Bad Guys, Good Guys, or Something in between? Corporate governance contributions in zones of violent conflict

Feil, Moira ; Fischer, Susanne ; Haidvogl, Andreas

; Peace Research Institute Frankfurt


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Dokumentart: Bericht / Forschungsbericht / Abhandlung
Institut: HSFK-Hessische Stiftung Friedens- und Konfliktforschung
Schriftenreihe: PRIF reports
Bandnummer: 84
ISBN: 978-3-937829-72-2
Sprache: Englisch
Erstellungsjahr: 2008
Publikationsdatum: 02.04.2009
Originalveröffentlichung: (2008)
DDC-Sachgruppe: Politik
BK - Basisklassifikation: 89.75 (Internationale Konflikte: Allgemeines), 89.76 (Friedensforschung, Konfliktforschung)
Sondersammelgebiete: 3.6 Politik und Friedensforschung

Kurzfassung auf Englisch:

The influence of corporate activities on violent conflict has received widespread attention,though almost exclusively because of negative effects, particularly those caused by the extractive industries. At the same time, politicians and researchers recently raised expectations of corporate actions in a globalized world. Corporations are assumed to function as partners not only in economic development and poverty alleviation, but also in establishing peace and security. However, company contributions to conflict prevention, conflict resolution, and post-conflict peacebuilding, have hardly been scientifically investigated. Consequently, there is a notable discrepancy between expectations of corporate contributions to governance in conflict zones, and conceptual and empirical knowledge. Against this background, this report asks how corporations contribute to peace and security in zones of violent conflict and proposes an analytical approach to describe the contributions. The report seeks to draw more general conclusions on the potential of corporate contributions towards peace and security by analyzing four company case studies. These case studies cover several industry sectors and conflict zones. Company Alpha (apseudonym) belongs to the food & beverage industry in Rwanda, Studiosus is a tourist company operating in Israel and the Palestinian Territories, Kuehne+Nagel is a logistics company in Northern Ireland, and Shell is the largest oil company operating in Nigeria. Governance involves sustained corporate policies and activities that work towards the creation and implementation of collectively binding rules and norms and provision of collective goods. Codes of conduct, policy documents or sustainability reports usually include a company’s policies on important governance topics, such as human rights, anticorruption,labor rights or environmental protection. A review of a company’s activities and behavior shows whether the corporation actually does what it declares. Corporate engagement can have varying relevance to peace and security: actual contributions to security governance; governance contributions to other policy fields related to establishing peace and security; and governance contributions that are not related to the provision of peace and security. Security governance directly addresses the level of violence in conflict zones. In this case, security is defined in a classical and narrow way. Additionally, the authors draw on literature on conflict prevention and peacebuilding to identify policy fields that are commonly considered important when addressing the issues related to violent conflict. Three such dimensions were identified: (a) political order, (b) socio-economic governance, and (c) the socio-cultural sphere. This framework was applied to the four company case studies. A comparison of the cases shows that one of the companies currently has a policy in place directly relating to security governance. Companies mainly contribute to the other policy fields relevant to peace and security through their policies and behavior, particularly in the ‘political order’ and ‘socio-economic’ dimensions. Concerning ‘political order’, companies mainly have policies and activities about (1) human and labor rights, and (2) anti-corruption and transparency. Companies also contribute to governance in the following socio-economic policy fields: (1) environmental standards, (2) community development, and (3) equal distribution of economic goods. Why do we find such an accumulation of corporate engagement in the socioeconomic and political order dimensions? Research indicates that corporations contribute most to governance in those areas that relate to their core expertise and resources. This expertise would also give some legitimacy to their governance contributions as they are more clearly in a position to contribute to problem solving. This is particularly the case with ‘socio-economic’ activities, where companies might perceive their expertise to be strongest, though even political order (e.g. fighting corruption and enhancing transparency) relates to good corporate governance to some extent. Interestingly, companies themselves often do not consider their contribution to issues in the socio-economic field, such as community development or income generation, to be a ‘political’ activity. In contrast, contributing to political order seems to be more sensitive (e.g. addressing human rights issues). Several reasons might explain why companies are reluctant to engage in security governance: Firstly, the provision of security is considered to be at the core of state responsibilities; engaging in security provision would then result in a deep entrapment in processes that are regarded as highly political and sensitive governmental responsibilities. All companies perceive profit making as their priority; through their policies and activities they seek to support host societies and governments but not to substitute them. Secondly, companies may lack the expertise and capacity to engage in issues directly linked to security governance. A company’s main concern is usually managing the security of their own operations. Providing more encompassing security for a conflict region would overextend the capacities and resources that companies have at their disposal. Thirdly, engagement in security governance might depend on the intensity and proximity of the conflict to a company’s operation. The higher the level of violence and the more a company is affected by conflict, the more likely companies will engage if they want to continue their operations. In summary, the findings suggest that companies do contribute to peace and security. However, they are limited in scope and in the issues they address, and yet diverse in applied standards. Thus, if policy frameworks and strategies continue to assume that the private sector is a governance partner in conflict zones it may lead to a rude awakening when the private partner turns out to be incapable or unwilling to fulfill this role. Instead of merely relying on corporate governance contributions to peace and security, policy makers are recommended to review where and under which conditions such interventions have successfully taken place. The question of what is keeping corporations from becoming more involved also needs to be asked, ideally through honest dialogue with corporations. This will help clarify expectations and assumptions about corporate contributions to peace and security.

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