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PANEL DISCUSSION ON CORPORATE RESPONSIBILITY

Explore the role of private sector in conflict zones, policy approaches for engagement, challenges in Iraq, and recommendations for fostering legitimacy, accountability, and transparency.

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PANEL DISCUSSION ON CORPORATE RESPONSIBILITY

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  1. 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

  2. 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

  3. 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”. ”

  4. Profiteering & Opportunism by Both Business & Government? IN IRAQ: ENVIRONMENT Lack of reconstruction Insecurity GOV’T BUSINESS • Strongest perception of illegitimacy, profiteering and corruption rests within the administration • Fear that subcontracting and hiring practices by business will exacerbate pre-existing tensions.

  5. A Role for Responsible Business BUSINESS Confer legitimacy National & Int’l Level Earn legitimacy • Bidding process • Awarding contracts Community Level Accountable Inclusive • Hiring & • sub-contracting Transparent

  6. 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 • Requires: • independent scrutiny of civil society • Recommended: • civil society capacity building Accountability

  7. 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

  8. Conclusion • Responsible companies need courage, stamina and a long-term 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.

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