Business expertise tapped for smarter disaster aid

by Megan Rowling | @meganrowling | Thomson Reuters Foundation
Thursday, 26 January 2012 10:00 GMT

Aid agencies are teaming up with companies to find more effective ways of providing emergency relief

This article is part of an AlertNet special report on humanitarian aid:

By Megan Rowling

LONDON (AlertNet) - From shipping supplies into disaster zones to setting up emergency telecoms networks and sending aid payments via phones, businesses are increasingly donating cash and expertise to help people hit by humanitarian crises.

The for-profit and non-profit sectors have traditionally been at odds when it came to humanitarian aid -- with aid workers suspicious of corporate motives and businesses doubtful of charities’ efficiency.

But in recent years, a growing number of aid agencies have teamed up with companies offering logistics services and new technologies to find ways of responding more effectively to disasters like floods, earthquakes and hunger crises.

Since its first experience helping the Red Cross and Red Crescent in the 2006 Lebanon conflict, logistics firm Agility has contributed transport, forklifts and warehousing, and shared supply chain know-how in around 20 emergencies, for example.

The Middle East's largest logistics provider has an agreement with International Medical Corps to help its aid operations, and sends trained volunteers to assist U.N. and other agencies under a World Economic Forum (WEF) initiative to deploy emergency logistics teams in big disasters.

"There is certainly a lot of value for industries to engage with humanitarians," said Frank Clary, who manages disaster relief contributions for Kuwait-based Agility.

"It is something employees want to do ... and it doesn't cost too much."

The private sector has also given more cash, with corporate donations tending to rise sharply when major natural disasters hit the headlines.

In recent years, funding from private sources -- including businesses, individuals, foundations and trusts -- has accounted for about a quarter of all humanitarian aid, rising to $4.3 billion in 2010 from $2.7 billion in 2006, according to Global Humanitarian Assistance, a British-based group that monitors aid flows.

The U.N. refugee agency, UNHCR, alone has managed to increase corporate-sector income to $32 million in 2011 from $3.7 million in 2006.

And the trend is likely to continue as private donations become more important to charities, which fear that debt-laden governments -- traditionally the biggest donors -- may start squeezing aid budgets.

In an AlertNet survey of 41 of the world's largest aid groups released on Thursday, nearly half saw the private sector as a key source of extra funding to meet rising needs as crises get worse in coming years due to climate change and urbanisation.


Olivier Delarue, who manages UNHCR's business relationships, said U.N. aid workers have become more receptive to private-sector solutions.

"It is not about the company telling you what to do, but offering ways of doing your work better," he said. "The aim is to improve our efficiency, reduce our costs and increase the self-reliance of refugees."

Skype, for example, has developed a low-bandwidth version of its messaging software to allow UNHCR staff to communicate in remote areas.

IKEA and UNHCR are now working on a major three-year project to set up new camp facilities for Somali refugees pushed into Kenya and Ethiopia by drought and conflict, backed by a $62 million grant from the IKEA Foundation.

Its chief executive officer, Per Heggenes, said the world’s biggest furniture retailer hopes to use its innovation to assist refugees in producing goods -- from sanitary towels to soap -- for sale in the camp and even beyond.

"You often get positively surprised by the energy and entrepreneurialism that exists among refugees ...  But there is also a lot of frustration," he said.

"We can help do something to create a purpose for more people while they are waiting ... to live a normal life outside the camps."

The relatively new concept of cash transfers is another area of cooperation that is proving fruitful.

Aid agencies and governments are increasingly turning to banks and mobile phone companies to distribute cash electronically in emergencies. It is quicker and more secure than handouts, and allows people to buy what they need locally.

During the 2010 Pakistan floods, for instance, Visa Inc., the global payments technology firm, partnered with the state and United Bank Limited to get cash relief to 2 million families using a government-funded, prepaid debit card.

Visa said programmes like this can benefit rural communities by offering them access to financial services for the first time, while enabling the company to expand its business.


Despite the shift towards more creative, longer-term partnerships, former U.N. aid chief John Holmes believes there is still a lot of untapped potential in sectors like water, construction and pharmaceuticals.

Holmes, who served as U.N. Emergency Relief Coordinator from 2007 to 2010, said the fragmented nature of the aid system deters some companies from humanitarian involvement because they do not know who to approach. Others see disaster relief as too transitory.

"It doesn't leave anything behind which they can label as theirs," said Holmes, who is now director of UK-based international thinktank, the Ditchley Foundation. "They would rather invest in a hospital or a school where they can say, 'This is what we've done.'"

Some aid workers are troubled by the ethics of companies donating more goods and services in emergencies. Medecins Sans Frontieres (MSF) UK's executive director, Marc DuBois, told the AlertNet survey that private-sector funding linked to the use of companies' own products posed a risk to the independence and quality of humanitarian action.

Others regard suspicion of commercial agendas as outdated.

"I see it as a win-win," said Hugo Slim, an Oxford University academic and former aid official who set up Malachite, a firm advising investors on emerging markets.

"I don't think it is necessarily a sinister motive to hope that by pioneering and innovating in a disaster you might not stumble across an invention or a market that could be useful in the future." 


Whether growing corporate interest in aid is mainly about boosting brands, keeping employees motivated or simply doing the right thing, researchers argue more evaluation is needed to determine which types of contribution save most lives.

"If (companies) abide by codes of conduct, and if NGOs are very clear about what they are asking their private-sector partners for, then it can be a good thing," said Lawrence Haddad, director of the Institute of Development Studies at Britain's University of Sussex.

"But I think there is a tendency to glorify (business) competence and professionalism and what they bring to the party," he said, adding that there was not enough transparency or evidence about what works and who's doing what.

Experts say the twin pressures of climate change and urbanisation mean companies will also have to start thinking fast about how to protect their own assets and workers from disasters in cities, such as the flooding that hit Thailand last year.  

Engineering and construction firms might spot opportunities in working with governments to build infrastructure that can better withstand more extreme weather and rising seas.

Former U.N. official Holmes urged aid agencies to involve local businesses more in boosting the resilience of the communities where they operate, and to provide them with financial support to keep on trading when a crisis does hit.

“We are constantly at risk of ignoring the fact that what you really need to do is get the local economies up and running again as fast as possible,” he said. 

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