Responsible business in conflict settings: The challenges and opportunities of international standards

This week, the International Dialogue on Peacebuilding and Statebuilding officially launches its brochure ‘International Standards for Responsible Business in Conflict Affected and Fragile environments’, providing a concise overview of some of the key standards that can help businesses operate responsibly in conflict-affected and fragile environments.

Business operating in conflict-affected and fragile environments run the risk of making the wrong decisions and perpetuate the tensions that originally sparked the conflict. But, if they make the right decisions, they can help a country turn its back on conflict, and move towards lasting peace. For instance, a UK-based company trading coltan and cassiterite in the Democratic Republic of Congo was accused by civil society groups of not implementing the OECD Guidelines for Multinational Enterprises. The company made illicit tax payments to an armed rebel group with a documented record of grave human rights abuses, and purchased minerals from mines in the DRC that employ child and forced labor. How do these and other companies make the right decisions? What international standards and guidelines have been designed to ensure that companies contribute to peaceful development?

Plethora of standards and guidelines

Over the past 15 years, a plethora of internationally accepted standards and guidelines have been developed for business and human rights, culminating in the adoption of the United Nations Guiding Principles for Business and Human Rights in 2011. Many of these standards have special relevance for conflict-affected areas, such as the Voluntary Principles on Security and Human Rights and the OECD Due Diligence Guidance for Minerals from Conflict-Affected Areas. But often Governments, civil society actors, local businesses and business associations do not have easy access to user-friendly information on international standards. Also, there are still some major challenges related to the implementation of the different standards, as they have not notably improved multinational companies’ track record of human rights violations.

First of all, companies are hardly aware of the existence of the different guidelines. Companies may lack corporate commitment or capacity to implement international standards e.g. at the operational level, in particular small and medium sized companies, even when they committed themselves to observing these standards. In conflict-affected and fragile environments, they may find it difficult to fulfill their commitments in the absence of an enabling environment. At times, they operate without being held to account. Most international standards for responsible business conduct are voluntary and place no obligation on companies and governments to implement them. Existing guidelines and principles do not always offer the possibility to address wrongdoing or harm caused. Very few have a non-judicial grievance mechanism attached, with the exception of the OECD Guidelines and the IFC Performance Standards. This reduces the incentives to implement international standards, particularly in difficult environments, and undermines their effectiveness and credibility.

Easy-to-use brochure

With this in mind, the International Dialogue on Peacebuilding and Statebuilding, a partnership between governments affected by conflict and fragility, donors and civil society organisations, housed within the OECD, collaborated with SOMO, to develop an easy-to-use brochure, consolidating and distilling those standards most relevant to conflict affected and fragile contexts. It builds on the core principles of the New Deal for Engagement in Fragile States (New Deal) championed by the International Dialogue and signed up to by 40 countries and organisations in 2011, as a guide to effective engagement in conflict-affected and fragile environments, in ways that tackle the root causes of conflict and to promote sustainable peace. Building the economic foundations for peace is pivotal to the New Deal which acknowledges the critical role the private sector can play in promoting peace when it acts responsibly.

It is hoped that this brochure will be instrumental in overcoming the challenges mentioned and that it will encourage companies to implement the available standards and contribute to a lasting peace. Because especially in fragile environments, companies need to be extra vigilant to “do no harm” and operate in a conflict-sensitive way.

The brochure will be launched today at the OECD Conference Centre in Paris. 

Mark van Dorp is Senior Researcher at SOMO, the Centre for Research on Multinational Corporations, based in Amsterdam.