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Introduction
Non-governmental organisations (NGOs) and reporters are increasingly focusing on the economic dynamics underlying today’s armed conflicts. The media report daily on the role of natural resources in war-torn countries such as gold and coltan in the Democratic Republic of Congo (DRC), oil in Chechnya, Colombia or Sudan, or diamonds in Angola and Sierra Leone. Controversies over the so-called ‘blood diamonds’ brought over 30 governments, NGOs and the diamond industry around the negotiating table to regulate trade.
Corporate social responsibility
Corporate social responsibility has become a fashionable subject and is being included in standard MBA curricula. A vigorous debate opposes those who maintain that corporations should not be diverted from their traditional objective, that is, maximising shareholder value, to others who contend that companies must take into account the interests of a much wider circle of stakeholders including host communities, consumers, present and future generations, etc. Preliminary empirical evidence suggests that business strategies addressing the concerns of a broad range of stakeholders pay off in the long run.
Corporate giants
The influence of some multinational corporations on war situations and on parties to conflict, along with their role in international relations, is growing steadily. Successive waves of mergers and acquisitions have given birth to ‘corporate giants’ whose turnover and profit surpass the combined national income of several war-torn countries. The net income of the oil giant ExxonMobil, for example, peaked at a record $17.7 billion in 2000. The gross domestic product (GDP) of Angola was $5.9 billion in 1999, that of Burundi $0.7 billion and that of the DRC $7 billion (1998). Indeed, 51 of the 100 largest economies in the world are companies.
In parallel, both political instability and liberal economic reform have reduced the state’s power and prerogatives in many countries where the International Committee of the Red Cross (ICRC) operates. Today’s diplomacy confers a greater role on the private sector. This is in particular the case when dealing with major global challenges such as preserving biodiversity, alleviating poverty, coping with population growth or ensuring access to drinking water.
The primary objective of private companies obviously is and remains the generation of profit. A number of factors nevertheless combine to induce certain companies to adopt a more open and considerate attitude with regard to social corporate responsibility issues, including:
- growing pressure from public opinion, shareholder groups and consumers, and the need to protect a company’s image and reputation through a mix of preventive and corrective measures;
- long-term strategic planning, especially in the oil and mining sectors, where return on investments often involves periods of 15 years or more. (For these companies, political stability plays an important role in the development of markets, and long-term profitability depends, among other things, on a company’s acceptance in the local communities where it operates.);
- increased risk of judicial proceedings and even penal sanctions against company executives for violations of international law; and
- sharing of expertise and information with humanitarian organisations as part of corporate risk management and crisis management strategies.
As companies expand and explore new opportunities, they operate under complex and ever more difficult conditions. This applies in particular to firms whose investment decisions are dictated by geology rather than by political stability. In many instances, they face civil strife, political unrest or outright armed conflict in countries with a weak judicial apparatus, little respect for the rule of law and a lack of appropriate legal enforcement and monitoring mechanisms. In such environments, companies have to address some sensitive questions, the answers to which have a direct bearing on the humanitarian situation on the ground, such as:
- how to provide adequate security for corporate staff and facilities while at the same time respecting international standards of human rights and international humanitarian law, and
- how to ensure that corporate activity and the ensuing distribution of wealth at least does not make things worse, or at best helps to ease tensions between warring parties?
Voluntary principles and guidelines
In an attempt to cope with these challenges, some companies have adopted voluntary sets of principles and guidelines of ethical behaviour to meet the expectations of key stakeholders. These corporate codes of conduct are often based on internationally recognised norms (e.g. human rights, labour standards).
One of the most recent voluntary sets of principles deals with the role of private firms in conflict-prone areas. It is the outcome of a process initiated by the governments of the US and the UK to offer a framework for security arrangements by their industries in sensitive contexts.
Human rights organisations, labour unions and British and American companies in the extractive sectors participated in a process that led (on 20 December 2000) to the adoption of a set of guidelines entitled ‘Voluntary principles on security and human rights’. Eighteen companies, including BP-Amoco, Conoco, Chevron, Freeport McMoran, Rio Tinto and Shell thereby acknowledged that even though governments have the primary responsibility for promoting respect for human rights and international humanitarian law, they themselves share the common goal of promoting respect for these internationally recognised rights.
The voluntary principles were released at a time when the ICRC was initiating a dialogue with about a dozen companies operating in war-prone areas, with the primary aim of sensitising firms to specific humanitarian concerns and mobilising their support. This dialogue shall undoubtedly help oil and mining firms to translate commitments to abide by the ‘Voluntary principles on security and human rights’ into operational reality. The ICRC was subsequently invited to contribute to forthcoming meetings in the voluntary principles process in its capacity as guardian and promoter of international humanitarian law.
The ICRC’s objectives
The ICRC’s governing body has drawn a road map for the development of overall relations with the private sector in a coherent and co-ordinated manner, and has made this one of its institutional priorities for the years to come. The global strategy adopted by the ICRC’s Assembly in December 1999 includes two new objectives which focus on establishing a substantive dialogue with the private sector on humanitarian issues, namely:
- to promote humanitarian principles among firms operating in war-prone regions; and
- to strengthen the ICRC’s network at an operational level, involving business leaders where relevant.
The medium-term aim is to improve the ICRC’s capacity to provide effective protection and assistance by including among regular interlocutors private companies that have substantial direct or indirect influence on armed conflicts and on the fate of war victims. Parallel efforts are being undertaken with states whose responsibility it remains to comply with, and ensure respect for, international humanitarian law.
In order to carry out its humanitarian activities, the ICRC maintains relations with all those who exert direct or indirect influence on armed conflicts. Against the current background of globalisation, multinational companies with their growing economic and financial power may have greater influence than more traditional ICRC interlocutors in the field. The ICRC has consequently decided to reach out to the private sector.
In making this move, the intention is to enhance the ICRC’s ability to protect and assist the victims of armed conflicts by strengthening its network of contacts at the operational level, through the inclusion of influential new stakeholders such as multinational companies. A first step is to improve mutual understanding and to sensitise the private sector to the humanitarian principles and country-specific concerns of the ICRC. Through dialogue, the ICRC may also further increase its own understanding of the economic dynamics underlying conflicts and of the role and reasoning of various economic players involved.
The ICRC does not intend to propose yet another corporate code of conduct. It has instead decided to actively spread knowledge of the most relevant fundamental humanitarian principles and provisions, highlighting their operational and practical implications in specific situations in which companies operate. The objective is to ensure that private enterprises know these principles, promote them and put them into practice when the situation calls for it, especially in contractual relationships with government or private security forces. It is also to encourage private companies to promote respect for humanitarian principles in their relations with partners such as states, private military companies, government security forces, local authorities, etc.
For the ICRC, entering into dialogue in the field with all those who bear arms is the only way to provide effective protection and assistance to all people in need thereof. It will therefore initiate or step up dissemination activities for private security companies active in armed conflicts, to which the rules of international humanitarian law ought to be presented as a whole. The ICRC is aware of the risk that this may be perceived as conferring legitimacy upon such companies but, as has been rightly pointed out, it develops a similar dialogue “with any party to or participant in an armed conflict, without any implication as to the legitimacy of the cause upheld by them”.
Conclusion
The ICRC is convinced that building relations with the corporate sector can serve to strengthen its diplomatic and operational outreach, provided that the objectives and business arguments in favour of engagement are clearly spelt out and acknowledged on both sides. The business community is in fact a very diverse world in which sensitivities differ and varying degrees of responsiveness to environmental, social or humanitarian concerns are found. Multinational companies and humanitarian agencies obviously do not share the same agenda, but may nonetheless have common interests, such as the desire to work in places with satisfactory security conditions where fundamental humanitarian principles are not systematically violated.
Exchanges have been successfully initiated with some 20 multinational companies at headquarters level. These firms have expressed a genuine interest in building up relations with the ICRC in war-prone countries. The challenge is now to deepen that dialogue with the hope that engaging the business community in the field will indeed make a real difference.
Note
* This commentary is based on Carbonnier’s essay, Corporate responsibility and humanitarian action: What relations between the business and humanitarian worlds?, first published in IRRC 83(844), December 2001.
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