Conflict Prevention: The Untapped Potential of the Business Sector 9781626373136

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CONFLICT PREVENTION

CONFLICT PREVENTION The Untapped Potential of the Business Sector

Andreas Wenger Daniel Möckli

b o u l d e r l o n d o n

Published in the United States of America in 2003 by Lynne Rienner Publishers, Inc. 1800 30th Street, Boulder, Colorado 80301 www.rienner.com and in the United Kingdom by Lynne Rienner Publishers, Inc. 3 Henrietta Street, Covent Garden, London WC2E 8LU © 2003 by Andreas Wenger and Daniel Möckli. All rights reserved by the publisher Library of Congress Cataloging-in-Publication Data Wenger, Andreas. Conflict prevention : the untapped potential of the business sector / Andreas Wenger and Daniel Möckli. p. cm. Includes bibliographical references and index. ISBN 1-58826-136-0 (hc : alk. paper) 1. Conflict management. 2. Pacific settlement of international disputes. 3. Social responsibility of business. I. Möckli, Daniel. II. Title. JZ5538 .W46 2002 658.4'053—dc21 2002073984 British Cataloguing in Publication Data A Cataloguing in Publication record for this book is available from the British Library. Printed and bound in the United States of America

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The paper used in this publication meets the requirements of the American National Standard for Permanence of Paper for Printed Library Materials Z39.48-1984. 5 4 3 2 1

CONTENTS

Acknowledgments

vii

1 Introduction

1

The State of Conflict Prevention, 2 Business and Conflict, Business and Stability, 4 Corporate Conflict Prevention, 6 The Structure of the Book, 9

2 Toward a Culture of Prevention

17

New Life for an Old Idea, 17 The Case for Preventive Action, 21 Concept and Activities, 31 From Rhetoric to Action, 40

3 Assessing Conflict Prevention Today

51

The Many Initiatives, 51 Adjusting to Conflict Prevention, 53 Limited Effectiveness, 68 Improving Performance, 81

4 Bringing In the Business Sector

99

Business and Conflict Prevention, 99 The Business Stake in International Stability and Human Security, 103 Conflict Prevention: A Powerful Manifestation of Corporate Social Responsibility, 111 The Business of Which Business, 120

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Contents

5 Corporate Conflict Prevention: Paths to Engagement

129

Beyond Doing No Harm, 129 Business as Enabler, 137 Business as Economic Peacebuilder, 143 Individual Corporate Conflict Prevention: Opportunities and Limitations, 157

6 Conclusion: Business as a Strategic Partner in Conflict Prevention

167

Toward Global Governance in Conflict Prevention: Legitimacy Through Transsector Partnership, 169 The Case for a Collective Business Initiative, 171

List of Abbreviations and Acronyms Works Cited Internet Resources Index About the Book

vi

179 181 203 217 233

ACKNOWLEDGMENTS

T

he idea for this book grew out of a series of discussions among a group of people from differing backgrounds but connected by a common concern: making conflict prevention more effective. While conflict prevention was widely endorsed in the 1990s, in practice preventive action had not brought about the success that many had hoped for. The insufficient political will of states and a lack of capacity of nongovernmental organizations all too often translated into late and unsustainable prevention efforts, while the human, economic, and political costs of conflict to local and international communities alike in countries such as Rwanda, Bosnia and Herzegovina, Kosovo, and Afghanistan multiplied. The stimulus for exploring the link between business and conflict prevention can be traced back to the deliberations of a study group, whose four members merit special mention. Jens Drolshammer, senior partner of Homburger and honorary professor of law at the University of St. Gallen, Switzerland, initiated the group’s work out of his long-standing practical and academic interest in the changing role of corporations in international affairs. Peter Arbenz, honorary member of the International Committee of the Red Cross and president of Helvetas, the Swiss Association for International Cooperation, shared his practical experience with regard to current preventive actors and initiatives. Ulrich Grete, former member of the Group Executive Board of the Union Bank of Switzerland and member of the board of the Ecoscientia Foundation, and Oscar Holenweger, president of Tempus Private Bank Ltd., Zurich, brought a business

vii

Acknowledgments

perspective to the exploration of what the corporate community could, and should, contribute to the advancement of peace. Soon after the study group convened, it became apparent that the issue deserved a much broader academic study that would detail a conceptual framework for analyzing the potential of the business sector as an agent of peace. Once we set out to draft and redraft the first chapters of this book, we welcomed every opportunity to discuss our ideas with the four members of the study group. We thank them for their time and willingness to share their many insights and broad-ranging experiences. Their help and advice over the past year and a half have been essential for the completion of the book. Others have been of inestimable assistance to us. A multifaceted work like this one requires a great deal of data gathering and an extensive literature review. We were fortunate to be able to engage the help of two excellent research assistants: Mauro de Lorenzo and Judith Niederberger. We thank them and many other colleagues for their comments on drafts of the study. We are particularly grateful to Stefan Brem and Cornelius Friesendorf; our understanding of the changing role of the business sector in international affairs profited greatly from their suggestions and criticism. We also wish to express our special thanks to Peter Fuchs, Robert Jenny, and Jonas Widgren, whose insights and experience as practitioners and whose comments on earlier drafts of the manuscript proved invaluable to the consolidation of our argument. While this book has benefited greatly from the work of these colleagues, the final interpretations are our own, and we take full responsibility for the analysis and conclusions presented herein. We owe a particularly great debt to Michelle Norgate; without her help, the high quality of this book in terms of the language and focus would not have been possible. We also are very grateful to Lisa Watanabe and Marco Zanoli, who assisted us considerably in bringing the manuscript into its final shape. Finally, this project would not have been possible without the generous financial support of the Ecoscientia Foundation, which we gratefully acknowledge. We also thank Lynne Rienner, Lesli B. Athanasoulis, and Sally Glover at Lynne Rienner Publishers; they saw the manuscript through to publication with great skill, high standards, and good cheer. — Andreas Wenger, Daniel Möckli viii

CHAPTER

1

Introduction

C

onflict prevention is en vogue. No other issue in the field of international affairs has received more attention in recent years, among both policymakers and academics. State and nonstate actors alike have emphatically endorsed the many calls for a strategic shift from a “culture of reaction” to a “culture of prevention.” They vow to free the first decade of the twenty-first century from the large-scale violence of the 1990s and repeatedly express their new determination with forceful rhetoric and countless declarations. But what is conflict prevention? Who are the actors and what are the driving forces behind this development? How effective have preventive efforts been so far, and how can their performance be improved? What are the strengths and weaknesses of those actors that are already involved in conflict prevention? What is the link between conflict prevention and business, and why should corporations engage in preventive efforts? And how can the business community contribute to the advancement of peace? These are the issues we address in this book. Conflict Prevention: The Untapped Potential of the Business Sector emerged from a series of discussions among a group of conflict prevention experts from the academic, economic, and practical fields. Despite intensive international efforts in the area of conflict prevention, there is still little agreement about how violent and deadly conflicts might best be averted. We offer a new perspective, arguing that such efforts could be much more effective if they incorporated the private sector. We examine the qualities that the business 1

Conflict Prevention

community could bring to bear in prevention efforts and show why it is in the interest of corporations to participate. Our aim is to present a set of perspectives that is at once analytically convincing and also firmly anchored in the real world. With our policyoriented approach, we hope to stimulate the academic debate and, at the same time, to encourage business practitioners to engage in international efforts at preserving and restoring peace. The link between business and conflict is multifaceted. This book addresses that link from four angles. First, it investigates the changing nature of conflict that has become increasingly complex and multidimensional. Today’s security risks no longer emanate predominantly from powerful states, but rather from warring social groups operating in weak and failed states.1 Second, it discusses the imperative of preventing deadly conflicts in the context of a broadening concept of international security. A lack of economic opportunity, for example, is often an underlying cause of social and political instability. Human security—in contrast to the security of states—depends as much on social, economic, and ecological factors as on military and political factors. This book combines security and development concepts of conflict prevention, offering an integrated approach to the topic.2 Third, it posits conflict prevention as an issue of global governance,3 arguing for a transsector approach that involves the public sector (i.e., states and international organizations [IOs]; the civil society sector (i.e., nongovernmental organizations [NGOs]); and the business (i.e., private) sector.4 Fourth, it discusses (economic) peacebuilding as a growing challenge in the context of an expanding concept of corporate governance. A closer look at the changing and growing role of the business sector in international relations demonstrates that the corporate community has both the means and the motivation to help ensure the long-term success of prevention efforts.

The State of Conflict Prevention Today more actors are embracing a broader concept of conflict prevention than ever before. During the Cold War, conflict prevention focused on the management of war between states and remained limited to state actors and, less importantly, IOs. Yet over the past decade NGOs have embraced the idea of conflict pre2

Introduction

vention. Today many more nonprofit organizations specialize in the peaceful transformation of conflict than public sector actors are willing and able to support. At the same time, the traditional short-term preventive instruments of diplomats and the military have proven increasingly inadequate in dealing successfully with conflicts in the post–Cold War era. Consequently, the concept of prevention has been expanded by a long-term dimension that places an emphasis on economic, social, and political approaches as complements to the traditional conflict management tools.5 The emergence of conflict prevention as an important area of activity for state and nonstate actors alike reflects the recent shift from interstate to intrastate wars. Today more than 90 percent of armed conflicts take place within, rather than between, states, and up to 90 percent of the victims in intrastate wars are civilians rather than regular combatants.6 Most of these conflicts are about access to resources, issues of identity, and/or the consequences of state failure. They usually take place in transition and developing countries and are fought with small arms rather than high-tech weaponry. The tragedies of Rwanda, Bosnia, Somalia, and Kosovo demonstrated to the international community that intrastate conflicts could have far-reaching local, regional, and global consequences and could destabilize whole regions.7 The international community urgently needed to find ways to prevent such conflicts from turning massively violent—or it would have to face the consequences of transnational risks such as organized crime, drug trafficking, uncontrolled proliferation, international terrorism, and large-scale refugee flows at home. The changing nature of conflict prompted the move away from the traditional “reaction” approach to a “prevention” approach. Over the past decade, the willingness of states to seriously consider early preventive action has increased significantly, largely as a result of the horrendous human, political, and economic costs—for both the local population and the international community—of a strategy of late humanitarian intervention. The Carnegie Commission on Preventing Deadly Conflict has estimated the calculable costs of the seven major wars of the 1990s (before Kosovo) at U.S.$199 billion.8 At the same time, the chances for successfully tackling the root causes of deadly conflict have improved. In an environment no longer dominated by the strange stability of superpower stalemate, successful conflict prevention 3

Conflict Prevention

has become possible. Humanitarian and human rights principles have gained much ground in recent years, even though these may at times compromise the sovereignty of individual states. States and international organizations can no longer afford to ignore evidence of bad governance or massive violation of human rights on the grounds of traditional principles such as territorial integrity and noninterference. Conflict prevention emerged in the increasingly pluralist international system of the 1990s, shaped by economic liberalization and privatization, rapid technological advances, relentless global competition, emerging markets, and increased societal expectations. Globalization has led to the empowerment of NGOs and corporations as international actors, at the same time increasing the need for global governance. While nonstate actors do not replace the state as the crucial international actor, they are bound to increasingly supplement it. However, the current processes and institutions of global governance still largely fail to adequately take into account the growing influence and power of nonstate actors.9 Regarding the prevention of deadly conflicts, this is particularly true for the business sector, which so far has remained aloof toward international prevention efforts. Although business is intrinsically involved in conflict-related matters, the emerging pattern of governance in conflict prevention is bisectoral rather than trisectoral, limited to states/IOs and NGOs.

Business and Conflict, Business and Stability Why has the potential of the business sector regarding the effective prevention of violent conflict not yet been recognized? Above all, there is lack of clarity regarding the link between business and conflict and business and stability. On the one hand, public sector actors and NGOs tend to perceive the link between business and conflict in terms of a few well-known cases in which big companies, especially from the extractive industries, have done business without considering the social and ecological interests of local communities, thus exacerbating or causing conflict. On the other hand, private sector actors still tend to see their interests as unrelated to the (supposedly public affairs) issues of political risk 4

Introduction

management and conflict prevention. Both these perceptions are simplistic and do not adequately reflect the changing dynamics involved in conflict causation and conflict prevention. However, taken together they account, to a large degree, for the fact that corporations have so far not become involved in conflict prevention. Corporations have long been accused of causing or exacerbating conflict through their business operations—in fact, ever since charter companies like the British East India Company and the Dutch West India Company began to do trade overseas and colonize large regions.10 Today transnational corporations are frequently—and often rightly—reproached for harming their host countries by damaging the environment, exploiting local work forces, and/or disrupting social and political relationship patterns. Some are even accused of backing repressive regimes or deliberately prolonging conflict in order to pursue their parochial financial agendas. All too often, businesses in conflict-affected countries find themselves identified as part of the problem rather than as potential agents of positive change, a perception that is mirrored in the growing critical literature on corporations and conflict.11 This negative perception of the link between business and conflict is reinforced by the image of business mercenaries and war entrepreneurs. Today many private actors, in addition to states, take on the function of security providers. As is the case with privatization elsewhere, privatization in the field of security is driven by the prospect of reduced costs, increased efficiency, and better quality of services. New types of corporate actors—the international security entrepreneurs specializing in military and police functions—are quietly establishing themselves. They are increasingly willing and called upon to operate in conflict regions, and this has fueled concerns with regard to the legitimacy and accountability of their activities.12 Both local and global civil communities have tended to see few reasons for welcoming the power of privatization in areas related to the peaceful transformation of conflict because they are unable to see beyond those examples that give much cause to fear the privatization of power.13 Conversely, because conflict management has until recently been deemed the exclusive domain of states and international organizations, the potential of corporate conflict prevention has been overlooked. The above perceptions fail to take into account the qualities and comparative strengths that business actors could 5

Conflict Prevention

bring to conflict prevention, and they fail to do justice to the fact that many corporations have already been involved in the peaceful transformation of conflict simply by doing business.14 Economic growth and opportunity, which are essential to helping to reduce poverty and enhance social and political stability, can be sustainable only if generated by enterprises. Even though the engagement of most companies so far has been inadvertent, companies do have an obvious role to play in any attempt to stabilize conflict-affected societies. Yet before the prevention of violent conflict can become an issue of trisectoral global governance, public, civil, and private actors have to develop a better understanding of the role that the business community might play in conflict prevention. We hope that this book will help to increase awareness about the (very good) reasons for the private sector to become involved and to take its share of responsibility alongside states, IOs, and NGOs.

Corporate Conflict Prevention The case for systematic inclusion of the business sector into international preventive endeavors rests on three interrelated arguments. First, the balance sheet of conflict prevention is still unsatisfactory. This is at least partly the result of the limitations and deficits that current preventive (public and civil society) actors face. Business actors bring a set of qualities to conflict prevention that could effectively complement the strengths and compensate for the weaknesses of states, IOs, and NGOs. Public sector actors have focused their prevention efforts on building strong states but have been reluctant or unable to engage in the socioeconomic dimension of conflict prevention. More than half a decade after the Dayton Peace Agreement, there is still no economic growth in Bosnia and Herzegovina—and it looks no better in Kosovo and Afghanistan.15 With little or no economic opportunity, people in conflict-affected countries lack the prospect of a better future that is so important for convincing them of the benefits of peace. The absence of prosperity and employment often brings about much discontent and extremism, which diminishes the chances of preventing the outbreak or recurrence of violence. Economic peacebuilding, in the sense of developing local private sectors in conflict-prone or conflict-rid6

Introduction

den countries, thus represents an important component of any conflict prevention. Only the private sector has the competence and flexibility to work with business-to-business approaches and in partnerships with local governments and the international community toward the creation of sustainable jobs and economic opportunity. Second, the business community has a direct interest in the advancement of peace. There is a strong economic rationale for private actors to join international prevention efforts. Over the past decade, the corporate sector has become increasingly vulnerable to political instability in developing and transition countries and associated asymmetrical threats against business centers around the world. While the official aid flows received by developing and transition countries decreased in the 1990s, dropping to U.S.$40.7 billion in 2000, long-term private resource flows to the nonindustrial world increased sharply, from U.S.$62 billion in 1991 to U.S.$225.8 billion in 2000.16 This trend reflects the relentless pressure on companies to search for new markets in a business environment dominated by the processes of liberalization and privatization. Many of these new markets, however, are in unstable countries or regions plagued by civil strife and massive political violence. Combined, the economic trend and the conflict trend force business actors to choose between two courses of action, each of which is detrimental to their interests: they either have to accept a loss in market opportunities, or they face increased business costs. Third, there are even more important long-term socioeconomic reasons for business actors to engage in conflict prevention, although these reasons are less visible. Globalization is a highly uneven phenomenon with a few winners and, as yet, too many losers. Processes of integration occur parallel to processes of fragmentation and marginalization.17 Increasing socioeconomic exclusion and economic inequalities, both within and between states, represent potential new sources of instability. This is why the pressure on companies is mounting to include wealth creation into the broader context of corporate social responsibility (CSR), according to which the performance of a company is assessed on the basis of a triple bottom line, which takes account not only of economic concerns but also of environmental and social concerns. In this changing business context, corporate reputation and brand 7

Conflict Prevention

value have become key corporate assets. Public pressure on the business community is likely to increase. A voluntary and proactive role in international conflict prevention operations by the business community will convince activists and consumers of the willingness of corporations to take on their share of global governance much more than mere pledges by businesses that they will avoid causing social and ecological harm. While recently developed instruments of industrial self-regulation, such as codes of conduct and annual behavior reports, will remain on the agenda, these alone are unlikely to protect a corporation’s brand. We argue that a proactive contribution to the prevention and the peaceful transformation of violent conflict is a particularly powerful and promising manifestation of CSR. Conflict prevention is a very sensitive public issue. The greatest responsibility for the preservation of peace and stability will therefore remain with the public sector.18 Yet the business sector, with its own qualities, can support and complement the preventive efforts of the actors already involved in conflict prevention. Corporations must become comprehensively involved in economic peacebuilding. They can do this in two promising ways: they can pursue core business activities, such as trade and foreign direct investment, with a specific conflict prevention perspective; or they can transfer know-how with regard to private sector development, especially to local communities. To ensure both the success and the legitimacy of their actions, business actors are well advised to act in transsector partnerships with public and civil society actors. Better transsector coordination is, in fact, key to improving the still modest overall performance of international conflict prevention. Establishing effective trisectoral governance patterns in the area of conflict prevention is a complex and long-term task. Business is extraordinarily heterogeneous, and the potential range of companies with an interest in, and the specific qualities for, conflict prevention is very broad. Individual preventive activities and programs must therefore be the first step for companies to engage in corporate conflict prevention. However, the private sector will become a strategic partner in a sustainable prevention effort only if corporations are willing to overcome their fragmentation and pool their resources and know-how. We propose that business actors create a collective prevention initiative that orchestrates 8

Introduction

the activities of the business community in conflict prevention and serves as a contact point for other actors engaged in international prevention efforts. Such a (business-funded but donorindependent) initiative should bring a business perspective to the planning and implementation of preventive operations; design and implement corporate programs in the area of economic peacebuilding; offer advice and early warning to its corporate members; and recruit experienced staff from the private sector with the expertise required for specific temporary programs.

The Structure of the Book The next chapter of Conflict Prevention: The Untapped Potential of the Business Sector puts conflict prevention into its historical context and offers a conceptual framework of what conflict prevention means today. Although most papers, speeches, and comments on post–Cold War security and stability refer in one way or another to conflict prevention, it is often unclear what concrete scopes, targets, and instruments the authors have in mind. While in the early 1990s the concept of conflict prevention was nothing more than “an idea in search of a strategy,”19 there are now perhaps too many strategies. As a consequence, the literature on conflict prevention often contains inconsistent terminology and conceptual ambiguities.20 For this reason, we clarify the terminology used in this book and develop an analytical framework that defines conflict prevention as a comprehensive concept in terms of goals and activities, combining an operational with a structural and a systemic dimension.21 As conflict patterns are cyclical, rather than a series of clear-cut temporal phases, conflict prevention should be viewed as an umbrella concept that requires continuous efforts. Similarly, security, good governance, and economic development must be considered if preventive action is to work. Chapter 3 assesses the state of conflict prevention in terms of concrete efforts and initiatives. It discusses the problems that public and civil society actors face regarding early and sustainable action, and it explores the qualities that the business sector could bring to bear in the prevention of deadly conflict. So far, no systematic assessment of current approaches and no evaluation of the strengths and weaknesses of individual actors in conflict preven9

Conflict Prevention

tion has been undertaken, and the literature has been dominated by country-specific case studies. Our research reveals that preventive action has certainly not failed for a lack of initiative or effort.22 Rather, some characteristic deficits of the actors currently engaged lie at the heart of the problem—aside from the fact that conflict prevention is a very complex challenge and local actors may reject international support for many reasons. Most handicaps of states and international organizations derive from the difficulties of governments to muster broad political will for resolute and early preventive action, while the limited financial capacity of many NGOs has restrained them from a more comprehensive engagement.23 Chapter 4 describes the changed context of business in a global economy, evaluates the relationship between corporations and current conflicts, and shows why it is in the interest of the business sector to play an active role in international preventive efforts. While much has been written on the role of NGOs in conflict prevention,24 little literature exists on the issue of business and conflict prevention. A few notable exceptions, such as Allan Gerson and Nat J. Colletta’s monograph Privatizing Peace and Jane Nelson’s report The Business of Peace, are discussed in some detail at the outset of Chapter 4.25 The dearth of specific studies is to some extent complemented by the rapidly growing body of literature on related topics, such as the expanded role of the business sector in international relations, the new paradigm of corporate social responsibility, and the impact of various companies on local conflict environments.26 Chapter 5 recommends six effective ways for the business sector to contribute to conflict prevention.27 We disagree with those who call for more business diplomacy, because the raison d’être of business actors is quite unlike that of states or international organizations.28 Business should focus on its key competence and strengths in the area of private sector development and not on actively promoting political and moral values. Also, we are not convinced of the validity of proposals for a permanent international conflict prevention regime and proposals for a new institutional structure to facilitate a unified transsector approach to (postconflict) peacebuilding.29 Case-by-case arrangements and an ad hoc division of labor are not only more realistic aims, but they are also more flexible and allow preventive efforts to be adapted to 10

Introduction

the vastly different local environments around the globe. Instead, we see the need for a collective initiative at the business level.30 Only a joint corporate effort will provide the business community with the benefits of peace and, at the same time, convince public actors of the untapped potential of the business sector to usefully contribute to conflict prevention. The research agenda on war and peace has for many years been focused on the causes of wars, on conflict escalation, and on the management of the advanced stages of violent conflict between states. Only recently has the interest begun to shift to studies on the causes of peace, on early conflict prevention, and on the root causes and process factors of violent intrastate conflict. Remarkably, the same is true for the literature on business and conflict. While there is a considerable body of work on business as a source of conflict, research on business as an agent of peace is only just emerging. The long-standing reluctance to scientifically analyze the positive forces of peace at least partly reflects the complexity of such an undertaking. Although there is much empirical evidence, it is difficult to prove that proactive preventive measures—of business actors as much as any other actor—have actually made an impact on the peaceful resolution of a conflict, since any prediction on how a conflict would have evolved without third-party interference must remain speculative. This book sets out to analyze the link between two issues— conflict prevention and business—that have generally not been perceived as related. It is novel insofar as it develops a conceptual framework for studying the strengths and weaknesses of business as an actor in preventive endeavors. It is a first step that hopefully will stimulate further work on an important but understudied issue. There is a need for more empirical work on the link between business and conflict and business and stability. Our study has benefited a lot from those case studies already available, but many more studies are necessary to establish a comprehensive picture. There is a need for more theoretical work on the changing role of the corporate sector in international relations and the emerging patterns of global governance. Our analysis has gained many insights from the literature on the privatization of security and on the challenges of governance in a globalizing world. Finally, there is a need for policy-oriented approaches. This book suggests concrete ways how individual corporations can proac11

Conflict Prevention

tively become involved in preventive action and shows how the business sector can become a strategic partner of states, IOs, and NGOs in a joint and sustainable prevention effort. Today business is intrinsically linked to violent conflict. The question is, how can it contribute to its prevention?

Notes 1. On the changing nature of conflict, see Kurt R. Spillmann and Andreas Wenger, with the assistance of Daniel Möckli, eds., Towards the 21st Century: Trends in Post–Cold War International Security Policy (Berne: Peter Lang, 1999). On development and conflict prevention, see Mary B. Anderson, Do No Harm: How Aid Can Support Peace—Or War (Boulder: Lynne Rienner, 1999). 2. On the widening of the concept of international security, see Barry Buzan, Ole Wæver, and Jaap de Wilde, Security: A New Framework for Analysis (Boulder: Lynne Rienner, 1998). On the notion of human security, see United Nations Development Programme, Human Development Report 1994: New Dimensions of Human Security (New York: Oxford University Press, 1994); Roland Paris, “Human Security: Paradigm Shift or Hot Air?” International Security 26, no. 2 (2001): 87–102. 3. On the notion of global governance, see Joseph S. Nye and John D. Donahue, eds., Governance in a Globalizing World (Washington, DC: Brookings Institution Press, 2000); Martin Hewson and Timothy J. Sinclair, eds., Approaches to Global Governance Theory (Albany: State University of New York Press, 1999). 4. The trisector approach we apply in this book requires two comments. First, it is obviously a simplifying model, as each sector in itself is more or less heterogeneous and fragmented. However, as we show in Chapter 3, each sector demonstrates idiosyncrasies that render the model helpful for analyzing current processes of governance. Second, for the sake of simplicity we equate the civil society sector with NGOs in this study, remaining aware that the concept of civil society also comprises labor unions, sports clubs, religious organizations, and any other organization outside the state and the market. On these two points, see Robert O. Keohane and Joseph S. Nye, “Introduction,” in Governance in a Globalizing World, eds. Joseph S. Nye and John D. Donahue (Washington, DC: Brookings Institution Press, 2000), 1–41; and Thomas Carothers, “Think Again: Civil Society,” Foreign Policy, no. 117 (1999/ 2000): 18–29. 5. Carnegie Commission on Preventing Deadly Conflict, Preventing Deadly Conflict: Final Report (Washington, DC: Carnegie Commission on Preventing Deadly Conflict, December 1997). 6. Peter Wallensteen and Margareta Sollenberg, “Armed Conflict, 1989–2000,” Journal of Peace Research 38, no. 5 (2001): 629–644; Simon

12

Introduction

Chesterman, ed., Civilians in War (Boulder: Lynne Rienner, 2001). 7. See Michael E. Brown, ed., The International Dimensions of Internal Conflict (Cambridge: MIT Press, 1996); Oliver P. Richmond, “Emerging Concepts of Security in the European Order: Implications for ‘Zones of Conflict’ at the Fringes of the EU,” European Security 9, no. 1 (2000): 41–67. 8. The figure is quoted in Tobias Debiel and Martina Fischer, “Krisenprävention in einer gewaltträchtigen Welt: Was kann europäische und deutsche Entwicklungspolitik leisten?” Aus Politik und Zeitgeschichte, no. 12 (2001): 14. On the costs of recent conflicts, see Michael E. Brown and Richard N. Rosecrance, eds., The Costs of Conflict: Prevention and Cure in the Global Arena, Carnegie Commission on Preventing Deadly Conflict (Lanham, MD: Rowman and Littlefield, 1999). 9. Keohane and Nye, “Introduction,” 26–32. 10. See Antony Wild, The East India Company: Trade and Conquest from 1600 (London: HarperCollins, 2000). 11. See, for example, Scott Pegg, “The Cost of Doing Business: Transnational Corporations and Violence in Nigeria,” Security Dialogue 30, no. 4 (1999): 473–484; Jedrzej George Frynas, “Political Instability and Business: Focus on Shell in Nigeria,” Third World Quarterly 19, no. 3 (1998): 457–478; Human Rights Watch, The Price of Oil: Corporate Responsibility and Human Rights Violations in Nigeria’s Oil Producing Communities, January 1999; Human Rights Watch, The Enron Power Corporation: Corporate Complicity in Human Rights Violations, January 1999; Global Witness, “All the Presidents’ Men”: The Devastating Story of Oil and Banking in Angola’s Privatised War, March 2002. 12. See P. W. Singer, “Corporate Warriors: The Rise of the Privatized Military Industry and Its Ramifications for International Security,” International Security 26, no. 3 (2001/2002): 186–220; Damian Lilly, The Privatization of Security and Peacebuilding: A Framework for Action, International Alert, September 2000. 13. Singer, “Corporate Warriors,” 197. 14. Virginia Haufler, “Is There a Role for Business in Conflict Management?” in Turbulent Peace: The Challenges of Managing International Conflict, eds. Chester A. Crocker, Fen Osler Hampson, and Pamela Aall (Washington, DC: United States Institute of Peace Press, 2001), 669. 15. See International Crisis Group, Bosnia’s Precarious Economy: Still Not Open for Business, ICG Balkans Report, no. 115, 7 August 2001; International Crisis Group, Kosovo: A Strategy for Economic Development, ICG Balkans Report, no. 123, 19 December 2001. 16. The figures are taken from the World Bank, Global Development Finance: Financing the Poorest Countries, Analysis and Summary Tables 2002 (Washington, DC: International Bank for Reconstruction and Development/World Bank, April 2002), 32, 90–95. 17. James N. Rosenau, “Stability, Stasis, and Change: A Fragmegrating World,” in Challenges of the Global Century: Report of the Project on

13

Conflict Prevention

Globalization and National Security, eds. Stephan J. Flanagan, Ellen L. Frost, and Richard L. Kugler (Washington, DC: National Defense University Press, 2001), 127–153; Dietmar Fricke, Globalisierung und Bürgerkriege: Eine theoriegeleitete Analyse von Globalisierungsprozessen und ihrem Verhältnis zu regionalen Konflikten (Berlin: Köster, 2000). 18. Carnegie Commission on Preventing Deadly Conflict, Preventing Deadly Conflict, 105. 19. Bruce Jentleson and Michael Lund, Preventive Diplomacy: An Idea in Search of a Strategy, paper presented at the International Studies Association (Washington, DC, 1994), quoted in Volker Matthies, Krisenprävention: Vorbeugen ist besser als Heilen (Opladen: Leske and Budrich, 2000), 21. 20. For an overview of the literature on conflict prevention, see Chapter 2, especially notes 3 and 4. 21. See Tables 2.1 and 2.2 in Chapter 2. 22. For a list of preventive actors, initiatives, and instruments, see Internet Resources, pp. 203–213. 23. For an overview of individual strengths and weaknesses of preventive actors, see Table 3.2 in Chapter 3. 24. See Pamela Aall, “What Do NGOs Bring to Peacemaking?” in Crocker, Hampson, and Aall, Turbulent Peace, 365–384. For further literature, see Chapter 3, note 70. 25. Allan Gerson and Nat J. Colletta, Privatizing Peace: From Conflict to Security (Ardsley, NY: Transnational Publishers, 2002); Jane Nelson, The Business of Peace: The Private Sector as Partner in Conflict Prevention and Resolution, International Alert, Council on Economic Priorities, and the Prince of Wales International Business Leaders Forum, 2000. 26. Key literature on these issues include Virginia Haufler, A Public Role for the Private Sector: Industry Self-Regulation in a Global Economy (Washington, DC: Carnegie Endowment for International Peace, 2000); Jörg Andriof and Malcolm McIntosh, eds., Perspectives on Corporate Citizenship (Sheffield: Greenleaf Publishing, 2001); Peter Schwartz and Blair Gibb, When Good Companies Do Bad Things: Responsibility and Risk in an Age of Globalization (New York: John Wiley, 1999). 27. For an overview of the six roles, see Tables 5.1 and 5.2 in Chapter 5. 28. A prominent advocate of the idea of business diplomacy is the Institute for Multi-Track Diplomacy. See Louise Diamond and John W. McDonald, Multi-Track Diplomacy: A Systems Approach to Peace, 3d ed. (West Hartford, CT: Kumarian Press, 1996), 57–64. For other supporters of business diplomacy, see Chapter 5, note 4. 29. For an overview of propositions for conflict prevention regimes, see Michael S. Lund, Preventing Violent Conflicts: A Strategy for Preventive Diplomacy (Washington, DC: United States Institute of Peace Press, 1996), 160–210. For the proposal of Allan Gerson and Nat J. Colletta to set up a Peace Transition Council for transsector peacebuilding, see Chapter 13 of Gerson and Colletta, Privatizing Peace; see also Chapter

14

Introduction

6 in this book. 30. See Figure 6.1, Chapter 6, for possible functions of such a collective business initiative.

15

CHAPTER

2

Toward a Culture of Prevention

New Life for an Old Idea In the early 1990s, many people hoped that the end of the Cold War would usher in a more peaceful world. Today such optimism is gone. With as many as 5 million casualties in the past ten years,1 we have witnessed a higher death toll from violent conflict than in any other decade since World War II. This has led to the sobering recognition that the traditional instruments of states are no longer adequate for managing the new kinds of conflicts that have dominated the international arena since the fall of the Berlin Wall. The current popularity of conflict prevention must be viewed in this context. The idea that conflicts should be prevented is, of course, not new. However, the fact that numerous actors from different backgrounds have come to emphasize prevention in recent years and have vowed to make it a priority of their security concerns raises some important questions: How did the concept of prevention evolve? Why has it come to the forefront in the past decade? How is the concept understood today? And what particular stance toward conflict prevention have governments, NGOs, and the business community taken so far? In this chapter we investigate each of these issues. Two types of actors have contributed to the marked increase in public attention on conflict prevention: states and international organizations on the one hand, and NGOs on the other. In the public sector, prevention gained prominence with the Agenda for 17

Conflict Prevention

Peace of 1992, in which then UN Secretary-General Boutros Boutros-Ghali proposed measures to strengthen the concept of preventive diplomacy.2 Boutros-Ghali made his proposals with a specific view to improving the preventive capabilities of the United Nations (UN), but his general reflections influenced the thinking of many other international actors and institutions. After the humanitarian disasters of Somalia, Rwanda, Bosnia and Herzegovina, and Kosovo, international organizations like the European Union (EU) and the Organization for Security and Cooperation in Europe (OSCE) needed little persuasion to embrace the idea of prevention and present it as a focal point of their future activities. Numerous governments followed, and the Group of Eight (G8), as well as world leaders such as former U.S. president Bill Clinton, British prime minister Tony Blair, German chancellor Gerhard Schröder, and Russian president Vladimir Putin, have made public their resolutions to put prevention at the top of the global agenda and make it a new policy paradigm. Parallel to these commitments from states and IOs, many representatives from the civil society sector have in recent years emphasized the importance of conflict prevention. NGOs have taken up the issue mainly because a stable local environment in conflict areas is a prerequisite for these organizations to achieve their goals. However, some NGOs have gone even further, placing conflict prevention at the very heart of their activities. NGOs now focusing on conflict prevention have been particularly active in bringing the concept of prevention to the public and in pressuring governments to address conflicts early and vigorously. Simultaneously, the academic community has been undertaking extensive research on preventive action. For example, Michael S. Lund’s study Preventing Violent Conflict: A Strategy for Preventive Diplomacy (1996) proved groundbreaking.3 Lund’s assessment of the prospects of a policy of prevention influenced many scholars and led to a wave of research, conferences, and new literature that in turn brought about a huge increase in the popularity of conflict prevention.4 Further, many think tanks and foundations now deal with conflict prevention, most notably the Carnegie Commission on Preventing Deadly Conflict, an international panel of sixteen eminent international leaders and scholars including Cyrus R. Vance, David A. Hamburg, Brian Urquhart,

18

Toward a Culture of Prevention

and Gro Harlem Brundtland, whose publications have done much to bring conflict prevention to the attention of the international community.5 So far, the business sector is the only essential actor of the international community that has not taken a perceptible and committed stand on preventive action. Unfortunately, the overzealous rhetoric of some participants already active in prevention has elicited the suspicion of some observers; the conspicuous silence and inactivity of a large part of the business community is equally disappointing. For a long time, corporate passivity vis-àvis conflict was considered perfectly normal. Business and politics were regarded by many as two discrete worlds, and dealing with conflict was generally deemed the exclusive domain of states and international organizations. Yet today such perceptions need revision. The process of globalization and the changing nature of conflict have not only given new life to the old idea of prevention. These developments have also brought to light a close and multifaceted link between business and conflict, fostered corporate interest in worldwide stability, and unveiled the vast potential of corporate conflict prevention. The History of Prevention Until recently, the concept of conflict prevention was restricted to a small number of actors and issues. Governments alone were charged with preventing conflict, and their efforts focused almost exclusively on the avoidance of war between states. Indeed, their efforts, while undoubtedly preventive by nature, were not labeled “conflict prevention,” a term that emerged only once the Cold War had ended. Any attempts at prevention were aimed at avoiding great-power struggles and at ensuring that conflicts between small and medium powers did not escalate into large-scale regional wars. European and (later) global politics after the Treaty of Westphalia of 1648 and until the final decades of the twentieth century were characterized by the traditional international state system. In a world that was perceived as state-centric and anarchic, prevention during that period focused on the management of conflict and on escalation control rather than on tackling the potential causes of conflict. Diplomacy, bi- or multipolar balances

19

Conflict Prevention

of power, alliances, and military deterrence were thus considered key tools for avoiding interstate wars.6 Beginning in the late 1940s, when it became evident that those tools had failed to prevent two world wars, additional instruments aimed at deterring war and stabilizing the international system were introduced. States set up international institutions and security regimes to increase international stability and cooperation through common norms and regulations. The UN went as far as banning war as a legitimate policy option, instead promoting the notion of collective security. Concepts such as arms control and disarmament were introduced in order to prevent accidental nuclear war and ensure stability based on mutually assured destruction.7 As well as these “systemic” efforts to build a stable international state system, there were third-party initiatives to prevent specific conflicts from turning violent. The good offices of the World Bank in the Indus water conflict between India and Pakistan (1947–1960) and the mediation efforts of Ethiopia’s Haile Selassie in the territorial dispute between Algeria and Morocco (1962–1970) are just two examples.8 The Chasm Between Security and Socioeconomic Development For most of the Cold War, however, international efforts to prevent war remained restricted to state diplomacy. Yet such a statecentric and security-oriented conception of preventive action did not allow for the involvement of nonstate actors, and all endeavors were limited to a politico-military conflict management model. The many activities after World War II—and especially in the context of decolonialization—that were employed to encourage peace and that emphasized the need for economic and social development were usually not viewed as part of the general effort to prevent war. Consequently, there were no real links between the official development agencies and the many emerging development and humanitarian NGOs on the one hand, and the state security agencies and international organizations on the other, even though a collaborative approach would have enhanced conflict prevention.9

20

Toward a Culture of Prevention

Such perceptions have changed in the past decade. In the 1990s, we saw the emergence of an explicit concept of conflict prevention; a sharp increase in public attention regarding the concept of conflict prevention; and a broadening of the definition of what prevention entails and of the number and type of actors involved in it. This shift has allowed nonstate actors to become engaged in international conflict prevention efforts, both conceptually and in the field. However, so far only NGOs have taken resolute advantage of this opportunity, becoming indispensable actors in all aspects of conflict prevention today. By contrast, the business sector has not displayed a clear interest in an active engagement in international endeavors to avert large-scale violence, and it continues to act as though conflict and conflict prevention were none of its business.

The Case for Preventive Action With regard to the driving forces behind the recent changes of the concept and public visibility of conflict prevention, two factors deserve closer attention. On the one hand, globalization has brought about an erosion of the traditional international system, which is becoming increasingly pluralist and increasingly less state-centric. There are now more actors on the stage of world politics than in the nineteenth and early twentieth centuries, and many of these have manifest interests in peace and stability similar to those of states. On the other hand, there is now arguably more instability in the international arena than ever before, a result primarily of the international community’s inability to effectively manage the now dominant form of conflict—the intrastate conflict—with traditional preventive instruments. These two aspects account for the fact that there are more actors today putting more emphasis on a broader concept of prevention. Globalization: More International Actors, a Greater Need for Global Governance The globalization of economic liberalization and privatization and of information technologies—which has all but eliminated previous limitations of space and time regarding the dissemination of

21

Conflict Prevention

information—has significantly eroded the Westphalian state system. The present permeability of borders; the enormous growth in transborder flows of capital, services, and goods; the resulting density of networks of interdependence; and the (generally) diminished relevance of territory mean that the nation state’s regulatory capacity has been reduced. Although the existence of the nation-state is not seriously threatened, a loss of the state’s monopoly and a diffusion of political power are clearly discernible.10 The winners in this shift of power are primarily the nonstate sectors, as well as the substate and suprastate levels. Exaggerated as references to a “privatization of politics” might be,11 there has been a sharp increase in the governance capacity of both the corporate community and civil society. Like public sector actors, nonstate actors are today capable of defining the content of public goods. Even more importantly, they are also capable of influencing the social, economic, and political processes by which these goods are provided.12 Thus, in contrast to the state-centricity of the past, the changing patterns of governance encompass actors from the public sector, the business sector, and the civil society sector who perceive each other as either rivals or partners, depending on the issue of governance addressed.13 The empowerment of the business sector has come about predominantly as a result of the rapid development of a global economy. Transnational corporations (TNCs) have become important actors in international relations, and state actors compete with one another to offer the TNCs suitable institutional and societal frameworks for investing in their countries’ industry and services. The dramatic increase in foreign direct investment and cross-border production of the now more than 60,000 TNCs and over 800,000 affiliates means that many TNCs today pursue their own international agendas.14 More than ever before, business actors are deeply involved in world politics, and they clearly state that a stable political environment is a precondition for the realization of their economic interests.15 With regard to NGOs, the globalization of communications has enabled them to establish global cooperative measures and participate much more effectively in the setting of the international political agenda. The new opportunities presented by modern communications have also brought about an astounding increase in their number. The number of international NGOs 22

Toward a Culture of Prevention

alone grew from 6,000 to 26,000 in the 1990s.16 Although nongovernmental organizations vary enormously in terms of their sizes, mandates, structures, and strategies, they all keenly observe the policies of states and companies and try to influence the formulation and implementation of new policies according to their own mandates. There is no issue today in which NGOs are not somehow involved, and consequently they have contributed significantly to the emergence of the multisector pluralism that increasingly characterizes international affairs.17 It is important to note that many current processes and institutions of governance are still state-centric and do not yet adequately reflect the rise of nonstate actors. In some issue areas, such as international economic relations, governance is already pluralistic, with the corporate sector applying instruments such as private international regimes or industrial self-regulation to compensate for the decreased regulatory competence of national governments.18 In other issue areas, however, the mills have ground more slowly. Global ills such as poverty, armed conflict, inequality, disease, environmental degradation, transnational crime, violation of human rights, and a lack of access to education and technology are not being redressed with adequate forms of global governance. Further, traditional public sector mechanisms and structures have not been thoroughly adapted, and nonstate actors have not been sufficiently integrated into what should become genuine cross-sector patterns of global governance.19 Nevertheless, some initial attempts at providing more governance in these fields are under way. In the particular case of the prevention of conflict, moves have been made largely as a consequence of the changing nature of conflict and the declining ability of the international community to handle conflicts effectively with traditional conflict management tools. We need to carefully examine the latter trend in international relations as well if we are to understand the increase in support for conflict prevention, the broadening of the concept, and the current deficits with regard to multisectoral governance. The Changing Nature of Conflict Between 1989 and 2000, there were more than 100 intrastate but only seven interstate armed conflicts around the world.20 The 23

Conflict Prevention

shift from interstate to intrastate conflicts as the predominant form of large-scale organized violence has many causes. Factors such as the increasing economic interdependence of states, the destructiveness of modern warfare, the spread of democracy, and the setting up of international security regimes account for the fact that few states have gone to war with one another since 1945, and even less so since the end of the Cold War. Simultaneously, although there has been a reduction in the number of internal conflicts in the 1990s, many such conflicts continue.21 On the one hand, without the bipolar balance of power the relative discipline and predictability of the international system have been eroded, and this has allowed old internal antagonisms to come to the fore. On the other hand, after the demise of communism, many countries embarked on a process of political and economic transformation, and the concomitant redistribution of power often brought about new conflicts. Moreover, some states failed once the financial aid of superpowers had ceased, resulting in increased violence between groups.22 Intrastate conflicts today occur typically in transition or developing countries. They are often marked by a high degree of violence and usually claim high casualties. The most drastic case is no doubt Rwanda, where about 40 percent of the population have been killed or displaced since 1994; but losses in other internal conflicts have also been extremely high.23 Further, an overwhelming majority of victims in intrastate conflicts these days are civilians, not combatants. This stands in sharp contrast to earlier periods, dominated by interstate conflicts, and leaves no doubt that the civilian population is often a deliberate target of warring factions.24 Even though most intrastate conflicts are geographically much more confined than many previous wars and great power struggles have been, they can nevertheless have far-reaching consequences for the international community. Large flows of refugees, transnational organized crime, and the uncontrolled proliferation of small arms can destabilize whole regions. The Balkan tragedy, for example, forcefully brought home to the Euro-Atlantic community the realization that ignoring such conflicts is not a viable strategy. The changing nature of conflict and the fact that many intrastate conflicts pose a threat to regional and international stability 24

Toward a Culture of Prevention

have deeply affected the way the international community perceives security in the post–Cold War world. The prevalence of intrastate conflict has meant that the state sector—the traditional agent in conflict issues—has been forced to seek new ways of providing peace and stability and to modify its conceptions of security and conflict prevention; it has also caused other actors, such as the development community and many NGOs, to focus on security and become involved in efforts to prevent conflict. These two developments account for the prominence that the idea of conflict prevention has enjoyed in the past few years, and they consequently merit a more detailed investigation. Security and Development Find Common Ground Throughout the 1990s, states repeatedly showed themselves to be at a loss when faced with intergroup violence. Traditional preventive instruments such as deterrence, sanctions, diplomatic pressure, and peacekeeping often proved insufficient or inadequate means of dealing with such conflicts. Consequently, the two most typical responses that states adopted were, first, humanitarian intervention—that is, military intervention, applied after much blood had already been shed—to forcefully deescalate a conflict and bring violence to a halt; and, second (against their better judgment) no reaction at all. Both strategies were highly unsatisfactory and in several cases downright disastrous. Whether action came late, as in Bosnia and Herzegovina and Kosovo, or whether it was nonexistent or at most halfhearted, as in Rwanda and Somalia, the human, strategic, political, and economic costs were enormous, for both the local population and the international community.25 First, let us consider the human costs of some recent conflicts. In the 1994 genocide in Rwanda, for instance, 800,000 people were slaughtered, 1 million were internally displaced, and 2 million fled the country. The four wars in the Balkans in the past decade claimed the lives of more than 200,000 people and forced nearly 2 million to leave their homes. Taken together, the conflicts of the past decade caused more than 5 million casualties, more than twice as many as in any decade since World War II. Limited though the significance of such figures is, they serve to 25

Conflict Prevention

convey an idea of the human suffering and degradation that today’s intrastate conflicts can bring about.26 When we assess the strategic and political costs of intrastate conflicts, we should view the general problems of regional destabilization and mass migrations mentioned above in conjunction with the—domestically unacceptable—loss or humiliation of soldiers in peace support operations, the decreased credibility of international organizations and states, and the often sharp disputes within alliances or in the international community about how military intervention should proceed and with what legitimacy. In addition, it is obviously very difficult to resolve a conflict by means of third-party intervention once the conflict has escalated into large-scale violence. Once warring factions are armed and mobilized, and once there have been casualties on both sides and hatred is being fueled by mutual atrocities, military intervention can at best protect the civilian population and prevent further mass killings; it cannot bring a stable peace to a war-torn country. An obvious example is Bosnia and Herzegovina where, more than half a decade after international troops arrived to reestablish peace, the international community has succeeded in providing some sort of stability but is still far from defining a clear exit strategy. The need for a long-term international presence in a conflict region once violence has ceased contributes heavily to the huge financial and economic costs of many of today’s conflicts. Military tasks—such as providing a secure and stable environment, demobilizing belligerents, and clearing landmines—and the various civilian efforts to reconstruct the economy, rebuild the infrastructure, reintegrate soldiers into society, and temporarily run the country and build up institutions are all high-cost activities. Add to these the costs of the initial military intervention, costs associated with refugees, and the loss of economic opportunities, and the figure becomes staggeringly high. The estimated total cost of the Bosnian war to the international community, to invoke just one example, amounted to U.S.$53.7 billion.27 States and international organizations learned two basic lessons from the negative experiences and high costs of their lateintervention or nonintervention policies. First, they came to realize that the only feasible way to deal effectively with internal conflicts is early preventive action aimed at resolving antagonisms 26

Toward a Culture of Prevention

between groups before violence breaks out. Second, the first lesson implied that the concept of prevention had to be adapted to the new circumstances. Policymakers realized that since conflicts involving substate actors were difficult or impossible to manage and control from outside, the emphasis had to be placed on the period before the eruption of violence, with the aim of addressing the causes of serious disputes. This in turn meant that conflict prevention policy would require a long-term dimension to complement the traditional short-term measures and that preventive instruments could no longer be limited to diplomatic and military activities but would also have to encompass economic, social, and political approaches. At the same time as foreign and security policy representatives of governments and international organizations began to embrace a broader concept of prevention, with its socioeconomic dimension, officials from development departments came to realize that in development assistance more attention had to be paid to stability and security aspects. They increasingly questioned their own traditional claim that development policy was essentially technical in character; and they concluded that too many development projects had been stopped by violent conflict, too much money had had to be diverted from long-term aid to emergency relief, and too much assistance had ended up stabilizing and legitimizing unjust power structures and thus reinforcing conflicts.28 The shocking events in Rwanda, which had previously been a prime example of successful development cooperation, were a turning point. They left no doubt that conflict prevention had to be included in development policies, and conflict-related considerations and political conditionality have since become cornerstones of most assistance.29 Human Security As a response to the changing nature of conflict, the development sector and the security sector found themselves united in their drive to prioritize conflict prevention. While governments and international organizations recognized a pressing need for this paradigmatic change in their policies, they also found that such change opened up myriad opportunities. When the end of the Cold War brought about the end of superpower rivalry and confrontation, 27

Conflict Prevention

the global political climate became more cooperative, and multilateral institutions gained in importance. Without the ideological bipolarity of the Cold War, a greater scope for joint action in addressing intrastate conflict came about, overriding the traditional principles of territorial integrity and noninterference. The view that sovereignty can be meaningful only if governments are responsible and accountable has gained much ground in recent years. It is based on a changed perception of security, which is no longer understood as focusing exclusively on the security of the state and security between states, but increasingly relates also to the security and rights of peoples and citizens. As a result of the changed nature of conflict and the erosion of Westphalian principles, we have experienced a shift away from the conventional concept of international security to what is now commonly termed human security. Proponents of human security acknowledge that while the security of states has improved in recent years, the security of various peoples has declined considerably, making it necessary to refocus security efforts on strengthening the rights of citizens, even though this may compromise the sovereignty of individual states. Human security thus stands for a broadened security notion that complements purely military and political measures for ensuring security with efforts at preventing conflict by social, economic, and ecological means. The goal, then, is to ensure all peoples’ freedom from fear and freedom from want.30 So far, international law does not adequately cover the new concept of security. The Kosovo intervention showed that there is still much resistance to attempts to place human rights on an equal legal footing with the principles of sovereignty and territorial integrity. Resistance is particularly high outside the Euro-Atlantic region. Nevertheless, the fact that states are no longer ignoring evidence of bad governance and violations of human rights in other states is remarkable. In light of states’ increased awareness of the domestic issues of other states, their governments and international organizations have embraced the idea of conflict prevention. The recognition of states that third-party engagement and assistance can be legitimate and necessary in certain conflict-prone situations is vital to the success of conflict prevention.

28

Toward a Culture of Prevention

NGOs Join In, Business Stays Out In the emerging post-Westphalian, increasingly pluralist system, states and international organizations have not been alone in embracing conflict prevention. Yet, as illustrated in Table 2.1, of the two sectors that have recently joined the global theater—the NGO and the business sector—only the former has shown an interest in this particular field of global governance. As peace and stability are global public goods that are marked by nonrivalry in consumption and nonexcludability of benefits,31 the corporate sector has so far not begun to contribute to efforts at averting violent conflict. This participation gap between the business community and other actors implies that the emerging pattern of governance in conflict prevention is for the time being bisectoral rather than trisectoral. Civil society actors have been very active in promoting conflict prevention, and some of them have in fact specialized in early warning and the nonviolent transformation of conflict. With the help of global media and new information technologies, nongovernmental actors have brought conflicts and human suffering around the globe to the public eye. Often, through their media and advocacy activities, they have aroused so much attention and public sympathy that policymakers have had little choice but to address specific issues. NGOs are in an ideal position to challenge the public and the business sector’s reactions to conflict-related issues, although frequently they also work with these actors in joint efforts at conflict prevention. As for the business community, there is a strong case for companies to give up their current passive stance on conflict prevention. As we show in subsequent chapters, playing a proactive, constructive role in averting conflict is in the interest of the corporate sector. In an ever more integrated international economy, companies are intrinsically involved in conflict-related matters and are often directly affected by conflict, either losing market opportunities or incurring higher business costs in conflict-ridden environments. Also, as TNCs increasingly move into nonindustrial countries, they are more and more likely to cause social and ecological harm, and thus the likelihood of them becoming a target of public protest will grow. Corporate conflict prevention represents

29

Table 2.1

Conflict Prevention as an Issue of Global Governance: The Individual Actors Westphalian System Global Governance

Public sector (states and IOs)

State-centric. Unisectoral governance.

Conflict Prevention

Post-Westphalian System Global Governance

Conflict Prevention

Security: managing great power conflict and escalation control. Unisectoral governance. Development (after 1945): economic and social development. Not viewed as conflict prevention.

Multilateralism. Unisectoral, bisectoral, or trisectoral depending on issue.

Security and development. Bisectoral governance.

Civil society sector (NGOs)

Development and humanitarian NGOs (after 1945): economic and social development. Not viewed as conflict prevention.

Empowered NGOs. Unisectoral, bisectoral, or trisectoral depending on issue.

Development and humanitarian NGOs, conflict prevention NGOs. Bisectoral governance.

Business/private sector

Business activities such as investment, trade, and employment. Not viewed as conflict prevention.

Empowered corporations. Unisectoral, bisectoral, or trisectoral depending on issue.

Still no conscious participation in conflict prevention governance.

Toward a Culture of Prevention

an important way for firms to ensure stable and growing markets; demonstrate their willingness to share political responsibility; avoid damage to their reputation; and ensure that the current antiglobalization movement does not cause a reversal of the process of economic liberalization. The business community undoubtedly has the necessary potential to contribute effectively to conflict prevention. Although there is a currently dominant perception that business causes conflict, one could in fact argue that corporate actors have implicitly always been engaged in prevention, simply by creating economic opportunity and jobs through their business activities. This (so far) mainly coincidental corporate involvement indicates just how valuable contributions by the corporate sector could be if it were to deliberately link its core business activities to preventive objectives and were to employ its instruments and know-how in international preventive endeavors. Conflict prevention is clearly as relevant and feasible for the business community as it is for governments and NGOs. But before we make a case for corporate engagement and define specific roles for the business sector, we must examine what conflict prevention is about, what other actors are doing in this field, and what the major failings of current preventive efforts are.

Concept and Activities The literature on conflict prevention reveals, in part, confusing terminology and some conceptual ambiguities. In fact, the many definitions of conflict prevention attest to the newness of the discipline and to the diversity of research and practical activities that in some way share a similar goal—the avoidance of violent conflicts. In the following sections, we define the concepts as they are used in our book. Preventing What? The term “conflict prevention” is arguably misleading and subject to much debate, for experts generally agree that conflict per se is not always negative, nor should it always be prevented. Diverging interests are a normal part of human interaction and can be a 31

Conflict Prevention

constructive element of societal development. What needs to be prevented, therefore, is not conflict in general but any violence associated with it. To avoid misunderstandings and semantic inaccuracy, some have posited alternative terms such as “crisis prevention” and “preventive diplomacy.” Yet these terms are not unproblematic. For example, the overuse of the term “crisis” has diminished its conceptual value.32 And the term “preventive diplomacy,” coined by the UN, points to one specific instrument (diplomacy) used to prevent conflict, excluding other equally valid means. Thus, when we use the term “conflict prevention,” while acknowledging its limitations, we do so in the understanding that conflict prevention means the avoidance of violent or deadly conflict and refers to acts of managing change peacefully.33 Thus, “preventive action” need not be applied to each and every conflict. Rather, it should focus on situations where the violent expression of conflict is possible, imminent, or distant. With regard to the conceptual framework surrounding conflict prevention, two key issues, each of which is the topic of considerable debate, deserve closer attention. The first debate surrounds the temporal demarcation of a conflict and looks at when preventive action should start and when it should end. The second debate surrounds the conceptual demarcation and is concerned with determining the scope, the targets, and the instruments of conflict prevention. The Demarcation of Time From an analytical point of view, there are good reasons for associating the concept of conflict prevention with a distinct phase in the temporal progression of any given conflict. For example, conflicts are traditionally split into three phases—previolence, violence, and postviolence—where conflict prevention is understood as applying to the first phase only, distinct from subsequent “conflict management” and “postconflict reconstruction.” Yet this widely used model no longer reflects the realities of modern intrastate conflicts. In practice, in many current conflicts, no sequential, chronological pattern to a conflict is discernible, no official declaration of war clearly announces the beginning of violence in civil conflict, and violence does not stop with a truce or a peace treaty. 32

Toward a Culture of Prevention

Given the current need to view conflict dynamically, as a long-term cycle where violence can occur at any stage, it is useful to see prevention as a comprehensive concept that is independent of a fixed chronology and that can be applied at any stage throughout the cycle. As illustrated in Figure 2.1, preventive action should not focus only on preventing the emergence of violent conflict but should also be applied to prevent ongoing conflicts from spreading and violence from recurring. Conflict prevention should thus be seen as an umbrella concept that requires continuous efforts.34 The Demarcation of the Concept Although the term “conflict prevention” is understood these days to be far more comprehensive than it used to be, it should not be understood to include all measures that a third party might employ in its dealing with a conflict. Peace enforcement and peacemaking, which refer to efforts to end hostilities by military and diplomatic means in a conflict that has already escalated, should not be identified as parts of conflict prevention, even though they can be linked to ongoing preventive measures. Peace enforcement Figure 2.1

Conflict Prevention as a Chronologically Comprehensive Concept

Conflict intensity

Conflict management and humanitarian emergency relief

Prevent spreading of conflict Prevent outbreak of conflict

Prevent recurrence of conflict

Conflict prevention Conflict duration

33

Conflict Prevention

and peacemaking should be understood as pertaining to the narrower concept of “conflict management,” although the line of distinction between conflict management and conflict prevention is not always clear. Similarly, humanitarian emergency relief in an escalated conflict ought to be viewed as a category in its own right. Postconflict reconstruction, however, is an integral part of prevention, although the primary goal of preventive action must be the avoidance of violence and not the aftercare of a violent conflict. Systemic, Operational, and Structural Prevention In order to define what conflict prevention means today, we need to look at the kinds of activities a modern appreciation of the term would include. Oddly enough, “systemic” elements are usually not considered part of a modern concept of prevention. This is true not only of the traditional elements of prevention, such as the balance of power and military deterrence, but also of elements introduced recently, such as international security regimes and institutions. The reason for this is that although these measures are still significant in international relations, they are frequently not applicable to intrastate conflicts, in which the warring factions are not necessarily state actors. Internal antagonisms clearly dominate the international agenda, and so current debates on prevention usually disregard systemic aspects. However, any conception of prevention that excludes the systemic dimension remains incomplete. Systemic elements may not form a constitutive part of the discourse on conflict prevention, but some of these elements can indeed have a preventive effect, even in intrastate conflicts. Most notably, the prospect of access to international regimes and institutions (both in the security and the economic realm) can be a powerful incentive for countries to resolve internal differences peacefully and comply with the conditionalities of membership. In fact, given the widening notion of security in the 1990s, it seems appropriate to expand the category of systemic prevention. As modern international law attributes increasing importance to human rights as a fundamental common value, the case for incorporating this post-Westphalian element into the systemic dimension of prevention is compelling. The broadening recognition by 34

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states that complying with basic human rights is an essential component of modern sovereignty and that failure to do so can prompt the international community to interfere in domestic affairs may well deter governments from resolving their internal conflicts by violent means. Thus, systemic elements are not only quintessential to international stability but are also a valuable means of projecting stability on to conflict-prone countries. We therefore see systemic prevention as the conceptual foundation for what are commonly regarded as the two main dimensions of conflict prevention today, “operational” and “structural” prevention.35 Operational prevention relates to measures that are applied in an immediate crisis in order to avoid imminent violence. It is a short-term approach intended to counteract the symptoms of violence. The main instruments of operational prevention are the tools of preventive diplomacy: negotiation, mediation, arbitration, and other forms of good offices that encourage dialogue and facilitate a nonviolent resolution of the conflict.36 Often such lastminute measures are accompanied by some kind of coercion or inducement. Sanctions, the threat of force, preventive deployment, preventive disarmament, and promises of economic assistance are methods applied in operational prevention. The purpose is to discourage the conflicting parties from taking up arms and to make it plain to them that the international community does not tolerate open hostilities.37 If such measures fail and largescale violence erupts, operational prevention continues and seeks to avoid a spreading of the troubles, but the task of deescalating the conflict then lies within the realm of conflict management. Structural prevention, also frequently referred to as “peacebuilding,” is based on the recognition that short-term diplomatic action is often an inadequate tool for averting internal violence in a conflict-prone country. Consequently, structural prevention addresses the causes of a conflict. Aiming to provide structural stability as the key to peace, structural prevention operates on a far broader scale than operational prevention in terms of its targets, its instruments, and the actors involved. Another important characteristic of structural prevention is that it is a long-term measure. Ideally, peacebuilding sets in at the early stages of a conflict—before disputed issues become complex and the conflicting parties are fully mobilized—and is sustained until the conflict has 35

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been resolved. Thus, the temporal and conceptual features of structural prevention correspond to the temporal and conceptual features, described above, of a modern and expanded concept of prevention, and thus structural prevention is the key component in the preventive scheme today. Although none of its elements are new, they have become key to a joint perspective regarding the avoidance of violent conflict. Causes of Conflict Peacebuilding measures usually have one of two targets: they either address the root causes of a conflict, or they focus on the process factors that determine whether or not force is applied to resolve a conflict.38 Tackling root causes is, in a way, the most convincing strategy for prevention, since it aims at creating the conditions for sustainable peace. Yet tackling root causes is often difficult. Clearly identifying the underlying causes of conflict can prove a complex undertaking. Although in theory we can distinguish between different kinds of conflicts and can categorize these on the basis of their causes—disputes relating to resources, identity, or governance and political participation—experience shows that most conflicts do not fit any one of these categories. Indeed, conflicts usually have multiple causes.39 While social and economic grievances, for instance, are significant factors in most conflict-prone environments, such grievances are often reinforced by ethnic or religious competition and/or minority rights issues. Because conflicts are multidimensional, the best way to resolve their root causes is to take a multidimensional approach.40 Conflict resolution should also occur at various levels, and any approach should deal with those process factors that either encourage or discourage the use of violence. This second aspect of structural prevention usually shapes the course of a conflict. Root causes can create a climate for violent conflict, but on their own they do not make the eruption of armed hostilities inevitable. While there is a whole range of potential process factors, two deserve particular attention: elite behavior and the lack of democratic institutions. First, it is worth noting that the attitudes and motives of elites often determine whether or not a conflict turns violent.41 As organized violence is the result of deliberate choices made by leaders, those engaged in attempting to prevent conflicts 36

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should seek to influence the behavior and views of elites. It is widely acknowledged, for example, that it is not ethnic differences but their political instrumentalization by elites that leads to violent conflict. Also, as recent research has revealed, many conflicts do not result from grievances but from the economic greed of an elite or of rebel leaders who believe they may profit from the structures of a shadow economy.42 Thus, if third parties manage to persuade leaders not to resort to violence, there is a fair chance that a conflict will not escalate, whatever the root causes. The second process factor that can lead to the use of violence in conflict is the absence of functioning democratic institutions. Democracy renders conflict visible and offers citizens a framework for the peaceful conciliation of their interests. Without democratic institutions, political systems lack features such as the rule of law, participation, transparency, and accountability. Hence, nongovernment parties in a conflict often have no means to articulate their grievances and bring these into an institutionalized process of transforming conflict without violent means. If the theory of democratic peace maintains that democratic states do not go to war with one another, it can equally be argued that within states the prospects for conflicts being resolved peacefully are much better in democratic systems than in nondemocratic systems.43 Fields of Structural Prevention With root causes and process factors as its two focal points, peacebuidling is inevitably an extensive conception. A large variety of activities and instruments can help to achieve structural stability. These can be grouped into those that seek to provide economic and social opportunity and stability, and those that seek to promote good governance and strengthen civil society, bearing in mind that a clear distinction between the two is not always possible. Inequality of economic and social opportunity and poverty are often underlying causes of conflict, so reducing poverty, stimulating economic growth, and achieving general social and economic stability in conflict-prone countries are key. Socioeconomic peacebuilding can comprise many features. Setting up a liberal market economy and favorable conditions for trade and investment, building up a physical infrastructure, and, for instance, strengthening 37

Conflict Prevention

local business capacity are all important factors for generating employment opportunities and sustainable economic development. Providing an adequate social infrastructure—in particular regarding health and education—is another key to improving opportunity.44 Promoting good governance and civil society is another task of structural prevention. Good governance, itself a fashionable concept with many definitions, relates in general to democracy and the rule of law on the one hand, and effective public institutions and sound management on the other. These are essential to a peaceful transformation of conflict, since they provide the institutional framework and political reliability needed for a stable environment. A great many preventive activities can foster good governance. Of particular importance are the protection of human rights and the political inclusion of minority groups. But many other measures—such as the strengthening of representative political institutions, support for political party building, and electoral assistance—can each have an impact on the political stability of a country.45 Regarding the public institutions through which government implements policy, two aspects of good governance require particular attention. First, corruption needs to be addressed if public institutions are to become effective and transparent. Second, the reformation of security sector institutions has often turned out to be a prerequisite for establishing a firm democratic structure. Placing the military and police forces under civil control is of great importance in this regard. It is also vital that these forces become more professional and that military expenditure be restricted to an appropriate level.46 To build up a vibrant civil society, good governance is needed, not only because the measures employed in fostering good governance also encourage pluralism beyond the realm of official politics, but also because in the absence of strong political institutions, societies with highly mobilized publics may degenerate into disorder and instability.47 As for other measures, an independent media and free access to information certainly are high priorities. Another important action to be considered is the support of local NGOs, especially those that promote cross-cultural education and training. Moreover, as recent research has shown, women often play an important role in discouraging the use of violence in 38

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conflict, suggesting that backing women’s groups can be especially worthwhile.48 The Characteristics of Structural Prevention—and a Note of Caution Although the activities that present themselves under the general heading of structural prevention are striking in their diversity, they share distinct characteristics, two of which deserve closer attention. First, almost all peacebuilding activities can be applied throughout the conflict cycle. Some measures—the process of disarming, demobilizing, rehabilitating, and reintegrating former belligerents, for instance—relate specifically to postconflict reconstruction efforts. Yet most other preventive measures are applicable before, after, and, ideally, even during the occurrence of violence. Thus, structural activities, above all others, make conflict prevention a comprehensive means of action. Second, the broad range of activities that make up structural prevention mean that many third-party actors are involved. Because structural efforts are directed at all levels of the state and society in a troubled country, nonstate actors are bound to be particularly heavily involved in this realm of prevention—and we have already alluded to the fact that corporations are already participating, albeit unwittingly, in socioeconomic peacebuilding through their core business operations. The wide scope of peacebuilding and the seemingly endless list of possible activities that can be undertaken make structural prevention a potentially powerful tool. Yet a note of caution should be added. For one thing, such an extensive approach can be functional only if all initiatives and activities of peacebuilding are clearly linked to risk situations where armed conflict might potentially break out. Without this restriction, most foreign policy activities could be labeled as conflict prevention, and the concept would then become irrelevant. Consequently, development assistance, for instance, should be regarded as part of conflict prevention only in those cases where its activities are related to endeavors to avert conflict.49 Another thing to bear in mind is that while structural prevention is undoubtedly a key to the sustainable advancement of peace, international preventive efforts cannot, as some from the 39

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development community would have it, rely exclusively on such long-term peacebuilding. In many cases, effective prevention will require a balanced strategy, including operational as well as systemic elements. Operational prevention is indispensable in situations where the conditions for peace worsen over time, despite early engagement, or, as is often the case, where actors ignore early warnings for too long and delay their involvement. Systemic prevention, however, can be a useful factor in bringing peacebuilding to fruition, although, as we have pointed out, this particular preventive dimension is not always feasible in today’s intrastate conflicts. With respect to conceptual aspects, we can conclude then that conflict prevention is likely to be most successful when a comprehensive approach is taken, combining the three dimensions of prevention that are summarized in Table 2.2.50 This in turn means that if conflict prevention is to be rendered more effective, the whole concept, with its wide range of activities and instruments, must be taken into consideration and refined.

From Rhetoric to Action The lack of consensus regarding the definition of conflict prevention is above all a manifestation of the recent surge of interest in it. Given the many driving forces that have thus increased the conceptual importance attached to prevention, we may well ask about the extent to which, if at all, the current theoretical interest in prevention is translated into practice. The answer must be both negative and positive. Even a superficial look at the past few years makes it painfully clear just how far we still are from a culture of prevention. A tradition of reaction rather than a pattern of prevention still prevails.51 The list of missed opportunities and failures of prevention is awkwardly long and leaves no doubt that in many cases the international community is still at a loss to avoid armed conflict.52 But there are also encouraging signs that conflict prevention can have substantial results. First, as outlined above, the concept has become widely accepted. Although the current wealth of preventive strategies poses problems, it at least gives a clear indication that many efforts to further develop the notion of prevention 40

Table 2.2

Conflict Prevention as a Comprehensive Concept in Terms of Activities and Goals Dimensions of Conflict Prevention Systemic

Structural/Peacebuilding

Operational

Fields of activities

Balance of power; military deterrence; international economic and security regimes; modern international law (war banned, human rights).

Foster social and economic opportunity and stability; promote good governance and strengthen civil society.

Preventive diplomacy; preventive deployment; preventive disarmament; sanctions and incentives.

Goals

Provide and project international stability. Prevent interstate (and intrastate) conflict.

Address long-term root causes and process factors of conflict. Prevent intrastate (and interstate) conflict.

Address symptoms of imminent violence. Prevent intrastate (and interstate) conflict.

Conflict Prevention

are being made in both the academic and the political realms. Furthermore, there is a significant number of cases where preventive action has been a genuine success. Even though it is not possible to prove the positive impact of preventive measures, since we can only speculate about whether a conflict that has been resolved would have become violent without those measures, the indications of effective prevention are in many cases compelling.53 The ongoing stabilization of Macedonia since 1992, the peaceful transition in South Africa, and the resolution of minority disputes between Hungary and Slovakia and in the Baltic states come to mind. And there are probably many more success stories than those we know of. One of the peculiarities—and indeed one of the problems—of prevention lies in the fact that when it works, it fails to get media attention. Where no violence occurs, the world often fails to take notice of a conflict and its resolution. Finally, there are reports that reveal that in some of the most tragic conflicts, conflict prevention would have been feasible had more or different action been taken. The assessment of the international engagement in Somalia by the former UN special representative, Mohamed Sahnoun, for example, leaves no doubt that much of the catastrophe that unfolded could have been avoided with an earlier and more resolute intervention. Similarly, an independent inquiry into the actions of the UN in Rwanda recently concluded that a force with as little as 2,500 peacekeepers would have been sufficient to stop or at least limit the genocide.54 Critical though these reports are about the inertia of the international community in these cases, they also underline emphatically that deadly conflict is by no means inevitable. Thus, while the bad news is that no culture of prevention has emerged, the good news is that not all concern about prevention is purely rhetoric. As this chapter has shown, there is an increasing recognition in the international community that preventive action is possible and that more efforts and resources must be directed toward avoiding violence. We conclude that a successful translation of the numerous declarations of intent into effective preventive action depends on three conditions. Successful conflict prevention requires the skill to find the right way and an adequate mix of activities; the will of actors to become engaged; and the capacities to implement the measures at the right time. Where the international community stands with respect to these conditions 42

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is the subject of Chapter 3, which will assess the performance of those actors currently engaged in preventive action in order to define a role for the business sector in what must become a trisectoral issue of global governance.

Notes 1. Jane Nelson, The Business of Peace: The Private Sector as Partner in Conflict Prevention and Resolution, International Alert, Council on Economic Priorities, and Prince of Wales International Business Leaders Forum 2000, 18. 2. Boutros Boutros-Ghali, An Agenda for Peace: Preventive Diplomacy, Peacemaking and Peace-Keeping, Report of the Secretary-General Pursuant to the Statement Adopted by the Summit Meeting of the Security Council on 31 January 1992 (New York: United Nations, 1992). 3. Michael S. Lund, Preventing Violent Conflicts: A Strategy for Preventive Diplomacy (Washington, DC: United States Institute of Peace Press, 1996). 4. Recent academic literature on prevention includes Fen Osler Hampson and David M. Malone, eds., From Reaction to Conflict Prevention: Opportunities for the UN System (Boulder: Lynne Rienner, 2002); David Carment and Albrecht Schnabel, eds., Conflict Prevention: Path to Peace or Grand Illusion? (Tokyo: United Nations University Press, forthcoming); Janie Leatherman et al., Breaking Cycles of Violence: Conflict Prevention in Intrastate Crises (West Hartford, CT: Kumarian Press, 1999); Chester A. Crocker, Fen Osler Hampson, and Pamela Aall, eds., Turbulent Peace: The Challenges of Managing International Conflict (Washington, DC: United States Institute of Peace Press, 2001); Luc Reychler and Thania Paffenholz, eds., Peacebuilding: A Field Guide (Boulder: Lynne Rienner, 2001); Volker Matthies, Krisenprävention: Vorbeugen ist besser als Heilen (Opladen, Germany: Leske and Budrich, 2000); Österreichisches Studienzentrum für Frieden und Konfliktlösung et al., eds., Krisenprävention: Theorie und Praxis ziviler Konfliktbearbeitung, Friedensbericht 1999 (Chur, Switzerland: Ruegger, 1999). 5. Carnegie Commission on Preventing Deadly Conflict, Preventing Deadly Conflict: Final Report (Washington, DC: Carnegie Commission on Preventing Deadly Conflict, December 1997). For other publications of the commission, see http://www.ccpdc.org. 6. See Michael Howard, The Invention of Peace: Reflections on War and International Order (London: Profile Books, 2000); Kimon Valaskakis, “Long-Term Trends in Global Governance: From ‘Westphalia’ to ‘Seattle’,” in Governance in the 21st Century, ed. OECD, Future Studies (Paris: OECD, 2001), 45–66; Hedley Bull, The Anarchical Society: A Study of Order in World Politics (New York: Columbia University Press, 1977); Evan Luard, The Balance of Power: The System of International Relations,

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1648–1815 (Houndmills, England: Macmillan, 1992); Kalevi J. Holsti, Peace and War: Armed Conflicts and International Order, 1648–1989, Cambridge Studies in International Relations, no. 14 (Cambridge: Cambridge University Press, 1991); Glenn H. Snyder, Alliance Politics (Ithaca: Cornell University Press, 1997). 7. See Helga Haftendorn, Robert O. Keohane, and Celeste A. Wallander, eds., Imperfect Unions: Security Institutions over Time and Space (Oxford: Oxford University Press, 1999); Stephen D. Krasner, ed., International Regimes (Ithaca: Cornell University Press, 1983); Robert O. Keohane, International Institutions and State Power: Essays in International Relations Theory (Boulder: Westview, 1989). 8. See Hugh Miall, The Peacemakers. Peaceful Settlement of Disputes Since 1945 (Houndmills, England: Macmillan, 1992). 9. On the history of NGOs, see John Boli and George M. Thomas, eds., Constructing World Culture: International Nongovernmental Organizations Since 1875 (Stanford: Stanford University Press, 1999). 10. The notion of globalization should not be equated with the older concept of interdependence. According to Robert O. Keohane and Joseph S. Nye, globalization refers to the increase of globalism, a concept that, compared to interdependence, has two main characteristics. First, it refers to networks of interdependence rather than to single linkages. Second, these networks must include multicontinental distances, not simply regional networks. See Keohane and Nye, “Introduction,” 2. 11. See Tanja Brühl et al., eds., Die Privatisierung der Weltpolitik: Entstaatlichung und Kommerzialisierung im Globalisierungsprozess (Bonn: Dietz, 2001). 12. The definition of “governance capacity” is taken from Christoph Knill and Dirk Lehmkuhl, “Private Actors and the State: Internationalization and Changing Patterns of Governance,” Governance: An International Journal of Policy, Administration, and Institutions 15, no. 1 (2002): 43. 13. See Nye and Donahue, Governance in a Globalizing World; James Nathan Rosenau and Ernst Otto Czempiel, eds., Governance Without Government: Order and Change in World Politics (Cambridge: Cambridge University Press, 1992); Daphné Josselin and William Wallace, eds., Non-State Actors in World Politics (Houndmills, England: Palgrave, 2001). 14. See United Nations Conference on Trade and Development (UNCTAD), World Investment Report 2001: Promoting Linkages (New York: United Nations, 2001), 1. 15. See Nick Butler, “Companies in International Relations,” Survival 42, no. 1 (2000): 149–164. 16. Keohane and Nye, “Introduction,” 22. 17. See Thomas Risse-Kappen, ed., Bringing Transnational Relations Back In: Non-State Actors, Domestic Structures and International Institutions (Cambridge: Cambridge University Press, 1995); Jackie Smith, Charles Chatfield, and Ron Pagnucco, eds., Transnational Social Movements and Global Politics: Solidarity Beyond the State (Syracuse: Syracuse University Press, 1997); Margaret E. Keck and Kathryn Sikkink, Activists Beyond

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Borders: Advocacy Networks in International Politics (Ithaca: Cornell University Press, 1998). Early observers of the trend toward transnational relations were Robert O. Keohane and Joseph S. Nye, eds., Transnational Relations and World Politics (Cambridge: Harvard University Press, 1971); and Peter Willetts, ed., Pressure Groups in the Global System: The Transnational Relations of Issue-Oriented Non-Governmental Organisations (London: Pinter, 1982). 18. See Richard A. Higgott, Geoffrey R. D. Underhill, and Andreas Bieler, eds., Non-State Actors and Authority in the Global System (London: Routledge, 2000); Haufler, A Public Role for the Private Sector; A. Claire Cutler, Virginia Haufler, and Tony Porter, eds., Private Authority and International Affairs (Albany: State University of New York Press, 1999); Justin Greenwood and Henry Jacek, eds., Organized Business and the New Global Order (New York: St. Martin’s Press, 2000); John Braithwaite and Peter Drahos, Global Business Regulation (Cambridge: Cambridge University Press, 2000). 19. See Hewson and Sinclair, Approaches to Global Governance Theory; Commission on Global Governance, Our Global Neighborhood (New York: Oxford University Press, 1995). See also the Global Governance Initiative of the World Economic Forum, http://www.weforum.org/site/ homepublic.nsf/Content/Global+Governance+Task+Force. 20. Wallensteen and Sollenberg, “Armed Conflict, 1989–2000,” 632. 21. For trends in armed conflict since 1945, see Monty G. Marshall, “Measuring the Societal Impact of War,” in From Reaction to Conflict Prevention: Opportunities for the UN System, eds. Fen Osler Hampson and David M. Malone (Boulder: Lynne Rienner, 2002), 63–104. See also Ted Robert Gurr’s article “Containing Internal War in the Twenty-First Century” in Hampson and Malone, From Reaction to Conflict Prevention, 41–62. 22. See Mats Berdal, “International Security After the Cold War: Aspects of Continuity and Change,” in Towards the 21st Century: Trends in Post–Cold War International Security Policy, eds. Kurt R. Spillmann and Andreas Wenger, with the assistance of Daniel Möckli (Berne: Peter Lang, 1999), 19–66. 23. Carnegie Commission on Preventing Deadly Conflict, Preventing Deadly Conflict, 11. 24. On estimations of civilian casualties in conflict, see Chesterman, Civilians in War; United Nations, Report of the Secretary-General to the Security Council on the Protection of Civilians in Armed Conflict, S/2001/331, 30 March 2001; United Nations Development Programme, Human Development Report 1997: Human Development to Eradicate Poverty (New York: Oxford University Press, 1997), 65. 25. On the costs of conflict, see Michael E. Brown and Richard N. Rosecrance, eds., The Costs of Conflict: Prevention and Cure in the Global Arena, Carnegie Commission on Preventing Deadly Conflict (Lanham, MD: Rowman and Littlefield, 1999); Nick Killick and Simon Higdon, “The Cost of Conflict,” in Contributing to Preventive Action, ed. Peter Cross, CPN Yearbook 1997/98 (Baden-Baden: Nomos, 1998), 97–119.

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26. The figures are taken from Andrea Kathryn Talentino, “Rwanda,” in Brown and Rosecrance, The Costs of Conflict, 53; Gert Weisskirchen, “Aufgaben und Perspektiven der OSZE 2001,” Vierteljahrsschrift für Sicherheit und Frieden 18, no. 4 (2000): 303–305. 27. Andrea Kathryn Talentino, “Bosnia,” in Brown and Rosecrance, The Costs of Conflict, 47. 28. See Anderson, Do No Harm, 7–76; Mark Duffield, Global Governance and the New Wars: The Merging of Development and Security (London: Zed Books, 2001). 29. Two key documents in this respect have been issued by the Development Assistance Committee (DAC) of the OECD, which brings together most Western development agencies: The DAC Guidelines on Conflict, Peace and Development (1997) and the supplement Helping Prevent Violent Conflict: Orientations for External Partners (2001) have been published as one report. See OECD/Development Assistance Committee, The DAC Guidelines: Helping Prevent Violent Conflict (Paris: OECD, 2001). 30. See Chapter 1, note 2. See also the Human Security Network, which brings together more than a dozen countries from around the world, at http://www.humansecuritynetwork.org. 31. See Inge Kaul, Isabelle Grunberg, and Marc A. Stern, eds., Global Public Goods: International Cooperation in the 21st Century (New York: Oxford University Press, 1999). On collective action and the problems relating to the provision of collective goods, see Mancur Olson, The Logic of Collective Action: Public Goods and the Theory of Groups (Cambridge: Harvard University Press, 1971). 32. Andrea Smutek-Riemer, “Die Krise des Krisenbegriffs: Worthülse oder hilfreiches Konzept im Rahmen der Sicherheitspolitik?” Österreichische Militärische Zeitschrift 33, no. 3 (1995): 275–284. 33. Carnegie Commission on Preventing Deadly Conflict, Preventing Deadly Conflict. 34. Ibid., 35–37; Matthies, Krisenprävention, 33–36. 35. The terms “operational” and “structural” prevention are taken from the Carnegie Commission on Preventing Deadly Conflict, Preventing Deadly Conflict, Chapters 3 and 4. 36. See Lund, Preventing Violent Conflicts, Chapters 2–4; I. William Zartman, ed., Preventive Negotiation: Avoiding Conflict Escalation, Carnegie Commission on Preventing Deadly Conflict (Lanham, MD: Rowman and Littlefield, 2001). 37. See Bruce W. Jentleson, Coercive Prevention: Normative, Political, and Policy Dilemmas, Peaceworks, no. 35 (Washington, DC: United States Institute of Peace, 2000); David Cortright, ed., The Price of Peace: Incentives and International Conflict Prevention, Carnegie Commission on Preventing Deadly Conflict (Lanham, MD: Rowman and Littlefield, 1997). 38. On the causes of conflict, see the first thirteen contributions in Crocker, Hampson, and Aall, Turbulent Peace. See also OECD/DAC, DAC Guidelines, 86–89; Matthies, Krisenprävention, 36–42.

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39. See Frances Stewart, “Horizontal Inequalities as a Source of Conflict,” in Hampson and Malone, From Reaction to Conflict Prevention, 105–136. 40. See John Paul Lederach, Building Peace: Sustainable Reconciliation in Divided Societies (Washington, DC: United States Institute of Peace Press, 1997); Dieter Senghaas, Civilizing Conflict: Constructive Pacifism as a Guiding Notion for Conflict Transformation, paper prepared for the (electronic) Berghof Handbook for Conflict Transformation, Berghof Research Center for Constructive Conflict Management, 30 March 2001; Dieter Senghaas, “Hexagon-Variationen: Zivilisierte Konfliktbearbeitung trotz Fundamentalpolitisierung,” in Friedliche Konfliktbearbeitung in der Staaten- und Gesellschaftswelt, eds. Norbert Ropers and Tobias Debiel (Bonn: Stiftung Entwicklung und Frieden, 1995), 37–54. 41. Carnegie Commission on Preventing Deadly Conflict, Preventing Deadly Conflict, 105–109. 42. See Paul Collier, “Economic Causes of Civil Conflict and Their Implications for Policy,” in Crocker, Hampson, and Aall, Turbulent Peace, 143–162; Mats Berdal and David M. Malone, eds., Greed and Grievance: Economic Agendas in Civil Wars (Boulder: Lynne Rienner, 2000); International Committee of the Red Cross, War, Money and Survival, Forum, no. 2 (Geneva: ICRC, 2000). 43. Carnegie Commission on Preventing Deadly Conflict, Preventing Deadly Conflict, 94–98. 44. This issue is discussed in more detail in Chapter 5. 45. A good overview of good governance can be found in OECD/ DAC, DAC Guidelines, 113–128. See also Sam Agere, Promoting Good Governance: Principles, Practices and Perspectives (London: Commonwealth Secretariat, 2000). 46. On the issue of corruption, see Robin Hodess, with Jessie Banfield and Toby Wolfe, eds., Global Corruption Report 2001 (Berlin: Transparency International, 2001); United Nations Development Programme, Corruption and Good Governance, Discussion Paper, no. 3 (New York: United Nations, 1997). On security sector reform, see Tor Tanke Holm and Espen Barth Eide, eds., Peacebuilding and Police Reform (London: Frank Cass, 2000); Herbert Wulf, Security-Sector Reform in Developing Countries: An Analysis of the International Debate and Potentials for Implementing Reforms with Recommendations for Technical Cooperation (Eschborn: Deutsche Gesellschaft für Technische Zusammenarbeit, October 2000). 47. See Sheri Berman, “Civil Society and the Collapse of the Weimar Republic,” World Politics 49, no. 3 (1997): 401–429; Samuel P. Huntington, Political Order in Changing Societies (New Haven: Yale University Press, 1968). 48. See Sanam N. Anderlini, Women at the Peace Table: Making a Difference (New York: United Nations Development Fund for Women, 2000); OECD/DAC, DAC Guidelines, 54f. 49. On the need to link preventive initiatives to specific risk situations, see the report of the Swedish Ministry for Foreign Affairs Prevent-

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ing Violent Conflict: A Swedish Action Plan (Stockholm: Regeringskansliet, 1999), 2. 50. Several scholars have defined so-called toolboxes for prevention. See Michael Lund, “A Toolbox for Responding to Conflicts and Building Peace,” in Peacebuilding: A Field Guide, eds. Luc Reychler and Thania Paffenholz (Boulder: Lynne Rienner, 2001), 16–20; Annika Björkdahl, “Developing a Toolbox for Conflict Prevention,” in Preventing Violent Conflict: The Search for Political Will, Strategies and Effective Tools, Report of the Krusenberg Seminar (Stockholm: SIPRI, 2000), 17–22. 51. See Michael S. Lund, “Creeping Institutionalisation of the Culture of Prevention?” in Preventing Violent Conflict: The Search for Political Will, Strategies and Effective Tools, Report of the Krusenberg Seminar (Stockholm: SIPRI, 2000), 23–30. 52. Some critics argue that conflict prevention is an unrealistic ideal and is oversold. See Stephen John Stedman, “Alchemy for a New World Order: Overselling ‘Preventive Diplomacy’,” Foreign Affairs 74, no. 3 (1995): 16–20. For a response, see Michael S. Lund, “Underrating Preventive Diplomacy,” Foreign Affairs 74, no. 4 (1995): 160–163. Another critical voice is Rolf Hanisch, “Krisenprävention—eine neue Leerformel,” in Jahrbuch Dritte Welt 2000: Daten, Übersichten, Analysen (Munich: Beck, 2000), 55–67. 53. There is a growing amount of literature in which examples of successful—and unsuccessful—prevention are listed. See Bruce W. Jentleson, ed., Opportunities Missed, Opportunities Seized: Preventive Diplomacy in the Post–Cold War World, Carnegie Commission on Preventing Deadly Conflict (Lanham, MD: Rowman and Littlefield, 2000); I. William Zartman, “Preventing Deadly Conflict,” Security Dialogue 32, no. 2 (2001): 137–154; European Centre for Conflict Prevention, in cooperation with the International Fellowship of Reconciliation and the Coexistence Initiative of State of the World Forum, eds., People Building Peace: 35 Inspiring Stories from Around the World (Utrecht: European Centre for Conflict Prevention, 1999). For regional surveys of conflict prevention activities, see the publication series of the Searching for Peace Program of the European Centre for Conflict Prevention: Monique Mekenkamp, Paul van Tongeren, and Hans van de Veen, eds., Searching for Peace in Africa: An Overview of Conflict Prevention and Management Activities (Utrecht: European Platform for Conflict Prevention and Transformation, 1999); Paul van Tongeren, Hans van de Veen, and Juliette Verhoeven, eds., Searching for Peace in Europe and Eurasia: An Overview of Conflict Prevention and Peacebuilding Activities (Boulder: Lynne Rienner, 2002); Monique Mekenkamp, Paul van Tongeren, and Hans van de Veen, eds., Searching for Peace in Central and South Asia: An Overview of Conflict Prevention and Peacebuilding Activities (Boulder: Lynne Rienner, 2002). 54. See Mohamed Shanoun, Somalia: The Missed Opportunities (Washington, DC: United States Institute of Peace Press, 1994); United Nations, Report of the Independent Inquiry into the Actions of the United

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Nations During the 1994 Genocide in Rwanda, S/1999/1257, 15 December 1999. Another case in point is Kosovo. See Marc Weller, “Missed Opportunities of Conflict Prevention in Kosovo: 1987–1999,” in Mainstreaming Conflict Prevention: Concept and Practice, CPN Yearbook 2000/ 01, eds. Luc van de Goor and Martina Huber (Baden-Baden: Nomos, 2002), 238–268; Heinz Loquai, Der Kosovo-Konflikt—Wege in einen vermeidbaren Krieg: Die Zeit von Ende November 1997 bis März 1999 (BadenBaden: Nomos, 2000).

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CHAPTER

3

Assessing Conflict Prevention Today The Many Initiatives As we established in the previous chapter, there is thus far no culture of prevention in international relations. Identifying exactly where the international community currently stands in its efforts to implement its new policy of preventing violent conflict is a difficult task. Even a superficial look at conflict prevention in action reveals an impressive number of concrete initiatives. Given that conflict prevention in its current form is still a relatively new concept, this large number of activities is encouraging and underlines the willingness of many actors to move beyond mere rhetoric. However, it appears that the success of many of these preventive efforts has been modest at best, which leaves us with the somewhat sobering realization that there is still a wide gap between intention and performance. In this chapter, we seek to assess the current state of conflict prevention. As argued in the historical outline of prevention in Chapter 2, conflict prevention until now has essentially been viewed as a bisectoral rather than a trisectoral endeavor, in which the business sector has been involved at best unwittingly. Consequently, here we first look at the activities and performances of the public and the civil society actors that are intentionally engaged in conflict prevention; the fields of prevention they are involved in and those they avoid; the kinds of activities and initiatives they pursue; and their specific profiles regarding conflict prevention and their comparative strengths and weaknesses. 51

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Once we have identified the challenges and deficits of current conflict prevention efforts, we investigate ways of making preventive efforts more effective and explore the still unrecognized potential of the business sector in this field. We look at the extent to which business is already involved in conflict prevention, at the assets and comparative strengths that corporations could bring into international preventive action, and the reasons why business has not taken a more active stance toward conflict prevention. An assessment of the current indirect and largely unintentional relationship of the business sector to conflict prevention will allow us, in subsequent chapters, to analyze the reasons why corporations have a stake in international peace and stability and the specific roles they can play in helping to make preventive undertakings more successful. Our research clearly demonstrates that the current relative lack of success of conflict prevention has not occurred for want of preventive activities. There was a considerable increase in preventive initiatives in the 1990s, a process that has been accelerated by the war in Kosovo. There are two prerequisites for successful conflict prevention—development of early warning capacities and adjustment of policies and institutions—and, not surprisingly, in these areas we have seen much dynamic action. Yet a remarkable amount of action has also occurred in the practical (operational, structural, and systemic) fields of preventive action. However, there is one area of prevention that has been largely neglected, and that is the field of socioeconomic peacebuilding, where many initiatives are insufficiently linked to conflict-specific situations. This neglect often has a negative impact on the entire preventive operation, since prevention is most likely to be successful when pursued comprehensively. Apart from the deficits in the socioeconomic realm of prevention, the main weakness of preventive endeavors today is that all of the current third-party actors in conflict prevention have their inherent problems with early and sustainable action. To be sure, conflict prevention is a complex endeavor and can be further hampered by local actors. Nevertheless, it is these particular deficits of third-party actors that account for much of the ineffectiveness that characterizes preventive efforts. Domestic constraints on states reduce their ability to achieve the necessary political will for resolute preventive action, and this in turn weakens 52

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the performance of the whole public sector, accounting not only for many deficits of governments but also for the notoriously inadequate capacities of international organizations. With regard to civil society actors, it is above all insufficient resources that restrain them from a more comprehensive engagement. Given these deficiencies, there are two essential measures that would make preventive efforts more effective. First, individual preventive efforts need to be coordinated much more effectively, both in terms of actors involved and the issues they wish to address. Divisions of labor need to be established on a case-by-case basis. Second, it is of paramount importance that the business sector be brought in as an active partner in international endeavors to prevent conflict. The extent to which business has made contributions to the cause of peace unawares suggests strongly that its contributions could be massive if willed. As the driving force behind most economic growth, business actors are bound to play a critical role in any effort at peacebuilding, especially in the economic realm, whether they are aware of it or not. As this chapter concludes, however, before there can be a shift from bisectoral to trisectoral governance in conflict matters, business will have to change its self-conception, and those actors already involved will have to recognize its potential.

Adjusting to Conflict Prevention A good starting point for assessing the status of conflict prevention is to analyze the extent to which previous concepts and institutions have been adapted. To do this we need to assess the steps actors have taken to make prevention policy-relevant. A close look at the public sector and the civil society sector shows that astounding improvements have been made. Formulating Policy and Adapting Institutions States and international organizations have made considerable progress at the level of policy formulation.1 Many governments and international organizations have produced policy papers that address conflict prevention and provide their departments with a 53

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conceptual framework for their preventive activities. Particularly prominent examples are Sweden’s action plan Preventing Violent Conflict (1999), UN Secretary-General Kofi Annan’s report Prevention of Armed Conflict (2001), and the EU’s Communication from the Commission on Conflict Prevention (2001).2 Important conceptual papers have also been produced by development agencies.3 While all these papers differ considerably in their content and depth, they all express a willingness to bring a conflict prevention perspective to the policy planning process and to integrate security and development aspects into a common strategy. The formal integration of prevention into institutional structures and decisionmaking processes is another indication that many states and international organizations are committed to prevention above and beyond mere rhetoric. Many states have modified their institutions and now run units that deal specifically with conflict prevention, as, for example, Canada’s Peacebuilding and Human Security Division, Britain’s Conflict and Humanitarian Affairs Department, and Switzerland’s Conflict Prevention Unit and Good Governance Unit.4 The same is true of many international organizations. A noteworthy example is the OSCE, which after the end of the Cold War shifted its emphasis from promoting détente between the two blocs to preventing conflict in Eastern Europe by building a Conflict Prevention Center and establishing a whole set of preventive tools. Another case in point is the EU, which is in the process of setting up institutions and capabilities for conflict prevention and crisis management, both in the European Community and in the intergovernmental Common Foreign and Security Policy.5 In recent years there has also been much effort and innovation to meet the challenges of prevention in the civil society sector. Many traditional NGOs that have in the past been engaged in the fields of human rights, development, and humanitarian affairs have now placed their activities in the larger context of conflict prevention and peacebuilding. Often this has brought about institutional and conceptual modifications similar to those in the public sector. Further, some international NGOs have been founded with the explicit purpose of advocating conflict prevention. The mission of the London-based International Alert, for instance, is to address the root causes of conflicts and transform conflicts by peaceful means, and it runs country-specific and issue-specific 54

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projects to that end. The International Crisis Group (ICG) is another example of an NGO that has dedicated its efforts to preventing deadly conflict. With prominent political figures including Jacques Delors, Wesley Clark, and Fidel Ramos on its board of trustees and former Finnish president Martti Ahtisaari as its chairman, the ICG aims primarily to assist governments and IOs in their preventive activities. Its core expertise includes field research, policy prescription, and advocacy, and its country analyses are renowned.6 Also, as many NGOs are small and have limited resources, some have set up platforms and networks to give NGO activities in conflict prevention more visibility. Such NGO networks can be found in the United Kingdom, Germany, and Finland,7 for example, but the most prominent ones work on an international level. Forums like the European Platform for Conflict Prevention and Transformation, the Applied Conflict Resolution Organizations Network (ACRON), and the Forum on Early Warning and Early Response (FEWER) have all emerged in the past few years with the aim of strengthening NGO engagement in conflict prevention by improving inter-NGO cooperation and networking.8 Early Warning: Crisis Centers and Information Networks The international community’s willingness to add substance to prevention is evident in its building up of early warning capacities. Gathering and analyzing information is a prerequisite for any effective preventive action, and we have therefore seen a vast increase of early warning initiatives. Before the 1990s, early warning was understood as an activity confined to military reconnaissance and the early detection of natural disasters and assessments of their humanitarian consequences. Recently, however, there have been many endeavors to establish units and systems for detecting and interpreting potentially violent conflicts.9 Again, actors from both the public and the civil society sector have introduced initiatives in this field. Several international organizations and a few states, such as Germany, now run their own situation and crisis centers, many of which operate twenty-four hours a day. The EU, for instance, has a Policy Planning and Early Warning Unit that includes a Situation 55

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Center, where about twenty staff continuously analyze international developments and monitor potential conflicts.10 The impetus for establishing such centers has often come from the foreign and security departments of these actors, but much other activity related to early warning has been introduced by development agencies that, owing to their local presence and long-term engagements, have particular strengths in this field. Various conflict monitor systems, often based on country risk profiles and tension barometers, have been set up and are being employed; the one used by the Swiss Agency for Development and Cooperation is particularly advanced.11 Also, the new generation of development programs focuses specifically on creating local early warning and conflict analysis capacities within governments and civil society in conflict-prone countries.12 The essential role of NGOs in early warning should also be stressed here. NGOs constitute a de facto global network of information collectors, and their information flow is usually much faster than that of state bureaucracies and international organizations.13 In addition, NGOs like ICG or FEWER specialize in early warning and are therefore well equipped to draw the attention of the international community to conflict-prone situations. Combined, the many NGO early warning efforts and the activities of the public sector represent a considerable amount of action in this field. True, there are still some obvious deficiencies that, not surprisingly, give ground for criticism. Above all, there is as yet no standardized early warning model. Some models try to develop indicator-based systems of analysis, and others rely on the less systematic method of field observations. And most approaches are tailored to either the location or the issue they observe. Moreover, many early warning systems are not yet fully developed or integrated into policy planning structures.14 Still, the deficiencies of current early warning must not be overrated. The overall performance of international actors can be assessed as positive, considering how difficult it is to detect and understand signals of impending violence in good time, and given that early warning in the political realm requires profound expertise on the causes and dynamics of conflicts. It also often requires the ability to solve mysteries rather than unveil secrets, as was required of the intelligence community during the Cold War.15 It would be unfair to suggest that insufficient early warning is to 56

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blame for many failed attempts at conflict prevention, when in fact the cause for failure is often a gap between early warning and adequate responses. We now turn our attention to such responses, examining current activities in the operational, structural, and systemic dimensions of conflict prevention. Operational Prevention: International Organizations and their Innovations In light of the many and various efforts to conceptually and institutionally adapt to conflict prevention and to enhance early warning capacities, the question arises as to what specific instruments and initiatives individual actors have developed to implement preventive action. Only where such instruments are readily available, or at least in the process of being developed, can a clear intention to move beyond preventive rhetoric be established. Starting with an assessment of current initiatives in operational prevention, two main observations should be stressed. First, international organizations, and to a lesser extent states, are at the center of most attempts at last-minute prevention, even though there are cases where diplomatic efforts of nonstate actors, so-called Track II diplomacy, has also played a role. The predominance of public sector actors in operational prevention is in accordance with the conceptual framework described in Chapter 2. Second, and more surprisingly, although the range of possible activities to prevent impending violence in volatile situations seems limited, there is still a considerable amount of innovation and modification in this field, highlighting the actors’ willingness to improve the effectiveness of the instruments of operational prevention. International organizations and states are in the limelight during last-minute international activity, when conflicts are on the verge of turning violent. Clearly, they are the only actors with the means of power and persuasion, essential in those cases where mediation, in the sense of facilitating negotiations, is no longer sufficient to avert an imminent crisis. Yet significantly, many states prefer multilateral institutions to do the job. With the exception of great powers like the United States and a few small states, such as Norway, that place special emphasis on mediation, the responsibility for operational prevention thus usually lies with international organizations. 57

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A key instrument of the preventive diplomacy efforts of public sector actors are the special or personal representatives, appointed on a case-by-case basis to hammer out deals between warring parties. Such representatives are usually eminent people, such as former Austrian chancellor Franz Vranitzky, who tried to deescalate the crisis in Albania in 1997 on behalf of the chairman-in-office of the OSCE, and former French defense minister François Léotard, who as an EU appointee has been in charge of the peace negotiations in Macedonia.16 The demand for such representatives has risen sharply in recent years, and the UN has set up a network of such people so it can act quickly when necessary.17 Where the situation requires, the heads of international organizations—usually the secretaries general of the UN or the North Atlantic Treaty Organization (NATO), or, in the case of the EU, the high representative for the Common Foreign and Security Policy and the commissioner for foreign relations—and states intervene directly, appropriating the diplomatic leverage of their organizations and governments and the concomitant international media attention. The indefatigable shuttle diplomacy of Javier Solana, Chris Patten, Lord Robertson, and numerous other high-ranking diplomats regarding Skopje in early 2001 springs to mind. Although operational prevention is primarily the responsibility of the public sector, there is evidence that nonstate actors occasionally make important contributions. For example, in the case of Mozambique and Burundi, the Community of Sant’Egidio, a Rome-based NGO, moderated peace negotiations between the divided groups where governments and international organizations had been unable to do so.18 Given the complexity and difficulties inherent in the task of averting large-scale violence in an already escalated conflict, such Track II diplomacy can be a useful component of operational conflict prevention, notwithstanding the preponderance of official Track I diplomacy efforts in this field. A remarkable feature of current operational prevention is the degree to which states and international organizations have endeavored to improve and modify their set of instruments in recent years. Five main developments are evident: First, capacities have been enhanced for fact finding, confidence building, and monitoring missions in most organizations, and particularly in the EU and the UN. Since these kinds of missions can contribute greatly 58

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to successful diplomatic initiatives—providing accounts of the interests of parties, creating trust among them, and observing developments from close-by—there is obviously recognition that this option should be explored more vigorously.19 Second, discussions are under way as to how sanctions, traditionally a major instrument of international pressure, could be made smarter and more effective. The sobering fact that sanctions often harm the masses without achieving the political aim behind them has provoked a revision of strategies, which in the future should target the elites more specifically and directly, particularly by freezing their financial assets.20 Third, mechanisms have been set up that allow for quick international action in cases of emergency. These mechanisms are mostly about the availability of quick money, as is the case with the UN’s Trust Fund for Preventive Action and Canada’s Peacebuilding Fund.21 But there are now also provisions for the rapid deployment of assets and expertise. The EU’s rapid reaction mechanism should in future enable the European Commission to deliver its civilian instruments fast and unbureaucratically as shortterm stabilizers, and the database of the UN Standby Arrangements System contains a list of both civilian and military resources available from member states.22 Fourth, peacekeeping is currently being overhauled to match the requirements of intrastate conflicts. Whereas first-generation peacekeeping was usually rather straightforward in its mission, focusing essentially on the monitoring of cease-fires between states, the international community—NATO/Partnership for Peace (PfP) countries and, more recently, the EU in particular—has moved to multidimensional, robust peace support operations that cover a large variety of different tasks, including elements of peacebuilding, and they provide for a use of force as the situation requires.23 Particularly interesting is that peacekeeping is no longer limited to preventing the recurrence of violence in a postconflict environment but has also been applied to avert an initial eruption of violence. The UN’s experiences with preventive deployment in Macedonia, Haiti, and the Central African Republic have been positive, and the presence of troops there has not only stabilized the situations but also sent clear signals to the conflicting parties that the international community will not tolerate a further escalation of the conflicts.24 59

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Finally, initial efforts to improve the effectiveness of preventive disarmament are now clearly recognizable. Since small arms are by far the most widely used weapon in internal conflicts and unambiguously exacerbate the conflict situation by increasing both the lethality and duration of violence, the international community is primarily seeking to stop the illicit use and proliferation of these “weapons of mass destruction of the poor,” as many call them. This is a formidable task, however, and no global normative framework has emerged, even though discussions are now under way. Thus, for the time being, emphasis is being placed on practical measures—measures that are pointed at disarming both conflict-prone and postconflict societies. Many of these disarmament programs apply a compensation scheme, and the UN “weapons for development” approach of retrieving weapons in exchange for development incentives is particularly promising. Other schemes focus specifically on the disarmament, demobilization, and reintegration of former combatants, also an important step in preventing a relapse into conflict.25 Overall, operational prevention has been developed in recent years in ways that suggest that there is a general willingness to improve its—often poor—effectiveness. Preventive diplomacy is now an established and widely used tool, and although it is occasionally complemented effectively by Track II efforts, it is applied mainly by international organizations and states. Further, additional financial and military tools have been developed that give reason for hope that last-minute action, within its limitations, could become a more successful endeavor than it has been so far. Structural Prevention: Good Governance and Civil Society Initiatives With regard to long-term peacebuilding, we distinguished in Chapter 2 between initiatives targeted at good governance and civil society and initiatives that address socioeconomic issues. If we compare current activities in these two fields of prevention, we see that socioeconomic measures are underrepresented. Many initiatives aim to strengthen good governance and civil society with structural measures. This applies, above all, to international organizations and NGOs, although the bilateral efforts of many states play a complementary role. Most important, however, are 60

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the many initiatives of international organizations, and these can be categorized into three main types. First, several organizations have developed institutions that deal specifically with issues of good governance and civil society. The OSCE is the most prominent example: It has a High Commissioner on National Minorities, a Representative on Freedom of the Media, and an Office for Democratic Institutions and Human Rights, which employs more than forty staff. Other important institutions include the UN High Commissioner for Human Rights and the Council of Europe Commissioner for Human Rights. What these institutions have in common is the broad range of tasks, which, besides monitoring and reporting, often includes technical cooperation projects for institution building, capacity building, democracy programs, and electoral assistance.26 Field missions and development cooperation programs, the other two types of initiatives, cover similar tasks. Unlike the instruments used by the institutions mentioned above, however, those used by field missions and development cooperation programs are temporary, designed according to the specific needs of a society in conflict. Field missions have been established by the OSCE, the UN, and, more recently and in a much more limited fashion, by the Council of Europe.27 They can vary significantly in terms of their mandate, but they are all marked by their flexible and pragmatic character and, in most cases, by their longterm engagement. While the most famous missions are related to the postviolence phase of a conflict, as in East Timor, Bosnia and Herzegovina, and Kosovo, there are also those that attempt to build peace as a means of preventing violence in the first place. Noteworthy examples are missions of the OSCE in the Central Asian republics, the Baltic states, and Ukraine. Although they are much smaller than the postconflict missions and draw much less public attention, their anticipating action represents most genuinely a spirit of conflict prevention.28 Regarding development cooperation, many efforts link aid more consciously to the promotion of good governance. While this is particularly true of multilateral efforts—the UN Development Programme (UNDP) portfolio for governance and the rule of law, for instance, now comprises more than half of all UNDP programs and activities, with an annual budget of more than U.S.$1.2 billion29—there is also evidence that the bilateral programs of states 61

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are moving in this direction. Development cooperation is the major field in which states still engage both individually and in a multilateral framework, and the fact that national development agencies are adopting programs to create “enabling environments” for good governance and a strong civil society is certainly an important step toward effective structural prevention.30 Yet NGOs, not states, are the second most active in this field. They also apply several approaches toward achieving good governance and a viable civil society. Some NGOs work as advocacy groups, and through their monitoring and reporting they hope to build up pressure on governments in conflict countries and on the international community. Many advocacy groups focus on human rights—Amnesty International and Human Rights Watch being the most prominent and influential.31 Other NGOs concentrate on less aggressive fieldwork. Although a few, like the Carter Center, aim some of their field activities at the state—by offering electoral assistance, for instance32— most of these organizations direct their efforts at society. Many aim to build up an indigenous capacity for resolving conflict through long-term Track II mediation at the midrange and grassroots levels of leadership—for instance, in the form of problemsolving workshops, as designed by Herbert Kelman, John Burton, and Ronald Fisher.33 The method of training local peacebuilders and generating citizen interaction between parties in conflict is applied by such NGOs as Search for Common Ground, the Conflict Management Group, the Institute for Multi-Track Diplomacy, and International Alert.34 Another method is to support and strengthen indigenous NGOs or to back the free press in a volatile country. Finally, an original and effective initiative worth mentioning is Peace Brigades International, which sends international teams of volunteers to accompany local human rights activists in order to protect them against violence and prosecution.35 However heterogeneous and dispersed the approaches of the civil society sector in this field are, in combination they cover a broad range of issues and are an important contribution to international peacebuilding efforts in the realm of good governance and civil society. Further, as they tend to focus on the level of society rather than that of the state, NGOs in many cases effectively complement the public sector, which concentrates primarily on matters of government. 62

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Structural Prevention: Efforts at Socioeconomic Peacebuilding We now turn to the second component of structural prevention: the realm of social and economic opportunity and stability. Preventive activities in this field have been much more limited. Although official development agencies, development NGOs, and international financial institutions—key actors in this field—have done much to promote the general cause of poverty reduction and economic growth, relatively few programs are focused deliberately on volatile countries. Development agencies and the more than 2,500 international NGOs active in the field of development have often shown themselves reluctant to assign a substantive share of their resources to conflict-specific socioeconomic activities, even though they increasingly plan and work with a conflict prevention perspective and in many cases run good governance programs.36 Their reluctance to commit more resources to such activities is understandable as their primary goal is to eliminate poverty rather than to engage in the structural prevention of conflict. Thus, for these actors, conflict prevention in the social and economic sphere is often limited to doing no harm with their development projects.37 This passive form of prevention, which uses instruments like conflict impact assessments, staff training, and country strategy papers, is very valuable in itself, yet it does not contribute specifically to the socioeconomic stabilization of countries at risk of violent conflict. The same reluctance is true for the international development banks. The World Bank, with its conditionality-based structural adjustment programs (requiring domestic reforms toward a neoliberal market economy and disciplined fiscal and monetary policies defined by the International Monetary Fund) and its comprehensive development framework, has access to powerful instruments for generating economic growth and addressing the problem of poverty. Yet it lacks a clear perspective on conflict prevention in these activities. Even though postconflict reconstruction has become an issue in recent years, leading to the setting up of a Conflict Prevention and Reconstruction Unit at the World Bank, active conflict prevention does not figure prominently in the strategy papers of this international organization. 63

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This is because its members sharply disagree as to whether the bank, whose mandate is economic, should engage in politically sensitive fields at all. Consequently, the World Bank struggles with the idea of using its economic means for moderating intrastate conflicts, except perhaps in postviolence situations, where the rebuilding of social and economic institutions and (infra)structures is viewed as predominantly technical in character.38 The four regional development banks do not really point their activities in any systematic way at conflict prevention either. The European Bank for Reconstruction and Development (EBRD) was set up in 1991 with the purpose of fostering the transition toward open market–oriented economies and promoting private sector activity in the former communist countries of Central and Eastern Europe and the Commonwealth of Independent States (CIS); it has a mandate to make its economic assistance conditional to political pluralism.39 But although the EBRD’s conditionality may indeed be a powerful tool for advancing features of good governance, the bank does little to prevent conflict by specifically addressing the socioeconomic parameters of a conflict-prone society. Like its global counterpart, and like the regional African, Asian, and Inter-American Development Banks, it does much to foster socioeconomic opportunity and stability in general, but it fails to directly make use of such measures to ease tension in a conflict environment. Systemic Prevention: Deterring Violence Through Cooperation and International Law Finally, empirical evidence has amply demonstrated in recent years how powerful systemic elements of conflict prevention can be in the peaceful resolution of conflicts in volatile countries and regions. Above all, the prospect of access to certain international economic and security regimes and institutions such as the EU and NATO has proven a strong incentive for candidates to voluntarily implement structural measures of peacebuilding in order to comply with the conditionalities of participation. A second and as yet less pronounced systemic factor that potentially deters governments from resorting to violent means is the willingness of an increasing number of states to bring to international justice those 64

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who violate basic human rights, as codified in modern international law. International organizations have been engaged primarily in defusing tension and underwriting peace and stability by linking conflict-prone societies more closely to multilateral regimes.40 The most powerful form of such cooperation has undoubtedly been to offer conflict-prone countries membership in these organizations, thus eliciting their compliance with the norms and regulations of the organizations. However, integration is not the only strategy that allows IOs to project stability through broad cooperation. The European Union has clearly proven itself the most powerful actor in this kind of systemic prevention. This is not to say that membership in or cooperation with other organizations such as NATO/PfP or the Council of Europe has not been attractive and sought after, only that these organizations deal mostly with good governance and security-sector reform. The EU, however, has a very wide range of political and economic assets to offer and ties incentives to membership or cooperation with a conditionality that is much more diverse and deals with conflict prevention from more than one angle. The EU enlargement process is one of the most effective instruments for preventing conflict. Applicant countries from Central and Eastern Europe are required to radically adapt their economic and social systems to the Western market model and take over the voluminous and far-reaching acquis communautaire; they also have to meet high standards of democracy, human rights, minority protection, and the rule of law, set in the so-called Copenhagen criteria of 1993. The prospect of EU candidate status is also a key factor in the stabilization of the five Western Balkan countries today. The EU, with its Stabilization and Association Process launched in 1999, offers these countries an attractive contractual framework for developing close relations, engaging in political dialogue, perhaps eventually becoming EU members, receiving favorable trade preferences, and obtaining technical and financial assistance, provided they comply with the strict economic and political conditions. Croatia and Macedonia have already embarked on this process, and Albania, Bosnia and Herzegovina, and Serbia and Montenegro are eager to follow, although it is unlikely that they will be able to do so in the foreseeable future.41 65

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But the EU has cooperation and assistance programs of considerable scope even with those countries at the European periphery that lack a realistic membership option. Technical Assistance for the CIS Countries (TACIS), for instance, seeks to support the transformation processes in the former republics of the Soviet Union, hoping to reduce the many risks of ethnic division, weak states, and the lack of democracy. The EuroMediterranean Partnership, to cite a second example, has set the target of establishing a free-trade area by 2010, which should provide the region with more stability.42 Finally, the Cotonou Agreement 2000 will govern relations between the EU and more than seventy African, Caribbean, and Pacific countries in the first two decades of the twenty-first century. Unlike the Lomé Convention, its predecessor, this new partnership does not build exclusively on trade and development but includes an explicit political dimension of good governance. It is thus a potentially powerful tool for promoting and implementing multilayered measures of peacebuilding by pursuing a systemic approach, although the coming years will show to what extent the EU is ready to emphasize this new preventive component.43 The second form of systemic prevention worth pointing out here comprises the legal instruments that the international community has developed to advance the cause of peace. It is impossible to quantify the deterring effect that the banning of war and the UN concept of collective security has had on national leaders. However, the case with human rights is different. The UN and regional organizations like the Council of Europe have succeeded in setting up a broad normative framework on human rights, and important initial steps have been taken recently to improve the enforcement of these norms.44 The setting up of ad hoc UN criminal tribunals for the former Yugoslavia, Rwanda, and Sierra Leone and the decision of the international community to establish the permanent International Criminal Court to prosecute crimes against humanity, war crimes, and genocide have raised hopes that in the not-too-distant future national governments might worry about being held accountable for their disrespect of human rights. These hopes have been reinforced by the surprisingly swift extradition of former Yugoslav president Slobodan Milosevic to the UN court in The Hague in June 2001.45

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The preventive effect of legally enforcing human rights is twofold. On the one hand, bringing to justice those responsible for crimes is a prerequisite for reconciling a nation, restoring a sense of justice, and preventing the recurrence of violence. On the other hand, legal efforts of this kind are likely to be an effective deterrent for potential future perpetrators of atrocities, indicating to them that future crimes will not go unpunished. Again, it is remarkable how numerous and diverse the initiatives in the field of systemic prevention are, particularly in view of the limited number of actors involved. This fact reflects our view that the quantity of current preventive activities is by no means holding conflict prevention back today. Indeed, as summarized in Table 3.1, a considerable amount of action is going on in the realm of conflict prevention—regarding both conceptual and institutional adaptations and early warning—and in the individual dimensions of operational, structural, and systemic preventive action. The one notable exception is socioeconomic peacebuilding, however, where there is a conspicuous deficiency of engagement and where more effort is required if conflict prevention is to be applied in a balanced and comprehensive fashion.

Limited Effectiveness Although the international community has moved beyond rhetoric, there is still a large gap between preventive intention and performance. Two main factors, together with the neglect of socioeconomic peacebuilding, account for the limited effectiveness to date of conflict prevention. First, the peaceful transformation of a potentially violent antagonism is a complex endeavor, and thirdparty actors find it immensely difficult to determine the right way to tackle individual conflicts with all their peculiarities. Second, as an assessment of their profiles shows, all actors involved in prevention today are marked by a series of weaknesses that limit their governance performance in matters of conflict. Finding the Right Way: The Complexity of Conflict Prevention Few would argue with the view that conflict prevention is a complex endeavor for all actors engaged in preventive matters. Finding 67

Table 3.1

Quantity of Preventive Action According to Fields of Engagement and Actors Public Sector States

International Organizations

Civil Society Sector (NGOs)

Policy formulation/ institutional adaptations

B

B

B

Early warning

B

B

B

Operational prevention

B

A

B

Structural prevention: good governance and civil society

B

A

B

Structural prevention: socioeconomic peacebuilding

X

X

X

Systemic prevention

n.a.

B

n.a.

Notes: Large amount of action (A); sufficient amount of action (B); insufficient amount of action (X). States and the civil society sector (NGOs) have no role in systemic prevention.

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a feasible response to an individual conflict is complicated by the fact that the goal—conflict prevention—is ambitious and often difficult to achieve. This is particularly true for operational prevention, which seeks to defuse and stabilize a situation in an already escalated environment, but it is also valid for long-term peacebuilding. As we pointed out in Chapter 2, the causes and process factors of conflict are often extremely complex and multifaceted, so it is not surprising that we are still far from any systematic program of how best to tackle them, and for now we are forced to constantly innovate, improvise, and muddle through. At the level of local actors, warring factions often do not consent to third-party involvement and assistance, and their unwillingness to cooperate significantly hampers preventive action. There are many reasons why local actors resist international support. Historical legacies, reservations about sovereignty and territorial integrity, refusal to accept conditions, economic interests, and lack of understanding of the potential benefits of cooperation can foster mistrust and lead to a rejection of outside help. Also, as we have argued, local elites in many cases seek to exploit conflicts for their own parochial purposes and thus have no interest in conflict resolution. Moreover, the presence of international actors is often feared because it suggests to the international community the existence of a potential crisis, and this in turn can damage a country’s image and reduce its attractiveness to foreign investors. This is not to say that preventive action should occur by invitation only. Indeed, averting the possibility of mass killings sometimes requires measures that are directed against important local actors, especially government. But recent experiences have shown that a genuine resolution of a conflict is exceedingly difficult to achieve for third-party actors if their engagement is not accepted and/or requested.46 Finally, third-party actors themselves face obstacles that can complicate preventive endeavors. There may be international actors who reject efforts to resolve a conflict for national interest or business reasons. Also, third-party actors tend to neglect the specific needs and expectations of the recipients of their assistance. Instead of adapting their measures to local cultures and requirements and cooperating with local stakeholders to define conflict resolution measures, third-party actors often impose their own Western-style approaches and solutions. The principle of local ownership is frequently ignored, and the insufficient mobilization 69

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of local knowledge and resources can result in aid dependency rather than a strengthening of indigenous capacities.47 The failure of international actors to empower local stakeholders is mirrored in their selection of who receives their help. Obviously, there have been many cases in recent years where too little attention has been paid to choosing the recipients of assistance and, as a consequence, local power balances have been upset. States and international organizations, in particular, seem to struggle with the idea of engaging with a variety of participants, including nonstate actors, and they often focus solely on the host government. NGOs, however, although they generally pursue a bottom-up approach, hoping to identify potential peace constituencies in society, all too often have seen their assistance manipulated by those who have sought to advance their own parochial interests.48 These challenges show why actors often struggle to find the right way, and we need to investigate whether anything can be done to diminish these difficulties. If the imponderabilities of conflicts and the unwillingness of warring parties to accept outside involvement are givens that the international community must learn to handle, it is the responsibility of the international community to address the third-party deficiencies outlined above. Above all, it is up to the intervening actors to modify their perceptions and place stakeholder participation at the center of their concerns. We are encouraged by the fact that some steps in this direction have been announced recently. Most of this debate has occurred at the NGO level, but in governments and IOs there is also a growing recognition that preventive services must become more demand-driven and client-focused.49 At the same time, the international community is still far from achieving genuine partnerships between donors and recipients and from establishing a culture of listening, as some actors have vowed to do. A fast translation of the current rhetoric of “help to self-help” into action will be indispensable if the international community is to improve its skills in preventing conflict more effectively. The Public Sector’s Achilles’ Heel: The Reticence of States The general difficulties of conflict prevention aside, some specific weaknesses of individual actors are to blame for the unsatisfactory 70

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outcome of many preventive endeavors. There is no doubt that current actors often make invaluable contributions to the advancement of peace, but their profiles reveal some inherent limitations. Starting with the public sector, it is remarkable that many shortcomings of both states and international organizations in conflict prevention are directly due to the difficulties of states in building up sufficient political will for resolute and effective action. States possess some obvious characteristics that make them powerful and valuable preventive actors. They are accepted as key international players, and their tax bases provide them with regular and often large incomes. Also, they have a wide variety of instruments at their disposal. States are also subject to a high degree of accountability, especially considering the periodic democratic elections that are held in most states involved in conflict prevention. The main factor that stops national governments from taking a lead in preventive efforts is the difficulty they face in amassing sufficient and effective domestic political will. There are three interrelated uncertainties that negatively affect the willingness of state representatives to act early and with resolution in conflictprone situations. First, it is always unclear at early stages how a conflict will evolve—whether it will turn violent and make preventive measures necessary—and what risks an engagement would entail. Second, it is often equally difficult to discern how and to what extent national interests will be affected by an impending conflict. And third, preventive measures are costly. Although the costs are generally much lower than the huge expenditures required by reactive interventions, the expenditures required by preventive measures are usually immediate, yet the benefits lie in the indefinite future and are not easy to predict. The costs and the lack of certainty frequently make it impossible to mobilize enough domestic support and thus lie at the heart of the reluctance of governments to take firm preventive action. Often other ongoing, already escalated crises, whose immense human and other costs are broadly covered by the media, overshadow potential crisis situations. The result is that merely potential crises are disregarded, and governments tend to take a wait-and-see approach. The difficulties that governments encounter in gaining sufficient political will for effective action are often exacerbated by additional idiosyncratic weaknesses. Above all, it is precisely the 71

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potential power of states that can nourish distrust of local actors. A heavy bureaucracy may also impede swift action, as do slow decisionmaking processes. A further handicap is a lack of knowledge about the local context of many conflicts. On the one hand, since the end of the Cold War we have seen the emergence of conflict areas—such as the Balkans and the Caucasus—with which many states were previously unfamiliar. The lack of expertise in these areas was glaringly obvious. On the other hand, now that various local groups and not states are at the center of conflicts, the traditional top-down approach of state actors repeatedly proves an inadequate means for reaching those elements of society that are below the level of the state. The State-Dependency of International Organizations These difficulties do not mean that states reject the need to move toward a culture of prevention. As the first part of this chapter underlined, states have undertaken many measures to adapt to the modern apperception of conflict prevention. Yet the difficulties mean that the actions taken by states are often not as resolute and comprehensive as they should ideally be. Many initiatives are halfhearted and not backed by adequate resources. States generally have a strong tendency to keep a low profile with regard to unilateral preventive action and instead task international organizations with the job. Making conflict prevention the business of international organizations makes sense. The scope and complexity of the matter, in fact, virtually demand a multilateral pooling of effort. International organizations usually possess a high degree of legitimacy and acceptance; the UN for instance was founded with the explicit mission “to save succeeding generations from the scourge of war.”50 And then there is their proximity to conflicts that often makes international organizations, especially regional ones, the obvious actors.51 Such assets and the competence delegated by states have prompted IOs to take a primary role in conflict prevention. The past few years have seen not only far-reaching institutional and conceptual adaptations, but also an enormous quantity of preventive initiatives of international organizations, rendering IOs the 72

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most visible international actors in conflict prevention. Although even after a decade of searching for a new security architecture no clear division of labor has emerged between these IOs, a pattern of complementary strengths and focal points is evident. Thus, at present the UN is the only organization with a truly global outreach. It is also the only organization with almost universal membership, giving it an exceptionally high degree of legitimacy. Further, since the UN defines security very broadly, it has an extensive range of instruments and numerous specialized agencies at its disposal.52 The European Union, however, is perhaps the most powerful organization with respect to preventive issues. It is not only the largest donor worldwide, but it is also about to add more political and military muscle to its traditional economic power. The EU is in the process of broadening its set of preventive instruments and will increasingly be in a position to incorporate elements of power and persuasion into its preventive strategies.53 The OSCE and the Council of Europe act with much less public visibility, but their preventive work is all the more important. The OSCE’s instruments are those most attuned to the needs of conflict prevention today. With its slim and flexible structures, the OSCE pursues a pragmatic and quiet approach, targeted mainly at long-term peacebuilding.54 The Council of Europe is predominantly concerned with setting standards and formulating norms. In this it complements the activities of the UN, albeit with an exclusive focus on the European area.55 Finally, NATO, with its PfP program, has developed important cooperative security structures in recent years, and multinational PfP forces have proven an indispensable security component of many civilian peace operations.56 Yet despite all the advantages and measures of international organizations, even a superficial look at their performance shows how limited their achievement often is. Many international organizations, though publicly visible, still struggle with effective action. Obviously, bureaucracy and complex decisionmaking processes are impediments, and an aggravating peculiarity of many international organizations lies in their consensus voting, which can result in extensive compromises. But this is just one side of the story. Of greater significance is the fact that the performance of international organizations depends to a large extent 73

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on the support of their member states. Even if international organizations set up an agenda independent of the positions of member states, the proper implementation of this agenda is still largely reliant on the backing of governments. What this statedependency means is that the difficulty of governments to gain sufficient political will to preventive action has a direct negative bearing on the effectiveness of multilateral institutions in the realm of conflict prevention. The major negative effect that the lack of political will brings to bear on the preventive activities of IOs relates to resources. There is frequently a huge disparity between the tasks that states assign to international organizations and the financial and human resources allocated to them. No doubt, governments genuinely want their organizations to successfully avert violent conflict, but their unwillingness to make enough resources available often makes it almost impossible for these organizations to deliver. Most organizations are permanently underfunded, and the situation regarding government funds specifically designated for preventive purposes is often no better. By 2000, only seven countries had made donations to the UN Trust Fund for Preventive Action, and the total collected in three years was a mere U.S.$7.4 million.57 Also, there are estimates that only about 60 percent of the amounts pledged by donors for peacebuilding and reconstruction missions in countries such as Afghanistan and East Timor ever reaches the implementing international agencies.58 Yet resource constraints are not only financial; they also apply to staffing. Human resource shortages are particularly acute in field missions. Time and again IOs are unable to recruit and deploy qualified personnel in sufficient numbers and at the right time. This is because IOs largely depend on member states to second staff. The OSCE Kosovo Verification Mission of 1998–1999, for example, had an authorized staff of 2,000, but by the time it withdrew, fewer than 1,400 had arrived.59 Similarly, as many as 25 percent of the 8,641 police positions authorized for UN operations were vacant in August 2000. With regard to other civilian specialists, up to 50 percent of peacebuilding-related positions in UN missions were unoccupied at that time.60 It is a difficult enough task for international organizations to implement preventive initiatives with a multinational staff—the civilian police force in East Timor came from as many as forty-two 74

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countries61—that is subject to frequent changes due to limitedduration contracts. Endeavors for which national governments fail to contribute sufficient personnel are doomed to failure. Encouragingly, some efforts are being made to tackle the problem of secondment, and a key innovation is the setting up of expert pools. The OSCE now runs a database with skilled personnel available for rapid expert assistance and cooperation teams (REACT).62 Yet the problem with such databases is that they do not allocate a quota to member states, leaving states to decide whether and to what extent they second their experts. Of great value would thus be the building up of national contingents of readily deployable experts. But few countries have such a facility, and programs like those in Canada, Germany, and Switzerland are the exception rather than the rule.63 The Public Sector’s Narrow Conceptual and Geographic Focus The two main reasons why many public sector initiatives have frequently led to modest results or have failed are domestic obstacles that stop states from developing enough political will for resolute preventive action and the ensuing scant resources provided to IOs. The fact that ultimately all effectiveness of public actors in conflict prevention is state-dependent entails two further consequences, which have considerable bearing on the performance of states and international organizations alike. First, states and IOs predominantly become engaged in operational and late structural prevention (aftercare) and largely neglect early previolence peacebuilding. The reluctance to act early is determined by the uncertainties that mark the early stages of conflict, and these uncertainties make it exceedingly difficult for governments to pursue a sustainable approach. Rather than getting in early and remaining involved throughout the conflict cycle, states and consequently international organizations are able to act only when the need to do so appears obvious—and this often makes their approach look patchy. The case of the Balkans illustrates this behavior perfectly: we need only to compare the enormous means available for postviolence reconstruction with the limited efforts at early prevention. More than €2.4 billion were pledged by states and IOs in March 2000 alone, when members of 75

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the new Stability Pact for South Eastern Europe launched a quick action package to stimulate regional stability.64 Another case that shows the emphasis on short-term and postviolence prevention is the OSCE. Although this organization runs more previolence preventive missions than any other, it still spends an overwhelming share of the resources available for field activities on the three large postwar peacebuilding operations in Bosnia and Herzegovina, Kosovo, and Croatia. As much as 80 percent of the money goes to these missions, and the disparity is even greater with regard to staff. Several hundred international staff members are involved in these big Balkan missions, compared to often fewer than ten experts allocated to early prevention missions.65 The European Union is another case in point. Despite its active role and comprehensive set of preventive instruments, recent efforts to build up a European security and defense policy have shown that EU member states are still more inclined to invest in military crisis management capacities than to spend large sums on strengthening the broader set of conflict prevention instruments. Not that a strong military component would not be essential for a credible foreign and security policy and indeed for conflict prevention. Yet the imbalance between the ambitious goal of creating capabilities for the rapid and sustained deployment of 60,000 military troops and the vague propositions for civil peacebuilding means is striking.66 A second consequence of the state-dependency of public sector preventive activity is the narrow geographic focus on the European periphery that characterizes a large majority of governmental or intergovernmental initiatives. As we indicated in Chapter 2, except for the UN and its related agencies, the states and international organizations that have embraced the modern notion of conflict prevention are mainly from the Euro-Atlantic zone. Although there are a few non-European regional organizations, like the Organization of African Unity (OAU), the Economic Community of West African States (ECOWAS), and the Organization of American States (OAS), that have begun to deal with preventive matters and have developed some institutions and mechanisms, these examples are rare and should not distort the general picture.67 The Euro-Atlantic governments are the driving force behind prevention, and their national interests largely define the geographical 76

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scope of the preventive engagement. Since the fall of the Berlin Wall these interests have predominantly been threatened by crises and instabilities at the European periphery—the Mediterranean, the Middle East, southeastern Europe, and the Caucasus. Because of this, states and international organizations have focused their attention on these areas. Although there are no precise figures to show the extent to which the Euro-Atlantic community focuses its prevention efforts on its strategic neighborhood, there are clear indications that regions that fall outside this strategic area are seriously neglected. For one thing, the outreach of most European international organizations active in the realm of prevention is clearly regional. Although the instruments of organizations like the OSCE and the Council of Europe would be valuable in resolving conflicts in all parts of the world, their application is explicitly restricted to the wider European area. Another indicator is the geographic distribution of some financial flows to recipient countries. Even though no specific figures are available regarding preventive initiatives, the data for development cooperation suggests that in the post–Cold War period there has been a strong increase in assistance to countries at the fringes of Europe at the expense of African, Asian, and South American developing countries. Between 1992 and 1997, the EU reduced the relative proportion of development cooperation disbursements to the African, Caribbean, and Pacific countries (ACP) from 45 percent to 14 percent, while it increased its assistance to the southern Mediterranean region from 9 percent to 25 percent and to Eastern Europe and the CIS from 33 percent to 46 percent.68 A similar picture is conveyed by the figures for the flows of aid from the member countries of the Organization for Economic Cooperation and Development (OECD), showing the same kind of relocation of resources between 1993 and 1999.69 The geographic limits to the preventive engagement imply a lack of action in many parts of the world. Yet the narrow focus is merely the last in a series of limitations that have arisen from the inability of states to obtain enough political will for effective action, and it is apparent that many of the problems of public sector actors are inherent and will influence their performance in the foreseeable future. As much as this sector genuinely strives to give priority to the prevention of conflict, its difficulties in so doing are bound to remain. 77

Conflict Prevention

The Civil Society Sector’s Limited Capacity If we attempt to evaluate the performance of the civil society sector in conflict prevention, two features appear particularly noteworthy. First, NGOs possess some distinctive strengths precisely in places where the public sector is struggling the most, and their relative advantage gives them an important role to play in prevention. Second, NGOs also display weaknesses, capacity being the one problem that haunts them most. Their lack of a secure financial basis accounts for many shortcomings in their preventive initiatives.70 Although NGOs, in terms of their organization, strategies, and types of engagement, are heterogeneous and thus difficult to assess as a group, they nevertheless display a few common characteristics that allow for generalizations about their performance in preventing conflict. To start with, compared to the preventive profile of public actors, NGOs have a series of relative advantages.71 First, their activities usually focus on the society level rather than on the state level. Their bottom-up approach is thus a useful and necessary complement to the efforts of governmental actors. It is essentially nonthreatening in character, since NGOs have no authority to enforce their measures (even though many actors fear their media campaigns, of course). Also, their grassroots perspective allows for highly flexible strategies. Above all, their closeness to society usually means that NGOs are more familiar with local conditions, a valuable asset in peacebuilding. A second advantage of NGOs is their commitment. Volunteer organizations are generally highly motivated in their activities, which they undertake in the context of a clear mission they have set themselves. The rationale of NGOs active in conflict prevention is essentially to achieve peace, and their will to undertake measures to that end is unrelenting and—contrary to states and international organizations—not subject to parochial interests. Further, the usually unambiguous nature of their motives gives them a degree of credibility at the level of the population that is rarely achieved by public actors. The third major advantage of NGOs is that their presence in the field is often long term. NGOs are often involved in peacebuilding

78

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efforts long before public actors become involved, and they often remain longer. Given the long-term commitment required to achieve successful conflict prevention, the sustained engagement of many NGOs is valuable, particularly as it provides the NGOs involved with a degree of expertise and competence unparalleled by any other actor. There are also considerable problems associated with the involvement of NGOs in conflict prevention.72 Some critics find fault with the lack of accountability that characterizes volunteer organizations. The fact that NGOs are not accountable to any citizenry or shareholder community, unlike governments and the corporate sector, frequently brings about deficient transparency. This raises serious questions of legitimacy and leaves critics wondering whether NGO participation in global governance really does diminish the much-lamented “democracy deficits” or whether it reinforces them. As a consequence, actors from both the public and the business sectors still view NGOs with some skepticism and are reluctant to enter into partnerships with them.73 Having said that, the lack of legitimacy and the unpredictability of NGOs, while important, are not key to understanding the considerable problems NGOs face in conflict prevention. Rather, we must turn our attention to the volatile resource base of many NGOs. Because these actors lack a secured and regular source of revenue comparable to the tax-based income of states, capacity is the main weakness of a great many NGOs. NGOs are constantly confronted with the need to raise funds, which reduces the effectiveness of their performance in three ways. First, although NGOs have the will to act, they often lack the means to do so comprehensively and vigorously. Of course, some NGOs have a sound financial base, but the average volunteer organization is familiar with the downsizing or termination of programs due to lack of resources. Staff continuity is a related problem. The working periods of many field employees are necessarily short as volunteers often work either for free or for unsustainably small incomes. The resulting frequent staff changes have a negative impact on programs. A second consequence of having to depend on fund-raising is that many NGOs are not as independent in their actions as they would like to be. This is a particularly problematic feature when we

79

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consider that the main donors of a remarkable number of NGOs are states. While overall NGOs today disburse more money than the World Bank in peacebuilding matters,74 many of them receive a considerable share of their revenues from the public sector. The dependency on states is especially accentuated with development and humanitarian NGOs, which often receive more than half of their resources from governments, but it is commonplace in other fields of peacebuilding too.75 What this means, above all, is that as NGOs frequently function as contractors to states or are dependent to some degree on public resources, the problems governments encounter with conflict prevention can have an equally adverse effect on the ability of the civil society sector to act resolutely. Consequently, states often find it difficult to allocate large sums of money to NGOs engaged in preventive matters. When they succeed, they may at least want to have a say in how their money is spent. Both issues can severely restrict the scope of an NGO’s action. Finally, the need to raise money also makes publicity an imperative for NGOs. Without a certain level of media attention, volunteer organizations are unlikely to get enough resources from potential public or private donors. Thus, NGOs tend to get involved in those conflicts that either might affect the strategic interests of states or that are in the limelight. They may choose their arena of involvement primarily according to public expectations, irrespective of actual needs and irrespective of their own suitability to meet those needs.76 The result can be a limited geographic focus, although this tendency is far less pronounced than is the case with public sector actors. If the deficiencies of NGOs in conflict prevention are mainly capacity-related, the sheer number of such organizations reinforces them. The fact that so many NGOs vie for limited resources not only creates competition between them but also generally leads to a fragmentation of efforts, with often suboptimal outcomes. But despite these obstacles, an assessment of NGO engagement in preventive action should not portray too gray a picture. The civil society sector plays a very important role, making up for some of the deficiencies that characterize public actors. The main characteristic that limits its effectiveness is insufficient and erratic capacity.

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Improving Performance Having outlined the kinds of initiatives currently involved in conflict prevention and having assessed the effectiveness of individual actors, we now turn to the issue of how the unsatisfactory performance of the international community might be improved. In so doing, we must bear in mind two basic findings noted above if we are to avoid impracticable propositions. First, conflict prevention is a difficult and complex matter, and there is no textbook solution to making it work. The second finding is related to the first: Any actor engaged in prevention will inevitably encounter specific difficulties with early, resolute, and sustainable preventive action. With regard to the actors currently engaged, public sector representatives are primarily restrained by the domestic obstacles of states to obtain sufficient political will, while the civil society sector is above all beset with problems of capacity. Two measures for making conflict prevention more effective appear particularly promising. For one thing, while for all actors there is room for improving their performance, a better coordination of individual initiatives and actors is key to advancing prevention. Second, the business sector and those actors already involved in conflict prevention need to realize that an active preventive role of corporations is instrumental in rendering the governance efforts of the international community more successful. Like their counterparts from the public and civil society sectors, business actors have a strong interest in a world without violent conflict. Like the other sectors, they possess characteristic strengths and weaknesses that give them a specific profile as agents of prevention. Adding the strengths of corporations to the rather different strengths of those already directly engaged in conflict prevention is certain to bring much-needed assets to areas where states, international organizations, and NGOs have significant deficiencies and will make international preventive efforts more balanced and sustainable. Coordination and Divisions of Labor Given that no actor has a flawless profile for the purposes of conflict prevention, there is a need to better coordinate the preventive

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efforts of the international community. There is often far too much duplicity, rivalry, and ignorance of other initiatives for preventive measures to be effective. We have argued for a genuine partnership between donors and recipients; we believe that enhanced cooperation and an improved division of labor between the donors themselves are equally important. Better coordination is urgent and feasible, and it should be focused on three levels: the intrasector level, the intersector level, and the interissue level.77 With regard to measures undertaken within a particular sector, the prospects for improvement vary greatly. The performance of NGOs and IOs is often severely weakened by too much intrasector competition, and it will likely be very difficult to significantly reduce the rivalry within the civil society sector, given the huge number of organizations and the limited resources available. Despite the emerging networks of NGOs, civil society organizations will always compete against one another. The situation for international organizations is somewhat different. Because there are far fewer of these organizations and they are ultimately accountable to their member states, it seems practicable to enhance cooperation between these organizations and reduce an overlapping of their tasks. Indeed, encouraging steps in this direction have already been taken. There are now regular high-level meetings between the UN and regional IOs on issues of peacebuilding.78 Particularly noteworthy is the framework agreement between the UN and the European Union that not only provides for a structural dialogue but also entails concrete forms of cooperation and provisions for cofinancing projects administered by the UN.79 Also, there is the OSCE’s Platform for Cooperative Security that, since its adoption in 1999, has served to develop and maintain political and operational coherence among all European international organizations dealing with security.80 Still, the potential for more interinstitutional consultation and cooperation is enormous and must be exploited further if international organizations are to act as “interlocking” rather than “interblocking” agents of prevention.81 Intersector cooperation is even less developed than intrasector development. Many public actors—the UN, the World Bank, Norway, Canada, and Switzerland are obvious examples—have recognized the need to interact with civil society representatives and have set up various forums of dialogue,82 but the inclusion of 82

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nonstate actors into international structures of individual peacebuilding missions is still rare. Operations in Kosovo, Macedonia, Bosnia and Herzegovina, and East Timor have developed more or less sophisticated structures for intergovernmental cooperation but marginalize possible nonstate participation. Of course, integrating fragmented groups like NGOs in a fair way is a difficult task. But some form of enhanced consultation and a networked pattern of cooperation could help to dovetail the initiatives of different sectors, thus improving the efficiency of international preventive efforts. Finally, there is a need for better coordination not just of agents of prevention but also of issues. A multi-issue approach, encompassing military, political, social, and economic aspects, is likely to be more effective than an approach that limits international efforts to specific issues.83 A multi-issue approach often brings about a very high degree of complexity, particularly because it attempts to link civilian and military actors with very different backgrounds.84 Yet enhanced issue coordination and institutionalized civil-military cooperation (CIMIC) are prerequisites for successful preventive action in many cases, even though these two features undoubtedly still represent formidable challenges to the international community. A look at the general requirements for effective coordination among actors and issues in conflict prevention shows that, first of all, leadership is important. The presence of a prime mover is often indispensable to an agreement that determines who does what and how to structure the coordination.85 Besides such political leadership—usually exerted by a state—there is also a need for a lead agency in an administrative sense. This function is often assumed by an international organization, or, where complexity requires it, by conflict-specific creations like the Office of the High Representative in Bosnia and Herzegovina or the Special Coordinator of the Stability Pact for Southeastern Europe.86 A second feature to make cooperation effective is to define a strategic framework that delineates individual roles and responsibilities.87 Also, joint needs assessments are an indispensable tool for ensuring that all actors involved have a similar view of where the problems lie and how best to tackle them.88 A much-debated recent topic has been whether an international conflict prevention regime will emerge any time soon. 83

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Even though there is an extensive range of concrete proposals— put forward by both state and nonstate actors—as to how to organize such a regime,89 no permanent preventive system with assigned geographic and functional responsibilities seems likely to come about. Such a development would not necessarily be desirable, for, as UN Secretary-General Kofi Annan has pointed out, multiactor arrangements that are too formal are often not flexible enough to keep up with a rapidly changing agenda.90 Thus, above all there is a need for case-by-case arrangements that regulate the coordination of actors and initiatives in particular interventions. Such ad hoc divisions of labor have the advantage of being responsive to both the specific needs of recipients and the individual assets of international actors, giving them a high degree of flexibility. Ideally, such temporary regimes and networks would come into being at the beginning of a preventive operation. This not only allows individual actors to attune their initiative to what others do but also generally fosters the principle of best practice—which in international preventive undertakings has been ignored too often. Recent developments in the Balkans suggest that the practice of coordinated ad hoc efforts in conflict prevention is beginning to take root. The massive civilian peacebuilding efforts in Kosovo are coordinated by a special representative of the UN SecretaryGeneral, under whose leadership four international organizations and agencies are working together in a joint operation. The Office of the UN High Commissioner for Refugees (UNHCR) is in charge of humanitarian assistance, the UN itself covers issues of civil administration, the OSCE has the lead in democratization and institution building, and the EU manages matters of reconstruction and economic development.91 Even more comprehensive is the long-term, regional peacebuilding approach of the Stability Pact, where the special coordinator is in charge of about forty governmental actors who deal with a total of nearly 250 projects in issue-specific working tables.92 Coordination arrangements like these could serve as role models for other preventive endeavors. Subsequent ad hoc structures should, however, include nonstate actors, enabling truly intersectoral partnerships. Moreover, it is imperative that the international community makes the effort to better coordinate initiatives outside the Balkan region. Above all, such coordinating 84

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mechanisms should be set up in earlier phases of prevention, before the sheer scale of required action forces international actors to pool and harmonize their efforts. A Role for Business The second measure that would greatly enhance conflict prevention is an active and comprehensive engagement of the business sector in this realm of global governance. Any attempt to make a case for business involvement in conflict prevention may initially appear odd. Conventional wisdom has it that a profit-oriented, competitive actor like the business community is ill suited to playing a constructive role in averting violent conflicts. Conflict prevention is not generally seen as a core domain or interest of corporations, and business actors are not generally seen as having the appropriate tools for contributing significantly to the efforts of the public and the civil society sector to resolve conflicts peacefully. “The business of business is business,” as the American saying goes. Until now, both the business community and those actors already engaged in preventive measures have held that there is no role for the corporate sector in conflict prevention. Indeed, if public and civil society actors have spoken of a link between business and conflict, the sense has usually been negative. NGOs in particular often identify the corporate sector as part of the problem in conflicts.93 They frequently point to famous examples of TNCs whose inconsiderate business practices have led to social and/or ecological harm and caused or exacerbated local conflict. Increasingly, they also draw attention to the negative or at least questionable impacts of private security and military companies that have begun to take up roles and functions in war and conflict management that were previously considered the exclusive domain of public sector actors.94 Yet there is another, more positive, viewpoint. Although there have always been corporations that, intentionally or unintentionally, have caused harm, an unbiased assessment of the link between business and conflict reveals that private actors also have an enormous potential for helping to prevent large-scale violence. Even though companies usually do not pursue their basic activities, such as investment and trade, with the conscious intention of 85

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preventing conflict, such measures can have significant positive impacts on the stabilization of conflict-prone or conflict-torn societies. Private actors have, albeit unwittingly, long been involved in structural socioeconomic prevention simply by generating economic opportunity—a realm mostly neglected by public and civil society actors. This fact suggests that they have much experience and expertise to offer. But private actors have even more to offer. The experience of business in managing complex problems involving a multitude of different actors must be seen as a further asset. Business players are also familiar with whole-systems thinking and complex-systems change. They also have much to offer in terms of leadership and teamwork. And the fact that corporations are obliged to constantly evaluate their activities in order to develop “best practices” makes them particularly valuable partners in efforts to improve the coordination and division of labor in multisector preventive work.95 The typology of conflict prevention profiles of individual actors presented in Table 3.2 indicates that corporations, as potential agents of conflict prevention, could effectively complement the strengths and compensate for the weaknesses of public and civil society actors. Above all, business actors, if they were to recognize their own interests in contributing to conflict prevention, would be unlikely to face the main deficiencies that limit the effectiveness of other actors. They would not find themselves beset with domestic constraints on their will to act, like states, and they would not be troubled by limited financial and human resources, like NGOs. These two features of business actors alone justify the call for their involvement in conflict prevention. Added to these is the fast and simple decisionmaking process of enterprises that allows them to act early and with mandates that are less vulnerable to compromise and dilution than those of multilateral institutions. Another business sector asset is the sustainability they could bring to preventive measures. Corporations are often on the ground before a conflict erupts, and as businesses usually hope to stay on after a conflict has ended, they have a strong incentive to ensure that their preventive action endures. Those corporations that have been active in a conflict-prone or conflict-ridden location also have valuable knowledge of local conditions and, in some cases at least, enjoy a degree of local acceptance that other third-party 86

Table 3.2

Typology of Individual Actors and Their Conflict Prevention Profiles Public Sector States

International Organizations

Civil Society Sector (NGOs)

Business Sector

Perceived need to act

+

+

+

✓

Will to act/commitment

✓

+

+

✓

Independence of action

+

✓

–

+

Resources: willingness/ability to invest in conflict prevention

–

–

✓

+

Global focus

–

–

–

+

Sustainable engagement, including (early) previolence prevention

–

–

+

+

Local acceptance

–

+

+

+

Local knowledge

–

+

+

+

International acceptance

+

+

–

✓

Pooling of efforts Broad variety of instruments (incentives and coercives)

+

+

–

–

+

+

–

–

Swift decionmaking/flexibility

–

–

+

+

Accountability/legitimacy

+

+

–

–

Note: Characteristic strength (+); characteristic deficit (–); key deficit (✓).

Conflict Prevention

actors do not. Finally, many business actors are global players and rely on worldwide networks and thus naturally pursue a global view and have a basic interest in the advancement of peace around the world—in contrast to states and many NGOs in the EuroAtlantic area. Corporations are bound to encounter their share of difficulties with effective preventive action. Similar to NGOs, the business community is marked by a large degree of fragmentation and a limited variety of instruments, and its measures are essentially noncoercive. Business actors are also likely to be confronted with concerns about the legitimacy of becoming involved in conflict prevention and could face the charge that they are accountable to their shareholders only and consequently fail to represent a sufficiently broad public interest.96 The biggest obstacle to getting business actors involved in conflict prevention, however, is a lack of clarity, by both corporations and public and civil society actors, regarding the role that the business community might play. Clearly, as long as business actors see their interests as unrelated to the prevention of conflict, it is futile to point out the qualities and comparative strengths that companies could bring to conflict prevention. Inversely, if NGOs and public actors continue to view the relationship of business and conflict as inherently negative, it makes little sense to present a case for corporate conflict prevention. In other words, only if the private sector changes its self-perception, and the actors already involved in preventive action can be persuaded that their current view on business and conflict is simplistic, do we have a solid foundation for arguing for an active and comprehensive business engagement. In Chapters 4 and 5 we show why it is in the interests of the business sector to join international preventive operations and how business actors can effectively contribute to governance efforts in the realm of conflict prevention.

Notes 1. See Luc van de Goor and Martina Huber, eds., Mainstreaming Conflict Prevention: Concept and Practice, CPN Yearbook 2000/01 (BadenBaden: Nomos, 2002).

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2. Swedish Ministry for Foreign Affairs, Preventing Violent Conflict: A Swedish Action Plan (Stockholm: Regeringskansliet, 1999); Swedish Ministry for Foreign Affairs, Preventing Violent Conflict: A Study (Stockholm: Ministry for Foreign Affairs, 1997); United Nations, “Prevention of Armed Conflict,” Report of the Secretary-General, A/55/985–S/2001/ 574, 7 June 2001; European Union/Commission of the European Communities, Communication from the Commission on Conflict Prevention, COM(2001)211 final, 11 April 2001. 3. OECD/DAC, The DAC Guidelines: Helping Prevent Violent Conflict (Paris: OECD, 2001). See also the example of the German Gesellschaft für Technische Zusammenarbeit (GTZ): Norbert Ropers, Friedensentwicklung, Krisenprävention und Konfliktbearbeitung: Technische Zusammenarbeit im Kontext von Krisen, Konflikten und Katastrophen (Eschborn: Deutsche Gesellschaft für Technische Zusammenarbeit, 2002). A useful survey of how development agencies have conceptually and institutionally adapted to conflict prevention is offered by Manuela Leonhardt, “Improving Capacities and Procedures for Formulating and Implementing Effective Conflict Prevention Strategies: An Overview of Recent Donor Initiatives,” in The Impact of Conflict Prevention Policy: Cases, Measures, Assessments, eds. Michael Lund and Guenola Rasamoelina, CPN Yearbook 1999/2000 (Baden-Baden: Nomos, 2000), 89–112. 4. For Canada’s unit, see the website of the Canadian government: http://www.humansecurity.gc.ca; for the UK, see Mukesh Kapila and Karin Wermester, “Development and Conflict: New Approaches in the United Kingdom,” in From Reaction to Conflict Prevention: Opportunities for the UN System, eds. Fen Osler Hampson and David M. Malone (Boulder: Lynne Rienner, 2002), 297–320; for Switzerland, see the website of the Swiss Agency for Development and Cooperation: http://194. 230.65.134/dezaweb2/home.asp. See also Klaas van Walraven, Conflict Policy in Some Western Countries: Some Explorative Notes (The Hague: Netherlands Institute of International Relations [Clingendael Institute], 1999). 5. For a good overview of the OSCE, see the regularly updated OSCE Handbook, available online at http://www.osce.org/publications/ handbook/index.htm; for the European Union, see International Crisis Group, EU Crisis Response Capability: Institutions and Processes for Conflict Prevention and Management, Issues Report, no. 2, 26 June 2001. 6. For International Alert, see http://www.international-alert.org; for the International Crisis Group, see http://www.intl-crisis-group.org; see also Alain Destexhe, “New Institutions for New Times: The Case of the International Crisis Group,” in Turbulent Peace: The Challenges of Managing International Conflict, eds. Chester A. Crocker, Fen Osler Hampson, and Pamela Aall (Washington, DC: United States Institute of Peace Press, 2001), 649–658. 7. For the Conflict, Development and Peace Network in the UK, see http://www.codep.org.uk; for the Plattform Zivile Konfliktbearbeitung in Germany, see http://www.konfliktbearbeitung.net; for the Citizens’ Security Council in Finland, see http://www.katu-network.fi.

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8. For the European Platform for Conflict Prevention and Transformation, see http://www.conflict-prevention.net; see also Paul van Tongeren, “The Challenge of Coordinating and Networking,” in Peacebuilding: A Field Guide, eds. Luc Reychler and Thania Paffenholz (Boulder: Lynne Rienner, 2001), 510–519; for ACRON, see http://www.acron. iwa.org; for FEWER, see http://www.fewer.org/. See also the European Peacebuilding Liaison Office in Brussels: http://www.eplo.org. 9. See Klaas van Walraven, ed., Early Warning and Conflict Prevention: Limitations and Possibilities (The Hague: Kluwer Law International, 1998); Lund, Preventing Violent Conflicts: A Strategy for Preventive Diplomacy (Washington, DC: United States Institute of Peace Press, 1996), 108–113. 10. International Crisis Group, EU Crisis Response Capability, 28. 11. See Heinz Krummenacher and Susanne Schmeidl, Practical Challenges in Predicting Violent Conflict: FAST—An Example of a Comprehensive Early-Warning Methodology, Working Paper, no. 34 (Berne: Swisspeace, October 2001). 12. United Nations, “Prevention of Armed Conflict,” 24. 13. David Carment and Albrecht Schnabel, Conflict Prevention: Naked Emperor, Path to Peace, Grand Illusion or Just Difficult? Paper presented at the forty-first annual convention of the International Studies Association, Los Angeles, March 2000, 7. 14. On the variety of models, see John L. Davies and Ted Robert Gurr, eds., Preventive Measures: Building Risk Assessment and Crisis Early Warning Systems (Lanham, MD: Rowman and Littlefield, 1998). 15. Lund, Preventing Violent Conflicts, 108–111. 16. On the mission of Vranitzky, see the relevant chapter in the electronic OSCE Handbook (see note 5). For an overview of EU special representatives, see the website of the Council of the European Union: http://ue.eu.int/pesc/envoye.asp?lang=en. 17. United Nations, “Prevention of Armed Conflict,” 15. 18. Ibid., 32. 19. For the EU monitoring missions, see the website of the Council of the European Union: http://ue.eu.int/pesc/ecmm/index.htm; see also International Crisis Group, EU Crisis Response Capability, 28. On the UN missions, see the UN report “Prevention of Armed Conflict,” 14–16. 20. On the issue of smart sanctions, see the website of the Swiss State Secretariat for Economic Affairs: http://www.smartsanctions.ch. 21. On the Trust Fund, see United Nations, “Secretary-General Says Conflict Prevention Should Be Cornerstone of Collective Security in the Twenty-First Century,” press release concerning the address by UN Secretary-General Kofi Annan to the Security Council on conflict prevention, SG/SM/7491, 20 July 2000; for the Canadian Peacebuilding Fund, see http://www.acdi-cida.gc.ca/peace. Another Conflict Prevention Fund is run by the UK. See the conflict prevention website of the Foreign and Commonwealth Office: http://www.fco.gov.uk/news/keythemepage. asp?PageId=254.

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22. European Union/Commission of the European Communities, Communication from the Commission on Conflict Prevention, 21; United Nations, Report of the Panel on United Nations Peace Operations, A/55/305– S/2000/809, 21 August 2000, 17. 23. See Kurt R. Spillmann et al., eds., Peace Support Operations: Lessons Learned and Future Perspectives (Berne: Peter Lang, 2001); Winrich Kühne, “From Peacekeeping to Postconflict Peacebuilding,” in Reychler and Paffenholz, Peacebuilding, 376–388; Wolfgang Biermann and Martin Vadset, eds., UN Peacekeeping in Trouble: Lessons Learned from the Former Yugoslavia (Aldershot, England: Ashgate, 1998); Dennis C. Jett, Why Peacekeeping Fails (New York: St. Martin’s Press, 1999); United Nations, Report of the Panel on United Nations Peace Operations. 24. United Nations, “Prevention of Armed Conflict,” 20f. 25. See the Graduate Institute of International Studies, Geneva, Small Arms Survey 2001: Profiling the Problem (Oxford: Oxford University Press, 2001); Herbert Wulf, ed., Disarmament and Conflict Prevention in Development Cooperation, Proceedings of an International Conference, 30–31 August 1999, BICC Report, no. 14, Bonn International Center for Conversion, February 2000; United Nations, “Prevention of Armed Conflict,” 21–23. 26. On the instruments of the OSCE, see the electronic OSCE Handbook (see note 5); for the UN High Commissioner for Human Rights, see http://www.unhchr.ch; for the Commissioner for Human Rights of the Council of Europe, see http://www.commissioner.coe.int. 27. The missions of the OSCE are covered in the electronic OSCE Handbook (see note 5). For a list of current UN political and peacebuilding missions, see the UN website: http://www.un.org/peace/ppbm.pdf; see also the UN peacekeeping operations website: http://www.un.org/ Depts/dpko. For the field missions of the Council of Europe, see the report of the Council of Europe/Directorate of Strategic Planning, Council of Europe in 2000 at a Glance: Programme of Activities 2000: Implementation Report, SG/Inf(2001)11, 20 March 2001. 28. See Claus Neukirch, “Die Langzeitmissionen—das Rückgrat der OSZE,” Vierteljahrsschrift für Sicherheit und Frieden 18, no. 4 (2000): 306–310. 29. United Nations, “Prevention of Armed Conflict,” 24. 30. See, for example, Strategy 2010 of the Swiss Agency for Development and Cooperation: Sustainable, Looking to the Future, Working in Partnership, Aiming for Impact, Swiss Agency for Development and Cooperation, 2000. 31. For Amnesty International, see http://www.amnesty.org; for Human Rights Watch, see http://www.hrw.org. 32. For the Carter Center, run by former U.S. president Jimmy Carter and his wife, Rosalyn, see http://www.cartercenter.org. 33. On mediation in general, see Thania Paffenholz, “Western Approaches to Negotiation and Mediation: An Overview,” in Reychler and Paffenholz, Peacebuilding, 75–81; Louise Diamond and John W. McDonald,

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Multi-Track Diplomacy: A Systems Approach to Peace, 3d ed. (West Hartford, CT: Kumarian Press, 1996). On problemsolving workshops, see Herbert C. Kelman, “Interactive Problem Solving in the Middle East,” in Reychler and Paffenholz, Peacebuilding, 97–110; John Wear Burton, ed., Conflict: Human Needs Theory (New York: St. Martin’s Press, 1990); Ronald J. Fisher, Interactive Conflict Resolution (Syracuse: Syracuse University Press, 1997). 34. For Search for Common Ground, see http://www.sfcg.org; for the Conflict Management Group, see http://www.cmgroup.org; for the Institute for Multi-Track Diplomacy, see http://www.imtd.org; for International Alert, see http://www.international-alert.org. 35. For Peace Brigades International, see http://www.peacebrigades. org. 36. The figure is taken from Colette Chabbott, “Development INGOs,” in Constructing World Culture: International Nongovernmental Organizations Since 1875, eds. John Boli and George M. Thomas (Stanford: Stanford University Press, 1999), 226. 37. See Andreas Mehler and Claude Ribaux, Crisis Prevention and Conflict Management in Technical Cooperation: An Overview of the National and International Debate, GTZ series, no. 270 (Wiesbaden: Universum Verlagsanstalt, 2000); Manuela Leonhardt, “The Challenge of Linking Aid and Peacebuilding,” in Reychler and Paffenholz, Peacebuilding, 238–245. For an extensive bibliography on development and humanitarian NGOs and conflict, see International Alert, Development/Humanitarian NGOs and Conflict: A Bibliography and Listing of Web Sources, Version 2.1, March 2000. 38. On the World Bank and conflict, see Jonathan Stevenson, Preventing Conflict: The Role of the Bretton Woods Institutions, Adelphi Paper, no. 336 (Oxford: Oxford University Press, 2000); Patricia Cleves, Nat Colletta, and Nicholas Sambanis, “Addressing Conflict: Emerging Policy at the World Bank,” in From Reaction to Conflict Prevention: Opportunities for the UN System, eds. Fen Osler Hampson and David M. Malone (Boulder: Lynne Rienner, 2002), 321–355; John Pender, “From ‘Structural Adjustment’ to ‘Comprehensive Development Framework’: Conditionality Transformed?” Third World Quarterly 22, no. 3 (2001): 397–411; Nicole Ball, Jordana D. Friedman, and Caleb S. Rossiter, “The Role of International Financial Institutions in Preventing and Resolving Conflict,” in The Price of Peace: Incentives and International Conflict Prevention, ed. David Cortright, Carnegie Commission on Preventing Deadly Conflict (Lanham, MD: Rowman and Littlefield, 1997), 243–264; Alfredo Sfeir-Younis, “The Role of International Financial Institutions,” in Preventing Violent Conflict: The Search for Political Will, Strategies and Effective Tools, Report of the Krusenberg Seminar (Stockholm: SIPRI, 2000), 45–50; John Stremlau and Francisco Sagasti, Preventing Deadly Conflict: Does the World Bank Have a Role? (Washington, DC: Carnegie Commission on Preventing Deadly Conflict, June 1998). 39. On the activities of the EBRD, see Transition Report 2000: Employment, Skills and Transition (London: EBRD Publications, 2000).

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40. See Jens van Scherpenberg and Peter Schmidt, eds., Stabilität und Kooperation: Aufgaben internationaler Ordnungspolitik (Baden-Baden: Nomos 2000). 41. On the conditionality of EU membership and its effects on conflict prevention, see International Crisis Group, EU Crisis Response Capability, 35f. 42. On TACIS and on the Euro-Mediterranean Partnership (Barcelona Process), see the relevant pages of the European Commission: http:// europa.eu.int/comm/external_relations. 43. An assessment of the Cotonou Agreement is offered by Tobias Debiel and Martina Fischer, Crisis Prevention and Conflict Management by the European Union: Concepts, Capacities and Problems of Coherence, Berghof Report, no. 4, Berghof Research Center for Constructive Conflict Management, September 2000, 10–16; see also International Crisis Group, EU Crisis Response Capability, 36. 44. See David P. Forsythe, Human Rights in International Relations (Cambridge: Cambridge University Press, 2000); Paul Gordon Lauren, The Evolution of International Human Rights: Visions Seen (Philadelphia: University of Pennsylvania Press, 1998); Philip Alston, ed., The United Nations and Human Rights: A Critical Appraisal (Oxford: Clarendon Press, 1992). 45. On the Rome Statute of the International Criminal Court, see http://www.un.org/law/icc. 46. The OSCE is a good example of an international actor that is dependent on the willingness of conflicting parties to cooperate. See Berthold Meyer, “Wie die OSZE gewaltsamen Konflikten vorbeugen kann,” in Perspektiven und Defizite der OSZE, eds. Dieter S. Lutz and Kurt P. Tudyka (Baden-Baden: Nomos, 2000), 65–80. 47. See Vivien Erasmus, “Community Mobilization as a Tool for Peacebuilding,” in Reychler and Paffenholz, Peacebuilding, 246–257. Two interesting case studies are presented by Janine R. Wedel, Collision and Collusion: The Strange Case of Western Aid to Eastern Europe, 1989–1998 (New York: St. Martin’s Press, 1998); and Roberto Belloni, “Civil Society and Peacebuilding in Bosnia and Herzegovina,” Journal of Peace Research 38, no. 2 (2001): 163–180. 48. On the importance of supporting peace constituencies, see Kumar Rupesinghe, “Transformation innerstaatlicher Konflikte: Von den ‘Problemlösungs-Workshops’ zu Friedensallianzen,” in Friedliche Konfliktbearbeitung in der Staaten- und Gesellschaftswelt, eds. Norbert Ropers and Tobias Debiel (Bonn: Stiftung Entwicklung und Frieden, 1995), 304–320. 49. For a good example, see the Comprehensive Development Framework approach of the World Bank: http://www.worldbank.org/cdf. 50. Preamble of the Charter of the United Nations: http://www.un. org/aboutun/charter. 51. On international organizations and conflict prevention, see Carment and Schnabel, Conflict Prevention: Path to Peace or Grand Illusion;

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Abram Chayes and Antonia Handler Chayes, eds., Preventing Conflict in the Post-Communist World: Mobilizing International and Regional Organizations, Brookings Occasional Papers (Washington, DC: Brookings Institution, 1996); Sonia Lucarelli, “Conflict Prevention in Post–Cold War Europe: Lack of Instruments or Lack of Will?” in International Security Challenges in a Changing World, eds. Kurt R. Spillmann and Joachim Krause (Berne: Peter Lang, 1999), 245–280; Martina Fischer, “‘Krisenprävention’: Modebegriff oder friedenspolitische Notwendigkeit?” in Krisenprävention: Theorie und Praxis ziviler Konfliktbearbeitung, Friedensbericht 1999, ed. Österreichisches Studienzentrum für Frieden und Konfliktlösung et al. (Chur: Ruegger, 1999), 61–68; Renata Dwan, “Divisions of Labour Between International, Regional and Subregional Organizations,” in Preventing Violent Conflict: The Search for Political Will, Strategies and Effective Tools, Report of the Krusenberg Seminar (Stockholm: SIPRI, 2000), 37–44. 52. See United Nations, “Prevention of Armed Conflict,” 10–31; United Nations, “‘We the Peoples’: The Role of the United Nations in the 21st Century,” Millennium Report of the Secretary-General, A/54/2000, 3 April 2000; Chandra Lekha Sriram and Karin Wermester, “Preventive Action at the United Nations: From Promise to Practice?” in From Reaction to Conflict Prevention: Opportunities for the UN System, eds. Fen Osler Hampson and David M. Malone (Boulder: Lynne Rienner, 2002), 381–398. 53. See International Crisis Group, EU Crisis Response Capability; Debiel and Fischer, Crisis Prevention and Conflict Management by the European Union; International Security Information Service, ed., Enhancing the EU’s Response to Violent Conflict: Moving Beyond Reaction to Preventive Action, Conference Report and Policy Recommendations, 7–8 December 2000, Brussels (ISIS Europe, January 2001). See also the conflict prevention website of the European Commission: http://europa.eu.int/ comm/external_relations/cpcm/cp.htm. 54. See Jonathan Cohen, Conflict Prevention in the OSCE: An Assessment of Capacities (The Hague: Netherlands Institute of International Relations [Clingendael Institute], 1999); Victor-Yves Ghebali and Daniel Warner, eds., The OSCE and Preventive Diplomacy, PSIO Occasional Paper, no. 1 (Geneva: Graduate Institute of International Studies, 1999); Dieter S. Lutz and Kurt P. Tudyka, eds., Perspektiven und Defizite der OSZE (Baden-Baden: Nomos, 2000); Wolfgang Zellner, “Die OSZE zwischen organisatorischer Überforderung und politischem Substanzverlust,” in Friedensgutachten 2000, ed. Forschungsstätte der Evangelischen Studiengemeinschaft et al. (Münster: Lit, 2000), 99–108. 55. A useful collection of essays on the activities of the Council of Europe is offered by Uwe Holtz, ed., 50 Jahre Europarat (Baden-Baden: Nomos, 2000). 56. On NATO/PfP, see Andreas Wenger, Christoph Breitenmoser, and Patrick Lehmann, Die Nato-Partnerschaft für den Frieden im Wandel:

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Entwicklung und Zukunft eines kooperativen Sicherheitsinstrumentes, Zürcher Beiträge zur Sicherheitspolitik und Konfliktforschung, no. 53 (Zurich: Center for Security Studies and Conflict Research, 1998). 57. United Nations, “Cornerstone of Collective Security.” 58. See Simon Chesterman, “Good Politics Are Local,” International Herald Tribune, 17 May 2002. 59. Meyer, “Wie die OSZE gewaltsamen Konflikten vorbeugen kann,” 68. 60. United Nations, Report of the Panel on United Nations Peace Operations, 21f. 61. For the UN mission in East Timor, see the UN website: http:// www.un.org/peace/etimor/etimor.htm. 62. For REACT, see the OSCE website: http://www.osce.org/react. 63. For the Canadian Resource Bank for Democracy and Human Rights, see http://www.canadem.ca; for the German program, see the website of the German Federal Foreign Office: http://www.auswaertigesamt.de/www/en/aamt/job/jobs_io/ausbildung_aa_html; for the “Swiss Expert Pool for Civilian Peace Building,” see the website of the Swiss Federal Department of Foreign Affairs: http://www.eda.admin.ch/sub_ expool/e/home.html. 64. See the website of the Stability Pact: http://www.stabilitypact. org/qsp_info.shtml. 65. For updated figures, see the electronic OSCE Handbook (see note 5); see also OSCE/Conflict Prevention Centre, Survey of OSCE Long-Term Missions and Other OSCE Field Activities, SEC.INF/279/01, 21 May 2001. 66. See Saferworld and International Alert, Preventing Violent Conflict: Opportunities for the Swedish and Belgian Presidencies of the European Union in 2001, December 2000. 67. For an assessment of conflict prevention by some non-European regional organizations, see various articles in Carment and Schnabel, Conflict Prevention: Path to Peace or Grand Illusion; see also Monde Muyangwa and Margaret A. Vogt, An Assessment of the OAU Mechanism for Conflict Prevention, Management and Resolution, 1993–2000, Africa Reports, International Peace Academy, 2000. 68. The figures are taken from Debiel and Fischer, Crisis Prevention and Conflict Management by the European Union, 12. Also of interest is the EU budget 2001 for external action, which provides shares of nearly 40 percent for preaccession aid, around 10 percent for both the Mediterranean/Middle East area and the Balkans, but only 5 percent for Asia, 4 percent for Latin America, and 1.5 percent for southern Africa. See International Crisis Group, EU Crisis Response Capability, 17. 69. OECD/Development Assistance Committee, Geographical Distribution of Financial Flows to Aid Recipients: Disbursements, Commitments, Country Indicators (Paris: OECD, 2001). 70. On the issue of NGOs and conflict (prevention), see Aall, “What Do NGOs Bring to Peacemaking?” in Crocker, Hampson, and Aall,

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Turbulent Peace. See also Pamela Aall, “Nongovernmental Organizations and Peacemaking,” in Managing Global Chaos: Sources of and Responses to International Conflict, eds. Chester A. Crocker and Fen Osler Hampson (Washington, DC: United States Institute of Peace Press, 1996), 433–443; Robert I. Rotberg, ed., Vigilance and Vengeance: NGOs Preventing Ethnic Conflict in Divided Societies (Washington, DC: Brookings Institution Press, 1996); Kenneth Hackett, “International NGOs in Preventing Conflict,” in Preventive Diplomacy: Stopping Wars Before They Start, ed. Kevin M. Cahill, revised and updated ed. (New York: Routledge and the Center for International Health and Cooperation, 2000), 273–285. See also Gunnar M. Sorbo, Joanna Macrae, and Lennart Wohlgemuth, NGOs in Conflict: An Evaluation of International Alert, CMI Report, no. 6 (Bergen: Chr. Michelsen Institute, 1997). 71. On the advantages of NGOs in conflict prevention, see Carnegie Commission on Preventing Deadly Conflict, Preventing Deadly Conflict, 111–114; Matthies, Krisenprävention, 77. 72. See Norbert Ropers, “Enhancing the Quality of NGO Work in Peacebuilding,” in Reychler and Paffenholz, Peacebuilding, 520–532. 73. On the issue of NGO legitimacy and accountability, see L. David Brown et al., “Globalization, NGOs, and Multisectoral Relations,” in Governance in a Globalizing World, eds. Joseph S. Nye and John D. Donahue (Washington, DC: Brookings Institution Press, 2000), 271–296. 74. Kevin Clements, “Engaging Civil Society in Conflict Prevention: Challenges for the EU,” in Enhancing the EU’s Response to Violent Conflict: Moving Beyond Reaction to Preventive Action, Conference Report and Policy Recommendations, 7–8 December 2000, Brussels, ed. International Security Information Service (ISIS Europe, January 2000), 8. 75. See David Hulme and Michael Edwards, eds., NGOs, States and Donors: Too Close for Comfort? (Houndmills, England: Macmillan, 1997); Alan Fowler, “NGO Futures: Beyond Aid: NGDO Values and the Fourth Position,” Third World Quarterly 21, no. 4 (2000): 589–603. 76. See Cyrus Vance and Herbert S. Okun, “Creating Healthy Alliances,” in Cahill, Preventive Diplomacy: Stopping Wars Before They Start, 165–171. 77. Many insights into the problems of coordinating international peacebuilding operations can be gained from a recent case study on the West Bank and Gaza. See Rex Brynen, A Very Political Economy: Peacebuilding and Foreign Aid in the West Bank and Gaza (Washington, DC: United States Institute of Peace Press, 2000). 78. United Nations, “Prevention of Armed Conflict,” 31. 79. European Union/Commission of the European Communities, “Building an Effective Partnership with the United Nations in the Fields of Development and Humanitarian Affairs,” Communication from the Commission to the Council and the European Parliament, COM(2001)231 final, 2 May 2001. 80. For the Platform for Cooperative Security, see the website of the OSCE: http://www.osce.org/ec/platform.

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81. See Heiko Borchert, “Managing Peace-Building More Professionally—Improving Institutional Co-operation,” in OSCE Yearbook 1999, ed. The Institute for Peace Research and Security Policy (BadenBaden: Nomos, 2000), 407–419; Heiko Borchert, Europas Sicherheitsarchitektur: Erfolgsfaktoren—Bestandsaufnahme—Handlungsbedarf, Nomos Universitätsschriften Politik, no. 102 (Baden-Baden: Nomos, 1999), esp. Chapter 9. 82. For UN cooperation with NGOs, see the UN website: http:// www.un.org/partners/civil_society/home.htm; see also Thomas G. Weiss and Leon Gordenker, eds., NGOs, the UN, and Global Governance (Boulder: Lynne Rienner, 1996). The World Bank runs a website on its cooperation with civil society actors: http://wbln0018.worldbank.org/essd/ essd.nsf/NGOs/Home. For Norway, see van Walraven, Conflict Policy in Some Western Countries, 9–12; for the Canadian government/NGO consultations, see http://www.humansecurity.gc.ca/canadiens_consultationse.asp; for the Center for Peacebuilding in Switzerland, founded by the Swiss Federal Department of Foreign Affairs and Swiss NGOs, see the website of the Swiss Peace Foundation: http://www.swisspeace.ch/html/ navigation/fr_program_koff.html. Just how delicate intersector cooperation between public and civil society actors can be is aptly illustrated by the Conflict Prevention Network (CPN) of the EU, a policy-oriented tool with over forty institutional partners and experts at the disposal of the European Commission and the European Parliament. Founded in 2000, the much-praised CPN project was already discontinued at the end of 2001, due to insurmountable differences as to its role and independence. See the CPN website, located at the German Institute for International and Security Affairs (Stiftung Wissenschaft und Politik): http://www. swp-berlin.org/cpn. 83. See Colin Knox and Pádraic Quirk, Peace Building in Northern Ireland, Israel and South Africa: Transition, Transformation and Reconciliation (Houndmills, England: Macmillan, 2000). 84. On CIMIC, see Michael Pugh, “Civil-Military Relations in International Peace Operations,” in Peace Support Operations: Lessons Learned and Future Perspectives, eds. Kurt R. Spillmann, Thomas Berneauer, Jürg M. Gabriel, and Andreas Wenger, with the assistance of Yvonne Rosteck (Berne: Peter Lang, 2001), 109–134. 85. See Carnegie Commission on Preventing Deadly Conflict, Preventing Deadly Conflict, 155–162. 86. See the website of the Office of the High Representative in Bosnia and Herzegovina: http://www.ohr.int. For the Special Coordinator of the Stability Pact for South Eastern Europe, see http://www. stabilitypact.org. 87. OECD/DAC, DAC Guidelines, 96–100. 88. Two positive examples of joint needs assessments are the Joint Assessment Mission to East Timor (which includes technical specialists from donor countries, UN agencies, the European Commission, the World Bank, and the Asian Development Bank) and the Afghanistan

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Preliminary Needs Assessment (prepared by the United Nations Development Programme, the World Bank, and the Asian Development Bank). See the website of the World Bank: http://www.worldbank.org/ html/extdr/regions.htm. 89. See Lund, Preventing Violent Conflicts, 169–210. 90. United Nations, “Role of the United Nations in the 21st Century,” 70. 91. See the website of the UN Interim Administration Mission in Kosovo: http://www.unmikonline.org. 92. For a critical assessment of the Stability Pact, see Mabel Wisse Smit, “The Jury Is Still Out on the Stability Pact for South Eastern Europe,” Helsinki Monitor 11, no. 2 (2000): 7–19. 93. A recent study by the aid agency Caritas Switzerland on the roles of individual actors in the realm of conflict prevention exemplifies the distrust of many NGOs vis-à-vis the business community. The study explicitly excludes the corporate sector as a potential component of what it calls “strategic alliances for peace,” mainly on the grounds that companies cannot yet be held politically accountable for their negative impacts on conflict. See Caritas Schweiz, Allianzen für den Frieden: Ein Positionspapier von Caritas Schweiz zu Krisenprävention, Konfliktbearbeitung und Friedensförderung in der Internationalen Zusammenarbeit, Positionspapier, no. 8 (Luzern: Caritas-Verlag, 2000), 75–77. 94. See Chapter 1, note 12. 95. On these skills, see the Business and Peacebuilding program of the Institute for Multi-Track Diplomacy: http://www.imtd.org. 96. On the issue of legitimacy, see Virginia Haufler, “Is There a Role for Business in Conflict Management?” in Crocker, Hampson, and Aall, Turbulent Peace, 670.

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4

Bringing In the Business Sector

Business and Conflict Prevention The effectiveness of international efforts in conflict prevention could benefit considerably from the involvement of the business sector. But what does the private actor have to gain from joining international preventive endeavors? This chapter looks at the relationship between conflict and business from a corporate point of view. Yet highlighting the contributions that the business community could make to conflict prevention will not suffice to convince companies to become involved. Rather, we must demonstrate to business leaders that it is in their companies’ own interests to contribute to preventive efforts. Only by pinpointing these corporate interests can we realistically hope that commercial actors will join the public sector and NGOs, thus making the prevention of violent conflict an issue of global, trisector governance. Any attempt to analyze the interests of the business sector in conflict prevention raises some important questions: What is the link between business and conflict today? What is the cost to business of political violence and instability? How does the new paradigm of “corporate social responsibility” relate to the notion of conflict prevention? And, bearing these questions in mind, what kinds of companies could corporate involvement apply to? In this chapter, we present two reasons for corporate involvement in conflict prevention. First, there are convincing economic reasons for corporations to engage in conflict prevention. Confronted with relentless competition and increasing pressure to 99

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succeed, corporations are constantly searching for new markets, and many of these are in countries troubled by severe intrastate conflicts. From a business point of view, the political instabilities in many developing and transition countries have meant lost market opportunities and/or markedly increased business costs. The second argument relates to the increasing need for companies to protect their reputations. The business sector has grown considerably in power and influence in recent years. Consequently, corporations are now under increasing public pressure to do business in a socially and ecologically responsible manner. “Naming and shaming” campaigns against unethical business practices pose a growing threat to brand value and consumer loyalty, and thus to profits. Corporate social responsibility has in many ways become an obligation, and conversely it has also become a new and potentially lucrative dimension to business practice. Corporate conflict prevention can thus be seen as a promising and convincing component of any CSR strategy. We conclude that conflict prevention should not be seen as relevant only to large transnational companies. On the contrary, most enterprises, irrespective of their size, their geographic area of activity, and their commercial focus, have good cause to deal with the matter. Further, industries that are more likely to cause or exacerbate conflict, such as the extractive sector, have an obvious obligation to become involved in conflict prevention. For many other corporations, contributing to the advancement of peace means securing business opportunities and demonstrating corporate citizenship. What differs from company to company is merely the scale and the kinds of preventive contributions they can and should make—an issue we address in Chapter 5. Corporate Conflict Prevention: The State of the Art It is striking how little attention has been paid to the issue of business and conflict prevention. While there is a vast and growing body of literature on related topics, such as damage done by various companies and the new paradigm of corporate social responsibility, the idea that corporations might make positive contributions toward averting conflict has drawn little attention. This might seem surprising, especially given the ongoing debates 100

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about new forms of global governance and the expanded role of the business sector on the one hand, and the large, untapped preventive potential of corporations on the other. That said, a few notable steps have been taken in recent years in this area, and there are now several projects that, although they differ considerably in their scope and approaches, all deal with a potential positive link between the commercial sector and the avoidance or stabilization of conflict—giving rise to the hope that a new strand of research is about to emerge. In particular, the Prince of Wales International Business Leaders Forum (IBLF) has done pioneering work in this field and deserves credit for seminal preliminary research and important public advocacy on the topic. The IBLF, a London-based international NGO dedicated to the promotion of socially responsible business practices, works with some sixty corporate members, as well as public sector actors and civil society organizations, on a variety of policy issues and is active in over thirty emerging and transition economies. Together with International Alert, the IBLF runs a specific program, Business and Peace, in which it seeks ways for corporations to contribute to peace in conflict-prone countries. While a major focus is on helping companies avoid causing conflict in their core business activities, strategies for proactive engagement in conflict prevention are also considered.1 Further, the IBLF recently set up the Conflict and Security Resource Centre and together with the British government cohosted its Business and Peace conference. Most importantly, however, in 2000 the IBLF, International Alert, and the Council on Economic Priorities published the important report The Business of Peace: The Private Sector as Partner in Conflict Prevention and Resolution. Although not all findings of this report are entirely convincing—for example, we question the value of the notion that the business sector should take part in human rights advocacy— the report is nevertheless an invaluable source of material, including rare case studies and concrete examples of corporate peacebuilding.2 The Institute for Multi-Track Diplomacy (IMTD) is another NGO that is exploring the opportunities for the commercial sector in conflict prevention. With its Business and Peacebuilding program, the IMTD aims primarily at involving the business community in long-term mediation activities in order to resolve 101

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specific conflicts. To that end, it has established the International Business Council and has conducted field research in Cyprus, South Africa, the Middle East, and Northern Ireland; and in 2000, it began a series of seminars—the Business and Conflict Resolution Executive Seminars—to engage business leaders in dialogue on peace.3 At the academic level, the Institute for Peacebuilding and Development (IPD) was set up at George Washington University in 2001. The institute focuses on the social and economic rebuilding of war-torn societies and on the possible roles of NGOs and the business sector in such processes.4 The IPD’s codirectors, Allan Gerson and Nat J. Colletta, recently published a monograph, Privatizing Peace, in which they call for a new partnership between the UN, the World Bank, and the business community to promote conflict management and peacebuilding.5 Virginia Haufler, who directed a project on the role of the business sector in international affairs at the Carnegie Endowment, has also published an article on how corporations could engage in conflict management.6 Also worth mentioning are three consulting companies that focus on the role of corporations in conflict. The International Peace Forum (IPF) provides services for fostering initiatives in international conflict resolution and peacebuilding. An IPF program that investigates the intersection between business and peace undertakes research, designs training programs for corporations, and hosts roundtables on the issue. In April 2000, the IPF co-organized the major conference Business and International Security, which explored the challenges that companies face when working in partnership with other actors in conflict situations.7 Political and Economic Link Consulting (PELC) specializes in business and armed conflict. Based on its research on corporate responses to conflict in developing countries, PELC consults public sector actors and corporations. In 1999, for example, on behalf of the U.S. Agency for International Development (USAID), it examined how Sri Lanka could attract more foreign trade and investment despite its civil war.8 There is also the Collaborative for Development Action, a consulting firm concentrating on issues surrounding humanitarian assistance. Under the direction of Mary B. Anderson, author of an important study on how aid can cause harm,9 the company runs the Corporate Engagement Project,

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which seeks to assist corporations develop practical management tools for operating in conflict zones.10 Finally, it is worth pointing out that in the public sector, some initial work on corporate contributions to averting violent conflict has also been undertaken. The major impetus here has come from development agencies, which, facing shrinking resources, have for several years sought public-private partnerships (PPPs). It is not surprising that the influential Development Assistance Committee of the OECD, in a recent supplement to its 1997 guidelines on conflict, peace, and development, inserted for the first time a short chapter on business and economic peacebuilding, pointing to the large potential for transsector cooperation.11 Another public sector initiative was launched by the UN Global Compact (discussed later in this chapter), which set up a policy dialogue with business and NGO representatives on the role of the private sector in zones of conflict.12 The projects outlined above by no means represent a broad common interest in the topic. Research interest is still sparse, and, as shown in Chapter 3, so far neither the public sector, nor the business sector, nor NGOs have recognized the relevance and potential of corporate involvement in conflict prevention. One reason why state actors have developed a growing interest in early preventive action are the enormous costs, at the local and international levels, of the tragic intrastate conflicts in Africa and the Balkans during the 1990s. Strikingly, the same argument holds true for the corporate community. The costs to businesses of conflict may have a different origin than the costs to states and international organizations, but they are comparable in that they are detrimental to the interests of the entrepreneurial sector. Business, therefore, has as great an interest in stability and the peaceful transformation of conflict as public sector actors do.

The Business Stake in International Stability and Human Security The examination of the relationship between business and stability is intrinsically linked to an investigation into the link between business and conflict. This link has changed considerably in the

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past three decades. For many corporations, the general shift from a national economic focus to an international and global economic focus and their own increasing geographic diversification of interests and operations have meant that they tend to find themselves confronted with conflict situations much more frequently. These days, businesses are more likely to be adversely affected by the transnational reverberations of faraway conflicts, and they also are likelier to have business interests in conflictprone areas. As a result, the link between the commercial sector and conflict is complex and not, as some would have it, simply and straightforwardly negative. Admittedly, there is a growing danger that a corporation will cause conflict, and we have already pointed out some well-known examples of companies that have caused harm to local communities; conversely, business these days is also much more exposed to the detrimental effects of conflict than in the past. Thus, the lesson for business leaders here is that they need a much greater understanding of the dynamics involved in conflict causation and conflict prevention and their role in both. Their ability to plan business strategies with an awareness of all aspects of conflict will increasingly be key to their long-term economic success. The Corporate Challenge of Intrastate Conflicts In the past decade, we have witnessed an increased connection between business and conflict. While corporate interests have spread around the world, intrastate conflicts have caused much political instability in developing and transition countries. Some of these conflicts, especially those in the Balkans, aroused worldwide attention, yet many more have remained the concern primarily of local and regional actors. In combination, these intrastate conflicts pose a formidable challenge to the business sector. This challenge is relevant to the rapidly growing number of companies that already do or intend to do business in developing or transition countries. Markets in these countries have become attractive and more important for the commercial sector in recent years, since, in theory, business there has become easier and more profitable, thanks to the rapid processes of liberalization and 104

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privatization in these countries and the considerable business potential of the new information technologies. These potential markets have also become increasingly important to the success of companies, which now face enormous pressures to secure their competitiveness by expanding market share. Sufficient finance for research and development—so vital today to any company that wishes to stay ahead of competitors in a business environment marked by production processes that are increasingly dominated by technology—often requires growth that cannot be achieved without an expansion of the company’s market.13 Many business sector actors who face growing market pressure and who are searching for promising business opportunities have in the past few years increased their activities in or expanded their activities to nonindustrial countries. Thus, total net longterm private resource flows to developing and transition countries, according to the World Bank, have nearly quadrupled in the past decade, increasing from U.S.$62 billion in 1991 to U.S.$225.8 billion in 2000. Foreign direct investment (FDI) during the same period has increased nearly fivefold, from U.S.$35.7 billion to U.S.$166.7 billion.14 In stark contrast, official aid flows received by developing and transition countries in 2000 were 18 percent below the 1991 level, falling from U.S.$49.5 billion to U.S.$40.7 billion. Described as a share of donors’ gross national income, official development assistance dropped from 0.33 percent to 0.22 percent in the same period. Only five donor countries in 2000 reached the UN target of 0.7 percent that was supported by the Group of Seven countries at the Earth Summit in Rio in 1992.15 It is unrealistic to assume that the March 2002 announcements of the EU and the United States that they would boost their aid spending will change this overall picture significantly. These pledges, made after the terrorist attacks of September 11 and the high expectations on donors at the Monterrey conference Financing for Development, might be realized in a short-term increase of official flows of funds. They are unlikely, however, to reverse the longterm trend of decreasing official aid.16 The massive increase in private capital flows to developing and transition countries manifests the enhanced significance of these countries to the business community. Parallel to this economic trend, however, is a “conflict trend.” An overwhelming majority of 105

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the forty or so current conflicts are taking place in the nonindustrial world, particularly in Africa, Central Asia, East Asia, and South Asia.17 These trends, taken together, suggest that the growing interest of corporations to do business outside the OECD area increases the likelihood of corporations having to deal with situations brought about by political instability and uncertainty. Growing Vulnerability to Political Violence and Asymmetrical Threats How has the business sector reacted to the challenge of conflict so far? Corporations have shown a tendency to tackle the issue on a case-by-case basis. Usually a company will undertake an internal risk assessment to decide whether to go into a conflict-prone country—or if the company is already operating in a conflictprone country, to decide whether to stay. Regardless of whether a company eventually opts to stay out and accept the ensuing opportunity loss or to go in and accept the additional business costs, its corporate interests are in any case likely to be severely hampered by intrastate conflicts. As a consequence, business so far has limited its increased international activities to a few nonindustrial countries (as is discussed in more detail below). It will become ever more difficult for companies to focus their risk assessments on specific conflicts and undertake their evaluations independently from other international actors. The global economic reverberations of the terrorist attacks of September 11, 2001 have illustrated just how vulnerable to conflict business is and how little geography and national borders matter in attempts to protect corporate interests from the consequences of such globally calamitous events. Extremism, hatred, and despair in failing states can become the basis for asymmetrical threats against the economic centers of the world, with negative effects to the business community around the globe. Although the terrorist attacks on New York and Washington were not specifically directed against the business community but against liberal society as a whole, the damage they caused to corporate interests was enormous. The attacks had a substantial direct economic impact, namely a tragic loss of employees and customers and the destruction of property. More than 3,000 people were killed, and local damage around the former World Trade 106

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Center alone was estimated at U.S.$40 billion.18 However, from an economic point of view, the indirect repercussions are even more far-reaching and are bound to reverberate through the world economy for a long time. The sense of uncertainty und vulnerability after the attacks among consumers and business leaders accelerated a downturn in the economy and put many companies under great financial strain. Corporations’ perception of risks tends to be higher these days, resulting in deferred investment decisions and a greater reluctance to trade. Also, the costs of many business operations have risen markedly since the attacks. Many companies have taken measures to increase security to better protect their staff, property, and information assets. Many also find maintaining client and supplier networks more complicated because, for example, of tighter border security. Finally, commercial insurance premiums have increased sharply, and Morgan Stanley analysts predict that total insurance costs to U.S. companies will increase from U.S.$148 billion in 2000 to between U.S.$210 billion and U.S.$240 billion in 2002.19 The economies of the industrial world are not the only parties to have been severely shaken by September 11. Many small entrepreneurs in the developing world face a steep drop in demand and falling commodity prices. A particularly large number of jobs in nonindustrial countries have been lost because of the slump in tourism. Undoubtedly, a negative trend was discernible in these countries well before September 11. However, the downward trend was sped up considerably by the terrorist attacks. The World Bank estimated that an additional 10 million people have fallen below the poverty line of U.S.$1 a day as a result of the economic aftershocks of the events—and this has further aggravated the situation in many conflict-prone developing and transition countries.20 The terrorist attacks of September 11 have forcefully brought home to the business sector the fact that it is as vulnerable to political violence and asymmetric threats as all other facets of society. The business community no longer perceives itself as a world apart from politics; rather, the business sector is now more closely linked to the public sector than ever before. Business can no longer set itself apart from the (supposedly public affairs) issues of conflict prevention and political risk management. Corporations are now forced to cease viewing security as a private good tangential only 107

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to the protection of their own operations. It is vital to their interests that they start investing in the wider concept of human security. By joining efforts to tackle the conditions in which states like Afghanistan fail, corporations can contribute to the reduction of political violence and foster a climate of stability, thereby limiting both their extra costs and their loss of market opportunities incurred by violent conflict.21 The Extra Costs of Conflict The financial loss and additional costs brought about by conflict vary considerably, depending on factors such as the geographic proximity of a firm to the conflict, the severity of the conflict, and the type of industry and investment structure the company represents.22 However, we can identify at least four kinds of costs and negative ramifications that corporations in conflict areas must take into account.23 There is, first, the material damage a company may suffer in the course of violent conflict. Plants, machinery, and other private property such as oil pipelines are constantly at risk of being damaged or destroyed. Evidence that in intrastate conflicts private firms have increasingly become the deliberate target of destruction abounds. In Bosnia and Herzegovina, for example, 45 percent of all industrial plants and 75 percent of all oil refineries had been destroyed by the end of 1995.24 Second, security and risk management costs are likely to remain permanently high. Often, private security companies are hired to protect employees and assets. Many firms also run specialized emergency training programs. Insurance premiums are extremely high in conflict-prone countries—if insurance coverage is available at all. Overall, security costs in an environment of conflict can be up to 9 percent of a company’s budget, as was the case, for example, for oil companies in Algeria.25 A third cost increase relates to personnel. Labor markets can be disarticulated in times of conflict, and companies can suddenly lose staff due to military recruitment, displacement, or even violent death. Also, a serious brain drain may occur, when large numbers of skilled staff are forced or decide to emigrate. Other obstacles can include absenteeism, discord, and discrimination within the workforce—or even kidnapping, as occurred in Western corporations in Chechnya and Nigeria in recent years.26 108

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Finally, the general business environment in a conflict area can be seriously damaged. A weakened government and ineffective institutions pose major hindrances to the free flow of business, as does a damaged public infrastructure, especially in the field of transport and communications. Local markets can be disrupted; formal organizations, such as banks, can be put out of business; the trust between economic agents can be lost; and a switch of the economic system to subsistence and informal activities is an everpresent danger. Further, conflicts often provoke international repercussions, which can greatly disadvantage companies doing business in these areas. Sanctions and embargoes are common international responses to conflict, as is the reserve with which international capital markets approach companies in such countries, frequently leaving them with insufficient capital. Although precise figures of the costs of conflict to businesses are difficult to ascertain, the costs are without a doubt enormous. The costs of the civil war in Sri Lanka to the business community, for instance, have been estimated at U.S.$2.2 billion.27 Economic losses from the sixteen-year civil war in Mozambique were considered to be as high as U.S.$15 billion, with industries so badly damaged that postwar production was only about 20 percent to 40 percent of prewar capacity.28 Such additional costs, together with the high risk and uncertainty that companies face in conflictridden countries, present a compelling argument in favor of corporate engagement in efforts to prevent violent conflict and (re)build stability. The argument becomes even stronger when we consider the many long-term negative effects that conflict is likely to have on business operations. Many of the difficulties listed above will not simply disappear when the violence comes to an end. Postconflict reconstruction in the socioeconomic field is a delicate and long-term endeavor—as postconflict reconstruction is on the political level—and the negative repercussions of conflict are likely to trouble corporations for years after the successful negotiation of any peace accord. Loss of Market Opportunities If many companies today are confronted with the challenge of operating in conflict situations, we may reasonably assume that many more have at some stage decided against going into conflict-prone 109

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countries, despite their need to expand their markets. There are strong indications that corporations are highly conflict-sensitive in their choice of business locations or, conversely, that conflict poses a considerable barrier to private capital movement. Even though private capital is increasingly moving into developing and transition economies, that trend is noticeably volatile. The instability and uncertainty that accompanied the financial crises between 1997 and 1999, for example, brought about a remarkable temporary redirection of many private capital flows to the industrial world from less stable economies. While the relative share of nonindustrial countries in global FDI went up sharply, from 22.3 percent to 36.5 percent, between 1991 and 1997, it plummeted to 18.9 percent in 1999. Another slump can be expected in the wake of September 11, although the impact of the terrorist attacks is likely to be less spectacular.29 Once we analyze the trend regarding FDI in detail and break down the overall figures for developing and transition countries on a country-to-country basis, it becomes apparent just how concentrated international production in the nonindustrial world still is. Of all FDI going to these countries in 2000, the forty-seven least developed countries (LDCs) combined received only 2.5 percent, whereas the top ten countries secured the lion’s share of 74 percent.30 To be sure, conflict is by no means the only factor in the conspicuously uneven distribution of FDI in nonindustrial countries. Other factors, such as poverty, the lack of appropriate human resources, lack of infrastructure, and insufficient technical progress, also play an important role. Yet all too often, ongoing conflict brings about or accentuates other deficits, thus becoming a primary cause of the general socioeconomic underdevelopment of LDCs. It is no coincidence that those eleven LDC countries whose real gross domestic product per capita declined by more than 3 percent a year between 1990 and 1998 and who are among those countries who rate the lowest on human development indices all experienced severe armed conflicts and internal instability during the 1990s. Companies have little commercial incentive to invest in conflict-affected countries where the average life expectancy is under fifty years (compared to seventy-eight in OECD countries), the mortality rate of children under five can be as high as 30 percent, and disrupted school systems do not allow for adequate literacy rates.31 110

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If the above implies that many corporations refrain from seizing market opportunities because of conflict, then the business sector has every reason to contribute to the advancement of peace and stability. As the Institute for Multi-Track Diplomacy has put it so succinctly, “Expanding peace means expanding markets, and expanding markets translates into greater profits for business.”32 Business cannot succeed in societies that fail. And unlike public sector actors, the interest of business in stability is not limited to what states call their “strategic environment.” Rather, corporations, and transnational corporations in particular, need worldwide stability. Worldwide stability alone can secure them access to those new markets that will allow them to enhance their profits. And worldwide stability alone can do justice to their increasingly transnational business activities.

Conflict Prevention: A Powerful Manifestation of Corporate Social Responsibility The case for businesses to become involved in conflict prevention is supported not only by the manifest corporate stake in international stability. The growing criticism and pressure that corporations face today concerning their role and power in a globalized economy is a second imperative to their involvement. The argument that the expansion of corporations in an ever more liberalized world must be accompanied by a new and broad concept of business responsibility has gained much support in recent years. Calls for socially and ecologically responsible business practices are legitimate, and they are set to become increasingly relevant from a commercial point of view. While there are many ways in which corporations can prove themselves to be socially responsible, an engagement in efforts to prevent violent conflict is surely a most promising and rewarding endeavor. The power of the business sector has risen sharply in recent decades. Economic liberalization, together with technological developments that diminish the costs of communications and transport, have given rise to economic forces that have reduced the capacity of the state to control the world economy, fostering the power of the market instead.33 The instant mobility of capital 111

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across borders and currencies, for example, has severely undermined the ability of national authorities to control the institutions and markets that create and trade the credit instruments that are so vital to the “real economy.” Similarly, transnational business enterprises, whose intrafirm trade may constitute as much as a quarter or even a third of international trade, can move profits and losses from one area of operation to another with ease (“transfer pricing”). This potentially allows them to evade both national taxation policies and international attempts at trade regulation.34 Growing corporate power has meant that activists today monitor and pressure companies as much as they did authoritarian governments in earlier decades.35 The business community increasingly finds itself pilloried by the antiglobalization and antilogo movement and is frequently accused of being responsible for the drawbacks of globalization. Obviously, the activists have very diverse concerns, including the exploitation of the South, the deprivation of the environment, the democracy deficit of international organizations, and job cuts. Yet most activist groups share the view that globalization is driven by the narrow interest of corporations and not by the people. Many of them identify the business sector, together with international financial institutions, as the driving force behind globalization; hence, corporations represent a logical target of protest—and, increasingly, of violence.36 More moderate are those who take a less negative stance toward globalization, acknowledging its potential benefits but wanting to ensure that corporations do not abuse their increased influence and power. The major concern of these groups is that enterprises, despite a lack of globally shared regulations, operate responsibly and be accountable for their actions. They believe that commercial actors should not perform toward a single financial bottom line but toward a triple bottom line that includes social and environmental concerns. In other words, they demand that business leaders cease to focus exclusively on shareholder value but, in addition, take into account the concerns of stakeholders such as employees, customers, local communities, public authorities, NGOs, suppliers, and creditors. They hold that the overall performance of a company from this point of view should be measured according to its combined contribution to economic prosperity, social capital, and environmental sustainability. Wealth creation is thus placed in the wider context of what is 112

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termed corporate social responsibility, a concept that is not new but that has recently come to the forefront of debates.37 The Legitimacy and Relevance of CSR How should the business community respond to this growing criticism? There is no doubt that it is very difficult, if not impossible, to accommodate those who fundamentally oppose the process of globalization. Having said that, it would certainly be wrong to simply ignore their views. Even though many assertions of antiglobalists are not conclusively supported by evidence, critics of globalization undeniably have a point when they maintain that global integration is far from global but is a highly uneven and selective phenomenon. While most industrial countries and a few “globalizers” in the developing world, such as India, China, Vietnam, Uganda, and Mexico, are benefiting significantly from a more liberal international system, a large majority of developing countries face the threat of further marginalization. Trade in these countries has diminished in relation to national income, economic growth has been stagnant, and poverty has in some cases risen sharply. Globalization, at least in the short term and in some parts of the world, appears to have accentuated wealth disparity between the most and least developed countries, contrary to the promise from some quarters that it would reduce such disparity.38 It is in the interest of the business sector to acknowledge and support the equitable distribution of the benefits of globalization. Companies can do this by responding positively and resolutely to the demand for corporate social responsibility. Indeed, taking a comprehensive CSR perspective is a legitimate move and is of utmost importance to the corporate sector. It is legitimate for two reasons. From a global governance point of view, integrating social and ecological concerns into business strategies is a necessary and important corporate contribution to efforts at moving from “ungovernance”39 to some form of governance in these fields. From a corporate governance point of view, CSR is a convincing stakeholder model in the ongoing debate about defining adequate new forms of relationships and decisionmaking within a company, as well as between a company and its environment.40 Even though neither of these two governance perspectives is usually explicitly associated with CSR, it seems to us that this is what the new paradigm is essentially about. 113

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But why do we judge CSR to be of such importance to the business sector? It seems realistic to assume that the failure of the commercial community to live up to CSR expectations is likely not only to hurt corporate profits but also to further the cause of the antiglobalization movement. The result of such a development could well be a major reversal of globalization, with undoubtedly negative consequences for business and for the economy at large. The notion of CSR has become so prominent recently that business has little choice but to take up the issue if it wants to preserve both consumer loyalty and the current international liberal order. It is remarkable how fast the idea of CSR has caught on with many different actors. NGOs, public sector actors, academics, and also business organizations and a growing number of individual corporations have already embraced the new paradigm. Indeed, David Henderson, one of the few critics of CSR who argues that expanding the responsibility of companies impairs their performance and undermines the market economy, is perfectly right in his observation that “in the past history of debates concerning the role and social responsibility of business, no other approach, no other way of thinking, has won such broad support, whether among businesses or more generally.”41 Not surprisingly, NGOs and consumer organizations were the first to raise the issue and are largely responsible for the current CSR momentum. While some NGOs, like the International Business Leaders Forum, seek to assist the business sector in mainstreaming a CSR perspective into business strategies, many others concentrate on assessing whether or not the business operations of corporations cause harm to local communities, employees, and the environment. To that end, they monitor enterprises around the globe and, through publicity campaigns, bring to the attention of consumers what they see as acts of corporate misconduct. Such “naming and shaming” campaigns of NGOs can have very negative effects on the profits of companies. Nike, for example, faced well-orchestrated protests in eleven countries and fifty U.S. cities in October 1997 over allegations that it was using child labor, worker intimidation, and subsistence pay rates in Pakistan.42 Shell was confronted with public outrage and consumer boycotts in the wake of the execution of eight Ogoni leaders in 114

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Nigeria, after NGOs had accused the company of irresponsible social and environmental policies in its African business operations.43 Numerous other cases could be listed here concerning well-known corporations such as De Beers, Heineken, Nestlé, PepsiCo, Premier Oil, and Talisman Energy.44 All these examples underline how effective NGOs can be in targeting corporations and potentially causing them high reputation costs. States and international organizations also acknowledge the need to ask corporations to be more responsive to the social and ecological consequences of their operations. But in addition, they view CSR as a concept for establishing PPPs in order to jointly tackle those challenges where the skills and resources of the business sector can effectively complement public actor efforts.45 Perhaps the most active proponent of CSR so far has been UN General-Secretary Kofi Annan, who in 1999 set up the Global Compact Initiative, which encourages business leaders to live up to their new responsibilities and enter into a partnership with the UN.46 Two other public sector actors that have been particularly active in the realm of CSR are the OECD and the European Union,47 but many more have also taken up the issue.48 Academic projects and programs dealing with issues such as business ethics and stakeholder approaches are mushrooming as well, a notable example here being the Corporate Citizenship Unit of the Warwick Business School.49 Most remarkably, however, a growing number of business actors are themselves promoting the principle of corporate social responsibility. Many strategic company statements today refer to the notion of CSR. Moreover, there are now several business organizations whose core mission is to advance the ideas of CSR in the corporate sector. The most prominent is the World Business Council for Sustainable Development (WBCSD), a coalition of some 150 TNCs that share a commitment to environmental protection, social equity, and economic growth. Under the leadership of its president, Stephan Schmidheiny, who during the course of the Earth Summit of 1992 published an important study on sustainable business management,50 the WBCSD has become a highly influential body, comprising many top business actors such as ABB, AT&T, General Motors, Monsanto, Nestlé, Rio Tinto, Sony, and Volkswagen.51 Another important business organization is Business for Social Responsibility, a U.S.-based global resource for corporate 115

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actors willing to support CSR that has more than 1,400 members and affiliates.52 CSR Makes Business Sense What this broad support of CSR by business and nonbusiness actors alike demonstrates is that corporate social responsibility is much more than an ethical duty for a company. It is above all about the preservation of corporate reputation and brand value and is thus about profit. If a company ignores CSR considerations in its business practices, it is likely to alienate consumers and other constituencies and suffer significant reputation damage, which can have far-reaching negative consequences. The intense competition that corporations face today has rendered a good reputation a key corporate asset. The social acceptance and trust awarded to a company by the consumer has become an essential backbone of brands—that is, of those tools with which companies seek to retain the loyalty of their customers. Good reputation has therefore developed into a salient element of competitive advantage, and competing for the reputation of a good “corporate citizen” will increasingly affect key business features, such as sales to customers, the ability to attract and motivate employees and business partners, and the relationship to public sector actors.53 The view that CSR makes sound business sense is underlined by empirical evidence. The Dow Jones Sustainability Index (DJSI), for instance, clearly outperformed the Dow Jones Global Index (DJGI) between 1996 and August 2001. The DJSI, consisting of the top 10 percent of companies, in twenty-one countries, that are perceived as leaders in sustainable development, had an average annual return of 15.8 percent, compared to 12.5 percent on the DJGI.54 Several empirical studies have supported the view that “stakeholder-balanced” companies show higher growth rates than those companies that are shareholder-only focused.55 CSR therefore increasingly represents both an obligation and a commercial opportunity for the business sector. Since CSR is certain to become an important part of the financial bottom line, corporations are well advised not to look at it as merely an optional extra but to treat it as a core business value and an integral part of their business management. Corporate citizenship today is all too often still “an image-oriented window-dressing strategy, a 116

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fig leaf of a corporate culture that is not everyday practice,” to cite Eberhard von Koerber.56 Rather than perceiving CSR as a mere public relations issue, it is in the self-interest of companies to approach CSR as an important investment. CSR is a leadership challenge for CEOs, chairs, and board directors, a challenge that requires extensive adaptations to structures and processes in order to enable the mainstreaming of a social responsibility perspective into daily business operations.57 The CSR task for the commercial community is a tough one. In addition to satisfying their shareholders, enterprises are now required to take into consideration a seemingly ever growing number of stakeholders and convince these of their corporate responsibility—and business leaders must, at times, feel as though they are fighting windmills. But the Rubicon has definitely been crossed, and, as noted, a fast-growing number of companies have already expressed their willingness to take up the CSR challenge. So what is the way ahead for companies, and how can their handling of the issue of corporate social responsibility lead to their success? A Hundred Flowers: CSR as a Pluralistic Concept All sectors of society approve of corporate social responsibility as a business principle. However, two essential aspects of CSR have remained highly controversial. First, no consensus has been reached as to what factors the CSR concept should contain. There is no agreement on the definition of social and environmental harm, and is it not clear what kind of social responsibility (other than the vow to do no harm) CSR should comprise. The second aspect is linked to the first: It is equally unclear how corporations might best demonstrate CSR and how their commitment might be verified. Although these two aspects are often interpreted as major deficits of CSR, they can also be seen as its particular strengths. Social responsibility is a multidimensional phenomenon that is necessarily subject to individual conditions and interpretations. CSR will be redefined over time to serve changing needs and expectations. It is therefore neither possible nor desirable to define CSR by definitive, one-size-fits-all criteria. Instead, we should 117

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look at CSR as a pluralistic concept that evolves in many different directions. Jagdish Bhagwati is certainly right to argue in a Foreign Affairs article that in the field of CSR “a hundred flowers must be allowed to bloom.”58 The pluralistic character of CSR speaks strongly against establishing global regulation and enforcement mechanisms in order to counterbalance the growing power of corporations. Rather, any feasible way to achieve CSR must point to the idea of industrial self-regulation.59 Individual companies ought to define by themselves what CSR as a concept means to them. It is up to them to determine what they stand for, and it is up to them to translate their visions and values into their specific CSR role. Accepting the concept of corporate self-governance, we are skeptical of the current trend in which states, IOs, and NGOs formulate standards and common codes of conduct for the business community and invite, or often pressure, companies to “voluntarily” adopt these. The UN Compact with its nine principles on human rights, labor standards, and the environment; the revised OECD Guidelines for Multinational Enterprises 2000; the SA 8000 standard for workplace conditions by Social Accountability International; the AA1000 Series of the Institute for Social and Ethical AccountAbility; and the Global Sullivan Principles of Social Responsibility are but a few prominent examples of what has been aptly named a “corporate ethics crusade”60 that seeks to standardize corporate social behavior.61 All these attempts at standardization are difficult to reconcile with the idiosyncratic diversity of the business sector. Various corporations, depending on factors such as their industry sector, their size, and their location of operations, will and must differ widely in their CSR approaches and in the emphasis they place on individual issues. Universally applicable principles, therefore, do not point to a promising way ahead. At best, the principles and minimal standards proffered by the authorities are kept very general, giving them the character of a political statement rather than that of a genuine code of conduct. At worst, they set rigid norms of behavior, and the result is that they can do more harm than good to those they seek to protect. What good is it to seventeenyear-olds in Vietnam and Indonesia, for example, when Nike, for fear of further accusations of child labor, decides to no longer hire workers under eighteen in its shoe factories, even though this 118

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age is well beyond the end of minimal compulsory education in those countries?62 Conflict Prevention as a CSR Issue Corporate self-initiative, first and foremost, can make self-regulation successful. The credibility of such initiatives depends on what companies do and how they do it. The how is fairly straightforward. A company should first develop its own code of conduct, in which it articulates its strategic CSR direction and identifies the CSR issues, stakeholders, and principles. It must then make sure that it not only acknowledges but also exercises its responsibility. Finally, transparency regarding a company’s social and ecological performance, and effective external communication regarding its value creation, are essential. CSR reporting should be as routine as financial reporting (though quantitative thinking and short-term perceptions in the social field must naturally play a less dominant role). Verification is most convincing when pursued by the growing number of business and NGO actors who specialize in triple bottom-line accounting.63 As for the what, the field is wide open. We argue that business should take up the issue of conflict prevention as a particularly credible and powerful manifestation of CSR—a move that also makes good economic sense. Admittedly, the prevention of violent conflict has so far not been directly associated with CSR—a consequence of the missing link, in general, between the business sector and conflict prevention. CSR debates most often revolve around how to run business activities safely, legally, and effectively; how to minimize adverse impacts of those activities on society and the environment; and how to create proactive societal value by contributing to policy issues such as education, health, and private sector development.64 From a broader perspective, however, each of these components of CSR can have a direct bearing on the successful prevention of conflict. In conflict-prone countries, corporate compliance and risk minimization can be part of a larger effort to ensure that companies do not cause or exacerbate conflict with their business operations. The third aspect, value creation, applies to the business sector at large and points to the many opportunities for corporations to assist in efforts to avert violent conflict proactively 119

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and according to their specific competence.65 Corporate engagement to advance the social capital of education and health and to advance the economic development of a country that is threatened or affected by conflict is an essential contribution to conflict prevention and therefore a credible expression of CSR. These are fields to which the commercial sector can contribute effectively. If business actors are willing to render much-needed assistance and know-how to conflict prevention, positive repercussions on their societal acceptability and stakeholder relationships are bound to follow. If we thus identify corporate conflict prevention as a high-potential component of CSR strategies, it is not our intention to simply add a few more previously undiscovered “roses” to the many other flowers that make up the concept of CSR. Our aim is to encourage the corporate community to view the traditional issues of CSR as potential tools for conflict prevention. It makes sense for business actors to back international endeavors to avert large-scale violence and to build peace, not only because social and political instabilities anywhere in the world can harm corporate interests, but also because it is a promising and important way for companies to meet the challenge of corporate social responsibility. We examine in Chapter 5 how the commercial sector could get involved in conflict prevention and what kinds of specific contributions it ought to make. To conclude this chapter, we define the kinds of companies we are addressing when we argue for corporate conflict prevention.

The Business of Which Business Business is a heterogeneous formation. Companies vary in their sizes, their types of industry, their areas of operation, the kinds of assets they have in foreign countries, their organization, and in many other characteristics.66 Which groups of business actors have a stake in conflict prevention? And which of these can make a contribution to international peace and stability? Those that immediately spring to mind are the transnational corporations. TNCs that operate in many countries and whose supply and distribution networks penetrate into faraway corners of the world are the prime candidates for preventive action. They are the most likely business actors to be confronted with the challenge 120

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of conflict and serious damage from instability; since they often undertake part of their operations in developing and transition countries, they run an especially high risk of causing societal and environmental harm in conflict-prone societies and of being scrutinized and “shamed” by CSR activists; and they are the corporate actor most likely to have the capacity, resources, and know-how for effective preventive measures. Yet putting all responsibility on transnationals would fail to take into account the risks and costs that other business actors encounter as a result of conflict and to acknowledge the potential they have in assisting conflict prevention. As shown above, large national companies and small- and medium-sized enterprises (SMEs) can be shaken by the reverberations of social and political instability, even if many of them do not do business close to conflict areas and have no intention of expanding into new markets. They too have a substantial interest in peace and stability, and some of them might make available core competencies or niche products that can be of great value to successful conflict prevention. If size is not a factor for excluding or including various companies from conflict prevention, the same applies to the type of a company’s industry and the location of its operations. That said, some industry sectors undoubtedly are at greater risk of causing or exacerbating conflict than others. The big “footprint” players with major on-the-ground investments in countries like Sudan or Angola, such as the extractive sector or infrastructure companies, are more likely to cause social or ecological harm than, say, the information and media industries.67 They are consequently under particularly high pressure to exercise their social responsibility. Also, the kinds of risks that corporations face vary greatly, depending on individual sectors and locations of businesses. Travel and tourism industries are likely to encounter very different risks from those encountered by the agriculture or forestry industries, for example. Yet all these sectors, each in its own way, have a similar stake in stability. All are confronted with the notion of an expanded concept of corporate responsibility today. Since the complex and multidimensional character of most conflicts requires a multidimensional response, it is paramount that business actors from all kinds of industries bring in their specific knowledge and expertise. Even sectors usually not associated with conflict can take 121

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up essential roles in building peace and stability. Consulting firms, for instance, can have a key impact by creating awareness and integrating a conflict prevention perspective into their clients’ business plans. There is no single profile of a corporate actor who typically might get involved in conflict prevention. Some companies will have stronger incentives to become engaged than others. Yet others might appear especially suitable as preventive actors because of their capacity, their geographic reach, or their particular qualities and skills. Overall, however, the range of enterprises that potentially qualify for corporate conflict prevention is indeed broad. Ultimately, it is up to each company to decide whether and to what extent its active participation in preventive endeavors can help safeguard its interests in a stable business environment and effectively promote its corporate citizenship.

Notes 1. For the Business and Peace program of the IBLF and International Alert, see http://www.pwblf.org/csr/csrwebassist.nsf/content/f1c2a3c4a5. html. For the Business and Conflict program of International Alert, see http://www.international-alert.org/policy/business.htm. See also the article by Phil Champain, program manager of International Alert, “Assessing the Corporate Sector in Mainstreaming Conflict Prevention,” in Mainstreaming Conflict Prevention: Concept and Practice, CPN Yearbook 2000/01, eds. Luc van de Goor and Martina Huber (Baden-Baden: Nomos, 2002), 145–162. 2. Jane Nelson, The Business of Peace: The Private Sector as Partner in Conflict Prevention and Resolution, International Alert, Council on Economic Priorities, and the Prince of Wales International Business Leaders Forum, 2000. 3. For the Business and Peacebuilding program of the IMTD, see the IMTD website: http://www.imtd.org/initiatives-businesspeacebuilding.htm. 4. For the Institute for Peacebuilding and Development, see http:// www.peacebuilding.net. 5. Allan Gerson and Nat J. Colletta, Privatizing Peace: From Conflict to Security (Ardsley, NY: Transnational Publishers, 2002); see also Allan Gerson, “Peace Building: The Private Sector’s Role,” American Journal of International Law 95, no. 1 (2001): 102–119. 6. Virginia Haufler, “Is There a Role for Business in Conflict Management?” in Turbulent Peace: The Challenges of Managing International Conflict, eds. Chester A. Crocker, Fen Osler Hampson, and Pamela Aall (Washington, DC: United States Institute of Peace Press, 2001), 659–675;

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see also Virginia Haufler, “Countering Conflict: Corporate Social Responsibility in War Torn Societies,” paper prepared for the annual meeting of the American Political Science Association, San Francisco, 29 August–4 September 2001. 7. For the International Peace Forum, see http://www.intlpf.com. 8. For PELC, see http://www.pelc.net; see also the article by Jonathan Berman, president of PELC, “Boardrooms and Bombs: Strategies of Multinational Corporations in Conflict Areas,” Harvard International Review 22, no. 3 (2000): 28–32. 9. Mary B. Anderson, Do No Harm: How Aid Can Support Peace—Or War (Boulder: Lynne Rienner, 1999). 10. For the Corporate Engagement Project of the Collaborative for Development Action, see http://www.cdainc.com; see also Mary B. Anderson and Luc Zandvliet, Corporate Options for Breaking Cycles of Conflict (Cambridge, MA: Collaborative for Development Action, May 2001). 11. OECD/DAC, The DAC Guidelines: Helping Prevent Violent Conflict (Paris: OECD, 2001), 69–71. 12. See the website of the Global Compact: http://www.unglobal compact.org/un/gc/unweb.nsf/content/zones_conflict.htm. 13. See Chris Brown, Understanding International Relations, 2d ed. (Houndmills, England: Palgrave, 2001), 174. The issue is treated in more detail by John Stopford and Susan Strange, with John S. Henley, Rival States, Rival Firms: Competition for World Market Shares, Cambridge Studies in International Relations, no. 18 (Cambridge: Cambridge University Press, 1991). 14. World Bank, Global Development Finance: Financing the Poorest Countries, Analysis and Summary Tables 2002 (Washington, DC: IBRD/ World Bank, April 2002), 32. For additional figures on private sector investment in low- and middle-income countries, see the report of the World Resources Institute, the United Nations Environment Programme, and the World Business Council for Sustainable Development Tomorrow’s Markets: Global Trends and Their Implications for Business, April 2002. For figures concerning transition economies specifically, see the European Bank for Reconstruction and Development, Transition Report 2000: Employment, Skill and Transition (London: EBRD Publications, 2000), 81. 15. World Bank, Global Development Finance: Financing the Poorest Countries, 90–95. The donor countries in question are Denmark, the Netherlands, Sweden, Norway, and Luxembourg. 16. See the website of the UN International Conference on Financing for Development: http://www.un.org/esa/ffd. The EU announced that its member countries would raise their development assistance to 0.39 percent of their gross domestic product on average (and no less than 0.33 percent) by 2006. The United States pledged a U.S.$10 billion increase in aid over three years. 17. Depending on their definition of conflict, research institutes for the year 2000 listed between thirty-three and forty-seven violent conflicts. See Peter Wallensteen and Margareta Sollenberg, “Armed Conflict,

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1989–2000,” Journal of Peace Research 38, no. 5 (2001): 632; See also the annual conflict barometer of the Heidelberg Institute of International Conflict Research: http://www.hiik.de/konfliktbarometer/index.htm; alternatively, see the database of the Arbeitsgemeinschaft Kriegsursachenforschung in Hamburg: http://www.sozialwiss.uni-hamburg.de/Ipw/ Akuf/home.htm. 18. Murray Weidenbaum, “Economic Warriors Against Terrorism,” Washington Quarterly 25, no. 1 (2002): 43. 19. See the special report “Globalisation: Is It at Risk?” in The Economist, 2 February 2002, 61–63. 20. See Multilateral Investment Guarantee Agency (MIGA), “Assessing the Impact of September 11,” online interview with MIGA officers, President James D. Wolfensohn, Executive Vice-President Motomichi Ikawa, Vice-President for Guarantees Roger Pruneau, and Director of Investment Marketing Services Karin Millett (MIGA News, 14 January 2002 [http://www.miga.org/screens/news/feature/impact.htm]). 21. On the business lessons of the terrorist attacks, see the Prince of Wales International Business Leaders Forum, Managing in a World of Fear and Conflict: An IBLF Briefing Paper, 12 October 2001. 22. Berman, “Boardrooms and Bombs,” 28–32. 23. The following draws on Nelson, The Business of Peace, 20–26. 24. Champain, “Assessing the Corporate Sector,” 148. 25. Nelson, The Business of Peace, 22. 26. Ibid., 23. 27. Ibid., 21. 28. Carnegie Commission on Preventing Deadly Conflict, Preventing Deadly Conflict: Final Report (Washington, DC: Carnegie Commission on Preventing Deadly Conflict, December 1997), 20. 29. See World Bank, Global Development Finance: Building Coalitions for Effective Development Finance, Analysis and Summary Tables 2001 (Washington, DC: International Bank for Reconstruction and Development/World Bank, April 2001), 37; Global Development Finance: Financing the Poorest Countries, 37–43. 30. World Bank, Global Development Finance: Building Coalitions for Effective Development Finance, 38f.; see also United Nations (UNCTAD), World Investment Report 2001 (New York: United Nations, 2001), 1–5. 31. See the United Nations Conference on Trade and Development, The Least Developed Countries 2000 Report (New York: United Nations, 2000); see also UNCTAD’s website on the LDCs: http://www.unctad. org/ldcs. The eleven countries are Afghanistan, Angola, Burundi, Comoros, Democratic Republic of Congo, Djibouti, Haiti, Liberia, Rwanda, Sierra Leone, and Somalia. 32. See the web introduction to the IMTD project Business and Peacebuilding (see note 3). 33. Much of this and the following paragraph draw on the excellent chapter on conflict and cooperation in the global economy in Brown, Understanding International Relations, 168–193. See also Jeffrey Frankel,

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“Globalization of the Economy,” in Governance in a Globalizing World, eds. Joseph S. Nye and John D. Donahue (Washington, DC: Brookings Institution Press, 2000), 45–71; Susan Strange, The Retreat of the State: The Diffusion of Power in the World Economy, Cambridge Studies in International Relations, no. 49 (Cambridge: Cambridge University Press, 1996). 34. Susan Strange, “The Westfailure System,” Review of International Studies 25, no. 3 (1999): 345–354; Brown, Understanding International Relations, 170–174. 35. See on this the special report “Brands” in The Economist, 8 September 2001, 27–29. 36. Prominent examples of critical and disapproving positions visà-vis TNCs include David C. Korten, When Corporations Rule the World (London: Earthscan, 1995); Jerry Mander and Edward Goldsmith, eds., The Case Against the Global Economy: And for a Return Toward the Local (San Francisco: Sierra Club Books, 1996); and Naomi Klein, No Logo: Taking Aim at the Brand Bullies (London: Flamingo, 2000). 37. There is a broad range of literature on the issue of corporate social responsibility. See, for example, Jörg Andriof and Malcolm McIntosh, eds., Perspectives on Corporate Citizenship (Sheffield: Greenleaf Publishing, 2001); John Elkington, “The ‘Triple Bottom Line’ for TwentyFirst-Century Business,” in Companies in a World of Conflict: NGOs, Sanctions and Corporate Responsibility, ed. John Mitchell (London: Royal Institute of International Affairs, 1998), 32–69; World Business Council for Sustainable Development (WBCSD), Corporate Social Responsibility: Making Good Business Sense, WBCSD Report, January 2000; Simon Zadek, The Civil Corporation: The New Economy of Corporate Citizenship (London: Earthscan, 2001); Claude Auroi and Catherine Schümperli Younossian, eds., Le Commerce Durable: Vers de plus justes pratiques commerciales entre le Nord et le Sud (Geneva: Graduate Institute of Development Studies, 2001). 38. See David Dollar and Aart Kraay, “Spreading the Wealth,” Foreign Affairs 81, no. 1 (2002): 120–133. 39. Strange, Retreat of the State, 14. 40. On the issue of corporate governance, see the International Institute for Corporate Governance at the Yale School of Management: http://www.mba.yale.edu/program/corpgovernance.htm. For a World Bank point of view, see Magdi Iskander and Nadereh Chamlou, Corporate Governance: A Framework for Implementation, World Bank, June 2000. The World Bank also runs a useful website on the issue: http:// www.worldbank.org/html/fpd/privatesector/cg. See also the OECD/Ad Hoc Task Force on Corporate Governance, OECD Principles of Corporate Governance, SG/CG(99)5, 16 April 1999. 41. David Henderson, Misguided Virtue: False Notions of Corporate Social Responsibility (London: Institute of Economic Affairs, 2001), 39. 42. Peter Utting, Business Responsibility for Sustainable Development, Occasional Paper, no. 2 (Geneva: United Nations Research Institute for Social Development, 2000), 25.

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43. See on this Peter Schwartz and Blair Gibb, When Good Companies Do Bad Things: Responsibility and Risk in an Age of Globalisation (New York: John Wiley, 1999), 26–33. 44. For some examples, see Nelson, Business of Peace, 24f. Additional cases can be found in: Schwartz and Gibb, When Good Companies Do Bad Things, 25–66. 45. Stephen P. Osborne, ed., Public-Private Partnerships: Theory and Practice in International Perspective (London: Routledge, 2000). 46. On the Global Compact, see http://www.unglobalcompact.org; see also Sandrine Tesner, with the collaboration of Georg Kell, The United Nations and Business: A Partnership Recovered (Houndmills, England: Macmillan, 2000); Dominic Kelly, The Business of Diplomacy: The International Chamber of Commerce Meets the United Nations, Working Paper, no. 74/01 (University of Warwick: Centre for the Study of Globalisation and Regionalisation, May 2001). 47. See OECD, Corporate Social Responsibility: Partners for Progress (Paris: OECD, 2001); and OECD, Corporate Responsibility: Private Initiatives and Public Goals (Paris: OECD, 2001). On the position of the European Commission toward CSR, see European Union/Commission of the European Communities, “Promoting a European Framework for Corporate Social Responsibility,” Green Paper Presented by the Commission, COM(2001)366 final, 18 July 2001. 48. Important examples include UNCTAD and the UN Research Institute for Social Development (UNRISD). See United Nations Conference on Trade and Development, The Social Responsibility of Transnational Corporations (New York: United Nations, 1999); for the UNRISD project Business Responsibility for Sustainable Development, see http://www. unrisd.org/engindex/research/busrep.htm. 49. For the Corporate Citizenship Unit, see http://users.wbs. warwick.ac.uk/ccu. On the issue of business ethics, see, for instance, Peter Ulrich and Thomas Maak, “Business Ethics: The Founding Principles,” European Business Forum, no. 3 (2000): 19–23; William C. Frederick, James E. Post, and Keith Davis, Business and Society: Corporate Strategy, Public Policy, Ethics, 7th ed. (New York: McGraw-Hill, 1992); Archie B. Carroll and Ann K. Buchholtz, Business and Society: Ethics and Stakeholder Management, 4th ed. (Cincinnati: South-Western, 1999); Edwin Rühli and Jan S. Krulis-Randa, eds., Gesellschaftsbewusste Unternehmungspolitik—“Societal Strategy,” Schriftenreihe des Instituts für betriebswirtschaftliche Forschung an der Universität Zürich, no. 62 (Berne: Haupt, 1990). 50. Stephan Schmidheiny, Changing Course: A Global Business Perspective on Development and the Environment (Cambridge: MIT Press, 1992). 51. For the WBCSD, see http://www.wbcsd.ch. 52. For Business for Social Responsibility, see http://www.bsr.org. For a gateway to the websites of some business-led organizations on CSR, see http://www.worldcsr.com/pages.

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53. See Oonagh Mary Harpur, “Building a Sustainable Reputation,” in Business Ethics, eds. Chris Moon and Clive Bonny (London: The Economist, in association with Profile Books, 2001), 101–115. For more general reflections on the notion of reputation, see Charles Fombrun, Reputation: Realizing Value from the Corporate Image (Boston: Harvard Business School Press, 1996); Daniel B. Klein, ed., Reputation: Studies in the Voluntary Elicitation of Good Conduct (Ann Arbor: University of Michigan Press, 1997). 54. World Business Council for Sustainable Development, The Business Case for Sustainable Development: Making a Difference Toward the Johannesburg Summit 2002 and Beyond, WBCSD Report for the World Summit in Sustainable Development, 2001, 2. 55. For these studies, see the summaries on the website of Business for Social Responsibility (see note 52). Perhaps the most prominent study is John P. Kotter and James L. Heskett, Corporate Culture and Performance (New York: Free Press, 1992). The link between integrated triple bottom-line thinking and increased competitiveness is also being examined by the Trimaran Program of SustainAbility, a for-profit organization specializing in business strategy and sustainable development. See http://www.sustainability.com. 56. Eberhard von Koerber, Corporations as Bearers of Holistic Responsibility (lecture given on the occasion of the R.I.O. Management Forum 2001, Lucerne, 27 November 2001), 3. 57. This point has been repeatedly made by the IBLF. See, for instance, Jane Nelson, Peter Zollinger, and Alok Singh, The Power to Change: Mobilising Board Leadership to Deliver Sustainable Value to Markets and Society, Prince of Wales International Business Leaders Forum and SustainAbility, April 2001. 58. Jagdish Bhagwati, “Coping with Antiglobalization: A Trilogy of Discontents,” Foreign Affairs 81, no. 1 (2002): 7. 59. See Virginia Haufler, “Self-Regulation and Business Norms: Political Risk, Political Activism,” in Private Authority and International Affairs, ed. A. Claire Cutler, Virginia Haufler, and Tony Porter (Albany: State University of New York Press, 1999), 199–222. 60. Ethan B. Kapstein, “The Corporate Ethics Crusade,” Foreign Affairs 80, no. 5 (2001): 105–119. For another critical view see Gary Gereffy, Ronie Garcia-Johnson, and Erika Sasser, “The NGO-Industrial Complex,” Foreign Policy, no. 125 (2001): 56–65. 61. See OECD, OECD Guidelines for Multinational Enterprises 2001— Focus: Global Instruments for Corporate Responsibility, Annual Report 2001 (Paris: OECD, 2001). For Social Accountability International, see http://www.cepaa.org; for AccountAbility, see http://www.accountability.org.uk; for the Global Sullivan Principles, see http://globalsullivanprinciples.org. 62. The example is taken from Kapstein, “Corporate Ethics Crusade,” 110. 63. This paragraph draws much on a CSR framework developed by IBLF. See World Economic Forum, in partnership with the Prince of

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Wales International Business Leaders Forum, Global Corporate Citizenship: The Leadership Challenge for CEOs and Boards, January 2002. On the issue of reporting, see SustainAbility and United Nations Environment Programme, The Global Reporters (London: SustainAbility, 2000). See also the Global Reporting Initiative, a multistakeholder organization that seeks to develop and promote a generally accepted framework for voluntary CSR reporting, albeit with a strong environmental focus: http://www.globalreporting.org. 64. Chris Marsden, “Making a Positive Impact on Society,” in Corporate Social Responsibility: Partners for Progress (Paris: OECD, 2001), 45–49; World Economic Forum, in partnership with the Prince of Wales International Business Leaders Forum, Global Corporate Citizenship, 6. 65. The CSR concepts of compliance, risk minimization, and value creation have been developed by Nelson, who identifies them as three strategies for corporate responsibility. See Nelson, The Business of Peace, 28f. 66. See Haufler, “Role for Business,” 667–670. 67. See Jane Nelson and Frances House, “New Ethical Frontiers in Emerging Markets,” in Moon and Bonny, Business Ethics, 119–132.

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5

Corporate Conflict Prevention: Paths to Engagement Beyond Doing No Harm The foundation of all corporate conflict prevention is to avoid causing harm that could spark or exacerbate conflict. Corporations must make sure that they do not support war economies by providing conflict parties with the resources and means of waging war. This may mean not investing in repressive regimes, refraining from corruption and implementing companywide, meaningful anticorruption policies, not buying “contentious” diamonds from countries such as Sierra Leone and the Democratic Republic of Congo, not extracting oil in places like Sudan, and taking measures to avoid being abused as a money-laundering organ.1 Also, companies must generally ensure that their business operations have no negative impact on their environment, and especially on local communities.2 In addition, however, the business sector has good cause to join efforts to enhance the effectiveness of preventive endeavors. It remains essential, therefore, to create awareness among corporate actors about how the business community could and should contribute to the advancement of peace. In this chapter we discuss possible roles the business sector could take in conflict prevention. While the potential negative impacts of business on conflict and on local communities mark important issues that require further research, we are concerned with feasible and useful ways for companies to proactively engage in preventive efforts. What specific approaches should business actors take? Who should they address with their preventive activities? 129

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And, given the concerns about the legitimacy of corporate involvement in conflict prevention, how can the business sector reassure local conflicting parties as well as the international community that its actions are credible? Clearly, governments and international organizations will continue to hold the greatest responsibility for preserving and restoring peace. We argue, however, that there are at least six plausible and effective ways for the business sector to support and complement the preventive efforts of other actors and bring in those corporate qualities and comparative advantages that can improve the general performance of conflict prevention. Once these are applied with a clear conflict prevention perspective, the private sector’s economic and social activities, in particular, have the potential of becoming invaluable contributions to the peaceful transformation of conflict. Business actors can add to the prevention of conflict either by enhancing the activities and capabilities of other preventive actors or by becoming involved themselves as actors in socioeconomic peacebuilding. Both strategies, we maintain, can be pursued in three ways. But some of these ways are unlikely to yield tangible results if companies do not act collectively and in transsector partnerships with states, international organizations, and NGOs. Therefore, what may be needed most to bring in the business sector effectively is a collective corporate initiative that strategically represents the corporate sector in the planning and implementation of preventive operations and coordinates preventive efforts within the business community. Business Diplomacy: A Word of Caution Ascertaining that corporations should become involved in conflict prevention is one thing: determining how they should do so is quite another, given that conflict prevention is a very sensitive public matter. In our view, corporations must not attempt to play the same role and take up the same activities as other preventive actors because business actors operate in very different ways from public and civil society actors in terms of their internal organization, their priorities, and their thinking. They pursue different

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goals, and their raison d’être is quite unlike that of states, IOs, and NGOs. For example, democracy to many business leaders is less essential than stability—a priority many nonprofit organizations disagree with. Because of such differences, business diplomacy should not be regarded as a standard role of corporate conflict prevention. There are no doubt situations in which companies might feasibly become engaged in such activities. Indeed, both public sector actors—such as the Development Assistance Committee of the OECD—and NGOs—such as the Institute for Multi-Track Diplomacy and the International Business Leaders Forum—have put forward the idea of using business diplomacy for the purpose of forestalling the outbreak of violent conflict. They encourage business leaders to use their growing political influence in order to become involved in preventive diplomacy and/or human rights advocacy—as individuals or, preferably, collectively.3 Business actors have at times successfully brought together conflict parties for peace talks or have exerted pressure on governments and other actors to refrain from violence. The Consultative Business Movement in South Africa, for instance, played a significant role in the peaceful transition from apartheid to democracy, facilitating contact between the leaders, pressuring the government to negotiate, and even participating in the constitutional process. Similarly, the Group of 7 in Northern Ireland, consisting of trade and business organizations, has done much to signal the significance of a peaceful resolution of the long-standing antagonism to decisionmakers and the public.4 Individual business leaders have also at times been praised for their engagement as diplomats for peace. U.S. businessman Ron Lauder comes to mind. As president of the cosmetic company Estée Lauder and friend of former Israeli prime minister Benjamin Netanyahu, Lauder carried out numerous shuttle tours between Damascus and Tel Aviv between 1997 and 2000, conveying messages to and from Syrian president Hafez al-Assad. Another much-cited example is the late Tiny Rowland, former head of Lonrho (now Lonmin), a multinational company that in the 1980s suffered severe losses because of the civil war in Mozambique. After protection payments had failed to prevent the rebel group Renamo from damaging corporate assets such as oil pipelines, and

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after Lonrho’s own security costs had skyrocketed, Rowland changed his strategy and embarked on a shuttle diplomacy that lasted for more than eight years. To a considerable extent, his indefatigable efforts at building up bonds of trust between the warring parties and the neighboring governments contributed to the peace negotiations, and the conflict eventually came to a successful end in 1992.5 Yet it would be wrong to expect business to become a primary actor in preventive diplomacy and human rights advocacy. Commercial actors are generally ill suited for such tasks. The fact that they have gained in economic power does not mean that they are capable of transforming whole countries. Corporations lack the know-how and experience to deal with issues such as political and military negotiations and the promotion of human rights. Operational prevention and lobbying for good governance can be risky endeavors; and, if done rashly, corporate preventive efforts in these fields can end up doing more harm than good, for the company as well as for the cause of peace. In addition, as Marina Ottaway warns with good reason, the idea of corporations actively spreading political and moral values inevitably evokes gloomy shadows of the past, suggesting parallels to powerful charter companies like the British East India Company, which in early modern times sought to “civilize” overseas countries on behalf of their governments.6 While we are skeptical about business diplomacy as a form of direct corporate engagement, we strongly endorse an indirect role for corporations in fields like operational prevention and the advancement of good governance. By supporting public sector actors and NGOs, the business sector can make a valuable contribution to the advancement of peace, even if it does not stand in the limelight with regard to preventive action. Enterprises can, for instance, sponsor confidence-building measures and dialogue agreed upon by conflicting parties. In doing so, they effectively assist operational prevention, but they do not need to get involved in the actual mediation and negotiating processes. Similarly, by supporting democracy organizations and independent media, corporations can contribute to the observance of human rights without exposing themselves to political confrontations with government.

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Creating Value: Toward Proactive Corporate Conflict Prevention The business sector has both compelling reasons and the necessary abilities to engage in proactive efforts at conflict prevention. Only by adding a “do” dimension of corporate conflict prevention to their “do no harm” policies can companies effectively and credibly safeguard their interests in stability, demonstrate their social responsibility, and make a significant difference in current preventive endeavors. For this reason, and because a considerable amount of research has already been done on doing no harm, we are mainly concerned in this chapter with the “do” component of corporate conflict prevention. How can the commercial sector create value in international conflict prevention? Again, we need to distinguish between an enabling and an active role that corporations might take in order to allow for a realistic and comprehensive answer. As a secondary actor of conflict prevention, business can take on an enabling role in a wide range of preventive activities. As primary actors, however, corporations—like public and civil society actors—should concentrate on issues they are familiar with. Differentiating between these two approaches to corporate engagement has the double advantage of not restricting the many opportunities for corporate value creation and, at the same time, discouraging business and nonbusiness actors alike from applying an inflexible scheme of corporate involvement to all fields of conflict prevention. Direct corporate involvement in conflict prevention should remain focused on economic peacebuilding. The case for corporate action in this field does not arise only from the ability of the business sector to create value in economic matters. Rather, the reluctance and inability of the international community to comprehensively cover the socioeconomic dimension of conflict prevention makes an active corporate role in this field important. Although there is no best practice in the area of economic peacebuilding, developing and/or rebuilding a strong local private sector in conflict-prone countries is certainly key. Only an effective private sector can produce the wealth, efficiency, and profitable jobs that are necessary for the kind of economic opportunity that may, as Allan Gerson has aptly put it, “salve the sources of conflict.”7

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Economic peacebuilding, therefore, is largely about private sector development (PSD) in a conflict-related context. While the major issues may vary according to individual conflicts and countries, all issues are linked to the larger target of promoting economic development through business and investment. The many PSD programs and services notwithstanding,8 experience shows that states and international organizations often lack the competence and flexibility to create strong local private sectors. As John Birkelund has convincingly argued, “Free markets and democracies are built not from above but from below— on the foundation of a vibrant middle class that has a stake in the future of its economy and its country.”9 This is not to say that the task of economic peacebuilding should be assigned to nonpublic sector actors alone. Creating economic opportunity, in the sense of providing both economic growth and equitable access to the benefits of such growth, is a complex challenge that requires a wealth of measures and reforms at both public and private levels of society. Therefore, public sector engagement remains highly relevant. At the same time, however, activities beyond traditional government-to-government approaches are much needed and would be an invaluable complement to current efforts. The active participation of companies in economic peacebuilding should thus become a central component of conflict prevention. Business actors more than anyone else have the necessary expertise and assets to significantly advance private sector development. The provision of economic opportunity ultimately depends on their willingness to do business, and they alone know best what steps it takes to render a business environment competitive. Business-to-business approaches and business partnerships with local governments and the international community can indeed be the key to success in PSD. The Growing Need for Corporate Economic Peacebuilding No single field of conflict prevention is likely to bring about stability and peace when pursued on its own. Success in conflict prevention requires a comprehensive approach, combining operational, structural, and (where feasible) systemic measures. Politics in all these categories undeniably plays an important role, making 134

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for an array of particularly complex tasks. Without good governance, stable political processes, and the willingness of elites to compromise, peace is unlikely to endure. Yet political stability alone is no guarantee for peace if other dimensions of conflict prevention are ignored. Thus, a strategy that attributes to politics too great a significance over and above economic and social matters is bound to fail.10 Private sector development ought to be viewed as a primary objective of any conflict prevention measure. There is now broad evidence that economic characteristics, such as low average incomes, slow growth, and dependence on primary commodity exports, are significant predictors of intrastate conflicts.11 Even where economic factors are not a primary source of conflict, it is vital that they receive due attention in preventive endeavors. Economic opportunity can inhibit the use of violent means in transforming a conflict. It is key to stability in any conflict. While poverty and despair are a breeding ground for violence and extremism, the prospect of prosperity and a better future are a powerful incentive to convince people of the benefits of peace. A lack of jobs often correlates to a higher readiness for violence, a fact that holds true especially for young people. In the Middle East, for instance, where over 55 percent of the population is under twenty-five, youth unemployment and underemployment rates, according to the IBLF, exceed 50 percent.12 In the Balkans, the figures are also staggeringly high. Is it bold to assume that providing young people in such regions with employment, training, and other opportunities would significantly decrease the reservoir of discontent and radicalism? Generating economic opportunity is all the more important since it is a prerequisite for the success of social preventive measures. Only a sound economic basis will eventually allow for longterm indigenous investment in health and education. Without economic development and growth, no state will be able to maintain the social services set up as part of social peacebuilding once the international donor community has left. And even if it was, better education alone cannot bring about prosperity if economic parameters remain inappropriate. Yet peacebuilding efforts in the 1990s all too often focused too heavily on building functional, strong states. In southeastern Europe, for example, private sector development has been much 135

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neglected in the past decade, with most international resources directed to security and political governance issues. Although there have been some efforts at strengthening the local business sectors, such efforts have focused primarily on physical reconstruction. The Stability Pact, in the first two and a half years of its existence, provided €3.5 billion for infrastructure projects, while making only €400 million available for other PSD measures.13 Economic opportunity in countries such as Bosnia and Herzegovina and the Federal Republic of Yugoslavia (especially Kosovo) is thus still widely lacking.14 In Bosnia and Herzegovina, for example, economic growth is slowing down rapidly as international assistance is decreasing. Reforms to create a viable business climate are being neglected, and there is still a conspicuous lack of investment. Unemployment figures remain very high, which means that many people are unable to pay taxes. Corruption is rampant and further deters the emergence of a competitive private sector.15 The current situation in Kosovo conveys a similar picture, although there the ongoing uncertainty about the final political status of the province means an additional serious obstacle to investor confidence.16 Outside southeastern Europe, peacebuilding efforts are not as well documented but the evidence available suggests that current actors are paying too much attention to the state at the expense of the private sector.17 Given the sudden overthrow of the Taliban regime in Afghanistan, for instance, political, military, and humanitarian issues once again took precedence over issues related to the country’s economic recovery. Early reconstruction efforts included some vital economic measures, like the Recovery and Employment Afghanistan Program (REAP), which for six months supplied more than 14,000 Afghans with jobs repairing the public infrastructure. But too many of these measures were short-term, doing little to create economic opportunity in the long run.18 Given the neglect of private sector considerations by current peacebuilders, it is even more important that the business sector takes the initiative. Only an engagement of the corporate community can give economic peacebuilding the kind of relevance and recognition that is essential for successful conflict prevention. In this chapter, we identify specific ways that companies, as “primary” actors of peacebuilding, can contribute to the socioeconomic development of conflict-afflicted countries. But first we investigate 136

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the potential roles corporations might play as enabling actors of conflict prevention.

Business as Enabler The concept of an enabling preventive role for the business community comprises all the types of assistance that corporations can usefully offer to other actors in conflict prevention. The role of business is a supportive one in which companies function as an intermediary and catalyst for the peaceful transformation of conflict. Any enabling act ought to be targeted at either providing more substance and sustainability to individual preventive initiatives or to strengthening the preventive actors. The number of public-private partnerships between companies and international organizations, as well as between companies and individual divisions or state ministries, is on a steep rise.19 Less frequent but also on the rise are PPPs between enterprises and international or local NGOs;20 also, more trisector partnerships are emerging.21 However, an overwhelming majority of all these partnerships does not target the issue of conflict prevention. There is already a fair amount of enabling going on in social and economic issues such as education, health, poverty mitigation, and community participation.22 But it is rare to find corporations that explicitly support preventive programs or actors. Business, even without being directly engaged in preventive action, can provide other actors with several assets that can make a real difference in conflict prevention. Helping other actors do a better job will also benefit the corporate community itself. As argued in Chapter 4, the success of conflict prevention is essential to the success of business. Even noneconomic matters of prevention often have a direct bearing on the economic outlook and the strategic options of companies. Take the issue of health, for example. A commission of experts led by Jeffrey Sachs has demonstrated convincingly that investment in health is a springboard for security and stability, as well as economic development and poverty reduction.23 Similarly, other features—such as education, an independent judiciary, democratic institutions, and coexistence programs—contribute to defusing tensions and enhancing the business potential in a conflict-prone country. In an enabling role, 137

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companies have the opportunity to influence and advance efforts to promote peace wherever they consider such action relevant and necessary. When companies engage in conflict prevention as secondary actors, they are undertaking more than mere philanthropy. Even if the means employed are philanthropic, the main purpose of commercial sector enabling must be to set the foundations for economic development. How then can corporations support and improve current preventive action? We propose three approaches, summarized in Table 5.1: They can sponsor preventive actors and activities with funding; they can support preventive endeavors with product donations; or they can take measures to empower other actors through what we term strategic philanthropy. The role of private sector actors becomes progressively more complex and demanding from the first to the third of these approaches. Conversely, increasing commitment makes corporate support more sustainable. Role 1: Funding Funding programs and projects of other actors is the most simple and straightforward way for enterprises to contribute to the prevention of conflict. Companies choose their object of support, donate the money required, and leave it to the recipient to invest these resources in accordance with the declared preventive goals. Experience from the general CSR engagement of corporations suggests that this could well become a common way for the business sector to become involved in conflict prevention. Once they have supplied the funds, companies keep their expenditures and risks to a minimum, contributing no further project-related personnel, skills, and/or knowhow. Since money is the only asset that is transferred, a company can select its programs and beneficiaries from the whole range of activities, regardless of the type of industry it represents. Philanthropy of this traditional kind is occasionally the subject of criticism. There are CSR activists who believe that simply donating money is an easy way out for companies to appear socially responsible. Although such criticism is certainly not unfounded, it is worth recalling the chronic shortage of money that often greatly hinders or prematurely ends the preventive work of international organizations and NGOs. With financial assistance from the business sector, NGOs in particular will get the chance 138

Table 5.1

Three Roles of Corporate Enabling Fields of Engagement

Focus of Support

Structural Operational Systemic

Actors Initiatives

Types of Business

Examples of Support

Role 1: Funding

✓

✓

✓

✓

Any kind of corporation

Fund NGOs, peace conferences, mediation processes, democracy programs, health measures.

Role 2: In-kind support

✓

Occasionally

✓

✓

Selected kinds of industries

Provide modern communications equipment to peacebuilders, IT to education programs, drugs to AIDS programs.

Role 3: Strategic philanthropy

✓

Any kind of corporation

Help enhance management capacity of NGOs, make conflict prevention a strategic issue of social investment.

Note: Corporate conflict prevention (✓).

✓

Conflict Prevention

to implement more programs and operate with more sustainability than is the case today. Funding can thus indeed have a positive impact and is a useful component of corporate conflict prevention. Some companies that have undertaken CSR measures can be said to have fostered the advancement of peace. For example, the Norwegian oil company Statoil, doing business in Venezuela, is providing funds for Amnesty International and the UNDP to train local judges to identify and deal with breaches of human rights and international law.24 Several transnational corporations are supporting the Abraham Fund, a nonprofit organization that promotes Jewish-Arab coexistence in Israel through such measures as establishing democracy education programs in Arab and Jewish kindergartens and teaching local teachers the benefits of mutual understanding and tolerance.25 Glaxo Wellcome (now GlaxoSmithKline) has enabled RefAid, a charitable associate of the UNHCR, to build two health centers in northeastern Rwanda, where hundreds of thousands of refugees have been resettled in the wake of the genocide.26 Another example is Bristol-Myers Squibb, which recently committed U.S.$115 million to governments, NGOs, and research institutes engaged in fighting the AIDS epidemic in southern and western Africa.27 Although companies, by providing funding, might address various conflict-relevant issues, they hardly ever consciously make the link between their activity and conflict prevention. PPPs in the field of general development projects are certainly very important. In today’s international environment, however, companies should also consider channeling their contributions into conflict-specific activities. Role 2: In-Kind Support The same point applies to product support. There is enormous potential for corporations to engage valuably in conflict prevention by offering their products to preventive actors—as donations, or at least at the lowest viable commercial price (near-production cost). This kind of corporate enabling is certainly more demanding than funding as it requires close coordination between donor and recipient. Also, as the product needs of actors vary according to individual programs, the search for partners is usually limited to a specific type of industry. Still, in-kind donations are often 140

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essential and can make a real difference to the outcome of preventive endeavors. At present, PPPs of this kind hardly ever cover the field of conflict prevention. Examples like Oracle’s donation of 100 computers to Catholic, Protestant, and nonsectarian schools in Belfast as part of the Computer for Coexistence program run by the State of the World Forum are still exceptions.28 Instead, product assistance is usually focused on traditional development programs and on humanitarian disaster response. An industry that has proven particularly active in this respect is the information and communications sector. Companies like British Telecom, Dell, and Oracle have engaged in refugee assistance in the Balkans, providing satellite telephones and other communications tools to displaced people. Ericsson, in cooperation with UN partners and the Red Cross, has developed the Disaster Response Program to facilitate communications between humanitarian relief workers dealing with natural and human-made disasters.29 With its Least Developed Countries initiative, Cisco, in collaboration with the UNDP and the USAID Leland Initiative, is extending its much-used Cisco Networking Academy Program to LDCs like Rwanda. Its comprehensive e-learning program provides local workforces with the skills to design, build, and maintain the Internet infrastructure in order to help them participate in the global economy.30 Also noticeable is the creation of the Disaster Response Network in the engineering and transportation sector. Launched at the World Economic Forum in 2002, the network, set to become an independent nonprofit organization, will solicit and coordinate corporate commitments of services and materials to assist disaster relief efforts, functioning as a clearinghouse for specific resource needs.31 The pharmaceutical industry is also frequently asked to donate drugs and/or offer differential pricing in poverty- or conflict-stricken countries. Initiatives in this sector include the medical donation programs of GlaxoSmithKline and the Partnership for Quality Medical Donations (PQMD), which brings together leading pharmaceutical companies and NGOs to improve the provision of voluntary medical aid.32 More product assistance from all these industry sectors would be helpful and much appreciated in preventive operations. Ideally, corporations would not only donate products but would also become engaged in producing the kinds of products that are 141

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required specifically in peacebuilding activities. As the Human Development Report 2001 has shown, the market generally lacks the power to develop and diffuse technologies that are needed outside the well-off countries of the industrial world. Since technology is created in response to market pressures, research seriously neglects the needs of the poor—and, for that matter, of societies in conflict. For example, of the more than 1,200 drugs licensed between 1975 and 1997, only thirteen were for tropical diseases and only four were commercially developed for tropical diseases that affect humans.33 The question arises as to why the suggestion of the head of research at Novartis, who has proposed that TNCs should devote a portion of their profits to the research and development of noncommercial products, is not taken up. In the pharmaceutical industry alone, the top nine Fortune 500 companies would have raised U.S.$275 million had they invested a mere 1 percent of their profits in research. Such a step would diminish the current glaring contrast between the world’s research agenda and the world’s research needs. No doubt, corporate contributions of this kind could be invaluable to conflict prevention.34 Role 3: Empowering Other Actors— Strategic Philanthropy The third possibility of corporate enabling is so far a little known form of partnership. Strategic philanthropy is a new concept whose main goal is to build the capacity of other actors. Also referred to as “venture philanthropy,” “high-impact philanthropy,” or “new generation philanthropy,” this approach goes beyond straightforward funding and product donations. In addition to their individual sponsoring activities, corporations make long-term commitments to make the recipients of their sponsorship more effective. Corporations share managerial and technological expertise and invest in the organizational capacity of these actors, thus empowering them by reducing time wasted on fund-raising activities and allowing them to concentrate on results and to produce more effective services. This new kind of philanthropy is more strategic in its approach than the other kinds. It requires companies to prioritize the issues they intend to support and the actors they seek to enable. A company will thus limit its beneficiaries but allow these to 142

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achieve greater results. If critics view corporate funding as “spare change,” this new approach is definitely about “real change,” to use Rosabeth Moss Kanter’s term.35 NGOs, in particular, have much to gain from strategic philanthropy. Indeed, they are the obvious choice for this kind of corporate enabling. Assistance by commercial actors helps civil society actors improve the rates of return on their investment; further, strategic philanthropy also allows NGOs to emancipate themselves from their often extreme public sector dependency. The notion of high-impact philanthropy is still taking root. Nevertheless, a rising number of corporations have picked it up already. Some, like BP, PricewaterhouseCoopers, and McKinsey, share their management skills with local NGOs in Azerbaijan, Vietnam, and India.36 Other “pioneers,” like Levi Strauss & Co., stand out for their successful identification of targets for their strategic support.37 Further, AVINA, Stephan Schmidheiny’s foundation dedicated to sustainable development in Latin America, has already gained much experience in empowering civil society organizations.38 The idea of using strategic philanthropy in corporate conflict prevention deserves due consideration. In years to come, it is likely to gain increasing international recognition. This approach, in which all previous forms of philanthropy can be combined, is set to become the most effective way for corporations to create value as enablers. Admittedly, strategic philanthropy is also the most complex of all enabling measures, requiring not only money and goods but also dedicated and skilled staff and lasting commitments. But there are ways for the business sector to manage this result-oriented concept of empowerment without an excessive investment of resources. The best solution here, as indeed with other forms of corporate conflict prevention, would be for commercial actors to become engaged collectively—a point discussed at the end of this chapter.

Business as Economic Peacebuilder The challenge of finding ways for “primary” corporate peacebuilding is greater than that of describing ways in which corporations 143

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might become enablers in conflict prevention. Companies acting as active peacebuilders are more directly confronted with the conflict at hand. Private sector development in areas of conflict is complex, and identifying realistic corporate roles for creating economic opportunity in an environment plagued by conflict is a great challenge. Any discussion about economic peacebuilding must take issue with the following three factors of PSD: how best to create an enabling business environment, how to develop local business capacity, and how to attract foreign direct investment. We need to look at these components in more detail in order to be able to define ways in which the business sector can effectively help lay the economic foundation for peace. An enabling and competitive business environment is the single most important feature of successful private sector development. Without an enabling business climate, no local capacity building or foreign direct investment is likely to occur. A hospitable and nondiscriminatory economic, physical, legal, and regulatory framework that allows business to operate effectively is essential. Important in such a framework are sound and consistent macroeconomic policies, especially low inflation, fiscal stability, and stable exchange rates. Also indispensable are efficient market institutions and a predictable legal framework for commercial activities. Markets can work properly only if they have rules, enforcement mechanisms, and organizations that promote market transactions. In contrast, unreliable public sector management—arbitrary and opaque administrative practices, corruption, and the absence of rule of law—poses serious impediments to the emergence of vibrant local markets. Also critical for investor confidence is the availability of credit provided by a strong financial sector. Finally, infrastructure is also vital for an enabling business environment, especially as far as transport systems, communications facilities, and energy supplies are concerned.39 Local business capacity is the second major feature of PSD. Indigenous entrepreneurship, particularly the development of SMEs and sustainable microenterprises, is a critical component of building and maintaining economic opportunity. But local business development can be severely constrained, even where the business environment is generally good. Lack of education and low skill attainment of the labor force are frequent impediments. Equally disadvantageous are the low capacities of local entrepreneurs, 144

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who may have little understanding of business essentials, such as financial and managerial skills and technical know-how. Moreover, poor access to markets and a lack of information about potential markets can reduce the willingness and ability of locals to set up or expand businesses. Consequently, if local business capacity is to be effectively enhanced, education opportunities and business development services must be provided.40 Finally, foreign direct investment of TNCs can potentially have a very positive effect on the socioeconomic development of countries.41 Bringing in assets such as capital, technology, management know-how, access to markets, and jobs, FDI can help to finance sustained economic growth and opportunity for the long term. Admittedly, not all experts share the view that FDI is beneficial to the host economy.42 Indeed, if applied without due consideration of the local situation and realities, FDI can exacerbate existing inequalities and impede economic development. Yet empirical evidence strongly suggests that the impact of FDI on host economies is overwhelmingly positive.43 TNCs are estimated to bring about a one-for-one increase in domestic investment in developing countries, with spillovers to home industries as well as to other industry sectors in the host country.44 Although powerful international competitors occasionally crowd out inefficient local firms, they usually bring in many more new businesses by building links to domestic suppliers, subcontractors, and other companies.45 TNC-promoted socioeconomic welfare might also bring about increased political stability, as has been empirically demonstrated by William H. Meyer.46 PSD measures in a conflict-related context will necessarily differ from those used for general development assistance. Gilles Carbonnier quite rightly argues that the basic underpinnings of the economy cannot be taken for granted in countries affected by conflict.47 Peacebuilders, rather than searching for “best practice” models, ought to adapt PSD concepts to individual conflict constellations. At the same time, corporations must pursue PSD with a long-term perspective, even in reconstruction efforts where short- and medium-term conflict-specific activities predominate. Although the instant provision of employment is indispensable to the stabilization of a country emerging from violent conflict, sustainable economic opportunity generated by a functioning business sector is ultimately based on the three components we have 145

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discussed. Economic peacebuilding—just like private sector development under normal circumstances—takes many years and much patience. What roles should the business sector take up in economic peacebuilding? As summarized in Table 5.2, we propose three ways in which corporations can become directly involved. They can participate commercially as contractors to peacebuilders; they can promote PSD through investment; and they can become engaged noncommercially, offering preventive partners and local actors their know-how and assistance with regard to any aspect of the economic dimension of conflict prevention. Role 4: Commercial Corporate Peacebuilding—Business as Contractor The role of the commercial corporate peacebuilder is most easily associated with the profit-oriented nature of companies. Business opportunity is the major driving force for companies to become commercially involved in conflict prevention. Adopting this role, corporate actors offer their commercial services and products to local parties or, especially, to international actors involved in prevention. Since these services and products are in many cases of a better quality and cheaper than those of public sector actors and NGOs, companies are contracted for specific preventive tasks. This kind of commercial partnership is already well established in the fields of humanitarian disaster relief and military (peace support) operations. There are innumerable contractual agreements with actors such as the UN, with business supplying equipment, relief products, and many other services.48 Such PPPs typically revolve around logistics, engineering, and transport. Common tasks given to corporations include providing clean water, ensuring the food supply, planning and maintaining refugee camps, building up effective sanitation systems, and offering health services.49 While for a large majority of companies such contracts represent one aspect of a much wider portfolio, others have developed specific expertise in this kind of assistance. Brown and Root Services, for instance, a part of the Halliburton Company, offers technical, engineering, logistical, and construction services in conflict and postconflict situations, particularly for military purposes.50 Another example is Crown Agents, a UK-based 146

Table 5.2

Three Roles of Corporate Economic Peacebuilding Fields of Engagement

Business Climate Role 4: Commercial

Role 5: Semicommercial

Role 6: Noncommercial

Local Business Capacity

Foreign Direct Investment

✓

Show effects

Spillovers

✓

✓

✓

✓

Note: Corporate conflict prevention (✓).

Focus of Support

International Peacebuilders

Local Public Sector

✓

✓

✓

✓

Types of Business

Local Business Local NGOs Sector Limited range of industries, such as infrastructure and logistics.

✓

✓

TNCs, limited range of industries.

✓

Any kind of corporation.

Conflict Prevention

company focusing on development assistance. Among other things, Crown Agents provides specialized procurement, freight, and logistics services in humanitarian disaster relief and postconflict reconstruction, and it even runs a professional emergency response team.51 There is also potential for such outsourcing in the field of conflict prevention. Business is ubiquitous today, and corporate actors are likely to be commercially involved in any large conflict prevention operation. Building or reconstructing road networks, providing communications facilities, and removing land mines are tasks where the business sector has an evident role to play. Even if commercial corporations do not have explicit preventive intentions, their involvement is still vital to the advancement of peace. The impact of commercial corporate action on conflict prevention has obvious limits, however. Physical (re)construction work—the repairing of key public infrastructure, in particular— stands out as the main field where the business sector can create value on a regular basis. Other than that, the potential for corporate action is relatively modest. Many requirements of private sector development cannot be achieved with commercial services. Building market institutions and generating local business capacity are not tasks that can simply be outsourced. Further, since contracts depend on the decisions and preferences of other actors, most notably those of the public sector, corporations are hired only for measures deemed important by current peacebuilders. The same dependency also means that companies, in their role as commercial economic peacebuilders, are likely to get commissioned only for late-action, postviolence work. Commercial corporate peacebuilding is thus unlikely to be able to fill the gap in PSD that other actors have left open. The role as contractor is undeniably an important one, but it cannot generate the kind of balanced approach and vigor that is lacking today in conflict prevention. Nor can contracting alone do justice to the profound interests of the corporate sector in stability and to the potential of companies to contribute actively to the prevention of conflict. It is also worth pointing out that there is no need to actively promote the idea of commercial corporate peacebuilding to the business community. The logic of the market suggests that business actors automatically become active if contractual work is profitable. Promotion is needed, if at all, to create 148

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awareness among current preventive actors that outsourcing can be a promising approach. Role 5: Semicommercial Corporate Peacebuilding—Promoting Peace Through Investment What we call “semicommercial” corporate peacebuilding is the most direct and active way for companies to help advance the development of a strong local private sector in a country prone to conflict. This role requires business leaders to combine the profit motive of their business operations with the willingness to take on additional risk in the cause of conflict prevention. Semicommercial measures thus link the commercial interests of business with a distinctive notion of corporate social responsibility—which makes this a potentially very important and effective means for corporations to become engaged in economic peacebuilding. Doing well while doing good, in terms of economic peacebuilding, means that companies foster efforts at private sector development with business activities that are not related to contractual work. Activities may include portfolio investment or trade, in particular buying goods processed responsibly by local factories in conflict-prone countries. But foreign direct investment undoubtedly achieves the most substantial and sustainable effect for peacebuilding. TNCs can strengthen the private sector in less privileged countries by extending their international production beyond the industrial world and a few select transition and developing countries. Foreign-backed industrial projects make up an essential part of any PSD strategy. Corporate actors, as the driving force and primary actor of international production, thus play a key role in deciding which countries may succeed in creating economic opportunity—and which ones are left behind. The market obviously privileges success, which is why new investment is normally directed at places that show evidence of stability and a competitive business environment rather than a great many uncertainties. Nevertheless, there are constellations in which activities like trade and FDI make good business sense even in conflict-ridden areas. Clearly, companies cannot play a role as semicommercial peacebuilders in all cases of conflict. We can reasonably assume that they will not become engaged at the height 149

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of violence or in countries that are handicapped not only by conflict but also by other factors such as “poor geography,” where potential markets are so distant that FDI is not lucrative.52 But in many low-level conflicts and in postviolence reconstruction operations, business investment can be a valuable and potentially lucrative move for corporations and a powerful component of economic peacebuilding. Semicommercial corporate peacebuilding is an option worth considering for enterprises. Going into a country early—that is, immediately after a peace agreement has been established or even while troubles continue—can allow companies to establish an advantageous market position before their competitors arrive (“firstmover advantage”). Early investment often means greater shortterm risks, but in the long run it might well bring high returns.53 Also, semicommercial peacebuilding is corporate value creation at its best, and the results of such CSR efforts are substantial. Peacebuilders, and especially the local communities, are certain to benefit from new economic opportunities, while international stakeholders will take notice of and appreciate the corporate engagement for peace. The following examples illustrate how engaging in peacebuilding efforts through investment and/or trade can be profitable for companies. Despite the ongoing civil war, Coca-Cola decided to go into Angola in 2000 and has now invested more than U.S.$40 million there. The company has created more than 300 factory and office jobs, and many more people now sell soda on the street. Coca-Cola expects large future sales and profits, despite the damaged transport infrastructure, widespread corruption, high security costs, a virulent black market, and a shortage of skilled workers.54 Another example is the Paglas Corporation in the Autonomous Region of Muslim Mindanao, in the Philippines. Established in the late 1990s by a former Philippine major—who was able to convince a foreign investment consortium of the region’s business potential despite notorious interethnic violence—this large banana plantation now employs over 2,000 people. The company’s amazing economic performance is recognized as a driving force behind regional economic development and the progressing reconciliation between Muslim and Christian communities in the town where Paglas operates. This could not have occurred if it had not been for the willingness of 150

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the investors to attempt to do business in a high-risk area that other corporations had avoided.55 PeaceWorks is also worth mentioning. This U.S.-based gourmet food company seeks to defuse conflicts in the Middle East, Guatemala, South Africa, and other countries by fostering commercial cooperation between the firms of former adversaries. Apart from brokering joint ventures, PeaceWorks also acts as a U.S. distributor of the jointly fabricated products. Although PeaceWorks designates itself as a “not-onlyfor-profit” company, it shows by example how corporations can also become involved in peacebuilding through peace-oriented trade relationships.56 Semicommercial corporate peacebuilding is no easy task. Companies considering investment must assess with extra care the course and nature of the conflict and the possible responses of the international community in order to fully apprehend the risks and opportunities. There are situations in which a corporate engagement might be counterproductive, from a peacebuilding point of view, even when the level of violence and the direct threat to corporate assets are low. In countries like Iraq, for instance, companies opting for investment are bound to meet harsh criticism as long as the international community pursues a policy of noninvolvement and sanctions. In such cases, a policy of noninvestment or disinvestment might be the corporate action that helps advance peace most, although there are no clear criteria just when to take such a negative stance. This implies that semicommercial corporate peacebuilders are required to carefully coordinate their actions with other actors engaged in conflict prevention if they want to make sure that their involvement creates preventive value rather than harm. Partnership between business and nonbusiness actors is the key to success, from both a commercial and a peacebuilding point of view. To many businesses, such partnerships might be a somewhat sensitive issue because it may mean integrating noncommercial actors into corporate decisionmaking processes with regard to investment-related issues such as the location and size of production. Also of paramount importance is a firm commitment from public sector actors to comprehensively support corporations in their investment. In a climate of latent conflict, the public sector must provide the necessary structural conditions for corporate investment. If macroeconomic reforms or the building of market 151

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institutions are vastly neglected, the business sector will be reluctant to invest. Urgently needed from the public sector is the extension of political risk insurance (PRI) coverage. The availability of PRI, together with other investment-facilitating instruments that help companies plan and implement their foreign production, can be a crucial incentive for business leaders to decide in favor of perceived high-risk investment.57 FDI can be a powerful source of stability in conflict-torn societies. By directly creating sustainable jobs and economic opportunity, international production is a particularly effective and tangible way of providing local communities with the kind of hope and prospects for a productive and healthy life that is indispensable to enduring peace. Also, early investment sends an important signal to other investors. FDI that turns out to be profitable not only draws the attention of other business actors to potential business opportunities but also illustrates that there is a sufficiently predictable and favorable business environment to justify corporate risk taking. Further, the presence of TNCs in conflict areas is an important catalyst for building or enhancing local business capacity. TNC investment often raises the productivity of domestic enterprises. Many local firms gain modern technology, knowledge, and skills from transnationals. Spillovers usually occur through direct links between TNCs and local suppliers or buyers, or through domestic companies hiring workers formerly trained and employed by TNCs. Further, acting as intermediaries between the host economy and the world markets, TNCs may also pave the way for local firms to get better access to export markets, reducing information and communication barriers that all too frequently put local firms in “unglobalized” countries at a commercial disadvantage.58 Finally, TNC affiliates can, through inclusive, nondiscriminatory employment practices, exert a lasting influence on the promotion of diversity and tolerance in conflict-prone societies. By providing economic opportunity regardless of people’s ethnicity, religion, or color, foreign companies can make an important contribution to attempts at overcoming mutual hostile perceptions and cultural stereotypes within local communities.59 There are no doubt limits to what semicommercial corporate peacebuilding can do for conflict prevention. Corporate engagements of this kind will materialize only in specific conflict situations and at 152

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specific stages of a conflict, and they usually presuppose public sector assistance. Moreover, the range of international business actors who might take up such a peacebuilding role is restricted to large companies, mostly TNCs. But even if this semicommercial approach is not always applicable, we nevertheless believe that the business community and current preventive actors should be made aware of just how powerful such measures can be. No other activity of conflict prevention can make a bigger difference to the advancement of peace. And no other step is more urgently awaited by societies in conflict-torn countries. Role 6: Noncommercial Corporate Peacebuilding—Know-How Transfer and Business Assistance Finally, enterprises can also contribute to economic peacebuilding by bringing in a genuine business perspective to private sector development as noncommercial actors of conflict prevention. Companies that take this role offer their extensive economic experience and know-how to any actor seeking to create economic opportunity in conflict-prone countries. The business sector may advise other international peacebuilders on PSD-related issues, work directly with local governments and NGOs, or support and empower local companies and entrepreneurs in a business-tobusiness approach. Noncommercial corporate peacebuilding is a particularly important and promising preventive role for companies. The case for corporate know-how transfer and assistance is particularly compelling in view of the limited capabilities and the poor performance of current actors in economic peacebuilding. The assets of corporate actors—their independence of action, swift decisionmaking abilities, local knowledge, and ample resources—enable them to engage in this kind of peacebuilding early and throughout a conflict cycle. Corporations as noncommercial peacebuilders can achieve high impacts on the advancement of peace and stability without having to take high business risks. An advisory and assisting role does not require companies to channel their regular business activities into conflict prevention. Further, noncommercial involvement is another credible form of demonstrating corporate social 153

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responsibility. While the extra risk makes semicommercial corporate peacebuilding CSR-relevant, the disinterested nature of noncommercial measures will induce stakeholders to perceive such preventive action as a credible act of corporate citizenship. Another major advantage of nonprofit corporate peacebuilding is that it is not restricted to a specific type of industry or to features like the investment structure or size of a company. Many enterprises that are unable or reluctant to become engaged as contractors or investors can still valuably contribute to the advancement of peace in this way. The business sector in its noncommercial role can thus cover a much wider array of preventive tasks than with either of the other two approaches. Noncommercial peacebuilding might well become the most prominent role of primary corporate conflict prevention in the future. It not only gives the business sector the opportunity of becoming a comprehensive partner in any conflict prevention operation, but it is also certain to meet the appreciation of current preventive actors. Once governments, IOs, and NGOs have fully recognized the potential of a systematic business involvement in economic peacebuilding, corporate advisory services and practical business assistance are likely to be in great demand. Corporate know-how transfer and assistance can be used for any aspect of economic peacebuilding, although partners and addressees will change with individual issues. While most of these business measures are not necessarily spectacular, they are, in fact, key to the creation of economic opportunity and to the preservation of longterm peace and stability. Companies have great potential to contribute to the creation of a favorable business environment; and since this is essentially the domain of governments, local and international public sector actors are the obvious partners for the business sector in this case. With any issue, corporate assistance in setting the right priorities to meet the needs of a market economy can be extremely helpful. The corporate community can, for instance, advise the local government in creating incentives (such as reduced import duties, tax exemptions, and the right to repatriate profits) that encourage business activities. Countries that are (overly) dependent on primary commodity exports might also appreciate corporate counseling on how they might diversify their economy. Another area in which corporate expertise is particularly desirable is in ensuring 154

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domestic competition. Promoting and providing for competition in markets has been generally acknowledged as a precondition of economic growth and opportunity.60 Economic peacebuilding, however, often takes place in countries where institutions and policies inhibit domestic competition. The corporate sector, more than any other, is in a position to identify the major barriers to competition and formulate the kind of reforms that foster a competitive business environment. Companies know best, for example, how excessive and complex entry regulations—like those in Mozambique, where seventeen procedures, 174 business days, and a sum of money equivalent to 116 percent of GDP per capita are necessary to start a new company—pose a major hindrance to competitive business, especially in contrast to a country like Canada, where the same formalities take two procedures, two days, and a cost equivalent to 1.4 percent of GDP per capita.61 The business community could also be helpful in encouraging governments to build adequate institutions and policies to create, protect, and enforce property rights. Former entrepreneur Hernando de Soto has convincingly argued that without strong property rights, sustainable economic opportunity can hardly emerge. As long as barking dogs are marking property, large-scale business action is unlikely to unfold. Nor can the large extralegal economy that usually evolves in the course of conflict be reintegrated into the legal realm.62 Again, the corporate sector better than any other can advise policymakers on what kind of property laws are needed to assure local and international entrepreneurs of the feasibility and potential profitability of investment. Enhancing the capacity of the local business sector is an area where international business action can be particularly useful. A business-to-business approach allows companies to empower local entrepreneurs and develop indigenous private sector growth. The corporate community can foster entrepreneurial capacity building by means of financial and nonfinancial services. Semicommercial business assistance that supplies loans to local credit institutions and microenterprise lenders can make a valuable contribution to economic peacebuilding.63 Nonfinancial business development services, however, should focus on the internal, skill-related weaknesses of enterprises, as well as on external constraints that arise from insufficient marketing services and information resources. By advising and assisting entrepreneurs on issues such as technology, 155

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product improvement, promotion, international market developments, and opportunities for links to TNCs, international companies can help local actors upgrade their businesses and create economic opportunity.64 Besides supporting already established organizations engaged in enterprise development—FUNDES, ACCION International, and EnterpriseWorks Worldwide come to mind65—the corporate sector could advance the cause of economic peacebuilding considerably by setting up specific enterprise programs in those many conflict-affected countries where such assistance simply does not exist. A noteworthy example of individual corporate action in this field is the South African Business Beat Initiative of Deloitte Touche Tohmatsu. Aiming to strengthen black economic empowerment, the company seeks to encourage entrepreneurship by transferring skills, providing access to specialist advice in areas such as information technology (IT) and taxation, helping with business plan development, and searching for creative funding solutions.66 Another useful contribution is the establishment of business advice centers. Here the best way for corporations to become involved is not by running such organizations permanently but by helping to create a competitive market for local suppliers of business development services. Initially, corporate peacebuilders might well be required to offer these services themselves. In the long run, however, they should aim at helping local business actors provide quality services that are demand-driven and for which local enterprises are willing to pay.67 With regard to attracting foreign direct investment, the business sector can help local governments and international peacebuilders understand the changing location strategies of TNCs. Globalization has made local conditions more important to the investment choices of international players. The mobile assets of TNCs today go where local immobile assets best complement them. Traditionally, factors such as large markets, natural resources, and cheap labor were decisive factors for choosing where to direct FDI. Today, however, features like technical progress, skilled workforces, and industrial clusters with dense networks of suppliers tend to be key factors determining the FDI choices of many industry sectors. In view of this shift, developing countries (and countries engaged in peacebuilding, in particular) must find ways

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to develop location-specific advantages in order to become or stay competitive for investment.68 Companies as noncommercial peacebuilders can also direct their FDI-related know-how and assistance toward the business community. They can play a vital role in promoting specific FDI opportunities among TNCs and in sharing with other companies their views and experiences on doing business in conflict-prone countries. Corporate actors are the most credible promoters of the benefits of corporate peacebuilding. A business-to-business approach, analyzing and weighing the pros and cons of investment, could well result in more companies taking the extra risk and generating the kind of economic opportunity that is so important for long-term social stability and peace.

Individual Corporate Conflict Prevention: Opportunities and Limitations Given that there are various opportunities for the corporate sector to usefully contribute to conflict prevention, what is the way forward for companies who wish to engage in prevention? How can entrepreneurs willing to take their share of preventive efforts become involved? Obviously, single-business approaches must and will make up an important component of corporate conflict prevention. Corporate social responsibility refers primarily to individual commercial actors, not collectively to the “business community.” This implies above all that it is the duty of each enterprise to measure its impact on society, adequately engage with its stakeholders, and make sure that it does not cause harm with its business activities. But it also means that companies should not hide behind vague codes of conduct when it comes to the proactive roles discussed in this chapter. Having said that, there are obvious limitations to individual, value-creating corporate activities—and it is important to address these too when discussing the as yet untapped business potential to prevent violent conflict. Corporations are bound to act individually when their commercial operations are an integral part of their preventive engagement. Corporate contracting and corporate investment are

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core business activities that must be company managed. Noncommercial preventive action in some cases can be pursued by individual businesses, too. In fact, if corporations accept the view that conflict prevention is closely linked to their social responsibility, they will probably seek to handle corporate preventive roles in the same way they manage their traditional CSR programs.69 Enterprises today deliver their funds, products, services, skills, and expertise through their internal management structures, be it through a special CSR unit or through their normal purchasing, marketing, distribution, or communication departments. Most business actors pursuing this approach define their CSR measures at the level of local branches, although a few notable cases, such as BP and IBM, seek to attach to their community development programs a global strategic scheme.70 Alternatively, they set up separate legal entities to manage and funnel their noncommercial, public-purpose activities.71 Most of such singlebusiness foundations focus their engagement on those countries the company does business in.72 But again, there are also those foundations that promote specific values and issues, irrespective of the countries the company is commercially engaged in.73 These traditional ways of CSR engagement can be feasible for noncommercial corporate conflict prevention as long as companies restrict their participation to roles such as funding and inkind support. Conversely, with more demanding roles such as strategic philanthropy or corporate know-how transfer, common CSR approaches will frequently prove unsuitable for effective corporate action. Corporate conflict prevention differs sharply from traditional social investment in two major respects. First, the measures required are often more complex. Most enterprises will be unfamiliar with conflict prevention. Many might employ their own CSR specialists today, but proactively dealing with matters of conflict requires additional, conflict-related knowledge of the issues at stake and actors involved that individual commercial actors usually lack. Corporate foundations might be better suited to developing and institutionalizing prevention-related expertise, but often their major handicap is a lack of capacity for delivering hands-on assistance. Some foundations do run their own content-based programs, but so far they usually do not have available the business personnel necessary for an effective engagement in activities such as PSD. 158

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Second, preventive measures are often also more delicate than traditional corporate community work. Corporate conflict prevention might touch upon sensitive public issues, such as economic policies or tax regimes. Credibility therefore represents the biggest single challenge companies might have to face when acting on their own. Business actors who become engaged within their normal corporate structures will find it difficult to convince all stakeholders of their noncommercial intentions. In the case of foundations, the problem of credibility appears less acute, as foundations do not represent the commercial interests of their parent companies. But even foundations can find it difficult to convince preventive actors and stakeholders of their independence from their corporate donors. A final handicap of individual company initiatives is the fragmentation of effort that characterizes this kind of corporate conflict prevention. Individual initiatives can be essential and innovative, but if there are too many isolated projects the overall needs of conflict prevention are likely to be overlooked. Above all, such fragmentation will prevent the business sector from being able to act and from being perceived as a strategic partner. Thus, individual business approaches alone cannot do justice to the large potential of corporate conflict prevention. If we maintain that companies should become involved in such a way that they can bring in their full weight and potential, the coordination of corporate efforts is indispensable, both within the business sector and with other preventive actors. Partnership in many instances will be the key to success. Partnership, therefore, is the final issue we need to address.

Notes 1. See Jane Nelson, The Business of Peace: The Private Sector as Partner in Conflict Prevention and Resolution, International Alert, Council on Economic Priorities and the Prince of Wales International Business Leaders Forum, 2000, 79–83; Virginia Haufler, “Is There a Role for Business in Conflict Management?” in Turbulent Peace: The Challenges of Managing International Conflict, eds. Chester A. Crocker, Fen Osler Hampson, and Pamela Aall (Washington, DC: United States Institute of Peace Press, 2001), 661. 2. See Jake Sherman, Private Sector Actors in Zones of Conflict: Research Challenges and Policy Responses, IPA Workshop Report on an expert

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workshop held 19 April 2001 (New York: International Peace Academy, July 2001). 3. See Louise Diamond and John W. McDonald, Multi-Track Diplomacy: A Systems Approach to Peace, 3d ed. (West Hartford, CT: Kumarian Press, 1996), 57–64; Nelson, The Business of Peace, 110–115; OECD/ DAC, The DAC Guidelines: Helping Prevent Violent Conflict (Paris: OECD, 2001), 69. See also Christopher L. Avery, Business and Human Rights in a Time of Change (Amnesty International [UK], 2000); United Nations/Office of the High Commissioner for Human Rights, Business and Human Rights: A Progress Report (Geneva, January 2000). 4. For the Consultative Business Movement and the Group of 7 see the two excellent case studies of International Alert: http://www. international-alert.org/policy/business/casestudies.htm. Both business initiatives have also been explored by the IMTD: http://www.imtd.org/ initiatives-businesspeacebuilding.htm. See also Ray Mullan, “The Role of the Business Community in Northern Ireland,” in Peacebuilding: A Field Guide, eds. Luc Reychler and Thania Paffenholz (Boulder: Lynne Rienner, 2001), 165–168; Nelson, The Business of Peace, 112–114. 5. On Ron Lauder’s business diplomacy, see three articles in ArabicNews (1 May 2000; 11 May 1999; 6 April 1999): http://www.arabicnews. com. On Tiny Rowland, see Alex Vines, “The Business of Peace: ‘Tiny’ Rowland, Financial Incentives and the Mozambican Settlement,” Accord: An International Review of Peace Initiatives, no. 3 (1998): 66–74. 6. Marina Ottaway, “Reluctant Missionaries,” Foreign Policy, no. 125 (2001): 44–54. 7. Allan Gerson, “Peace Building: The Private Sector’s Role,” American Journal of International Law 95, no. 1 (2001): 103. 8. The European Union, the OECD, and the World Bank have all developed their own overall strategies for PSD. See European Union/Commission of the European Communities, “A European Community Strategy for Private Sector Development in ACP Countries,” Communication from the Commission to the Council and the European Parliament, COM(1998)667 final, 20 November 1998; OECD/Development Assistance Committee, DAC Orientations for Development Co-operation in Support of Private Sector Development, DCD/DAC(93)32/REV2, 1 June 1994; World Bank, Private Sector Development Strategy: Directions for the World Bank Group, 9 April 2002; see also the website of the World Bank: http://www.worldbank.org/html/fpd/privatesector. Other multilateral organizations, such as the UN Conference on Trade and Development (http://www.unctad.org), the International Finance Cooperation (http:// www.ifc.org), the International Labour Organization (http://www.ilo. org), and the UN Industrial Development Organization (http://www. unido.org), concentrate on specific components of PSD. 9. John P. Birkelund, “Doing Good While Doing Well: The Unheralded Success of American Enterprise Funds,” Foreign Affairs 80, no. 5 (2001): 20.

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10. There are many who argue that the political dimension of conflict and its resolution must constitute the main focus of peacebuilding. See Elizabeth M. Cousens and Chetan Kumar, with Karin Wermester, eds., Peacebuilding as Politics: Cultivating Peace in Fragile Societies (Boulder: Lynne Rienner, 2001). 11. Paul Collier, “Economic Causes of Civil Conflict and Their Implications for Policy,” in Crocker, Hampson, and Aall, Turbulent Peace, 143–162. 12. Prince of Wales International Business Leaders Forum, Managing in a World of Fear and Conflict: An IBLF Briefing Paper, 12 October 2001, 4. 13. The figures were taken from the online report of the Special Coordinator of the Stability Pact for South-Eastern Europe, “2 1/2 Years of Stability Pact,” of December 2001. See http://www.stabilitypact.org. 14. See Dimitri G. Demekas et al., Building Peace in South Eastern Europe: Macroeconomic Policies and Structural Reforms Since the Kosovo Conflict (Washington, DC: International Bank for Reconstruction and Development/World Bank, February 2002). 15. See International Crisis Group, Bosnia’s Precarious Economy: Still Not Open for Business, ICG Balkans Report, no. 115, 7 August 2001; Elizabeth Sellwood, “Policy Recommendations for Sustainable Post-Conflict Reconstruction in South Eastern Europe,” in Enhancing the EU’s Response to Violent Conflict: Moving Beyond Reaction to Preventive Action, Conference Report and Policy Recommendations, 7–8 December 2000 (Brussels: International Security Information Service ([ISIS] Europe, January 2000), 37–40. 16. See International Crisis Group, Kosovo: A Strategy for Economic Development, ICG Balkans Report, no. 123, 19 December 2001. 17. See Tilman Brück, Valpy FitzGerald, and Arturo Grigsby, Enhancing the Private Sector Contribution to Post-War Recovery in Poor Countries, Queen Elizabeth House Working Paper, no. 45/1 (Oxford: University of Oxford International Development Centre, 2000). 18. REAP is an initiative of the United Nations Development Programme. See http://www.undp.org/afghanistan/archive/05mar02.html. On peacebuilding in Afghanistan after the fall of the Taliban regime, see International Crisis Group, Afghanistan and Central Asia: Priorities for Reconstruction and Development, ICG Asia Report, no. 26, 27 November 2001. 19. See Jane Nelson, Building Partnerships: Cooperation Between the United Nations and the Business Community (United Nations Global Compact, in collaboration with the Prince of Wales International Business Leaders Forum, February 2002); see also the UN website on the United Nations and business: http://www.un.org/partners/business. 20. See Simon Heap, NGOs Engaging with Business: A World of Difference and a Difference to the World, INTRAC NGO Management Policy Series, no. 11 (Oxford: INTRAC, 2001).

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21. See, for instance, the Business Partners for Development initiative of the World Bank, which comprises twenty-nine pilot projects of development partnerships with business: http://www.bpdweb.org. See also Putting Partnering to Work: Tri-sector Partnership Results and Recommendations, a report of Business Partners for Development published in April 2002. There is also the Partnership Brokers Forum, a project of the Resource Centre for the Social Dimensions of Business Practice: http://www.partnershipbrokers.net. 22. See Shirley Sagawa and Eli Segal, Common Interest, Common Good: Creating Value Through Business and Social Sector Partnerships (Boston: Harvard Business School Press, 2000). 23. See World Health Organization, Macroeconomics and Health: Investing in Health for Economic Development, Report of the Commission on Macroeconomics and Health, chaired by Jeffrey D. Sachs, December 2001. 24. For the Statoil case study, see the website of the WBCSD: http://www.wbcsd.org/casestud/statoil/index.htm. 25. For the Abraham Fund, see http://www.abrahamfund.org. 26. See the website of RefAid on this case: http://www.refaid.com/ html/corporate/glaxoprofile.htm. 27. See the Secure the Future program of Bristol-Myers Squibb: http://www.securethefuture.com. 28. Juliette Bennett, “Business in Zones of Conflict: The Role of the Multinational in Promoting Regional Stability,” paper prepared for the UN Global Compact Policy Dialogues, International Peace Forum, March 2001, 10. 29. Nelson, The Business of Peace, 108. 30. For this Cisco initiative, see the website of Cisco Systems: http:// www.cisco.com/warp/public/779/edu/commitment/intl/partnerships/ldc. 31. See the press release “World Economic Forum Announces Disaster Response Network,” World Economic Forum, 2 February 2002. 32. For the Global Community Partnership Programmes of GlaxoSmithKline, see http://www.gsk.com/community/programmes.htm. For PQMD, see http://www.pqmd.org; see also Nelson, The Business of Peace, 109. 33. See United Nations, “Secretary-General Urges Business Leaders, at ‘Turning-Point in History’ to be ‘Part of the Solution’ in War Against World Poverty,” press release concerning the address by UN Secretary-General Kofi Annan to the closing session of the World Economic Forum in New York City, SG/SM/8115, 4 February 2002. 34. See United Nations Development Programme, Human Development Report 2001: Making New Technologies Work for Human Development (New York: Oxford University Press, 2001), 111f.; see also Nancy B. Dyke, ed., Alleviating Global Poverty: Technology for Economic and Social Uplift, Conference Report of the Aspen Institute International Peace, Security and Prosperity Program, Aspen Institute, 2001. 35. Rosabeth Moss Kanter, “From Spare Change to Real Change: The Social Sector as Beta Site for Business Innovation,” Harvard Business

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Review (May/June 1999): 123–132. On the issue of strategic philanthropy, see Michael E. Porter and Mark R. Kramer, “Philanthropy’s New Agenda: Creating Value,” Harvard Business Review (November/December 1999): 121–130; see also the website of Venture Philanthropy Partners: http://venturephilanthropypartners.org. 36. On BP, see http://www.bp.com/environ_social/social_respon/ index.asp; for the other two cases, see Nelson, The Business of Peace, 68. 37. On Levi Strauss & Co., see http://www.levistrauss.com/ responsibility. 38. On AVINA, see http://www.avina.net. 39. See OECD/DAC, Support of Private Sector Development, 12–21; see also World Bank, World Development Report 2002: Building Institutions for Markets (Oxford: Oxford University Press, 2002). 40. European Union/Commission of the European Communities, “Strategy for Private Sector Development,” 7. 41. On the issue of FDI and development, see Theodore H. Moran, Foreign Direct Investment and Development: The New Policy Agenda for Developing Countries and Economies in Transition (Washington, DC: Institute for International Economics, 1998). 42. For a skeptical view, see Gordon H. Hanson, Should Countries Promote Foreign Direct Investment? G-24 Discussion Paper, no. 9 (UNCTAD and Center for International Development at Harvard University, February 2001). 43. See Sanjaya Lall, FDI and Development: Policy and Research Issues in the Emerging Context, Queen Elizabeth House Working Paper, no. 43 (Oxford: University of Oxford International Development Centre, 2000); Edward M. Graham, Fighting the Wrong Enemy: Antiglobal Activists and Multinational Enterprises (Washington, DC: Institute for International Economics, 2000). 44. See Barry P. Bosworth and Susan M. Collins, “Capital Flows to Developing Economies: Implications for Saving and Investment,” Brookings Papers on Economic Activity, no. 1 (1999): 143–169; Magnus Blomström and Ari Kokko, “Multinational Corporations and Spillovers,” Journal of Economic Surveys 12, no. 2 (1998): 247–277; James R. Markusen and Anthony J. Venables, “Foreign Direct Investment as a Catalyst for Industrial Development,” European Economic Review 43, no. 2 (1999): 335–356. 45. See UNCTAD, World Investment Report 2001, 127–162. 46. William H. Meyer, “Human Rights and MNCs: Theory Versus Quantitative Analysis,” Human Rights Quarterly 18 (1996): 368–397. 47. Gilles Carbonnier, “The Challenges of Rebuilding War-Torn Economies,” in International Security Challenges in a Changing World, eds. Kurt R. Spillmann and Joachim Krause (Berne: Peter Lang, 1999), 297–320; Gilles Carbonnier, Conflict, Postwar Rebuilding and the Economy: A Critical Review of the Literature, The War-Torn Societies Project Occasional Paper, no. 2 (Geneva: United Nations Research Institute for Social Development, 1998).

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48. Nelson, The Business of Peace, 68. 49. Haufler, “Role for Business,” 665. 50. For Brown and Root Services, see http://www.halliburton.com; see also Nelson, The Business of Peace, 107. 51. For an overview of the involvement of Crown Agents in international humanitarian and peacebuilding missions in the Balkans, Sierra Leone, East Timor, and other countries, see the company’s “Track Record in Humanitarian Relief Operations” at http://www.crownagents. com. See also Nelson, The Business of Peace, 107. 52. David Dollar and Aart Kraay, “Spreading the Wealth,” Foreign Affairs 81, no. 1 (2002): 132. 53. Gerson, “Peace Building,” 116. 54. See “Braving War and Graft, Coke Goes Back to Angola,” New York Times, 22 April 2001. 55. See the Paglas case study of IBLF and International Alert: http:// www.pwblf.org/csr/csrwebassist.nsf/content/a1a2a3a4e5.html. 56. For PeaceWorks, see http://www.peaceworks.com. 57. On PRI, see Alan Gerson and Nat J. Colletta, Privatizing Peace: From Conflict to Security (Ardsley, NY: Transnational Publishers, 2002), 55–64; see also Theodore H. Moran, ed., International Political Risk Management: Exploring New Frontiers (Washington, DC: World Bank, 2001). Key public sector institutions facilitating investment include the Multilateral Investment Guarantee Agency of the World Bank Group and national export credit agencies. For MIGA, see http://www.miga.org. 58. See Andrea Fosfuri, Massimo Motta, and Thomas Roende, Foreign Direct Investment and Spillovers Through Workers’ Mobility, Discussion Paper, no. 2194 (London: Centre for Economic Policy Research, 1999); Niko Matouschek, Foreign Direct Investment and Spillover through Backward Linkages, Discussion Paper, no. 2283 (London: Centre for Economic Policy Research, 1999); Andrés Rodriguez-Clare, “Multinationals, Linkages, and Economic Development,” American Economic Review 86, no. 4 (1996): 852–873; Sanjaya Lall, “Investment, Technology and International Competitiveness,” in The New Globalism and Developing Countries, eds. John H. Dunning and Khalil A. Hamdani (Tokyo: United Nations University Press, 1997), 232–259. For a valuable sourcebook on business linkages, see the Prince of Wales International Business Leaders Forum, The Business of Enterprise: Meeting the Challenge of Economic Development Through Business and Community Partnerships, April 2002. 59. For an example of a targeted workplace diversity initiative, see the MultiCultural Transformation program of Deloitte Touche Tohmatsu in South Africa, outlined on the website of the WBCSD: http://www. wbcsd.org/casestud/multiculture/index.htm. 60. See World Bank, World Development Report 2002, 133–149. 61. See Simeon Djankov et al., The Regulation of Entry, Harvard Institute of Economic Research Discussion Paper, no. 1904 (Cambridge: Harvard University Press, 2000).

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62. Hernando de Soto, The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else (New York: Basic Books, 2000); de Soto, The Other Path: The Invisible Revolution in the Third World (London: Tauris, 1989). 63. Notable initiatives include the Deutsche Bank Microcredit Development Fund, as well as Commerzbank’s decision to become a joint shareholder of the Micro Enterprise Bank (MEB) in Kosovo. For the Deutsche Bank, see the case study on the website of the WBCSD: http://www.wbcsd.org/casestud/db/index.htm. For MEB, see http://www. mebkosovo.com. 64. Jacob Levitsky, ed., Business Development Services: A Review of International Experience (London: Intermediate Technology Publications, 2000); Jonathan Dawson, with Andy Jeans, Looking Beyond Credit: Business Development Services and the Promotion of Innovation Among Small Producers (London: Intermediate Technology Publications, 1997). 65. For FUNDES, a foundation set up by Swiss business leaders that promotes SME development in more than a dozen Latin American countries, see http://home.fundes.org. For ACCION, a nonprofit organization dedicated to providing finance and business training to microenterprises, see http://www.accion.org. For EnterpriseWorks Worldwide, an NGO specializing in empowering small producers, see http:// www.enterpriseworks.org. 66. For the Business Beat Initiative, see http://www.businessbeat.co.za. 67. See Mary McVay and Alexandra Overy Miehlbradt, Emerging Good Practices in Business Development Services, BDS Seminar Reader for the First Annual Seminar, Turin, Italy, 4–8 September 2000 (Geneva: International Labour Organization, 2000). 68. United Nations Conference on Trade and Development, World Investment Report 1999: Foreign Direct Investment and the Challenge of Development (New York: United Nations, 1999); Frank Barry, Holger Görg, and Eric Strobl, Foreign Direct Investment, Agglomerations and Demonstration Effects: An Empirical Investigation, Discussion Paper, no. 2907 (London: Centre for Economic Policy Research, 2001); Michael E. Porter, “Location, Competition and Economic Development: Local Clusters in a Global Economy,” Economic Development Quarterly 14, no 1 (2000): 15–34. 69. See International Finance Corporation, Investing in People: Sustaining Communities Through Improved Business Practice: A Community Development Resource Guide for Companies, December 2000, Chapter 6. 70. See Steven Rochlin et al., Benchmarks for International Corporate Community Involvement: Executive Summary (Center for Corporate Citizenship at Boston College and ProbusBNW, 2001). For BP, see http:// www.bp.com/environ_social/index.asp; for IBM, see http://www.ibm. com/ibm/ibmgives. 71. A list of important foundations in Europe and the United States is provided by the UN Fund for International Partnerships: http://www.

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un.org/unfip/philanthropies.htm; see also Andreas Schlüter, Volker Then, and Peter Walkenhorst, eds., Foundations in Europe (London: Directory of Social Change, 2001). 72. For example, see the Rio Tinto local community foundations in countries such as Indonesia or Zimbabwe, referred to in Nelson, The Business of Peace, 91. Another case study refers to Escondida in Chile, one of the world’s largest copper producers. See International Finance Corporation, Investing in People, 65–69. 73. The Bill & Melinda Gates Foundation (http://www.gatesfoundation. org) focuses on global health issues, especially on vaccines for the poor; the Soros Foundations Network (http://www.soros.org) helps build and maintain the infrastructure and institutions of an open society in more than thirty transition and developing countries; the Novartis Foundation for Sustainable Development (http://www.foundation.novartis.com) concentrates on development cooperation in the fields of social development, health, and agricultural development; the United Nations Foundation (http://www.unfoundation.org) was set up by Ted Turner in 1997 with an exceptional gift to the UN of U.S.$1 billion over ten years. Also of note are the Ford Foundation (http://www.fordfound.org) and the Carnegie Corporation (http://www.carnegie.org), which have been dedicated to strengthening democratic values, reducing poverty, and generally advancing human achievement for many years.

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6

Conclusion: Business as a Strategic Partner in Conflict Prevention

0

ver the past decade, the role of the private sector as an international actor has increased considerably. To a large extent, this is the result of liberalization and privatization. The opening of national markets to foreign investment has led to a dramatic expansion in transborder flows of capital, services, goods, ideas, and people. The transfer of assets and services from public agents to private hands has enlarged the private sector’s share and direct control of national economies. As a result, the regulatory capacity of states has dwindled, whereas the governance capacity of nonstate actors has grown. New forms of governance patterns have become established. The collective activities of international economic actors, in particular, have become heavily dependent on public-private partnerships, industrial selfregulation, and private international regimes. In the area of war and peace, however, governance is still profoundly state-centric. The broadening of the security agenda to include new risks of a primarily political, social, cultural, economic, and/or ecological nature is so far not adequately reflected in new forms of global governance. Yet the momentum of privatization has also spread to this formerly exclusive domain of the state. All large humanitarian relief operations, all military peace support operations, and most traditional development programs depend heavily on services and assets provided by the private sector. In fields such as logistics, engineering, and transport, not much would work without public-private partnerships. 167

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Less visible, but of greater concern, is that privatization is undermining the state monopoly regarding the use of force. Corporate bodies that specialize in providing military skills are taking over functions of war, such as combat and operational support, military advice and training, arms procurement, intelligence gathering, and hostage rescue. Police functions have also been outsourced to private actors. Many private security companies now specialize in crime prevention—protecting property and people in nonconflict and conflict situations alike. Their services are used mainly in weak and failing states by local and Western governments, but also by corporations in the extractive industry and by humanitarian agencies.1 Conflict prevention has also undergone some privatization. The (re)construction of key public infrastructures, for example, is often outsourced to private actors. However, commercial corporate preventive action has its limits. Many important preventive measures, such as building institutions for markets or tackling corruption, cannot simply be outsourced by the public sector. More importantly, commercial prevention does not posit the business sector as a strategic partner with a key competence in the area of economic peacebuilding. Commercial prevention is about economies of scale and the efficient use of scarce resources and not about the formulation and implementation of sustainable preventive programs and projects. Commercial prevention is driven by the logic of the market and—once delegated to a specific actor—is executed in the narrow (economic) interest of the company and not in the larger (social and political) interest of a peaceful transformation of conflict. We do not argue for the further privatization of conflict prevention. Our case goes far beyond commercial corporate peacebuilding and focuses on those business qualities that can effectively complement the preventive efforts of public and civil society actors and make the private sector a strategic partner in their preventive efforts. Establishing such a partnership is no easy task. Measures to avert violence and build peace in conflict-affected countries are often related to sensitive issues that touch upon aspects of sovereignty and public authority.2 The primary responsibility for the preservation and restoration of peace has therefore to remain with the public sector. Only the public sector can formulate conflict prevention policies and gain political legitimacy for their 168

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implementation. However, when it comes to the socioeconomic aspect of peacebuilding, the business sector should play a role both in planning and in implementing preventive operations. We have identified the need for corporations to achieve credibility with the local and international community as the single biggest challenge for business to become an acknowledged actor in conflict prevention. Whether business actors seek to enable other preventive actors by funding, in-kind support, or strategic philanthropy, or whether they become engaged as economic peacebuilders themselves, they will frequently encounter concerns about the motives behind their preventive actions. If companies want to become involved in conflict prevention as trustworthy partners, two principles should guide their corporate value-creating activities. First, they should seek to work in transsector partnership with states, IOs, and NGOs. Second, they should pool their resources and know-how on the intrasector level and establish a collective business initiative.

Toward Global Governance in Conflict Prevention: Legitimacy Through Transsector Partnership Creating a partnership that includes the public, civil society, and business sectors, and that seeks to advance sustainable conditions of peace, must be the long-term goal. Industrial self-regulation in the form of codes of conduct and CSR reporting is no substitute for a genuine move from bisectoral to trisectoral governance patterns in conflict prevention. In any case, the search for new forms of cooperation will be a very complex challenge, not least because both the private sector and the civil society sector consist of a very heterogeneous array of agents. Patterns of governance among actors from different sectors with different roles and responsibilities will have to be networked rather than hierarchically organized. A first essential step on the way ahead is to make both the business community and current preventive actors aware that the business sector has an important role to play in such joint preventive efforts. Our assessment of current conflict prevention operations has revealed that neither states nor international organizations and 169

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NGOs have a flawless profile for engaging in early preventive action. The same is true for business actors. Taken together, however, the three profiles complement each other’s strengths and weaknesses to a considerable degree. From this we concluded in Chapter 3 that better coordination of initiatives and actors would substantially improve the performance of international preventive endeavors. Bringing in the business sector reinforces this argument. Whatever commercial or noncommercial role companies and business foundations might engage in, the effectiveness of their actions will depend on how well their efforts are coordinated with public sector and NGO activities. Transsector partnership is not only a precondition for efficiency; it is also the most promising way for the private sector to deal with its credibility deficit. The legitimacy of a comprehensive business role in the prevention of deadly conflict can be decisively enhanced if companies pursue their efforts jointly with actors who represent a broader public interest. If corporations work in partnership with international organizations like the UN or with democratically elected governments, they will defuse concerns that their commercial nature makes them inappropriate actors in preventive operations.3 Conversely, global governance in the field of conflict prevention will not be achieved simply by the business sector agreeing to take on its due share. As long as other preventive actors do not recognize its full potential as a partner in such matters, the business community will be reluctant to actively engage in peacebuilding.4 The business sector must be given a fair say in devising and implementing preventive operations, in particular with regard to the often neglected area of economic peacebuilding, if it is to bring in its own assets and comparative advantages. At the Monterrey Conference on Finance for Development in March 2002, the corporate community was welcomed for the first time to contribute officially to a UN conference program and participate actively in the search for solutions.5 The same cooperative spirit should characterize future conflict prevention operations. What kind of governance structures can best facilitate cooperation between the corporate sector and current preventive actors? Some have called for the establishment of a permanent institutional framework to coordinate joint activities and programs. Allan Gerson and Nat J. Colletta have suggested that a Peace 170

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Transition Council (PTC) be set up to allow for a unified transsector approach to postconflict peacebuilding. Consisting of twenty representatives appointed by the UN, the World Bank, the NGO community, and the business sector, the PTC would help formulate and implement strategies for recovery, coordinate functions and synergistic gains, and run its own programs.6 However, we believe that what we have argued with respect to the interplay of current actors in prevention applies with undiminished validity to trisector collaboration; case-by-case arrangements and an ad hoc division of labor seem a more achievable and realistic means. They also promise greater flexibility for adapting cooperative regimes to individual requirements. The creation of a permanent initiative is required, in our view, on the intrabusiness level rather than on the transsector level. Only a joint business initiative will put the corporate sector in a position that corresponds to its interest in stability and to its potential for contributing valuably to conflict prevention.

The Case for a Collective Business Initiative Business leaders should recognize their engagement in conflict prevention for what it really is: a strategic task and an issue of leadership. Globalization and the changing context in which business operates today have increased the complexity of networked interdependence between politics and the market. Together with the changing nature of conflict, this has increased the business interest in peace and security. No longer can corporations deal with security as a private good related only to the protection of their business property and activities. Over the past years, their stake in human security and worldwide stability has been growing fast. The business sector needs to redefine its role in averting deadly conflict, and it needs to develop a sustainable strategy on how best to complement the preventive initiatives of states, IOs, and NGOs with a business perspective and specific business qualities. The structural changes in the international system are forcing the business sector to deal with conflict one way or the other. Corporations can passively stick to codes of conduct—and will have to face the public pressure and the ensuing damage to their 171

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corporate brands. Or they can acknowledge that their activities in developing and transition countries are intrinsically linked to conflict and that the odds are growing that they (willingly or unwillingly) will cause harm to local communities and exacerbate conflict. If such recognition translates into greater willingness by the business sector to increase its share of responsibility for a more equitable way of wealth creation and a more proactive role in international preventive efforts, the credibility of business activities is likely to grow in the perception of both public and civil society actors. Once the business sector accepts that a long-term engagement in conflict prevention is in the interest of peace and in the interest of business, business actors will have to search for ways to deal successfully with their potential deficits as peacebuilders and become a strategic partner in international preventive efforts. Pooling corporate resources and know-how in joint business efforts is key if the business sector is to engage comprehensively, effectively, and credibly in conflict prevention. Collective solutions can achieve a scale and impact that cannot be matched by individual business action. Multibusiness approaches to conflict prevention minimize the likelihood that companies will pursue parochial interests. Collective solutions are essentially nonthreatening and are likely to be run by responsible leaders. Also, capacity is significantly enhanced through collective efforts, and thus sustainability becomes a notable feature of any collective corporate initiative in conflict prevention. For these reasons, intrabusiness coordination must represent an important component on the road toward successful corporate conflict prevention. Noncommercial corporate peacebuilding is a particularly high-potential option when undertaken collectively, but the semicommercial activities of corporations can also be boosted and supported this way. Further, orchestrated business measures can help to empower other preventive actors, complementing the efforts of individual companies and foundations. The preventive activities of a collective business initiative should have a geographical reach that is global rather than regional or country-specific. There are already several examples of collective business initiatives that focus on socioeconomic development in specific countries or regions.7 In Sri Lanka, Colombia, Northern Ireland, and South Africa, there are even corporate initiatives that 172

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explicitly seek to contribute to the peaceful resolution of conflict.8 Such local initiatives undoubtedly are essential and deserving— and we can only encourage business leaders in other conflict-affected areas to undertake similar efforts. However, only an initiative with a worldwide focus is likely to be backed by a large number of corporate players, including key multinationals; only a global initiative will be able to adequately represent the potentially global interest of the business sector in its dealings with the public sector, whose geographical focus, for reasons of national strategic interests, tends to be comparatively narrow in scope; and only such an initiative can become an acknowledged umbrella organization of the international business community with respect to all matters of corporate conflict prevention. What roles should a collective business initiative take over in international prevention efforts? As illustrated in Figure 6.1, we

Figure 6.1

Potential Roles of a Collective Business Initiative with Global Outreach

Strategic partner/ corporate interlocutor: brings a business perspective to conflict prevention; focuses on economic peacebuilding.

Preventive programs: business development services; strategic philanthropy; and funding.

Collective business initiative

Advisory services to corporate members: do no harm; social invesment/ enabling; semicommercial and foreign direct investment; and commercial/in-kind support (clearinghouse).

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propose three major functions for such a body. The first function would be to represent the corporate sector as a strategic partner vis-à-vis other local and international actors engaged in conflict prevention and would allow for extensive networked cooperation. A collective corporate initiative should aim at bringing a business perspective to the strategic planning and management of preventive endeavors—a factor that has been conspicuously neglected so far. In particular, it could assist local and Western governments, international organizations, and NGOs in assessing the needs and defining the necessary measures with respect to economic peacebuilding. It would also do the necessary networking, both with other international and local actors and within the business community. In addition, it would constitute a central contact point in all preventive matters relating to the business sector. A second key function of a collective business initiative would be to design and implement corporate programs and projects aimed at building up local business capacity. Preventive fieldwork in which corporate know-how is transferred and business development services are set up might well become one of the most visible and appreciated contributions the suggested initiative could offer. Assistance of this kind could be available to local business actors even when the local government and international preventive actors are unwilling or unable to become engaged. A third key function of a business initiative would be to offer advisory services to its member companies. In return for their funding, corporations could expect support and expertise on any issue relating to conflict. They could get information on how to avoid doing harm with their business operations, make conflict prevention an issue of their CSR, and create value for peace through their social investment. Or they could seek help with semicommercial peacebuilding, the initiative in this case providing them with information about investment opportunities and supporting them in obtaining political risk insurance coverage. Country-specific investment guides that bring together host governments and companies seeking new locations could be useful tools offered by the initiative.9 Further, the initiative could function as a coordinative organ and clearinghouse for companies interested in opportunities for commercial peacebuilding and corporate in-kind donations.

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If a corporate conflict prevention initiative is to operate effectively along these lines, its organizational features will have to be defined carefully. A first requirement is that it be business-funded but donor-independent so that it can ensure both a solid financial basis and broad credibility. Second, it should be run by a business-experienced management board in accordance with the constant internal and external evaluation practices common in the business world. Third, the decisionmaking process should be lean and fast, with a strategic executive committee responsible for key decisions. This will allow for early and quick responses, when necessary. Fourth, permanent staff—practitioners and academics with backgrounds in business, international relations, conflict resolution, or development assistance—should plan, coordinate, and externally represent the agency’s activities. Finally, as far as the implementation of these activities is concerned, the initiative could acquire the necessary competence and capacity by recruiting employees from its member companies on a temporary basis. Volunteers would be selected according to their specialized knowledge, skills, or networks that are relevant to the tasks or countries in question. Setting up a pool of corporate experts for economic peacebuilding missions and other activities related to conflict prevention could become a hallmark of the initiative.10 The establishment of a collective business initiative starts with growing awareness on the level of individual companies (rather than on the level of business associations) for the need and the potential for corporate conflict prevention. Once the premise is accepted that only collective action will make the business community a strategic partner in a sustainable prevention effort, a substantial effort has to go into a careful evaluation of the best way to achieve extensive intrasector cooperation. Two principal options seem possible. A collective business initiative for conflict prevention can either become an integrated or associated component of an already existing organization, or it can become the task of a newly founded nonprofit business organization. While practical considerations may favor the first option, they should never compromise the disinterested and nonprofit character of the initiative. It is conceivable that a corporate organ such as the World Business Council for Sustainable Development could be a suitable and effective body to host and run the initiative. The council has

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a global outreach, represents numerous key companies, and benefits from a global network with strong regional cells. It is committed to sustainable development via the three pillars of economic growth, ecological balance, and social progress—and it might well consider the addition of a pillar of conflict prevention as the next logical step in shaping a sustainable development strategy for the twenty-first century. In addition, the council already has achieved much and is widely accepted, and it is therefore unlikely to become implicated in the antiglobalist protests that so fiercely challenge the work and policies of some other business associations today. However, the potential number of preventive business actors is much greater than the TNCs currently represented in the council. A key question in such a solution would therefore be whether and how the council could provide a platform for networked cooperation with other companies, especially with SMEs, whose know-how can be key to the success of prevention.11 An alternative would be to design a new organization dedicated to corporate conflict prevention. Though setting up a new organization and convincing business leaders to join is a difficult and time-consuming task, the single-issue approach of such an organization would give the business community an independent and credible voice in international prevention efforts. There may be other ways to access the untapped potential of the business sector for conflict prevention. Yet any initiative should be based on the notion that a commitment to transsector partnership and to collective corporate action is the most convincing way for corporate value creation in conflict prevention. These principles will both enhance the credibility and impact of corporate measures and achieve for the business sector a strategic role in actively shaping the emerging trisectoral governance patterns in the field of global peace and security.

Notes 1. P. W. Singer, “Corporate Warriors: The Rise of the Privatized Military Industry and Its Ramifications for International Security,” International Security 26, no. 3 (2001/2002): 186–220. 2. Virginia Haufler, “Is There a Role for Business in Conflict Management?” in Turbulent Peace: The Challenges of Managing International

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Conflict, eds. Chester A. Crocker, Fen Osler Hampson, and Pamela Aall (Washington, DC: United States Institute of Peace Press, 2001), 670. 3. Ibid., 671. 4. Allan Gerson, “Peace Building: The Private Sector’s Role,” American Journal of International Law 95, no. 1 (2001): 114. 5. The International Chamber of Commerce (ICC) coordinated the policies and proposals of the business sector in Monterrey. See the special International Business Forum website of the ICC: http://www. iccwbo.org/monterey/home.html. On the general role of the ICC, see Volker Schneider, “Global Economic Governance by Private Actors: The International Chamber of Commerce,” in Organized Business and the New Global Order, ed. Justin Greenwood and Henry Jacek (New York: St. Martin’s Press, 2000), 223–240. 6. See Allan Gerson and Nat J. Colletta, Privatizing Peace: From Conflict to Security (Ardsley, NY: Transnational Publishers, 2002), Chapter 13; Gerson, “Peace Building,” 113–118. 7. Notable examples include the Philippine Business for Social Progress (http://www.pbsp.org.ph); the National Business Initiative in South Africa (http://www.nbi.org.za); and Business for Africa (http:// www.africaplc.com). 8. For SriLankaFirst, a peace initiative launched by Sri Lankan business leaders in 2001, see http://www.srilankafirst.com. For the Ideas for Peace Foundation in Colombia, see http://www.ideaspaz.org/que_es_ ingles.htm; see also Gerson and Colletta, Privatizing Peace, 32–34. On the Group of 7 in Northern Ireland and the Consultative Business Movement in South Africa, see Chapter 5, note 4. 9. UNCTAD and the International Chamber of Commerce run a project on investment guides for selected LDCs. See http://www. unctad.org/en/pub/investguide.en.htm. 10. With regard to the idea of a private sector expert corps, the Senior Expert Corps of Swisscontact, a technical cooperation foundation established by Swiss business leaders, deserves mention. This initiative pools more than 400 retired managers and employees of various industry sectors who volunteer to transfer their knowledge and experience to SMEs in developing and transition countries. See http://www. swisscontact.ch. 11. On the WBCSD, see also Chapter 4, note 51.

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ABBREVIATIONS & ACRONYMS

ACP ACRON CIMIC CIS CPN CSR DAC EBRD ECOWAS EU FDI FEWER GTZ

IBLF ICC ICG IMTD IO IPD IPF LDCs

African, Caribbean, and Pacific countries Applied Conflict Resolution Organizations Network civil-military cooperation Commonwealth of Independent States Conflict Prevention Network corporate social responsibility Development Assistance Committee (OECD) European Bank for Reconstruction and Development Economic Community of West African States European Union foreign direct investment Forum on Early Warning and Early Response Deutsche Gesellschaft für Technische Zusammenarbeit (German Society for Technical Cooperation) Prince of Wales International Business Leaders Forum International Chamber of Commerce International Crisis Group Institute for Multi-Track Diplomacy international organization Institute for Peacebuilding and Development International Peace Forum Least developed countries 179

Acronyms & Abbreviations

MEB MIGA NATO NGO OAS OAU OECD OSCE PELC PfP PPP PQMD PRI PSD PTC REACT REAP SMEs TACIS TNC UN UNCTAD UNDP UNHCR USAID WBCSD

180

Micro Enterprise Bank Multilateral Investment Guarantee Agency North Atlantic Treaty Organization nongovernmental organization Organization of American States Organization of African Unity Organization for Economic Cooperation and Development Organization for Security and Cooperation in Europe Political and Economic Link Consulting Partnership for Peace public-private partnership Partnership for Quality Medical Donations political risk insurance private sector development Peace Transition Council rapid expert assistance and cooperation teams Recovery and Employment Afghanistan Program small- and medium-sized enterprises Technical Assistance for the CIS Countries transnational corporation United Nations United Nations Conference on Trade and Development United Nations Development Programme United Nations High Commissioner for Refugees United States Agency for International Development World Business Council for Sustainable Development

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INTERNET RESOURCES

T

his list of resources presents the main websites of actors and initiatives referred to in the book, specific subsites included in the reference section, and a selection of other useful links. The electronic version will be updated regularly by the International Relations and Security Network, run by the Center for Security Studies at the Swiss Federal Institute of Technology (ETH) Zurich, http://www.isn.ethz.ch. The list is organized as follows: Public Sector Governments International Organizations and Multilateral Initiatives Civil Society Sector Individual NGOs NGO Networks Resource Websites Academic Institutions and Commissions Media Business Sector Companies Business Organizations, Associations, Foundations, and Initiatives Cross-Sector Cooperation

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The Public Sector Governments Canada Canada’s Human Security http://www.humansecurity.gc.ca Canadian International Development Agency: Peacebuilding http://www.acdi-cida.gc.ca/peace Canadian Resource Bank for Democracy and Human Rights (CANADEM) http://www.canadem.ca Germany Deutsche Gesellschaft für Technische Zusammenarbeit (German Society for Technical Cooperation) http://www.gtz.de Federal Foreign Office: Civil Crisis Management and Prevention http://www.auswaertiges-amt.de/www/en/aussenpolitik/ friedenspolitik/ziv_km/index_html Federal Foreign Office: Training to Prepare Civilian Personnel for International Missions http://www.auswaertiges-amt.de/www/en/aamt/job/jobs_io/ ausbildung_aa_html Switzerland Federal Department for Foreign Affairs: The Swiss Expert Pool for Civilian Peace Building (SEP) http://www.eda.admin.ch/sub_expool/e/home.html Swiss Agency for Development and Cooperation: Conflict Prevention and Conflict Management http://194.230.65.134/dezaweb2/home.asp Swiss State Secretariat for Economic Affairs: Smart Sanctions http://www.smartsanctions.ch United Kingdom Department of Trade and Industry: Society and Business—Developing Corporate Social Responsibility in the UK http://www.societyandbusiness.gov.uk Foreign and Commonwealth Office: Conflict Prevention http://www.fco.gov.uk/news/keythemepage.asp?PageId=254

International Organizations and Multilateral Initiatives Council of Europe (CE) http://www.coe.int

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Internet Resources

Commissioner for Human Rights http://www.commissioner.coe.int Economic Community of West African States (ECOWAS) http://www.ecowas.int European Bank for Reconstruction and Development (EBRD) http://www.ebrd.com European Union (EU) http://europa.eu.int Council of the European Union: Common Foreign and Security Policy (CFSP) http://ue.eu.int/pesc/default.asp?lang=en Council of the European Union: European Union Monitoring Mission (EUMM) http://ue.eu.int/pesc/ecmm/index.htm Council of the European Union: EU Special Representatives http://ue.eu.int/pesc/envoye.asp?lang=en European Commission: Conflict Prevention http://europa.eu.int/comm/external_relations/cpcm/cp.htm European Commission: External Relations http://europa.eu.int/comm/external_relations Global Corporate Governance Forum http://www.gcgf.org Human Security Network http://www.humansecuritynetwork.org International Finance Corporation (IFC) http://www.ifc.org International Labour Organization (ILO) http://www.ilo.org Multilateral Investment Guarantee Agency (MIGA) http://www.miga.org Office of the High Representative in Bosnia and Herzegovina (OHR) http://www.ohr.int Organization of African Unity (OAU) http://www.oau-oua.org Organization of American States (OAS) http://www.oas.org Organization for Economic Cooperation and Development (OECD) http://www.oecd.org OECD Development Assistance Committee (DAC) http://www.oecd.org/dac

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Internet Resources

Organization for Security and Cooperation in Europe (OSCE) http://www.osce.org OSCE Handbook http://www.osce.org/publications/handbook/index.htm Platform for Cooperative Security http://www.osce.org/ec/platform Rapid Expert Assistance and Cooperation Teams (REACT) http://www.osce.org/react Special Coordinator of the Stability Pact for South Eastern Europe http://www.stabilitypact.org Quick Start Package http://www.stabilitypact.org/qsp_info.shtml United Nations http://www.un.org Charter of the United Nations http://www.un.org/aboutun/charter International Conference on Financing for Development (Monterrey, March 2002) http://www.un.org/esa/ffd Preventive Action and Peacemaking http://www.un.org/Depts/dpa/docs/peacemak.htm Rome Statute of the International Criminal Court http://www.un.org/law/icc United Nations Fund for International Partnerships: Foundations http://www.un.org/unfip/philanthropies.htm United Nations Interim Administration Mission in Kosovo http://www.unmikonline.org United Nations Peacekeeping http://www.un.org/Depts/dpko United Nations Political and Peace-Building Support Missions http://www.un.org/peace/ppbm.pdf United Nations Transitional Administration in East Timor http://www.un.org/peace/etimor/etimor.htm United Nations/Office of the High Commissioner for Human Rights (UNHCHR) http://www.unhchr.ch United Nations Conference on Trade and Development (UNCTAD) http://www.unctad.org Least Developed Countries (LDCs) http://www.unctad.org/ldcs UNCTAD–ICC: Series of Investment Guides http://www.unctad.org/en/pub/investguide.en.htm United Nations Development Programme (UNDP) http://www.undp.org

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Internet Resources

Crisis Prevention and Recovery http://www.undp.org/erd Recovery and Employment Afghanistan Programme http://www.undp.org/afghanistan/archive/05mar02.html United Nations Industrial Development Organization (UNIDO) http://www.unido.org United Nations Research Institute for Social Development (UNRISD) http://www.unrisd.org Business Responsibility for Sustainable Development http://www.unrisd.org/engindex/research/busrep.htm World Bank http://www.worldbank.org Comprehensive Development Framework http://www.worldbank.org/cdf Conflict Prevention and Reconstruction Unit http://wbln0018.worldbank.org/essd/essd.nsf/Post-Conflict/home Corporate Governance http://www.worldbank.org/html/fpd/privatesector/cg Countries and Regions http://www.worldbank.org/html/extdr/regions.htm Economics of Civil Wars, Crime and Violence http://www.worldbank.org/research/conflict Private Sector Development http://www.worldbank.org/html/fpd/privatesector World Bank and European Commission Joint Office for Economic Reconstruction and Development in South East Europe http://www.seerecon.org

Civil Society Sector Individual NGOs Abraham Fund http://www.abrahamfund.org Accion International http://www.accion.org AccountAbility http://www.accountability.org.uk Amnesty International http://www.amnesty.org Amnesty International UK Business Group http://www.amnesty.org.uk/business

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Internet Resources

Berghof Research Center for Constructive Conflict Management (Germany) http://www.berghof-center.org Carter Center http://www.cartercenter.org Conflict Management Group http://www.cmgroup.org EnterpriseWorks Worldwide http://www.enterpriseworks.org Global Sullivan Principles of Social Responsibility http://globalsullivanprinciples.org Human Rights Watch http://www.hrw.org Corporations and Human Rights http://www.hrw.org/corporations Institute for Multi-Track Diplomacy http://www.imtd.org Business and Peacebuilding http://www.imtd.org/initiatives-businesspeacebuilding.htm International Alert http://www.international-alert.org Business and Conflict Programme http://www.international-alert.org/policy/business.htm International Crisis Group http://www.intl-crisis-group.org Peace Brigades International http://www.peacebrigades.org Prince of Wales International Business Leaders Forum http://www.pwblf.org, http://www.csrforum.org Business and Peace Programme http://www.pwblf.org/csr/csrwebassist.nsf/content/f1c2a3c4a5.html RefAid http://www.refaid.com Glaxo Wellcome Healthcare Centres http://www.refaid.com/html/corporate/glaxoprofile.htm Search for Common Ground http://www.sfcg.org Social Accountability International http://www.cepaa.org

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Internet Resources

Transparency International http://www.transparency.org Global Corruption Report http://www.globalcorruptionreport.org Venture Philanthropy Partners http://venturephilanthropypartners.org World Economic Forum http://www.weforum.org Global Governance Task Force http://www.weforum.org/site/homepublic.nsf/Content/Global+ Governance+Task+Force World Resources Institute http://www.wri.org

NGO Networks Applied Conflict Resolution Organizations Network (ACRON) http://www.acron.iwa.org Citizens’ Security Council (Finland) http://www.katu-network.fi Conflict, Development and Peace Network (UK) http://www.codep.org.uk European Peacebuilding Liaison Office in Brussels http://www.eplo.org European Platform for Conflict Prevention and Transformation http://www.conflict-prevention.net Forum on Early Warning and Early Response (FEWER) http://www.fewer.org Plattform Zivile Konfliktbearbeitung (Platform for Civil Conflict Management) (Germany) http://www.konfliktbearbeitung.net

Resource Websites Business and Human Rights http://www.business-humanrights.org Codes of Conduct http://www.codesofconduct.org CR Info: Conflict Resolution Information Source http://www.crinfo.org

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Internet Resources

Directory of Development Organizations http://www.devdir.org Resource Centre for the Social Dimensions of Business Practice http://www.rc-sdbp.org Partnership Brokers Forum: Building Partnerships for Sustainable Development http://www.partnershipbrokers.net

Academic Institutions and Commissions Arbeitsgemeinschaft Kriegsursachenforschung (Study Group for the Causes of War) (University of Hamburg) http://www.sozialwiss.uni-hamburg.de/Ipw/Akuf/home.htm Carnegie Commission on Preventing Deadly Conflict http://www.ccpdc.org Center for Corporate Citizenship at Boston College http://www.bc.edu/bc_org/avp/csom/ccc Center for Security Studies (Swiss Federal Institute of Technology [ETH], Zurich) http://www.fsk.ethz.ch Commission on Global Governance http://www.cgg.ch Corporate Citizenship Unit (Warwick Business School) http://users.wbs.warwick.ac.uk/ccu Harvard School of Public Health: Conflict Prevention Initiative http://www.hsph.harvard.edu/hpcr/cpi/cpi.htm Heidelberg Institute for International Conflict Research http://www.hiik.de Conflict Barometer http://www.hiik.de/konfliktbarometer/index.htm Institute for Peacebuilding and Development (George Washington University) http://www.peacebuilding.net

Media ArabicNews.com http://www.arabicnews.com The Economist http://www.economist.com

210

Internet Resources

International Herald Tribune http://www.iht.com New York Times http://www.nytimes.com

Business Sector Companies ABB http://www.abb.com AT&T http://www.att.com BP http://www.bp.com BP Environmental and Social http://www.bp.com/environ_social/index.asp Bristol-Myers Squibb http://www.bms.com Secure the Future http://www.securethefuture.com British Telecom http://www.bt.com/index.jsp Cisco Systems http://www.cisco.com Cisco Least Developed Countries Initiative http://www.cisco.com/warp/public/779/edu/commitment/intl/ partnerships/ldc Coca-Cola http://www2.coca-cola.com Collaborative for Development Action http://www.cdainc.com Commerzbank http://www.commerzbank.com Corporate Reputation Management http://www.corporate-reputation-network.com Crown Agents http://www.crownagents.com

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Internet Resources

De Beers http://www.debeersgroup.com Dell http://www.dell.com Deloitte Touche Tohmatsu http://www.deloitte.com Business Beat http://www.businessbeat.co.za Deutsche Bank http://group.deutsche-bank.de Ericsson http://www.ericsson.com Ericsson Response Program http://www.ericsson.com/ericssonresponse Escondida http://www.escondida.cl/english Estée Lauder http://www.elcompanies.com General Motors http://www.gm.com GlaxoSmithKline http://www.gsk.com Global Community Partnership Programmes http://www.gsk.com/community/programmes.htm Halliburton http://www.halliburton.com Heineken http://www.heineken.com IBM http://www.ibm.com IBM Community Relations http://www.ibm.com/ibm/ibmgives International Peace Forum http://www.intlpf.com Levi Strauss & Co. http://www.levistrauss.com Levi Strauss Social Responsibility http://www.levistrauss.com/responsibility Lonmin http://www.lonmin.com

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Internet Resources

McKinsey http://www.mckinsey.com Micro Enterprise Bank Kosovo http://www.mebkosovo.com Monsanto http://www.monsanto.com Morgan Stanley http://www.morganstanley.com Nestlé http://www.nestle.com Nike http://www.nike.com Novartis http://www.novartis.com Oracle http://www.oracle.com PeaceWorks http://www.peaceworks.com Pepsico http://www.pepsico.com Political & Economic Link Consulting http://www.pelc.net Premier Oil http://www.premier-oil.com PricewaterhouseCoopers http://www.pwcglobal.com ProbusBNW http://www.probusbnw.com Rio Tinto http://www.riotinto.com Shell http://www.shell.com Shell Nigeria http://www.shellnigeria.com Sony http://www.sony.com Springfield Centre for Business in Development http://www.springfieldcentre.com

213

Internet Resources

Statoil http://www.statoil.com SustainAbility http://www.sustainability.com Talisman Energy http://www.talisman-energy.com Volkswagen http://www.volkswagen.de

Business Organizations, Associations, Foundations, and Initiatives AVINA http://www.avina.net Bill & Melinda Gates Foundation http://www.gatesfoundation.org Business for Africa http://www.africaplc.com Business for Social Responsibility http://www.bsr.org Carnegie Corporation of New York http://www.carnegie.org Ford Foundation http://www.fordfound.org FUNDES http://home.fundes.org Ideas for Peace Foundation (Colombia) http://www.ideaspaz.org/que_es_ingles.htm International Chamber of Commerce http://www.iccwbo.org International Business Forum: UN International Conference on Financing for Development (Monterrey, March 2002) http://www.iccwbo.org/monterey/home.html National Business Initiative (South Africa) http://www.nbi.org.za Novartis Foundation for Sustainable Development http://www.foundation.novartis.com Philippine Business for Social Progress http://www.pbsp.org.ph

214

Internet Resources

Soros Foundations Network http://www.soros.org SriLankaFirst http://www.srilankafirst.com Swisscontact http://www.swisscontact.ch United Nations Foundation (Ted Turner) http://www.unfoundation.org World Business Council for Sustainable Development (WBCSD) http://www.wbcsd.ch WBCSD case study: Deloitte Touche Tohmatsu http://www.wbcsd.org/casestud/multiculture/index.htm WBCSD case study: Deutsche Bank http://www.wbcsd.org/casestud/db/index.htm WBCSD case study: Statoil http://www.wbcsd.org/casestud/statoil/index.htm worldCSR.com http://www.worldcsr.com

Cross-Sector Cooperation Business Partners for Development http://www.bpdweb.org Canadian Department of Foreign Affairs and International Trade: Peacebuilding Consultations with NGOs http://www.humansecurity.gc.ca/canadiens_consultations-e.asp Center for Peacebuilding (Swiss Peace Foundation) http://www.swisspeace.ch/html/navigation/fr_program_koff.html Conflict Prevention Network http://www.swp-berlin.org/cpn Fund for Peace: Human Rights and Business Roundtable http://www.fundforpeace.org/programs/table/table.htm Global Compact http://www.unglobalcompact.org Policy Dialogue on the Role of the Private Sector in Zones of Conflict http://www.unglobalcompact.org/un/gc/unweb.nsf/content/zones_ conflict.htm Global Reporting Initiative http://www.globalreporting.org

215

Internet Resources

Partnership for Quality Medical Donations http://www.pqmd.org United Nations and Business http://www.un.org/partners/business United Nations: Partners in Civil Society http://www.un.org/partners/civil_society/home.htm World Bank: Business World http://www.worldbank.org/business World Bank and Civil Society http://wbln0018.worldbank.org/essd/essd.nsf/NGOs/Home

216

INDEX

ABB, 115 Abraham Fund, 140 Academic community researching preventive action, 18 Academic institutions/ commissions: Internet resources on, 209 ACCION International, 156 Accountability: nongovernmental organizations and, 79 Advocacy groups, 62 Afghanistan, 6, 136 Africa, 103, 140. See also individual countries African, Caribbean, and Pacific (ACP) countries: aid flows to, 77 Agenda for Peace (1992), 17–18 Ahtisaari, Martti, 55 Aid/resource flows to developing/ transition countries, 7, 77, 105–106 Albania, 58, 65 Algeria, 20, 108 Amnesty International, 62, 140 Anderson, Mary B., 102 Angola, 150 Annan, Kofi, 54, 84, 115 Antiglobalization movements, 112, 113

217

Applied Conflict Resolution Organization Network (ACRON), 55 Arbitration, 35 Arms: control, 20; proliferation of small, 24 al-Assad, Hafez, 131 Assessment of current state of conflict prevention: business involvement, 53, 85–88; complexity of conflict prevention, 68–70; early warning capacities, 55–57; improving performance, 81–88; initiatives, 51–53; international organizations, state dependency of, 72–75; limited effectiveness to date, 68–80; nongovernmental organizations, 78–80; operational prevention, 57–60, 75; overview, 51–53; policy formation and adapting institutions, 53–54; public sector and reticence of states, 52, 70–72; public sector’s narrow conceptual/geographic focus, 75–77; structural prevention, 60–64, 75; success, two prerequisites for, 52; systemic prevention, 64–68;

Index

typology of individual actors/ conflict prevention profiles, 87 AT&T, 115 AVINA, 143 Balkans: cooperation/coordination, 84; early warning capacities, 75; EU candidate status, 65; financial loss and additional costs brought by conflict, 103; ignoring problem not a option, 24; in-kind support, 141; refugees, 141; Stability Pact for South Eastern Europe, 76; unemployment as breeding ground for violence, 135 Baltic states, 42, 61 Banks, international/regional development, 63–64. See also World Bank Bhagwati, Jagdish, 118 Bipolar balances of power and history of prevention, 19–20 Birkelund, John, 134 Bisectoral/trisectoral governance, 4, 6, 8, 29–31 Blair, Tony, 18 Bosnia and Herzegovina: cooperation/coordination, 83; economic growth/opportunities, 6, 136; EU candidate status, 65; far-reaching consequences of intrastate conflicts, 3; field missions, 61; late action in, 25; Office of High Representative, 83; preventive diplomacy, 18; strategic/political costs of intrastate conflicts, 26 Bottom-up approach, 70, 78 Boutros-Ghali, Boutros, 18 BP, 143 Bristol-Myers Squibb, 140 Britain, 54, 55, 204 British East India Company, 5, 132 British Telecom, 141 Brown and Root Services, 146

218

Brundtland, Gro H., 19 Burundi, 58 Business and Conflict Resolution Executive Seminars, 102 Business and International Security Conference, 102 Business and Peace program, 101 Business environment, an enabling/competitive, 144–146, 154 Business for Social Responsibility, 115–116 Business of Peace: The Private Sector as Partner in Conflict Prevention and Resolution, 10, 101 Business sector, bringing in the: assessment of current state of conflict prevention, 53, 85–88; bisectoral vs. trisectoral governance, 4, 6, 29–31; business stake in international stability/human security, 103– 104; challenge of intrastate conflicts, 104–106; clarity regarding link between business and conflict/stability, 4–5; Collaborative for Development Action, 102–103; consulting companies focusing on role of corporations in conflict, 102–103; corporate social responsibility, 111–120; encouragement given, 131; environment, an enabling/ competitive business, 144 –146, 154; experience of business in managing complex problems, 86; financial loss and additional costs brought by conflict, 108 –111; Institute for MultiTrack Diplomacy, 101–102; Institute for Peacebuilding and Development, 102; International Peace Forum, 102; leadership/teamwork, 86; limitations/deficits that public/

Index

civil society actors face, 6; market opportunities, loss of, 109–111; multifaceted link between business and conflict, 2; negative perception of link between business and conflict, 5, 85; Political and Economic Link Consulting, 102; postWestphalian era and business staying out of prevention efforts, 29–31; Prince of Wales International Business Leaders Forum, 101; projects dealing with link between business/ conflict prevention, 101–103; reasons for corporate involvement, two, 99–100; vulnerability to political violence/threats, 106–108; which business have a stake in conflict prevention, 120–122. See also Corporate social responsibility Canada: cooperation/coordination, 82; institutional structures, formal integration of prevention into, 54; operational prevention, 59; Peacebuilding and Human Security Division, 54; Peacebuilding Fund, 59; rapid expert assistance and cooperation teams, 75 Carnegie Commission on Preventing Deadly Conflict, 3, 18–19 Carter Center, 62 Central African Republic, 59 Central Asian republics, 61 Changing nature of conflict: civilian victims in intrastate conflicts, 24; emergence of conflict prevention, 3; human costs of recent conflicts, 25–26; human security, 27–28; lessons learned from late intervention or nonintervention, 26–27; new

life to old idea of prevention, 19; NGOs join in and business stays out, 29–31; overview, 23–24; reaction to prevention, shift in culture from, 3–4; security and development find common ground, 25–27; strategic/political costs of intrastate conflicts, 26 Chechnya, 109 Children: mortality rates for, 110 Cisco, 141 Civilian victims in intrastate conflicts, 24 Civil-military cooperation (CIMIC), 83 Civil society. See Local actors; Nongovernmental organizations Clark, Wesley, 55 Clinton, Bill, 18 Coca-Cola, 150 Cold War, 2, 19, 20 Collaborative for Development Action, 102–103 Collective business initiative, 171–176 Colleta, Nat J., 102, 170 Colombia, 172 Commercial corporate peacebuilding, 146–149, 168 Commitment and nongovernmental organizations, 78 Commonwealth of Independent States (CIS), 64, 66, 77 Communications: globalization of, 22 Communism and changing nature of conflict, demise of, 24 Community of Sant’Egidio, 58 Competition: barriers to, 155; intrasector, 82 Complexity of conflict prevention, 68–70 Complex-systems change, 86

219

Index

Comprehensive means of action, structural prevention as a, 39, 41 Conceptual framework surrounding conflict prevention: causes of conflict, 36–37; concept, the demarcation of the, 33–34; defining terms, 31–32; operational prevention, 35; public sector’s narrow geographic and, 75–77; structural prevention, 35–41; systemic prevention, 34–35; time, the demarcation of, 32–33 Confidence building: operational prevention and enhanced capacity for, 58 Conflict and Security Resource Centre, 101 Conflict Management Group, 62 Conflict prevention, pluralist international system of 1990s and emergence of, 4 Consulting companies focusing on role of corporations in conflict, 102–103 Cooperation/coordination: assessment of current state of conflict prevention, 53, 81–85; business sector, bringing in the, 86; development cooperation programs, 61–62; Internet resources, 212–213; North Atlantic Treaty Organization, 73; systemic prevention, 65–66. See also Partner in conflict prevention, business as a strategic Copenhagen criteria of 1993, 65 Corporate Engagement Project, 102–103 Corporate social responsibility (CSR): antiglobalization movements, 112; business sense, makes sound, 116–117; conflict prevention as a CRS

220

issue, 119–120; defining terms, 117–118; funding, 138, 140; legitimacy and relevance of, 113–116; local branches, 158; noncommercial corporate peacebuilding, 158; as a pluralistic concept, 117–119; power of business sector, increasing, 111–112; proactive contributions, 8; reporting, 119, 169; semicommercial corporate peacebuilding, 150; standards/ codes of conduct for business community, 118; states’ capacity to control world economy reduced, 111–112; verification, 119; wealth creation brought into broader context of, 7–8, 112–113 Corporations: democracy vs. stability, 131; exacerbating conflict through their operations, 5, 85; globalization empowering, 4; inclusion of business sector into preventative endeavors, three arguments for, 6–8; international relations, TNCs as important actors in, 22; Internet resources, 203, 210–211; military skills, provision of, 167, 168; selfregulation, 23, 118; transsector coordination, 8; wealth creation into broader context of corporate social responsibility, 7–8. See also Business sector, bringing in the Corruption, 38, 136 Cotonou Agreement (2000), 66 Council of Europe: field missions, 61; humanitarian and human rights principles, 66; narrow geographic focus, 77; standard setting and formulating norms, 73; visibility, acting with low public, 73

Index

Council on Economic Priorities, 101 Credibility issues for business sector, 159, 169, 175 Credit, 144 Criminal tribunals, 66 Crisis prevention, 32 Croatia, 65 Crown Agents, 148 CSR. See Corporate social responsibility Cyprus, 102 Dayton Peace Agreement, 6 De Beers, 115 Decisionmaking processes, formal integration of prevention into, 54 Decolonialization, 20 Dell, 141 Deloitte Touche Tohmatsu, 156 Delors, Jacques, 55 Demand-driven/client-focused preventive services, 70 Democracy, 24, 131 Deployment, preventive, 35 de Soto, Hernando, 155 Destructiveness of modern warfare: changing nature of conflict and, 24 Developing countries: aid/resource flows received by, 7, 105–106; foreign direct investment, 110; intrastate conflicts/wars, shift from interstate to, 3, 24. See also individual countries Development cooperation programs, 61–62 Diplomacy and history of prevention, 19–20 Disarmament, 20, 35, 60 Disaster Response Network, 141 Dow Jones Global Index (DJGI), 116 Dow Jones Sustainability Index (DJSI), 116 Dutch West India Company, 5

Early warning capacities, 52, 55–57, 75, 76 Earth Summit (Rio, 1992), 105 East Timor, 61, 74–75, 83 Economic Community of West African States (ECOWAS), 76 Economic issues: aid/resource flows, comparing private and official, 105; business environment, an enabling/competitive, 144–146; business inclusion into preventative endeavors, three arguments for, 7; commercial corporate peacebuilding, 146–149; corporate economic peacebuilding, growing need for, 135; early prevention vs. postviolence reconstruction, 75–76; financial costs of recent intrastate conflicts, 3, 26, 103, 106–111; funding, 74, 79–80, 138, 140, 174; generating economic opportunities, 135–136; geographic focus, narrow, 77; global governance, inadequate forms of, 23; growth/opportunity sustainable when generated by enterprises, 6; interdependence of states, increasing, 24; political will for resolute action, states inability to achieve, 71; security and socioeconomic development, chasm between, 20–21; semicommercial corporate peacebuilding, 147, 149–153; United Nations Development Programme, 61. See also Foreign direct investment Elites: attitudes/motives of, 36–37, 69 Employment issues, 135, 136 Enabler, business as, 137–139. See also Roles/pathways for business sector in conflict prevention EnterpriseWorks, 156

221

Index

Ericsson, 141 Estée Lauder, 131 Ethiopia, 20 Ethnicity/race, 36 EU. See European Union Euro-Mediterranean Partnership, 66 European Bank for Reconstruction and Development (EBRD), 64 European Platform for Conflict Prevention and Transformation, 55 European Union (EU): aid/ resource flows to developing/ transition countries, 105; cooperation/coordination, 66, 82– 84; corporate social responsibility, 115; early prevention vs. postviolence reconstruction, 76; early warning capacities, 55–56; enlargement process, 65; funding, 138, 140; geographic focus, narrow, 76–77; good governance, 61; institutional structures, formal integration of prevention into, 54; multidimensional robust peace support operations, 59; operational prevention, 58, 59; powerful organization with respect to preventive issues, 73; preventive diplomacy, 18; rapid reaction mechanism, 59; Special Coordinator of the Stability Pact for Southeastern Europe, 83, 84, 136; Stabilization and Association Process, 65; state focus and neglect of private sector considerations, 135– 136; systemic prevention, 64–66. See also Organization for Security and Cooperation in Europe Expertise/knowledge, lack of, 72, 75

222

Fact finding, operational prevention and enhanced capacity for, 58 Fear of international support by locals, 69–70 Field missions, 61, 62, 74 Financial issues. See Economic issues Finland, 55 First generation peacekeeping, 59 Foreign direct investment (FDI): attracting, 156–157; increase in, 22, 105; least developed countries, 110; positive effect on socioeconomic development, 145; semicommercial corporate peacebuilding, 147, 149–153 Forum on Early Warning and Early Response (FEWER), 55, 56 Foundations, 18–19 Fragmentation of effort, 88, 159 FUNDES, 156 Funding: collective business initiative, 174; corporate projects/programs, 138, 140; international organizations, 74; nongovernmental organizations, 79–80 General Motors, 115 Geographic focus, narrow, 76–77 Germany: early warning capacities, 55; Internet resources, 204; nongovernmental organizations, 55; rapid expert assistance and cooperation teams, 75 Gerson, Allan, 102, 133–134, 170 Glaxo Wellcome/GlaxoSmithKline, 140, 141 Global governance: bisectoral vs. trisectoral, 4, 6, 8, 29–31; conflict prevention as an issue of, 29–31; corporate social responsibility, 113;

Index

globalization increasing need for, 4, 21–23; inadequate forms of, 23; partner in conflict prevention, business as a strategic, 170; trisectoral governance, 8 Globalization: antiglobalization movement, 112, 113; communications, 22; global governance, more international actors and greater need for, 4, 21–23; interdependence between politics/market, 171; new life to old idea of prevention, 19; NGOs and corporations empowered by, 4; noncommercial corporate peacebuilding, 156; uneven phenomenon, 7 Global Sullivan Principles of Social Responsibility, 118 Good governance, 38, 60–62 Government. See Global governance; Public sector Group of 7 (G7), 131 Group of Eight (G8), 18 Guatemala, 151 Haiti, 59 Halliburton Company, 146 Hamburg, David A., 18 Hands-on assistance as a handicap of corporate foundations, 158 Haufler, Virginia, 102 Heineken, 115 High-impact philanthropy, 142–143 Human costs of recent conflicts, 25–26 Human Development Report 2001, 142 Humanitarian and human rights principles: acceptance of, growing, 4; changing nature of conflict, 27–28; legally enforcing, 66, 68; systemic prevention, 35, 66 Human Rights Watch, 62

Hungary, 42 India, 20, 143 Indigenous capacity for resolving conflict, 62. See also Local actors Individual corporate conflict prevention: opportunities/ limitations, 157–159 Indonesia, 118 Indus water conflict between India and Pakistan, 20 Inertia of the international community, 42 Information, access to, 38 Infrastructure issues, 136, 144 In-kind support, 140–142 Institute for Multi-Track Diplomacy (IMTD), 62, 101–102, 111, 131 Institute for Peacebuilding and Development (IPD), 102 Institute for Social and Ethical Accountability, 118 Institutional structures, formal integration of prevention into, 54–55. See also Operational prevention; Structural prevention; Systemic prevention Insurance costs, 107 Interdependence of states, increasing economic, 24 International Alert, 54–55, 62, 101 International Business Leaders Forum, 114, 131 International Criminal Court, 66 International Crisis Group (ICG), 55, 56 International organizations (IOs): assessment of current state of conflict prevention, 72–75; bisectoral vs. trisectoral governance, 4; business organizations/associations/ foundations/initiatives,

223

Index

211–212; competition, intrasector, 82; cooperation/ coordination, 82, 83, 212–213; demand-driven/client-focused preventive services, 70; early warning capacities, 75; funding, 74; good governance, 60–61; history of prevention, 20; Internet resources, 204–207; the media, 209; multilateral regimes, linking societies in conflict to, 65; nongovernmental organizations, 207–208; operational prevention, 57, 75; personnel shortages, 74; standards/codes of conduct for business community, 118; state, dependence on the, 72–75; structural prevention, 75. See also United Nations; individual organizations International Peace Forum (IPF), 102 Internet resources: academic institutions and commissions, 209; business organizations/ associations/foundations, 211–212; cooperation/ coordination, 212–213; corporations, 203, 210–211; international organizations, 204–207; the media, 209; nongovernmental organizations, 203, 207–208; public sector, 203, 204 Intersector cooperation, 82–83 Intrastate conflicts/wars, shift from interstate to. See Changing nature of conflict Investor confidence, 144 Iraq, 151 Ireland, Northern: collective business initiatives, 172; Group of 7, 131; in-kind support, 141; Institute for Multi-Track Diplomacy, 102 Israel, 131, 140

224

Issue coordination: improving conflict prevention by better, 83 Kanter, Rosabeth M., 143 Kelman, Herbert, 62 Kidnapping, 108–109 Know-how transfer and business assistance, 147, 153–157 Knowledge/expertise: lack of, 72, 75 Kosovo: cooperation/coordination, 83, 84; economic growth/ opportunity, 6, 136; farreaching consequences of intrastate conflicts, 3; field missions, 61; human rights, 28; late action in, 25; personnel shortages for international organizations, 74; preventive diplomacy, 18 Lauder, Ron, 131 Law, deterring violence through international, 64–66, 68 Leadership, 83, 86, 131–132 Least developed countries (LDCs), 110. See also Developing countries; Transition countries Legitimacy issues: corporate foundations, as a handicap of, 159; corporate social responsibility, 113–116; international organizations, 72, 73; nongovernmental organizations, 79; partner in conflict prevention, business as a strategic, 175 Leland Initiative, 141 Léotard, François, 58 Levi Strauss & Co., 143 Liberalization and privatization, 105. See also Globalization Life expectancy, 110 Literacy rates, 110 Local actors: capacity, local business, 144–145, 155–156,

Index

174; corporate social responsibility, 158; international support resisted by, 69–70; NGOs supporting crosscultural education/training, 38; resolving conflicts, indigenous capacity for resolving, 62 Location-specific advantages, developing, 156–157 Lomé Convention, 66 Long-term peacebuilding, nongovernmental organizations and, 79. See also Structural prevention Lonrho/Lonmin, 131–132 Lund, Michael S., 18 Macedonia: cooperation/ coordination, 83; effective prevention, 42; EU candidate status, 65; François Léotard, 58; United Nations, 59 Market opportunities, conflict and loss of, 109–111. See also Economic issues Market/politics: globalization and interdependence between, 171 Material damage suffered by businesses due to conflict, 108 McKinsey, 143 Media, the, 38, 209 Mediation, 35, 57 Meyer, William H., 145 Middle East: business leaders as diplomats, 131; funding, 140; Institute for Multi-Track Diplomacy, 102; PeaceWorks, 151; unemployment as breeding ground for violence, 135 Military: privatization and the, 167, 168; under civil control, 38 Milosevic, Slobodan, 66 Minority rights issues, 36 Monitoring missions, operational prevention and enhanced capacity for, 58 Monsanto, 115

Montenegro, 65 Monterey Conference on Finance for Development (2002), 105, 170 Morgan Stanley, 107 Morocco, 20 Mortality rate, of children under five, 110 Mozambique: competition, barriers to, 155; financial loss and additional costs brought by conflict, 109; operational prevention, 58; Tiny Rowland, 131–132 Multidimensional robust peace support operations, 36, 59 Multifaceted link between business and conflict, 2 Multipolar balances of power and history of prevention, 19–20 Naming and shaming campaigns by NGOs, 114–115 Needs assessments: cooperation/ coordination and, 83 Negative perception of link between business and conflict, 5, 85 Negotiation, 35 Nestlé, 115 Netanyahu, Benjamin, 131 New generation philanthropy, 142–143 NGOs. See Nongovernmental organizations Nigeria, 109, 114–115 Nike, 118–119 Noncommercial corporate peacebuilding, 147, 153–158 Nongovernmental organizations (NGOs): assessment of current state of conflict prevention, 78–80; bottom-up approach, 70, 78; business sector, bringing in the, 131; collective business initiatives, 174; communications, globalization of, 22;

225

Index

competition, intrasector, 82; corporate social responsibility, 114; democracy vs. stability, 131; development cooperation programs, 62; early warning capacities, 56; embracing idea of conflict prevention, 2–3; fragmentation, 88; funding, 79–80, 138, 140; globalization leading to empowerment of, 4; good governance, 60–62; increase in number of, 22–23; indigenous, strengthening, 62; indispensable actor in all aspects of prevention, 21; inkind support, 141; Institute for Peacebuilding and Development, 102; institutional structures, formal integration of prevention into, 54–55; Internet resources, 203, 207–208; local NGOs that support cross-cultural education/training, 38; naming and shaming campaigns, 114–115; partner in conflict prevention, business as a strategic, 171; Peace Transition Council, 171; philanthropy, strategic, 143; pressuring governments to address conflicts early, 18; security and socioeconomic development, chasm between, 20; socioeconomic peacebuilding, 63; standards/codes of conduct for business community, 118 North Atlantic Treaty Organization (NATO): cooperative security structures, 73; multidimensional robust peace support operations, 59; operational prevention, 58; Partnership for Peace, 59, 73; systemic prevention, 64 Norway, 57, 140 Novartis, 142

226

Nuclear war, 20 Operational prevention: assessment of current state of conflict prevention, 57–60, 75; complexity of conflict prevention, 69; comprehensive approach combing structural/ systemic and, 134; early warning capacities, 75; instruments of, main, 35; time, conditions worsening over, 40. See also Preventive diplomacy Oracle, 141 Organization for Economic Cooperation and Development (OECD): business sector, bringing in the, 131; corporate contributions to avoiding conflict, initiatives for, 103; corporate social responsibility, 115; Development Assistance Committee, 103; geographic focus, narrow, 77; standards/ codes of conduct for business community, 118 Organization for Security and Cooperation in Europe (OSCE): Conflict Prevention Center, 54; cooperation/coordination, 82, 84; early prevention vs. postviolence reconstruction, 76; field missions, 61; geographic focus, narrow, 77; good governance, 61; institutional structures, formal integration of prevention into, 54; Kosovo Verification Mission, 74; personnel shortages, 74; Platform for Cooperative Security, 82; pragmatic and quiet approach, 73; preventive diplomacy, 18; rapid expert assistance and cooperation teams, 75

Index

Organization of African Unity (OAU), 76 Organization of American States (OAS), 76 Organized crime, 24 Outsourcing in the field of conflict prevention, 148 Paglas Corporation, 150–151 Pakistan, 20 Partner in conflict prevention, business as a strategic: collective business initiative, 171–176; commercial corporate preventive action, limits of, 168; credibility, corporate, 169; Peace Transition Council, 170–171; transsector partnership, 8, 169–171 Partnership for Quality Medical Donations (PQMD), 141 Patten, Chris, 58 Peace Brigades International, 62 Peacebuilding. See Structural prevention Peace enforcement/peacemaking, 33–34 Peace Transition Council (PTC), 170–171 PeaceWorks, 151 PepsiCo, 115 Personnel/staff: costs suffered by businesses due to conflict, 108– 109; multinational, 74–75; shortages for field missions, 74, 75 Pharmaceutical industry, 141, 142 Philanthropy, strategic, 142–143 Philippines, 150–151 Police forces: under civil control, 38 Policy and adapting institutions: formulating, 52, 53–54 Political and Economic Link Consulting (PELC), 102 Political risk insurance (PRI) coverage, 152, 174

Political will for resolute action: states inability to achieve, 52, 70–72, 74, 75 Politico-military conflict management model, 20 Politics and corporate economic peacebuilding, 134–135 Politics/market: globalization and interdependence between, 171 Poverty/despair as breeding ground for violence, 135 Premier Oil, 115 Preventing Violent Conflict: A Strategy for Preventive Diplomacy (Lund), 18 Prevention, toward a culture of: case for preventive action, 21–31; changing nature of conflict, 23–31; conceptual ambiguities and confusing terminology, 31–40; globalization, 21–23; history of prevention, 19–20; new life for an old idea, 17–19; rhetoric to action, 40, 42–43; security and socioeconomic development, chasm between, 20–21; shift in culture from reaction to prevention, 1 Preventive diplomacy: Agenda for Peace (1992), 17–18; business diplomacy as direct corporate engagement, 132; conflict prevention and semantic confusion, 32; special/personal representatives, 58. See also Operational prevention PricewaterhouseCoopers, 143 Prince of Wales International Business Leaders Forum (IBLF), 101, 135 Private sector development (PSD), 134, 145. See also Business sector, bringing in the; Partner in conflict prevention, business as a strategic; Roles/

227

Index

pathways for business sector in conflict prevention Privatization spreading to domain of the state, 22, 167–168 Privatizing Peace (Colleta & Gerson), 10, 102 Process factors of a conflict, 36–37 Products offered as in-kind support, 140–142 Public-private partnerships (PPPs), 103, 115, 140–141, 146. See also Partner in conflict prevention, business as a strategic Public sector: Agenda for Peace (1992), 17–18; aid/resource flows, comparing private and official, 105; assessment of current state of conflict prevention, 70–77; bisectoral vs. trisectoral governance, 4, 6, 8, 29–31; business environment, an enabling/competitive, 144; cooperation/coordination, 83; corporate contributions to avoiding conflict, public initiatives for, 103; demanddriven/client-focused preventive services, 70; early warning capacities, 75; economy, decreasing ability to control world, 111–112; focus on, neglect of private sector considerations and, 135–136; good governance, 38, 60–61; interdependence of states, increasing economic, 24; international organizations, dependence of, 72–75; Internet resources, 203, 204; local actors, government distrust of, 72; narrow conceptual/ geographic focus, 75–77; operational prevention, 57, 75; political will for resolute action, states inability to achieve, 52,

228

70–72, 74, 75; privatization spreading to domain of the state, 22, 167–168; regulatory competence of national governments, 23; semicommercial corporate peacebuilding, 151–152; structural prevention, 75. See also Security Putin, Vladimir, 18 Ramos, Fidel, 55 Rapid expert assistance and cooperation teams (REACT), 59, 75 Reaction to prevention, shift in culture from, 1, 3–4 Red Cross, 141 RefAid, 140 Refugees, 24, 141 Regional stability and changing nature of conflict, 24–25 Regulation, industrial self-, 23, 118, 169 Regulatory competence of national governments, 23 Religion, 36 Research and development of noncommercial products, 142 Rio Tinto, 115 Risk management/security costs suffered by businesses due to conflict, 108 Robertson, Lord, 58 Roles/pathways for business sector in conflict prevention: caution, a word of, 130–132; clarity regarding role of business, lack of, 88; commercial corporate peacebuilding, 146–149; comprehensive approach combing operational/structural/ systemic measures, 134; economic opportunity, generating, 135–136; enabler, business as, 137–139; funding, 138, 140; individual corporate

Index

conflict prevention, opportunities/limitations, 157–159; in-kind support, 140–142; international actor, increase in role of the private sector as, 167; leaders, individual business, 131–132; need for corporate economic peacebuilding, 134–137; noncommercial corporate peacebuilding, 147, 153–157; overview, 129–130; peacebuilders, business as economic, 143–146; philanthropy, strategic, 142–143; politics, 134–135; semicommercial corporate peacebuilding, 147, 149–153; state focus and neglect of private sector considerations, 135–136; value in international conflict prevention, creating, 133–134. See also Partner in conflict prevention, business as a strategic Root causes of a conflict, 36 Rowland, Tiny, 131–132 Rwanda: causalities, statistics on, 24; criminal tribunals, 66; farreaching consequences of intrastate conflicts, 3; halfhearted action in, 25; in-kind support, 141; lessons learned from late intervention or nonintervention, 27; prevention would have been feasible if different actions taken, 42; preventive diplomacy, 18 Sachs, Jeffrey, 137 Sahnoun, Mohamed, 42 Sanctions, 35, 59 Schmidheiny, Stephan, 115, 143 Schröder, Gerhard, 18 Secondment, 75 Security: changing nature of conflict and international, 24;

development and security find common ground, 25–27; financial loss and additional costs brought by conflict, 108; human security and changing nature of conflict, 27–28; privatization in the field of, 5; socioeconomic development and, chasm between, 20–21; systemic prevention, 34; and terrorist attacks of September 11, 105, 106–108, 110 Selassie, Haile, 20 Self-regulation, industrial, 23, 118 Semicommercial corporate peacebuilding, 147, 149–153 Serbia, 65 Shell, 114–115 Shuttle diplomacy, 58 Sierra Leone, 66 Single-business approaches, 157–159 Slovakia, 42 Small- and medium-sized enterprises (SMEs), 121, 176 Small arms: proliferation of, 24 Social Accountability International, 118 Social/political/economic approaches, 3, 6–8. See also Corporate social responsibility; Operational prevention; Structural prevention; Systemic prevention Socioeconomic peacebuilding, 37, 63–64. See also Structural prevention Solana, Javier, 58 Somalia: far-reaching consequences of intrastate conflicts, 3; halfhearted action in, 25; prevention would have been feasible if different actions taken, 42; preventive diplomacy, 18 Sony, 115

229

Index

South Africa: business sector, bringing in the, 131; collective business initiatives, 172; Consultative Business Movement, 131; effective prevention, 42; individual corporate action, 156; Institute for Multi-Track Diplomacy, 102; PeaceWorks, 151; South African Business Beat Initiative, 156 Sri Lanka, 102, 109, 172 Standards/codes of conduct for business community, 118 Statoil, 140 Strategic philanthropy, 142–143 Strategic/political costs of intrastate conflicts, 26 Structural prevention: assessment of current state of conflict prevention, 60–64, 75; causes of conflict, 36–37; characteristics of, 39–41; comprehensive approach combining systemic/ operational and, 134; early warning capacities, 75; fields of, 37–38; good governance, 38, 60–62; overview, 35–36; shortterm diplomatic action, inadequacy of, 35; socioeconomic peacebuilding, 63–64; third-party actors, 39 Success, cases where preventive action has been a, 42 Successful conflict prevention: two prerequisites for, 52 Sweden, 54 Switzerland: Conflict Prevention Unit, 54; cooperation/ coordination, 82; early warning capacities, 56; Good Governance Unit, 54; institutional structures, formal integration of prevention into, 54; Internet resources, 204; rapid expert assistance and cooperation teams, 75; Swiss

230

Agency for Development and Cooperation, 56 Syria, 131 Systemic prevention: assessment of current state of conflict prevention, 64–68; comprehensive approach combining operational/structural and, 134; expanding category of, 34–35; humanitarian and human rights principles, 35, 66; overview, 34; structural prevention working along side, 40 Talisman Energy, 115 Technical Assistance for the CIS (TACIS), 66 Terrorist attacks of September 11: World Trade Center and, 105, 106–108, 110 Think tanks, 18–19 Third-party actors and structural prevention, 39 Time and conceptual framework surrounding conflict prevention, 32–33 TNC. See Transnational corporations Track II diplomacy, 57, 58, 60, 62 Transition countries: aid/resource flows received by, 7, 105–106; foreign direct investment, 110; intrastate conflicts/wars, shift from interstate to, 3, 24. See also individual countries Transnational corporations (TNCs), 120–121. See also Business sector, bringing in the; Partner in conflict prevention, business as a strategic; Roles/pathways for business sector in conflict prevention Transsector coordination/ partnership, 8, 169–171 Treaty of Westphalia (1648), 19 Trisectoral/bisectoral governance, 4, 6, 8, 29–31

Index

Ukraine, 61 Unemployment, 135, 136 United Nations (UN): Agenda for Peace (1992), 17–18; aid/ resource flows to developing/ transition countries, 105; commercial corporate peacebuilding, 146; cooperation/ coordination, 82, 84; corporate contributions to avoiding conflict, initiatives for, 103; corporate social responsibility, 115; Development Programme (UNDP), 61–62, 140, 141; disarmament, 60; field missions, 61; funding, 74, 140; Global Compact Initiative, 103, 115, 118; global outreach, only organization with, 73; good governance, 61; High Commissioner for Refugees (UNHCR), 61, 84; history of prevention, 20; humanitarian and human rights principles, 66; in-kind support, 141; legitimacy/acceptance, 72, 73; operational prevention, 58–60; partner in conflict prevention, business as a strategic, 171; Peace Transition Council, 171; personnel shortages, 74; policy and adapting institutions, formulating, 54; Prevention of Armed Conflict (2000), 54; preventive deployment, 59; standards/codes of conduct for business community, 118; Standby Arrangements System, 59; systemic prevention, 66; Trust Fund for Preventive Action, 59, 74 Urquhart, Brian, 18 U.S. Agency for International Development (USAID), 102, 141

Value in international conflict prevention, creating, 133– 134 Vance, Cyrus R., 18 Venezuela, 140 Venture philanthropy, 142–143 Vietnam, 118, 143 Volkswagen, 115 von Koerber, Eberhard, 116 Vranitzky, Franz, 58 Warwick Business School, 115 Western-style approaches: imposing vs. adapting, 69–70 Westphalian state system/ principles, 21–22, 28 Whole-systems thinking, 86 Women discouraging the use of violence, 38–39 World Bank: aid/resource flows, comparing private and official, 105; conditionality-based structural adjustment programs, 63; Conflict Prevention and Reconstruction Unit, 63; cooperation/coordination, 82; debate over involvement in sensitive conflicts, 63–64; history of prevention, 20; partner in conflict prevention, business as a strategic, 171; Peace Transition Council, 171 World Business Council for Sustainable Development (WBCSD), 115, 175 World Economic Forum (2002), 141 World Trade Center: and terrorist attacks of September 11, 105, 106–108, 110 Yugoslavia, Federal Republic of, 136

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ABOUT

THE

BOOK

D

espite intensive international efforts in the area of conflict prevention, there is still little agreement about how civil wars might best be averted. And, as the news regularly reminds us, the many attempts at preventive action have not been strikingly successful. The authors of Conflict Prevention offer a new perspective, arguing that such efforts could be much more effective if they incorporated the business sector. Andreas Wenger and Daniel Möckli examine the qualities that the business sector could bring to bear in the prevention of deadly intrastate conflict. They also propose specific ways in which businesses might be engaged in prevention efforts—and show why it is in the interests of corporations to participate. Calling for a cooperative approach that involves states, international organizations, NGOs, and corporations, they demonstrate that the business sector has both the means and the motivation to ensure the long-term success of prevention efforts.

Andreas Wenger is professor of international security policy and director of the Center for Security Studies at the Swiss Federal Institute of Technology (ETH) Zurich. His publications include Nuclear Weapons into the 21st Century, Russia’s Place in Europe, and International Relations: From the Cold War to the Globalized World. Daniel Möckli is researcher at the Center for Security Studies, ETH Zurich. He is author of Neutralität, Solidarität, Sonderfall: Die Konzeptionierung der schweizerischen Aussenpolitik der Nachkriegszeit, 1943–1947. 233