Global Compact Guidance on Responsible Business and Investment in Conflict-Affected and High-Risk Areas

At its triennial Global Leadership Summit held in June 2010, the UN Global Compact launched a "Guidance on Responsible Business and Investment in Conflict-Affected and High-Risk Areas". The Global Compact is the premier UN-sponsored platform that brings together 5300 businesses world-wide to commit to uphold, on a voluntary basis, ten principles around human and labor rights, the environment and anti-corruption in their activities. The Guidance for conflict-affected areas was jointly developed with the Principles of Responsible Investment, another UN/business initiative that aims to commit financial service firms to environmentally and socially sustainable financial investment.  The Guidance is now building and summarizing on best practices that have emerged over time. It focuses on three topics: 1) how to implement the ten principles of the Global Compact in the core business of companies active in conflict areas, 2) how to shape relations with governments in conflict areas, and 3) how to engage local stakeholders and communities and make social investments. 

The Guidance is quite detailed. This is good as it gives companies options on what they can do. But the degree of detail also makes it difficult and sometimes confusing for firms understanding what is really indispensible and what is of, say, a more voluntary nature ? "nice to have", opposite to "need to have", as the management jargon would go. In addition, the Guidance does not differentiate between company size and industries. Nor does the document finally address the motivation of a company for its presence in a conflict area: is it there because of the commodities to be extracted, the cheap labor used in outsourced manufacturing and services, or local consumer base targeted as a potentially lucrative market for finished products? Obviously, these things have an impact on the firm's footprint in a conflict area. In my experience, however, companies usually want tailor-made solutions when it comes to such things as minimizing their impact on conflicts. My guess therefore is that not many companies will eventually apply the Guidance one-to-one as it is. They will need support and help in finding tailor-made solutions, not least because this is outside their own core competence.  They will have to rely on specialist providers. One of them could be swisspeace. Its Business & Peace project has taken the Guidance as an inspiration for exploring ways how companies can be assisted and what products and services, based on swisspeace's vast knowledge and expertise base, can be developed.  The Business Advisory Board supports Business & Peace in these endeavors with its own advice, experience and familiarity with the business world.

Rolf Tanner

22.02.2011