Terri Beswick

8 January 2018

Conflicts cost

The cost of conflict is undeniable. Counting the number of people who lose their lives from conflict, however, only tells part of the story. Those living with violence also face the additional costs of protracted psychological trauma, physical injury, sexual violence, destroyed infrastructure, mass displacement, divided families, homes lost and polarisation among societies. The consequences of conflict are far-reaching and clearly threaten the EU’s expressed core values of peace, security, sustainable development, poverty reduction, and human rights. Therefore, all the organs of European Union external action should be concerned with making sure that the EU’s engagement in environments affected by conflict (1) does no harm and (2) is designed to reduce the risks of conflict and maximise sustainable peace. For European populations funding development or delegating responsibility for EU trade relations through their governments, being aware of how the EU does ‘due diligence’ in such high-risk contexts is an important element of accountability.

Maximising the good, avoiding the bad

Due diligence is often associated with a legal liability argument, as it places responsibility on actors to demonstrate that they did all that was reasonable in advance to avoid causing harm or damage. It is also associated with commercial contexts, where thorough research and analysis of the market, significant players, and consumer behaviour is seen as a reasonable and even routine step in order to avoid future losses and protect investments. The legal liability and commercial framing for due diligence maps neatly onto two EU responsibilities: (1) to do no harm and (2) to maximise the effectiveness of the time, human resources and financial investment in development and trade engagements. As a global actor with approximately 140 delegations and offices around the world, the EU is big business. It disbursed 10.3 billion EUR of overseas development aid in 2015 and represented around 60% of the world’s foreign direct investment for that year.

What would ‘due diligence’ look like in EU development and trade? 

In order to be precise about what to do and what to avoid doing to meet its responsibilities, the EU needs a broad and deep analysis of the conflict context that incorporates the root causes, contemporary drivers, and the obvious and less obvious stakeholders, and covers the many facets of the conflict. To meet the criterion of being ‘due’ and ‘diligent’, this kind of analysis cannot be ad hoc, optional or superficial.

Five components for due diligence in conflict-affected environments

1. The first component of due diligence in conflict-affected environments is an obligation to analyse the political, economic, social, environmental and security aspects of the context and to explicitly make the link to the risks of violence. If a commercial actor were entering such an uncertain and high-risk context, it would be remiss for it to focus purely on economic, financial or business analysis while disregarding the broader factors that influence and interact with those sectors. Likewise, though the central government and security sector may appear to be the most relevant sectors for analysis at first glance, conflict requires a much broader lens. Analysis of economic mismanagement in Venezuela, the geopolitics of trade in Ukraine, demographic shifts in South Africa, divided households and gender roles in Kyrgyzstan, drought and rural-urban migration in Syria, and the abuse of security forces and the rise of Boko Haram in Nigeria all make the case for analysing multiple facets of a context.
2. The second component of due diligence relates to a need to understand the full spectrum of conflict stakeholders at various levels, including non-state actors and population groups. In commercial terms this would be the equivalent of being able to identify the key players in a market, as well as those with the capacity to influence it, and importantly the behaviours and preferences of consumers. Conflict stakeholders could be (directly and indirectly) affected population groups, those most active in the conflict, those carrying out violence, allies, spoilers, and even the international and regional actors with aid engagements in the context. The term ‘conflict stakeholders’ should quite literally encompass all those who have a ‘stake’ in the conflict. Without this clarification, the term ‘stakeholder’ in isolation has little meaning. Consequently, analysis of conflict stakeholders is clearly a more expansive task than what is understood by more commonly used aid language, which only extends to mean ‘vulnerable groups’, ‘civil society’, ‘leaders’ or ‘local communities’.
3. At some point, thorough analysis of the context has to be linked to more reflective assessment to identify the opportunities and limitations of the EU as an actor. This generated a third component: reflection on the position and perceptions of the EU in the conflict context. After all, the messenger can be as important as the message. This aspect of due diligence analysis would look at whether the EU is best positioned to engage, which is just as relevant for development and trade as it would be for other foreign policy engagements such as diplomacy. Though this is more likely to be factored in at the initial strategic decision-making stage, the speed with which dynamics evolve in conflict-affected contexts recommends a frequent process that is tied to flexible decision-making, for example on the adaptation of development programmes, as is foreseen to some degree in the EU’s risk management framework for budget support.
4. The fourth component is designed to probe theories of change that overestimate positive effects or overlook conflict risk in the design, implementation or evaluation of development programming or trade. While there is global recognition of (and increasingly data that demonstrate) the economic and developmental damage resulting from conflict, the relationship is not unidirectional. Unequal development and economic marginalisation can themselves drive conflict. Therefore, it is crucial to assess the potential positive and negative interactions between the EU’s development and trade engagements and the conflict dynamics in the given context(s) to maximise effectiveness (commercial due diligence) and to avoid harm (legal due diligence). This would mean a shift to assessing impact in a way that can reveal when even ‘successful’ development programming or access to international trade might have a negative effect on a conflict, for example by shifting the dynamics of political or economic power in a context, and triggering a negative reaction from one or more conflict stakeholders.
5. Ultimately, due diligence is not research in a vacuum: it is undertaken for the sole purpose of making decisions or adjusting a course of action to be more prudent and to be better able to avoid possible harm. This means that a due diligence process is only complete if and when it shapes real decisions. The fifth component, therefore, relates to opportunities embedded in EU development programming cycles and the milestones of EU trade relations to review whether the instrument or approach is appropriate and able to meet conflict prevention and/or peacebuilding objectives given the analysis revealed by due diligence research. Or more simply, whether the structure of EU development and trade instruments allows for failing interventions to be either abandoned or adapted in the interest of reducing the risks of violence occurring.

The ambition to prevent conflict and promote peace in EU development and trade

According to the European Centre for Development Policy Management, the EU’s institutions and selected EU Member States are among the biggest supporters of peacebuilding, representing five out of the top ten conflict, peace and security donors (measured in terms of aid contributions). At the same time, the EU has reiterated its commitment to conflict prevention and peace in treaties, policies, statements, and speeches for more than 15 years. Expertise in managing conflict and promoting peace is presented as an intrinsic characteristic of the European Union project. Thus, the analysis of the EU’s due diligence with regard to key development and trade instruments given in the EU-CIVCAP report ‘Due Diligence in Contexts Affected by Conflict: EU Development Aid and Trade’ offers a systematic analysis of how the EU seeks to meet its commitments to preventing conflict and promoting peace in practice. The proposed due diligence framework may be ambitious, but with so much at stake it does not make sense to set the bar low.

Related Deliverable

DL 3.3: Reports on integrating conflict prevention in CSDP, EU trade policy and EU development policy

Authors: Beswick, T., L. Angelini, L. Conti, S. Wander, C. Cogitore, A. Penfrat, B. Moore and N. Habbida
Lead Institution: European Peacebuilding Liaison Office

Published: 30 November 2017

[PDF, ~1.4MB; click to access]

Related Report

Title: “Due Diligence in Contexts Affected by Conflict: EU Development Aid and Trade”

Authors: Beswick, T., L. Angelini, L. Conti, S. Wander, C. Cogitore, A. Penfrat, B. Moore and N. Habbida
Publisher: EU-CIVCAP
Type: Conflict Prevention Report
Reference: #2
Date: December 2017

[PDF, ~0.7MB; click to access]

Photo details

Title photo caption: Ukrainian and European flags waving

Title photo credit: EC Photo/Etienne Ansotte

About the Author

Terri Beswick

Terri Beswick is an analyst specialising in peace and conflict policy. She has nine years of experience working in international policy in the UK, France, Belgium, Jordan and the Netherlands.