Role of business in armed conflict can be crucial – ‘for good and for ill’

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Following are former Secretary-General Kofi Annan’s remarks at an open debate of the Security Council on “the role of business in conflict prevention, peacekeeping and post-conflict peace-building” in New York.

The economic dimensions of armed conflict are often overlooked, but they should never be underestimated. The role of business, in particular, can be crucial, for good and for ill.

Private companies operate in many conflict zones or conflict-prone countries. Their decisions – on investment and employment, on relations with local communities, on protection for local environments, on their own security arrangements – can help a country turn its back on conflict, or exacerbate the tensions that fuelled conflict in the first place.

Private companies also manufacture and sell the main hardware of conflict – from tanks to small arms, anti-personnel mines or even machetes.

And private enterprises and individuals are involved in the exploitation of, and trade in, lucrative natural resources, such as oil, diamonds, narcotics, timber and coltan, a crucial ingredient in many high-tech electronics. Governments and rebel groups alike have financed and sustained military campaigns in this way. In many situations, the chaos of conflict has enabled resources to be exploited illegally or with little regard for equity or the environment. When local populations are excluded from discussions on access and control of natural resources – and see little benefit from them in their communities – this in turn can be a cause of more conflict.

These are complex challenges. They touch on fundamental questions of sovereignty, democratic governance, corporate accountability and individual integrity. Moreover, many of the transactions involved occur in the shadows, or within the context of failed States that do not have the capacity to regulate activities that are driven by profit but which fuel conflict. Enforcement and monitoring measures aimed at cracking down on such activities often lack teeth, if they exist at all. Supply chains are often so multi-layered as to defy efforts at greater transparency. Even legal activities can have unfortunate or unintended consequences. […]

The Security Council, for its part, has already addressed many of them. You have imposed targeted sanctions. You have supported the Kimberley Process which, though a voluntary initiative, has reduced the trade in so-called conflict diamonds. You have set up expert panels to assess the role of political economy in triggering or prolonging conflict. You have authorized some peacekeeping missions to assist in the monitoring of economic sanctions and arms embargos, and to support efforts to re-establish national authority over natural resources. […]

The time has come to translate ad hoc efforts into a more systematic approach. At the United Nations, such an approach would promote greater cooperation and interaction between the security and development arms of the Organization. It would give us the tools with which to better understand, and more actively influence, the economic incentives and disincentives that drive the dynamics of armed conflict. And it would ensure that those factors are reflected in efforts to prevent conflict, in peace agreements and in the mandates given to peace operations. […]

This is a subject on which passions run high, as we know. We need to find the proper balance between inducement and enforcement. There are times when outrage is the only proper reaction. […] We must create a space where all can come together and find solutions.

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