Two months on, the G8 summit in Gleneagles, Scotland, already seems to be a thing of the distant past. That hazy midsummer, when Sir Bob Geldof and Bono sought to “make poverty history”, has since given way to fears of terrorist bombs and hopes of test cricket success. So what did happen at Gleneagles?
– Aid: a doubling of aid to Africa, to $50bn per year by 2010
Doubling of aid to developing countries, to $100bn per year by 2010
– Debt: 100% debt cancellation for 18 of 52 heavily indebted poor countries
– Trade: commitment to open markets more widely and, in agriculture, “to reduce trade distorting domestic subsidies” and “eliminate all forms of export subsidies”.
UK Prime Minister Tony Blair gave a modest welcome to the outcome. “It isn’t all everyone wanted, but it is progress,” he insisted. UN Secretary General Kofi Anan agreed: “The fight to end poverty is just starting,” he said. The commitments on aid and debt-relief were good enough for Geldof: “10 out of 10 on aid, 8 out of 10 on debt,” was his verdict. Campaigners were more critical. In its response to the summit communiqué, the Make Poverty History coalition said that although “important steps have been taken,” more action would be needed to eradicate global poverty, which it claims kills 10m children every year.
Make Poverty History welcomed the increase in aid as a “step forward,” but said “it will still arrive five years too late”. Only $20m of the pledged increase is new money, it said, and some of this might be borrowed from future aid budgets. Not one G8 member has met the aid target set by the UN millennium development goals. EU members at the summit did pledge to increase aid to a collective target of 0.56% of GDP by 2010, but this still falls short of the UN target of 0.7%.
On debt, campaigners said: “the principle of cancelling 100% of the debt owed to multilateral institutions is a positive step,” although concerns were expressed at the “economic policy conditions attached to debt relief”. G8 leaders agreed that the debts of “eligible” heavily indebted poor countries “should be cancelled”. But debt cancellation will take time. The deal will provide $1bn of relief this year, yet this is far less than the $10bn a year estimated to be needed to eradicate extreme poverty.
Trade provoked the most dissent. “The G8 have not met the challenge of trade justice,” the coalition said. Leaders agreed that subsidies should be reduced “by a credible end-date”. But no concrete date was set. Instead they made a less substantial commitment to “inject the necessary political momentum” into the next round of Doha trade talks, which will take place in Hong Kong in December. Contact ( http://www.g8.gov.uk)
TRADE FOR GOOD
The Shell Foundation has teamed up with retailer Marks & Spencer on a programme to help small-scale producers in developing countries access western markets. The new supply-chain programme, Trade for Good , will give small producers in developing countries guaranteed access to M&S shelf-space. The Shell Foundation plans to invest $1m in local flower and fruit growing enterprises, which between them will supply three M&S products. Staff from both companies will contribute time on the ground to review the suppliers’ operations and develop business skills.
The Shell Foundation developed the programme after realising that most small enterprises applying for its assistance lacked a solid customer base. Participating producers will gain stronger purchasing ties to M&S, as well as valuable access to market information. Producers set to benefit are flower growers in South Africa and orange and bean growers in Morocco. Shell and M&S claim that up to 3,000 South Africans living in poverty will be helped by the scheme.
Sharna Jarvis, a Shell Foundation programme manager, explained: “The partnership is a completely new way of approaching the issue of development aid. It’s about demonstrating that businesses have a big role to play in development and that engaging with small suppliers in the developing world can be a double win – good for business while helping to eradicate poverty.” Commenting on the partnership, M&S sustainable development manager, Katie Stafford, said: “The Shell Foundation’s proposal made sense ethically and commercially. By working more closely with our suppliers we hope to develop exclusive, new and exciting products that our customers want whilst strengthening our supply chains”. Contact Marc Lopatin, Shell Foundation 020 7934 2097 ( http://www.shellfoundation.org)
TRADE NOT AID
Marks & Spencer chairman Paul Myners believes it is trade alone that will help developing countries “break free of the red tape, corruption and historical shackles that keep them mired in poverty”. Writing in The Times , Myners observed: “trade can prosper only when conditions both inside and outside Africa are conducive to African business”. But the right “economic infrastructure” is not yet in place, neither inside nor out.
Internally, in Africa, there are two main problems: regulation and red tape, and the size of the informal sector, which makes up 40% of all economic activity. “These conditions,” according to Myners, “militate against good governance, enable bribery and corruption and feed the greed of indigenous elites”.
Externally, in developed countries, tariffs and subsidies prevent access to markets. According to Myners, these trade rules force producers in developing countries to “operate inefficiently in sub-scale local markets”. “Developed world policies are mandating continuing poverty in Africa,” he said.
“As we commit to help Africa, we must re-examine our own behaviour. The money we give Africa is beginning to be seen in the context of the money we give to ourselves, for example, in agriculture,” he added.
Myners welcomed the launch of Business Action on Africa and other initiatives, such as the Climate Facility for Africa and the New Partnership for Africa’s Development (NEPAD) . Contact Marks & Spencer 020 7935 4422 ( http://www.marksandspencer.com)
BUSINESS ACTION ON AFRICA
African and multinational companies have launched a new campaign organisation to stimulate economic development in Africa. Business Action on Africa is a business-led initiative with a clear aim: to advocate the role of the private sector as a catalyst for economic growth and poverty reduction. At its launch-summit in London, timed to coincide with the G8 summit, the organisation issued a statement endorsing many of the proposals set out in the Commission for Africa report.
The statement highlights the need in Africa for better infrastructure, better regulation, greater integration of regional economies, and quicker customs procedures to facilitate trade. It urges multinational companies to act on HIV/AIDS and to work with governments in clamping down on corruption. On trade, it makes an uncompromising call for the elimination of trade-distorting agricultural subsidies in developed economies, within a specified timeline – a call G8 leaders proved unable to answer.
Speaking at the launch in London, the chief executive of Nigeria’s Diamond Bank , Pascal Dozie, said: “the key to poverty reduction is wealth creation, and you can only create wealth through private sector through investment and job creation”. Anglo American chairman , Sir Mark Moody-Stuart, who chaired the summit, said the regulatory framework in Africa must be reformed if business is to flourish. “It needs to be transparent, but it needs to be simple”.
Business Action for Africa will receive administrative support from the International Business Leaders Forum. Funding has been provided by Anglo-American, De Beers , the Department for International Development, GlaxoSmithKline, SABMiller, Shell and Unilever . The new organisation already has 60 members. Membership is free and open to all businesses that can demonstrate their commitment to stimulating economic growth in Africa. Contact Zahid Rahman, Business Action for Africa 020 7467 3607 ( http://www.businessactionforafrica.org)
BUSINESS ADDS VOICE
More than 100 leaders of UK industry signed a petition backing calls for greater trade, aid and debt relief, delivered to the G8 leaders meeting at Gleneagles. Advertisements in the Financial Times and other newspapers urged business people to add their names to the campaign by sending an email.
The campaign was set up at short notice by film producer and script writer Richard Curtis and UBS chairman for Europe, the Middle East and Africa, Ken Costa. Niall Fitzgerald, former chairman of Unilever , and Sir Richard Branson, chief executive of Virgin , were among those whose names appeared in the advertisements. Explaining their support for the petition, executives mentioned a need to add the voice of business to those of celebrities and campaign groups, and said there was a moral imperative to relieve the poverty of others. Contact Robert Watkinson, Africa Practice 020 7462 7589 ( http://www.africapractice.com)
MANDELA: FIGHT AIDS
Nelson Mandela has called on African and multinational companies to step up their efforts against the HIV/AIDS pandemic. Mandela welcomed the opening of the South African branch of the Global Business Coalition on HIV/AIDS (GBC). In his statement, the former president said: “We are encouraged by the commitment of the private sector to move beyond the conventional AIDS rhetoric, towards action and active engagement with the pandemic and its devastating impact”.
Business action against AIDS has too often kept the disease at arms length, he said, preferring to fund research into its economic impacts, rather than address its human costs. What is needed, Mandela continued, is a workplace-focused response: “Research on its own is not sufficient. This partnership will allow us to design and implement workplace policies which will target stigma and discrimination in the workplace and provide access to counselling and care for those infected and affected. A better workplace response to AIDS will also take into account the needs of the communities that businesses serve”. Contact ( http://www.businessfightsaids.org)
WINNING POLICY
Anglo American has been commended for its efforts to reduce HIV infection among its South African workforce. The mining company, which has over 145,000 employees in South Africa, was awarded the Business in the Community international award for development in Africa. The company first developed its strategy to minimise the impact of HIV/AIDS in the early 1990s. It has since offered education to all employees, and care and support to those infected. 23% of Anglo American employees in Southern Africa are HIV positive. As a result of the company’s policies, 2,200 of its staff receive antiretroviral therapy and a further 4000, in the earlier stages of infection, are on ‘wellness programmes’.
Presenting the award, Business in the Community chief executive, Julia Cleverdon praised Anglo American for its “long-term commitment to implementing programmes which have a positive impact on local communities across the continent”. The company’s efforts, she added, “show the positive economic and social impacts business can make on Africa through investment and provide a model which other companies can embrace”. Contact BITC 0870 600 2482 ( http://www.bitc.org.uk)
COMMON COMMITMENT
Unilever and Oxfam launched on September 1 a report on a joint initiative to explore the impacts of business on poverty reduction in Indonesia. The project considered the impacts of Unilever Indonesia (UI) across the entire business value chain, from producers and suppliers, through the company’s core business, to distributors, retailers and consumers.
The report estimates that a full-time equivalent of about 300,000 local people make their livelihoods from UI’s value chain, with more than half of the employment found in the operating company’s distribution and retail chain and about one-third in the supply chain. In monetary terms, the research found that the total value generated along UI’s value chain, as measured by gross margins, was conservatively estimated to be $633m. UI earned about $212m of this; the remaining $421m was distributed among other actors along the chain
In the end, both organisations came to realise that, despite their very different goals, they shared a “common commitment to contributing to poverty reduction and development”. Both said they were much closer to understanding the “limitations and opportunities” determining what companies can and cannot be expected to do to contribute to poverty reduction. Oxfam and Unilever also produced a selection of key lessons learnt from the project. The Corporate Citizenship Company , the publisher of Briefing, acted as advisers to the project board. Contact Oxfam 0870 333 2444 ( http://www.oxfam.org.uk); Unilever 020 7822 5252 ( http://www.unilever.com)
MINING FOR TROUBLE
Mining company Rio Tinto in August announced that it is to go ahead with its titanium oxide mine in Madagascar. The project, which will involve the removal of up to 1,000 hectares of land and coastal rainforest, has been criticised by environmental campaign groups. Friends of the Earth said it was concerned by the impact the project would have on the island’s biodiversity. Madagascar is home to 200,000 plant and animal species, three quarters of which exist nowhere else in the world. Rio Tinto has promised to minimise the project’s environmental impact. The company has been working with horticulturists at Kew Gardens in London to preserve the seeds from threatened plants. It has set aside a conservation area, and plans to replant trees 50 hectares at a time once mining work has started. Campaigners are sceptical that the local population, particularly the Malagasy people who live in the forest, will see the benefits of foreign investment. But Rio Tinto estimates that its 40-year project could generate over $20m a year for the government in taxes and dividends, creating 1,700 jobs over the next three years in construction and at least 600 mining jobs when work begins in 2008. Contact Rio Tinto 020 7930 2399, ( http://www.riotinto.com)
WORLD BANK GOLD MINE
The World Bank has failed to practise its own message of sustainable development, according to a report released to the Financial Times . The International Finance Corporation (IFC), the private finance arm of the bank, has been criticised for its role in funding a gold mine project in Guatemala. The bank’s own watchdog, the Compliance Adviser Ombudsman, accuses the IFC of failing to properly consult the local community or evaluate the social and environmental impacts of the mine.
The project, which is being carried out by Canadian construction company Glamis Gold , has already led to mass protests and two deaths. A referendum in a nearby municipality in June showed 98% opposed to moving forward with the project. The draft report argues that the IFC could have anticipated these problems: “The IFC should have considered more systematically the potential risk on human rights at the project level; should have taken appropriate measures to mitigate these risks”. Rashad Kaldany, director of the bank’s oil, gas and mining division, told the Financial Times that Glamis Gold “has done a lot of good in the community and has been creating job opportunities in a place where it is very hard to make a living”. The report will embarrass the World Bank, which last year rejected the recommendation of an independent report that it pull out of extractive industries. Contact World Bank, 00 1 202 473 1000 ( http://www.worldbank.org)
I DID IT MY WAY
The US has signed an agreement with China, Japan, Australia, India and South Korea to develop technologies to reduce greenhouse gas emissions. The Asia Pacific Partnership on Clean Development and Climate aims to complement rather than replace the Kyoto Protocol by promoting the research and development of environmentally friendly technology. It does not, however, set any new targets for greenhouse gas emissions, nor does it commit to sharing the outcomes with countries outside the agreement, although ways to include “other interested and like-minded countries will be considered”. Critics of the partnership fear that it is an attempt to undermine the Kyoto Protocol, which the US and Australia have refused to sign. Contact Department of Foreign Affairs and Trade, Australian Government 00 61 2 6261 1111 ( http://www.dfat.gov.au)
LAND OF THE RISING SONY
Sony is the company most actively promoting corporate social responsibility in Japan, according to a survey published by Japanese business daily, Niuhon, Keizai Shimbun . The survey evaluated companies on the basis of a range of criteria: management strategy, corporate structure, compliance, social contribution, commitment to employees and commitment to consumers and suppliers. Top ranking companies included Matsushita, Komatsu, NEC and Toyota , all manufacturers with production and sales operations at a global level. Contact Sony 00 81 3 5448 2180 ( http://www.sony.com)
AFRICAN INTERVENTION
Bristol-Myers Squibb has partnered with the US based Baylor College of Medicine to provide medical care for children in Africa with HIV/AIDS. An AIDS corps will be created to send up to 250 doctors to Africa, to treat around 80,000 children over the next five years and train local health care professionals. A further $40m programme will build four new children’s clinics. The company will also improve access to treatment for children with HIV/AIDS by reducing the price of their medication. Contact Becky Taylor, Bristol-Myers Squibb 00 1 609 252 4476 ( http://www.bms.com)
RIGHTS ON
UN Secretary General Kofi Annan has appointed Harvard professor John Ruggie as the first special representative on human rights and transnational corporations and other business enterprises. He is resigning from his current role as a special adviser to the Annan on the Global Compact. Contact Matthias Stausberg, UN Global Compact 00 1 917 367 3423 ( http://www.unglobalcompact.org)
Editorial Comment
The appointment of John Ruggie as the UN’s first special representative on human rights and business troubled many in the US business and government communities. Critics fear a return to the ‘bad old days’ of an anti-corporate UN, seeking to shackle free enterprise at every move. But this couldn’t be further from the truth. Ruggie’s appointment represents a continuation of the UN’s business-friendly agenda that Annan has been so keen to foster during his term. His job is to forge a consensus between human rights activists, corporations and governments over the social responsibilities of private firms, working in partnership with business, not against it. Admittedly, this will be no mean feat, given the apparent contempt Washington has for the UN and all it stands for. News just in as Briefing goes to press has the US ambassador to the UN John Bolton making no fewer than 750 amendments to the proposed UN commitments on aid to developing countries, combating global warming and nuclear disarmament, just three weeks into his post. In the 32-page US version, the US wants to eliminate all specific reference to the Millennium Development Goals, accepted by all countries in 2000, including the US. What chance human rights?
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