Friday, April 12, 2024

The private sector’s role in peacebuilding


A lot has been said about the importance and value of peace. We talk a lot about its importance. However, we tend to agree little on what it is and what it takes. The most popular view of peace is an absence of war or violence. This view is congruent with the original meaning of peace obtained from Greek word for peace, ‘Irene’ found in New Testament (Bible). According to irenologists with whom most scholars agree, all violence is bad. Peace has intrinsic and instrumental value because it is in almost everyone’s interest.
There are cases in the world and in Ethiopia in particular that exposed the fact that some corporations have exacerbated conflict in areas where social tensions are prevalent. Conversely, companies are expected to reduce their negative impacts on conflict, and to contribute proactively to promoting peace. Business companies have a great deal of stake in peace. Where there is no peace, there is no conducive environment for business unless that business is arms dealer. A strong business case exists to building peace and stability because it is one way that will enable companies to enhance their risk- management and ‘social license to operate’, as well as to increase business opportunities and earn support from local communities. Further, conflict is expensive for business, causing for example, suspended operations.
For the past five years or so, Ethiopia has seen one of the worst forms of violent protests. As a result, some business companies including foreign-owned companies were targeted. Foreign businesses have been systematically attacked in protest of the government’s development-centric approach, with protesters citing land grabs and unfair competition as key issues. It is to be recalled that in 2016, eleven companies ranging from textile firms to a plastics maker to flower farms had been damaged or destroyed, while more than 60 vehicles had been torched in Oromia region in a wave of unrest over land grabs and rights. 90% of flower farms between Ziway and Hawassa, in Oromia region have been attacked, this causing one American flower firm to pull out of the country. Similarly, the Dutch owned, 2,000 workers, fruit farm of Africa Juice BV was set alight with other Dutch and Israeli firms also being targets of attack. By the same year, anti-government protesters in Ethiopia have turned their anger on foreigners, torching tourist resorts and foreign-owned factories in Oromia region. The Bishangari Lodge on the shores of Lake Langano south of the capital Addis Ababa, one of the main tourist destinations in Oromia, was completely destroyed. Protesters have torched vehicles that belong to Dangote’s cement factory (the largest cement factory in the country) at demonstrations just one year after its inauguration. The violence in Oromia continued in 2018, and unidentified gunmen killed the Ethiopia country manager of Nigeria’s Dangote Industries alongside two company employees after he was attacked in Oromia region while returning to the capital from his workplace. Following protests primarily in Oromia and Amhara region former Prime Minister Hailemariam resigned after which Abiy Ahmed took office in April 2018. Since then, Ethiopia has seen a political liberalization applauded worldwide for its pace and breadth. In its first year of office, the new government has expanded media freedom; released thousands of political prisoners; welcomed banned political groups to operate freely in the country; appointed non-party figures to positions of influence; and reformed justice system. These moves lifted the hopes and morale of many Ethiopians who would remember the recent past unfavorably.
Despite hopes for changes, the violence surged under Abiy’s administration by taking a form of inter-communal and ethnic conflict, this time, with geographic shift from Oromia region. The major hotspot regions in the country for the past year and a half included the north-eastern, north-western and western Amhara Region; several weredas in the Benishangul-Gumuz Region; western, southern and central Oromia; bordering areas between Oromia and Somali Region; and eastern and north-eastern parts of the Southern Nations, Nationalities, and Peoples’ Region which led Ethiopia to top global list of the highest internal displacement in 2018 even though the government disputes this figure. In addition to massive displacement, cars, bars, restaurants, hotels and lodges and other properties of business companies were destroyed. As a result of unrest over Sidama’s quest for greater autonomy, many lives were lost and businesses were targeted in Hawassa and around its vicinities. The city is home to Hawassa Industrial Park, which has attracted international textile and clothing companies. More recently, in the aftermath of the killing of prominent Oromo signer Hachalu Hundessa, violence engulfed Oromia region claiming lives of hundreds of people and destroying small to large businesses including commercial buildings, residential houses, hotels, schools, groceries, and many others located mainly in towns of Shashemene and Batu . Among the businesses targeted in the area and sustained a heavy damage included the two hotels of the prominent figure, Athlete Haile Gebresilassie and large foreign owned flower companies.
Despite the political unrest, the new administration’s policies of private-sector led liberalization are attracting a number of companies from within and abroad to invest in Ethiopia. Private sector appetite remains strong and the government is trying to implement various economic sectors to attract business firms and boost job creation, which is needed to the country with population of over 100 million people.
Ethiopia has a lot of growth potential and untapped resources. The main challenge that businesses are facing currently is political instability. In cognizant of this, the investors and the public at large put pressure on government to uphold rule of law and order in the country. It is important that the country ensure peace and stability quickly and return to normalcy. Businesses, alongside other stakeholders, have a key role to play in peacebuilding, but all too often their involvement in building peace is little more than an afterthought. Businesses have to play active role in building peace and stability. This article argues that private sector can play a pronounced role in peacebuilding. Businesses can contribute to government efforts to safeguard investors and the public. One can ask immediately the following question: “How?” The following are the possible measures that private businesses can take to support and build peace and stability:
Employ conflict-sensitive business practices
It is well known that business companies are profit making organizations and thus, may attract criticism from some interest groups. It is imperative that they refrain from using socially irresponsible means to generate profit. Today’s businesses have to exercise the tipple bottom lines: profit maximization, corporate social responsibility and environmental responsibility to ensure their operational sustainability.
Companies should make a shift in their thinking from a compliance with law only approach, to building a Corporate Social responsibility (CSR) policy approach, then onto a do-no-harm strategy (which considers company–conflict dynamics, and requires conflict-sensitive business practices), and finally, towards a more positive, proactive structural peacebuilding and eventually, peacemaking approach. It is also important to align corporate peacemaking with CSR and strategic plan at larger scale to respond to long term challenges.
Understanding how a business influences peacebuilding is central to improving it. The PeaceNexus Foundation, with support from Covalence, recently launched a Peacebuilding Business Index, which incorporates broader Environmental, Social and Governance (ESG) indicators, with additional emphasis on how companies address specific challenges in fragile contexts, such as the disrespect for human rights, high levels of corruption, or the lack of public services. The criteria used give companies a yardstick to measure and showcase how their policies and practices can actively contribute to the stabilization and rehabilitation of conflict-affected areas, going beyond simply “doing no harm”, which previous frameworks such as the UN Guiding Principles on Business and Human Rights have often focused on. Companies are advised to observe ‘Guidance on Responsible Business in Conflict-affected and High-risk Areas’ by the UN Global Compact and Principles for Responsible Investment, which outlines how companies can support structural peacebuilding.
Increase engagement with stakeholders
Working with different stakeholders including peace and conflict-resolution experts or organizations, community representatives or societal groups such as women and youth, other companies (both domestic and international companies), local governments and non- governmental organizations is an effective way to building peace. Such a collective action will alleviate unnecessary suspicion, increase credibility and therefore, could encourage well-structured, inclusive peace processes. For example, collective action of international and domestic businesses formed South African Consultative Business Movement (CBM), an organization which was committed to the values of democracy and peace, inclusive consultation, conflict resolution skills, and a national rather than narrow interest-based agenda. This gave it the credibility required to act as a facilitator in the 1990s’ peace/constitutional negotiations. Another example of such a collaborative approach is that of the Kenyan Private Sector Alliance (KEPSA). KEPSA comprised of over 100,000 members, who played a role in mitigating election-related violence in Kenya in 2007-8 and 2013. Cooperating closely with civil society, KEPSA organized a three-phased public communication campaign, ‘Mkenya Daima’ (meaning ‘My Kenya Forever’), garnering support for peaceful elections, as well as funding peace forums, preventing incitement, disseminating conciliation narratives, negotiating privately with political leaders, and organizing presidential debates.
When companies engage in the above activities, whether they should do it in the public sphere or keep their approach private is an important consideration and depends on circumstances on the ground. Some times “quite diplomacy”, invisible and informal approach works better. Other times companies could be more open about their membership and support.
Hire across societal lines
Reports indicate that 70% of Ethiopian population is under 30. There has been significant increase in educational attainment as a result of expansion of higher education; however, there has not been as much job creation to provide employment opportunities to the newly educated young job seekers. The increasing trend of ethnic tensions in Ethiopia compounds the problem. Businesses can reduce, or exacerbate, tensions through their employment processes. Not only can the creation of local jobs address unemployment, often one of the drivers of conflict, but hiring different groups to work together can build good relations between communities. On the other hand, benefiting one ethnic group over another in hiring processes can build resentment, aggravating existing ethnic tensions. Therefore, businesses should look into their human resource policies and recruitment and section processes to ensure fairness.
Invest in places that need it most
It is common to see that investors give lip service to fragile places while in reality shying away from investing in those places. Investors should put their money where their mouth is. The oft-stated view by companies that social and political development are “not their business” needs to be reconsidered, given that the presence and actions of those very businesses in fragile communities affects the way social and political development occur which, in turn, creates the stable or unstable environment in which the business has to operate. Decades of investment in the business, substantial infrastructure and potential future profits can be lost in one civil war, which should make the promotion of peace, security and stability a significant feature of business planning and corporate social responsibility. Of course, investing in conflict prone places exposes businesses to more risk. But there are cases where investors became successful in investing in fragile places through developing good risk mitigation strategies. This demonstrates that investing for peace pays off. When investing in such places, investors should carefully identify the right partners to work with, who can help investors reduce risk, by covering first-loss or providing guarantees, or by contributing their skills, expertise and understanding of the context.
Share information
Companies collect and process various data about social, economic and political environment surrounding their business. Mostly this information is kept private as it is believed to be politically sensitive. However, sharing this information with federal government is valuable to peace. For example, disclosing risk assessments with government or other relevant national actors can empower them to mitigate tensions and prevent violence thereby safeguarding the business and the local people from possible violence.
Businesses should demonstrate leadership transparency. As a part of transparency they may be required by government to share some important information about their operation and to larger extent, data about their customers. Even though it is controversial, it is common that large companies like Google and Facebook share some sensitive user data upon government request. The absence of information about key aspects of industry can exacerbate conflict. Business can address this by showing leadership transparency and driving forward transparency initiatives. For example, the Extractive Industries Transparency Initiative (EITI) sets good governance standard for sharing information regarding contracts, production, revenue collection and allocation, and social and economic spending in the extractive industries such as oil, gas and minerals, overseen by a multi-stakeholder group in each country.
Pay taxes
Finally, among other possible initiatives that businesses can take to build peace is paying tax. This is the least businesses can do. However, some business companies see tax avoidance and evasion as a normal part of their operation which is so wrong. History of advanced countries such as Great Britain, for that matter many western countries, shows that an effective tax system can contribute to peacebuilding, improved governance, and political and economic stability. We know that Ethiopia’s tax to GDP ratio is one of the lowest in sub-Saharan countries’ standard. There is already inefficient and ill-designed tax system. Some businesses take advantage of this poor tax system to avoid tax. Businesses are not the only players here; the feedback loop between the tax system and political accountability relies heavily on common citizen engagement as well. However, if businesses, in particular large international businesses, are seen to avoid paying their share, it risks leaving citizens with a sense that the system is inherently unfair. It is imperative that we have a private sector that supports the strengthening of institutions and the rule of law, not one that detracts from it.

The author is currently working as Assistant Professor at School of Commerce, College of Business and Economics, Addis Ababa University; Email:

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