Theme 1: The Role of Business in Advancing Peace Through Commerce

[Peace Through Commerce]

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A discussion moderated by Cindy Schipani, Professor of Business Law, Ross School of Business Visit Biographies for more about presenters

How can business contribute to sutainable peace?
In this session leaders from business and NGO institutions provide their understanding of the ways that commerce and peace link together. The presentations focus actual experiences of institutional leaders and empirical testing done of the relation of business and peace. The speakers range from groceries to tourism to technology to international development.

Presentations:
What do leading business and NGO leaders see as the contribution business can make to sustainable peace?
Watch the four videos and join the discussion with presenters below.

	Steve Killelea, Australian Entrepreneur and Philanthropist, Founder of Global Peace Index "The Compelling Case for Business to Embrace Peace"(6:41)			Walter Robb, President & Chief Operating Officer, Whole Foods Market "How We Do Business Matters: the Case for Conscious Capitalism"(5:34) Presentation slides Full Presentation Video

	Roger Dow President & CEO Travel Industry Association of America "Peace From The Perspective of the Tourism Industiry"(9:28)			John Sullivan Executive Director Center for International Private Enterprise "The Center For International Private Enterprse's Public-Private Partnerships and Peace"(8:37)

Resources

• Global Peace Index 2008 and GPI Country Rankings 2008
• CIPE Overseas Report CIPE Executive Director John Sullivan speaks with CNBC Pakistan about the importance of strong corporate citizenship within the modern business model.
  
• Walter Robb's presentation slides from "How We Do Business Matters: the Case for Conscious Capitalism," including Whole Foods stakeholder map (page 4).

Discussion: How can business contribute to sutainable peace?

1. Is asking business to contribute to peace an extension of corporate social responsiblity or is it something different?

2. Each speaker provides a concrete, positive example or set of examples where businesses have made a contribution to social harmony. Do you think the kinds of businesses and NGOs they represent in these industries can replicate what these organizations have done? Are there other busineses that you think could also play a leading role in promoting peace?

3. What impact, if any, do you think the recent global economic downturn will have on these efforts?

[Rodrigo Ortiz]

1. I would have to say that it depends on various factors: business mission and vision, market, country, clients, etc. It would not be part of CSR if, say, Ratheon decided to invest in peace it would most certainly go against what the company is all about. Oh sure, they do have Ethics, Environment, Safety and other programs; but to a company of that nature, investing in peace would be awkward to say the least, just like maybe to another company it would seem so natural. In response to the question, I believe it should be part of CSR where available, so that it's easy to implement since most companies have a CSR agenda already.

2. Yes, I believe they are capable of replicating what the example businesses have done given enough will and resources. Can't really answer the second part of the question.

3. It definitely has an impact and we're seeing it now, at least in my country. Budget cutbacks and massive layoffs do not leave much room for scenarios such as the one presented by Mr. Killelea. Companies are downsizing and "non-critical" operations, such as CSR, are among the first to go.

[Antonio]

These are very interesnting topics because it´s a kind of corious questions, but I think that the problem is that these, business and peace are very near, and this knowledge give us the opportunity to know how we must build our society and poors countrys, if we create peace and business we will be helping in a suitable development.

I had have the opportunity of visiting very poors countrys, I also live in a developing country, but I had visited Haiti las summer and I concerned that if we do not have a peace, a kind of culture of business and development, we are not going to grow, so there´s my opinion, both of them

Now, I created and work in a NGO, this is contributing in these topics, fist helps in economics development into a indigenous area, and then the education we give tries to create an enviroment of peace and building over the problems. I think that education provides quite good solutions for peace and growth

[Amana Nova]

Thank you for creating an open forum in which NGO's and Business can offer their views and expertise. Such a group has the power to substantially affect the outcome of the world situation.
I am grateful to be a part of this discussion.
Amana

[Opportunity Collaboration]

Amana,
So true! Things cannot and will not change by themselves. That is why we need to come together as Poverty Alleviation Leaders and create change ourselves.

[Graham Baxter]

The case for "Mutual Advantage" has been well made - a peaceful operating environment is good for business and good business promotes peace. The question for me is how far should and more importantly can businesses go in generating and promoting that peaceful operating environment - where, in short, are the boundaries?

Some limits may be clear. Businesses do not generally hold any democratic mandate and so for their representatives to become directly involved in the political process of conflict resolution, peace brokering or inter-mediation processes would seem inappropriate. However, working with government and civil society to create a regulatory that create a level business playing field and which favor investment and fair competition feels right for leading responsible businesses. In between, there are wide open gray areas where progressive businesses will tread carefully in collaboration with others from all sectors of society.

There are some great examples out there already where businesses have voluntarily taken a lead - the Voluntary Principles on Security and Human Rights, the Extractive Industries Transparency Initiative and the Ethical Trading Initiative are just a few global initiatives which, when applied in post-conflict regions, can and have made a difference. There are also plenty of examples of companies (some of whom are members of the International Business Leaders Forum) which have taken steps to work with other "development" players to make a difference to the investment climate and as a result promote peace and prosperity. But at this time of economic downturn and extreme short-term business pressures it is unreasonable to expect commerce alone to be the knights in shining amour come to save the world. Apart from anything else, the credibility of some of them has been seriously undermined as a result of perceived irresponsible behavior leading to the current crisis.

We have found that when responsible businesses come together in difficult, post-conflict regions there are plenty of steps they can take together to accelerate prosperity and thereby to stabilize the peaceful environment. But it is hard work and needs concerted support not only from long-sighted business leaders but also governments, development agencies and civil society working together in partnership.

[Miemie Winn Byrd]

I'm so glad that Graham and Kaitlyn brought in the subject o government into this discussion. I work with senior government officials and mililitary leaders primarily from the Asia-Pacific Region. Most of them see that their countries' security, stability, and sustainable peace depend on their ability to solve the issue of poverty and inequalities. Most of them have no idea about the business community. There are hardly any dialog taking place between most of these officials and the business community. We need to bring policy and decision makers from these countries into our discussions so that they could be aware of this movement occuring outside of the governments.

[Donald Scott Wilde]

May I jump in? Sorry I'm late to the party. :)

Business's goal is, first and foremost, sustainable profit. I happen to know, I ran myself into the ground while spending too much time trying to "do good".

The first thing that needs to happen is an attitude shift by those who "make news" that profit is not A Bad Thing. All too often, people whose salaries and benefits come from the public trough or from some kind of populist group castigate businesspeople for building a profit into their relationships. Year after year, people who never created an ounce of value from their own minds decry the "obscene" profits of Exxon-Mobil without ever bothering to do the math and discover that their profits are actually fairly small compared to the amount of money they have to handle to get them. In this last year, they reported a profit margin of less than ten cents on the dollar.

Let's contrast that with a typical government-funded boondoggle. I live near Austin, Texas, USA. The local transportation planning agency is building toll roads as fast as they can, and they set the toll at EIGHT TIMES what it costs to run the system, and FOUR times what it costs to be in the black (counting debt repayment). Despite known bottlenecks that cost travelers hundreds of hours of waiting every year, they refuse to consider any project on which they cannot extort such revenue. Is this atypical? Well, let's just say that the buses in the same city run with costs that are more than twenty times their fare revenues.

As governments have collected more power for themselves, they have destroyed opportunities for business outside of their blessing. One critical factor in business is the ability to predict future stability. Politicians think they have a need and a right to "do something" -- usually by writing bad checks which will be repaid through fiat money or taxing the labors of successful businessmen -- and their actions, because they are imposed externally, make no predictable sense in the marketplace.

So, the next thing that has to happen is that governments and do-gooders need to stop trying to "improve" things by interfering. If I, to make a fictitious example, build an electric motor assembly plant in Mexico and thousands of people flock to my hiring call because I'm paying cash money and 20% more than anybody else is paying, I am making motors less expensive for American consumers in their washers and dryers. The laborers are happy because they have more money,. the consumers are happy because they can afford to buy a new dryer as well as a washing machine, and I, because of my profit, do not need to be a wage slave. Everyone should be happy.

The fictitious little Mexican town in my example is more peaceful, too. The workers are happy because they see the improvement in their quality of life and they can dream about what they might be able to achieve for their families next month and maybe even next year.

Okay, so why is this not happening all over the place? Well, the simple answer is that IT IS. Business is already a huge force for peace. Both multinationals and small business entrepreneurs spend far more money on overseas trade relationships than any government "foreign aid" program ever will, and far more effectively.

We do not need government to "foster this new initiative," because it is not new. On the contrary, we need government to get out of the way and stop sabotaging successful business relationships by robbing them of profit or demanding that they comply with burdensome regulations.

Remove regulations? Yes, that is my third demand as an entrepreneur. It is politically popular now to decry "deregulation" in the banking sector of the American economy as the 'mistake' that caused evil greed to take over. Never mind that everybody in DC was quite happy with the tax money they were collecting and thousands of people with very few skills were making money fixing up houses to sell ("flipping"). Never mind that cable TV was actually educating people, not just turning them into vacuous idiots. Never mind... I could go on.

Now that the Progressives are coming into power in America, we will see more whining about how we need to regulate this and regulate that. My electric motor plant, for example, must be shut down because I don't give the workers subsidized health insurance (yet). The plant next door that makes the connectors that plug my motors into the dryer has to be shut down because it includes a metal plating line and we all know how bad those are. Right?

Miemie, government isn't the solution to poverty. Well, it is in the sense that Imelda needed to stop buying so many shoes. :) Business exists in the poorest of countries. It exists whether it's the free exchange of goods without money in barter transactions or international tourists spreading cash on the streets.

Business can do much much more. Business IS doing much, much more in spite of government. It is South Korean _businessmen_ that are driving the opening of trade with the north, and they are pushing their government out of the way.

Governments cause wars, people don't. Governments -- and those that they cause to hate them -- are the problem, not the solution.

[Donald Scott Wilde]

I tried to extend the last post a bit, but I guess I took a bit too long.

I make my point very strongly, and one could argue that I make it one-sidedly. Please excuse me where my jumping up and down bruises toes! I do not mean to imply that business does not include greed as a motive and that business people many times create negative consequences. My fictitious laborers choose to take my paychecks in spite of the "less than perfect" working conditions. I chose to take the paychecks of a former employer in spite of their incredibly excessive greed that put me in a hospital ICU twice and almost killed me. We each make free choices based upon our circumstances.

I would argue that government creates wars, not people. Governments -- and the people they cause to hate them -- are the obstacle to peace and the impediment to productive trade.

Yes, business is imperfect. Corporations can do evil things. There is one essential difference between government and business, and it is crucial to this discussion. Business is accountable, and government is not. Businesses fail or are bought up all the time -- except when government props them up -- and CEOs are fired on a daily basis. In government, on the other hand, egregious abuses are tolerated and excused. An individual politician or bureaucrat may take a fall here and there, but, in America for example, the Republicans and Democrats still control the machinery despite repeated proof of their corruption and incompetence... and greed.

I see very few real business people in this discussion, but it is understandable. They're too busy keeping their companies out of the toilet because profit is really, really difficult to keep making day in and day out.

I think the most important message we can give to government out of this is that they should be dealing with the log in their own eye before they worry about the splinter in mine.

[Michael Zaetz]

First, I must note the presentations and comments have been very insightful. I completely agree with Dow. The tourism industry plays a substantial role in promoting global peace and awareness. It's unfortunate that travel is down due to the state of the global economy. What better way to understand cultural diversity than to roam the world.

[Nancy Woodruff]

1. Business intent to be socially responsible may create generous efforts toward peace, but if the goods, services or practices of the business damage peace, the company's social responsibility is weakened and its motives are suspect. Defining peace and what creates it seems very important to this discussion.

2. The business sectors represented by the speakers appear more compatible with peace than some. Tourism, healthy foods and the 2 NGOs have less conflict with peace endeavors than say polluting industries such as pharmaceuticals or utilities. However, any business willing to take into account the impact of its products and practices on human and environmental well-being will find ways to contribute to peace... beyond giving money to social causes. I believe those businesses with the most direct impact on human health are the businesses that can most effectively lead in promoting peace. Could we consider human health as the base of sustainability and sustainability as a prerequisite for peace?

3. If the global economic downturn brings us to a greater awareness of how to live and produce essential goods such as food, housing and energy sustainably, then I believe the downturn can have a positive impact. Here again the question: what creates peace and sustainability? Is peace the absence of violence? Can we create sustainability from having science and technology save us? What role does personal responsibility play? Can some humans live in peace and prosperity while others struggle along behind them?

[Rowan E. Wagner]

I think what Nancy has a valid point on directly impacting health, personal responsibility and technology. My small business model is derived from my past work in community development and health. Looking not only into the impact the products and service have in postively or negatively impact my customers health but how the process fo the business can engage the community in providing a living model on helping my empoyees (who come from marginalized groups) gain the psychological and economical empowerment. In addition I live and work in the community where I do business; as a positive deviant in terms of utilizing environmental accounting practices to better capture the cost and provide the stimulus to develop more efficient ways of using energy, human resources and space to offset the higher initial costs of using more energy/time efficient technology and balanced life human resource policies.

[Nancy Woodruff]

I agree with Rowan's model: engaging at the community level, empowering marginalized groups with economic activity, and having business ownership working in close relationship with, and proximity to, the process.

I am doing something similar: working in a small community in the southern U.S., trusting that as a community we will come to think of 'living well locally' as a powerful driver for our own sustainable development. As small farming died here, industry came, polluted and has now left. We are a superfund site awaiting clean-up. We need fresher, healthier food, we need to find and engage the next generation of farmers, we need better health and we need a vision of what we can do for ourselves and the world beyond.... something rooted in our natural resources that will regenerate and conserve them while also regenerating us. This is why, for me, health becomes an important connector between business and peace.