Where is the private sector in humanitarian response?

By Adva Saldinger 29 June 2016

Syrian refugees. How can the international development community better engage and partner with the private sector? Photo by: jaci XIII / CC BY-NC-SA

The number and breadth of businesses involved in humanitarian relief is growing, following a similar boom in private sector engagement with development aid.

Yet the pace of change is slow, and a host of barriers stand in the way. Private sector partners say they are ready to play their part — if they are treated as equals, and not like ATMs. They want to leverage their unique skills and networks and follow results-driven work plans. They often need help navigating the United Nations bureaucracy.

“I would love to have people not think of the private sector as an anomaly in the room,” Paul Musser, the vice president of public-private partnerships at Mastercard, told Devex. “We want to be engaged as equals.”

The recent World Humanitarian Summit in Istanbul was an opportunity to assess where things stand and build new relationships. In the lead-up to the WHS, organizers held 19 business-focused consultations with more than 900 companies. Though the private sector made up a small minority of attendees — including just a handful of CEOs — many saw the invitation as a good first step.

Business leaders told Devex they want to be involved, and see both moral and financial incentives to help. Small and medium-sized companies in particular also face particular risks to their own interests when crises hit.

“It’s our responsibility. We owe it to ourselves to think more boldly about what we can do,” Hikmet Ersek, the CEO of Western Union, told Devex at the summit.

Business case

Until recently, just a few private companies wanted to dig into the complicated world of humanitarian relief. Financial services and logistics companies, such as Western Union and UPS, were among the first to see a business case for pitching in. Both have large global operations and staff in areas affected by conflict or crisis who needed support to keep operating.

Increasingly, however, firms across sectors have an incentive to get involved. “It’s not just a humanitarian, legal, moral obligation. There’s more,” said Ruma Bose, the president of the Tent Foundation, which was founded by Chobani founder Hamdi Ulukaya to get more businesses engaged in solving the refugee crisis.

There may be a direct financial dividend from investing in refugees, according to a report commissioned earlier this year by the Tent Foundation. The international study found that every euro invested in welcoming refugees yields nearly 2 euros in economic benefits within five years.

Companies can work with the humanitarian community as suppliers or service providers. Often, the places they work — and the people they serve — represent future markets. Helping those emerging markets grow is in Mastercard’s interest, to find new customers in those areas, Musser said. The company also sees a role in helping other businesses get involved in humanitarian aid, which is why Musser often talks to other companies about the benefits Mastercard has seen, he said.

It’s also about being a good community member and supporting employees, customers and suppliers who are part of affected communities, said Ed Martinez, the president of the UPS Foundation.

“It’s part of the sustainability of the organization to make sure to take care of a community in crisis,” he said.

Some companies, especially SMEs, are also increasingly looking at how they can engage, particularly in resilience and preparedness in advance of disaster, because they are vulnerable and their futures could depend on it. One in 4 SMEs that are hit by crisis don’t reopen, according to Marcos Neto, director of U.N. Development Program’s Istanbul International Center for Private Sector in Development. Many SMEs now acknowledge the need to plan ahead, and work with others during crisis, both for the success of the business, but also because they can help restabilize economies.

Barriers to engagement

Yet disagreements over the style and substance of humanitarian aid have hindered engagement, both at the WHS and more broadly.

Prior to the WHS, the United Nations had rarely engaged the private sector; their participation was not seen as a priority, said Ruma Bose, the president of the Tent Foundation, who was surprised more companies didn’t attend the summit. In phone calls, she had with companies in the lead-up to the event, however, many didn’t understand what the summit was about or why they should attend, Bose said.

Outreach is one problem, but another may also be the nature of the event itself.

Companies want to produce products or cashflows and measure results, objectives that don’t match up with the nature of gatherings such as the World Humanitarian Summit, said Western Union’s Ersek.

“Here everyone is very visionary, but we want to see more actions,” he told Devex at the WHS, adding that he understands not everything can be done at once but there could be more concrete steps.

Ersek said he would like to see a clear agenda outlining what needs to be determined and then attendees shouldn’t leave until those goals have been accomplished.

“Meetings end because of time, not because of results,” he said. That often means that the companies in the room don’t get a chance to speak.

Instead, the private sector wants to be involved as a peer on a strategic level, where they are engaged for their expertise and not just their checkbooks, executives told Devex throughout the summit. Firms want collaboration that is well thought out, is not redundant, and makes use of available resources. They would like to be part of early conversations and want a specific agenda to work toward, Bose said.

“They want to be treated as equals and we cannot continue to ignore that plea,” said Kathryn Taetzsch, World Vision's senior relief coordinator and private sector partnerships lead.

Transparency is also important. Companies want clarity in what a partner is looking for, what they know, what they can offer and how business can gain from engagement. The U.N., for example, could be more cognizant of the jargon they use and the way they work, business leaders told Devex. Rather than multipage reports, firms would prefer a single page that outlines what they can do, said Marcy Vigoda, the chief of the U.N. Office for the Coordination of Humanitarian Affairs’ partnerships and resource mobilization branch.

Prepositioning partnerships

Relationship-building with the private sector needs to start now, not in the midst of a disaster, Devex heard throughout WHS. Stakeholders are now seeking to preposition partnerships — have relationships in place, with clear understandings the strengths and resources of each partner — in advance of a crisis or disaster.

“If we’re exchanging business cards in an emergency it’s too late,” said UNDP’s Neto.

Yet this is often how current partnerships are being built — when resources are already strained by crisis, staff are working long hours and there is little bandwidth to build a relationship. As a result, most such partnerships are transactional and don’t succeed, said World Vision’s Taetzsch.

“We have very little chance of working well together if partnerships don’t exist in advance,” she said. She said that between 40 and 60 percent of ad hoc engagements with the private sector don’t lead to lasting relationships or achieve what they could.

Taetzsch helped launch earlier this year the Humanitarian Private Sector Platform for East Africa, a coalition of international NGOs, U.N. agencies, and private sector partners that aims to better manage information, document best practices and help facilitate long-term relationships to respond to conflict or disaster. She said she hopes such platforms will be helpful for businesses that may want to engage but don’t know how navigate the system.

Connecting Business Initiative

While it’s not consistent across all agencies, and may present challenges, the U.N. has been looking for new ways to engage with the private sector and bring them into the conversation.

The WHS was one acknowledgement of that. Martinez of the UPS Foundation said that he’s never seen the type of recognition about what the private sector can do for the humanitarian community at a similar conference.

The U.N. needs to help businesses navigate their role with national governments and the U.N. crisis management system “so resources can be deployed faster and more effectively,” Helen Clark, the U.N. Development Program’s administrator said at the summit.

One such effort is the Connecting Business Initiative, launched at WHS and led by the U.N. OCHA, the U.N. Office for Disaster Risk Reduction, and UNDP. CBI is a global portal designed to connect a variety of business networks so they can share best practices and help identify local needs and available resources during a crisis. The platform is meant to facilitate better planning in advance of disasters so that governments, business groups and companies, working in concert with U.N. agencies, can better coordinate.

“If they don’t know how, but want to engage it’s us [who] have to answer that question,” Neto said.  

The initiative will also look to help support SMEs in particular to plan for disasters and be more resilient. It will tap into existing business networks to do local assessments and knowledge building. And there will also be some outside oversight; the secretariat responsible for overseeing the platform and initiative will be accountable to a board that is made up not just of U.N. officials but of government and business representatives.

CBI may prove one way to continue the conversations of the WHS — a first step in building the relationships that will drive private sector engagement. Whether there will be an influx of business participation and a more cohesive, coordinated approach may depend on how well those relationships are developed and how all parties adapt.

EDITOR’S NOTE: Deloitte financially supported the reporter’s travel to Istanbul to attend the World Humanitarian Summit. Devex retains full editorial independence and responsibility for this content.

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About the author

Adva%2520saldinger%2520photo
Adva Saldinger@AdvaSal

As a Devex Impact associate editor, Adva leads coverage of the intersection of business and international development. From partnerships to trade and social entrepreneurship to impact investing, she enjoys exploring the role the private sector and private capital play in development. Previously, she has worked as a reporter at newspapers in both the U.S. and South Africa. Most recently, she has been ghostwriting a memoir for a former child slave and NGO founder in Ghana.


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