Archive for Multi-stakeholder Dialogue

links for 2009-03-23


On the Ruggie-Report

As the smoke seems to have cleared by now, I thought it would be good to sum up the major developments about the Ruggie-Report on Business and Human Rights. Here is the report as well as the collated comments - a fascinating and in my opinion quite convincing example of multi-stakeholder statements.

In a nutshell: Business and government must adhere to three principles - the state duty to protect against human rights abuses by third parties; the corporate responsibility to respect human rights; and develop more effective access to remedies, when human rights abuses have occured. Currently, business conduct produces what the report calls “governance gaps”, refering to differences of corporate behavior overseas and back home. These gaps and legal loopholes provide “the permissive environment for wrongful acts by companies of all kinds without adequate sanctioning or reparation”.

However, according to the Global Policy Forum and Misereor (download), the report does not have global governance solutions to the global governance gaps it notes. Instead, it is limited to what its author deems politically achievable. This above all includes incremental steps, such as Bilateral Investment Treaties (BITs) and export promoting via Export Credit Agencies (ECAs). On a positive note (made by Oxfam Australia), Ruggie is in favor of strengthening judicial capacities to hear complaints and enforce remedies against corporations, thus demanding a stronger role for government. Even stronger, Ruggie states the opportunity and in fact necessity that corporate misconduct should be dealt within criminal courts such as the ICC - a primer in regards to business responsibilities. Still, Ruggie categorically rejects the UN Norms or any other global legal instrument to establish a fixed framework of human rights duties of corporations.

A critical look by Ethical Corporations’ Peter Davis led to a raging response by Professor Ruggie. So maybe the smoke has not cleared after all - which might not be such a bad thing in any case, as it will at least ensure that - and this is on what most stakeholders agree - the work goes on …


Internet for the next billion

netRecent statistics point out that approx 1.3 billion people have access to the internet. While this sounds like a big number, it leaves out a couple of billion users — or to use a term that excites companies more: customers — that might want to be connected. Which would explain why there is such huzzbuzz around the “not-quite-but-almost-at-the-bottom-of-the-pyramid” solutions. Negroponte led the way in using a meshed network to connect his educational tool, but now comes the next version ot this to bridge the digital divide. Combine this with Rifkin’s “Access matters”, and the future is bright, who knows?

In any case, it seems that Varshavsky wasn’t fast enough with his FON this time. Maybe he should have focused on BoP, too?


Just a thought in between all the music

It’s actually worthwhile to stop for a second and remember that poverty and climate change are intrinsically linked. As we have seen, World Bank, IMF and lots of UN efforts are not producing results on eradicating poverty and in creating sustainable livelyhoods. That’s not a criticism against them, but rather against their role as being a political football (thanks to Michael Hopkins for that term) in a game that still has too many bad actors, bad governments and of, course, bad business.

However, Hopkins stresses, and I couldn’t do more than repeating, that

“the future catastrophe will lead corporations to focus more on their carbon footprint than on their development footprint”.

As conflict is not only intrinsically linked to both climate change and development but indeed the work on it may often provide the missing link itself, we all know that there’s still some way to go on that road of “the role of business in conflict”.


Voluntary Sector Initiatives and other New Partnerships

ethical_corp.jpgI attended a conference on Business and NGO partnerships last week. Good for readers of this blog that there was an off-the-record policy which blocked all WLAN and thus prevented me from live-blogging! So you won’t get every breath they took as in that CSR-Conference in October, see my posts on Ed Freeman et al.

Conferences hosted by Ethical Corporation are by and large quite worthwhile their time (disclaimer: I do occasionally work as a freelance journo for Ethical Corporation), and this one was no exception. And, you can imagine that not only for a journo it’s always worth your while to get the information from the horses’ mouth.

The German-language readers of this blog might get a wee brief on this conference at a post in - btw a great multilingual (English/Spanish/German) source for CSR-related issues. All other ones might get the gist of it by focusing on the bold subheadings - plus, of course, following the links below the article.


Zeichen und Wunder


:) BoP!

via Pienso

update: Here is a critical account of Yunus’ work and “Microcredit as Business” by a CDG research fellow.


Making CSR work

freeman03-11-13-39.jpgFreeman presents ideas that are forthcoming in Freeman, Harrison and Wicks, “Managing for Stakeholders”, which will be published in 2007. His core proposition is “Business is all about value creation and trade”. In his opinion, “capitalism” refers to a number of different debates in society: Often the term is confusing and opaque. He’s stating that, if we think about how a society can sustain a system of voluntary value creation and trade, then capitalism can be beneficial. And he highlights traditional models of capitalism, portraying markets as the main metaphor for most models of business. However, what does it help a business, to think about creating value in trade, he asks. And: What does the entrepreneur do?

Economies work in part, “because there always is a better way to start”. However, the problems with competition are captured by four arguments: the global, historical, societal framework, and the human nature argument. Historical: Value creation and trade has emerged in a time *before* the nation state. The traditional idea is that capitalism works because people compete with each other - and that entrepreneurship must relate to the concept of a singular, egotistical entrepreneur. Freeman thinks this is wrong.

Following up on this, he remarks: How can we have an ethical theory separated from business, if we always have been value creators and traders? The overall internalised presumption is that business is morally questionable - without realising the benefits of business. And thus, businessmen are mostly interested to answer the question “what do you stand for” rather than “what business are you in”.

To Freeman, capitalism is a system of social cooperation. It is about how to create value for each other - something that no-one does on their own. And exactly this is, why capitalism works. We have simply forgotten that business works because we can work together and because we have joint interests. He calls this “stakeholder co-operation”.

In addition to this, “stakeholder responsibility” is needed to create, trade and sustain value: parties agree that they accept responsibility for the consequences of their actions. When third parties are harmed, they must be compensated, or a new agreement must be negotiated with all of those parties who are affected.

Value can be created, traded and sustained because human beings are complex psychological creations, capable of acting from many different values and points of view. Economists ignore a lot of what we already know about human behaviour. They talk about “rewards and punishments” and ignore that human beings have complex emotional lifes. Freeman states: this exactly, this complexity is the reasons why business works. That’s where capitalism starts. And this is stakeholder engagement, adding to stakeholder responsibility and stakeholder co-operation. So, according to Freeman, the classical and scholarly debate between Freeman and Friedman is “beside the point”:

“Stakeholder engagement is the essence of what business is all about.”

Update: Freeman’s keynote.

Comments (1)

Good Business

shake_hands.jpgDr. Wilhelm captured the stage again as key note speaker after the dinner (btw an excellent one, don’t get me started on this). Funny enough, he quoted a NEPAD executive’s speech from the opening session of the Bonn IBF conference from the beginning of the week. And, he ends with a brief but true demand: Do business, but do it in a good and profitable way.



hu-logo2.jpgAfter the morning keynotes, the entire conference moved into a different building – the quite impressive Paul-Löbe-Haus, a politicians’ beehive immediately next to the Bundeskanzleramt. Of course, I felt like a politician (minus the tie), observed by classes of wee schoolchildren trying to figure out whether or not I would actually board one of many black limousines waiting in front of the building. Never mind. Only sad thing about the building was that due to security constraints there was no WLAN available, so what follows is a brief account from my notes.

There was a wealth of lectures – which is the right occasion to congratulate Anja Schwerk for the months of hard work in putting this together: What a great job! The lectures often covered aspects which are just about now reach the awareness of companies in Germany - or, more interesting, they were bleeding edge in their own right. They ranked from a consumer perspective to CSR (most notably Good Brand’s recent survey on cause-related marketing) to a workshop on measuring performance and sustainable value creation – and why companies fail to quantify sustainability. Also, there was a session on labour, another one on regulation and yet another one on corruption. As I’d say, anyone only faintly interested in CSR would have been hard pressed not to find a session or a lecture of interest.

I picked the session on “What does corporate responsibility mean in different cultures and how should global companies handle the difference?”, so here are some impressions on this:

Van Miller from Northern Kentucky University looked at “CSR in Outsourcing”, focusing on Maquilas in Mexico. Based on information by the maquilaportal he looked at what the portal named as the “Top 100 Maquilas”. Key conclusion by Miller: „Human rights is not really an issue – it is not that salient: Labour is the issue”.

Sanford Moskowitz and Roxanne Rabe tackled the issue of “Bridging the cultural divide within MNCs and International Ventures” - as fuzzy as the title was the presentation. It’s actually been a while that I listened to professors discussing in broadest terms “Globalisation as a Western Ethical Model” and that the “Asian Model” (remind me again: what is Asia and how many countries does it include??) is less efficient than an obscure much needed universal code of ethics. Hmm.

Jürgen Wilhelm from German Development Service DED made up for this with quoting a lot of examples of “Practical experience of CSR programmes by German development co-operation”. Amongst other things, Wilhelm sees increasing CSR-interest in Nicaragua, where the DED assists in the founding of a CSR-organisation. Also, he points to successful development projects that are financed by the private sector. This includes an SME-mentoring program in Namibia, financed by local banks and a HIV/Aids program in Uganda, financed by a tea company.

He went on to discuss the well-known dichotomy of voluntarism versus a regulated corporate accountability (a quick “Hi” to Yvonne from the Nachhaltigkeitsrat :)), but poses this question within the context of developing countries: What works better? Hmm. Complex, me thinks, since this is tangent to the responsibility of MNCs in the informal sector - and to the benefits they can reap through that in learning about the “indigenous knowledge”.

(I remember that at this weeks’ InWent conference there had been a strong desire by the South to opt for “light regulation coupled with financial assistance” — whereby light refers to securing basic rights.)
Wilhelm ends with stark statements anyone from within the PSD-crowd will agree on: “Mugabe will not attract foreign investors” and “There are so many wonderful stories in Africa, but the media does not report on them”. True.
After a much needed coffee break, the audience heard the rapid account of what would have easily qualified for an entire 90 minute session - given in some 20 minutes by Liesl Riddle from George Washingthon (DC) University: A case study on “CSR as an informal institution: The case of Egypt.” So she referred at such speed that one couldn’t think, let alone write down what she said. I just somehow managed to get the impression that it must have been an excellent presentation, but to pin it down now?

There’s a comment I need to make, though: We all know that life in globalisation times got “americanized” to a large extent. Germans have learned English, most of us can cope to a satisfying degree or more - but: what about people from Eastern Europe, new EU member states or, for that matter, from Portugal, Greece and other countries who have not been graced by a 40+ year presence of US/UK soldiers? If I didn’t get a lot out of that lecture, how would they feel?

Ah well, it will all be online soon, giving us the opportunity to follow through. Gotta go now, more later…

Update: I knew it was good: Here you go - Presentation by Riddle


MDGs and business - African perspectives

bongos2.jpgI am just back from a conference on the “Business Challenge Africa”, putting business into the responsibility - and opportunity - framework for working towards the Millenium Development Goals. Again, there were lots of interesting business ideas, most of which were sourced from within countries such as Zambia, Uganda, Malawi and South Africa, do have a look at the case study section of the background paper on the conference (link above, right hand navigation, as there is no separate url provided).

What worries me, though, is that all topics CSR are present and known by representatives of North as well as South. Everyone - even Nestle - agrees on the role business can play in eradicating poverty through providing opportunity and that there is a business case (arghh, this discussion must raise its ugly head at every conference only vaguely related to CSR, mustn’t it?) for it. However, where’s the beef? There’s far too little serious (not in moral but in bottom line terms) and scalable multi-sectoral partnerships involving MNCs with NGOs and/or governmental agencies.

Ah well, suppose there’s a time for everything?


GRI-conference: shun the Equator and principle NGOs

munttoren.jpgMartina from Eldis blogs the current GRI conference, where GRI G3 is officially released - more information on the draft version of these guidelines for Corporate Responsibility at Ethical Corporation.

The Equator principles have been criticised for dealing only with project finance and to ignoring other forms of lending which can also lead to negative social and environmental impact. Also, the well-known Global Compact problem of “Free Riders” applies to these principles, too.

And, the debate of lacking NGO-accountability raised their head for the umpteenth time:

Why should corporations listen to calls for greater transparency and engage with NGOs criticism, if the NGOs themselves are perceived to be unaccountable and non-transparent?

As Martina points out, NGOs have done a lot in the last few years to improve their accountabilty but as there seems to be a marked difference between the business of business and the business of NGOs, acountability standards should probably be handled differently anyway. However, she concludes that there is a clear business case for NGOs to do better - as long as they want to engage with the business community.


BoP till you drop

bop2.jpgManagement guru C.K. Prahalad gave a lecture to World Bankers at their headquarter on “Democratising commerce”. He has a critical take on an aid industry of governments and NGOs that tends to see the poor as victims to be helped. Instead, he argues for seeing the poor as part of the solution, focussing on wealth creation at “the bottom of the pyramid” (what he calls BoP). To have this less of an abstract guru talk, he backed it up with a number of cases, all of them private sector solutions to development .

However, the PSD blog asks, although these examples are excellent and exciting stories,

How do these solutions “scale” in Nicaragua or Laos or Moldova? With deep respect for Prahalad, I’d like to see more examples of bottom of the pyramid solutions in smaller developing countries. Surely we’re interested in more than the Indian or Chinese or Brazilian pyramid.

Update: Commenting on this, points to their database, searchable by country/region as well as activity type (e.g. water, education, financial services, business development), providing BOP examples from Latin America, Asia, Eastern Europe, and Africa.


Coffee to ease ethnic tensions?

Coffee brings people togetherThe World Bank PSD blog points to a piece the BBC had on coffee plantations in Rwanda. Apart from producing fair trade and high-quality coffee, coffee growing reportedly produces healing and reconciling effects of joint work by Hutus and Tutsis, fostering understanding and providing “a practical programme (…) that brings people together.”

Here’s more details on this.

Update: After seeing Black Gold, Coffee will never taste the same, reads the blurb. Pienso adds to this the debate on Fair trade at the World Bank blog.


Can’t buy me peace, then?

“Do no harm” - The guideline of Mary Anderson has proven to be necessary countless times. When aid is fed into conflict zones it is often ineffective or can even exacerbate the conflict, e.g. through regional or unequal distribution. And whenever business gets involved with conflict settings, they have to be very careful not to fuel existing regional or intrastate conflict. But what happens, if businesses and donor agencies, maybe negotiated by international NGOs, realise that they already are on the same plane - working towards a sustainable environment? There is a hefty debate between donor agencies, how this could work. However, the debate is largely ignored by the business community. This is, what this blog is about.