Multinational Corporations, Social Responsibility and Conflict. (Economic and Social Implications)

Article excerpt

"The international business community will increasingly need to promote greater economic inclusion and social justice in its operations, or it will be blamed for contributing to the conditions that lead to violent conflict."

It is not a coincidence that the World Trade Center and the Pentagon were part of the same attack. In an increasingly global economy, these pillars of business and government are now tied together as the symbol of a growing link between the public and the private sector. The attacks are evidence of a rising perception that globalization creates poverty and inequality, which in turn create the motive for much violence. In response, the private sector is becoming more public-minded, while the public sector is becoming more business-minded. The events of September 11, 2001, the demise of Enron and a worsening recession clearly demonstrated that good corporate governance at home and abroad, promoting economic inclusiveness and community goodwill, are important elements of international security. This interweaving of roles calls for new partnerships between business and government, in which sharing skills and expertise can be valuable in promoting regional and global stability.

The security operations normally associated with peacekeeping are uniquely governmental responsibilities, which corporate actors actively avoid. Conflict is endemic to failed states, where violence becomes the predominant means to express grievances and to secure control over wealth and key economic goods. While governments have the primary concern in preventing violent conflict, businesses and financial institutions have an important role to play in avoiding or resolving conflicts that are associated with economic production. These include conflict situations that stem from the breakdown of traditional social frameworks, involving an influx of immigrants and the rapid emergence of cash economies. Governments are also responsible for responding to conflict and post-conflict situations.

However, globalization and the mounting number of conflicts occurring in regions where multinational corporations (MNCs) operate have prompted international organizations, the media, human rights groups, social investors and consumers, as well as some corporate executives, to discuss the responsibility MNCs share in promoting peace and avoiding conflict. Corporate social responsibility and business ethics groups assert that corporations have an interest in leveraging their skills and impact to promote stability in their areas of operation, not only because it is the right thing to do, but also because it makes good business sense. The more traditional human rights groups make use of international law to ensure that businesses are not complicit in human rights abuses, while conflict resolution groups offer their problem-solving skills and their expertise in identifying root causes of conflict.

All these players agree that multinational companies operating across borders should bear some responsibility for the effects of their operations on the local environment and population. The role of business in conflict prevention, crisis management, post-conflict reconstruction and peacebuilding was the focus of several conferences held in 2001 by organizations ranging from large multilateral agencies such as the United Nations, the World Bank and the World Economic Forum to the smaller non-governmental organizations such as the International Peace Academy and Transparency International.

In October 2001, at a World Economic Forum workshop on security and political risks, participants agreed that businesses increasingly acknowledge political stability to be crucial to their growth and that "they must construct global political and economic scenarios which do not ignore the potential for systemic discontinuities such as September 11, and the impact such events can have on the private sector. …