A discussion moderated by Dean Krehmeyer, Executive Director, Business Roundtable Institute for Corporate Ethics

Visit Biographies for more about presenters

How can partnerships help business in contributing to peace and stability?
One of the often recommended approaches for fostering peace through commerce is a partnership model. Because businesses may not have the expertise or capabilities to know how best to engage in a geographic area, they team with those who can provide them with such insights.

Presentations:
Partnership Approaches to Advancing Business' Contribution to Peace - with NGOs and Employees
Watch the four videos and join the discussion with presenters below.

Norman Bishara, Assistant Professor of Business Law & Business Ethics, and
Cindy Schipani, Professor of Business Law, Ross School of Business, University of Michigan

"Complementary Alternative Benefits to Promote Peace " (6:12)

Kimberly Eaason, Director of Strategic Relationships, TransFair USA


"Fair Trade Certification: Good Practice for Business and Increased Prosperity for Developing Communities"
(7:03)

Virginia Haufler, Associate Professor of Government and Politics, University of Maryland

"New Institutional Models: The Kimberly Process" (6:37)

Michelle Westermann-Behaylo, Doctoral Candidate, George Washington University

"Institutionalizing Peace Through Commerce: The Partnership Dimension" (3:06)

Resources

Discussion: How can partnerships help business in contributing to peace and stability?

1. For the business partnership models presented, what are the unique strengths? Are these models replicable, and what are the hurdles to replicating?
2. Where should the discussion of business partnership models be initiated – is this primarily a management-led issue or a board/governance-led issue? Who could most make positive action happen?
3. Does the partnerships described in the presentations reduce risk? Create value? How would a newly hired MBA-graduate who has participated throughout the “Business Fights Poverty” eConference make the pitch for their company to “get on board”?

Views: 640

Replies to This Discussion

Leon,

I think you make a very good point. Partnerships between big business corporations and governments in more unstable economies presents a huge opportunity. Corporations can capitalize on new destinations that they can market to tourists, while they help stabilize economies and offer further support to tourists interested in traveling to these locations. Tourism stimulates so much growth and money that it is a great industry for poorer economies to get involved with if they can. Unfortunately, because poorer economies are often unstable, much of the time there is political unrest and other conflict or instability that scares tourists off. Big business backed tourism offers much more security for tourists, encouraging more visitors, and new destinations offer great business opportunities.
ALSO CHECK OUT this link:

http://londonminingnetwork.org/2009/04/rio-tinto-attacked-from-all-...

[The Rio Tinto board] responded to issues of Indigenous Peoples’ rights by stating that some people were opposed to the projects in question, others in favour, that they would create jobs and that they would therefore go ahead with them. They refused to deal with the underlying issue of contention – the pursuit of mining projects on Indigenous land against the express wishes of Indigenous communities.
Brandon

In state dominated economies where development is led by the state rather than private enterprise, it makes sense for businesses to form partnerships with governments. But we need to add a caveat here - not just any government but democratically elected governments that have the support of the people. For peace is best promoted through democratic institutions. Some examples in the under-developed and developing countries have shown that businesses can in fact suffer a backlash from being associated with an unpopular regime. Such a business will find it has made a not so smart partnership afterall.
Marilyn,

I want to further discuss state dominated economies and tourism - before expanding any further on this topic let me point out TWO very extreme examples. North Korea, and China (before the 1980's). North Korea currently has EXTREMELY limited possibilities for foreign tourists (at least from non-allies) - if business, and I understand the business case for any operations in North Korea are limited at best - were able to establish some type of relationship with the North Korean government allowing tourism I believe that in some capacity whatever intellectual capital is transferred through such an arrangement could only better the prospects of North Koreans not diminish them. The public may not initially understand this, and yes, it is possible said entity could receive some degree of bad press - but the opportunity would likely outweight the fall-out.

China, and similar situations, become a little more precarious. Prior to Deng Xiao Ping deciding "to get rich is glorious" China was very much the same in many respects as North Korea is today. However through gradual political and corporate partnerships, J-V's, and offshore operations the Chinese have largely moved through the phases of economic development to a point where, today, they are becoming innovators. Without the initial foray into this unknown territory by many foreign instiutions much of this "progress" may not have been possible?

I am not saying that through tourism, etc... into these regions (even if it were possible) that guaranteed peace, or good will ensue - but the track record presents compelling evidence.

Additionally, Democracy does not work in many of these places - especially right off the bat - to adapt our values, and norms which promote and sustain peace to their style of government would be far more effective then unbridled support of democracy.
CHECK OUT THIS LINK to see how business-government partnerships can sometimes go badly wrong:-

http://news.bbc.co.uk/2/hi/asia-pacific/1401733.stm

Friday, 22 June, 2001, 10:35 GMT 11:35 UK
Exxon 'helped torture in Indonesia'

Also an illustration of how a multinational business has exacerbated the conflict situation in an under-developed but resource rich country.
Virginia

Your statement has put a totally different light on our discussion. Ending wars and
preventing war through spreading wealth through business partnerships are two very different propositions. Whilst wars may be business for some businesses, I'm sure most businesses would prefer to stay clear of wars. Nontheless I'm curious to hear how and what businesses you would propose for governments and private businesses to form partnerships in some of the hot spots of the world today?
The theme of this weeks dsicussion, "Partnership Approaches Involving Business", has really got me thinking that if any company wants to make a difference that they must not operate in a vacuum. The partnerships discussed this week range from employee partnerships to community partnerships; yet, what is important is that collaboration is essential. The purpose of this conference is to identify how we can strive for peace through better business practices, and while every theme is important I believe that peace will never be obtained without partnerships. While each type of partnership has its value I was wondering what others perceive to be the most partnership? Specifically, I am curious as to the partnerships that without which peace would not be obtainable. I am curious to hear what your thoughts are...
In total agreement with Joshua's arguments, I find Kimberly Eaason's title to be an effective one: Director of Strategic Relationships. Now, the most complicated process in social sciences usually turns out to identify the stakeholders: who will be affected by the processes and who should be invited to take active roles in the processes? In an attempt to create peace through commerce, an ideal answer would be 'everyone should be invited as everyone will be affected'. However, it is not possible to include everyone at the same level of activity, this is why I believe the relationships should be analyzed strategically and build up according to these analyzes. To answer your question, I would draw my point from our discussions a few weeks ago and claim that the most important partnerships between businesses and local entrepreneurs. This partnership will clearly establish the credibility of the business and provide the necessary financial sources and infrastructure to promote peaceful understanding between the conflicting parties.
As several people mentioned above, I also strongly believe that partnership in tourism plays an important role in promoting peace. For example, there is a program which is called ‘The International Committee of Tourism Partners’. It is the joint tourism project between Iran and the US. This partnership allows Iranian investors build ties with the US tourism industry under Iranian law and helps to develop tourism and investment projects within the tourism industry between two countries. I think it is a good way to promote ‘Peace through Tourism’.
Jeong Cho, Katie, Bianca & David

The tourism industry is definately the best industry for partnerships! From the customer to the product, so many people are involved and who may benefit. And its MOST HEARTENING to hear of inter-governmental partnerships in this industry, especially governments who have had difficult diplomatic relationships. The example given by Jeong Cho is just incredible!

At the next level i.e. partnerships between multinationals and communities in the tourism industry in my part of the world however, I would like to share a not so encouraging picture. Since I work as the middle person between community and multinational travel agents, I have discovered in negotiating rates for board, lodging and activities that the business relationship to be PRIMARILY EXPLOITATIVE. For example, for a cultural performance the travel agents pay a small fixed sum irrespective of the number of tourists. As a result of this I have seen many communities go in and then out, of the tourism business. They eventually return to their cash crop livelihood which pays them more. The multinationals on the other hand, earn enormous profits! I argue with these businesses that they need to see their business in the long term and that to be sustainble they need to make the community their partners by paying a percentage. But I see many of them turn away and go to other destinations where the indigenous communities are not wise to their ways yet. I gather these multinationals will continue doing this until they have exhausted their use of the communities and then go to another Asian country. I was informed by one European multinational that it expected the ethnic tourism trade in N. W. Borneo to last for just another 20 years! This is definately not a business partnership approach that will spread wealth and peace across the world.
MY SUMMARY TO DISCUSSION: How can partnerships help business in contributing to peace and stability?

1. For the business partnership models presented, what are the unique strengths? Are these models replicable, and what are the hurdles to replicating?

Business partnership models arising between:-

(1) governments and governments;

(2) governments and multinational businesses;

(3) multinational businesses and local business enterprises;

(4) multinational businesses and communities;

(5) multinational businesses, local businesses and communities; and

(6) multinational businesses (eg. ExxonMobil, Rio Tinto), public or private enterprises and communities and international NGOs (e.g. London Mining Network (LMN) - an alliance of human rights, development and environmental groups that pledge to expose the key role of companies listed on the London Stock Exchange, London-based funders and the British Government in the promotion of unacceptable mining projects).

I would like to focus on partnership model (6) as I see it as having the most potential to succeed in dealing with conflict. The unique strength of partnership model (6) is that it empowers external stakeholders (e.g. a community) who are otherwise powerless, through publicizing business irresponsibility thereby swaying public opinion, especially of investors and potential investors. Thus when a multinational is threatened by devestment, etc., it shall be persuaded to exercise business responsibility.


2. Where should the discussion of business partnership models be initiated – is this primarily a management-led issue or a board/governance-led issue? Who could most make positive action happen?

In my considered opinion, the question “Where should the discussion of business partnership model be initiated?” is primarily a Board/governance-led issue. Corporate law lays down clearly the fiduciary duties of directors to the company and its shareholders. Any business partnership that purports to extend duties beyond the company and its shareholders (internal and external) to stakeholders, must necessarily come from the Board. Management can be a pull factor to persuade the Board on the impact of stakeholders (internal and external) on long-term shareholder value and on business sustainability. Positive management action is then possible through engaging in stakeholder management.


3. Does the partnerships described in the presentations reduce risk? Create value? How would a newly hired MBA-graduate who has participated throughout the “Business Fights Poverty” eConference make the pitch for their company to “get on board”?
In the context of this econference “Peace through Commerce”, partnerships are intended to REDUCE RISK OF CONFLICT but whether they do or not depends ultimately on whether businesses embrace such risk as risk to shareholder value and business sustainability since their first corporate duty is to shareholders and not stakeholders.

It is possible to argue that reducing risk of conflict through external stakeholder management creates long-term shareholder value and business sustainability. This attempt at stakeholder management was illustrated by Rio Tinto Response to Business & HR Resource Centre at :

http://www.business-humanrights.org/Documents/Rio-Tinto-response-6-...

A newly hired MBA-grad who has participated throughout the “Business Fights Poverty” eConference should make the pitch for their company to “get on board” by stressing on : the fact that peace is inextricably linked to long-term shareholder value and business sustainability. The risk of conflict obliges multinational businesses to become good corporate citizens through responsible business and a commitment to peace through commerce. The lesson of ExxonMobil in Acheh, Indonesia is aptly illustrative of this. Please refer to :-

http://news.bbc.co.uk/2/hi/asia-pacific/1401733.stm

FINALLY, I would like to express my appreciation to the Moderator and Presenters in the conduct of this discussion as well as to my fellow participants for sharing their views and experience. SELAMAT TINGGAL (goodbye in Malaysian language)! If you wish to explore research collaboration, possible investment in a community based tourism model, etc. please contact me at ong_msa@yahoo.com. :-)
Thank you for your thoughtful response to this line of thinking. It is clear you are genuinely engaged in considering the value of partnerships, and how to pursue them.

I'd like to point out that there are different types of partnerships, and two of them stand out. First, we can look at the tourism example as an industry that has a direct stake in peace. The non-profit group Vision of Humanity and its Global Peace Index have focused attention on the sectors that would most benefit from peace--the "peace industries," and therefore would be a good place to start in developing partnerships: tourism, retail, financial services, and commercial aviation. Second, we can look at sectors that have been directly implicated in causing or facilitating conflict, whether intentionally or not: oil and gas, mining and minerals, timber and cocoa, and the financial services that support them. These also should be encouraged to participate in partnerships, but of a different sort than the ones in the peace industry.

This has been a very interesting discussion, and the participants contributed thoughtful, valuable comments. I look forward to the next thematic discussion in this conference.

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