In film, a common plot device is to tie the ambitions of a multinational corporation with an armed conflict in a developing country or -– as in the case of Avatar — on a faraway planet. There may be some truth behind that pattern: A significant share of corporate operations and foreign direct investment occurs in countries in conflict, or those that have just emerged from conflict. Such countries often have important natural resources, large markets and advantageous production costs. In 2009, there were 31 armed conflicts in the world, of which 14 took place in Asia, 10 in Africa, three each in Europe and the Middle East, and one in the Americas.

But some companies resist playing the role of villain; more and more contribute to strengthening peace. Achieving this goal isn’t easy, experts note. It requires adapting business processes and relationships with stakeholders who may be victims of or parties to war crimes. It requires sensitivity to the conflict.

According to the latest book by Maria Prandi and her colleague Josep Maria Lozano, such a scenario brings risks and opportunities. Prandi is a researcher in the Human Rights Program of the Pau Culture School at the Autonomous University of Barcelona. Lozano is a professor and senior researcher in corporate social responsibility (CSR) at ESADE’s Institute of Social Innovation.

The Pau Culture School, a research center focused on human rights and humanitarian crises and conflicts, has spent more than 10 years collaborating with ESADE’s Institute of Social Innovation on producing materials that explore the link between environments in conflict and the business world. The latest book from their collaboration, CSR in the Context of Conflict and Post-Conflict: From Managing Risks to Creating Value, was published in November. It is the last of three books in a series that was launched four years ago.

Prandi recently spoke with Universia Knowledge at Wharton about the book’s conclusions. Below is an edited transcript of the conversation.

Universia-Knowledge at Wharton: What is the overall theme of the trilogy?

Maria Prandi:The trilogy seeks to identify, evaluate and enhance the role of corporations when it comes to the three fundamental pillars of the United Nations: human rights, [economic and social] development and peace-building. In 2006 we published our Practical Guide to Human Rights for Companies, and then in 2009, a second book about what companies can do to battle world poverty, titled, Can Companies Contribute to the Millennium Development Goals? Keys for Understanding and Action.

The first conclusion in this study is that these three themes — human rights, development and peace — are interconnected, especially in the so-called complex environments. This interconnection must be intrinsically reflected in corporate social responsibility policies, not only in their contents but also in the way relationships are built with stakeholders.

UKnowledge at Wharton: Films often touch on the ties between multinationals’ ambitions and armed conflicts in a developing country or on a faraway planet, such as in Avatar. What you propose here is the opposite — that companies contribute to constructing peace. Do you believe that the role of the business sector during and after conflicts has changed in recent times?

Prandi:The role of the business sector can be particularly controversial in the context of an armed conflict. There is clear evidence of the role played by companies in perpetuating wars, principally because of the competition among the armed players for control and the subsequent commercialization of natural resources, which enables them to finance their armed activities. One such example is coltan, a mineral found in the Democratic Republic of the Congo. Coltan is indispensable for manufacturing mobile phones and computers, and it has been financing the war lords there ever since 1998. Nevertheless, there are more and more cases of companies involved in peacemaking in those countries that are at war or are emerging from war. This adds to their risks of operating in this sort of context.

UKnowledge at Wharton: How can companies help build peace? What type of companies should we be talking about, and in what situations?

Prandi:Companies play a fundamental role in strengthening peace in so-called complex environments. They can contribute to the creation of value, not only by generating economic growth but also by getting involved with the vulnerable segments of the population who commonly exist in these contexts, including displaced people, refugees, victims, ex-combatants, incapacitated people and so forth. Companies can make these people the focal points of their CSR policies.

In all sorts of sectors, national and international companies have developed policies that support creating opportunities for entrepreneurship and jobs for vulnerable people, creating bridges between communities that were previously confrontational through a concept called reconciliation in the workplace. This concept consists of simultaneously hiring people from various factions, even actively supporting peace negotiations such as those that occurred in South Africa through the Consultative Business Movement, a business group that mediated between the different players to enable the elections of 1994 to take place, and facilitated the end of apartheid. Or they are adapting their products and services so that they respond to the needs created in these sorts of environments.

Clearly, CSR policies that incorporate criteria for peace building have a dual goal. First, they have an economic goal focused on creating opportunities for sustaining entrepreneurship, and favoring economic activity on the local level in a responsible manner while focusing especially on those goals.

Second, they have a social goal of attending to the social exclusion at the root of the conflict, favoring reconciliation among those groups that have been confronting each other while promoting nonviolent relationships within the community where the company has influence. By deploying CSR policies and acting as connectors, these companies contribute to repairing the social fissures that exist between the various communities involved, thus creating a favorable environment for joint economic activity that must be designed with great care and with deep knowledge of the conflict and its consequences. We must not forget that the first obligation of the company is to prevent its activities from having any negative impact on peace-building. The concept known as “Do no harm” first emerged in a 1999 book by Mary B. Anderson, titled Do No Harm: How Aid Can Support Peace — or War.

UKnowledge at Wharton: Can you provide some examples or describe some projects that have been successful in building peace?

Prandi:There are successful experiences in such contexts as Colombia, the Philippines, Bosnia and Herzegovina, and South Africa, undertaken by companies that understood that their CSR policies needed to take into account that those countries that emerge from an armed conflict are not only impoverished but also suffer significant social fissures and wounds. In these complex environments, some companies have committed themselves to simultaneously employing or subcontracting people from various groups that had previously confronted one another, and then later providing them with training in technology as well as in the values of the culture of peace.

Others have offered training both for victims and for immobilized members of armed groups, enabling those people to become more employable in the labor market. Most experiences have been done from the perspective of peace: at the core of the business; in the politics of employment and hiring; in the relationships with local communities and other participants; and with explicit support for the peace process, which is a political dimension.

One such example are the activities undertaken by Grupo Exito, a leading retailer in Colombia, which has experienced one of the longest-running and most lethal conflicts in the world, a struggle that has had a great impact on the civilian population in terms of mortality and forced displacement. Grupo Exito’s policy addresses the areas of the population that are most vulnerable in terms of number of victims, displaced people, etc. After a period of personalized training, this program enables such people to become employees of the company. Then a continuous process of personalized attention and coaching develops the skills and responsibilities of these people. The entire family of the participant is also involved, as well as every aspect of his or her life, including personal health. The company preserves strict confidentiality concerning the identity of these people. Because the applicants for this program had a violent past, this initiative operates within the company in order to prevent any rejection by the fellow workers, and to gain support from those managers who are involved in the program. That way, this type of CSR is perceived as a corporate policy.

UKnowledge at Wharton: What sorts of tools or weapons can companies count on in order to develop these sorts of actions? Do they need to rely on a CSR policy that has already been established?

Prandi:These days, many companies incorporate policies for human rights into their CSR strategies. But there are still only a few companies that take into account the specific characteristics of this sort of highly complex working environment, which combines a weak level of governability with activity by armed groups, thus generating additional costs for companies.

From our research, we’ve concluded that companies should develop CSR policies that incorporate a perspective called conflict sensitivity. Being sensitive to the conflict does not necessarily mean that the company must get involved in peace-building initiatives. However, at the least, it does mean that the company must not have a negative influence on the conflict or on the process for strengthening peace.

In our book, we recommend that, for the first time, companies create scenarios for dealing with post-conflict conditions. Before making any investments, companies should study the impact and risks involved in engaging in business operations that involve any aspects of peacemaking. Their goal should be to identify specific risks and to set up measures for control. If the company already has a presence in a geographical area, it is important that this study also identify those relationships that have been established during the period of war. This includes which actors could have benefited, directly or indirectly; what consequences the violence had for business activities; and what influence the company’s activities had on the development of the conflict and on the various players involved.

Some of the questions that companies should address in such a study:

  • What were the implications of the company’s country of origin in the conflict?
  • What involvement, direct or indirect, has the company had in the conflict?
  • Who are the other major players, and what relationships does the company have with them?
  • What is the best way to define the company’s degree of commitment, and is this considered a dynamic process?
  • What behavior must the company avoid in order not to exacerbate the tensions between the various groups or weaken community relationships?
  • From the company’s economic position, what can be done to support the peace-building process?
  • What can be done to promote reconciliation in the workplace?
  • What needs to be done to get other people on board in terms of building peace and developing local knowledge?
  • What are the limitations of the company and its CSR policy for addressing aspects of the peace process?
  • What are the experiences of other key players in this sector in this country?

UKnowledge at Wharton: Regarding human capital, does the company need employees with a specific background? How much experience is required for those employees who are leading CSR policies in regions where there is currently a conflict or has been one recently?

Prandi:More than hiring employees with a specific background, the company needs to learn to work through alliances with other agents and organizations that have a presence in these sorts of environments. So it is more useful to have someone with skill at building bridges with NGOs, social organizations, or the United Nations than having someone who is narrowly trained in aspects of CSR but has little experience in these other areas. This perspective of conflict sensitivity will be incorporated into partnerships and alliances with all sorts of organizations that also offer a deep knowledge of the conflict and its causes and consequences.

UKnowledge at Wharton: What benefits might companies derive from this sort of commitment and behavior? What risks are involved for companies and for the favorable development of specific goals?

Prandi:The benefits for companies are clear, since the same economic activity also provides benefits in an environment of peace, where a company can develop itself without the additional costs derived from a conflict (economic, human, property destruction, disruption of production, etc.). By helping to strengthen the peace, companies can improve their reputations, improve the motivational level of their own employees, strengthen their presence in the market, and open the way into new markets.

UKnowledge at Wharton: What is the most complex situation that a company can battle against during or after a conflict? Normally, how can companies overcome them? In what ways do they fail to do so?

Prandi:One of the most important questions for companies during and after a conflict is how to reconcile their legitimate needs to guarantee the protection of their physical installations and personnel with their requirements to provide maximum respect for human rights and international humanitarian law (IHL). IHL comprises the totality of rules that apply during situations of armed conflict and war. These rules are especially important for companies that produce or market any sort of heavy or light armaments, as well as for other companies that operate during a conflict.

Recent experience shows that whether you’re talking about regular armed forces or about private corporate security, security-related tasks must be carried out by following a specific protocol of behavior, in a way that guarantees that your company is not accused of complicity in any abuses of human rights and IHL. The issue of security is especially important because it frequently has a decisive influence on the relationship between the company and the local community.