Is Peace the Business of Business? An Exploration of Corporate Role in Conflict Transformation

Executive Summary

=> BR Upreti, Safal Ghimire and Andrea Iff

With liberal economies growing around the globe, there is a hot debate on whether the role of corporate sector can be boon or bane in conflict contexts. Yet, economic actors have been and remain key players in transformation of societies. They are engaged both negatively and positively during conflict times. In this context, this paper talks about potential, motivation, challenges and determinants of corporate engagement for conflict transformation. It also comes up with a conceptual framework that interprets how corporate engagement can be oriented to the goal of peace and stability.

Upreti BR, Ghimire Safal, Iff Andrea. 2012. Is Peace the Business of Business? An Exploration of Corporate Role in Conflict Transformation, SAs RCO Discussion Paper-5, ISBN: 978-9937-8174-7-9, Copyright © 2012 by NCCR North-South

It is a part of the NCCR North-South three-year Research Project (RP) 'The Role of Private Sector in Peace Promotion'. So, by objectives, it explores the conceptual and operational interrelation between corporate sector and conflict transformation. Looking at the trend and magnitude of corporate contribution, this paper unveils the economic dimension of conflict transformation. The empirical discussion of corporate engagement is based on the cases in Nepal.

During the preparation of this paper, several focus group discussions were conducted with businesspeople, union leaders and victims of conflict. Besides, 21 interviews were carried out with business owners in the areas of production and manufacturing, hotel and hospitality, and banking and finance. Along with discussing the Nepal case of corporate engagement for conflict transformation, this paper looks at business actors' relevance and implications in conflict transformation on the basis of the works by three major peace and conflict theorists (Johan Galtung, John Paul Lederach and Raimo Väyrynen). These three scholars are the founders of modern peace and conflict studies and it is therefore of main interest how already in the early work of peace and conflict studies the relevance of economy and economic actors is tackled.

In the context of Nepal, addressing socio-economic problems is more demanding because socio-economic structure was one of the core issues during the armed conflict (1996-2006). The rebels were strongly advocating for a change in the socio-economic set up of the country. Thus, the role of economic actors is specifically interesting in terms of transformation of these socio-economic structures.

What can be seen in the case studies is that the Nepalese corporate sector was supporting this transformation mainly by supporting the peace talks between the two conflicting parties, through bringing different people to one place to discuss and negotiate the matter, and through reconciliation efforts. It seems to be clear, however, that business initiatives of a sector or a group have been more fruitful rather than activities by one company.

Political negotiations may not possibly solve all socio-economic problems that had caused Nepal to face the decade-long armed conflict. The fear that the country may relapse into armed conflict has been motivation for the private sector to engage in peace. Further motives behind an engagement of business actors were a moral obligation to the society where they operate and also the need to make the overall context peaceful to prosper their own businesses. There are several other reasons for which corporate sector engages/can engage in conflict transformation (Kanagaretnam and Brown 2005; Mills and Fan 2006). First, this sector is very much vulnerable to frequent shocks leading to immediate downturns. Second, conflict generally leads to huge income gaps, massive youth unemployment, unending social exclusion and continuous political instability that force corporate actors to engage in transforming the conflict context. In Nepal, it was made sure through a quota system that business actors are represented in the Constituent Assembly (CA) that was responsible for the shaping of a new constitution. The inclusion of business people might have advantages for both sides. On the one hand, the view of business people on a new socio-economic vision of the country is crucial. On the other, businesspeople might be able to influence the constitution in a way that is favourable for them.

In Nepal, inclusion of business actors has advantages and disadvantages both. On the one hand, their closeness to the elite enables them to directly influence decision-makers at the top level. On the other, the relationship of business people with their own workers through unions is at the core of some of the uprisings in Nepal and that are also derailing the pro-peace engagement of corporate sector.

In this paper, engagements of business actors in Nepal are analysed from five different angles: political, economic, philanthropic, humanitarian and social engagement. Most of the non-commercial engagement of corporations is either in forms of religious donations or philanthropy. Hence, such investments have not been sector-specific. The corporations give donations mostly according to where they think appropriate. By this, on one hand, priorities are misplaced. On the other, the impacts of such activities are not profound because of being unplanned, disconnected and scattered on different issues. Hence, enriching peace-sensitive engagement of corporate sector seems a must.

The experience in Nepal shows that in a conflict environment, a focus on philanthropic activities is not enough. Rather, activities are needed that take into account the political aim of personal, relational, structural and cultural shifts. So, the social, political, economic, philanthropic and humanitarian engagements of the corporate sector need to aim at transforming the actors of the conflict. Such actors include business personnel, union leaders, political actors and business associations.

Corporate engagement for conflict transformation in Nepal is still insufficient to address socio-economic causes of conflicts. Still, many businesspeople think that massive production and economic burgeoning alone help transform the existing conflicts. But only economic growth and increase in production does not lead to peace and prosperity. It requires judicious distribution of benefits and resources as well the positive shift in the mode of production. For this to happen, corporate sector should go beyond its gate to join hands with the society in conflict matters. There is a need for proper identification of the conflicting issues where corporate sector can engage as a transformer. More to it, taking into mind the root causes of conflict while working for transformation is a must in conflict contexts.

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[Since it's a charity research, the authors are happy to make the publication publicly available free-of-cost. The full-text document will be made downloadable via official website of the NCCR North-South after some weeks. In the interim, this Discussion Paper can be downloaded here.]