Salaam, Responsibility
by Alex Blyth, 3 Nov 04
Reprinted with permission from Ethical Corporation magazine

Corporate ethics discussion, along with oil, is bubbling to the surface in the Middle East.

Vying to be responsible - Middle East
In recent months the five star hotels of Dubai, Cairo and other Middle Eastern cities have been filling up with corporate responsibility executives from multinationals. They are arriving in ever-greater numbers from North America and from Europe, to talk about how they can fulfil the broader responsibilities that come with operating in this part of the world. Mostly they are flying in, staying in five star hotels and then flying out straight after the conference. But it’s a start.

It all began in September 2003 when the Economist held a briefing on 'Corporate Social Responsibility in the Middle East' in Dubai. The event, as with so many conferences, featured British American Tobacco talking about how it tries to tackle issues of corporate responsibility in Europe and North America. Then in April 2004, a Middle East Forum on corporate social responsibility took place in Dubai. Shell, the Dubai Development and Investment Authority (DDIA) and the United Nations Development Programme were supporters.

Evidently there is some local buy-in to the idea by governments. Salem Bin Dasmal, deputy director general of the DDIA says that Dubai wants to become “a hub of corporate social responsibility, led by companies that are already here”. This, he says, will make this city a more attractive investment destination for businesses.

Six months later, and the hotel bookings are flying in. In September, there was another event on corporate responsibility in the Middle East. Again with involvement from British American Tobacco, this time with Microsoft, it included sessions on how to ‘tailor’ corporate responsibility for the Middle East and offered up several case studies to illustrate the point. Eight days later, consultancies MHC International and Business Principle ran what they called a “masterclass” on corporate responsibility and finance, again in Dubai.

More than just waffle?

So, is anyone doing anything other than talk? Most companies appear to be taking British American Tobacco’s line. Adrian Payne, head of corporate responsibility, says that that corporate responsibility is very much in the embryonic stages in the Middle East and “We are mapping our stakeholders, trying to understand the issues and identifying the areas where we can usefully contribute.”

Multinationals in the region seem keen to engage with governments and a local populace that are for the most part suspicious of western motives. Hussain Al-Mahmoudi, external affairs manager for Shell in Dubai, believes he has already identified the single biggest social responsibility of corporations operating in the Middle East: “With young people making up so much of the population in this region, companies like Shell have a responsibility to employing and training local workers, providing income and transferring knowledge.“

Ethical and stakeholder engagement programmes are also being seen as a way to ward off attacks (verbal or otherwise) on western companies in the region. The idea of building up a local bank account of goodwill that protects a company in tricky times seems to be striking a chord with regional managers. Effective stakeholder engagement in the region, if properly carried out, might also help companies gain a useful insight on how well an often anti-western youth might view their initiatives, as well as government views.

Business ethics on the rise
For German pharmaceutical giant Merck, business ethics has emerged as the key issue in this region. In April 1998 the pharmaceutical company established the Gulf Centre for Excellence in Ethics (GCEE) in Abu Dhabi, as part of its worldwide collaboration with the Washington-based NGO the Ethics Resource Centre. Merck also financially supports ethics centres in South Africa, Colombia and Turkey.

The initial focus of the Centre was on healthcare ethics in government, but over the past six years it has become clear that business ethics is increasingly important to the region and so the Centre is about to be relaunched. It has been moved to the business centre, Dubai and on 13th October, the Dubai Ethics Resource Centre (DERC) will unveil its portfolio of programmes and services, to be offered to public and private sector organisations.

These programmes and services are expected to include research projects aimed at developing integrity standards, board-level training on corporate governance best practice, ethics management training, and a multi-faceted programme aimed at preparing the new generation of business leaders for ethical leadership.

Environmental impact and NGO engagement
As in any region of the world, environmental impact is a major issue for almost every company in the Middle East. Equally important is the existence of non-governmental organisations with which companies can productively engage. The Emirates Environmental Group is emerging as a key NGO and an important source of learning on corporate environmental impact in the Middle East. Established in 1991, it now has more than one thousand two hundred members, comprising individuals, corporates, academic institutions and government bodies. It organises public education forums and community involvement projects from nationwide can collection campaigns to clean up drives.

Finally, it is not only multinationals which are looking at how to meld social responsibility with economic development. Egypt’s SEKEM Group is a good example of the many social enterprises which are springing up across the region. SEKEM has proven the feasibility and benefit of biodynamic farming in Egypt and has implemented a network of more than 800 farms locally and in Sudan. In addition, SEKEM pays for daily health clinics and mobile health units for local people, particularly in rural areas of the country.

Companies looking to act global while thinking local are beginning to scratch the surface of what’s needed to be ethical in the Middle East. So far there has been a promising start, albeit limited to rhetoric over action, as with so many things. However, there is good reason for companies to proceed with caution. The region is rife with socio-political complexities and companies seem so far to have noted that the cultural context for corporate responsibility is different.

Whilst in Europe and North America more the prospect of yet more talk about corporate responsibility prompts yawns and calls for regulatory action, there is much still to be discussed about corporate responsibility in the Middle East. This is at the very least good news for Dubai hoteliers.

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