Conference on Strengthening Responsible Business and Good Governance
Brussels, Belgium ∙ November 17 18, 2010
Financial Management Tower
The Africa Program on Strengthening Responsible Business and Good Governance aims to develop and implement solutions that address the dichotomy between opportunities and constraints in African markets. The Programs approach is to forge multi-stakeholder coalitions of business, civil society and government leaders that desire to improve investment and business climates, contribute to economic development, and foster leadership by promoting responsible business and good governance practices.1
One of the key objectives of the Program is to establish an Africa Responsible Business Network (RBN), which will serve as a platform for collaboration. This Conference, which was an integral part of the Africa Program, seeked to provide a forum for participants to create and sustain (or enhance existing) coalitions to facilitate and manage the process of reforming the way companies operate in Africa, utilizing the Africa RBN as a catalyst for change. In preparation for the conference, on November 16, a series of Expert Working Group Meetings were hosted to develop recommendations for actionable policy and programmatic options to promote responsible business practices.
1 Africa has experienced economic growth in recent years that is increasingly drawing the attention of multi-national investors. From 2000 to 2010, the gross domestic product (GDP) across the region increased an average of 5.5% per year, external debt decreased from 65% of GDP to 23%, and investment has increased from 17% of GDP to 23% (Source: IMF World Economic Outlook, September 2010). Africa’s collective GDP is estimated to reach $2.6 trillion by 2020 (Source: McKinsey Global Institute, June 2010). At the same time, however, the transaction cost of doing business in Africa can be quite high. Across the region, on average, it takes 45.6 days to start a business and businesses pay 66.5% of profits in taxes (Source: Doing Business Indicators 2009). The region scores 2.3 out of 10 on the Corruption Perception Indices for 2009, meaning corruption is perceived as significant obstacle to development. (Source: Transparency International). Reforms are needed that improve the business operating environment through sustainable long-term growth while addressing corruption.
- Outcomes from the Expert Working Group Meetings were discussed in each session to help transform discussion into action.
- Actionable programs of activities to be undertaken over the next two to three years by the World Bank Group/World Bank Institute and its partners were presented throughout the sessions.
- The role of the media and leadership for development were considered as operational responses in each topic.
- To complement the overall objective of the program, panelists made linkages in their remarks to related key themes discussed throughout the conference.
- Recommendations emerging from this conference were also presented at the World Forum for Ethics in Business, which began with a dinner on November 18 and continued on November 19 at the European parliament in Brussels, to help inform their increased engagement in Africa.
Dele Olojede, CEO and Publisher, Timbuktu Media;
and 2005 Pulitzer Prize Winner for International Reporting
Opening Session Speakers:
- Aliko Dangote, CEO, Dangote Group
- Albert Ramdin, Assistant Secretary General, Organization of American States
- Amir Dossal, Executive Director, United Nations Office for Partnerships
- Mohamed Ibn Chambas, Secretary General, ACP Group
- Vice President, African Development Bank (TBC)
- Charles Michel, Minister of Development Cooperation, Government of Belgium
- Obiageli Katryn Ezekwesili, Vice President Africa, World Bank
Why are responsible business, ethics, and good governance practices important for effective markets?
Businesses have a strong motivation to build coalitions, develop decision-making processes and operating standards that protect citizens and consumers from unethical practices while advocating for transparent markets that facilitate economic growth and new opportunities. To achieve this, business leaders face complex challenges that require value-based approaches. This session discussed the centrality of responsible business practices that ensure sustainable business success while maintaining stability and improve effectiveness of markets.
- Dirk Hoke, CEO Cluster Africa and CEO Morocco, Siemens AG
- Miguel Veiga-Pestana, Vice-President Global External Affairs, Unilever
- Wiseman Nkuhlu, President, International Organization of Employers
- Shri R Bandyopadhy, Secretary Minister of Corporate Affairs, Government of India (TBC)
- Roland Verstappen, Vice-President International Affairs and Corporate Responsibility, ArcelorMittal
Eradicating Poverty through Profit: Creating Opportunities in Low Income Markets
Successful companies at the "base-of-the pyramid" have all engaged in constructing markets and are working hard to make them efficient; they do not just tailor products and services to the existing demand. This market-construction approach requires managers to use different business strategies than in well established markets. Success has called for partnerships and collaborations with actors outside the boundaries of the organization. It has called for a strategy of building public value and social capital first as a prerequisite to gaining private value. Based on solid business rationale, this session presented tools and approaches that can be used to improve business engagement in low income markets.
- Vinita Bali, Managing Director, Britannia Industries Ltd.
- Cheikh Mboup, Agronomy Group Manager, Centre R&D Nestle Abidjan
- Bongiwe Njobe, Executive Director: Corporate Sustainability, Tiger Brands, South Africa
- Mauricio Adade, Chief Marketing Officer, Royal DSM N.V
- Sir Thomas Fischer, Executive Director, Bertelsmann Stiftung
Business Associations: Platforms for Collaboration
Business networks help unite interests to achieve common goals such as promoting regional integration by empowering African business associations, giving a voice to the African private sector and providing them the space to engage with other stakeholders. Advocacy, communications, standardization and capacity development are just some of the supporting functions that can be made available to members. Business associations can also provide a forum to recognize industry leaders, and address economic, social and political issues that may impact their corporate potential to grow and have positive development impact. Given the importance of these groups, this session discussed the role that business associations can play in promoting responsible business and good governance.
- Sipho Mseleku, President, Pan-African Chamber of Commerce and Industry
- Jean Diagou, President, Federation of West African Employers’ Organization
- Celina Torrealba Capri, Member of the Board, Instituto Ethos, Brazil
- Ashraf Gamal, Executive Director, Egyptian Institute of Directors
Business-led Collective Action for Good Governance and Anti-Corruption
Even with strong internal compliance mechanisms, it can be difficult for an individual firm or a stakeholder group to reduce corruption. By working collectively, companies, the public sector and other stakeholders can help level the playing field between competitors, strengthen the quality of legal and regulatory frameworks, create incentives to avoid bribery, and introduce greater transparency and predictability to business transactions in corruption-prone countries and sectors. This session will discuss how collective action can lead to more robust anti-corruption efforts.
- Olajobi Makinwa, Head of Transparency & Anti-Corruption Initiatives, United Nations Global Compact
- Mr Gerard Zovighian, Vice Chairman, Lebanese Transparency Association
- John Smart, Head of Fraud Investigation and Dispute Services Europe, MENA & Africa, Ernst & Young LLP
- Stephen Zimmermann, Director, Department of Institutional Integrity, World Bank , Pascale Dubois, Evaluation and Suspension Officer, World Bank
Procurement: Promoting a Level Playing Field
Corruption in Africa costs the continent nearly US $150 billion a year, according to the African Union. The effects are pernicious, not least in procurement processes driving up costs, deterring investment and undermining the quality of goods and services delivered. This session focused on how business can engage more pro-actively with governments in Africa in order to shape open and competitive procurement systems that benefit business, governments and citizens alike. It included discussion of key sectors, where minimizing discretionary decision making and ensuring a level playing field are crucial to maximizing sustainable revenues for national growth and development.
- Jean Daniel Laine, SVP Ethics and Compliance, Alstom Inc.
- Youssouf Sakho, General Director, Senegalese National Procurement Agency
- Mansour Kama, President, Senegal Employers’ Confederation
- Jacqueline Mugo, Executive Director Federation of Kenya Employers and current Chairperson of the East African Employer Federations Council
- Representative from AfDB (TBD)
Seeking the Next Generation of Multi-Stakeholder Governance: Building on Lessons in Extractive Industries
More than 250 million Africans live in countries where natural resources account for more than 80% of exports and, in some cases, more than 50% of government revenues. As new discoveries continue to be made, the importance of extractive industries continues to grow for the continent. Given the potential to support long term development represented by such resources, and the converse risks of falling subject to the so-called “resource curse”, both local and international firms have a vital role to play, working with government and civil society in ensuring good governance of natural resource exploitation. Industry is already an active player in the Extractive Industries Transparency Initiative and Kimberley Process. This session explored the lessons learned from industry engagement in such multi-stakeholder governance initiatives as applied in the Africa context. The panel considered the future of such initiatives and waschallenged to lay out a vision of a next generation of collaborative governance that business could actively support and with potential for broader application in Africa beyond just oil, gas and mining.
- Hans-Aasmund Frisak, Vice president CSR, Statoil ASA
- Jonas Moberg, Head, EITI Secretariat
- Sheila Khama, Head of Extractive Industries Programming, Africa Center for Economic Transformation (former CEO De Beers Botswana)
- Baron Dilip Mehta, CEO, Rosy Blue Group
Innovative Approaches to Development: Integrating Business for Collective Results
Faced with the urgent need to demonstrate results from overseas development assistance, donors and foundations are increasingly turning to the private sector as a way to address key development issues. Business sees increasing opportunity in low income markets and is often interested in expanding its role in meeting development challenges. But like other actors in the development process, private sector players face many of the same constraints that emerge from uneven governance practices and business ethics. This session examined how some innovative partnerships between donors and the business have tackled these challenges and look at ways that such partnerships could be forged in the future.
- Christiaan Reberger, Ambassador for the Millennium Development Goals & Public Private Partnerships, Ministry of Foreign Affairs of the Netherlands
- Gudrun Kochendoerfer-Lucius, Managing Director, InWEnt, Germany
- Jean-Michel Severin, former Head of French Development Agency (currently General Inspector of Finances at the French Ministry of Finances)
- Hartmut Reinke, Director for Middle East, Turkey, and Africa, DuPont
- Yumi Charbonneau, Senior Legal Counsel, Belgian Investment Company for Developing Countries SA/NV BIO
Key Messages and the Way Forward
- Sanjay Pradhan, Vice President, World Bank Institute
- Peter Moors, Director General for Development Cooperation, Belgian Ministry of Foreign Affairs, Foreign Trade and Development Cooperation
- Mahmoud Mohieldin, Managing Director, World Bank Group