Civil Society and Private Sector : Engagement for Sustainable Development.

John Samuel

                              

Context

The engagement with civil society organisations and private sector business enterprises, based on a shared sense of values, can be an important lever for positive social change by promoting sustainable environment, inclusive economic growth, human development and peace. While the primary motive of private sector enterprises is to create profit and wealth, the primary motivation of civil society organisations are non-profit initiatives for larger common good and public interest. In spite of such fundamental differences in terms of the core motives, there are many areas where private sector and civil society organisations can engage to make a lasting impact within the society.

 Civil society signifies an arena of voluntary collective actions of people around shared values, common purpose and larger collective or public interests distinct from that of family, state or profit-seeking institutions. Civil society exemplifies a set of ‘civic action’ in formal or informal ‘associational forms’ to promote the core civil values of human rights, diversity, voluntary collective action, public interest and the larger common good. The private sector signifies organisation and institutions that operate in an economic arena of market for providing goods and services for profit.  Broadly speaking the civil society represent the socio-cultural and political sphere of human action and private represent economic exchanges and activities. There is indeed a wide range of diversity both in the case of civil society organisations and private sector organisations, based on the context, size, and nature of business.

In spite of distinct set of arena, interests and normative frameworks, there   is an increasing awareness that achieving sustainable human development   will require stronger and new forms of engagement, collaboration and partnership between the civil society organisations and private sector institutions, around explicit shared values.  Identifying these shared values and the mutual accountability mechanisms for ensuring that the contribution of both set of actors advances rather than undermines these shared values is the foundation for building trust between citizens and private sector enterprises and for starting new dialogue between civil society and private sector.

 

Civil society has now become an arena of praxis- wherein theory is continually negotiated and re-negotiated based on the evolving practice in multiple social, economic and cultural contexts. This dynamism, pluralism and diversity to a large extent shape the emerging civil society discourse across the world. The civil society discourse in the twenty first century is qualitatively different from that of the twentieth century or that of the post-cold war politics. Civil society is increasingly a coalescence of the local and global, real and virtual and south and north. There is a new sense of global solidarity movement for justice- though such an interconnected process is highly dispersed, poly-centric, and multi-locational. There is a new civil society discourse facilitated by the radical shifts in information and communication technology, social networks as well as the emergence of the new media. The Internet, global e-lists, social networking sites, you-tube and digital mobilization across the world would have been unimaginable twenty years ago. Today information and campaign process can reach out to millions of people with the single click of a browser.  Hence, capacity of civil society organisation to communicate and organise across countries and continents have dramatically increased in the last ten years, with significant influence in shaping global public perception as well as public policy priorities.

 

 

The on-going revolution in communication technology and the effectiveness of knowledge-based economies have created a new model of business and corporate governance. A growing awareness about the need for ecological sustainability and the “New Economy’ framework with an unprecedented stress on communication and image merchandising has paved the way for a new generation of business leaders concerned about the responses of the community and the sustainability of the environment. It is in this context that we need to understand the new trends of ‘shared value’ framework that tend to go beyond the traditional corporate philanthropy and corporate social responsibility.  There is an increasing stress on ethical business practices and good corporate governance.

 

 

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Civil Society and Private Sector

 

 

Civil society signifies an arena of voluntary collective actions of people around shared sense of shared values, common purpose and larger collective or public interests distinct from that of family, state or profit-seeking institutions.  Civil Society may include formal and informal organisations, associations and network based on a set of shared values and interests. While associational aspects of civil society, beyond family, state and market, is an important characteristics of civil society organisations, the defining character of civil society is the ‘civil’ values of human rights, diversity, pluralism and freedom of association and expression. In this sense, civil society is also an arena for collective action and voices of people for accountability of the government, larger common good, particularly in relation to human development and sustainability of the environment. Hence, civil society is also an arena for civic engagement, democratisation of society and sustainable human development

The nature and character of the civil society may depend up on the political and social history of a society or country and also the character of the nation-state in which a range of civil society initiatives operate

 

Private Sector may include small and medium business enterprises to powerful global conglomerates with more revenue and assets than the Gross Domestic Products of many countries. Hence, the nature, character, size, and the political economy of private sector would significantly vary across the world. At one end of the spectrum there will be small and medium level business enterprises and at the other end of the spectrum there will be huge multi-national corporations with hundred thousand or millions of employees with operations across the world. So the wide range of diversity within the private sector and wide range of diversity within the civil society organisation would be an important factor that need be considered in the context of engagement between civil society organisations and private sector companies.

There is a long history of engagement between civil society and private sector.  In the nineteen century itself, many of the business entrepreneurs like Robert Owen sought to combine the promotion of private sector as well as the civil society organisations and movements for change. And in the twentieth century, there are many examples of the leaders of private sector enterprises contributing to the strengthening of civil society initiatives and organisations. In the last century many top private sector entrepreneurial leaders like Rockefeller, Henry Ford, Jamshedji Tata and many others contributed a significant part of their wealth for strengthening and supporting civil society initiatives and organisations across the world. And even now a substantial amount of financial resources to support civil society process and initiative come from institutions and foundations established by private sector entrepreneurs, including George Soros, Bill Gates, Warren Buffets and many others across the world. So there are many inspiring examples of many private sector companies and entrepreneurs making long term impact in terms of promoting and supporting civil society initiatives for human rights, justice, democratic governance and sustainable human development.

 

However, there is also a history of confrontation between civil society campaigns and big multi-national corporations. Many of such confrontations arise when big private corporations violate human rights or environmental safeguards or displace the local communities.

On the one hand private sector and civil society represent two important sides of the social and economic development of the society. Private sector helps to create employment opportunities and also contribute to the growth of economy. And civil society plays an important role to ensure the larger common good of the society, environment and planet as well as provides a civic and political space for channelling the voice of people and seeking accountability from the state as well as market. Apart from this, civil society organisations also play an important role of adopting innovative approaches and promoting creative options for addressing the governance as well as social issues. 

While the primary motive of private sector enterprises is to create profit and wealth, the primary motivation of civil society organisations are non-profit initiatives for larger common good and public interest. In spite of such fundamental differences in terms of the core motives, there are many areas where private sector and civil society organisations can engage to make a lasting impact within the society.

Traditional corporate philosophy is only one of the three broad areas in which private companies can discharge their social responsibility. These three areas are:

i. Traditional corporate philanthropy

ii. Corporate social responsibility, with a focus on sustainable development and attending to stakeholder priorities

iii. Ethical business

 

Traditional corporate philanthropy dates back to the 19th century and emerged out of a variety of factors, such as:

i. Concern for the welfare of the immediate members of the corporate body: the staff and employees, and their families.

ii. Innovative contributions by visionary business leaders in quest of personal satisfaction, who built up philanthropic institutions out of their individual shares,

iii. In part as a result of the desire to establish a strategic relationship with the State, or with society as such, some corporate bodies invest in the establishment of institutions that fulfil the specific requirements of the community,

iv. Through the establishment of trusts and foundations for tax benefits, which also support socially beneficial activities.

 

Corporate social responsibility is a qualitative metamorphosis of the traditional concept of corporate philanthropy. It acknowledges the debt that the corporation owes to the community within which it operates, as a stakeholder in corporate activity. It also defines the business corporation's partnership with social action groups in providing financial and other resources to support development plans, especially among disadvantaged communities.

 

In a traditional paradigm, most corporate bodies have come to view the concept of CSR as the extension of a financial input for a humanitarian cause.).

Ethical business is the more fundamental, emerging trend on the international scene. It focuses on three specific aspects of business: a) how a business is conceptualised, b) how a business is operated, and c) the notion of fair profit.

 

In an ethical business the essential thrust is on social values and business is conducted in consonance with broader social values and the stakeholders' long-term interests.

 

Apart from this, there is a growing perspective that shapes the new principles and practice of corporate social responsibility. This is a rights-based perspective on corporate governance. This perspective stresses the fact that consumers, employees, affected communities and shareholders have a right to know about corporations and their business. Corporations are private initiatives, true, but increasingly they are becoming public institutions whose survival depends on the consumers who buy their products and shareholders who invest in their stocks. This particular perspective stresses accountability, transparency and social and environmental investment as the key aspects of corporate social responsibility. Corporate social responsibility offers a two-way street to companies, stimulating innovative business and technological initiatives which would open up new avenues for company operations and focus on the prospect of touching new market zones. It would give a cleaner societal reputation and identity to companies, involve the company and its employees in community development and gain from being a participant in promoting peace, equity and social development.

 

The success of engagement between civil society and private sector will be determined by a shared sense of values and commitment to promote the larger common good beyond the immediate business interests. International business now accepts the triple-bottom-line concept:

i. The stakeholders in a business are not just the company's shareholders

ii. Sustainable development and economic sustainability

iii. Corporate profits to be analysed in conjunction with social prosperity

 

The companies that excel today are those that restructure themselves as adaptive, resilient, creative and sustainable -- as living companies with the capacity to learn and change.

Shared-value framework for engagement

There is a link between sustainable economy, sustainable human development and sustainable business.  Sustainability as a principle requires a long terms perspective on and commitment to environment, peace, and inclusive human and economic development.  Sustainability of economy within a country or society is to a large extend influenced by human as well as technological capacity, human development and enabling infrastructure as and purchasing  capacity of people.  The development of private sector and market will be influenced by the broader purchasing capacity of people, which requires inclusive economic growth.  There are evidences to show that increasing inequality, lack of democratic governance and social-economic insecurities tend to create conflict and violence in many countries.  In a society prone to violence and conflict, it will be a challenge to build sustainable business enterprises. Hence, it is important to promote sustainability, inclusiveness, accountability, transparency and respect for human rights as core normative values for strengthening engagement between private sector and civil society.

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The shared ‘value’ framework may comprise three sets of values; ethical values, environmental values and economic values.  There are four key questions that would help further discussions:

a)         How can engagement between civil society and private sector add ‘value’ to each sector in terms of capacity and sustainability?

b)         How does new partnership with civil society and private sector promote innovations (social, economic, corporate and technological)?

c)         How can engagement and partnership with civil society and private sector promote inclusive economic growth and sustainable environment?

d)         How can civil society and private sector contribute to each sectors sustainability as well as sustainable human development?

However, in many countries there is an absence of enabling legal and policy framework to promote partnership between civil society organisations and private sector.  There is also a key challenge of increasing economic and social inequality that tend to create new social and political discontent, hampering enabling social and economic conditions for sustainable business or peace. In significant parts of the world, the nexus between economic and political elites often hamper fair opportunity or transparent and accountable governance necessary for the growth of active civil society and vibrant private sector.  There is also a key issue of mutual scepticism between civil society organisation and private sector and in many countries, particularly where there is a nexus between political elites and big business, this also leads to direct confrontation between civil society organisations and private sector. So, on the one hand it will be important to identify specific challenges to explore creative solutions and on the other hand it would be important to identify specific areas for engagement and partnership between private sector and civil society

The terms of engagement between civil society and private sector need to be driven by a set of core principles. The United Nations Compact clearly articulated the ten key principles that would ensure more responsible private sector enterprises. The United Nations Global Compact is a voluntary initiative that seeks to advance universal principles on human rights, labour, environment and anti-corruption through the active engagement of the corporate community, in cooperation with civil society and representatives of organized labour. With over 10,000 corporate participants and other stakeholders from over 130 countries, it is the largest voluntary corporate responsibility initiative in the world.

The UN Global Compact's ten principles in the areas of human rights, labour, the environment and anti-corruption enjoy universal consensus and are derived from:

 •The Universal Declaration of Human Rights

•The International Labour Organization's Declaration on Fundamental Principles and Rights at Work

•The Rio Declaration on Environment and Development

•The United Nations Convention Against Corruption

 

The UN Global Compact asks companies to embrace, support and enact, within their sphere of influence, a set of core values in the areas of human rights, labour standards, the environment and anti-corruption:

 Human Rights

 •Principle 1: Businesses should support and respect the protection of internationally proclaimed human rights; and

•Principle 2: make sure that they are not complicit in human rights abuses. 

 Labour

 •Principle 3: Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining;

•Principle 4: the elimination of all forms of forced and compulsory labour;

•Principle 5: the effective abolition of child labour; and

•Principle 6: the elimination of discrimination in respect of employment and occupation. 

 Environment

 •Principle 7: Businesses should support a precautionary approach to environmental challenges;

•Principle 8: undertake initiatives to promote greater environmental responsibility; and

•Principle 9: encourage the development and diffusion of environmentally friendly technologies.  

 Anti-Corruption

 •Principle 10: Businesses should work against corruption in all its forms, including extortion and bribery.

 

Options for Engagement

Following are some of the specific areas for the strengthening engagement between private sector and civil society for promoting peace and sustainable human development:

 

1)         Promoting the principles of UN Compact

 

Private sector enterprises or companies can build partnership and alliance with civil society organisations for joint advocacy initiatives for promoting the key principles of UN Compact. This would on the one hand help companies to adopt principles of the UN Compact and on the other hand enable civil society organisations to positively influence the agenda for responsible corporate behaviour and positive interventions by the private sector companies.

2)         Sustainable management of nature resources and sustainable environment.

 

Sustainable management of nature resources such as water, forests, land and clear air requires change in the corporate behaviour, consumption pattern as well as the choices of companies and society. Civil society plays an important role for policy advocacy as well as influencing the societal attitude to ensure sustainable and clean energy, water and protection of forests, water and clean air. And private sector can play an important role for advocacy as well action within the sector to promote energy efficiency, green-business practices and promoting sustainable environment.

 

3)         Promoting Inclusive Economic Growth

While many countries faced unprecedented economic growth in the last twenty years, there is an increasing concern about the uneven pace of growth, excluding a large number of people from the benefits of economic growth.  In many countries, particularly in the emerging economies and developing countries, economic growth was more urban-centric and benefitting only a minority of people with high level of education and skill. This has resulted in increased social and economic inequality in many countries, resulting in social and political discontent.  Hence, the civil society and private sector together can play a role in partnership with respective governments to promote social and economic policies as well as more sustainable business practices to ensure inclusive economic growth as a key strategy to address the causes and consequences of social and economic inequalities.

 

4)         Sustainable Human Development Programme 

Civil society organisations and private sector enterprises and associations may be able to work together as partners in joint social development projects in promoting health, education, water and sanitation or other social development initiatives in a given area or community. However, it is important that such partnership is based on core principles of UN Compact to ensure mutual accountability and public transparency of such initiatives. This is important due to the fact that often private sector funding for NGO project in the community where a private company operates are seen as ‘corruption’ to silence NGOs and CSOs while companies indulge in displacing poor communities or destroying environment

 

 

5)         Advocacy for Accountable, Transparent and Responsive Governance

 

Private sector companies succeed when the governments are responsive, transparent and accountable. This helps private sector companies to operate in a transparent and accountable manner. One of the key roles of civil society organisations is to promote accountability, transparency, inclusiveness and responsiveness in government and public policy process. Hence, a stronger engagement in promoting advocacy initiatives for accountable, transparent and responsive government will be a ‘win-win’ approach in terms of civil society-private sector engagement.

 

6)         Promoting shared-value approach to corporate social responsibility

 Though there are more rhetoric and less concrete investment to promote corporate social responsibility, there are evidences of new leaders in the private sector with an eco-social perspective on corporate social responsibility. They recognise the fact that social and environmental stability and sustainability are two important prerequisites for the sustainability of the market in the long run. They also recognise the fact that increasing poverty can lead to social and political instability. Such socio-political instability can be detrimental to business, which operates from a variety of socio-political and cultural backgrounds. Seen from the eco-social perspective, corporate social responsibility is both a value and a strategy to ensure the sustainability of business. It is a value because it stresses the fact that business and markets are essentially aimed at the well-being of society. It is a strategy because it helps to reduce social tensions and facilitate markets. For the new generation of corporate leaders, optimisation of profit is the key, rather than the maximisation of profit. Hence there is a shift from accountability to shareholders to accountability to stakeholders (including employees, consumers and the affected communities). Civil society organisations and actors can play a very important role to build the capacity and networks of private sector actors to promote genuine corporate social responsibility initiatives.

7)         Partnership for Capacity Development

The civil society organisations in general and non-profit sector in particular provide employment opportunities for millions of people across the world. However, may of the small and medium civil society organisations often lack adequate capacity for management of programmes, project finance and resource mobilisation. It is here the private sector may be able to provide capacity development opportunity for the civil society organisations through staff exchange or specific programme designed for civil society organisations and non-profit sector.

 

On the other hand, a large number of for-profit private organisations and enterprises lack the capacity to communicate to communities and also to engage in social and environmental initiatives. Many of the private sector organisations also lack an understanding and appreciation of the principles of human rights, women’s rights, environmental safe-guards and social policies. It is here that civil society organisations can play an important role to build the capacity and perspective of private sector to enhance their capacity in the area of human rights and sustainable human development.

8)         Promoting Women’s Rights and Human Rights

In most of the countries and societies, women are marginalised and often paid less than men for the same job.  Women are not only marginalised in terms of gainful employment opportunities but also sexually harassed in the context of work. Hence, civil society organisations and private sector companies may undertake joint initiatives to promote women’s rights within the society and at work place. In many countries, marginalised/ minority communities (ethnic, racial, cast, religious and linguistic) are often discriminated in society as well as in terms of unequal job opportunities.  Civil society organisations and private sector may work together to promote more human rights and ensuring equal opportunities for women and those from the marginalised communities.

9)         Promoting youth empowerment and Leadership

The number of young people has increased in an unprecedented in the world, particularly in Asia, Africa and Arab World.  The increasing lack of unemployment, the tendency of global migration and the insecurities that emerge from economic, social and political inequalities give rise to discontent among a significant number of young people across the world. As per the report of the Amnesty International, in the last two years, there were protests in more than ninety countries and most of these protests were led by young people. In many countries, political and social unrest have affected private sector and companies in an adverse manner. Hence, from a long term perspective it will be strategic for private sector companies to invest in a generation of leaders who are committed to peace, justice, human rights and democratic principles. Civil society organisations can play a very important role in providing opportunities for promoting socially responsible young business entrepreneurs and also for promoting a new generation of competent and ethical leaders within the civil society and political process of a given country.

10)       Innovative technology for sustainable human development

The private sector plays a very important role in terms of innovating technology and finding solutions for long lasting problems of poverty, disease and development. The innovations in technology by private sector actors have helped to make safe drinking water available to poor communities, or to promote digital literacy to bridge the digital divide or to promote affordable generic drugs to fight communicable diseases or to save energy or to create more green technology to protect the environment.  Private sector also developed innovative technologies to ensure transparency and accountability through e-governance. While private sector organisations may have technology, civil society organisations often have wide network within a given society and also the ‘know-how’ of how to translate a given technology in given community or society to ensure maximum impact. Hence, civil society –private sector engagement in the use of innovative technologies for sustainable human development can make a long-term impact within a country or society

Civil Society Organisations have a responsibility to engage with the private sector companies to make them more sensitive to issues of human dignity, human rights and sustainable human development. Private sector on the other hand will be able to enhance the capacities and resources for civil society organisations to play a strategic leadership role in promoting a peaceful and sustainable world without poverty and discrimination.