Capture in conflict-affected and high-risk areas (CAHRA)
Business and human rights in conflict zones is arguably one of the most pressing issues before our movement today. Given the graveness and urgency of these conflicts, oftentimes the plodding pace of global mechanisms, policymaking, and civil society strategies cannot keep up with the changes around us. In other words, conflicts offer the perfect cocktail for corporations to capture the State and make a buck before anyone is the wiser.
In September 2023, the Government of Azerbaijan attacked the Armenian population living in the Nagorno-Karabakh region, leading to the ethnic cleansing and forced displacement of 100,000 people in just three weeks. Thirty years earlier, Azerbaijan and British Petroleum (BP) had signed a 30-year agreement to develop Caspian Sea oilfields, which, over time, expanded significantly to include almost every type of energy asset in Azerbaijan, including most recently a huge solar power plant in Jabrayil, part of the Nagorno-Karabakh region where the Armenian population has been displaced. Azerbaijan’s goal seems clear: to transform the conflict zone into a green energy-producing region where — thanks to BP’s capture of the Azerbaijani State — the country will boost energy production while BP reaps the profits. What does the corporate accountability movement have to say about this conflict? To date, very little.
That said, at least two organizations —Heartland Initiative and The Sentry, with honorable mention for the Business and Human Rights Resource Center and the Investor Alliance for Human Rights— are equipped to act fast and tackle the thorny corporate accountability questions in conflict-affected and high-risk areas.
Heartland Initiative
- “Heartland Initiative, Inc. is a nonprofit practice-based research organization that promotes the fundamental rights and freedoms of people in conflict-affected and high-risk areas. Heartland’s work responds to a growing need at the intersection of business and human rights, where public and private stakeholders understand that business activities can contribute to either the escalation or mitigation of conflicts and their attendant human rights violations. Through tailored learning services, Heartland works with stakeholders to develop solutions that simultaneously prevent and mitigate human rights harms while managing the heightened legal, reputational, and financial risks faced by companies and investors in conflict-affected and high-risk areas.”
- “Heeding the UNGPs’ call for enhanced HRDD in conflict-affected areas, Heartland Initiative has developed the Rights Respecting Investment in CAHRA methodology. Designed to assist investors in protecting the rights of vulnerable populations while simultaneously addressing the material risks faced by companies, Heartland’s methodology enables them to identify and assess the severity of a company’s risks based on its geographical, relational, and/or operational proximity to the violation, violator, and victim. This approach avoids focusing on a single issue, geography, or controversy in favor of a process that considers the interrelated risk variables of a company’s operational contexts, value chain partners, and business activities. What results is a more comprehensive human rights and material risk profile of the engaged company, encompassing a higher percentage of its global revenue and operations and a wider spectrum of at-risk rights-holders and countries. Applying this strategy in investor-led engagements incentivizes increased participation by companies who recognize a broader array of their material risks, by civil society organizations concerned about the rights of vulnerable populations, and by like-minded investors focused on risks to both people and their portfolios.”
The Sentry
Regarding its innovation for corporate accountability in conflict zones, “The Sentry examines the techniques used to benefit financially from armed conflict and atrocities, including:
- Convergence of licit and illicit systems– illicit actors conceal their operations and launder their profits through globalized systems of finance, trade, and transportation.
- Regulatory and sanctions evasion– illicit actors find ways to adapt to and avoid international laws, sanctions, and regulations.
- Disguised beneficial ownership– illicit actors employ increasingly sophisticated methods to disguise their true identities to avoid detection and exposure.
- Money and commodities laundering– illicit actors launder money and commodities such as gold to disguise their criminal origins and move it through legitimate financial systems undetected.
- Extractive industries and natural resource trafficking– illicit actors extract, tax, and sell natural resources to fund and sustain their operations.
- Corruption and illicit financial flows– illicit actors compete violently to capture state resources and divert funds for their own personal enrichment and to finance their armed campaigns.
- Security sector fraud and abuse– illicit actors manage state and military expenditures to fund off-budget activities with little-to-no transparency or accountability.
- Elite financing and offshored assets– illicit actors abuse their power and position to accumulate significant wealth that is then laundered through offshore jurisdictions to evade detection.
- War crimes and crimes against humanity– illicit actors orchestrate crimes against civilian populations in natural resource-rich territories — including enslavement, forced labor, and arbitrary arrests — as a key strategy for taking control over wealth and silencing dissent.”
Colombia in a period of transition
Another critical area has been in Colombia, where the Government of President Gustavo Petro has begun to change the narrative of the country’s conflict, placing the rule of law — including anti-corruption measures — above commercial and economic interests. The Government has also strengthened participation spaces, including to combat State capture.The Total Peace Law (2022),for example, is an attempt to negotiate and dialogue, subjecting armed groups to justice, which have been key actors as both subjects and objects of corporate capture in Colombia.
According to Luisa Rodríguez Gaitán from the Heinrich Böll Foundation, regarding companies and armed actors, these are gray areas where legality mixes with illegality, and companies employ both private security contractors and the use of paramilitaries. On the legal side, the approval of State energy battalions to provide private security is not yet well-studied. For example, the mining company Cerrejón has a battalion that guards the railroad infrastructure and mining operation, which has led to cases of extrajudicial executions, blocking water sources for the community, etc. On the illegal side, the case of the mining company Drummond demonstrated that paramilitaries committed massacres and forced displacement in order for the company to obtain more land.
In 2016, the Final Agreement for the Termination of the Conflict and the Construction of a Stable and Lasting Peace was a historic opportunity to introduce regulatory changes in the national economy to reduce the weight of extractivism and strengthen other productive sectors. This can be achieved by promoting an energy transition that avoids the imposition of disproportionate socio-environmental burdens, as well as a democratic transition that guarantees free expression, unconditional and unrestricted safeguarding of life, recognition of worldviews and traditional knowledge, and the creation and strengthening of State and community justice forums. This can be summarized as a “post-extractive transition.”