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Introduction
During June-September 2002, as part of its Business and Conflict programme, the UK-based
conflict transformation NGO International Alert conducted a short consultative research project
examining the potential of oil majors to support peace in Angola.1 The research arose following an
invitation from the oil and gas major Shell Group to International Alert to assess the company's
stakeholder engagement and social investment strategy through the lens of its expertise in the
challenges facing business operating in areas of conflict. Angola was chosen by Shell as the area to
test this inquiry out given Shell's plans to grow its business there. Through conversations with
about 40 individuals from key organisations both in and outside of Angola, as well as from within
Shell, International Alert researchers sought to shed some light on the priority issues for achieving
peace and development in the country at that time, as well as the appropriate role for an oil
company such as Shell in contributing to these goals.2 The research also included a 'stakeholder
workshop' organised by Shell that took place in London in July 2002. International Alert set out
to contextualise the research findings in an analysis of Shell's approach to corporate social
responsibility (CSR) activities at both headquarter level and in Angola. This paper presents the
findings of the research as a case study of stakeholder perspectives on existing corporate practice
and opportunities in supporting peace.
The intervening period (October 2002 - January 2004) has inevitably seen events move on
for Angola both at home and abroad. The quartering camps for former UNITA soldiers and their
families that dominated humanitarian agendas during the report's research period are all now
closed. Large numbers of IDPs, and refugees scattered across Southern Africa, have been able to
return to their homes. Despite this development, and the implementation of several large-scale
welfare programmes, the onset of peace has failed to improve living conditions for a majority of
Angolans, and concerns about key issues such as food security and the prevalence of landmines
remain. On the political front, formal dissolution of the Joint Commission that oversaw the Lusaka
Protocol in November 2002 has marked the end of the peace process - eight years on from its
signing - leaving its completion to the government and UNITA, which now holds ministerial level
and parliamentary posts. 2003 also saw cabinet reshuffles and the appointment of a prime minister,
as well as ongoing criticism of the country's financial situation from the IMF. At the time of going
to print no date has been set for elections, but various candidates have announced their decision to
run. With regards to the Cabinda separatist struggle, the various factions of the FLEC have largely
been defeated, intensifying debate about decentralisation in Angola. Internationally, Angola has
withdrawn troops from the Congo, and found itself in the international spotlight as a nonpermanent
member of the UN Security Council during escalation of the Iraq crisis. An international
policy initiative of major significance that responds to the 'Publish What You Pay' campaign
highlighted by a vast majority of research participants during the 2002 research, the UK-led
Extractive Industry Transparency Initiative, has also had ramifications for Angola internationally.
These are just some of the developments that have affected Angola since the International
Alert/ Shell research took place. These and other events will have impacted people's perceptions
about prospects for lasting peace in Angola, and the role of investing oil majors in supporting it. By
presenting findings of stakeholder perceptions from summer 2002, the present report represents a
useful snapshot of opinion about key issues and the role of companies at a critical juncture of
Angola's history. It also offers insight into corporate priorities and decision-making concerning social investment in unstable countries. It includes a framework for understanding aspects of the
relationship between companies and conflict and the different kinds of interventions companies can
make in order to contribute to society in a meaningful way, which International Alert uses elsewhere
in it's work and which remains highly pertinent. While this report focuses on Shell Group, the issues,
challenges and recommendations raised are relevant across the industry.3
What is a peacebuilding approach to business?
To date, companies have paid insufficient attention to the ways in which they can impact on
existing or potential conflict in a country, with the result that their activities have often
inadvertently augmented rather than diminished tensions. Conflicts arising between or within
large companies themselves, and how to resolve these, have received detailed analysis within
the corporate sector, with theories often drawing on conflict transformation techniques.4
Political conflict in host societies however - and the role that business plays in this - has not
benefited from such in-depth thinking (Banfield 2003).
In conventional extractive sector analyses, violent conflict is reduced to a risk factor that
can be computed into financial risk ratings in relation to investment decisions. The primary
issue at stake in this approach is the impact that conflict (existing or potential) may have on
the company, through imposing increased transaction, security, reputation and other costs
(Bowden et al 2001; Nelson 2000). The reverse dynamic - the impact of the company on
conflict - has been under-researched and largely ignored in management decision-making.
Some progress has been made in understanding oil majors' impact on the local physical and
social environment, with Environmental and Social Impact Assessments (ESIA) becoming
increasingly sophisticated in approach and in some cases legally required. However, ESIA
methodologies typically tend to be limited to an analysis of corporate impact at the local
operational level, are inadequately formulated when it comes to involving stakeholder
perspectives, and do not specifically seek to understand the spectrum of corporate impacts on
conflict (Goldwyn and Switzer 2003).
Conflict at both local and national levels disrupts markets and incurs security and
reputational risks to companies, above all in an era of increased shareholder and media
expectation of performance on CSR. There is thus a strong 'business case' for companies
engaging in conflict prevention and peacebuilding - even in contexts such as Angola's where
oil production occurs offshore.5 The business case for engaging in conflict prevention was first
mapped out in the report co-published in 2000 by International Alert, the Council on
Economic Priorities and the International Business Leaders' Forum, The Business of Peace:
The Private Sector as a Partner in Conflict Prevention and Resolution. This report, and
International Alert and others' work elsewhere, demonstrates that by adopting a more
conflict-sensitive approach in three key areas, foreign businesses can minimise harmful impacts
and actively contribute to peacebuilding, with bottom-line gains incurred for business in the
process. These areas are: core business, social investment and policy dialogue.6 Conflict
prevention is most usefully defined broadly, to include issues relating to the structural drivers
of conflict: inequitable economic development, poor governance, and neglect of human rights.
High-quality, frequent and meaningful engagement with all stakeholders in order to build
relationships and to determine priority issues around these categories is an essential mechanism for
enabling business to become conflict-sensitive and to fulfil its peacebuilding potential. The
perceptions of all stakeholders will facilitate the construction of balanced and accurate conflict analyses - which should alert an investing company to the ways in which its operations might make
situations worse, and how to avoid these. Building on work begun at the UN Global Compact,
work is now underway to develop improved conflict risk and impact assessment methodologies
that will contribute to companies' engaging in effective conflict analysis through improved
stakeholder engagement in this way.7 Analysis through impartial stakeholder engagement:
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Enables more informed decision-making with regard to the immediate operating environment;
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Facilitates the beginnings of relationship-building between the company and other actors, both locally and country-wide;
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Reveals pertinent issues and priorities for peace and development in a country, as well as perceptions of the role that a company can play in these;
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Enables companies to fulfil their proper role as a stakeholder in a country's political economy.
A conflict prevention approach to business is in this sense dependent on an effective process of engagement.
Footnotes:
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International Alert's Business and Conflict programme aims to promote and catalyse a conflict-sensitive and peacebuilding approach from business
in partnership with others, with a focus on transnational corporations in the extractive sector, and national and grassroots level business actors in
conflict-affected countries. International Alert does not accept any financial support from corporate actors.
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Out of respect for the confidentiality with which participants spoke with the authors during the research, a list of names is not included in this
publication.
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International Alert has been continuing its research into different companies' practice regarding operating in conflict-affected countries. See
www.international-alert.org/policy/business.htm
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