Do Oil Corporations Care About Peacebuilding in Iraq?

Posted: August 25th, 2021

Do Oil Corporations Care About Peacebuilding in Iraq?

Student’s Name

Institutional Affiliation

Do Oil Corporations Care About Peace in Iraq?

The contribution of corporations in conflict resolution and peace sustainability is essential. Studies across the world about peace appreciate that businesses have a contribution to facilitate the creation of peaceful societies (Sweetman, 2009;Katsos & Alkafaji, 2017). Just as Nations need the investments of the business corporation for the development of the society, the companies also require a peaceful atmosphere to operate and thrive. Corporations are now commonly perceived as peacebuilders(Honke, 2014). There is a connection between the prevalence of peace and business operation as well as their success globally. Going forward, Iraq as a Nation requires the support of corporations working there to strengthen its peace. The risk of violence returning to developing countries such as Iraq is about 40%, which is a lot higher than other countries, yet the oil companies have continued business operations in that region (Katsos & Alkafaji, 2017). The concept of having a corporation involved in creating peace has received substantial attention and criticism for the last decade besides stimulating scholars to study the issue(Honke, 2014). However, according to (Forrer, Fort & Gilpin, 2012), there is a gap that requires undertaking an evaluation of the role of companies and strategies to promote a connection between conflict and conflict-sensitive business practice.  

Equally, the negative or positive role of corporations surrounding peacebuilding in Iraq remains a topic of interest around the world, yet there is a shortage of data to indicate success or otherwise. In this case, the study attempts to shine a light on the business operations in Iraq, a country that has not tasted all-round peace since 2003 is imperative. More so, economic development is the most basic form of peacebuilding, yet research indicates that Iraqi oil companies recruit employees outside of the workforce available within their area of operation, thereby inciting conflict in the area (Katsos & Alkafaji, 2017). To ensure that businesses enhance the peace situation in Iraq, building social cohesion is essential and must be present (Katsos & Alkafaji, 2017).  As such, the primary question haunting the Iraqi and other world societies sensitive to peace is about; “What is the interest of oil companies to venture into conflict-prone countries?” particularly about their aim for peacebuilding as the measure of the contribution mainly made remains unknown. 

Therefore, based on the above background, this literature review primary objective is to discourse the role of the oil companies in peacebuilding in Iraq and to explore the motivating factors behind their involvement, with a view of providing useful direction to answer the question of whether or not oil companies in Iraq indeed promote peacebuilding. The research question is: Do oil companies care about peacebuilding in Iraq? The significance of the study is that the findings would help drive further research on the subject of oil corporations’ contributions to peacebuilding.

Project Description

My project looks into the sense of responsibility that oil corporations should take in handling the peace building process in Iraq. To find answers that this project is seeking, I made a note to mind to investigate whether corporations actually do have a moral obligation to make the environments in which they operate better than they found them. Also, besides the oil corporations’ focus on sustainable development and corporate charity works for the immediate societies surrounding them through their Corporate Social Responsibility initiatives, should peace building be considered a pertinent CSR activity is well especially in countries like Iraq. Furthermore, being that Iraq has been ravaged by war mainly occasioned by the presence of oil for many years and also that it has one of the world’s largest oil reserves, of what economic good would peace building be to oil corporations especially if it emanates from and gets sustained by these corporations? While going about this project, my other consideration is to find if these oil corporations stand to suffer reprisals from ‘external forces’ especially in the face of the long held allegation that part of the oil fueled war in Iraq is usually as a result of the very ‘external forces.’ Through the secondary sources on this subject as described in the literature review section and my deep research, I found out answers to these rhetorics, and thus, constituted the bone and flesh of my project.

Literature Review

Definition of Peacebuilding

According to Katsos and Alkafaji (2017), peacebuilding is considered as aprocess of fostering and sustaining peace through the use of corporate initiatives. In this case, besides the respective organizations facilitating the transfer of technology and creating value for shareholders, they have a corporate responsibility to promote and provide job opportunities to the local populations. Subsequently, this would go a long way, reducing the likelihood of engaging in violent crimes.Harbinger & Simons expounds on the same assertions stating that peacebuilding should be regarded as the process of reconciliation through the combination of the local’s value claims and facts. Mainly, it involves a community’s urge to differentiate the good and the bad (2015). Accordingly, Barnet et al. (2014) indicate that peacebuilding necessitates the use of resources to reduce the likelihood of returning to war. Therefore, it involves the confrontation of highly severe conditions, including high destruction levels resulting from violence and continued conflicts and a lack of local assets(Vernon, 2015).  When people have fair access to sustainable livelihood and asset accumulation opportunities, combined with general well-being, justice, security in a context of good governance, that makes sustainable peace in the community possible. 

Moreover, Katsos (2010) defines peacebuilding as a process that involves the establishment of intermediaries to lessen conflict between two or more aggrieved parties. Peacekeeping missions frequently occur in conflict zones, such as Iraq. Therefore, this action happens in instances aimed at assisting affected parties to settle disputes and could extend to include the process of aiding the parties to maintain peace according to the peace agreement. In this regard, peacebuilding is not an event but rather a long and incremental process. It starts with managing the conflict itself using various conflict resolution mechanisms and later supporting the parties during the post-conflict period.

On the other hand, peacebuilding does not only occur in conflicted areas. It also involves being businessworthy in that one engages in ethical business practices that enhance stability through their scope of operations and cultural traditions. The action is business based whereby business players such as entrepreneurs spearhead the process. In this context, Sweetman (2009) maintains that peacebuilding is used to signify steps that may go beyond the typical conflict resolution mechanisms such as mediation and negotiation processes. Similarly, it may also incorporate proactive measures such as conflict prevention and final bits such as post-conflict work. For these reasons, peacebuilding is a dynamic concept that affects both the victims and the business community.

Components of Peacebuilding

Components of peacebuilding involve the establishment of structures that will promote a conducive environment that will foster peace and stability. For instance, Hirblinger & Simons (2015) posits that businesses participate in economic development initiatives through stabilization. In this case, Vermon (2015) affirms that enterprises provide economic inputs, such as providing job opportunities to locals or building infrastructure. Similarly, firms engage in track-two diplomacy, which entails non-formal and non-binding negotiations aimed at reducing conflict eruption. Further, Hay (2014) states that businesses intensify the observance of the rule of law through adopting the constitution and other recognized third-party standards, such as the international code of conduct. Thus, these components guarantee a stable operating environment for everyone.

Furthermore, businesses promote togetherness by enhancing social cohesion and instilling a sense of community ownership. This way, enterprises include all stakeholders in decision making. This step brings a sense of ownership in any launched initiative. Therefore, this strategy reduces cases of opposition. Moreover, developing stable systems that promote proper governance aids in reducing the chances of conflicts from recurring. Nevertheless, Barnett & Zürcher (2014) insists that although these components are meant for the greater good, some players use such initiatives to safeguard their status quo. Therefore, critical players must have a liberal mind when tackling such sensitive issues.

The Situation in Iraq

Wars, sanctions, and conflict drove Iraq from a rich country to one of the poorest (World Bank, 2019) economy in the world. Iraq’s involvement in the Iranian and Gulf war made the economy and security situation vulnerable. In fact, after almost five years of invasion of Kuwait, Iraq was not able to export oil (Calamur, 2018). As such, it has been difficult for Iraq to recover from both wars, the Iran war, and the Kuwait war, which affects Iraq’s economic and security situation. Iraq is one of the wealthiest countries in the world in natural resources and can produce up to 4 million barrels per day, which is estimated to almost $260 million per day (Calamur, 2018; OPEC; World Bank, 2019). Such amount of money can rebuild Iraq in a short period, but it is not as easy as it seems. Besides, Iraq was not able to fully rebuild itself due to the U.S invasion 15 years later, the subsequent civil war, and the fact that the country was taken over by ISIS which has affected Iraq’s economic attractiveness and its ability to rebuild(Calamur, 2018; World Bank, 2019). According to the World Bank, the Iraq economy depends mostly on oil (2019). Therefore, the first and most influential companies in Iraq must be oil companies.

Tensions between Economic Development and Peace

Both Katsos & Alkafaji, (2017); Rettyberg, (2016) agreed that companies want success and to take advantage of the new market opportunities in developing countries like Iraq, but most of them would go away from any safety threat that could slow down their activities in that region. According to Rettyberg, however, armed conflict slows down the investment operations, which negatively affect the economy, increasing pressure and cost on the private sector (2016). Bohlken and Sergent also found that some studies suggest that economic growth could lead to an increase in violence (2010). Similarly, Bohlken and Sergenti established that many studies refer to economic growth as the leading cause of instability and conflict (2010). However, despite previous studies that Bohlken and Sergenti were looking at, their conclusions assert that economic growth and expansion in trade primarily due to investment by corporations is likely to complicate or increase the violence situation in the country.

In terms of civil conflict in Iraq, companies have the option of involving in the conflict or creating peace, a situation that may negatively affect their security. At the same time, the companies can relocate their operations to avoid conflict entirely; and a final choice for a business is making a move and address the conflict (Sweetman, 2009). According to Vernon, the private sector can benefit the area in many aspects, which include building human capital, relationship and improve infrastructure, which could enhance capacity and capability enhancement to the growth of the local community, both individually and groups. Consequently, this would benefit the economy and improve the social level at the same time. Additionally, businesses can support economic and social progress by focusing on developing citizens’ knowledge and skills (2015). A strong economy means a healthy society. As such, a human is the most crucial subject that business benefits alongside the economic. According to Forrer, Fort& Gilpin, R., (2012), they explain that by providing jobs, respecting the law, sharing the responsibility with local people, involving in conflict resolution and managing risk assessments unique to the political environment in conflict-affected areas, companies could boost the economy and reduce conflicts.

 Vernon adds that relationships between societies are fundamental to have productive communication and trust, which allow people to understand what interests others and address their needs to provide trust, empathy, and partnership (2015). A strong economy can offer the relationship between the private sector and societies, and by this relationship, it would be easy to manage conflict and build peace environment. Furthermore, there is a mutual benefit between infrastructure and economic growth, especially in the sectors such as energy, communications and transport, and essential public services like health facilities and schools. However, that could be achieved if the infrastructure benefits everyone in society (Vernon, 2015). Therefore, companies could build peace by improving economic situations,access to the market, and ensuring balanced or equaling in the provision of job opportunities for the citizens.

However, fast-economic growth can be harmful and could create conflicts in the community. According to Vernon, the speed of economic growth initiatives could undermine peace processes when they do not conflict sensitive. Plus, trade and private businesses can operate selectively in the region, leaving other areas underdeveloped, thus dividing the benefits accrued to the community (2015). Similarly, Forrer, Fort & Gilpin mention that business can be part of the problem. They indicate that endowment to abundant natural sources like oil precipitates violent conflicts. According to them, this is often due to poor distribution of resources by some routine oil companies’ operations, among other impacts such as laxity in improving transportationinfrastructure of local societies, environmental degradation, and recruiting practices. Companies that hire based on a specific level of knowledge may mistakenly hire more people from one particular social group than from others (2012). Hence, such recruitment exercise is likely to create inconsistency in the existing structural conflict in education and jobs.

Contribution of Corporations to Peacebuilding

Companies in Iraq operate under constant threat of violence, but they are still in operation and trying to enhance peace through their operations. Some have employed the practice of corporate social responsibility to enhance peaceful coexistence in the community (Katsos & Alkafaji, 2017).  In addition, the corporations are involved in fostering economic and social development, including job opportunities, community engagement efforts, corporate best practices, and community-based resources as a way of contributing to peacebuilding (Forrer, Fort & Gilpin, 2012; Sweetman, 2009). “Numerous examples illustrate that business becomes involved in peacemaking once it realizes that peace is a necessity to operate, attract, and grow” (Rettberg, p. 487, 2016). As a result, corporations are moving to take a more active role in countries where they operate, whether the countries conflict or not.

There are many ways corporations are known to participate in peacebuilding for  including economic and social development (in the form of CSR), the rule of law, risk assessment, corporate citizenship and in some cases, diplomacy,  for this review, two of the practical ways business can contribute to peacebuilding will be discussed below in the subsequent sections;

Sensitive to the community’s social responsibility and cohesion.Community contribution is embedded in the concept of Corporate Social Responsibility (CSR). In thereview of several pieces of literature on corporate peacebuilding, it was found that the discourse always includes CSR. The concept of CSR began to grow in the early 1970s. During this period, advocates believed that the potential damage business could offset the gains of business could cause. It was argued that corporations carry the responsibility of making their operating environment better than they found (Sweetman, 2009). CSR is essential about a corporation’s involvement in peace-related activities since participating in them often involves an external review of company actions. In this case, CSR helps coordinate efforts between the private sector, governments, and NGOs, who are presumed to have similar perspectives (Sweetman, 2009). Overall, companies with records of CSR activities are more likely to include CSR activities specific to peacebuilding.

In 2000, the UN became involved in the concept of CSR through the Global Compact, which is voluntary and made up of companies that have signed to abide by ten core principles relating to human rights, labor, the environment, and incorrupt business (Swetman, 2009). Equally, the UN Global member companies that arerenowned in terms of investing time and material as well as human resources in CSR (Rettberg, 2016). In Rettberg’s view, companies that have developed an institutional network that arises from CSR practice tend to cooperate with the government and other peacebuilding actors.

In undertaking CSR initiatives, companies adopt various approaches, including sustainable development, corporate charity, socially conscious or responsible investment, community relations, and corporate governance. When addressing conflict, however, the options companies adopt are usually three-fold, corporate compliance, activities to reduce the effect of their operation in the area of conflict, and value creation. “Peacebuilding is particularly a powerful and promising manifestation of CSR” (Sweetman, p. 31, 2009). Also, a significant corporate contribution to peacebuilding is employment. He says, “business can be a mediating institution through employment” (p. 102). Accordingly, the employment practices of corporations must be community inclusive (Sweetman, 2009). Relatedly, Forrer, Fort & Gilpin (2012) also focuses on steps that can be taken outside of company operations, which are the decree of community engagement and manner of engagement.

The rule of law.It involves adopting third-party standards like international codes of conduct; corporate best practice is vital in the drive to include corporation in peacebuilding. “As corruption can stoke instability and violent conflict, businesses with strong ethical principles and zero-tolerance policies toward corrupt practices move the needle toward peace” (Forrer, Fort & Gilpin 2012). Companies should have internal ethical policies for doing business. However, critics argue that the company’s internal initiative may lack credibility in the absence of reliance on internally adopted standards with clear appraisals benchmarks (Ballentine &Haufler, 2009). As mentioned earlier, an international organization such as the United Nation’s Global Compact provides published guidelines to member companies. However, the matter is whether the Iraqi oil corporations abide by these guidelines since none of them is registered on the Global Compact as of May 2019 (UN Global Compact). There is also the question of whether businesses contributeto conflict by their operational behavior, for example, consistent bribery, funding of unusual concepts, and seeking government support crudely (Rettberg, 2016). Companies that respect the rule of law and abide by international standards and guidelines are more likely to achieve higher peacebuilding results. Both Katsos & Alkafaji (2017) and Sweetman (2009) point at local community employment as a strategy for peacebuilding. Sweetman (2009) mentions the importance of a measurement mechanism for the success of a company’s contribution to peacebuilding. 

Conclusively, the literature review appreciates that there is criticism that social projects undertaken by corporations are more related to public relations than the act of doing good. However, not all social projects are compromised. Further, there is a disconnection between how corporations perceive the peacebuilding efforts they make and how external peace actors view them, which might explain why research may have missed CSR as peace enhancing.  In any case, irrespective of the approval, the corporation may adopt its peacebuilding effort, which must be measurable for success. According to Swetman, there must be an evaluation mechanism for measuring the success of a company’s contribution to peacebuilding. Hence, it is not a surprise that there is no clear data confirming whether there are contributions of oil companies’ efforts to peacebuilding in Iraq. The study was limited due to the difficulties of finding any specific data about oil companies’ activities about peacebuilding in Iraq, which could make, which could have enhanced the accuracy of the findings established in this research. The paper recommends further studies to investigate oil companies’ responsibilities in contributing to peacebuilding, particularly in developing economies. 

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