International companies in post-conflict reconstruction.ppt

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1、The role and governance of the private sector,International companies in post-conflict reconstruction,Dr Peter Davis 13th March 2011,My research seeks to answer 2 questions What impacts do companies have in post-conflict reconstruction processes? How are companies integrated into those processes? Wh

2、y look at this topic? Significant increase in study of post-conflict in past 20 years But corporate role within this not understood Session on this described as “ground-breaking” at Post-Conflict People conference in London, November 2008,Companies in post-conflict reconstruction,Why a growing focus

3、 on conflict-affected zones?,More wars Estimated 150 conflicts since 1945 28 million deaths Twice the toll of WW1Recognition of collateral impact The injured Estimated 90 million since 1945 Economic development Lebanons GDP still estimated to be 50% below 1974 level by 1994. Survivors livelihoods An

4、gola has lost 80% of its farmland because of landminesGlobal geo-politics Under-pinned by the Liberal Peace thesis More latterly by conviction that failed states would harbour terrorists.,What causes conflict? Varying explanations (1),Statecraft? War is “a continuation of political intercourse, with

5、 the addition of other means.” (Clausewitz, 1832) This explanation works less well in a world where most conflicts are intra-state.Inter-communal grievance? Conflict an irrational activity, derived from “essentially inexplicable primordial qualities.” (Pugh & Cooper, 2004) Conflict the result of dis

6、putes such as religion, ethnicity, power etcEconomic greed? “War occurs if the incentive for rebellion is sufficiently large relative to the costs.” (Collier-Hoeffler, 2004) High correlation between low levels of income and conflict risk.,The result of weak state power? States that are unable to pro

7、ject power through their territory (Holsti, 2006) Warlord states Rentier statesThe New War thesis? Identity politics - identity based on national, religious, linguistic or ethnic factors as key cause of conflict Driven by globalisation All of the above? Levels of analysis approach International Soci

8、al Conflicts, which “are neither pure international (interstate) conflicts, nor pure social (domestic) conflicts, but sprawl somewhere between the two.”(Maill, Ramsbotham and Woodhouse, 2007).,What causes conflict? Varying explanations (2),What actually is reconstruction all about?,Reconstruction as

9、 sets of different tasks For example, as defined in Post Conflict Reconstruction Essential Tasks Matrix (US Department of State) Though not defined until 2005! The tasks of reconstruction divide into four overlapping but roughly sequential clusters: Physical security, trust-building and stability Cr

10、eating a peace infrastructure Governance, political transition, and self-government Economic development that is broadly based,Corporate impacts in 3 post-conflict theatres,Based on in-depth research (literature & field work) All 3 countries rather a mixed bag Azerbaijan Huge wealth from oil Greater

11、 Baku vs rest of the country Absence of coherent reform process Bosnia Physical reconstruction impressive, but remains a frozen conflict Political dead-lock, only broken by use of OHR powers A colony of the international community? Rwanda Hugely ambitious reform plan Vision 2020 but how realistic? E

12、conomy remains highly aid-dependent Questionable governance,Impacts: Economic Development,Financial impact the most obvious Azerbaijan: BTC alone estimated cost $3.7bn Rwanda: $350m Kivuwatt power generation facility Wider impact of applying normal business models Training and local partner developm

13、ent Local procurement BP spends $1.5bn on local suppliers (cf c $800m on foreign suppliers) Bralirwa estimates it provides employment for 35,000 families. “A certain professionalism” International rules of the road for business surely more effective than donor BDS programmes? Failure to attract furt

14、her FDI is why Rwanda and BiH remain unhealthily aid-dependent.,Impacts: Infrastructure development,Hard infrastructure physical stuff Largely a state-run activity Some notable exceptions Azerbaijan: BTC and oil infrastructure Rwanda: Kivuwatt / solid fuel generation Importance of soft infrastructur

15、e Construction as well as reconstruction The private sector is best placed to provide much of whats needed for a modern state Banking sector reform Makes functional the financial fundamentals donor agencies develop Educational frameworks HP/ Cisco in BiH Business Centre in Baku Commercial value chai

16、ns Starbucks in Rwanda,Impacts: Security, Trust and Stability,Workplaces as connectors in society “Opportunity for trust-building through repeated lateral interaction” (Pickering) Hiring on ability - Bralirwa, Rwanda / KPMG, BiH Long term stability BP will be in Azerbaijan until at least 2025 Heinek

17、en has committed to long-term presence How long will the donor community maintain a presence? BTC pipeline Part of the normal world “Mutzig: the taste of success” However, FDI can be de-stabilising Russian and Serbian investments in Entities, not BiH,Impacts: Governance,Azerbaijan: EITI and the Oil

18、Fund Azeri macro-economic model International standards of accounting and practice Bralirwa sites audited to same ISO standards as all Heineken sites Anti-corruption codes Diagnostic impact FIC White Paper (BiH) and RPSF Investment Climate Survey (Rwanda) However, also problems Need for post-conflic

19、t sensitivity banks in BiH APET deal undermined federal structures in BiH,Governing corporations in global affairs,Continuing dominance of the states system Realism is alive and well Governance is a “top down affair, with state-dominated institutions a given” (Ruggie. J. 1993) The norm remains the “

20、rootedness of all capital in discrete national formations.” (Held, D. and McGrew, A. 2002) Globalisation has not changed this.,A “growing asymmetry”,“Mainstream IR theory is utterly deficient in assessing the political power of these (corporate) actors.”Fuchs, D (2005). The Commanding Heights: The S

21、trength and Fragility of Business Power in Global Politics. Millennium: Journal of International Studies 2005 Vol 35. No 3 “Firms are basically functioning like governments, taking on the mantle of authority as contraction of government authority and the expansion of private regulatory authority are

22、 generally accepted by societies Legal formalism identifies state/ public authority as the only legitimate authority, rendering non-state/ private authority a theoretical and empirical impossibility. As an ontological non sequitur, private authority is thus not part of the discourse of responsible a

23、nd accountable governance.”Cutler, A Claire. (2002) Private International Regimes and Inter-Firm Cooperation. In Rodney Bruce Hall and Thomas Biersteker (eds), The Emergence of Private Authority in Global Governance.,Some efforts to square the circle,UN Global Compact (est 1999) Designed to “bring c

24、ompanies together with UN agencies, labour and civil society to support universal environmental and social principles 10 “universal principles” in human rights, labour standards, the environment and anti-corruption. In Larger Freedom (2005) Annans template for UN reform Envisages non-state involveme

25、nt in Human Rights Council Raises profile of Economics and Social Council Specifically speaks of the importance of “a dynamic private sector” UN Secretary Generals Special Representative on Business and Human Rights (2011) Protect, Respect, Remedy,Governance in post-conflict environments,Governance

26、by state institutions,Reconstruction strategy Strategic fora exist for donors, eg Rwanda Development Partners Private sector is excludedProject/ issue partners More widespread, eg EITI Sustaining Partnerships to Enhance Rural Enterprise and Agribusiness Development (SPREAD),Governance by corporates,

27、Pro-active awareness Heineken, Rwanda BP, Azerbaijan Engagement with initiatives like EITICollateral impacts “What war? / “we dont get involved in political issues” HP/ Cisco in BiH Night of 1000 dinners,Post-conflict: the importance of the private sector,It is impossible to create a stable, durable

28、 modern state without engaging the corporate sector. Yet no real attempt made by development community to engage corporations strategically Corporates have impacts whether the political architecture acknowledges them or not Indeed, the very absence of foreign investors can militate against successfu

29、l reconstruction Need for strategic engagement, not a tactical, ad hoc approach Need for symbiotic relationships who is best placed to do what? Ignore CSR departments and activities theyre irrelevant Private sector needs to be in from the beginning If FIC analysis of Bosnia is right now, why were companies not asked in 1995?,Thank you: now a shameless plug,“Corporations, global governance and post-conflict reconstruction”Available for pre-order from Routledge from May 2011,