Business (not) for peace: Incentives and disincentives for corporate engagement on good governance and peaceful development in the African context

ABSTRACT

European policy towards Africa assumes a peace-positive role for the private sector in developing countries. Conflicting evidence from fragile and conflict affected states, however, underlies a stark debate over business, peace, development, and extractives sector governance. This study draws from deep dives into about a dozen fragile and conflict affected contexts to add nuance to this conversation and inform future policy. It examines in turn three factors that rose to prominence in that research: the political economy shaping the private sector; disincentives for the private sector to engage in peacebuilding and statebuilding; and practical limitations of companies as peacebuilding actors. These factors help to explain the exceptional nature of those businesses that engage decisively for good governance and peace. Unpacking these factors may also open new entry points for shaping a private sector more likely to become an engaged and effective peacebuilding and statebuilding partner in extractives sector governance.

KEYWORDS:

• SDG 16
• business and conflict
• business and peace
• fragile and conflict affected states
• political economy
• corporate social responsibility

Disclosure statement

No potential conflict of interest was reported by the author.

Note on contributor

Brian Ganson, JD, is Head, Africa Centre for Dispute Settlement, and Extraordinary Associate Professor at the University of Stellenbosch Business School. His work focuses on the intersection of the private sector, conflict, and development in peacebuilding and other fragile contexts. He engages with human rights advocates, peacebuilders, governments, community advocates, multinational companies, and other international actors as a researcher, consultant, educator, evaluator, and mediator.

ORCID

Brian Ganson http://orcid.org/0000-0002-4908-9283

Notes

1. European Commission, Next steps for a sustainable European future: European action for sustainability. COM(2016) 739 final, Strasbourg, 22 November 2016, p. 3.

2. Ibid., p. 13.

3. European Union, The Africa-EU Partnership: 2 Unions, 1 Vision. Luxembourg: EU, 2014, p. 18.

4. European Commission, The Raw Materials Initiative – Meeting Our Critical Needs for Growth and Jobs in Europe. COM(2008) 699 final, 4 November 2008.

5. Collier P & A Hoeffler, ‘On the incidence of civil war in Africa’, Journal of Conflict Resolution, 46, 1, 2002, 13–28; Forrer JJ & JE Katsos, ‘Business and peace in the buffer condition’, Academy of Management Perspectives, 29, 4, 2015, 438–50; Miklian, 2018; Oetzel J et al., ‘Business and peace: Sketching the terrain’, Journal of Business Ethics, 89, 4, 2010, 351–73.

6. UNGC & PRI (UN Global Compact and Principles for Responsible Investment), Guidance on Responsible Business in Conflict-Affected and High-Risk Areas. New York: UNGC & PRI, 2010, p. 6.

7. Franks DM et al., ‘Conflict translates environmental and social risk into business costs’, Proceedings of the National Academy of Sciences of the United States of America, 111, 21, 2014, 7576–81; Goulbourne T, Corporate social responsibility: The business case’, International Affairs, Ottawa, Canada, 2003. <http://www4.carleton.ca/cifp/app/serve.php/1053.pdf>; Henisz WJ et al., ‘Spinning gold: The financial returns to stakeholder engagement’, Strategic Management Journal, 35, 2, 2014, 1727–48.

8. UNGC & PRI (UN Global Compact and Principles for Responsible Investment), Guidance on Responsible Business in Conflict-Affected and High-Risk Areas. New York: UNGC & PRI, 2010, p. 2.

9. European Commission, A Stronger Role of the Private Sector in Achieving Inclusive and Sustainable Growth in Developing Countries. COM(2014) 263 final, 13.5.2014.

10. OHCHR (Office of the High Commissioner for Human Rights), Protect, Respect and Remedy: A Framework for Business and Human Rights. Document no. A/HRC/8/5, 7 April 2008.

11. Drohan M, Making a Killing: How and Why Corporations Use Armed Force to Do Business. Guilford: Lyons Press, 2004.

12. MIGA (Multilateral Investment Guarantee Agency), World Investment and Political Risk 2010. Washington, DC: MIGA, 2010.

13. Ganson B & A Wennmann, Business and Conflict in Fragile States: The Case for Pragmatic Solutions. London: International Institute for Strategic Studies, 2016.

14. The Economist, ‘Risky returns: Business in difficult places’, The Economist, 20 May 2000.

15. Barbara J, ‘Nation building and the role of the private sector as a political peace-builder’, Conflict, Security & Development, 6, 4, 2006, 581–94.

16. Recent meta-analyses that examine both sides of the debate include Ganson B, ‘Business and peace: A need for new questions and systems perspectives’, in Miklian J (ed), Business and peacebuilding: Beyond the sustainable development goals. London: Routledge, 2019, forthcoming; and Miklian J, ‘Mapping business–peace interactions: Opportunities and recommendations’, Business, Peace and Sustainable Development, 10, 1, 2017, 3–27.

17. Case studies explored nine private sector actors: Unifrutti-Tropical Limited Inc. in the Philippines; Norsk Hydro in Brazil; The Kenya Private Sector Alliance (KEPSA) in Kenya; The Consultative Business Movement (CBM) in South Africa; The Chambers of Commerce in Cyprus; ISAGEN in Colombia; OCENSA in Colombia; Tipiel in Colombia; and Federación Nacional de Cafeteros (FNC) in Colombia. Two additional case studies were helped to contextualise the other nine: a country study of the role of the private sector in relation to persistent patters of fragility in Sierra Leone, and a case study of NorgesBank focusing on its management of investments in companies that operate in fragile states.

18. Creswell JW & CN Poth, Qualitative Inquiry and Research Design: Choosing Among Five Approaches. London: Sage, 2018.

19. Miller B et al., A Seat at the Table: Capacities and Limitations of Private Sector Peacebuilding. Africa Centre for Dispute Settlement, CDA and PRIO, 2019. This capstone document, as well as the underlying case studies and numerous supporting analyses, is available at https://www.cdacollaborative.org/cdaproject/business-and-peace/

20. Miklian J et al., ‘From boardrooms to battlefields: 5 new ways that businesses claim to build peace’, Harvard International Review, 38, 3, 2016, 13–17.

21. See, Prno J & DS Slocombe, ‘Exploring the origins of “social license to operate” in the mining sector: Perspectives from governance and sustainability theories’, Resources Policy, 37, 3, 2012, 346–57.

22. North DC et al., ‘Limited access orders: An introduction to the conceptual framework’, in North DC, Wallis JJ, Web SB & BR Weingast (eds), In the Shadow of Violence: Politics, Economics, and the Problems of Development. Cambridge: Cambridge University Press, 2013.

23. Ganson B, ‘Business in the transition to democracy in South Africa: Historical and contemporary perspectives’, Cape Town: Africa Centre for Dispute Settlement Working Paper 2017/5, 2017.

24. Austin JL & A Wennmann, ‘Business engagement in violence prevention and peace-building: The case of Kenya’, Conflict, Security & Development, 17, 6, 2017, 451–72.

25. Ganson B & H M’cleod, The Underlying Causes of Fragility and Instability in Sierra Leone. London: Commission on State Fragility, Growth and Development, 2018.

26. All anecdotes, illustrations and quotations are taken from the respective cases and related consultations as described in the Methodology section, unless otherwise noted.

27. As reported by industry informants participating in the Cape Town roundtable.

28. Wennmann A et al., Operational Experience of Business Environment Reform Programming in Fragile and Conflict Affected States. London: DIFD, 2017.

29. Ibid.

30. Ibid.

31. Zandvliet L & MB Anderson, Getting it Right: Making Corporate Community Relations Work. Sheffield: Greenleaf, 2009.

32. See, Nelson J, Business of Peace: The Private Sector as a Partner in Conflict Prevention and Resolution. London: International Alert, 2000.

33. MIGA (Multilateral Investment Guarantee Agency), World Investment and Political Risk 2010. Washington, DC: MIGA, 2010.

34. Muggah R et al., Governance for Peace: Security the Social Contract. New York: UNDP Bureau for Crisis Prevention and Recovery, 2012.

35. Austin JL & A Wennmann, ‘Business engagement in violence prevention and peace-building: The case of Kenya’, Conflict, Security & Development, 17, 6, 2017, 451–72.

36. A senior advisor to government on extractives sector concession agreements, from the Sierra Leone consultation.

37. Eg, Cawe A, Overgrown ‘Goods Lines’ and the ‘Belle of the Ball’: The Shifting Role of Business in Achieving a New ‘Social Compact’ and Shared Vision in South Africa, Africa Centre for Dispute Settlement Working Paper 2017/3. Cape Town: ACDS, 2017.

38. Ganson B, ‘Business and peace: A need for new questions and systems perspectives’, in Miklian J (ed), Business and peacebuilding: Beyond the sustainable development goals. London: Routledge, 2019, forthcoming.

39. See, OECD, Evaluating Peacebuilding Activities in Settings of Conflict and Fragility – Improving Learning for Results. Paris: OECD, 2012.

40. UNGC & PRI (UN Global Compact and Principles for Responsible Investment), Guidance on Responsible Business in Conflict-Affected and High-Risk Areas. New York: UNGC & PRI, 2010, p. 7.

41. Anderson MB, ‘False promises and premises?’, in Williams OF (ed), Peace Through Commerce. Notre Dame, IN: University of Notre Dame Press, 2008. See also Ganson B, ‘Business in fragile environments: Capabilities for conflict prevention’, Negotiation and Conflict Management Research, 7, 2, 2014, 121–39.

42. Ganson B, ‘Business and peace: A need for new questions and systems perspectives’, in Miklian J (ed), Business and peacebuilding: Beyond the sustainable development goals. London: Routledge, 2019, forthcoming.

43. Anonymous interview with a community leader in the Niger Delta, December 2016.

44. Emmerson B, Report of the Special Rapporteur on the promotion and protection of human rights and fundamental freedoms while countering terrorism. UN General Assembly A/70/371. NY: United Nations, 2015, p. 6.

45. Theuns E, ‘The business community after Apartheid and beyond: An analysis of business's engagement in the second decade of democracy’, in Shapiro I & K Tebeau (eds), After Apartheid: Reinventing South Africa? Richmond: University of Virginia Press, 2011, pp. 105–35, p. 117.

46. Cechvala, S and M Corpus, The Best Fertilizer of the Land is the Footprints of its Leaders: Unifrutti-Tropical Philippines Inc. Business and Peace Case Study. Cambridge, MA: CDA Collaborative Learning Projects, 2017.

47. Cawe A, Overgrown ‘Goods Lines’ and the ‘Belle of the Ball’: The shifting role of business in achieving a new ‘social compact’ and shared vision in South Africa, Africa Centre for Dispute Settlement Working Paper 2017/3. Cape Town: ACDS, 2017.

48. Charney C, ‘Civil society, political violence, and democratic transitions: Business and the peace process in South Africa, 1990 to 1994’, Comparative Studies in Society and History, 41, 1, 1999, 182–206.

49. Consultative Business Movement. Consultative Business Movement: 1987 - 1990, p. 14. Unpublished analysis. On file with the author.

50. Ibid.

Additional information

Funding

This work was supported by Carnegie Corporation of New York: [Grant Number B 9064]; Norwegian Ministry of Foreign Affairs: [Grant Number B 9064]. This special issue has been produced with the support of the European Union’s Erasmus+ Programme as a Jean Monnet Activity, through the project ‘The European Union’s Normative Role in African Extractives Governance’, implemented by the South African Institute of International Affairs. The European Commission support for the production of this publication does not constitute an endorsement of the contents which reflects the views only of the authors, and the Commission cannot be held responsible for any use which may be made of the information contained therein.