describe them here in the positive form more typical of the business and peace literature:

Businesses do, can or should impact socio-economic dynamics of conflict-prone places in peace-positive ways.

A significant portion of academic literature on business and peace studies the role of business in addressing, influencing and changing the material conditions of peacemaking and peacebuilding environments. One common proposition is that, if material conditions on the ground can be changed for the better, the root causes of conflict are addressed and the incentives for conflict are reduced. (See, e.g. the ‘jobs’ thrust of the World Bank’s World Development Report 2011). Under this argument, a company can become an intentional peacebuilding actor simply by deciding to be present in a conflict-prone place, despite risks and potential limitations on short-term returns. In this vein, one executive of a company operating in Afghanistan noted that,

No matter what planning is done or precautions taken, working in a war zone is a nightmare. It may be important to be there all the same, because the things you build can help ordinary people. In such cases the company’s work is in fact closer to CSR than to business development, even if there is a hope that the company will work there in the future.

(Ganson, 2013a, p. 83)

Business intentions may, however, go beyond doing business in difficult places. Business and government actors together may arguably make it harder for conflict actors to monetize control over resources, as attempted through, for example...

Table of contents

• Cover
• Half Title
• Series Page
• Title Page
• Copyright Page
• Table of Contents
• List of illustrations
• Foreword
• What’s old is new again
• PART I: Theoretical underpinnings
• PART II: Perspectives on the corporate side
• PART III: Empirical reflections
• Index