Published Date: Dec 4, 2012
SECP EMPHASISES ON FACTORS TO REDUCE CONFLICTS
Securities and Exchange Commission of Pakistan (SECP) Chairman Muhammad Ali on Monday emphasised upon the need for factors such as corporate social responsibility, corporate good governance and a culture of mediation to reduce and minimise conflicts.
The SECP has encouraged Corporate Social Responsibility (CSR) activities in broad areas like employees, environment, community (skill development, livelihood, health, education, social enterprise development, and environment conservation), risk management, anti-corruption, youth development, sports development, disaster management, infrastructure development, human rights and transparency.
Addressing the seminar organised by the Sustainable Development Policy Institute (SDPI) on ‘Plural Business Partnership for Peace; Perspective from Pakistan’, Ali stated, “When businesses start investing in social infrastructure, their impact on the communities can be transformational.” He also informed participants that SECP has drafted guidelines for public companies to performing CSR activities. These guidelines seek to institutionalise and codify CSR activities based on fair, transparent and responsible business practices to support community growth and to eliminate practices that harm the public, he added.
The SECP chairman further stated that code of corporate government would lead to improvement in culture of governance in public sector entities, corporate sector and would eventually be extended voluntarily to the family and individual businesses. Ali said that better governance in PSEs would minimise their losses and improve performance, which in turn would contribute to the growth. He said that higher economic growth and per capita income are important and without these the problem of conflict resolution would remain a challenge.
Ali said that the businesses can play a significant role in the CSR. The economy plays a major role in resolution of disputes and conflicts. Three areas where businesses can really make a difference in affecting policy and bringing an end to local conflicts are CSR; good governance practices and mediation.
Globally, there has been considerable interest in looking into the reasons and significance of conflict and substantial research has been undertaken to understand how economic methods can be used to improve our grasp of the subject like, ‘The Economics of Peace’. In Pakistan’s context, the impact of the high costs of the war on terror and the subsequent violence on our economy has been significant.
In order to create a business-friendly corporate regime in Pakistan, which best protects the investors’ interests; the SECP has recently signed a memorandum of understanding with the Karachi Centre for Dispute Resolution for creating awareness about mediation as an alternate dispute resolution mechanism. The post-MoU phase will focus on developing awareness; advocacy; building capacities; and creation of an institutional framework. The purpose of this initiative is to provide for a mechanism, which allows quick resolution of disputes. The SECP is committed to ensure that individuals and corporate entities in Pakistan are not deprived of their fundamental rights to trade and carry out business and that exploitation of investors, service providers and businesses is eliminated.
The SECP chairman said that the businesses are the drivers of economic activity and their pursuit of profits provides livelihood and opportunities – thus reducing poverty and economic inequalities, which leads to prosperity – in the communities where they operate. Poverty, unemployment and economic disparities are considered major reasons for crime, violence and conflict. Therefore, businesses at some level automatically address the core needs of the communities they serve. However, taking the role of businesses a step further, when businesses start investing in social infrastructure, their impact on the communities, within which they operate, can be transformational. This is where corporate social responsibility begins. In recent times, some thought leaders in the business world have moved beyond the discussion about profits and have started talking about doing good – providing returns to society through actively engaging in the social issues which matter most – caring about the environment, providing health and education services and improving the provision of social services to marginalised segments especially in conflict sensitive segments.
To ensure that corporate social responsibility initiatives are implemented in a strategic manner with clearly defined policies, the SECP has drafted guidelines, to be adopted on a voluntary basis, for public companies that have initiated or intend to initiate CSR activities. Through these guidelines, public companies would be encouraged to adopt working models with a focus on fair, transparent and responsible business practices in order to support community growth in the best public interest and to eliminate practices that harm the public. The guidelines mainly seek to institutionalise and codify CSR activities, the SECP chairman explained.
Ali added, “All three elements; CSR, good governance and a culture of mediation as coming together to create an environment where we can reduce and minimize conflict as much as possible. It is inherent human nature that we can’t eliminate conflict altogether but aiming for the least possible levels of conflict and friction should be key goals for all of us”.
Speaking at the seminar, Strategic Planning and Evaluation Commonwealth Director Nabeel Goheer said Commonwealth secretary general on the request of prime minister has decided to start a project in Pakistan for building a peaceful and democratic society. He said that the Commonwealth, a body of 54 member countries, working on two aspects; (i) conflict prevention and; (ii) conflict resolution. He said that the government of Pakistan is at highest level involved in the project which focuses on that dialogue is the only way to move forward for a peaceful Pakistan while acknowledging different identities. Ross Ferguson of Department for International Development (DFID) said that the communities should be at the heart of donors to promote vibrant business sector that plays full role in terms of peace and security for them. He said hat the peace building primarily about politics and government.