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The Business of Peace

By Jane Nelson

During the past decade the forces of political transformation and economic globalization have created a world of new opportunities and hope for some, but increased instability and insecurity for others. Now in the 21st century, violent conflict continues to affect the lives of millions of people, undermining human progress and economic development. This has important implications for business. From Azerbaijan to Zimbabwe, the potential and reality of violent conflict has become an unavoidable business issue.

Human ingenuity creates business opportunities even in the midst of destruction; Afghan children help make satellite dishes  [AFP]

As of 2000, there were 72 countries where security risk for foreign businesses was rated medium, high or extreme. Moreover, today, only about 4 percent of the world's GNP is military-related; 96 percent of the international business community provides civilian products and services. Most of these business sectors have a vested interest in stability and peace.

Business--ranging from large multinationals to informal micro-enterprises--has a vital role to play in creating wealth and promoting social and economic development. It also has a role in contributing both directly and indirectly to the prevention and resolution of violent conflict.

The reality is, however, that some companies are currently identified as direct causes of violent conflict or as being complicit in sustaining it in the countries in which they operate. This is often a result of unintended consequences arising from a company's operations or those of its business partners or the result of bad management, lack of awareness or inadequate policies and operating controls within the company itself.

There are three basic strategies that companies can adopt in managing their impact on society. They are applicable for companies operating in any industry sector, country or community, but have particular relevance in conflict-sensitive situations. At a very minimum a company should aim to be compliant with national regulations and, where applicable, international laws and standards. It should aim beyond compliance, however, to minimize risks and harm from its operations.

Strategies for Responsibility

Beyond compliance and doing minimal harm, companies can proactively create positive societal value by optimizing the external multipliers of their own business operations and engaging in innovative social investment, stakeholder consultation, policy dialogue, advocacy and civic institution-building, including collective action with other companies.

In practical terms, specific management challenges which companies operating in conflict situations often face may include deciding to invest or disinvest in countries with repressive or corrupt regimes, and finding ways to operate in accordance with international standards and encourage better governance if they do invest. They need to find out whether their investments and operations are actually helping fund or sustain a war economy, to find ways to influence the distribution of costs and benefits from their activities so that they do not increase inequality and instability, and to ensure their employees' security without compromising that of surrounding communities.

They can also consider how to contribute to humanitarian relief operations and investigate whether it is possible to play a careful role in peacemaking and rebuilding trust.

More generally, collective action by businesses can be especially valuable in addressing politically sensitive issues, such as corruption and human rights abuses. Linked to this, new types of cross-sector partnerships between business, government and civil society can be valuable mechanisms for addressing some of the complex, resource-intensive issues associated with conflict prevention. The National Business Initiative in South Africa, Philippines Business for Social Progress and the Confederation of British Industry in Northern Ireland are examples of "business in society" coalitions that have engaged explicitly in peace-building and conflict resolution activities.

Vulnerability

In the context of economic globalization, many communities feel vulnerable to massive changes beyond their control and at risk of being further marginalized. As employers of people from different ethnic and religious groups, as marketers to customers of different ethnicities and as members of multiethnic communities, companies can serve an important function in either exacerbating identity-based tensions or helping reduce them by encouraging ethnic diversity and tolerance.

In the Chiapas conflict in Mexico, for example, economic globalization and the threat that it poses to local identities and economic survival has resulted in the largely indigenous population of Chiapas supporting the local Zapatista Liberation Army. As an example of a creative approach to using market forces to ease the conflict in the region, the Azteca Trading Company produces a line of salsas and exotic spreads made from raw materials sourced from indigenous farming cooperatives, which include seven previously rival tribes in the war-torn area. Collaboration has flourished in what would have otherwise remained a divided and adversarial climate.

Tzetzal women in the Chiapas region listen to a political candidate; while political processes tend to widen divisions, business initiatives can bring people together  [AFP]

There is a growing and unavoidable business case for companies to analyze and take action in their capacity to prevent and resolve conflict. Apart from the direct, "on-the-ground" costs of being involved in violent conflict, companies face growing international legal and reputation costs of being seen to be complicit in conflict situations and human rights violations. Most companies and industries do better in peaceful and stable societies and thus have a commercial interest, as well as a moral imperative, to help build such societies and to create value by taking proactive measures.

Ultimately the challenge is about values-based leadership at every level of the company and at every level of society. The question of whether a company contributes to conflict or helps prevent it depends on the values, policies and operating guidelines of the company and the way its employees and business partners accept, interpret and implement these. The same can be said for society at large. Developing future leaders capable of building peace and prosperity in a complex world is probably the single greatest challenge we face in the 21st century. It is a challenge that government, civil society and business must address, both individually and in partnership.
 

PeaceWorks

PeaceWorks is an example of a U.S. corporation whose goals are to maximize economic returns while promoting cooperation in regions of conflict around the world. It does this through establishing joint business ventures among people of different, often conflicting backgrounds, under conditions where such a union would normally be impossible. From such ventures the company sources gourmet food products and other high-quality goods for retail to consumers in the United States.

Since its establishment in 1994, the company has developed international distribution networks across eight food sectors, working with over 50 distributors and reaching over 5,000 food outlets.

PeaceWorks's theory of fostering business collaboration between former adversaries and people of different backgrounds operates on multiple levels: at a personal level, as people interact on a daily basis; at the business level--as companies operate and profit together, they will gain a vested interest in preserving and cementing these prosperous relationships; and as the region develops economically, people and governments will be encouraged to continue their efforts toward coexistence.

Daniel Lubetzky, the founder and president of PeaceWorks, sums up his business as follows: "If enough people have an economic stake in cooperation and there are enough examples of such ventures, then a critical mass will be reached that can be the guardian of peace."

Jane Nelson is senior fellow and director of the Corporate Social Responsibility Initiative at Harvard's John F. Kennedy School of Government. She is author or coauthor of numerous books, including Profits with Principles (with I. Jackson), and The Business of Peace: Business as a Partner in Conflict Resolution, published by The Prince of Wales Business Leaders Forum, the Council on Economic Priorities and International Alert.

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