17th May, 2007

DAVID ADAMS

“We can’t beat poverty without business doing its part.”

That’s the reason, according to World Vision Australia chief executive Tim Costello, that the humanitarian organisation recently facilitated the creation of a new group known as the Business for Poverty Relief Alliance.

PUTTING A HUMAN FACE TO A GLOBAL FIGHT: Thirteen-year-old Chien, from the Hien Province in Vietnam, collects clean water from the water pump at the back of her house. This is one of her daily chores. The Business for Poverty Relief Alliance aims to inspire and enable Australian businesses to join efforts to fight poverty to help people like Chien. PICTURE: Courtesy of World Vision Australia© 2007.   “Global poverty represents a direct threat to the current and future prosperity of a range of Australian businesses through loss of potential markets, damage to foreign affiliates and a greater risk of regional instability." - from the report 'Business for Poverty Relief: A Business Case for Business Action', Allen Consulting Group

Initially comprised of five Australian companies - ANZ Bank, the Grey Global Group, IAG, Pfizer and Visy Industries - the alliance was formed with the aim of putting the issues of development, aid and poverty relief firmly on the Australian corporate agenda.

One of the group’s first actions has been to commission a report to detail the business case behind why both business and the Federal Government should boost their efforts toward helping alleviate global poverty.

The report, completed by the Allen Consulting Group, found that while corporate Australia was generally supportive of and active in social investment, “most companies have been less than active in ensuring that poverty is addressed in their closest export market”.

Noting that around 2.6 billion people (about 40 per cent of the world’s population) live on less than $US2 a day, the report says there is a “strong business case” for Australian companies to do more to address the plight of the poor in developing nations.

“Global poverty represents a direct threat to the current and future prosperity of a range of Australian businesses through loss of potential markets, damage to foreign affiliates and a greater risk of regional instability,” says the report’s executive summary.

“In addition, contributing to the development of poor countries - by generating income, creating jobs and investing in local businesses and skills - can present Australian firms with the opportunities of new markets.”

It says there are also reputational benefits for companies associated with responsible development efforts and makes “good business sense” in attracting and retaining the best employees.

In compiling the report, interviews were conducted with 20 of Australia’s leading chief executives. It was found in these interviews that not one of them was familiar with the United Nations Millennium Development Goals (MDPs) - a series of targets in relation to issues such as extreme poverty, education, gender equality, HIV/AIDS and child mortality - agreed to in 2000 as a blueprint for tacking poverty.

Costello says that such a result would be “unthinkable” in the UK, Europe and the US where big business leaders are very aware of the existence of the Millennium Development Goals.

Despite this lack of awareness, however, he says many companies in Australia are already working to help alleviate poverty.

Citing as an example the ANZ bank’s commitment to providing banking for the poor in Cambodia (the ANZ has been involved with Cambodia since 2004 when it established a partnership with the Royal Group to establish ANZ Royal Bank which was launched in 2005), Costello notes that the bank has given access to finance to far more poor people “than all the micro-finance World Vision and all the other agencies have done in 10 years and (they’ve) done that in about three months”.

Costello says that the “blind spot” of Australian business when it comes to the MDGs is puzzling. While Australian companies are all aware of their corporate responsibility to invest back into the local economy from which they make their profits, he says that when it’s overseas “the same practices, benchmarks, expectations” don’t apply.

This includes not only those who are directly represented in overseas nations but those who also have suppliers based overseas.

Costello says that even as a customer, Australian businesses can take a more active role by asking a few “Millennium Development Goal questions”.

“Like do your workers get enough food? Do their kids get primary education? Do girls get as much chance as boys, which is a gender empowerment goal of the Millennium Development Goals?,” he says. “There’s very simple things they can do if it’s just on their radar.”

Costello says that the report drawn up by Allens shows a clear business case for business to become more active in the fight against global poverty.

“It’s not a humanitarian case,” he says. “There’s no bleeding hearts or World Vision charity...Twenty-five years ago when China was very unstable and there was corruption and the tax system was changed every other day, there were only very few businesses that were brave enough to invest and take the time to build relationships.

“Well, they now reap the rewards and (the situation now in) Laos, Cambodia and Vietnam is an analogy to the China situation. Businesses will have in the next decade huge rewards if they take it seriously, not just saying how do we make money out of these countries but how do we win their goodwill by what we put back in. They’re the questions we ask by being part of the long term global plan to beat poverty in these areas.”

The report concludes with seven point action plan. These include a call for a national conference - involving both government, business and not-for-profit organisations - on the contribution of Australian businesses to poverty relief and progress towards the MDGs.

It also calls on companies doing business with and in developing countries to commit to “responsible and enlightened practice” all along their supply chains, that businesses report on their social, environment and economic impacts with regard to poverty relief and achieving the MDGs, and that Australian companies contribute an appropriate proportion of their social investment to poverty relief initiatives.

The report also calls on business to support a push for the Australian Government to increase it’s overseas aid budget to at least 0.54 per cent of gross national income by 2015 and set out a timetable for reaching the agreed UN target of 0.7 per cent. Australia currently contributes just 0.28 per cent of GNI to overseas aid and has committed to raise it to 0.34 by 2010 but has no timetable for reaching 0.7 per cent.

Costello, meanwhile, says the business community have responded well to report with more companies looking at joining the alliance.

“We have been very, very heartened,” he says.

~ www.worldvision.com.au