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Confronting Economic Distress Through Responsible Business

Posted on the 10 August 2012 by Center For International Private Enterprise @CIPEglobal

Confronting Economic Distress through Responsible Business

The chairman of the National Accountability Bureau, an anti-corruption organization in Pakistan, recently disclosed that “Rs 8 billion are being drained on account of corruption every day in Pakistan” (about $145 million USD). This statement shocked the country, considering the fact that Pakistan already faces several grave challenges like terrorism, energy shortages, flood devastation, a huge gap between rich and poor, inflation, bad governance, access to finance, and water scarcity.

Pakistan has a long history of corruption since its birth, considering that subsequent military dictatorships not only hollowed out key economic and political institutions, but also caused severe damage to the spirit of the democratic process, fair business practices, corporate governance culture, and institutional development. That said, “economic reform” is now one of the most popular phrases in Pakistan. Earlier this year, the chief of an Islamic political party, Maulana Fazal-ur-Rehman, stressed that there is need for economic reform in the country to stop corruption. Business associations are also urging the government discourage corruption and encourage economic reforms and corporate social responsibility in the country.

Raising the issue of corporate citizenship, CIPE and its partners brought together 20 companies to produce a Responsible Business Guide to encourage greater transparency, accountability and integrity in Pakistani companies. CIPE empowered youth and built their capacity through youth entrepreneurship, skills development, micro-finance and internship programs. CIPE worked with TCF (The Citizen foundation) to facilitate entrepreneurship education for disadvantaged young students and thereafter trained trainers to conduct these sessions at TCF campuses in different cities. To bring women into the business mainstream, CIPE helped to strengthen the capacity of women’s chambers, supported the formation of eight women’s chambers and organized the first women’s leadership conference where “How to Start a Business,” a guide for women, was launched and several successful businesswomen offered their assistance to women from rural areas including Baluchistan and Gilgit.

Yes, the responsibility lies on the shoulders of the judiciary and political parties (present as well as emerging) to influence the government to address corruption. Economic reform cannot come unilaterally, however, and responsible companies can also contribute to economic reform. Responsible action leaders from the business community can come forward and take initiative. Even peace can come through business — the United Nations Global Compact principles have most of the answers to cope with above challenges in the areas of human rights, labour, the environment and anti-corruption, provided Pakistani businesses are playing an active role and following these principle as a guide:

  1. Businesses should support and respect the protection of internationally proclaimed human rights
  2. Make sure that they are not complicit in human rights abuses
  3. Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining
  4. The elimination of all forms of forced and compulsory labor
  5. The effective abolition of child labor
  6. The elimination of discrimination in respect of employment and occupation
  7. Businesses should support a precautionary approach to environmental challenges
  8. Undertake initiatives to promote greater environmental responsibility
  9. Encourage the development and diffusion of environmentally friendly technologies
  10. Businesses should work against corruption in all its forms, including extortion and bribery

The relationship between business and peace can only be strengthened through good governance, and can eventually cultivate social enterprises. If we look around the country we have many examples whereby business made significant contributions towards peace and development. For instance, Engro Pakistan made a valuable contribution by building schools and hospitals in Sind to promote a healthier and more peaceful society. By following the guiding principles of the UN Global Compact, companies can open major pathways towards advancing peace and development in Pakistan and set a roadmap for other businesses to follow.

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