There is a certain irony in the fact that transparency is a word so frequently used, but so frequently misunderstood. At last, tangible examples are bringing clarity to the term, and possible benefits to all.
ABN AMRO, Barclays, Citigroup, Credit Lyonnais, Credit Suisse Group and The Royal Bank of Scotland are among ten banks from seven countries to adopt a voluntary set of guidelines for managing social and environmental issues related to the financing of development projects. Announced on June 4, the banks will apply the Equator Principles globally to project finance in all industry sectors, including mining, oil and gas, and forestry. In adopting the Equator Principles, a bank undertakes to provide loans only to those projects whose sponsors can demonstrate their ability and willingness to comply with comprehensive processes aimed at ensuring that projects are developed in a socially responsible manner, and according to sound environmental management practices. The banks drafted the principles themselves, based on the policies and guidelines of the World Bank and International Finance Corporation. Contact Moya Galal, Barclays, on 020 7699 4114 (http://www.equator-principles.com)
Extracting the truth
Shell, BP and Chevron are among the international companies giving support to the UK Industries Transparency Initiative,which the leaders of the G8 nations also publicly endorsed at the beginning of June. The EITI commits companies in the oil, gas and mining sectors to disclose the payments they make to host governments, such as taxes,signatory bonuses and royalties. The voluntary guidelines contain a reciprocal requirement on governments also to extractive industries. The initiative has been co-ordinated by the Department for International Development, and was publicly endorsed by a group of ten investment companies on May 19 led by ISIS Asset Management. The link between revenue payments in rich-but-poor countries and the problems of corruption, economic stagnation and by George Soros, the international financier, who set up the Publish what you pay coalition in April 2002. Contact Karina Litvack, ISIS, on 020 7506 1219 (http://www.publishwhatyoupay.org)
BBC to address HIV/AIDS
The BBC World Service is working with Viacom to launch the first pan-African radio campaign on HIV/AIDS, it was announced on May 18. The Kaiser Foundation will fund the initial production and running costs of £216,000. The World Service is to produce anti-AIDS radio messages in seven language services in Africa, where it has 60m regular listeners. Viacom is also planning a European AIDS awareness campaign involving its Blockbuster video arm and outdoor advertising hoardings. Meanwhile, the International Organisation of Employers and the International Confederation of Free Trade Unions are to co-operate in the global fight against HIV/AIDS, it was announced at the recent Global Compact policy dialogue on HIV/AIDS. The organisations issued a joint statement calling their affiliates, member enterprises and trade unions the highest priority. Contact Yogesh Chauhan, BBC, on 020 7973 6363 (http://www.bbc.co.uk); Merigan Twelves, Blockbuster, on 020 7734 4455 (http://www.blockbuster.co.uk); Barbara Perkins, IOE, on 00 41 229 290000 (http://www.ioe-emp.org).
Human rights handbook
The human rights responsibilities of international companies are set out in a new booklet published by Amnesty International on April 4. Outlining existing international law, treaties and codes on human rights relevant to business, Amnesty is promoting the publication as a useful tool for companies bidding for contracts in Iraq to ensure they avoid human rights buses during the rebuilding period. Contact Sarah Green, Amnesty, on 020 7814 6238 (http://www.amnesty.org.uk)
Coke provides AIDS drugs
Africa’s Coca-Cola bottling companies are to provide HIV/AIDS healthcare benefits to all employees and their spouses and children, it was announced on April 15. Co-ordinated by the Coca- Cola Africa Foundation, the initiative will cost approximately $1m a year. The foundation will cover half (50%) of the cost, the bottling companies will pay 40%, and employees will contribute the final 10%. Contact Sonya Soutus, Coca- Cola, on 00 1 404 676 2121 (http://www.cocacola. com)
Human rights on the line
Only one in ten (10%) of Asia’s top 250 listed companies has a policy on the protection of human rights, comparedto five in ten (50%) European companies, according to research published by the University of Hong Kong. The first ever Asia-wide survey of CSR finds that three in ten (30%) Asian companies have a policy on producing a CSR or sustainability report, compared to more than six out of ten (64%) European companies. Meanwhile BP continues to face criticism in connection to its involvement with the Baku-Ceyhan pipeline. A new report by Amnesty International claims the oil major put pressure on the Turkish government to skimp on human rights in the construction of a £1.8bn oil pipeline to transport oil from Azerbaijhan via Georgia and Turkey. BP denies the claims made in the Human rights on the line report. Instead, the company highlights its efforts to ensure that all landowners and land users receive compensation for the temporary loss of their land while the pipeline is built. This assurance goes beyond that required by Turkish law. Contact Richard Welford, UHK, on 00 8 52 2857 8645 (http://www.hku.hk); Sarah Green, AI, on 020 7814 6238 (http://www.amnesty.org.uk); Tamam Bayatly, BP, on 00 1 994 1297 9732 (http://www.bp.com)
Hewlett Packard and Pfizer are backing the establishment of the first North American Global Compact learning forum, which will aim to encourage US companies to share experiences and information on engaging with the initiative. Contact Paul Fitzhenry, Pfizer, on 00 1 212 733 4637 (http://www.pfizer.com)
‘Transparency’ is the definitive buzzword in today’s international policy arena; something everyone is always talking about, but few can actually explain. So it is welcome that, out of the vagaries of liberal policy discourse, concrete examples like the Extractive Industries Transparency Initiative are bringing shape to this hitherto opaque term. One thing you can be sure of is that transparency is here to stay. Firstly, the capabilities of modern day communications make information more readily available. With accessibility to an incalculable range of sources now within the click of a mouse, information is beginning to be viewed as a public right, not a private concession.
Secondly, some national governments (mostly in the West) are latching onto the notion as they struggle to deal with the challenges of governing a global world. Greater transparency should, in theory, reduce the need for a police mentality as increased public disclosure effectively compels organisations towards greater compliance. The Equator Principles, which owe their genesis to the World Bank’s private sector lending arm, provide a good example of how a commitment to transparency should bring issues to the table in a way that regulatory authorities would be unable to impel or enforce.
Thirdly, and most importantly, companies and shareholders are seeing the benefits of transparency in practice. In the case of the extractive sector, lack of revenue transparency fuels accusations of complicity in corruption, impairs their local licenceto operate, exacerbates civil unrest and economic inequality, and generally creates an unstable and high-cost operating environment.
Businesses continue to see many hurdles to transparency, however – the sanctity of contracts, protection of competitive data, and personal security, to name but a few. Lack of transparency in other organisations, governmental and nongovernmental, represents perhaps the largest disincentive. But it requires someone to take the first step, and if the banking and oil industries follow through on their commitments, then the transparency buzzword will at last begin to translate into something tangible that other industries can learn from.