KATHMANDU: The intermittent disputes following the decade-long armed conflict has significantly reconfigured and shaped our national economy. As conflict generates its unique risks and opportunities, businesses respond in one of the three ways — enabling, sustaining or reducing the conflict.

Likewise, conflict reconfigures economies into combat (for example, extortion for conflict financing), shadow (like, black marketing benefiting from lack of rule of law) and coping (for instance, downsizing, out-sourcing) economy. With extension of conflict, the coping part shrinks while shadow and combat economy grows. 

In the context of conflict, corporate social responsibility (CSR), which integrates social and economic benefits into the business model, can be used as a strategic tool for peace-building by the business community. Businesses need to first understand the context of the conflict — root causes, actors, dynamics — and then analyse the risks related to proposed or ongoing business

in the conflict context. Finally, businesses design appropriate strategies to mitigate those risks creating win-win situation for key stakeholders. The bottom line of this approach to CSR is that the business activities do not exacerbate the conflict.

Nepali businesses are already engaged in several activities that constitute, or are perceived to constitute, CSR. This has created an increasing awareness that CSR is possible in Nepal. However, the experts critique that these activities are either done ‘after the profit’ or with the objective of ‘giving back to the society’ which are closer to charity and corporate philanthropy approaches. CSR as a peace-building tool is a strategic approach and most existing practices do not create value in terms of peace-building or mitigating conflicts.

It is interesting that no management gurus or business experts have ever introduced a framework of CSR that is

tailored to the Nepali economy which is highly labour intensive, marked with militant trade union, and comprised of few

corporate houses but a large number of small and micro enterprises (SMEs), et cetera. Furthermore, CSR of SMEs is perceived to be invisible, and all CSRs known to Nepalis come from large corporate houses.

Recently, at a programme in Kathmandu, participants reflected that a significant number of businesses refused to include CSR in the national industrial policy fearing that such a provision will become a breeding ground for bargaining from labourers, community and other stakeholders. This is an extreme example of lack of knowledge, attitude and skills required in implementing CSR as a peace-building tool.  

CSR needs to create economic as well as social values. Since conflicts have huge economic and social costs, any CSR activity that not only creates economic value but also avoids conflict and promotes peace in society is the most logical way of doing smart and sustainable business.

(The author is the project officer at National Business Initiative Nepal and can be contacted through info@nbinepal.org.np)