Session 1 Slim - Business Actors in Armed Conflicts

<p>Business actors
in armed conﬂict:
towards a new
humanitarian agenda
Hugo Slim
Dr Hugo Slim is a Senior Research Fellow at the Oxford
Institute of Ethics, Law and Armed Conflict at the University of
Oxford, and has advised several companies on human rights
and conflict resolution including Rio Tinto, G4S, and BP.
Abstract
The purpose of this article is to give an overview of current understandings of the
various roles of business actors in armed conﬂict. It traces the expanding discussion
of business and conﬂict in today’s civil wars, and the discussion’s importance to
humanitarian, human rights, corporate and peacebuilding policymakers. It shows
how the humanitarian understanding of business roles in conﬂict has progressed
beyond some simple and largely negative stereotypes about business in war to become
more sophisticated. The article then looks at the signiﬁcant diversity of business
actors, which can determine their experience of armed conﬂict. It is suggested that
there are six potential roles of business in armed conﬂict – that of victim, perpetrator,
supplier, humanitarian actor, peacebuilder, and conﬂict preventer. Finally, the article
recommends a range of ways to improve humanitarian policy so that humanitarian
actors engage with business more actively and appropriately on law, business relief,
and business continuity.
Keywords: business, armed conflict, humanitarian action, peacebuilding, business relief,
business continuity.
Henry Dunant, the founder of the Red Cross, is naturally remembered as a great
humanitarian. His personal humanitarian action at the Battle of Solferino and his
subsequent epiphany about the need for a new international organization is now
Volume 94 Number 887 Autumn 2012
doi:10.1017/S181638311300009X
903
ﬁrmly embedded in the founding history of modern humanitarianism.1 But Dunant
did not go to Solferino deliberately to start a global humanitarian organization. In
fact, he was in Solferino on business. He was urgently, perhaps desperately, seeking a
meeting with Napoleon III to seek his approval for a new land concession that
included a waterfall to irrigate his drought-stricken agricultural business in Algeria.2
This should perhaps encourage humanitarians to engage conﬁdently with business
people. After all, our modern founder was a businessman. Although by all accounts,
he was not very good at it.3
This article encourages humanitarian policymakers and practitioners
towards a more varied understanding of the roles and experiences of business
actors in armed conﬂict than has typically been the case among humanitarian
agencies. The article starts by brieﬂy surveying the academic and activist debate
about business and armed conﬂict over the last twenty years, with its particular
emphasis on war economies and its largely negative view of business as a cause of
war. Drawing on more nuanced views of business that have emerged in recent years,
the article then suggests that humanitarian policymakers might proﬁt from recog-
nizing the diversity of business in conﬂicted societies and the six main roles played
by business in armed conﬂicts. Finally, the paper tentatively recommends four ways
in which humanitarian actors could engage better with business in the interests
of the civilian populations that work in businesses or depend on them for their
livelihood and survival during armed conﬂicts.
Business and war
The relationship between business and armed conﬂict is ancient and enduring.
In human history, goods have just as often been secured by violence as by trade.
Armed force has regularly been used to protect trade or to expand business oppor-
tunities and develop new markets. Monarchs, states, and warlords have all needed
businesses to supply and ﬁnance their wars. And, of course, war itself has often been
primarily understood as a business activity by many of its foot soldiers because of
the unique freedom it offers to pillage, and because of the black markets it creates for
commodities made scarce by war.
In his famous 1827 novel, I Promessi Sposi, Manzoni describes the conduct
and motivation of Wallenstein’s pillaging troops,4 200 years earlier, as they moved
towards Mantua in the Thirty Years’ War:
When they arrived at a village selected as a billeting place, the men quickly
spread out over it and literally put it to the sack. Whatever could be consumed
1
See Henry Dunant, A Memory of Solferino, originally printed by American Red Cross, 1959, reprinted by
ICRC, Geneva, 2009.
2
Caroline Moorehead, Dunant’s Dream: War, Switzerland and the History of the Red Cross, Harper Collins,
London, 1998, pp. 6–7.
3
Francois Bugnion, ‘Henry Dunant’, in David Forsythe (ed.), Encyclopedia of Human Rights, Oxford
University Press, New York, 1996, p. 70.
4 Wallenstein was a militarily and commercially successful Bohemian commander who funded his own
private army, which he put at the service of the Habsburg Emperor, Ferdinand II.
H. Slim – Business actors in armed conflict: towards a new humanitarian agenda
904
or carried off vanished at once and everything else was ruined or destroyed.
Furniture became ﬁrewood; cottages became stables . . . they searched every
cranny of the houses, knocked down walls, dismantled buildings and quickly
identiﬁed recently dug spots in the gardens to ﬁnd where people had hidden
their valuables, or tortured them to tell them where they were hidden.5
Manzoni’s description would ﬁt proﬁteering military looters from many thousands
of wars in human history, most recently in Bosnia and Herzegovina, the Democratic
Republic of Congo, Sierra Leone, and Libya, for example.
War can be good for legal and respectable businesses too. The great
Frenchman Voltaire is known mostly to humanitarians for his timeless anti-war
passages in Candide and his determined human rights campaigns against unfair
trials, torture, and the death penalty. But in addition to being artistically and
politically brilliant, Voltaire was also commercially brilliant. From an early age, he
accumulated great wealth, not from his writing and plays but primarily from his
business deals. Voltaire’s ﬁrst fortune was made with a group of school friends who
worked out a formula with which to win the Paris lottery. His second fortune was
made from a business that supplied uniforms to the French army.6
Voltaire proﬁted legally from what scholars call a ‘war economy’. Accord-
ing to Le Billon, this is ‘a system of producing, mobilizing and allocating resources to
sustain violence’.7 It is a phenomenon that is highly relevant to the precepts of
humanitarian law and the practice of humanitarian action. Humanitarian lawyers
are concerned to ensure the rights and duties of business actors in war, and need
to understand when businesses act lawfully or unlawfully under international
humanitarian law. Businesses are protected in armed conﬂict under international
humanitarian law unless they are engaged in roles like arms manufacture, which
makes them a legitimate military target.8 But they are also bound not to engage
directly or indirectly in violations of international humanitarian law.9
In the civil wars of recent years, questions about business in conﬂict have
rightly extended beyond the conduct of businesses in war to the role that business
interests play in causing and sustaining armed conﬂict. Scholars and non-
governmental organizations (NGOs) have carried out a great deal of research to
understand how commerce of various kinds drives and shapes the violent patterns
of war.10 In the 1990s, research in this area heightened the insight that many
5 Alessandro Manzoni, The Betrothed [I Promessi Sposi], (trans. Bruce Penman), Penguin Kindle Edition,
London, 1983, p. 532.
6
Ian Davidson, Voltaire in Exile, Atlantic Books, London, 2004, p. 4.
7
Philippe Le Billon, Geopolitics of Resource Wars: Resource Dependence, Governance and Violence, Frank
Cass, London, 2005, p. 288.
8
ICRC, Customary International Humanitarian Law, Vol. I: Rules, Jean-Marie Henckaerts and Louise
Doswald-Beck (eds), Cambridge University Press, Cambridge, 2005, Rule 8, ‘Deﬁnition of Military
Objectives’, pp. 29–34.
9
See ICRC, Business and International Humanitarian Law: An Introduction to the Rights and Obligations of
Business Enterprises under International Humanitarian Law, ICRC, Geneva, December 2006.
10 See e.g., David Keen, Useful Enemies: When Waging Wars is More Important than Winning Them, Yale
University Press, New Haven and London, 2012, Chapter 2, and Complex Emergencies, Polity, Cambridge,
2007, Chapter 2; Philippe Le Billon, Fueling War: Natural Resources and Armed Conﬂict, Routledge,
Volume 94 Number 887 Autumn 2012
905
contemporary civil wars were driven as much by commercial greed as by political
grievance.11 In other words, war can be as economic as it is political.
Political actors – as governments or non-state armed groups – can have a
primarily economic project that they use violence and politics to deliver, or a
primarily political project that uses violence to co-opt the economy necessary to
ﬁnance it. Warring parties may want to appropriate land and resources for an elite
few. Or, in more socialist struggles, they may seek to reappropriate natural resources
for the many from the few. In either case, whether as a national or a guerrilla army,
they need to ﬁnance their forces at the very least. Economic resources are never the
whole story of a political contest but they are certainly central in many armed
conﬂicts. For example, the UN has calculated that over the past sixty years,
40 per cent of civil wars have been associated with important contests over mining
and natural resources of some kind.12 Diamonds and gold have been particularly
prominent as the sources of armed conﬂict and the means to ﬁnance several African
wars. This has led to major industry efforts to end so-called blood diamonds and
ensure that gold remains ‘conﬂict free’.13
Humanitarian lawyers struggle to ﬁnd the point at which a primarily
economic conﬂict becomes an armed conﬂict proper, or when it remains a violent
and protracted policing struggle against organized crime. This can be difﬁcult to
discern in some cases. The current ‘drugs war’ in Mexico is an example of this. This
struggle amongst a state, its citizens, and organized crime networks has an extremely
high rate of violent death higher than many situations considered as armed conﬂicts
proper.
The humanitarian implications of war economies
Insights into the economic rationale of war and its afﬁnity with theft, expropriation,
reapropriation, or criminality are not new to political science. Marxist theories, in
particular, have long observed the violent patterns of primitive accumulation that go
hand-in-hand with the development of capitalism. War has always been a means of
economic strategy and a way to the accumulation of wealth. This is particularly true
in colonialist violence. The clarion cry of British imperialism was ‘Commerce and
London, 2005. See also, the many reports of Global Witness available at: http://www.globalwitness.org/
news-and-reports (unless otherwise stated all links in this article last visited 20 September 2012).
11 Christopher Cramer, Civil War is Not a Stupid Thing: Accounting for Violence in Civil Wars, Hurst,
London, 2006; Mats Berdal and David M. Malone (eds), Greed and Grievance: Economic Agendas in Civil
Wars, Lynne Reiner, Boulder, 2000.
12 United Nations Inter-Agency Team for Preventive Action, Extractive Industries and Conﬂict: Guidance
Note for Practitioners, UN, New York, 2010, p. 7.
13 Details of The Kimberly Process on conﬂict diamonds are available at: http://www.kimberleyprocess.com/;
details of the World Gold Council’s initiative are available at: http://www.globalwitness.org/news-and-
reports, http://www.gold.org/media/press_releases/archive/2012/03/world_gold_council_unveils_latest_
draft_of_conﬂict_free_gold_standard/.
H. Slim – Business actors in armed conflict: towards a new humanitarian agenda
906
Christianity’.14 The world’s ﬁrst modern business corporation, the British East India
Company, famously had a standing army of 200,000 people which it used in
massacres and pitched battles, a fact that led to Adam Smith’s famous description
of the company as ‘that bloodstained monopoly’.15 Pioneering work by Global
Witness, Partnership Africa Canada, and the UN on the role of diamonds and
minerals in the wars in Angola, Sierra Leone, Liberia, and the Democratic Republic
of Congo (DRC) since 2000 has shown how the business interests of government
and non-state warring parties still deploy extreme violence against civilians in the
late twentieth and early twenty-ﬁrst centuries.16
War economies in civil wars take several forms depending on the nature of
the conﬂict and the goals and capacities of the combatants.17 Naylor distinguishes
three main forms of armed group conﬂict economies: predatory, parasitic, and extra-
ctive.18 In a predatory economy, armed actors raid and pillage the local area, unable
to control the territory fully. A parasitic war economy uses violence to control
territory and does business by taxing, extorting, or taking over businesses in what
then becomes a shadow economy within a state. In an extractive conﬂict economy,
armed forces violently take the necessary territory to appropriate and control
proﬁtable agricultural and mining businesses. As Jimmy Kandeh and David Keen
have pointed out, government forces as well as rebel forces are just as likely to adopt
such business practices in civil wars – the recent archetypal examples being the
military millionaires of the Indonesian army, and the soldier-rebels (or ‘sobels’) of
the Sierra Leone government who copied violent rebel practices to exploit local
business opportunities.19 Critics of the invasion of Iraq would say that the new oil,
construction, and service contracts awarded to international companies after the
Iraqi regime change are clear examples of the United States and its allies proﬁting
from a similar conﬂict economy.
Humanitarian actors are acutely alive to the role of business in war for a
variety of reasons:
. First, humanitarians are aware of the ability of business interests to cause war
and encourage commercially predatory, violent, strong men to use atrocities
against civilians to increase their market share.
14 David Livingstone, the famous Scottish missionary explorer of Africa, repeatedly framed his vision of
colonial progress as a threefold mission of ‘Christianity, Commerce and Civilization’, a phrase taken to
heart by British imperialists.
15 Nick Robins, The Corporation that Changed the World: How the East India Company Shaped the Modern
Multinational, Pluto Press, London, 2006, see Chapter 6 summarizing Adam Smith’s criticism of the
company and its monopoly.
16 Investigative research by Partnership Africa Canada and Global Witness, in particular, brought about
international political oversight by the United Nations and industry-wide monitoring by the Kimberly
Process – a joint government, company, and civil society initiative.
17 AchimWennmann, ‘Conﬂict economies’, in Vincent Chetail (ed.), Post-Conﬂict Peacebuilding : A Lexicon,
Oxford University Press, Oxford, 2009, pp. 74–89.
18 R. Thomas Naylor, Wages of Crime: Black Markets, Illegal Finance and the Underworld Economy, Cornell
University Press, Ithaca, 2002, pp. 45–47.
19 D. Keen, above note 10, Chapter 2; Jimmy D. Kandeh, ‘Ransoming the state: elite origins of subaltern
terror in Sierra Leone’, in Review of African Political Economy, Vol. 26, No. 81, 1999, pp. 349–366.
Volume 94 Number 887 Autumn 2012
907
. Second, humanitarians need to mitigate war’s terrible effect on local businesses
and family assets that soon become unable to sustain people’s livelihoods. When
war destroys people’s small farming or trading businesses, impoverishment
follows fast.
. Third, humanitarians rightly worry about the ambivalent role that aid
commodities can play in a local economy – potentially undermining markets
by creating gluts of certain items or increasing inﬂation by introducing new cash
in wages or relief distributions.
. Fourth, humanitarians are naturally alert to the moral hazard and perverse
commercial incentives that can be generated by humanitarian aid. Violent
groups may attract aid in order to tax it, divert it, or violently co-opt it. In this
way, aid becomes part of the conﬂict and its presence can increase violence
against those who need it. This core risk to humanitarian action in war is most
clearly confronted by humanitarian policies that aim to insulate their projects
against such risks by actively ‘doing no harm’ or applying ‘conﬂict-sensitive’
programming.20
. Finally, a large new business sector has developed to protect businesses
and other organizations in armed conﬂict, including humanitarian agencies.
The sharp rise in the scale, coverage, and proﬁtability of private security com-
panies (PSCs) and private military companies (PMCs), such as G4S, Aegis,
and Academi (formerly Blackwater), means that they are now a major new
commercial actor in armed conﬂicts, and one that is frequently armed.21
In the last few years, the Montreux Document has been negotiated to outline
international standards for operations by PSCs and PMCs in armed conﬂicts,22
and a more recent multi-stakeholder initiative, the International Code of
Conduct for Private Security Service Providers, aims to ‘clarify international
standards for the private security industry operating in complex environments,
as well as to improve oversight and accountability of these companies’.23
The recent evolution in business ethics
The initial discourse around business and conﬂict was dominated by a deeply
suspicious analysis of
‘big bad multinational corporations’ who were out for
everything they could get, and would cover-up whatever they needed to in order to
get it. In his important survey of colonial economies, David Fieldhouse describes
20 Mary Anderson, Do No Harm: How Aid Can Support Peace or War, Lynne Reiner, Boulder, 1999; Conﬂict
Sensitivity Consortium, Resource Pack on Conﬂict Sensitive Approaches to Development, Humanitarian
Assistance and Peacebuilding, available at: http://www.conﬂictsensitivity.org/publications/conﬂict-sensitive-
approaches-development-humanitarian-assistance-and-peacebuilding-res.
21 See company websites at: www.g4s.com; http://www.aegisworld.com; http://www.academi.com.
22 The Montreux Document on Pertinent Legal Obligations and Good Practices for States Related to
Operations of Private Military Companies and Security Companies during Armed Conﬂict, 2009,
available at: http://www.icrc.org/eng/assets/ﬁles/other/icrc_002_0996.pdf.
23 For a detailed description of this Swiss-led initiative, see: http://www.icoc-psp.org/About_ICoC.html.
H. Slim – Business actors in armed conflict: towards a new humanitarian agenda
908
how multinational and transnational corporations (MNCs and TNCs) got a
particularly bad press from Marxist economists who saw them as the main
instrument in the subjugation of peripheral colonial and post-colonial economies to
a dependency on a core global economy structured to suit Western self-interest.24
To these dependency theorists, all TNCs were little better than the British East India
Company or Spanish conquistadors of old, and many were still thought to be quite
happy to run private or proxy armies of their own. Shell in Nigeria, Lonrho in
southern Africa, and Rio Tinto in Papua were regarded as the epitome of this kind of
exploitative and irresponsible company, and still are by some NGO campaigning
groups like the London Mining Network.25
‘Multinational’ became a term of abuse in leftist circles during much of the
post-colonial period. This began to change in the 1990s when the arrival of cor-
porate social responsibility (CSR) and a deep reappraisal of business ethics across
many global corporations brought new cooperation between NGOs and compa-
nies.26 In the late 1990s, big business began to respond to ethical prompting by
NGO critics and stock market legislators, and also started to recruit former NGO
activists to run their social and supply chain teams. NGOs like CorpWatch (1996)
began to monitor individual company performance; a new wave of funds emerged
to focus on socially responsible investment (SRI); the UN launched its Global
Compact (1999); and stock markets developed indices like the Dow Jones
Sustainability Indices (1999) in New York and FTSE4Good in London (2001).
Most of these built on the ‘triple bottom line’ model of NGO innovator John
Elkington, which asked that companies report on their impact on ‘people, planet
and proﬁt’.27 At the same time, mainstream development theory – in governments
and NGOs alike – also changed to become less leftist and more supportive of the
business sector’s contribution to human development and human security. The
human rights obligations of business also began to be scrutinized and elaborated.28
The culmination of this process was the ofﬁcial adoption of the UN Guiding
Principles on Business and Human Rights by the Human Rights Council in 2011.29
These were carefully prepared over several years by Professor John Ruggie while
24 David Kenneth Fieldhouse, The West and the Third World: Trade. Colonialism, Dependence and
Development, Blackwell, Oxford, 1999, Chapter 9.
25 See, for example, London Mining Network, ‘Rio Tinto: a shameful history of human and labour rights
abuses and environmental degradation around the globe’, available at: http://londonminingnetwork.org/
2010/04/rio-tinto-a-shameful-history-of-human-and-labour-rights-abuses-and-environmental-degradation-
around-the-globe/.
26 John V. Mitchell, Companies in a World of Conﬂict: NGOs, Sanctions and Corporate Responsibility,
Earthscan and Royal Institute for International Affairs, London, 1998, Editor’s Overview, pp. 1–17.
27 John Elkington, The Triple Bottom Line for Twentieth Century Businesses, in J. V. Mitchell, above note 26,
Chapter 2.
28 For an excellent summary of the evolution of human rights obligations on business actors before the
Ruggie Process, see Andrew Clapham, Human Rights Obligations of Non-State Actors, Oxford University
Press, Oxford, 2006, Chapter 6 on corporations and human rights.
29 UN Doc. A/HRC/17/31, Guiding Principles on Business and Human Rights: Implementing the
United Nations ‘Protect, Respect and Remedy’ Framework, 21 March 2011, unanimously endorsed by
the United Nations Human Rights Council on 16 June 2011.
Volume 94 Number 887 Autumn 2012
909
he was the UN Secretary General’s Special Representative for Business and Human
Rights.
All these developments mean that the boundary between business and
humanitarian concerns has become much more porous. Humanitarian agencies and
businesses debate together, both profess respect for human rights, increasingly swap
staff, and have common participatory approaches to community development and
conﬂict reduction strategies at ﬁeld level.
Understanding the diversity of business
Just as earlier debates about business and war stereotyped business as big and bad
corporations, they often limited discussion to the extractives sector – oil, mining,
and timber – and to the arms trade. Other business sectors were overlooked. The
fact that the great majority of the world’s poor and most civilians in armed conﬂict
were also small businesspeople of one kind or another was equally obscured. As the
relationship between multinationals and NGOs became less conﬂicted, space
emerged for a more sophisticated discussion of business in conﬂict. Useful
distinctions were made between different kinds of companies, different sectors,
and the variety of business models.30 This more realistic discussion of the diversity
of business has enabled more nuanced thinking about how different types of
business affect armed conﬂict and are affected by it.
Business is not monolithic. Proper use of the term business must cover a
multitude of different forms of human production and exchange at all levels of
society. Only with a full view of all business types, is it possible to gain a full
appreciation of the dynamics of business and conﬂict. Important variations between
businesses are determined by several key factors. These differences need to be under-
stood by humanitarian agencies if they are to achieve better working relationships
and advocacy with the wide range of businesses present in any armed conﬂict.
Scale creates immediate and signiﬁcant differences between businesses.
So too does market reach – some businesses are local, some are national, and some
are international. Sectors also create variety between businesses and make real
differences between banking, retailing, mining, servicing, agricultural, manufactur-
ing, and construction businesses. In a civil war economy, a large, proﬁtable mining
business producing a raw material with strong international market demand is likely
to be more strategic to an armed force than, for example, a clothing retail chain at a
time when local people have little money for consumer goods. Business values are a
distinguishing factor too. Some businesses have very high ethical values around
corruption, bribery, treatment of employees, high standards of efﬁciency, good
customer service, and a strong notion of what constitutes morally responsible
products and services. Others do not.
There are also important ownership differences. Businesses can be privately
owned by one or more individuals or be publically owned through a stock market
30 Gilles Carbonnier, ‘Private sector’, in V. Chetail, above note 17, pp. 245–254.
H. Slim – Business actors in armed conflict: towards a new humanitarian agenda
910
thousands of miles away. Other businesses may operate a mutual or cooperative
business model in which the company belongs to all its members and customers.
Increasingly, social entrepreneurs in health, education, food, and micro-ﬁnance are
also trading as ‘social businesses’ rather than charitable NGOs. This term, coined by
Nobel laureate and founder of Grameen Bank, Muhammad Yunus, describes
companies that run commercial operations to meet speciﬁc social needs and return
all proﬁts into the business. Some of the world’s largest businesses are state
owned – especially in China, Africa, and South America.
A company’s business model is another vital differentiator between
businesses. Large high-investment mining companies like BHP Billiton or Xstrata
are often described as ‘captive’ businesses. They are geographically stuck to a small
area where natural resources lie. They are ﬁnancially trapped by the multi-billion
dollar upfront investment required to mine an area. They are also trapped in time
because of the decades it often takes to deliver a signiﬁcant return on investment
from high-tech extractive businesses. The business model of a mining company also
creates very high revenue but relatively very low employment. In contrast, a soft
drinks and brewing company can be relatively light on upfront investment and
employ or enable a marketing network of hundreds of thousands of people selling its
products across a whole country. This gives them real pro-poor reach across the
bottom of the pyramid (BoP) – the broadest and poorest part of the population in
most countries. Some sectors like mining and banking thrive with a few large
businesses because the bar for market entry is set by very high investment. Others,
like construction, farming, and retailing, include many thousands of small to
medium sized enterprises (SMEs). Some business models are very seasonal. Some
are export dependent, like cash crops, and some are import dependent, like tourism
whose customers must be attracted from abroad.
Some businesses are highly adaptable in war, even deeply innovative.
For example, in many wars, high-end sections of the property, hotel, and restaurant
market boom as they adapt by renting to international aid agencies. When inter-
national Safari tourism dried up because of armed conﬂict in Zimbabwe, several
local
tourist companies adapted to provide
logistical and administrative
support to international agencies. One of Switzerland’s most famous chocolate
bars – Ragusa – is also the result of business wartime innovation. When the supply
of cocoa became extremely scarce in wartime Europe, Camille Bloch invested in
hazelnuts instead and designed the product that became his leading brand.31
One of the main distinctions in any analysis of business is between the
formal and informal sectors. All economies have a formal and informal sector, but
poor and conﬂict-affected economies have particularly large informal sectors. The
formal sector is tax-paying and regulated by government. The informal sector is not.
Humanitarian agencies and NGOs work mostly with the informal economy. In an
armed conﬂict every poor family is a family business of some kind, desperately
trying to ﬁnd customers for the labour and products of its adult and child members
every day, and struggling to retain or recover its assets. What is often referred to as
31 See Ragusa, ‘Historique du produit’, available at: http://www.ragusa.ch/fr/historique-du-produit.html.
Volume 94 Number 887 Autumn 2012
911
‘livelihoods programming’ or ‘economic protection’ in humanitarian action is really
support to family businesses.
The six main roles of business in war
The strong emphasis on business as a potential motivation of armed conﬂict and
atrocity focuses excessively on one potential role of business as a cause or
perpetrator and obscures the other roles that business plays in war as victim,
supplier, humanitarian actor, peacebuilder, and conﬂict preventer. Alongside an
appreciation of different types of businesses operating in an armed conﬂict,
humanitarian workers also need to have a nuanced understanding of the different
roles that business can play in war. These roles can most easily be divided into the
six main areas explored below.
Business as perpetrator
The potential for businesses to be perpetrators of violations in armed conﬂict is
well recognized in international humanitarian law. This body of law describes the
violations that can take place during armed conﬂict. In relation to business, these
can include pillage, manufacture of illegal weapons, use of forced labour, and
unlawful violence by company-hired militias or collusion with state or non-state
forces. A company may commit these crimes directly or be complicit with others
who commit them.32
A landmark case of corporate war crimes from World War II is that
of I. G. Farben, the German chemical company that cooperated with the Nazi
authorities in the planning and co-option of chemical plants in Nazi-occupied
countries and also held the patent for and supplied Zyklon B, the gas used in Nazi
extermination camps, to German authorities.33 German, Swiss, and Turkish banks
have been shown to have been complicit in dealing in ‘Nazi gold’ that supported the
German war effort and was often gained through war crimes and atrocities. ‘Teeth
gold’ and jewellery from victims of the Holocaust were made into gold bars, and
gold bullion was stolen from banks and individuals in Nazi-occupied countries.34
More recently, NGO activists have been determined to secure modern
precedents for corporate crimes in war. One of their most high-proﬁle efforts has
been against Anvil Mining in the DRC for alleged logistical support of a massacre of
32 For a comprehensive discussion of corporate complicity in war crimes, see International Commission of
Jurists, Report of the Expert Legal Panel on Corporate Complicity in International Crime, Geneva, 2010;
and Salil Triparthi,
‘Business in armed conﬂict zones: how to avoid complicity and comply with
international standards’, Institute for Human Rights and Business, Geneva, 2010, both available at: http://
www.business-humanrights.org/ConﬂictPeacePortal/Issue/Complicity.
33 Peter Hayes, Industry and Ideology: I. G. Farben in the Nazi Era (2nd edn), Cambridge University Press,
Cambridge, 2000. For the original judgment, see US v. Carl Krauch et al. (I.G.Farben), US Military
Tribunal sitting at Nuremberg, 30 July 1948, in Trials of War Criminals before the Nuremberg Military
Tribunals under Control Council Law No.10, Vol. VIII, 1952, pp. 1081–1210.
34 Jonathan Steinberg, The Deutsche Bank and its Gold Transactions During the Second World War,
C. H. Beck, Munich, 1999.
H. Slim – Business actors in armed conflict: towards a new humanitarian agenda
912
one hundred civilians by DRC forces in Kilwa. Anvil staff were found not guilty in a
Congolese criminal court that judged Anvil’s vehicles to have been requisitioned by
force. The case has since been taken to the Quebec High Court by human rights
activists in a class action that was dismissed on grounds of inappropriate juris-
diction, and is now lodged in appeal at the Canadian Supreme Court.35 Global
Witness investigations, however, were initially successful in 2006 in the individual
case of the Dutch businessman, Guus Kouwenhoven, who was sentenced to eight
years in prison by a Dutch court for breaking a UN arms embargo in Liberia.36
Business as victim
Businesses are much more frequently the victims of armed conﬂict than its
perpetrators. As civilian objects staffed by civilians, they endure extreme hardship.
In every armed conﬂict, large businesses and SMEs alike are attacked and looted.
Their staff may be wounded, killed, and raped. They may be discriminated against
and summarily dismissed and replaced by new staff favoured by the enemy party.
Business installations of all kinds,
including small market stalls, company
warehouses, and large factories are frequently destroyed in armed conﬂicts. This
kind of war damage combines with restrictions on market access, credit, foreign
exchange, and supply chains and often results in bankruptcy or dramatically
reduced operations that mean lost earnings, wage cuts, and rising unemployment.
Business as supplier
When businesses do survive in war, they frequently thrive as suppliers of
commodities and services that are vital to the war effort or indispensable to civilian
survival. Arms companies, construction companies, food companies, and banks are
critical to any war effort’s ability to feed, pay, and equip its forces. Equally, many
large and small businesses sustain markets that are essential to the survival of
civilian populations. Bakeries keep bread in circulation. Wholesale merchants and
small local producers and retailers keep a wide range of food available. These
businesses are essential ﬁrst-line economic resources for endangered civilian
populations. Their signiﬁcance is now widely recognized by humanitarian agencies’
increasing policy of market-based programming, cash-transfer, and monetization
that are recommended by the Cash Learning Partnership.37 Local procurement is
35 Global Witness, ‘Congolese victims’ pursuit of justice against Canadian company goes to Supreme Court’,
26 March 2012, available at: http://www.globalwitness.org/library/congolese-victims%E2%80%99-pursuit-
justice-against-canadian-company-goes-supreme-court.
36 Global Witness, ‘Arms dealer and timber trader Guus Kouwenhoven found guilty of breaking a UN arms
embargo’, 7 June 2006, available at: http://www.globalwitness.org/fr/node/3569. Both Kouwenhoven and
the Prosecution appealed the sentence, and in 2008 the Appeals Court acquitted him on all charges (and
he was freed). The Prosecution appealed again, and in 2010 the Supreme Court returned the case for
retrial. It is to be seen whether the recently rendered judgment against Charles Taylor by the Special Court
for Sierra Leone will have any inﬂuence on the ﬁnal judgment in this case.
37 The Cash Learning Partnership is an association of agencies encouraging best practice in cash-based
responses, see: http://www.cashlearning.org/english/home.
Volume 94 Number 887 Autumn 2012
913
usually the preferred option for humanitarian action so that local businesses
routinely become the main suppliers for humanitarian agencies supporting civilian
survival. Local businesses run trucking ﬂeets and produce Plumpy’nut,38 plastic
buckets, and generic drugs for humanitarian assistance.
Business as humanitarian actor
During war many businesses do more than just commercially supplying
humanitarian agencies. They become direct humanitarian actors and lead operations
that protect and assist the civilian population. The paradigmatic example of a
business protecting endangered civilians
is Oscar Schindler,
the German
industrialist who saved 1,100 Jewish people during the Holocaust by employing
them in his enamelware and arms factories, and hiding their Jewish identity from
Nazi authorities. Although under-researched, many businesses have a noble history
of aiding and protecting their staff, their families, and the local population in times
of war. In Zimbabwe’s recent history of violent political conﬂict and economic
meltdown, for instance, many Zimbabwean and international companies have
played a vital humanitarian role. They paid their staff in baskets of food and
essential items when rampant inﬂation made money increasingly worthless, and
made sure that pensions and life insurance policies were honoured in the best way
possible. Even when they were sustaining signiﬁcant losses year-on-year, several
major multinational banks and mining companies like Barclays and Rio Tinto
stayed on. This was partly strategic to maintain a positive market position for when
the good times returned. But it was also undoubtedly because directors genuinely
felt that they could not abandon their staff and their families to whom they had a
moral duty.39
While this kind of informal humanitarian action is not well documented,
large strategic commitments to humanitarian action by large companies are
increasingly common. Many companies have formed practical humanitarian
partnerships with UN agencies and NGOs that aim to leverage their expertise in
war and disasters. Deutsche Post’s logistics partnership with the UN, Siemens’
collaboration with the International Federation of Red Cross and Red Crescent
Societies, and Motorola’s link with CARE International are three examples of such
business-humanitarian partnerships.40
Business as peacebuilder
The ﬁfth main role of business in conﬂict that is now clearly recognized in
international policy is the contribution that business leaders and their investments
can play in peacebuilding and post-conﬂict economic recovery. Business leaders
38 Plumpy’nut is a widely used emergency food relief item, see: http://www.nutriset.fr/en/product-range/
produit-par-produit/plumpy-nut-ready-to-use-therapeutic-food-rutf.html.
39 Field research carried out by the author in Zimbabwe in 2008–2009.
40 See Andrea Binder and Jan Martin Witte, Business Engagement in Humanitarian Relief: Key Trends and
Policy Implications, HPG Background Paper, ODI, London, 2007.
H. Slim – Business actors in armed conflict: towards a new humanitarian agenda
914
with trust and trading networks on both sides of a conﬂict can sometimes play a
vital bridging role in building peace. SwissPeace have researched how business
people have mediated early-stage peace talks between warring parties in South
Africa, Cyprus, Sri Lanka, and Nepal.41
More than talks alone, big money can bring a new pro-peace logic of its
own. Using a win-win commercial logic to build super-ordinate goals around
economic beneﬁts from an international coal agreement helped to shape the
beginnings of the European Union. Post-war investment by rich diaspora investors
or private equity and hedge fund investors looking for ﬁrst-mover advantage in
Sierra Leone, Liberia, South Sudan, Angola, Serbia, Somaliland, and Croatia has
helped drive economic recovery and a strong preference for peace in these countries
as they emerge from protracted civil wars. One example is Manocap, the private
equity group in West Africa formed by two people who had previously worked in
humanitarian capacities in Sierra Leone for the United Nations Development
Programme (UNDP) and GOAL.42
Business and conﬂict prevention
In times of peace, companies can play another major role by working to prevent
violent conﬂict. As part of their drive towards socially responsible corporate
citizenship and ethical business, many national and international businesses try to
limit the risks of conﬂict escalation in their own commercial operations. Like
humanitarian agencies, they too are trying to ‘do no harm’ and reduce the risk of
conﬂict.
Being a good ethical business today means making sure that your company
does not cause or sustain armed conﬂict and human rights abuses in any part of
your operations: along its supply chain; in its recruitment policies; in its working
conditions; in the way it behaves with the local population; and in the way it uses
guards and security forces to protect its installations. Conﬂict prevention of this
kind is ethically good business and it is also evidently good for business. Companies
need to guard against political instability in their operational environments and
avoid the catastrophic damage to their reputation that can happen overnight.
This nexus of commercial interest and morality is a happy one that is now well
recognized by many companies.43
There are now a wide range of international industry standards for all main
business sectors – including extractives, manufacturing, banking, and tourism –
which set guidelines for good practice in conﬂict prevention and reduction.44
41 Andrea Iff, Damiano Sguaitamatti, Rina M. Alluri and Daniel Kohler, Money Makers as Peace Makers?
Business Actors in Mediation Processes, Working Paper Series No. 2, SwissPeace, Bern, 2010.
42 See Manocap’s website at: http://manocap.com/.
43 Havina Dashwood, The Rise of Global Corporate Responsibility: Mining and the Spread of Global Norms,
Cambridge University Press, Cambridge, 2012.
44 Many of these, including the Voluntary Principles on Security and Human Rights, are available at the
Business
and
Human
Rights
Resource
Centre:
http://www.business-humanrights.org/
ToolsGuidancePortal/Issues/Securityissuesconﬂictzones. See also, the best practice community relations
guidance notes of the International Council on Mining and Minerals (ICMM), available at: http://www.
Volume 94 Number 887 Autumn 2012
915
The new UN Guiding Principles on Business and Human Rights represent the most
comprehensive international framework to date to ensure that all businesses apply
‘human rights due diligence’ of all kinds to their business activities to prevent or
remedy business-related human rights violations.45
Several extractives companies, like Rio Tinto, Anglo-American, BHP
Biliton, Newmont and Barrick (where John Ruggie has recently been appointed a
special advisor), are now adopting the theory and practice of conﬂict resolution,
peacebuilding, and human rights monitoring in their own efforts to reach fair and
peaceful relationships with local communities around their mines. Some of the most
progressive examples of this work have been by Rio Tinto in Australia.46 Being only
too aware that mining retains the potential to spark armed conﬂicts in countries
such as Guinea and Peru, Rio Tinto is now trying to apply conﬂict resolution work
in more complex settings with very recent histories of armed con���ict.
This adoption of conﬂict resolution methods has been explicitly en-
couraged by a number of peace NGOs, like International Alert, who have been keen
to show the potentially positive role responsible businesses can play in reducing
tension and building peace.47 Luc Zandvliet and Mary Anderson have used their
humanitarian experience of ‘do no harm’ programming to research and write a
new practical text on conﬂict reduction and peacebuilding for the commercial sector
that is now being widely used by mining companies.48 Recent mass demonstrations
and deaths in Peru and South Africa show that success is still some way off, and
suggest mining could still emerge as a major cause of conﬂict in the twenty-ﬁrst
century.49
Making business a normal part of humanitarian action
Humanitarian agencies have frequently proved themselves to be creative and
adaptive in their relationships with different actors in armed conﬂict. It is hoped
that a richer and more nuanced appreciation of the many different roles
and interests of business in armed conﬂict will lead to important new developments
in humanitarian agency relationships with business. The active engagement of
humanitarian agencies with business in its several roles in armed conﬂict can
be expected to bring about some important innovations in the repertoire of
icmm.com/social-and-economic-development; and IPIECA (the oil and gas industry association for
environmental and social
issues) guidelines, available at: http://www.ipieca.org/library?tid%5B%
5D=7&language=All&date_ﬁlter%5Bvalue%5D%5Byear%5D=&keys=&x=27&y=9.
45 See above note 29.
46 Bruce Harvey and Simon Nish, ‘Rio Tinto and indigenous agreement making in Australia’, in Journal of
Energy and Natural Resource Law, Vol. 23, No. 4, 2005, pp. 499–510, University of Dundee.
47 International Alert, Conﬂict-Sensitive Business Practice: Guidance for the Extractive Industries, London,
March 2005.
48 Luc Zandvliet and Mary B. Anderson, Getting it Right: Making Corporate-Community Relations Work,
Greenleaf Publishing, Shefﬁeld, 2009.
49 In August 2012, thirty-four people were killed at Lonmin’s South African mine, see: http://www.bbc.co.uk/
news/world-africa-19292909; and more than twenty people have been killed in Peru’s recent mining
disputes, see: http://www.bbc.co.uk/news/world-latin-america-19669760.
H. Slim – Business actors in armed conflict: towards a new humanitarian agenda
916
humanitarian action. To make this happen, humanitarians will need to engage
business people at all levels (small, medium-sized, and big business) as routine inter-
locutors in armed conﬂicts.
In the meantime, four main areas of humanitarian policy seem to offer the
most fruitful possibilities for greater humanitarian engagement with the business
community.
Business and humanitarian law
Greater contact with business at all levels needs to become an important part of the
wider dissemination of international humanitarian law and principles. Information
and advocacy campaigns at the national and international levels can usefully target
different business communities through local chambers of commerce, trade
associations, industry best-practice groups, stock exchanges, trade unions, and the
extensive business print and broadcast media. Humanitarian advocacy that targets
business better will enable business people to have a much clearer understanding of
their rights and obligations under international humanitarian law. This will give a
good sense of the prosecutions they can expect as perpetrators, the humanitarian
support and protection they can expect as victims, and the role they can play as
humanitarian actors.
Advocacy for business victims
Humanitarian needs assessment could usefully assess and report in much more
detail on the damage to speciﬁc businesses and markets during armed conﬂicts.
Greater international awareness of precise business casualties – natural resources,
factories, assets, markets, and ofﬁces destroyed, and employees killed or rendered
unemployed –will help to draw attention to the signiﬁcance of business losses for
the civilian population and encourage the protection of businesses under inter-
national humanitarian law.
Protecting business continuity
Humanitarian aid could explore creative ways of aid programming that supports
positive business continuity during armed conﬂicts. New forms of humanitarian aid
need to be deployed to support the survival of businesses that are vital suppliers and
critical employers, and can have a signiﬁcant impact on the condition of the wider
civilian population. This work could place a particular focus on SMEs and the
precarious middle tier (or meso level) of a conﬂict-affected economy.
One of the best ways to support parts of a war-torn society may be to keep
its businesses from going bankrupt. Projects of credit support, asset protection,
market access, foreign exchange support, restocking, and destocking that have been
used effectively at the micro-level with smallholders and sole traders could be
usefully scaled up to keep small businesses employing and supplying vulnerable
civilians at the meso level. Business relief at this level could include temporarily
Volume 94 Number 887 Autumn 2012
917
buying assets to keep them productive or to prevent them from being sold to
hording speculators at knock down prices. It could mean enabling foreign currency
exchanges for businesses dependent on key imports for food ingredients or
machinery. This kind of business relief can help to sustain employment and supply
life-saving goods across the so-called missing middle of so many poor and conﬂict-
affected societies.50
All these various kinds of business relief may add real value to more
conventional individual targeting of civilian populations and encourage business-
based innovations in humanitarian action. Supporting business continuity can be an
important part of wider resilience strategies in and after wars.
Involving business people
In many humanitarian agencies to date, business people have been most commonly
involved in humanitarian action as funders – in cash or kind. This simple idea of
them as donors restricts the contribution they can make to humanitarian pro-
gramming and also obscures the sense of businesses as victims on the ground. Better
engagement and involvement of local business people on the ground in humani-
tarian needs assessment and planning will help to give a fuller picture of the war
economy, its damaging effect on civilians, and its potential for renewal or adaptation
to survive chronic conﬂict.
Business as a new humanitarian stakeholder
The prospect of engaging with a whole new set of business stakeholders and
interlocutors in war may seem daunting to a humanitarian community that already
feels stretched and tested by a multiplicity of programming agendas in armed
conﬂicts. Indeed, actively engaging with business may seem unwise when humani-
tarians struggle enough to cooperate in a principled way with two other potentially
morally ambiguous communities – political authorities and armed forces. But
armed conﬂicts usually affect everyone and the humanitarian mission of impartial
assistance and protection must expect to involve stakeholders of every kind.
As described above, humanitarian scholars and activists have uncovered important
connections between business and armed conﬂict in the last two decades. It makes
sense to use this knowledge in the interests of civilian populations and, as business
people would say, leverage the value.
50 Nancy Birdsall, ‘Do no harm: aid, weak institutions and the missing middle in Africa’, Working Paper 113,
Centre for Global Development, 3 August 2007, available at: http://www.cgdev.org/publication/do-no-
harm-aid-weak-institutions-and-missing-middle-africa-working-paper-113 (last visited 18 Aril 2013).
H. Slim – Business actors in armed conflict: towards a new humanitarian agenda
918
</p>