Howard Sharman outlines how companies can work with aid agencies and NGOs to mitigate disaster impact in a businesslike fashion

I was part of a round table put together by PA International Foundation at the AidEx exhibition in Brussels towards the end of October.

Our brief was to discuss the future of humanitarian aid and development assistance. In particular, we were looking at the role of corporate responsibility and public private partnerships in developing new, innovative and long-term responses to emergencies.

The case histories threw up two clear models for private sector involvement with emergencies.

One is based on partnerships between companies (or their foundations) and UN organisations or NGOs.

The other is based on multinationals and NGOs partnering with local governments, local companies and the local community in developing countries to build wealth and resilience.

Let’s be clear about one thing though – neither of these solutions is going to see companies involved in what is becoming known as “first wave” response. There’s no likelihood that Procter & Gamble will be on the beach in the immediate aftermath of the next tsunami, or the next earthquake.

A stitch in time … 

But P&G – or similar companies – might well be able to play a significant role in disaster risk reduction (known as DRR), which is by some distance the most cost-effective way of responding to emergencies. In his keynote address to the round table session, Olivier Chastel, the Belgian minister for development cooperation stated that $1 spent on risk reduction saves $7 in losses from a disaster.

The tone was set by Dr Ioana Kornett from Action Contre la Faim (ACF), a French NGO. “The system is stretched,” she said. “The ‘new normal’ means that collaboration with the private sector is not an option but a necessity.” This is new language from NGOs who, in many instances, have tended to see corporates as the enemy.

But Kornett also has a very clear, and in my opinion accurate, view of what needs to be done before NGO-corporate collaboration on emergencies can be effective. “Corporate engagement … must be complemented with sufficient strategic clarity and definition of how to engage and why to engage,” she said.

Different drivers 

There’s no doubt that the “how” and the “why” are critical, since the basic drivers of the two partners – emergency response NGOs and profit-making companies – are very different.

And it is interesting to look at the examples of partnership and collaboration that were cited at the round table.

Royal DSM, a Netherlands global science-based company active in health, nutrition and materials, has been working with the World Food Programme to help eliminate malnutrition around the world. Some of the products that have been developed through this collaboration are used in emergencies – especially the slow-onset ones such as famines. But many others are used as part of the general development effort of WFP and other NGOs and governments around the developing world.

ACF cited partnerships with Danone-Aqua in Indonesia and the Veolia and GDS Foundations in Chad. These partnerships helped with fresh water, cholera control and malnutrition respectively. Again, these sorts of projects would appear to be just as much about development as they are countering disasters.

The other approach is to get involved with the local community, companies and government. I’ve written for Ethical Corporation before about Advance Aid’s work and the way that we aim to partner with local African manufacturers to supply emergency relief goods to the aid agencies that are responding on the ground to emergencies.

Local spend 

There’s $250m each year that is spent on the non-food items for emergencies that go to Africa. If all of that money could be spent with African companies, then as many as 60,000 jobs could be supported or created across the continent. Advance Aid’s view is that this would do a huge amount for development – and also make those communities more resilient as and when disasters hit.

Sohar Aluminium was singing a similar song at the round table. It runs, in Oman, what it claims is the world’s most modern aluminium smelter, but it is strongly focused on building up the percentage of local employees, doing as much of its buying as it can locally, and generally helping to strengthen the local community wherever possible.

Sohar CEO Henk Pauw told the round table that:

• 56% of non-raw material purchases stay in Oman;
• more than 70% of the employees are Omani with a target of 85% by 2014;
• 5,000 direct and indirect jobs have been created by the company;
• $2m per year is spent on staff training; and
• 1.5% of profits go to the community – $1m in 2010 and budgeting $1.7m in 2011.

Impact reduction 

The underlying theme of both models, I would contend, is the same – that the best way that companies can help the world to deal with emergencies is to work to reduce their impact.

This means disaster risk reduction in one form or another, whether it is helping to reduce malnutrition, which will inevitably strengthen families and communities against both famine and other natural disasters, or developing ways to supply clean water and reduce the risk of cholera.

Companies, though, will have to ask themselves “where’s the profit in this?” and “what’s in it for the shareholders?”. Is it all about generating goodwill? Does the development and emergency response community need the private sector more than the other way around? Should we be “privatising” emergency response at all?

What is responsibility?

The last word goes to Prof Mark Eyskens, chairman, PA International Foundation, a former prime minister, foreign minister and development aid minister of Belgium, who closed the round table.

He offered a new definition of CSR:

“CSR starts where all existing laws and regulations end; it is an organic link between enterprising, profit-making and social development that is conducted as a win-win solution in areas where a company requires something from society that cannot be bought and requires investment in society through a double business plan; one for industry and one for society.”

I’m not sure how that definition will sit with Ethical Corporation, but I like the idea that corporate responsibility starts where legislative and regulatory obligations end. And I also like the idea that companies do it because they “require something from society that cannot be bought”.

Society in turn certainly needs more help in dealing with – and preventing wherever possible – disasters. If companies can find a way to help that makes sense to them then we could all be the winners.

 

 

Howard Sharman is a senior consultant with Advance Aid.