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31 Aug 2015

Oliver Balch, The Guardian (UK)

Columnist discusses approaches to socially responsible investment in conflict zones such as South Sudan

"What can a South Sudan brewery teach us about business in conflict zones?"

SABMiller’s brewery in South Sudan is struggling and may face closure within weeks. This news is perhaps not surprising. Ethnic tensions and political discord have plagued the region for decades...Volatility is part and parcel of investing in conflict-riven countries, but where there are opportunities, companies will continue to seek a presence...But a key question is how companies can ensure they can establish a long lasting presence which benefits both their business and the region.

“Companies have an obligation to do due diligence on the countries and individuals that they engage with,” says Emma Vickers, country coordinator in South Sudan for Global Witness...That obligation is both moral (to ensure that corporate revenues aren’t helping perpetuate violence or human rights abuses) and fiduciary (to make sure investors’ capital is reasonably protected). There’s also a legal duty of care towards a company’s employees...

A more radical option is for investors to isolate themselves entirely...“The way that big multinationals have traditionally dealt with the problems of instability is to build what are essentially corporate welfare states in developing countries, with water, education, housing, healthcare and so forth.”...In an increasing number of cases, governments are obliging investors to actively support economic development measures designed to promote stability, says John Morrison, executive director of the Institute for Human Rights and Business. [also refers to Pearson & Unilever]