International development: stepping up to the plate

A new world Marshall Plan

The Chancellor of the Exchequer, Gordon Brown, called for a move to a third generation in corporate social responsibility when he addressed the Royal Institute of International Affairs conference on corporate social responsibility on January 22. Describing the first generation as charitable philanthropy and the second as social engagement, the Chancellor proposed that the third be judged not just by its input, but by its results in making a difference to poverty reduction in the developing world. Focussing on international development, Brown called for a modern Marshall Plan for the new world, in which business has a key role. He particularly stressed the need for companies to pursue high corporate standards when engaging as partners in the development process. Contact Simon Moyse, Treasury, on 020 7270 4420 (http://www.hm-treasury.gov.uk)

Leveraging local capital

Shell Uganda, The Shell Foundation and the Kampala-based finance company, DFCU Leasing, are teaming up to support the development of small and medium sized business in Uganda’s energy sector. Both the Shell Foundation and Dfcu Leasing are investing $2m in the Uganda Energy Fund, launched on January 30, which will provide both business development services and lease finance to SMEs. Shell Uganda is bringing its expertise to the partnership, providing skills training and mentoring to loan applicants.

The Shell Foundation is also investing $1m in a similar fund to promote black-owned SMEs in South Africa’s energy sector, due to come into operation in April. The Foundation’s investment has helped leverage $4m from two other financial institutions; ABSA, a commercial bank, and the government-backed Industrial Development Corporation. Contact Chris West, Shell Foundation, on 020 7934 5496 (http://www.shellfoundation.org)

Pressure to open markets

The chairmen of Centrica, Shell and Rio Tinto are among business leaders enlisted by trade and industry secretary Patricia Hewitt to support an alliance with Oxfam demanding the opening up of western markets to developing countries, it was announced on January 27. The group is calling for political leaders to step up efforts to reach agreements within the World Trade Organisation so that barriers are removed at a pace that benefits poorer countries as well as business interests. Contact Justin Forsyth, Oxfam, on 01865 312610 (http://www.oxfam.org.uk)

A co-operative effort

The Co-operative Group‘s commitment to guaranteeing a floor price above the market norm across a range of its supermarket products won it the Shell Award for Sustainable Development at this year’s WorldAware Business awards. As well as an enhanced price, The Co-op‘s fairtrade deal provides growers with an extra premium to improve community services such as schools, clinics and water supplies.

Other development initiatives singled out at the awards ceremony on January 29 included a programme to provide health workers in Africa with motorbikes so as to reach otherwise inaccessible communities, and a joint-venture with the Maasai people to establish tourist lodges in Kenya. Contact Parmender Daniells, WorldAware, on 020 8763 2555 (http://www.worldaware.org.uk)

Mali energy takes off

Electricité de France took the award for best renewable energy partnership with developing countries at the European Commission’s Campaign for take-off awards, announced on December 7. The campaign encourages investments in the renewable energy sectors by promoting and supporting existing initiatives and encouraging new parties to get involved. This year’s partnership award recognised a project by Electricité de France to support the cotton industry in Mali by providing energy services to rural populations using solar home systems. Contact Luc Werring, EC, on 00 32 2 2952 8779 (http://www.europa.eu.int)

Mind the gap

A post-earthquake rehabilitation initiative by Gap in India, and the response to drought in Pakistan by Lever Brothers, are two case studies presented in a new report analysing the position of disaster mitigation and preparedness in corporate social responsibility. Published by University College London in December, the report sets out factors inhibiting business commitment. The author’s suggestions for the development of corporate activity in this area include insurance-based partnerships, NGO creation and more input by business umbrella groups, such as chambers of commerce. Contact John Twigg, UCL, on 020 7679 2436 (http://www.ucl.ac.uk)

Combating corruption

Companies from leading industrial countries are slightly less likely to use bribes than they were in 1999, with the exception of companies from Britain and the United States, according to the second annual Global corruption report, published by Transparency International on January 23. The 2002 review is broken down into 16 regional reports, and provides accounts of positive reforms and negative developments in the fight against global corruption. Also recently published by TI is a best practice guide for business on countering bribery, the product of a partnership between companies, academia and trade unions. Contact Sarah Tyler, TI, on 00 49 30 3438 2019 (http://www.transparency.org)

Facing facts

Companies have no choice but to face corruption head on, and should therefore be judged on how they address inevitable commercial and ethical dilemmas, argues a new report published by the Control Risks Group on January 15. Facing up to corruption: a practical business guide presents the results of an international survey on business attitudes to corruption, and aims to help companies learn from the experiences of other firms facing similar dilemmas. Contact Julian Lahr, CRG, on 00 31 20 620 5360 (http://www.control-risks.com)

in brief

Indian companies see corporate social responsibility as central to corporate action, with “passive philanthropy no longer a sufficient response to rising expectations”, according to the CSR Survey 2002 India report published at the end of the year by the United Nations Development Programme and other partner organisations. Contact Momin Jaan, UNDP, on 00 91 11 462 8877 (http://www.undp.org.in)

Accenture, BMW, Levi Strauss and 3M are just some of companies engaging in partnerships in African development that are profiled in a report published by the United Nations Development Programme and the International Business Leaders Forum in December. Contact Katie Alison, IBLF, on 020 7467 3616 (http://www.iblf.org)

Comment: international development: stepping up to the plate

February 01 2003

by Briefing staff

The problems of the developing world are all too often pitched at companies as evidence of all that’s ill with corporate capitalism. But the rules of engagement need to be clarified if business is ever going to become a development big hitter

If one thing is clear from any discussions of businesses role in development, it’s that no-one really knows where the boundaries of corporate engagement should begin or end. Or, at least, lots of people know, only none of them agree.

Before representatives of the development debate meet again to sling statistics at one another (over three billion people living on less than $2 a day; eight billion potential consumers in the developing world by 2050), it mightn’t be a bad idea to circulate them all a copy of Gordon Brown’s Chatham House speech. His recognition that the “trade-not-aid” rationale is as valid for the FTSE 500 as it is for DFID at least takes everyone onto first base together.

Second base – that of social engagement, the Chancellor suggests – is in sight for most corporate players, if not exactly the most crowded spot on the development ballpark. As Litvin points out in ‘Empires of Profit’ (see the book review in this issue), engagement sounds great around a discussion table at Davos, but most companies looking to engage at a local level are presented with a dizzying array of political bear-traps and complex social sub-issues.

However, even for those companies that have laboured hard to establish a workable framework for multi-local engagement, reaching the Chancellor’s third base of poverty alleviation takes companies dangerously into the deep outfield. Agreed, companies can do more to promote enterprise and deliver creative business solutions to what Kofi Annan calls globalisation’s “problems without passports”. Shell’s support for SME development in Uganda’s energy market is one such example. Scaling up existing solutions like this is vital if any dent on the challenge of economic development is to be seen.

But most of the necessary conditions outlined by Brown – competitive privatisation, proper financial supervision, avoidance of corruption, cross-border systems of accountability – fall primarily to governments to resolve.

The real development challenge for companies, therefore, is to engage with the public sector. Business leaders lending their voice to the DTI’s alliance with Oxfam represents a good model for the way forward. Collective action in the political process by business is possible, as Johannesburg demonstrated. Whether it’s desirable or legitimate is where the disagreements start. Winning this argument is the key to showing that business can join the development team – and move everyone on towards the third base of poverty alleviation.