Chinese Responsible Investment Overseas Newsletter #5: Conflict-affected & High-Risk Areas

Author Craig Martell

...As the global demand for goods and raw materials continues to grow due in part to economic and income growth, more and more companies have been drawn to operate in or source from resource-rich conflict-affected areas. To many companies, these are unfamiliar and complex environments where risks of serious community grievances, human rights abuse, and other unwanted consequences of doing business are high. For example, hiring poorly trained security forces could result in the use of excessive force around company assets. On top of reputational, operational, financial, and legal risks for companies and investors, results such as this amount to serious human rights abuse and could lead to exacerbated tensions and instability in affected communities.  On the other hand, in these challenging contexts, responsible companies have the potential to make a meaningful contribution to lasting peace and prosperity by advancing economic development and recovery through inclusive employment and sustainable investment, and by adopting best practices in social and environmental accountability.
The UN Guiding Principles on Business and Human Rights as well as the complementary OECD Due Diligence Guidance for Responsible Business Conduct both shed light on principles for companies operating in conflict-affected areas, especially to uphold the corporate responsibility to respect human rights. Dozens of guidance tools developed by UN Global Compact and NGOs including International Alert, the Geneva Centre for the Democratic Control of Armed Forces (DCAF) and the International Committee of the Red Cross (ICRC), and the Institute for Human Rights and Business provide detailed and practical guidance on how to conduct human rights due diligence in a complex setting, and how to operate with a conflict-sensitive approach.
The China-led Belt and Road Initiative (BRI) will have tremendous potential to help address some of the root causes of conflicts along the route, such as economic disempowerment and marginalization of cultural identity. Businesses and other actors participating in this development strategy should be equipped with knowledge and capacity on internationally accepted principles, tools, and guidance, and develop their own good practices in high-risk environments.
We thank Dr. Alan Bryden at DCAF and Jason Tower at American Friends Service Committee (AFSC), for writing this issue’s guest blogs, which both provide relevant suggestions for Chinese companies dealing with conflict-related issues, as well as other useful information such as the detailed introduction about the DCAF-ICRC tools and the vivid storytelling of lessons learned from the Myistone dam project...


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