Predatory companies in fragile states

Abstract

Large-scale investments in fragile states - in Latin America, Africa, the former Soviet Union and Asia - become magnets for conflict, which undermines business, development and security.

International policy responds with regulation, state-building and institutional reform, with poor and often perverse results. Caught up in old ways of thinking about conflict and fragility, and an age-old fight over whether multinational corporations are good or bad for peaceful development, it leaves business-related conflicts in fragile states to multiply and fester.

Surveying a new strategic landscape of business and conflict, Brian Ganson and Achim Wennmann conclude that neither company shareholders nor advocates for peaceful development need, or should, accept the growing cost of business-related conflict in fragile states. Drawing on decades of experience from mainstream conflict prevention and violence reduction efforts, as well as promising company practice, they show that even acute conflict is manageable when dealt with pragmatically, locally and on its own terms.

The analysis and conclusions of this Adelphi book will interest policymakers, business leaders and community advocates alike - all those hoping to mitigate today's conflicts while helping to reduce fragility and build a firmer foundation for inclusive development.

Notes

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3 Katérina Stenou (ed.), Struggles Against Slavery: International Year to Commemorate the Struggle Against Slavery and its Abolition (Paris: UNESCO, 2004), p. 49.

4 Ibid.

5 Ibid.

6 James Houstoun, Some New and Accurate Observations of Geographical, Natural and Historical. Containing a True and Impartial Account of the Situation, Product, and Natural History of the Coast of Guinea, So far as Relates to the Improvement of that Trade, for the Advantage of Great Britain in General, and the Royal Africa Company in Particular (London: J. Peele, 1725), p. 44.

7 Fred W. Hackwood, A History of Darlaston, Near Wednesbury (Wednesbury: Woden Press, 1908).

8 The Royal Charter for Incorporating the Hudson's Bay Company Granted by His Majesty King Charles the Second, in the Twenty-second Year of His Reign, A.D. 1670 (London: R. Causton & Son, 1816).

9 Glyndwr Williams, ‘Ogden, Peter Skene’, in Dictionary of Canadian Biography, vol. 8 (2003), http://www.biographi.ca/en/bio/ogden_peter_skene_8E.html.

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11 Olufemi Amao, Corporate Social Responsibility, Human Rights and the Law: Multinational Corporations in Developing Countries (New York: Routledge, 2011), p. 14.

12 Drohan, Making a Killing: How and Why Corporations Use Armed Force to Do Business, p. 26.

13 Truth (London), 30 November 1893.

14 Timothy Brook, ‘Greed and Superprofits’, Toronto Globe and Mail, 2 October 2009.

15 Robert I. Rotberg, The Founder: Cecil Rhodes and the Pursuit of Power (Oxford: Oxford University Press, 1990), p. 549.

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17 Bown, Merchant Kings, p. 42.

18 Cavanagh, A Company with Sovereignty and Subjects of its Own?, p. 26.

19 Office of the Historian of the US Department of State, ‘Roosevelt Corollary to the Monroe Doctrine’, http://history.state.gov/milestones/1899-1913/roosevelt-and-monroe-doctrine.

20 Office of the Historian of the US Department of State, ‘Dollar Diplomacy 1909–1913′, http://history.state.gov/milestones/1899-1913/dollar-diplo.

21 Peter Chapman, Bananas: How the United Fruit Company Shaped the World (New York: Canongate, 2008), p. 38.

22 IRCA, Annual Report 1931, p. 6.

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24 Ibid.

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28 Andrés Perez, ‘Sierra Leone’s Diamond Wars’, Le Monde Diplomatique (English Edition), June 2000.

29 See Ben Brumfield, ‘Charles Taylor Sentenced to 50 Years for War Crimes’, CNN, 31 May 2012, http://edition.cnn.com/2012/05/30/world/africa/netherlands-taylor-sentencing.

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31 Amnesty International, Guatemala: Mining in Guatemala: Rights at Risk (London: Amnesty International, 2014).

32 Office of the United Nations High Commissioner for Human Rights (OHCHR), ‘Protect, Respect and Remedy: A Framework for Business and Human Rights’, document no. A/HRC/8/5, 7 April 2008, p. 16.

33 Ibid., p. 3.

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38 Ibid.

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40 Ibid., p. 134.

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45 Global Witness, Branching Out: Zimbabwe's Resource Colonialism in DRC (London: Global Witness, 2001).

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49 Rights and Accountability in Development (RAID), Unanswered Questions: Companies, Conflict and the Democratic Republic of Congo (Oxford: RAID, 2004).

50 Securities And Exchange Commission, 17 CFR PARTS 240 and 249b, effective 13 November 2012.

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56 See Consolidated United Nations Security Council Sanctions List, http://www.un.org/sc/committees/list_compend.shtml.

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62 See Wrigley, The Privatization of Violence.

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66 IFC, ‘IFC History’, http://www.ifc.org/wps/wcm/connect/corp_ext_content/ifc_external_corporate_site/about+ifc/ifc+history#.

67 International Commission of Jurists (ICJ), Report of the Expert Legal Panel on Corporate Complicity in International Crimes (Geneva: ICJ, 2008).

68 CalPERS, Global Governance Principles (2015), p. 6.

69 Norges Bank, ‘2014 Responsible Investment Report: Government Pension Fund Global’, 2015, p. 11.

70 Ibid., p. 7.

71 See EIRIS Conflict Risk Network, http://www.eiris.org/about-us/eiris-conflict-risk-network.

72 Barry Rehfeld, ‘Socially Responsible Funds Are Hot, But Are They Really Doing Good?’, The Street, 6 November 2014.

73 Geeta Aiyer, ‘Global Investment Community Can’t Afford to Ignore Sustainability’, Guardian, 14 November 2014.

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76 International Labour Organization (ILO) Constitution, articles 26–9, http://www.ilo.org/ilolex/english/iloconst.htm.

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78 CAO, ‘CAO Audit of IFC Investment in Corporación Dinant S.A. de C.V., Honduras’, CAO Audit Report C-I-R9-Y12-F161 (Washington DC: World Bank Group, 2013).

79 IFC Management Responses to CAO Audit, letters of January to October 2014, http://www.ifc.org/wps/wcm/connect/region__ext_content/regions/latin%20america%20and%20the%20caribbean/strategy/corporacion_dinant#mgmtresponse.

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81 Ibid.

82 Human Rights Council (HRC), ‘Elaboration of an International Legally Binding Instrument on Transnational Corporations and Other Business Enterprises with Respect to Human Rights’, document A/HRC/RES/26/9, 14 July 2014.

83 Claes Cronstedt, Robert C. Thompson, Rachel Chambers, Adrienne Margolis, David Rönnegard and Katherine Tyler, ‘An International Arbitration Tribunal on Business and Human Rights: Reshaping the Judiciary’, Version 3, 23 June 2014, http://businesshumanrights.org/sites/default/files/media/documents/intl_arbitration_tribunal_version_3-23_june_2014.pdf.

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92 See Kimberley Process, http://www.kimberleyprocess.com.

93 NSNBC, ‘Kimberley Process Demands Stop of US Ban on Zimbabwe Diamonds’, NSNBC, 20 November 2013.