New Report on Conflict-Sensitive Business Practice (CSBP)

September 29, 2006

A new report Conflict-Sensitive Business Practice: Engineering Contractors and their Clients, has been prepared by Engineers Against Poverty and International Alert

Contractors operating in unstable states face a range of conflict risks. Oil, gas and mining projects, which frequently have significant contractor involvement, can inadvertently trigger or sustain violence, or become the focus of resentment themselves. Produced in partnership with Engineers Against Poverty, this guidance note is addressed both to engineering contractors and their clients. It examines some key issues related to conflict, contractors and conflict sensitivity, and introduces conflict-sensitive business practice (CSBP) – steps through which these issues can be understood and managed.

The report outlines some of the key costs of conflict to projects, which include:
Direct costs:

  • Security – Higher payments to state/private security firms; staff time spent on security management
  • Risk management – Insurance, loss of coverage, specialist training for staff, reduced mobility and higher transport costs
  • Material – Destruction of property or infrastructure
  • Delays – Lost time through site blockades or disruption of materials and services
  • Capital – Increased cost of raising capital
  • Personnel – Kidnapping, killing and injury; stress; recruitment difficulties; higher wages to offset risk; cost of management time spent protecting staff
  • Reputation – Consumer campaigns, risk-rating, share price, competitive loss
  • Litigation – Expensive and damaging law suits

Indirect costs:

  • Human – Loss of life, health, intellectual and physical capacity
  • Social – Weakening of social capital
  • Economic – Damage to financial and physical infrastructure, loss of markets
  • Environmental – Pollution, degradation, resource depletion
  • Political – Weakening of institutions, rule of law, governance movements