Business in fragile states

Keynote speech at LBS/Wheeler Institute, London.

The rise of Private Development Companies is impacting the way that humanitarian aid and development assistance are implemented.

As a co-founder of Handicap International – recently renamed Humanity & Inclusion – my perspective stems from a 40 years commitment in conflict, post-conflict or fragile States settings.

From the promotion of the duty of assistance to wounded, disabled and vulnerable persons in emergency situations, HI broadened its mission over the years, to include socio-economic support to the most fragile segments of affected populations during the reconstruction phase.

Our range of action also led HI to be – as a co-founder of ICBL – one of the main stakeholders in the Ottawa process which banned antipersonnel landmines and then the Oslo process which outlawed cluster munitions. And today, as a member of INEW, HI is promoting the “STOP bombing civilians” campaign whose goal is the adoption of a political declaration by members of the UN, to restore compliance with the rules of military engagement.

Martin Barber, former UNMAS Director and Marc Bowden who are present with us, and I, in our personal capacity this time, are engaged in the UAI global initiative, United Against Inhumanity, a fast growing movement of experienced humanitarians – more or less 500 today – whose Call to Action has been included in your digital file, courtesy of the organizers. The Call is a straightforward invitation to all, including “watchers” or “bystanders” to participate. For businesses it means exploring ways in which they can be part of the prevention as a solution; and for us all, reflecting on how business and philanthropy can converge and go together.

The review Humanitarian Alternatives recently devoted two issues to Businesses and NGOs: “The maturity of a debate”[1] and “NGOs and the private sector: threat or opportunity?”[2]. They attempt to cover the evolution of the relations between two sectors, that have long ignored or contempted each other with mutual distrust when not outright arrogance.

Actually, to quote one of the authors, a growing number of examples illustrate that NGOs may no longer be the sole purveyors of honorable intentions[3]. The arrival of businesses in the humanitarian field is exponential, an almost irrepressible movement, and NGOs are fundamentally subject to the same functional rules. Actually it may not be that simple.

First the question of impartiality. Indeed, it is particularly difficult for businesses to be impartial in pre- or post-conflict situations… Specific issues call into question both ethics and geopolitics: hiring private security companies; negotiating with parties to the conflict; intervening in areas where the donor may have interests other than humanitarian; and of course, certain donors’ requirements with respect to counterterrorism.

The United States – “where for-profit development companies are clearly comfortable with their ties to the political sphere, and pursue overtly the goals of US foreign policy” – remain way ahead of Europe, where it is nevertheless gaining momentum. Regarding accountability, it is fair to recall a meaningful differentiating feature: NGOs are motivated by a set of values, while businesses are ultimately motivated by profitability. It is clear that businesses see beneficiaries more as consumers, leading to a kind of “competition”, of two very different forms of accountability.

The lack of transparency is also a recurrent problem. Private companies hardly share, or not at all, information on results and impact of their activities, and usually stay away from aid coordination mechanisms, making complementarity between actors more complex and hazardous….

Beyond the preoccupations on principles, I agree with one of the authors that some aspects of NGOs expertise can be useful to businesses, in the way they relate to the environment, authorities, partners and local businesses.

  • Good practices of the NGO sector (such as participation, inclusion, do no harm…) could help lower tensions with communities and improve the acceptance level and coherence of various actors.
  • On the question of “Risk aversion”: although differences in the acceptable level of risk will continue to prevail, businesses can benefit from the ways in which NGOs assess, and deal with the risk surrounding their programs and personnel.
  • The question of a “context specific approach” is a crucial one: private companies are frequently criticized for their misunderstanding of intercultural stakes and their lack of appropriate technical knowledge in aid. Actually, both businesses and NGOs are tempted to follow established models, in the belief that they can apply everywhere. Both should learn to secure well-established knowledge and understanding of a given situation, while remembering the apparent paradox that “the more you learn about a situation, the more its complexities make you feel that you know little”.

From an HI perspective specifically, businesses working in post-conflict settings must understand the disabling legacies of war, and should consider the higher rates of disability among the workforce in a fractured and dislocated context. By preparing themselves to do so – with exemplary policies in regards to the employment of marginalized groups – businesses may be a major player in a reconstruction phase. HI has signed numerous contracts with businesses willing to improve their policy of professional inclusion in such situations.

On their part NGOs could certainly learn from businesses practices of collective approach and negotiations (consortiums, chambers of Commerce,…) that are more powerful than individual ventures;

I would also like to mention a good example of “filling the ditch” which is an hybrid model – half-business, half-NGO – developed in recent years. One of them is the Lebanese NGO “arcenciel”[4] or “rainbow” that HI has supported when it was created in the middle of the civil war, therefore in a politically and religiously fractured environment. The young association – much like BRAC in Bangladesh – chose a “profit-making activities supporting non-profit activities model” with the ambition to participate to the development, through the inclusion of persons in difficulty. Te author indicates that today the association has a budget of 15 million dollars, and is self-funded to 72%.

To conclude I would like to stress that growing tensions in the world will create more situations hardly compatible with “business as usual”. And apart from arms deals and some dark businesses, conflict situations, post-conflict devastation and chaos, are obviously not conducive to the restoration of economic activities, necessary to the well-being of the population. And coming back to solutions, I wish to raise the question of influence and its modalities, in relation to the United Against Inhumanity initiative:

  • Of course business should have written policies regarding banking with/ investing in illegal weapons such as APMines and cluster munitions.
  • Indeed businesses can play a role in the prevention of conflict. Business can play a role in promoting restrain by warring parties. When a conflict proves inevitable, investors can contribute to convince them of the benefit of limiting devastation, so that business activities can restart early on, contributing to restore access of populations to basic services as early as possible.
  • It would certainly be interesting to see NGOs and businesses come closer together to reflect collectively on what could persuade antagonist parties to preserve civilian population, but also civilian infrastructures and equipment’s from the devastation of war. And I think that the initiative of the Wheeler Institute and London Business School represents a real opportunity to advance that goal.

Thank you for your attention.

[1] http://alternatives-humanitaires.org/en/category/focus-en/ngos-and-the-private-sector-threat-or-opportunity/

[2] http://alternatives-humanitaires.org/en/category/focus-en/ngos-and-the-private-sector-the-state-as-an-arbitrator/

[3] http://alternatives-humanitaires.org/en/2017/11/17/are-ngos-the-sole-purveyors-of-honourable-intentions/

[4] http://alternatives-humanitaires.org/en/2017/11/17/reconciliating-economics-and-social-concerns-the-example-of-arcenciel-in-lebanon/