Commonwealth Business Council

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The Commonwealth Business Council says of itself:

"The Commonwealth Business Council (CBC) provides leadership in increasing international trade and investment flows, creating new business opportunities, promoting good governance and corporate social responsibility, reducing the digital divide and integrating developing countries into the global market. In fulfilling its mission, CBC strives to provide a bridge between the private sector and governments, between emerging markets and developed markets and between small businesses and international private sector."[1]

In January 2014 former UK Minister Lord Marland was appointed as a part-time paid director/chairman of the CBC.

Origins of CBC

The Commonwealth Business Council (CBC) was formed in 1997 at the Edinburgh, Scotland, Commonwealth Heads of Government Meeting (CHOGM). "Its aim is to utilise the global network of the Commonwealth more effectively for the promotion of global trade and investment for shared prosperity." .[2]

CBC Board of Management

=Circa 2008

Profiles of key figures

Mr Jacques Lamarre, Chairman.

Mr Jacques Lamarre has over 35 years of experience as an engineer and senior executive responsible for engineering management implementation of large industrial, infrastructure and telecommunications projects in Canada and worldwide.

He began his engineering career in 1967 with Lavalin, a Montreal based global engineering and construction company. In May 1996 Jacques Lamarre was named President and Chief Executive Officer of SNC-Lavalin Group Inc. In the nine years since his appointment, and despite global market uncertainties, and challenges facing the engineering and construction industry worldwide SNC-Lavalin has maintained a high performance level and continuous growth. Under his leadership, SNC-Lavalin continues to maintain its position as a world leader in niche sectors of the global market - in the areas of oil and gas, power, infrastructure, environment and water, facilities and operations management, mining and metallurgy and agrifood".[4]

Dr Mohan Kaul, Chief Executive.

Dr Mohan Kaul was appointed Director-General and Chief Executive Officer of the Commonwealth Business Council (CBC) on its establishment by the Commonwealth Heads of Government in Edinburgh in October 1997. A firm believer in making globalisation work for all, he lead a number of high-level initiatives targeted at investment promotion and strengthening the investment climate, good governance and corporate social responsibility. His focus has been on building Public Private Partnerships, reducing the digital divide, WTO market access and trade facilitation and integration of developing countries into the global market.

His goal for the CBC is to achieve social and economic development through the promotion of good governance, sound market-oriented economic policies and the enhancement of private sector contribution to the national economies. Dr Kaul is currently a member of the Presidential Advisory Councils of Mozambique and Zambia. In the past he has served on similar councils in other countries. Dr Kaul holds other high-level positions as a member of the Board and Chairman of the Governance Committee of ICICI Bank (UK), Board of the Africa Virtual University; Governing Council of the Crown Agents Foundation, Board of Directors of the UK India Business Council, Advisory Council of Globalisation:British Expertise, Central Council of the Royal Over-Seas League, International Advisory Council of the Indian Institute of Management, Ahmedabad, Worshipful Company of World Traders and a Liveryman of the City of London".[5]

Intentions of Commonwealth Business Council

The intentions of the CBC are to promote greater trade throughout the countries of the Commonwealth. They aim to do this by "integrating developing countries into the global market".[6] The CBC sees itself as “a centre of excellence well equipped to deliver cutting edge programmes for the Commonwealth agenda”.[7] This 'integration' is normally organised through the outcomes of various summits, forums and working groups, normally chaired by the heads of global corporations. The general focus of the ‘Commonwealth agenda’ that they are setting is that developing countries, like Africa, need to be brought up to speed with the developed world in order for 'free trade' to blossom which, they believe, will in turn alleviate poverty in these developing countries.

What they actually do

Summits

The Commonwealth Business Council hosts a number of meetings and events all across the Commonwealth. The conference subjects cross a diverse range of topics, industries and the countries that are involved.[8]

Examples of events include:

  • West Africa Investment Forum, Nigeria, February 2008.
  • Sierra Leone Investment Meeting, London, January 2008.
  • Commonwealth Business Forum, Uganda, November 2007.
  • CBC Working Groups Dialogue with Commonwealth Finance Ministers, Guyana, October, 2007.
  • Africa Small Business Summit, Nigeria, October 2007.

Working Groups

The CBC also has various programmes which involve working groups looking at specific areas of development and investment. For example there is the Intra Africa Trade Working Group whose aim is to identify the primary constraints to intra African trade, to focus on the causes and recommend actions to eliminate the barriers and inefficiencies. Their recomendations are that current cross border trade is hampered by poorly managed border controls. They believe that trade is held back by old fashioned systems that do not take the needs of the customer into account and poor infrastructure which does not aid rapid and low cost logistics. This working group is chaired by Dr Yvonne Muthien, who is the vice president of Coca-Cola Africa. Other members include Unilever, Barclays, Shell, Kunene Brother’s Holdings, SAB Miller, Anglo American, and British American Tobacco. Their findings are that improvements to the areas which hamper greater trade will mean a bigger market for investors to "indulge in", with speedier transactions. They see this being achieved by the establishment of well-directed road and rail links, and ports that are well invested in and developed "through innovative financial agreements".[9] An example of the projects regarding infrastructure improvement is the construction of the N4 toll road from South Africa to Mozambique. Various corporations were involved in the consortium responsible for this, for example HSBC. However, many believe that these 'improvements' to infrastructure do not in fact aid the poorest people of the areas they affect. It is argued that this toll road, and others like it, actually benefit "big business rather than small traders and the informal economy", [10] which ultimately leads to greater poverty and further reliance on the multinational corporations profiting from constructing these developments.

The Commission for Africa

The involvement of companies like Shell, Anglo American and SAB Miller in these working groups has been widely criticised, especially by organisations concerned with human rights and environmental issues. The reason is that through these working groups and other groups like them, for example the Commission for Africa (which the Commonwealth Business Council was part of too), they are able to direct the spending of UK foreign aid money and influence the way that developments, for example new infrastructure, or resources, such as water, are handled, promoting the involvement of private finance and control.

The criticism of the direction taken by these government and industry based groups has been made both formally and informally. For example the Commission for Africa (CfA) received formal submissions from several non-governmental organisations (NGO’s), regarding the direction being taken, for its report which was published on 11th March 2005. ActionAid International advised that “increasingly ‘free’ global trade is leading to greater domination of poor countries by rich countries and private corporations”, [11]which inhibits their ability to institute policies which will help their poorest people. Oxfam agreed with this and in its submission document cited figures regarding the oil exports from Angola, which were estimated by the International Monetary Fund (IMF) to be worth US$4.6bn in 1999, yet “nine million people, roughly 70 per cent of the population, live in absolute poverty”. [12] This is worsened by the drive towards privatisation of resources and basic services. ActionAid argued that this “has often led to increased prices of essential items such as water and electricity, with severe impacts on poor families”. [13] Corporate Watch argues that the recommendations and criticisms of these NGO’s were basically ignored by the CfA and that this is not surprising, given the fact that some of the corporations responsible for these problems are those which were involved in the construction of the CfAs report and recommendations, for example Shell and Anglo American. [14]

A Gap Between Intentions and Functions?

One of the most favoured development routes of the CfA and the working groups of the Commonwealth Business Council are Public Private Partnerships (PPPs).These are promoted by the working groups as the most efficient way to proceed with the improvements to infrastructure and are the type of "innovative financial arrangements" [15]which are deemed necessary for Africa’s economy to grow. However there are many who argue that this is in fact not the case and cite evidence to back this claim up. For example a study published by South African Institute of International Affairs (SAIIA), called ‘Assessing Public-Private Partnerships in Africa’, looked at several projects that had already been implemented and what their impacts had been. It found that while there is a need to improve the infrastructure of Africa, “the record of PPPs in Africa over the last 15 years is mixed, the process is complex, and governments should not expect PPPs to be a ‘magic bullet’.” [16] The report concurs with others that are against the drive to only this type of development plan that the “private sector is not always more efficient and the service provision is often more expensive to the consumer”. [17]

An example of this has been the privatisation of water services in South Africa. In 1999 a contract was signed in the KwaZulu-Natal province with the newly formed Siza Water Company to allow them to run the water concession for 30 years. The major shareholder of Siza Water Company is SAUR Services, a French based company. Since its takeover there have been several issues related to the service provision. For example many people have been cut off which is deemed to have been the cause of an outbreak of over 140 cases of cholera in the first year in the area they had taken over. [18] Figures regarding the number of disconnections in South Africa published in 2002, show that since 1994 around 10 million people have been cut off by the various companies who came in to run water services. They simply cannot afford the increased water bills which often constitute about 30% of their income. [19] In the KwaZulu-Natal province Siza has not found the running of the water services easy and certainly not very profitable. However SAUR has in fact managed to get a 21% return on its investment which David Hemson, of the Human Sciences Research Council, argues is evidence that the small municipalities are “no match for multinational corporations when it comes to negotiations” [20]

This highlights another issue which is that the development needs of Africa are many and generally involve very expensive investment. For the corporations being enticed to get involved by agencies like the Commonwealth Business Council, there has to be a profit to gain or there is no incentive to get involved. Where they fail to run the concessions they win at a profit, the repercussions can be even worse for the local people as the companies decide to pull out. While the much publicised aims of agencies like the Commonwealth Business Council and their corporate partners are to improve service provision for those in developing countries, when profits start to wane their position can and does change. For example SAUR’s head Mr J.F. Talbot said in a presentation made in 2002 to the World Bank, that the “scale of the need far outreaches the financial and risk-taking capacities of the private sector” [21] and that a new approach is required to make investment in service provision in developing countries more attractive to the corporations. Amongst the things required of this new approach is a change to the levels of service that they can be expected to provide. He said that unrealistic levels had been expected in the past and that these were responsible for the management and profitability problems faced by the privately owned companies. The unrealistic levels he mentioned were expecting European water supply standards to be applied in developing countries and expecting that there should be water connections for all members of society. [22] So while they may go into the summits and working groups pushing the benefits of private sector investment, the reality often turns out to be that the corporations face exactly the same problems as municipal suppliers and are equally ill prepared to solve them. In fact because of their requirement to profit from such enterprises they are even more constrained in the types of solutions that can be provided, which ultimately seems to mean that the worst effects are passed onto the consumers - the poor people they came in to 'help' initially.

Conclusion

The Commonwealth Business Council's activities are wide reaching, but they generally tend to take the same format, which is the involvement of corporations in projects to 'develop' poor countries. The problem with this is that these corporations do not get involved without there being a benefit for them, which, as has been shown, can mean that the interests of the people the projects are meant to improve are in fact sidelined in the pursuit of profit.

Notes

  1. ↑ Commonwealth Business Council website, About CBC, accessed February 2008
  2. ↑ Commonwealth Business Council website, Origins of CBC, accessed 5 February 2008
  3. ↑ Commonwealth Business Council website, Board, accessed 26th February 2008
  4. ↑ Commonwealth Business Council website, [1], accessed 25th February 2008
  5. ↑ Commonwealth Business Council website, [2], accessed 25th February 2008
  6. ↑ Commonwealth Business Council website, About CBC, accessed 5th February 2008
  7. ↑ Commonwealth Business Council website, About CBC, accessed 5th February 2008
  8. ↑ Commonwealth Business Council website, [3], accessed 11th March 2008
  9. ↑ Commonwealth Business Council website, [4], accessed 17 March 2008
  10. ↑ Corporate Watch website [5] accessed 18th March 2008
  11. ↑ Commission for Africa website[6]accessed 18th March 2008
  12. ↑ Commission for Africa website[7]accessed 18th March 2008
  13. ↑ Commission for Africa website[8]accessed 18th March 2008
  14. ↑ Corporate Watch website [9] accessed 18th March 2008
  15. ↑ Commonwealth Business Council website [10], accessed 17th March 2008
  16. ↑ Organisation for Economic Co-operation and Development website [11] accessed 18th March 2008
  17. ↑ Organisation for Economic Co-operation and Development website [12] accessed 18th March 2008
  18. ↑ Organisation for Economic Co-operation and Development website [13] accessed 18th March 2008
  19. ↑ Global Policy Forum website [14] accessed 18th March
  20. ↑ Organisation for Economic Co-operation and Development website [15] accessed 18th March 2008
  21. ↑ world Bank website 21 accessed 18th March 2008
  22. ↑ world Bank website emphasis on unrealistic service levels accessed 18th March 2008
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