Peacebuilding Commission

Special Event (AM)

Special Headquarters Event Focuses on Potential of Private Sector

to Help Fragile Countries Emerge from Conflict

Panel Discussions Focus on Building Economic Stability by Creating Jobs

Speakers at a special event today highlighted the private sector’s potential to help fragile countries emerge from years, if not decades, of conflict by creating jobs and economic stability while healing rifts among diverse peoples.

A one-day conference co-hosted by the United Nations Peacebuilding Commission and the United Nations Global Compact brought business executives, political leaders, civil society groups and United Nations entities together in exploring techniques and initiatives that would enable the private sector to bolster United Nations efforts to rebuild conflict-ridden areas.  The aim was to identify partners with the ability to forge business relationships that would in turn trigger economic opportunities and private investment.

Ranko Vilović, Chairperson of the Peacebuilding Commission, said today’s event was an opportunity to demonstrate that body’s role in bringing various players together in support of such countries, while the private sector’s contribution was important to the international community’s technical and financial support for those countries.  Businesses could play a crucial peacebuilding role by generating economic growth through job creation, he stressed.  “It can be a powerful tool for bringing people together across ethnic, religious and cultural lines, building relationships based on a shared sense of mutual interest, overcoming differences that are difficult to surmount through other means.”

Judy Cheng-Hopkins, Assistant Secretary-General for Peacebuilding Support, said she would limit her remarks to Africa because the Peacebuilding Commission’s efforts were concentrated on the continent.  The site of the most fragile and post-conflict States, it had demonstrated growth rates of 8 to 11 per cent, even during the global economic downturn, yet its resource-rich countries were 50 per cent more likely to lapse into conflict, she noted.

In 2010, oil exports from one African country had exceeded total net aid to sub-Saharan Africa, she recalled.  Natural resources were fuelling the continent’s economic growth, as well as its conflicts, she said, adding that various arguments for dealing with that situation had been aired during the African Development Bank’s recent annual meeting.  One view advocated leaving natural resources in the ground as the countries were not yet ready to negotiate treaties and exploit the resources, while another held that they would rot if not extracted, since substitute sources and new markets could be found and developed.

She went on to support a third view:  dealing with today’s reality as countries negotiated contracts with multinationals.  Decades of civil war had left the continent with enormous infrastructure needs, and its fragile countries could not obtain large loans on favourable terms, not to mention the problem of corruption.  She urged Governments to use Web-based technologies to develop transparent systems that could lay out the results of geological studies, contract details and the distribution of Government revenues accruing from those deals.  Multinationals needed resources and it was in their interest to develop longer-term relationships with countries in order to protect their investments.  Donors must reward those countries that were doing well, she emphasized.  “Why not reward the countries that are doing well, versus those stealing from their people?”

Georg Kell, Executive Director of the Global Compact, encouraged participants from the business circle to explore ways to be part of a peacebuilding solution.  The good news was that the concept of entrepreneurship was growing more universal around the world, he said.  Although businesses faced such barriers as violence and corruption, local networks of entrepreneurs could be useful.  The answers to many challenges depended largely on the business community’s matchmaking capacity.  Tools and organizational modalities, such as guidance and transparency codes for investors, had also been developed.  Today’s meeting provided an opportunity for partnerships, he said.  “This is your meeting,” he added, urging participants to define their needs and to seek partnerships.

Panel Discussion I

Moderated by Bennett Freeman, Senior Vice-President for Sustainability Research and Policy at Calvert Investment, the first panel discussion featured presentations by Kebour Ghenna, Executive Director, Pan-African Chamber of Commerce and Industry; Zekrullah Kazemi, Director, Protina, Côte d’Ivoire; Christopher Neyor, former President and Chief Executive Officer, National Oil Company of Liberia; and Miro Smriga, Director, Ajinomoto.

Mr. FREEMAN noted that businesses had played a positive role in post-conflict situations over the 12 to 15 years in such places as the Balkans, Colombia, Sri Lanka, Liberia, Burundi and Rwanda.  “Peacebuilding requires all actors to contribute their capacity,” he said, urging Governments, non-governmental organizations, donors and the private sector to work together.

Mr. GHENNA said that when the topic of business and peacebuilding was under discussion, the focus was usually on the role of multinational companies.  But local businesses had an important role to play as well, he said, emphasizing that any comprehensive peacebuilding solution must include contributions from the private sector because conflict was driven partly by economic agendas.  However, the local private sector had not yet truly understood its potential to contribute to peacebuilding, he said, adding that, besides a lack of awareness of that capacity, there was a reluctance to get involved in politics.  The international community had not yet tapped the capacity of the local private sector, which had the skills and resources to effect change.

Mr. KAZEMI said the rebuilding of his company in 2011 had taken place in a difficult environment as Côte d’Ivoire had just ended a 10-year civil war.  The work had begun from “less than zero” because the company’s factory had been destroyed and the employees were from different religious and ethnic backgrounds.  Their “hearts were filled with hatred” after years of conflict, and it had become necessary to separate business from politics in the workplace.  Social functions had been organized to soothe differences, and people from different backgrounds had begun to eat together, and not to talk about political issues.  That exercise had effectively created a peaceful environment for workers, he said, pointing out that women had made a very important contribution.

Mr. NEYOR said Liberia had been devastated by 14 years of conflict.  Business executives believed that the absence of a critical mass of citizen participation in business activities had been a root cause, with the systemic denial of most people’s access to economic opportunities by a few people in Government sparking the violence.  Citizens were the true owners of the country’s natural resources, but their development had been corrupted by a few Government officials, frequently leaving the citizens poorer and the land environmentally devastated.  Real wealth was created when Government created an enabling environment that allowed its citizens to create wealth through private initiatives, he said, emphasizing that as a peacebuilding partner, the United Nations must help to strengthen local businesses and help them succeed.

Mr. SMRIGA said that Ajinomoto, a Japanese food company known for the manufacture of amino acid, had adopted a bottom-of-the-pyramid business model in the area of nutrition and health because, as a representative of food companies, it had an ethical duty to address malnutrition.  Highlighting important points to bear in mind when operating in post-conflict States, he said consumer goods manufactured by global corporations should only supplement existing ones used by the locals.  Ajinomoto sold vitamin and protein products for infants aged 6 to 24 months, but those products were not a substitute for traditional local products, he stressed, adding that partnerships must be brought down from global to local.  Ajinomoto had formed a joint venture with a Ghanaian company, and in that way, 70 per cent of the investment involved had remained local.  Extending know-how to fragile areas was also important, he said.

In the ensuing discussion, panellists and participants exchanged views on several topics, including the private sector’s ability to influence Governments and the balance between sovereignty and transparency.  The representative of Indonesia said that ensuring transparency had become a burden for Governments, emphasizing that the private sector, including foreign companies investing in her country, should bear the same responsibility.

Panel Discussion II

Hrvoje Sikirić, Chair of the United Nations Commission on International Trade Law (UNCITRAL), moderated the second panel discussion, which featured presentations by Louise Kantrow, Permanent Representative, International Chamber of Commerce to the United Nations; El Iza Mohamedou, Chief Political Analyst, African Development Bank; and Mette Strand Gjerloeff, Senior Specialist, Fragile and Conflict Affected Situations, International Finance Corporation.

Mr. SIKIRIĆ described UNCITRAL as a core international body working in the area of commercial international law.  Its work included developing texts in the areas of commercial law, from procurement to electronic commerce to maritime transport.  Those laws created an enabling environment for businesses operating in countries emerging from conflict, he said, urging the panellists to discuss the unique operating challenges that businesses faced in fragile States, and the concrete steps that would let them operate successfully.  He also urged them to specify what actors such as the United Nations could to support business actions, and whether international standards would help to increase responsible investments in post-conflict countries.

Ms. KANTROW said that the International Chamber of Commerce had been created in 1919 following the Second World War, and its member companies called themselves “merchants of peace”.  It now represented companies of all sizes from 120 countries.  Business and human rights were mutually supportive since the private sector could help Governments develop the institutions that would help foster economic growth and promote human rights.  But business could not be a surrogate for Government, he cautioned, emphasizing that responsible corporate practices could help set examples.  The United Nations Global Compact had helped to articulate responsible corporate principles, and their voluntary nature was the key to encouraging businesses to integrate those principles into their operating procedures.  The Chamber had worked to support the Global Compact’s tenth principle, which sought an end to all forms of corruption, he said, adding that it had also worked with the United Nations Conference on Trade and Development (UNCTAD).  Successful companies contribute to fragile countries by creating jobs.  Companies could not be indifferent to national conditions, and by acting collectively on the local level, they could help make Governments more accountable to their citizens.

Ms. MOHAMEDOU described how the African Development Bank was helping to improve infrastructure and access to financing in fragile States, saying it had applied a partial credit guarantee and a flexible mechanism to fragile States.  On extractive industries, the Bank was developing a comprehensive approach that applied to all types of natural resources, including a fragility assessment.  Because it was operating in 19 fragile States, sustainable stakeholder engagement was crucial, he stressed.  Up-front analysis undertaken with Member States showed a great deal of potential on the part of small and medium-sized enterprises to help kick-start domestic industry in such States, and pilot projects involving small local businesses were under way in six countries, he said, cautioning, however, that while some fragile States could do well on business indicators, that did not mean that foreign direct investment was materializing.

Ms. GJERLOEFF emphasized that the International Finance Corporation, a member of the World Bank Group, had created a strategy for creation jobs in fragile and conflict-affected countries, and had established the coordination team that would focus on them.  Job creation could break the cycle of poverty and crimes, and about 90 per cent of them were created by the private sector.  She went on to describe how the Corporation’s project in Liberia had brought electricity to tens of thousands of people, and how its stake in a rail infrastructure project and advisory services had helped to create many jobs in neighbouring Guinea.

During the discussion that followed, panellists and participants explored ways in which Governments could create suitable conditions for business, stressing the importance of working with parliamentarians.  One panellist said that businesses, which were often “ahead of the curve” in adopting best practices, could push Governments.  Also highlighted were the importance of integrating small and medium-sized businesses into supply chains, and the difficulty of gathering the necessary data for making financing decisions.

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