Will the private sector 'shut out' aid groups in emergency response?

Humanitarian pallets for Typhoon Haiyan victims are unloaded from an Emirates aircraft at Cebu airport. The airline donated cargo space to help in emergency response for Haiyan. Businesses are increasingly seen as alternative service providers and first responders in crises. Photo by: Simon Davis / DfID / CC BY

Humanitarian groups who don’t engage with the private sector risk being “shut out” of emergency response interventions as businesses are increasingly seen as alternative service providers, according to new research on how both types of aid implementers interact in disaster-affected countries.

A report published on Wednesday by the London-based Overseas Development Institute argues that the private sector is now far more than just a source of funding in disaster-affected regions, even if this can be significant in some cases. For instance, the private sector contributed at least half of all humanitarian assistance after Typhoon Haiyan struck the Philippines in November 2013.

It also plays a vital — and growing — role as service provider, innovator and long-term rebuilder of the economy, notes the survey, which looked in particular at Indonesia, Kenya, Jordan and Haiti.

Businesses are often the first responders to crises. By investing in restoring their own enterprises and repairing damaged supply chains, small and large firms “help get goods to affected people, reopen lines of credit, and enable livelihoods to resume,” the report says. That also allows humanitarian assistance to be delivered; an example of this is how banks and telecommunications firms are crucial for cash transfers, which have dramatically expanded the scope and increased the speed with which aid can be disbursed.

Aid groups no longer top of mind

Despite their complementary strengths and some examples of innovative partnerships to date — particularly in logistics, finance, telecommunications and construction — poor communication, misconceptions and lack of opportunities to interact are still limiting the potential for private businesses and aid agencies to work together.

And if humanitarian actors “do not begin to draw upon the private sector and their capabilities, there is a real chance that businesses will approach these issues independently,” said Steven Zyck, a research fellow at ODI and the report’s co-author.

That is even more the case in middle-income countries — set to grow in number, and so increasingly the setting in which disasters are played out — where the private sector already has a strong presence. It also applies to nations whose governments are wary of relying on outside assistance or of compromising their own sovereignty: when Cyclone Nargis ravaged Myanmar in 2008, the government’s first call to action was not to the United Nations or ASEAN, but to the domestic business community.

There has long been a natural interplay between the two sectors. Aid organizations depend on businesses of all sizes as service providers and suppliers; for instance, the World Food Program estimates that at least 40 percent of its spending in any one year goes directly to businesses.

Companies, for their part, have a clear business interest in speeding up post-disaster recovery in areas where they work.

Companies stepping up their game

The current excitement around private sector activity represents “a fundamental shift” in emergency preparedness and response, the ODI survey notes.

While multinationals like UPS or Google are most often cited, there are numerous examples involving regional, national and local firms who — though lesser-known — represent the vast majority of private sector-driven humanitarian work.

In Jordan, Save the Children works with domestic manufacturers to develop temporary housing; regional banks in the same country have established cash transfer programs that allow Syrian refugees to access aid from biometric ATMs. In Kenya, micro-insurance schemes protecting farmers against losses during drought involve numerous parties — from the insurance providers to the vendors to the satellite imaging and mobile money platforms. Similarly, accessible insurance schemes against dengue fever have been a success in Indonesia.

Yet, with collaboration still at the very early stages, distrust is still a barrier, and part of that may be a sense among some in the aid sector that businesses are a threat to their own existence.

Paradoxically, though, “by engaging with [the private sector] more, [aid organizations would] reduce the chance they become less relevant,” Zyck pointed out.

Poor communication

Much of the suspicion, it seems, stems from not talking to each other, or at least not doing it well enough.

Aid agencies and private firms may interact and coordinate their work within their own sectors — in standing committees or clusters, or through chambers of commerce — but rarely cross from one side to the other. When they do meet, that might mean the fundraising staff on one side talks to the CSR team on the other, but the technical experts are not involved.

When high-profile partnerships are agreed on by CEOs, headquarters do not always consider how they will be implemented downstream. Research among country teams, said Zyck, found that “people didn’t really know what those partnerships entailed, who was responsible, or how they could activate them.”

More communication would no doubt help each side understand one another’s motives, procedures and specialist language.

In this sense, many online platforms promise to connect the business and aid communities, but these are either “not well utilized”, or are too global in scope — these should be activated or improved, and made more relevant to national actors. Similarly, both sectors would benefit from more awareness of what options actually exist and what has been tried before: “something like a menu” of options, ideally available before a crisis hits, suggested Zyck.

Linking up is key

Simply knowing who to contact would be one starting point.

When the U.N. Office for Coordination of Humanitarian Affairs deployed for the first time a private sector liaison focal point following Typhoon Haiyan, that official’s role was “not to talk about fundraising — in fact, not to even mention the word fundraising”, explained Helena Fraser, who heads UNOCHA’s private sector team. Rather, the goal was for the focal point to connect the hundreds of requests and offers from global and Filipino businesses to “the right parts of the humanitarian family” and to the clusters that had been formed on each side but which had not yet linked across sectors.

Such linkages would help address the significant knowledge gap in terms of comparative advantages that each side brings in engaging with a particular community.

“It’s really fascinating to see what we don’t know about the capacities of those we could work with,” said Randolph Kent, a researcher at King’s College London and co-author of the report.

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About the author

  • Headshot anna patton

    Anna Patton

    Anna Patton is a freelance journalist and media facilitator specializing in global development and social enterprise. Currently based in London, she previously worked with development NGOs and EU/government institutions in Berlin, Brussels and Dar es Salaam as well as in the U.K., and has led media projects with grass-roots communities in Uganda and Kenya. Anna has an master’s degree in European studies — specializing in EU development policy — and is a fellow of the On Purpose social enterprise program.