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MPs issue warning to UK business

September 1999

A cross-party UK parliamentary committee has warned businesses they have a duty to use their influence in developing countries to promote social development.

In a hard-hitting new report, the House of Commons International Development Committee declares that it is ‘unacceptable for competition to be used as a reason for the private sector failing to use its influence in the development of a country.’

The committee says more work needs to be done on developing ‘core business standards’ for companies in developing countries ‘with agreements, particularly among the extractive industries, as to how their influence can be collectively exercised to promote social development.’ It recommends that the Prince of Wales Business Leaders Forum should promote such agreements.

The report on conflict prevention, drawn up by the 11-strong committee of MPs chaired by Bowen Wells, also recommends that the Department for International Development (DFID) should begin discussions with companies about including advice on conflict situations in their codes of conduct.

‘In their employment practices, companies should be aware of social tensions and work out how to ... encourage all groups to work and live peaceably side by side’, it says. The committee admits this is a ‘very complex task’ but adds: ‘this is all the more reason for guidelines and codes of conduct in this area’.

The Department of Trade and Industry and the Foreign Office are also urged to include ‘as a matter of course’ information on risks of conflict and actual conflict in their advice to British businesses working in developing countries. This information should cover advice ‘on how employment, investment 0and social policies can minimise social tensions’.

It adds that any code of practice adopted by the private sector in conflict-sensitive areas ‘should include a commitment from industry not to purchase or provide arms, security equipment or advice for state security forces.’ It also calls on the government to bring in legislation in the next session of parliament to criminalise the bribery of foreign public officials and make such bribes no longer tax deductible.

A spokeswoman for DFID told EP the government could not yet pledge to introduce such legislation, but that ‘we are working on getting there’.

The committee, which has taken two years to produce the report, praises the Ethical Trading Initiative and fair trade movement, which it says ‘are an essential component of any move to make private sector practice in developing countries conflict-sensitive’.

Conflict Prevention and Post-conflict Reconstruction, The Stationery Office, £11.50


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