CSRFiles Edition 5 by ThistlePraxis Consulting Journals

promoting discussions on corporate sustainability and responsibility across the african continent Vol2, issue 1, 2012 N 750 . 00 NGN $5 . 00 USD ÂŁ3 .00 GBP

The common future

contentS

ADVERTORIAL Sustainable Development in Cross River State

Cover Story The Common Future

TIMELINE

History of Sustainable Development

special report 2011 Annual CSR Review

In Print

AR-CSR™ 2011 Report

I don’t Know Other (Pls Specify) Post-

Pre-

Publisher’s note AR-CSR™. Our consultancy practice is still an emerging one, being barely two (2) years in existence. Since we operate in an environment that is yet to fully grasp the business case, we have done a lot of work, creating awareness on what CSR really is through our various platforms. As a result, we have driven the elevation of the discourse of CSR from charity to a business concept through our projects and products. For as long as things stay the same or change very slowly, we will intensify efforts to bridge the knowledge gap.

Why we do this…

SR Files™ was launched this time last year by President Mary Robinson (First Female President of Ireland & President, Mary Robinson Foundation) at the 2011 edition of the AR-CSR™ where she participated as Keynote Speaker. This journal leads our bouquet of information and resource products tailored for the African market. Others include our eNewsletters; a Weekly Newspaper Page in partnership with The Nigerian Guardian; Nigeria CSR Reports – a summary of all news stories classified as CSR by Nigerian newspapers, Industry Pulse and Sustainable Conversations™ Online; our new offerings). We also organize virtual and mainstream events to project issues of sustainable development, responsible investing and corporate sustainability & responsibility. Our focus at ThistlePraxis, is to elevate Corporate Social Responsibility which still gives people the idea that it has to be the corporate organization doing something social, for it to be responsible; to Corporate Sustainability and Responsibility. We believe that a business has to be sustainable as well as responsible. Our flagship initiative remains the Africa CEO Round-table & Conference on Corporate Sustainability & Responsibility; the

Since the AR-CSR 2011, the African business environment has shifted focus from corporate philanthropy as CSR, albeit very slowly. We have observed some progress in the financial industry in response to international agency demands across the continent. Sadly, in most cases, when there is a push from an externality, African organizations are more inclined to fall in line with globally accepted norms because this positions them as global yet local champions in the international community. However, the motive for signing up to such conventions does not intrinsically add up to doing the right thing. Notwithstanding, we have seen a steady increase in the acceptance and understanding of CSR but are yet to hit the mark because most organizations still miss the essence of sustainability & responsibility and emphasize a seeming inimical relationship of the two to the bottom line. In summary, so much may have happened yet very little change recorded. We have carefully studied the national and continental business environments to understand the peculiarities and have observed the dependence on international frameworks which in most cases do not align with local business practices and cultural inclinations

Remember, thought leadership is neither popular nor celebrated immediately. However, it begins with a step

of many African countries. As a continent, we are quick to sign up to international conventions on various aspects of Sustainable Development without any local framework to achieve the set goals. The era where business entities existed without recourse to society, their stakeholders, preservation of the environment and just for profit alone is long gone. A truly responsible business commitment to development requires businesses/ companies to think and act like long-term partners, working in tandem with government, other firms and community groups to nurture sustainable local industries. And just as business needs good governments, governments need willing and creative private sector partners that are willing to listen and collaborate in setting—and investing in—long-term development objectives. This is why we do this. I am grateful to Graham Sinclair, our Lead Discussant for a brilliant treatise on the future of PPPs in Africa. The title, Our Common Future is apt and thought-provoking. I hope you take this publication away from this event and reflect on the many ideas and thoughts this platform suggests and in doing so, deliberately effect changes in organizational policies and status quo – with you taking the lead as the Champion. Remember, thought leadership is neither popular nor celebrated immediately. However, it begins with a step. We are grateful also to our 2012 Keynote Speaker, Dr. Gro Brundtland for coming and the over forty (40) experts who have converged upon Calabar from different parts of the continent and beyond to lend their voice to this conversation and fulfill the objectives of this initiative. I am convinced that this event will score a turning point in Africa. Please stay in touch.

Ini Onuk

PUBLISHER Ini Onuk

…an open, unending conversation

EDITOR-IN-CHIEF Emilia Asim–Ita copy EDITOR Amarachukwu Iwuala CONTRIBUTORS

Uwem E. Ite, Graham Sinclair research Amarachukwu Iwuala Lucky Igbomor DESIGN

Dr. Dinka Eyo PRE-PRESS ‘Gbemi Osinuga administration Ife Aderoju Emeka Uwanna EDITORIAL CONSULTANCY A’Lime Media Limited Published BY:

Abuja: Port-Harcourt: Accra: Penthouse, Jana Plaza, 10, Isaac Boro Street, 14, Ablade Road, Ahmadu Bello Way, Old G.R.A, Port-Harcourt, Kanda Estate, Area 11, Garki - Abuja Rivers State Accra, Ghana Calabar: 1st Floor, FotoStudio Building, 15A, Murtala Muhammed Highway, Cross River State

Lagos: 81B, Lafiaji Way, Dolphin Estate, Ikoyi, Lagos,

+234 1 213 1776, +234 1 213 1404, +234 818 816 0518, +234 813 661 1906 csrfiles@thistlepraxisconsulting.com • info@thistlepraxisconsulting.com www.thistlepraxisconsulting.com DISCLAIMER: All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording or by any information storage and retrieval system, without written permission from the publishers, except for the inclusion of brief quotations in a review. Copyright © 2012 by ThistlePraxis Consulting Limited. Volume 2, Issue 1 June, 2012 Published in the Federal Republic of Nigeria. ........................................................................................................................... Cover Image: shutter stock library.

Do you have an idea? A tested solution or have views you would like to share with Africa? Contribute to CSR Files™, the leading resource on CSR on the continent. Send an enquiry email to: csrfiles@thistlepraxisconsulting.com

editorial

WHICH WAY AFRICA? The 2012 AR-CSR™ is finally here.

am excited to wrap up many months of planning and ‘meetingthons’. The entire team has worked so hard to make the 2012 edition better. I look forward to meeting each of the over 40 experts and speakers, who will participate in this event. In addition to client briefs, ThistlePraxis is partnering with the Standards Organisation of Nigeria (SON) for the Nigeria Adoption Process of ISO 26000 Guidance Standard on Social Responsibility, ISO 26000: NAP. It is, indeed, going to be a busy rest-of-the-year. This is a commemorative edition, featuring most of the issues; which will be discussed at the 2012 edition of the Africa CEO Roundtable/Conference on Corporate Sustainability & Responsibility (ARCSR™). In this edition, we espouse on Sustainable Development in Africa. The conference theme, succinctly, points to the call for a greater synergy between the Public and Private Sectors in Africa towards attaining far-reaching Sustainable Development indices in most sectors in African economies. As we count down to 2015 with the rest of the world, whatever framework emerges at the global scene must be reworked to better fit the peculiarities of Africa. I am convinced that with a better governance framework, the proposed Sustainable Development Goals (SDGs), as a replacement for the Millennium Development Goals (MDGs), will only record a success in Africa if the continent redrafts and adopts an African version or Agenda. Many of the regular sections and features are skipped whilst the others align with the conference theme. Frequently Asked Questions (FAQs) discusses PPPs in detail from concepts to forms of execution and

implementation. We have taken 9 Questions a notch higher in this edition to reflect on not just the thoughts of one, but nine leaders on issues of Sustainable Development. At this critical juncture, a feature on the history of Sustainable Development is important to remind us of where it all started about 20 years ago. Nonetheless, it is tantamount to an invaluable resource for accessing the progress made and reviewing the blueprint for the future.

I am convinced that with a better governance framework, the proposed Sustainable Development Goals (SDGs) as a replacement for the Millennium Development Goals (MDGs), will only record a success in Africa, if the continent redrafts and adopts an African version or Agenda.

The common future, that we all share in Africa; as the AR-CSR™ 2012 Lead Discussant argues in our cover story, must be bankable. This brilliant piece on PPPs for Sustainable Development is very apt and forms a holistic background to all that will be discussed in Calabar. Also, Verbatim and Glossary return with even more interesting contents.

I am pleased to announce and congratulate our Lead Consultant/ CEO on her invitation to join the World Economic Forum’s Global Agenda Council on Africa as a Member. We are proud of her achievements driven by her zest and sterling leadership qualities. We wish her a very successful period of service, which will in no small way add value to the lives of many Africans and stir Thought Leadership to create change. At the AR-CSR™ 2012, Sustainable Conversations™ Online will be unveiled. This portal will host virtual conversations on Sustainable Development in Africa so that many more people can engage one another at the same time, wherever they may be in response to many requests by readers. Our commitment remains unwavering as long as this platform remains open and available for discussions on the development and practice of CSR within the African business environment and beyond. Please, send in your contributions as we will be glad to publish them in order to engage in an open, unending conversation, which will not be possible without your opinion. All comments, inquiries, requests and reviews should be sent to the Editorial team: csrfiles@thistlepra xisconsulting. com or to me directly: emilia@ thistlepraxisconsulting.com. When the AR-CSR™ 2012 is over, we would answer this question confidently: Which Way, Africa?

2012

(PROTOCOLS) Welcome to the 2012 Africa Conference on Corporate Sustainability & Responsibility.

he absence of a platform to drive discussions, create frameworks, compare notes, rub minds and foster synergy across the continent gave rise to the vision of the AR-CSR™. It seemed very far-fetched for a very young emerging consultancy based in Lagos, Nigeria at that time to conceive of such a huge vision, not just for a country but for Africa. Our intent was plain, clear-cut and the journey ahead pretty simple to comprehend. One year after, we have no regrets and are continuously inspired by the potential for change, improved and widespread impact. Our focus remains elevating the discourse from Corporate Social Responsibility which still gives people the idea that it has to be the corporate organization doing something social, for it to be responsible; to Corporate Sustainability and Responsibility. We believe that the business has to be a sustainable entity before it can be responsible. So, what we imply is that, if a business model is built around responsibility; then it is sustainable. Since ThistlePraxis operates in an environment that is yet to fully grasp this concept, we first worked a lot on creating awareness on what CSR really is through our various platforms. As a result, we have driven the elevation of the discourse of CSR from charity to a business concept through our projects and products. We publish information and resource products tailored for the African market (such as CSR Files™ Journal, e-Newsletter and Weekly Page; Nigeria CSR Reports – a summary of all news stories classified as CSR by Nigerian newspapers) as well

CONVENER'S CONFERENCE REMARKS as organized virtual and mainstream events to project the issues of sustainable development, responsible investing and corporate sustainability & responsibility. At ThistlePraxis, we have made progress on many of the resolutions reached at the 2011 edition of the ARCSR™. We have made available a copy of the official report for each delegate. However, to summarize: we began a Thought Leadership Breakfast Series on Sustainable Development - Sustainable Conversations™ and have held two editions on ‘Fast-tracking Sustainable Development’ and ‘Driving Sustainable Agriculture for National Development’. In addition, we conducted the 2011 ANNUAL CSR REVIEW; a survey that seeks to determine the status of the practice of CSR in Nigeria every year. It also seeks to document progress made annually and encourage best practices. Surprisingly, many organizations declined participation for a myriad of reasons: some sought to know how much it would cost to participate in the survey, others treated it as a sponsorship request, some others stated that their organizations would not -participate because they did not have a clear-cut policy in place for CSR. Very few organizations participated. The exercise in itself was very revealing and gave us further insight to the perception of CSR. An abridged version of the survey report is published in the commemorative edition of our quarterly journal, CSR Files™. At the moment, ThistlePraxis has entered into a knowledge partnership agreement with the Standards Organization of Nigeria (SON) for the Nigeria Adoption Process of ISO 26000 Guidance Standard on Social Responsibility tagged ISO26000: NAP. The calls for Expressions of Interest

We intend to look at sustainable development in terms of education, health, water, peace and security, the environment, the financial sector, PPPs, governance and risk, climate change, biodiversity and our ecosystems, agriculture, corporate governance, FDIs, corruption and economic growth have just been concluded last week and we are preparing for the first technical meeting and inauguration of the adoption process by the end of July 2012. We intend for this process to be very thorough and productive so that when the guide is adopted; we can elevate its standard to a certification and possible criteria or element for the Nigeria Stock Exchange similar to the Johannesburg Stock Exchange Social Responsibility Index. This will ensure that organizations who do not meet social responsibility standards will not be listed or will be de-listed from the Exchange. Increasingly across Africa, some experts have called for legislation for CSR in order to compel the private sector to live up to her perceived responsibilities. We agree that there are countries where there is a form of legislation but at ThistlePraxis, we do not support a complete legislation despite the debates by several schools

of thought. What we propose and will support is a regulatory framework. I support a national strategy on CSR, just as we have in Canada, Botswana, South Africa and a host of other countries. At ThistlePraxis, we also envisage a situation in which investors will be required to establish a CSR policy as a new business and state corporate plans for sustainable development, those plans should be known to all stakeholders and collectively tailored to what the local communities really need. And we hope the Nigerian Ministry for Trade & Investments will take a cue from this. The AR-CSR™ 2012 seeks to elevate the discourse beyond CSR to sustainability and responsibility issues. Today, I present an even bigger, deeper and far-reaching case: Sustainable Development. We are convinced that this has to do with the economics of business and development at all spheres; that is why we talk about expanding economic opportunities for the private and public sector. We intend to look at sustainable development in terms of education, health, water, peace and security, the environment, the financial sector, PPPs, governance and risk, climate change, biodiversity and our ecosystems, agriculture, corporate governance, FDIs, corruption and economic growth. Professor Wole Soyinka, a Nobel Laureate recently proposed Developmental Autonomy and Sovereignty. He believes that member states as well as regions and subregions at the country and continental levels can grant themselves the

...Presidents in Africa to take up the gauntlet and facilitate development at all levels. The era of waiting for a Global Call to Action is no more, the era of waiting for the African Union to ratify a document so that all member states can adopt is long gone

autonomy for development. We cannot agree less with his passionate clarion call for Governors in Nigeria, Presidents in Africa to take up the gauntlet and facilitate development at all levels. The era of waiting for a Global Call to Action is no more, the era of waiting for the African Union to ratify a document so that all member states can adopt is long gone. The sacrosanct nature of sustainable development gives the impetus to private sector to develop their communities and by so doing; put pressure on the public sector to collaborate or follow suit. Some people have argued that this will only make the Public sector redundant as corporations cannot take over the responsibility of government. On the flip side of the argument, a pro-active private sector reveals the ineptitude – in most cases, monumental – of the public sector. Wole Soyinka argues further that the role of Developmental Economics must be considered at all times whilst the addiction to Foreign Aid which fuels corruption and commensurate decline in Human Development Indices must be curbed. The whole world followed the recently concluded Rio +20 UN Conference on Sustainable Development. Whilst the currently proposed Sustainable Development Goals (SDGs) are deliberated upon, it is important for us to develop and commit to our own frameworks drawn up in consideration of our local challenges and bottlenecks. At ThistlePraxis, our consultants argue whenever this issue is discussed that the SDGs will do no better than the MDGs if stricter governance frameworks are not instituted. In reaction to this, we are proposing the model of Sustainable Development Commissions for the Post-2015 era. Whilst we look to the erstwhile UK Commission as a case study, the existing frameworks which are not very effective must be reviewed. In Nigeria for instance, the Senior Special Assistant to the President on MDGs has the task of Sustainable Development in the country. Her office is replicated in the 36 states by the offices of the Special Adviser to the State Governor on MDGs. However, we realized that most of the appointees to those offices lack the needed skills to function and

...the SDGs will do no better than the MDGs if stricter governance frameworks are not instituted drive Sustainable Development issues across board. We are convinced that we have found a feasible model and will be in talks with our Host, the Cross River State Government for a pilot exercise in Nigeria. I am hopeful that one of the key elements that will come out of here will be a guiding framework for a Sustainable Development Commission starting at the level of the states and provinces with the feasibility of establishing a Federal or country-level agency in a few years. It is still a flicker of hope that we can and will do the right thing. Let me use this opportunity to thank the Executive Governor of Cross River State, the Government and people of Cross River State for hosting and supporting the AR-CSR 2012; Your Excellency, your support has been immense and I am very thankful that you accepted to support this initiative full throttle; thanks are due also to all our speakers, our partners who supported in one way or the other. Despite all our efforts, for two years running, we have not gotten a single corporate sponsor for the conference. We are still wondering why. At ThistlePraxis, we are passionate about Africa and we envisage a future where Africa leads discussions on sustainable development and responsible business. The countdown has already begun as the AR-CSR moves to East Africa with the 2013 edition scheduled to hold in Addis Ababa from June 20-21, 2013. We hope you will join us there as delegates, partners and sponsors. Once again, I welcome you to Calabar, welcome to Cross River State, welcome to the AR-CSR™ 2012.

faqs

PUBLIC-PRIVATE PARTNERSHIPS

WHAT ARE PUBLIC-PRIVATE PARTNERSHIPS? A Public-Private Partnership (PPP) is a partnership between the public and private sector for the purpose of delivering a project or service, which would traditionally be provided by the public sector. The PPP process recognizes that both the public sector and the private sector have certain advantages relative to the other in the performance of specific tasks and can enable public services/infrastructure to be provided in the most economically efficient manner by allowing each sector to do what it does best. PPPs involve the private sector partner providing a â&#x20AC;&#x2DC;bundleâ&#x20AC;&#x2122; of services such as design, construction and maintenance. Bundling thus differs from traditional contracting out, whereby separate contracts are let for each service. PPPs are another element in the general move to modernize the public service and local government, providing greater efficiency and effectiveness and ultimately a better quality customer service. WHAT IS THE ROLE OF GOVERNMENT IN A PPP? PPPs entail a sharing of responsibility between government and the private sector. The government is responsible for strategic planning and industry structure, some customer interface issues, regulation and (sometimes) payment on behalf of the service users. PPPs transform Government Departments and Agencies from being owners and operators of assets into purchasers of services from the private sector. Nonetheless, governments retain overall responsibility for service delivery.

WHAT IS THE ROLE OF THE PRIVATE SECTOR IN A PPP? The private sector will do one or more of the following: provide private finance to fund the project, enter into a long term [greater than 5 years] service contract, undertake the design and construction of an asset on the basis of an output specification prepared by the public sector and designed to meet broad performance targets and/or enter into a joint venture arrangement with the public sector to provide a service or asset. WHAT TYPES OF PUBLIC-PRIVATE INVOLVEMENT ARE AVAILABLE IN INFRASTRUCTURE? TDC - Traditional Design and Construction: The Government, as principal, prepares a brief; setting out project requirements before inviting tenders for the design and construction of the project. Private sector contractors undertake to design the project in accordance with the brief and construct it for an agreed sum, which may be fixed or subject to escalation. O&M - Operation and Maintenance Contract: These projects involve the private sector operating a publicly-owned facility under contract with the Government. LDO: Lease-Develop-Operate: This type of project involves a private developer being given a long-term lease to operate and expand an existing facility. The private developer agrees to invest in facility improvements and can recover the investment plus a reasonable return over the term of the lease.

BOM: Build-Own-Maintain: This type of arrangement involves the private sector developer building, owning and maintaining a facility. The Government leases the facility and operates it using public sector staff. BOOT: Build-Own-Operate-Transfer: Projects of the Build-Own-OperateTransfer (BOOT) type involve a private developer financing, building, owning and operating a facility for a specified period. At the expiration of the specified period, the facility is returned to the Government. BOO: Build-Own-Operate: The Build-Own-Operate (BOO) project operates similarly to a BOOT project, except that the private sector owns the facility in perpetuity. The developer may be subject to regulatory constraints on operations and, in some cases, pricing. The long-term right to operate the facility provides the developer with significant financial incentive for the capital investment in the facility. WHAT ARE THE BENEFITS OF PPPS? For the private sector, PPP projects provide an opportunity to participate fully in major infrastructural development and to contribute new ideas to the design and construction of works. PPPs also allow for the best of public and private sector management skills to work together in the delivery of services for public benefit. Sources http://www.rpa.ie/en/rpa/ppp/Pages/ PPPFAQs.aspx ht tp://w w w.sahealth .sa .gov. au/w ps/ wcm/connect/14c52480439f1277be55fe ed1a914d95/PPP+fact+sheet.pdf?MOD= AJPERES&CACHEID=14c52480439f1277 be55feed1a914d95

CY CMY

Advertorial

SUSTAINABLE DEVELOPMENT IN CROSS RIVER STATE 7-point agenda 8-year economic blueprint

“

The essence of this policy aligns with the government’s vision and mission of creating a prosperous State inhabited by wealthy people living in peace and security

“

ross River State has taken bold and pragmatic steps into a sustainable future since His Excellency, Senator Liyel Imoke, and assumed leadership of the State on May 29, 2007. Within the enclave of a Seven-Point Agenda articulated in a four year Economic Blueprint, Imoke has redefined the developmental perspectives of the State. This blueprint has motivated and powered the government’s strategic intervention in education, tourism, health, agriculture, environment, infrastructure, and private-sector booster initiatives. The essence of this policy aligns with the government’s vision and mission of creating a prosperous State inhabited by wealthy people living in peace and security.

Imoke dedicated the last four years in repositioning Cross River State for future greatness by running a responsible government that responds to the needs of the people.

POLICY DRIVE Governor Imoke runs a government that is driven by a social agenda. In pursuit of this social mandate, the government launched revolutionary interventions in health, education, environment, agriculture, infrastructural development, tourism and bold initiatives to make the private sector more attractive to domestic and international investors. The Government has also entered into strategic Public Private Partnerships, (PPPs), where such partnerships are critical to the advancement of the corporate interests of the State and the welfare of Cross Riverians. In the preceding three and half years, Imoke has leveraged human and material resources in the economy of the State

Advertorial 7-POINT AGENDA

Make agriculture more productive and rewarding by encouraging the adoption of agricultural best practices and ensuring that investment in the sector is strategic and adaptable.

Grow the tourism industry by enhancing existing tourist sites, developing new sites, and initiating and strengthening tourism activity in the State, particularly through the provision of a well regulated conducive environment.

Expand access to and affordability of qualitative education a defend social services to empower the youths with the relevant skills to compete in the emerging knowledge Economy.

Institutionalize basic health care by providing a Primary Health Care Delivery System that meets the needs of both urban and rural communities.

Develop a strong private sector driven economy by growing the purchasing power of Cross Riverians and encouraging private enterprise and strengthening the real sector of the State economy.

Build, upgrade and maintain infrastructure of transportation, electricity supply, communication, and water supply in urban as well as rural communities.

Preserve the physical environment through conservation and promotion of environmentally-friendly practices in development and lifestyle.

in order to: The civil service Imoke met was not in a state to support and indeed drive the new service charter he was clearly anxious to roll-out. Therefore, attaining the new targets required strategic bureaucratic reforms to re-engineer the Government and reposition it to meet the challenges of development and wealth creation in this new order. Governor Imoke, was compelled by systemic inadequacies to initiate reforms in the following critical structures of governance:

Renovation and equipping of offices was embarked upon and civil servants put through training and courses to build their skills and capacity.

a. Public Service b. Local Government c. Social Welfare d. Tax System, and e. Public Procurement.

LOCAL GOVERNMENT A holistic restructuring of the Local Government system was done to ensure the delivery of service dividends to the rural populace. Transparency in procurement has been matched with accountability by Chairmen of Local Government Councils. This tier of governance is fully democratized with regular and periodic elections for the Council Chairmen and Councilors. Relevant legislations have been made to ensure that funds are applied judiciously and in accordance with best practices.

PUBLIC SERVICE Computerization of the service was carried out. SERVICOM was moved to the Governorâ&#x20AC;&#x2122;s Office for effective monitoring and delivery of service mandate. A competitive examination was made the basis for promotion to the top echelon of the service.

TAX ADMINISTRATION Partly in response to external financial challenges, and partly in recognition of the need to raise its internal revenue curve, Imoke had to automate revenue generation processes and engaged consultants to strengthen the tax administration system.

PUBLIC PROCUREMENT A Due Process and Price Intelligence Unit was created to ensure accountability and transparency in government procurement process. The goal is to guarantee value for money and check wastage through inflated contracts. DIVIDENDS In his inaugural address on May 29, 2007, Imoke painted a broad picture of the future he envisaged for the State, and promised the people that he will work tooth and nail to get the State there. He never took the electoratesâ&#x20AC;&#x2122; mandate lightly. It is, therefore, auspicious to show the road traversed by Imoke in keeping faith with the promises he made to the people years ago. INVESTMENT OPPORTUNITIES The government has invested in the development of benchmark infrastructure to encourage investment. As a consequence, investment interest in State has surged significantly since 2007. This has been

Advertorial aided by a mix of natural endowments and critical legislation to provide tax waivers to level operational challenges. Bureaucratic hitches experienced by firms in getting off the ground have been comprehensively addressed by the establishment of the Cross River State One Stop Investment Centre (OSIC). This is the first among the 36 States and the FCT in Nigeria. The Cross River State Investment Centre collaborates with the Nigeria Investment Promotion Commission (NIPC) and the Abuja One Stop Investment Centre to provide Pre and Post-investment support services for existing and potential investors. The administration established a Microfinance and Enterprise Development Agency (MEDA) to provide finance support to the micro small and medium enterprise sector and help grow local enterprise. The presence of the Tinapa Free Trade Zone, Calabar Export Free Zone, a Public Private Partnership (PPP) legislation, and a Privatization Council together with the reforms, have helped in scaling investment levels. The result of this today, is that, Cross River State has become a haven for investors. This is evident in the number of new businesses being registered in the State. This number grew remarkably from 187 in 2007, to 868 in 2009. Some others, like University of Liverpool, (University Campus) ABG India (Shipyard) Nagarjuna, India (Fertilizer) and Film Power International (Solar Panel) are concluding their investment processes. HEALTH The capsule of the Government’s health drive is the strengthening of primary healthcare as a strong foundation for secondary and tertiary medicare. 66 new Primary Health Care Centres have been constructed and an existing 130 upgraded. Distributively, each electoral ward has one well-equipped PHC. 16 General Hospitals have been renovated, and 6 new ones constructed. Plans have advanced considerably to establish an international State-of-the-art referral hospital in Calabar to promote health tourism. This healthcare delivery has been further deepened by the establishment of the Dr. Lawrence Henshaw Memorial Hospital and Specialist Centre, with a Polymerase Chain Reaction (PCR) Laboratory, the 2nd in Africa. The centre provides treatment for tuberculosis and other infectious diseases. Significantly, the State has

recorded universal coverage of two insecticide Treated Mosquito Nets (ITNS) per household under the Roll Back Malaria Programme. The government is collaborating with MTN to set up a Renal Dialysis Centre and with Tulsi Chanrai Foundation for delivery of community Health in four Local Government Areas. SOCIAL SECURITY Cross River State is the first State in sub-Saharan Africa to implement a social security programme. “Project Hope” a free health initiative for pregnant women and children under five years of age and “Project Comfort” a Conditional Cash Transfer CCT, programme for very poor households, was instituted as a poverty alleviation strategy for the most vulnerable people and families in the society. The second enrolment of beneficiaries through a biometric process has been completed. Cumulatively, about 128,427 people have been enrolled for the free medicare while 2,231 households are being serviced under the Conditional Cash Transfer, CCT, programme. ENVIRONMENT The government has consolidated the enviable rating of Cross River State as the cleanest and most environmentally disciplined in the country with bold initiatives aimed at improving aesthetics, and protecting its ecosystem and improving its standing as a biodiversity hot spot. The government has effected a moratorium on logging and designated the State’s rich mangrove swamp as a reserve area, which have scaled up the value of the State’s Carbon stock. Under its urban renewal programme, aesthetic development has been extended to within a 25-km radius of each of the five Urban Development Authorities in Calabar, Ugep, Ikom, Ogoja and Obudu. The work of the Urban Authorities has been enhanced with the establishment of the Cross River State Waste Management Agency, and the acquisition of additional waste disposal bins and trucks including development of sand-fills. The Government has also completed the study and design process of 21 erosion sites in readiness for intervention. To push its climate change agenda, the government is planting 5 million trees across the State and is soon to establish a Wildlife Conservation and Eco-tourism Centre. In 2009, Governor Imoke was invited to the World Environment Summit on

Climate Change in Copenhagen, and subsequently nominated into the Governor’s Global Task Force on Climate Change, chaired by the outgone Governor of California, Arnold Schwazenager. Only last year, Imoke was invited to the Climate Change Conference in Cancun, Mexico. The government has also taken significant steps to conserve and develop its forest resources, through various initiatives. AGRICULTURE To match this broad statement, the government has put in place a marketsensitive, commercialized, competitive and dynamic programme for the full exploration of the agricultural potential in the State. MOUs have been entered with Tolan Energy Limited for the production of bio-diesel with an investment of $150 million. Yet another MOU is in place with Notore Chemical Industries for the cultivation and milling of 20,000 hectares of rice. These initiatives will create close to 20,000 jobs. FADAMA III, a World Bank partnered intervention in this sector has facilitated the provision of tractors, processing equipment, irrigation and credit to farmers. Another partnership has been forged with the NDDC for the revitalization of the poultry Farm at Ikot Effangha Mkpa. The government’s pilot programme in this sector, the Cross River Agricultural and Rural Empowerment Scheme, (CARES) has resulted in the allocation of 2HA each of developed oil palm and cocoa farms, 3,500 tons of fertilizers, and 1.2m disease resistant, high yielding cocoa species to more than 3,500 farmers. A further 100 hectares of land was developed and leased to 12 Cooperatives. EDUCATION The government’s determination to revamp and position this sector for excellence was underlined by a clear definition of the “Cross River State Standard” for academic benchmark. Under this initiative, 60 Secondary Schools, and 125 Primary Schools are undergoing comprehensive renovation. This renovation includes construction of modern classrooms, assembly halls, laboratories, desks and chairs, ICT, libraries, sports and recreational facilities, convenience, and other infrastructure to develop body and mind. Scholarships have been awarded to 177 post-graduate students,485 undergraduate students and 52 overseas students. Renovation work is also ongoing at

Advertorial the College of Education, the School of Health Technology, and the Cross River State University of Technology, CRUTECH. Lecturers have been recruited for CRUTECH and the College of Education while over 1,000 teachers have been employed, with a further 4,000 retrained in response to the renewed quest for excellence. A postgraduate school has been established at CRUTECH for higher academic pursuits. The strict monitoring and regulation of schools has resulted in the shutting of 80 primary and 27 secondary schools, and the checking of truancy and other vices amongst pupils and students.

TOURISM Cross River State has succeeded in establishing itself as a reference point for tourism in Nigeria and the subregion. Imoke has branded the State as a Destination of excellence in all areas. The government has addedvalue to the branding of the State by adding real value to the State’s tourism events and places leaving tourists spoilt for choice. A Water Park, and Amusement Arcade have been added to Tinapa Resort. A Theme Park is to be constructed there soon. The delivery of the Leboku International Festival, the Obudu International Mountain Race and the Calabar Festival and Carnival Calabar have been improved upon and increased private sector sponsorship recorded. To improve the tourist value of the Ranch Resort, the calibration and alignment of the instrument Landing System (ILS) at the Bebi Airstrip is at early stages. INFORMATION COMMUNICATION TECHNOLOGY The government has almost completed the development, deployment and utilization of modern information and communication technology in all the Local Government Areas in the State, including a Metropolitan Area Network that links all the State’s MDAs. A special purpose vehicle, the “Cross

River State Network Company Limited” is driving the ICT programme of the government. This vehicle is powered by the Consortium of CISCO and NEXTZON. Every bit of government business is e-governance compliant. RURAL DEVELOPMENT Significant progress has been made in the provision of infrastructure in rural communities previously cutoff from government attention. These infrastructures like roads and electricity are of high economic value in terms of the enhancement of the productivity and lifestyle of rural people. Three agencies were established by government to implement the Government’s rural development programme. They are: Rural Development Agency, (RUDA), State Electrification Agency, (SEA), and Border Communities Development Commission, (BORDERCOM). Over 500 kilometres of rural roads in 16 Local Government areas are being constructed. These roads have 19 bridges and an aggregate span of 746 metres. The administration is in the process of embarking on the second phase of another 500 kilometres across the State. Electricity is being provided in 67 rural communities. Transformers and other electricial materials have been procured. Five (5) new relief stations were built and eight (8) substations rehabilitated. Rural communities are being provided with motorized boreholes, Primary Health Care Centres and new Primary Schools. The development of rural areas is a critical mass index in the government’s vision of wealth creation.

URBAN RENEWAL The Imoke administration has ensured that the urban centres in the State remain the most livable in the country by sustaining the urban renewal programme in Calabar, Ugep, Ikom, Ogoja and Obudu. Calabar South is now easily accessible, thanks to this programme. Over 44 roads are being reconstructed in that Local Government. The extension of the Ndidem Usang Iso Road to link the Ikom/Calabar Highway has been completed, as well as the dualization of the City Gate Road to Tinapa and the access road to the proposed Calabar International Market. The Idundu Bridge has also been completed, linking Calabar to Akpabuyo through MCC Road. The streets of Calabar are a beauty to behold at night, with over 47 kilometres of street lights, which are being extended to Calabar South and other urban centres to enhance their value as commercial hubs in the State. Over 19,000 households in Calabar have been connected to regular uninterrupted Public Water Supply. An additional 25,000 are to be soon connected. This scheme is currently being extended to cover some other key urban cities including Ogoja, Ikom and Obudu. A well organized public transportation system, structured to match the tourism prospects of the State has been introduced by the Imoke administration. To this end, the use of motorcycle as a means of public transportation was banned in the State capital, while a modern fleet of taxis and buses were introduced.

Advertorial PUBLIC SERVICE Unprecedented incentives, reforms and welfare initiatives have been engaged by the Government to prime the Public Service for greater service delivery. Car and motorcycle loans, have been provided to ease transportation challenges usually faced by public servants. Professionalism and efficiency is emphasized by the government through training and manpower development programmes. ICT training and laptops have been provided to all categories of public officers. Staff moral has also been boosted through an annual percentage increment and regular payment of salaries, allowances and grants. The government through the Department of Mortgage Finance is collaborating with primary mortgage institutions and the Federal Mortgage Bank to provide mortgage loans for affordable housing for civil servants on an owner-occupier basis. The 610 housing units will be ready for allocation soon. INFORMATION AND ORIENTATION To ensure mass communication and keep the electorates constantly informed of government programmes and activities, information organs in the State have been revitalized by the Imoke administration. New Ultra Modern UHF Radio/ Television Digital Transmitting System are being installed in Calabar, Odukpani, Ikom and Obudu Ranch stations to guarantee universal coverage of the State. INTERNATIONAL DONOR SUPPORT Governor Imoke has engaged the support of International Donor Agencies to push this development agenda especially in meeting the Millennium Development Goals, MDG and the Conditional Grants Scheme, CGS. This funding is vital to the execution of 105 key projects in health, water, sanitation and alternative power generation. This donor partners – European Union, EU, Canadian International Development Agency, CIDA, World Bank, United States Agency for International Development, USAID, Department for International Development, DFID – have provided the State with finance and capacity building services.

SOME COMPLETED AND COMMISSIONED PROJECTS: Education The following Schools have been completed and commissioned by Governor Imoke under the comprehensive renovation of Schools Programme:i. Community Secondary School, Adim, Biase Local Government Area. ii. Community Secondary School, Nko, Yakurr Local Government Area. iii. Henshaw Town Memorial Secondary School, Calabar Local Government Area. iv. Government Secondary School, Ikom, Ikom Local Government Area. v. Government Secondary School, Igoli, Ogoja Local Government Area. vi. Comprehensive Secondary School, Mbembe, Obubra Local Government Area. Many others have been inspected by the Governor to access the progress of work on them. Rural Roads The following rural roads have been completed and commissioned by the Governor under this very ambitious Programme:i. Ugboro/Ijibor/Imaje Road (8.4 km), Bekwarra Local Government Area. ii. Iyamoyong – Iyamitet Road (14.2 km) Obubra Local Government Area. iii. Inyima – Assiga Road (9.1 km) and Yakurr (30 metre Span Bridge) Yakurr Local Government Area. iv. Itigidi – Adadama Road (10.6 km, with spurs to Etigeve and Isong Inyang) Abi Local Government Area. v. Betukwel – Ohong – Bedia – Ibong – Okorshie Road (9.5 km),

Obudu Local Government Area. vi. Ipollo – Ogba – Ijibollo, Apiapumtet Road, Yala/Obubra (23 km with 45 metre span Bridge) Obubra Local Government Area. vii. Ballop – Bendeghe – Afi – Bellip, Akparabong – Opu Road, Ikom Local Government Area. Rural Electrification Under Imoke’s Programme of opening access to rural areas for economic development, the following electrification projects have been completed and commissioned by the Governor:i. Nsidung/Ikot Adiaha electrification Project, Akpabuyo Local Government Area. ii. Ijibor Electrification Project, Bekwarra Local Government Area. iii. Bewo electrification Project, Bekwarra Local Government Area. iv. Ukambi/Ikwomikwu Electrification Project, Obudu Local Government Area. v. Iyamoyong – Iyamitet Electrification Project, Obubra Local Government Area. vi. Ukim Ita Electrification Project, Odukpani Local Government Area. vii. Efut Ibonda Electrification Project, Odukpani Local Government Area. viii. Mbok I/Mojabekabe Electrification Project, Ogoja Local Government Area. ix. MfoM I/Mfom II Electrification Project, Ogoja Local Government Area. x. Ngoli/Iyagor Electrification Project, Abi Local Government Area. xi. Mbora/Wanudu Electrification Project, Yala Local Government Area. xii. Ipuole – Okuku/Abachor Electrification Project, Yala Local Government Area.

Advertorial

With the advanced level of work on most of the projects, completion and commissioning is expected to be done before the end of the second quarter of the year.

Modern Market north of the city of Calabar, with infrastructure to match the Destination Cross River brand, while giving shoppers real value for their money.

MOVING INTO THE FUTURE In spite of the strategic programmes embarked upon by the government to create wealth for the State, Governor Imoke is looking towards the future. To this end, the following projects are to be executed to enable Cross River out-compete other in development and job creation:

Calabar Energy City The Government has succeeded in constituting a project team comprising major private sector players from the Finance and Oil and Gas service sectors to work with the State Government on this vital project. It is a dedicated energy sector residential, commercial and industrial cluster with international standard infrastructure. The city will make the State a hub for energy business.

Theme Park The Calabar Six flags Theme Park, a World Class Project to be operated and managed by the highest reputed operator in the United States Six flags incorporated. The Park will provide themed rides, attractions and shows for all generations in celebration of the spirit and culture of the sub-region. Located on 100 hectare land across the lake adjacent to Tinapa, the Theme Park, shall put the State on the map as the premium tourist destination, and create tremendous employment opportunities for Cross Riverians and Nigerians. Calabar Metropolitan Modern Market Calabar is one of the fastest growing cities in Nigeria today. Its tourism profile, and the peace and security the State is reputed for, continues to be a strong attraction for tourist, business and conferences. The existing markets are unable to cope with the growing pressure, or meet the demands of growing commercial activity. The State Government is, therefore, set to develop a new Metropolitan

Water Front Resort (The Riviera Club) This is conceptualized as a private development; an exotic exclusive private resort for discerning high networth individuals who appreciate the value of investing in real estate in this fast developing destination. To be situated along the waterfront of Calabar River, it would provide investors and holiday makers with the highest level of luxurious living and leisure facilities. This would also boost the profiling of the State as a destination. The Calabar Hospitality Training Academy As a major tourism destination, in the sub-region, the State intends to consolidate and deepen the excellence of all shades of services on the tourism spectrum through the establishment of a tourism academy. The academy will train manpower for the tourism and hospitality industry.

SECURITY In spite of its location in the volatile Niger Delta, Cross River State has a near zero crime rate. The Security network in the State is efficient with safety of lives and property guaranteed all-year round. Cross River State is perhaps the only State in the country with a functional emergency Response Centre, with dedicated staff providing 24-hours response to all emergencies. In line with its proactive approach to dealing with security, the State has engaged the services of internationally reputed security consultants to implement a blanket security masterplan. CONCLUSION His Excellency, Senator Liyel Imoke, has consistently maintained that Government should serve those who need Government the most. Fundamentally, the drive is to create a service oriented economy, and implement a social agenda that guarantees wealth creation and sustainable prosperity for Cross River indigenes, and all who regard the State as a home. Governor Imokeâ&#x20AC;&#x2122;s core policies and programmes are essentially strategic and regenerative. The bottom-line, the essence is efficient service to the people which is the value the Government gives. Cross River State is West Africaâ&#x20AC;&#x2122;s hot new destination for investors. Governor Imoke has raised the corporate profile of the State to unprecedented levels. Governor Imoke is running a Government with substance and ideas. He has the energy, leadership and values to keep Cross River State ahead.

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TOWARDS EFFECTIVE PARTNERSHIPS FOR SUSTAINABLE DEVELOPMENT

he concept of Sustainable Development has been increasingly used by governments, companies and other types of organisations to describe their activities and guide their policy-making. Although the Brundtland Report provided a solid foundation for Sustainable Development, it failed to explain how to implement it. Indeed the report emphasised that no single blueprint exists for Sustainable Development and that the ways, in which countries achieve Sustainable Development will vary among the different economic and political systems around the world. This triggered the development of several Sustainable Development policy frameworks, management guidelines and indicators which have been used in an attempt to operate the concept. However, due to the emergence of several interpretations of Sustainable Development, it became somewhat difficult to ascertain exactly what Sustainable Development means in selected contexts. Nonetheless, there now is common acceptance that Sustainable Development involves consideration of the environmental, economic plus social aspects of development and that these must be addressed in order for Sustainable Development to take

place. Partnership is at the very heart of the concept of Sustainable Development. The language of partnerships was very evident at the 2002 World Summit on Sustainable Development in South Africa. There was little sense of precisely how organisations could contribute to these new social partnerships, the manner in which such partnerships would or could be structured, the expected outcomes or how these outcomes compared with those of other approaches to development or poverty alleviation. Yet, the idea of partnership for Sustainable Development is not completely new. While the rhetoric of partnership has focused on reciprocity in information sharing, policy dialogue and meeting commitments, the practice has often fallen short of these basic ingredients. The partnership approach to development is very much predicated on considerations of efficiency and effectiveness, which is expected to bring about organisational and managerial change. Like stakeholder consultation, partnerships draw together the expertise and ideas of different actors in the society to help deliver the principal objectives of social performance. At the

same time, partnership is a special and more influential form of stakeholder engagement. It goes beyond consultation and dialogue - it is about joint action, where everyone does what they do best. Therefore, a successful partnership brings together the strengths of different organisations. For example, this can be the management and technical expertise of a company; the strategic co-ordination and resources of the government; the community engagement skills of Non-Governmental Organisations and the knowledge and resources of the local communities. In Nigeria, the need and imperative for Sustainable Development in the Niger Delta region cannot be overemphasised. The region is made up of nine states of the Nigerian federation and covers approximately 70,000 square kilometres of land with an estimated population of more than 30 million people, 75% of who live in the rural areas. It also accounts for over 90% of national export earnings and more than 70% of revenues, accruing to the Federation Accounts, mainly from oil production and exportation. However, the socio-economic reality of the Niger Delta region is a paradox of poverty amidst plenty. Per capita income is very low with more than 60% of the

column population, earning less than US$75 per month. As a result, the incidence of poverty is very high with over 70% of the population living at subsistence level. Yet, it has become a common political characteristic of the Nigerian government and its elites to blame oil multinationals (a potential vehicle and partner for development in the Niger Delta), for the development problems and incidence of poverty in the region. As a result, many inhabitants of the region have been left with a deep-rooted distrust of government institutions and the oil companies. The culture of blaming oil companies in the Niger Delta manifested in community protests (sometimes with government support) as well as indicting statements by state governors and members of the Nigerian National Assembly. This is predicated on the perceptions that the oil companies in Nigeria are massively exploiting their host communities and giving too little or nothing in return to the people. However, a closer examination will show that the poverty and underdevelopment in the Niger Delta can be linked to corruption, poor governance and the lack of accountability. The failure of the Nigerian government to provide and actively encourage social and economic development in the Niger Delta, or anywhere else in Nigeria, led to the heavy reliance (directly and indirectly) by the government and the Niger Delta communities on the oil companies. As the ‘dependency culture’ became established in the region, the communities increasingly regarded any development infrastructure provided by the oil companies as a form of rent for the use (and abuse) of the environmental resources of the region. In the process, they resorted to making aggressive demands and expecting ‘more development’ from the multinational oil companies in the Niger Delta. In turn, the community groups also became very passive recipients of development initiatives from the oil companies. Within the context of Sustainable Development in the Niger Delta, there is no doubt that partnership is necessary to deal with the myriad of social, economic and environmental development problems of the region. No development actor has the vast amount of financial resources required to develop the Niger Delta. In specific terms, the Nigerian government and the oil multinationals need each other

to develop the Niger Delta. On the one hand, the government need the multinationals to generate material wealth and provide jobs for their citizens. Conversely, the multinationals need the government to provide the infrastructural basis for their continued existence: both physical infrastructure in the form of the built environment and social infrastructure, including the legal protection of private property and institutional mechanisms. Governments are containers of distinctive business practices and cultures within which businesses are embedded as well as the regulators of business activity. From a theoretical perspective, the partnership approach to Sustainable Development in the Niger Delta has the potential of bringing benefits to all the parties, including the enhancement of transparency within government, more equitable distribution of wealth, avoidance of local disputes, grant of ‘licence to operate’ to companies and reduced dependency of local communities on companies in the Niger Delta. However, at the practical and implementation level, it will require significant levels of transparency and genuine cooperation between the Nigerian government and the oil companies matched by sound corporate and political governance from both parties respectively. In recent times, there has been a compelling case for partnership between government, business and civil society. Global leaders in the field of development are promoting collaboration between civil society and the market as a significant new strategy for promoting Sustainable Development. The partnership approach involves the ‘pooling’ of resources, competences, capacity and expertise, thereby achieving outcomes that add value to what each party could accomplish by acting alone. The approach builds on the idea that each sector in society has core competences and resources that, if appropriately arranged, are complementary to one another. To ensure effective partnerships, it is important to negotiate and reach consensus on what each partner will contribute and what each partner expects in term of roles and benefits. These agreements need to be captured in a signed document, which may vary from a legally binding contract to a less formal Memorandum of Understanding or Letter of Intent. Written agree-

ments enhance the effectiveness of partnerships while also serving as useful reference materials for any necessary arbitration. Similarly, partnership agreements, implementation plans and other documents should be made as specific as possible to the partnership under review, yet flexible enough to accommodate necessary modifications as new lessons are learnt about each stage of the partnership process. It is important to also note here that partnerships are easier to initiate than to implement. Therefore, the differences in organisational culture, unforeseen organisational and government policy shift as well as human relationship issues can lead to the failure of partnerships if they are not well managed. As such, it is not advisable for partners to play the ‘blame game’ when things go wrong. In conclusion, there is a growing realisation that partnerships are more efficient in contributing to Sustainable Development. For businesses, this stems from the argument that conventional ways of ameliorating the negative impacts of their activities and implementing social investment programmes (e.g. through company foundations) have been bogged down by an emphasis on quantity not quality. As such, establishing a tri-sector partnership between business, government and civil society represents a better strategy. This involves the sharing of responsibility which can result in more manageable costs and risks, increased effectiveness of actions in the community and reduced long-term dependence of communities on external agencies for their development. Although it may be easy to set up a cross-sector partnership, one of the biggest challenges of sustaining that partnership is the issue of providing long-term resources. Therefore, it is important for the partners to develop a robust strategy on how the partnership will be managed from the beginning to the end. Dr Uwem Ite is currently the Team Leader, Information, Education, Communication and Capacity Building within the Sustainable Development and Community Relations Department, the Shell Petroleum Development Company of Nigeria Limited. The perspectives presented in this article are personal. His previous publications on CSR and Sustainability can be found in various international journals, including: Corporate Social Responsibility and Environmental Management; Sustainable Development; CSR Files, Journal of International Development and Review of African Political Economy. He can reached on 0802 4299915 and uwem.ite@gmail.com

verbatim

WHAT ROLE SHOULD PUBLIC-PRIVATE PARTNERSHIPS PLAY IN SUSTAINABLE DEVELOPMENT?

Gordon Brown, Former Prime Minister of the United Kingdom and Chair of World Economic Forum Global Issues Group, United Kingdom.

Dr Goodluck Jonathan, President of the Federal Republic of Nigeria.

Hon. C Campbell, MP, Chair of the Committee, Parliament of Victoria.

“Africa’s infrastructure is not fit for the purpose of domestic trade. If the private and public sectors could work together, more effectively, and lay down guidelines that deal with risk, we could mobilize private capital. There is a new energy in Africa to move from design to delivery.”

“We are laying emphasis on Public/ Private Partnership (PPP) in reducing unemployment.”

“Public-Private Partnerships (PPPs) are one form in the range of procurement options that are available for public infrastructure. Being one of the newest in the suite of infrastructure delivery methods available to Government, intense interest is generated whenever governments consider their use.”

George Spadoro, Mayor, Edison, New Jersey.

Scott C. Ratzan, Vice President of Global Health, Government Affairs and Policy at Johnson & Johnson.

Eugene A. Schiller, Deputy Executive Director, Southwest Florida Water Management District.

“I have to be very positive about the future of PPPs. I don’t think there’s a panacea, I don’t think there’s a pot of gold, but I think there is a tremendous amount to be gained by government going through this process.”

“Global health and development are too important to relegate to any one group. Congress has an important opportunity to support and encourage more Public-Private Partnerships in health, literacy, maternal and child health and other related areas that can help address the MDGs.”

“A partnership by definition involves two or more parties committed to a common task, sharing risk and yielding a reward to all the partners. The service goals need to be achieved more efficiently together than alone. And successful PPPs enable both parties to do what they do best to achieve a common goal. In the end, it is as much about open honest communication as it is about money.”

Amil Dossal, Executive Director, UN Fund for International Partnerships, Columbia University

UNDP PPP Service Delivery Report ‘Stories from the field’.

Michael R. Reich, Taro Takemi Professor of International Health Policy, Harvard School of Public Health

“ ... From this, a space has evolved that did not exist before - a space, where Public-Private Partnerships, among governments, civil society, foundations and organizations, are gaining recognition as a promising approach for addressing social changes.”

“UNDP, through PPPSD, has provided technical and advisory services for the creation of an enabling governance environment with appropriate legal institutional, financial and regulatory frameworks and support for the capacity development of all stakeholders on Public-Private Partnerships.”

“Public-Private Partnerships for health have grown rapidly in response to the perceived failure of the health systems of developing countries to address major health problems and the perceived failure of the private market to produce needed vaccines and medicines for neglected diseases such as malaria and tuberculosis.”

Glossary

AFRICAN GREEN CITY INDEX

The 2012 Human Development Report for Africa explores why dehumanizing hunger remains pervasive in the region, despite abundant agricultural resources, a favorable growing climate, and rapid economic growth rates.

BIODIVERSITY

Biodiversity is the variety of all forms of life; from genes to species, through to the broad scale of ecosystems. Biomass,

The African Green City Index is a unique research project conducted by the Economist Intelligence Unit (EIU) in cooperation with Siemens, assessing and comparing 16 major African cities in terms of their environmental performance and policies. The study will look at different environmental categories, such as energy and CO2, transport, water, waste, land use, and environmental governance.

rial from living or recently living things. Biomass is organic mass that is processed and used to create biofuel and biodiesel. BUSINESS ETHICS Business ethics (also known as Corporate ethics) is a form of applied ethics or professional ethics that examines ethical principles and moral or ethical problems that arise in a business environment.

as a renewable energy source, is biological mate-

Cold Fusion

Cold fusion is a process of “shooting” neutrons into hard water molecules, therefore creating a reaction. This reaction takes place at room temperature, which is why the process is called “cold’.

Corporate Governance Corporate Governance is the system by which business corporations are directed and controlled. The corporate governance structure specifies the distri-

Design for the Environment (DfE)

A design concept that focuses on reducing environmental and human health impacts by thoughtful design and careful material selection.

bution of rights and responsibilities among different participants in the organization, such as the Board, managers, shareholders and other stakeholders, and spells out the rules and procedures for making decisions on corporate affairs Compact Fluorescent Lamp Also called compact fluorescent light, energy-saving light, and compact fluorescent tube, is a fluorescent lamp designed to replace an incandescent lamp; some types fit into light fixtures formerly used for incandescent lamps. The lamps use a tube which is curved or folded to fit into the space of an incandescent bulb, and a compact electronic ballast in the base of the lamp.

Development administration Development administration is concerned with plans, policies, programmes and projects which focus on nation building and socio-economic development. It aims to achieve socio-economic goals through the talents and expertise of bureaucrats.

Glossary

Embodied energy

The embodied energy (carbon) of a building material can be taken as the total primary energy consumed (carbon released over its life cycle). This would normally include (at least) extraction, manufacturing and transportation.

Ecological footprint A measure of how much productive land and water an individual, a city, a country, or humanity requires to produce all the resources it consumes and to absorb all the waste it generates, using prevailing technology. This land could be anywhere in the world.

Forest preservation

Those measures concerned with the protection and preservation of forest lands and resources.

Galileo

A global navigation satellite system (GNSS) being built by the European Union (EU) and European Space Agency (ESA)

Fiber cement is a composite material made of sand, cement and cellulose fibers. In appearance fiber cement siding most often consists of overlapping horizontal boards, imitating wooden siding, clapboard and imitation shingles. Fiber cement cladding is a non-combustible material which is widely used in high bush fire prone areas

Greenwash A catch-all term that refers to the act of making false or exaggerated claims about an organizationâ&#x20AC;&#x2122;s activities to make it seem more environmentally friendly than it is.

1. http://www.unhabitat.org/content.asp?cid=9584&catid=26&typeid=11&AllContent=1 2. http://www.undp.org/content/undp/en/home/librarypage/hdr/africa-human-development-report-2012/ 3. http://www.scribd.com/doc/38849593/Business-Ethics-CSR 4. http://en.wikipedia.org/wiki/Compact_fluorescent_lamp 5. http://wiki.answers.com/Q/What_is_the_meaning_of_development_administration 6. http://www.greenspec.co.uk/embodied-energy.php 7. http://www.csr.com/about/glossary-of-terms 8. http://www.businessgreen.com/glossary/g

cover story

The Common Future: Bankable? Sustainable Investment best practice scenarios across the world

and how economic opportunities are generated through PPPs for Sustainable Development Graham Sinclair

Building Africaâ&#x20AC;&#x2122;s infrastructure for this and future generations requires best practice PPPs to deliver â&#x20AC;&#x153;bankableâ&#x20AC;? benefits for public and private sector partners, the investors and citizens that keep them accountable. Financing for Sustainable Development of the more than US$100 billion in infrastructure needed on the continent must come from institutional investors, including African pension funds and insurers with long-term horizons and explicit integration of Environmental, Social and Governance (ESG) factors in their investment policies able to directly maximize the opportunities for PPP models in the US$1 trillion global infrastructure asset class. 29

cover story Huge amounts of capital are seeking positive investment performance around the world. Global financial stock stands at US$212 trillion and is growing . In the developing world, rapid economic growth is creating new wealth. Institutional investors, primarily, retirement funds, “dominate global financial markets” while mutual funds (collective investment schemes) assets worldwide increased 3.7 percent to US$25.61 trillion at the end of the first quarter of 2011 . Globally, the shape of institutional investment decisionmaking, for example, is being re-made by the shift from West to East. Savings in Asia, apart from Japan and Australia, are expected to increase by 100% to US$6.3 trillion by 2014 . Increasingly, these institutional investors – pension funds, insurers, banks - are turning their attention to emerging markets in Africa as the source of business and investment portfolio growth.

and growth in discretionary spending will define this next step in Africa’s growth. Consumer spending in Africa’s top 18 cities is expected to total US$1.3 trillion by 2030. The number of households with discretionary spending is expected to increase by 50 percent over the next decade to 128 million. The economy of Nigeria, with some 158m people to South Africa’s 50m (Africa’s largest economy), has grown by an annual rate of almost 7% in the past eight years and may even become Africa’s biggest by 2016 with Egypt (82m people) close behind . A decade after (misguidedly) labelling Africa “hopeless” , a contrite The Economist ended 2011, describing Africa as “the hopeful continent”. Perhaps, most interesting for investors, the African investment story inverted conventional wisdom: South Africa’s market outperformed that of the United States over the past five years.

Significant financial sector players now face a stakeholder world, shareholders are but one important audience, alongside regulators, consumers and NGOs. The United Nations Secretary General, Ban Ki Moon, declared to a gathering of major institutional investors in New York : “[y]our decisions carry enormous weight and we welcome your voices inside these halls.” With stature comes increased responsibility. Institutional investment decisions may, in aggregate, have systemic negative effects while in isolation, they may seem rational. The recent “Universal Owner” theory posits that as major corporations and stateowned enterprises, increasingly, look to retirement funds and other asset owners to buy their equity or fixed income securities, the major asset owners are diversifying by “buying” a slice of whole economies. The capital provided by retirement funds that drive the institutional investment industry value chain must be expected to operate with greater transparency, better governance and higher levels of accountability. Like other citizen journalists, pension fund members can post to social media from their Blackberry or iPhone in seconds.

Investing in infrastructure Africans are reminded every day of the need for more and better infrastructure. Estimates are that Sub-Saharan Africa’s infrastructure needs USD 93 billion per year “two-thirds for investment in new physical infrastructure and a third for operations/maintenance of existing assets” . But, only USD 45 billion is being raised and deployed. Foreign national investors and banks, after the global financial crisis, may not have the assets to deploy or may be lessinclined to. At the same time, long-term investors are also turning more toward infrastructure investment and looking to PPP opportunities. The growth in institutional investment happens at a time when – due to internal pressures and external stakeholder influence - pension funds are seeking returns with longer investment horizons and more funds are seeking to be invest, integrating ESG factors.

In recent years, global emerging market investors have exhibited a new appetite for investment opportunities in Africa. As an investment destination, the continent’s numbers are compelling. Africa is expected to have a combined Gross Domestic Product (GDP) of $2.6 trillion by 2020. Between 2001 and 2009, African real GDP rose by 4.9 percent – 1.5 percent more than the rate of global economic growth although off a low base. Urbanisation

Institutional investors in frontier and emerging markets are challenged by the context within which their assets are accumulating, where the socio-economic situation suggests there is a strong demand for capital to grow the local economy. Through mobilising capital, economic growth will be possible, where capital is wisely deployed and shareholder value created, not destroyed. But, pension funds face two major risks in infrastructure investing : firstly, the future forecasting of consistently positive and relatively low-risk returns and the potential volatility given the limited history of returns of asset class. Secondly, the large political component increases the investment risk linked to political or

regulatory impact, especially where infrastructure assets are influenced by local regulations with untested regulatory oversight. A traditionally conservative bunch, pension funds are always mindful of risks of “fiduciary duty” to be prudent investors and the new infrastructure asset class certainly has construction and asset-class risks. If the global infrastructure market is estimated to attract US$3.5 trillion from pension funds in this decade, raising the average allocation from 2% to 15%, how will this increase the positive impact on Sustainable Development, especially in Africa? Pension fund investors seek the diversification benefits and the predictable and reliable long-term cash flow streams. And with size, major pension funds are now able to do these deals directly, disintermediating advisers or third party intermediaries. Can African Public-Private Partnerships (PPPs) deliver long-term infrastructure development and will that lead to a long-term growth, where negative Environmental, Social and Governance costs are decoupled from economic growth?

What Are PPPs? The use of private financing, design, building and operation of infrastructure has emerged as one of the most important models employed by many governments to close gaps in infrastructure. While Public-Private Partnerships (PPPs) are unlikely to ever replace traditional infrastructure financing and development, they can be an important tool for governments hoping to address infrastructure shortages . PPPs have been used in sectors such as transportation, waste and water, education, public housing and urban regeneration, hospitals, defense and prisons. A PPP is a contractual agreement between a public agency (federal, state or local) and a private sector entity through which skills and assets are shared in

cover story delivering a service or facility for the use of the general public. In addition to the sharing of resources, each party shares in the risks and rewards potential in the delivery of the service and/or facility. The contract between a public sector institution/municipality and the private party is often where the private party assumes substantial financial, technical and operational risk in the design, financing, building and operation of a project. This legal relationship is the strength – and weakness – of PPPs. African analysts have claimed “PPP arrangements cannot outlive the administration that initiated them”.’ A PPP is not the only option. When they work well, PPPs can, for example, help improve access to safe water and sanitation services by providing a number of services such as delivering service to households, building new infrastructure, improving technology or using clean technology to better meet the needs of the community. The PPP model has been dominant since the 1990s, with governments, partnering with private sector financiers to finance, for example, the 20 to 50-year lifetime of a power plant project. Keys to successful PPPs include: having a public sector champion, the right statutory/legal context, clarity on roles and structure, a viable business model with clearly defined revenue streams, ongoing active stakeholder support and the right partners. The data confirms the intuition that PPPs increase efficiency: econometric analysis published in 2009 assessed performance of over 1,200 water and electricity utilities in 71 developing and transition countries. The study found significant efficiency gains when private sector participation was introduced . PPPs in the development context have been advanced by governments, the private sector and even NGOs as a means of “crowding-in” investment and expertise from the private sector for the delivery of public works and services. The objective for the public sector of a PPP programme is to harness private sector skills in support of improved public sector services. With large amounts of capital seeking investment opportunities, it would seem that no good project should be short of funding. PPPs as a trend of the last 20 years is likely to continue in the ongoing aftermath of the global financial crisis of 2007 - 2008 with even large developed economies strapped for cash and seeking alternative methods of meeting the increasing demands for investment

in public sector development. Transferring responsibility to the private sector for mobilizing finance for infrastructure investment is one of the major differences between PPPs and conventional procurement: the private sector role as lead arranger is to identify investors and develop the finance structure for the project. While PPPs may introduce more variation in modelling outcomes, there are limitations to the extent to which PPPs can improve project analysis.

Not all good news According to the Private Participation in Infrastructure database of the World Bank, the number of developing countries with new infrastructure PPP (PPI) projects in the first half of 2011 was the lowest since the early 1990’s, excluding those in India and Brazil, falling by 34% compared with the same period in 2010 . This may explain the flattening out of the appetite at the trans-national level. McKinsey reported that the number of PPPs created to address medical product development (e.g., new vaccines for neglected diseases) peaked in 2000, when more than 15 were launched in a single year while during the period of 2004 - 07, no new PPPs focused on this area. PPPs have their drawbacks. For example, poor planning and project selection lead to limited resources, which fail to achieve benefits concomitant with their cost. The result may be under-used assets and poor service delivery at a higher cost than necessary, an enormous societal cost in small growing economies. Unless specifically recruited and empowered, there is a significant lack of expertise within governments to design, develop, finance and implement such

projects. PPPs are complex to do and require skills typically found in the private not the public sector. PublicPrivate Partnerships of both the global and national varieties can do much good, but they also incur costs associated with both formation and management. For example, the Global Fund to Fight AIDS, Tuberculosis and Malaria logged operating expenses of roughly US$166 million in 2008 (about 7% of the US$2.4 billion committed to grantees) . A new model? Not all projects are bankable. “Bankable” answers the critical question: can the project attract not only equity finance from its sponsors, but the required amount of debt? Equity is usually more expensive than debt, therefore project sponsors often try to use a high proportion of debt to finance the project (project finance structures, typically, involve a large proportion of debt in the range of 70 to 95 percent ). Despite cases of success, the growth of PPPs in Sustainable Development is currently constrained. Many international operators, for example, are not motivated to make investments in developing regions, where social or environmental services are greatly needed. . Large infrastructure investments geared towards extractive industries tend to benefit large export partners and foreign investors and not the local economy. In Africa, earlier this year, major financiers were bearish on PPPs, for example, Anthony Sykes of Japanese bank, Sumitomo Mitsui, was reported as saying “[w]e’ve got to stop kidding ourselves that PPP is the answer. Lenders are going to be extremely unwilling to lend long-term to projects.” In a review of transport PPPs, some countries with “weak political commitment, a lack of appropriate regulatory safeguards and poor project governance pose worrisome risks for investors.” Timelines may also be a drag on PPP attractiveness for their political champions, leading to impatience to get projects up and running due to the financing pipeline being too long; PPPs sometimes taking three to four years to put into motion. “We have four years in power. When it ends, I don’t want people to say that all I did was waiting for a PPP to get underway.” The financial meltdown triggered by Lehman Brothers collapse in 2008 has eroded the PPP model. Banks have become nervous about lending to each other and Basel III capital

cover story adequacy requirements, tightening capital requirements, are pricing PPPs out of the market. PPPs are not the only answer. PPP policy, legal and institutional frameworks should be put into place to help improve their effectiveness . A critical success factor is translating into private and public sectors activities into each other’s language. And FIFA’s fair play problem exists here too(!): PPPs fail where there is a lack of transparency and investor confidence, with a reputation as a neutral partner, an honest broker, absolutely committed to transparency and fair play. New models for PPPs include the “pension model”, using private financing for the initial construction, then borrowing money from pension funds - which are cash-positive in some large African economies such as Nigeria and South Africa - to service the running costs and maintenance. Bankers have also referenced the ‘Chinese model’, already common in Africa; using money granted or lent for a large infrastructural project with a geopolitical benefit, but then “outsourcing” the labour and materials to build it before turning it over to the local government as part of a revenue/ commodity stream deal, usually linked directly to raw materials. Other people’s money PPPs and infrastructural deals are for major institutional investors managing their own balance sheets and their clients’ assets. Similar to the South American experience a decade ago, most private financing in Africa has come from foreign sources because local financial markets are relatively underdeveloped with development financing institutions (DFIs, such as the IFC, Proparco, CDC, GIZ, OPIC, CADF); playing a large role directly and through third-party investment managers. Availability of foreign financing is affected by timing and costs flowing from the recent financial crisis. In addition, foreign financing carries with it additional risks to the projects, in particular, foreign exchange exposure that is hard to cover given that the projects provide services mostly for local markets. Local citizens are exposed to global financing issues, resulting in more expensive public services than necessary. So, where are the African pension funds? A few countries - Cape Verde, Tanzania and Uganda - are reported to be taking steps on their own to address the financing gap, “investing pension funds into local infrastructural development.” The Nigerian Pension

Commission estimates the country’s pension fund assets at about US$11.9 billion. The largest institutional market in South Africa has a pensions system with institutional investment over US$ 400 billion, 5% of which may be allocated directly into Africa. While the effort to beat the “home country bias” explains some of why African institutional investors have little appetite locally, political risks, lack of liquidity and governance concerns rank high for local African investors, just as they do for global investors. With asset funding activities already tied to an African context, African pension funds may even be less likely to invest discretionary global asset allocations into Africa rather than, say, growing markets like Brazil, India, China, Turkey or Indonesia. There are, however, significant barriers to both investment and business

The next step forward towards bringing Africa on the minds of global investors is participation of the local institutions: African pension funds, insurance companies and successful entrepreneurs. Why would a western investor take the chance if local pension fund are not yet willing to take the risk? – Nanno Klieterp, CEO of FMO, 2012.

development in the region. These include: poor infrastructure in much of the continent, limited access to information, the absence or failure of regulatory mechanisms, a limited pool of skilled and semi-skilled workers and the small size of many domestic markets. Negative assumptions and obsolete perceptions about Africa play a major role in investment decisions, but political risk is no longer “reserved “for emerging markets as Greece and Spain have shown. What Investors Want The investment value chain in Africa is complex with many role-players and overlapping functions, activities and responsibilities. Reviewing recent research and from our interviews and survey respondents in the 2012 studies, the influential role of international investors and the largest institutional investors are clear. For example, “institutional investors will always play an important role in the area; private equity investors are growing in influence and scope and international institutions like the World Bank will likely have an important influence in the funding of some major infrastructure projects (to which they can attach conditions)”. Influence makers pointed to the major influence of institutional investors with: 1. Local country mandates 2. Pan-African mandates 3. Global emerging markets mandates SinCo research shows that the integration of ESG factors in private equity (PE) has been driven mostly by client mandates, especially where development finance institutions (DFIs) are anchor investors. Nearly half of all PE funds in Sub-Saharan

Relative weight of factors in choosing whether to invest in Sub-Saharan Africa

Ranking results identified as "very important" on 4-grade scale [8 options; n=48 PE investors + 44 asset owners and asset managers + 51 stakeholders]; SinCo analysis 2010-2011 fo

Attractive risk-adjusted returns

Political/economic risks

14 29

Liquidity

Environmental or social risks

Portfolio diversification

Overhang of capacity

Data on good performance

Corporate governance/standards

22 Private equity investors

Asset owners and asset managers

9 11 0

100

Source: Sustainable Investment in Sub-Saharan Africa, IFC + SinCo (July, 2011)

150

cover story Africa have had DFIs as clients. DFIs deploy capital through local PE funds and will continue to anchor SI with more demand for monitoring of ESG performance. Research on investors’ views of investing in Sub-Saharan Africa pointed to looking for riskadjusted returns, but secondly, to good corporate governance. The sustainability factor Definitions of Sustainability in South Africa, Nigeria and Kenya include issues that are common internationally such as governance, climate change, water use, diversity, human rights plus employee health and safety. There are also topics of local concern such as job creation, education, local ownership, community infrastructural development, the need for employee health care to supplement public health coverage for HIV/AIDS or water treatment systems. The governments in Africa are keenly aware that sustaining democratic practice and the rule of law, enhancing security of life and property, rebuilding and maintaining infrastructure are necessary preconditions to attract foreign investments. With less robust and smaller economies in need of growth, Africa’s 54 countries have a lot to lose in the context of the global need to separate economic growth from emissions growth. But investors in Africa have a major role to play in framing their future. Long-term thinking may affect investment-as-usual in general and the effect of institutional management, ‘short-termism’, being the antithesis of sustainable investment. Pressures from greater demand for materials, food and water (coinciding with environmental damage and resource depletion) are driving a “new era” of high and volatile resource prices. Studies show that companies can develop, implement and evaluate Social Responsibility programmes that foster stronger

With regards to Africa, in the past few years, foreign companies have raised their presence on the continent. With the economic opportunities and increasing investment in Africa, there is rising investor interest in the region. The concept of sustainable investing could also feature more prominently in African investment opportunities.

- Jim O’Neill, Chairman of Goldman Sachs Asset Management, 2011..

relationships with stakeholders, thus creating value for them and companies alike. Investors that manage their exposure to companies that have more resource-intensive production and supply chains than sector peers will be better positioned under resource constraints. Research by Deutsche Bank (2012) suggests that “at an analytical level”, ESG in investment is useful to investors and companies “both in terms of cost of capital and corporate financial performance (on a market and accounting basis).” In 2012, a global sustainable investment marketplace; integrating ESG factors is underway with AfricaSIF.org, leading an industry survey for the first time to cover all of Africa. SinCo expects that the global AUM will have risen to over USD12 trillion when the results are released in December, 2012 with at least USD450 billion in emerging markets. Some analysts predict that this could top USD25 trillion by 2015. 850 institutional investors, representing over USD30 trillion, have signed to the Principles for Responsible Investment (PRI) , an investor initiative in partnership with the UN Global Compact and the UN Environmental Programme Finance Initiative, using six principles in a voluntary framework to integrate the ESG factors into investment practice. The Carbon Disclosure Project (CDP) in 2012 counts over USD78 trillion AUM from over 655 institutional investors focused on climate change impacts, counting carbon footprints that reveal the risk in their investment portfolios. The Sustainable Development priorities, represented by the UN’s Millennium Development Goals, receive little explicit investment interest. Among factors nudging the institutional investment industry to develop a more advanced approach to investment decision-making is the need for growing transparency, institutional investor demand, stakeholders such as Non-Governmental Organizations (NGOs) plus changing expectations and reputational risks in a world tracked by social media . Do PPPs Lead to Sustainable Development? For emerging markets, a move to a low-carbon, low-water, climateresilient economy must be made with fewer resources, including capital. Using the most recent data, South Africa accounts for 38 % of Africa’s fossil-fuel emissions; Egypt, Algeria, Nigeria, Libya and Morocco together account for 46 %. Regulatory changes, alongside demand for new sources of energy and low-carbon economies,

will also create opportunities for new markets and green jobs. PPPs could help overcome financing gaps to invest in low carbon technologies . Investors need long-term certainty. Investors in PPPs, with 30 - 50 year horizons, need even more certainty, where the liquidity to exit a deal is not available. Policymakers and regulators, especially in frontier and emerging markets, have a mixed history of honouring their commitments over the long-term. In the field of Sustainability, the lack of global certainty has been a drag on the opportunity for more capital to drive sustainable investments. Investors were active at COP17 and Rio+20. The 17th Conference of the Parties (COP17) to the United Nations Framework Convention on Climate Change (UNFCCC) ended in “extra time” with a weak resolve to move to something substantive from 2015 that will be enforced from 2020. Investors, who met in side-events and pressed for rules to foster green investments, were frustrated. Some of the momentum is carried into the Rio+20 event in June, 2012. The critical response to the events is that the proactive and voluntary work of investors is even more important as regulators in different countries fail to align incentives and rules. Most dramatically, global carbon-dioxide (CO2) emissions from fossil-fuel combustion reached a record high of 31.6 gigatonnes (Gt) in 2011 . Ahead of the Rio+20 conference in June, 2012 marking 20 years since the 1992 Earth Summit, IEA Chief Economist Fatih Birol stated that “new data [present] evidence that … 2°C trajectory is about to close”. Leaving aside the developing economies equity issue, it is naïve to expect all PPP infrastructure investment to be cutting edge green technology systems. PPPs can help by tracking their own impact. Helping generate certainty for investors and benchmarks for stakeholders are critical in determining the success of Sustainable Development and PPPs. ESG tracking tools are important in each deal and across the investment ecosystem. IFC’s Sustainability Framework articulates a strategic commitment to Sustainable Development and informs IFC’s approach to risk management. The Environmental and Social (E&S) Performance Standards, an integral part of the Framework, have become a global benchmark for E&S risk management used by over 100 financial institutions worldwide, including 77 project financers and

cover story To reorient the economy’s path to sustainability, we need to accelerate the processes of innovation and scaling up, both of which require the incentives and motivations that make the private sector so successful. To ensure that public goods are delivered on a large scale, we need to internalize the public good as the overall goal of development. Unfortunately, the legal frameworks and practical institutional frameworks that exist today do not encourage such integration, which goes well beyond the concept of partnership. in African investment opportunities. -Beyond Public-Private Partnerships, Ashok Khosla 2001

banks signatories to the Equator Principles . Effective on January 1, 2012 , the latest IFC updates reflect evolution in good practices for Sustainability and risk mitigation in private sector investments of emerging markets over the past five years. They incorporate modifications on challenging issues that are increasingly important to sustainable businesses, including supply-chain management, resource efficiency, climate change, ecosystem services, labour practices and human rights. A positive example of the DFIled approach to ESG can be seen in a modest real estate project in Tanzania in April, 2010, when IFC signed its first deal to finance Chinese investments in Africa. IFC expects this move to help discourage violations of human rights and environmental standards. But, some analysts have pointed to a systemic problem of PPPs, using only a cursory approach to ESG factors, arguing that “PPPs should embed environmental and social safeguards in their goals, designs and specifications, along with tender evaluation, supplier selection plus monitoring and contracting functions … towards integrating Sustainability across the PPP life cycle … framed to support and stimulate green growth.” Benchmarking was outlined in the seminal report Sustainable Investment in Sub-Saharan Africa report (IFC + SinCo July, 2011), recommending performance metrics and analysis as essential. Investors need mechanisms and infrastructure to measure investment performance and ESG impact. PPPs will increase their opportunity for success, where their activity is benchmarked .

Co-designing the common future Financing Sustainability is urgently needed. Building African infrastructure is urgently needed. These do not have to be mutually exclusive. Africa needs infrastructure that does not burden taxpayers with unsustainable financing costs and with infrastructure products and services with high long-term negative environmental and social footprints. Despite their drawbacks and with the right degree of due diligence in selecting projects and project partners with lifecycle modelling project ESG impacts, PPPs can play a positive role in tackling Africa’s infrastructural needs in the 21st century. Accountability inside the deal and in the streets will maximize the opportunity for positive riskadjusted returns and long-term social benefit. Transparency is the critical long-term success factor, delivering long-term stakeholder credibility. For PPPs to deliver on their promise to citizens in Africa, both the consumers of the PPPs services or products and the institutional investors need to keep the private and public sector partners accountable. A related, but strategic lever is media freedom. Investors in PPPs advance better ESG, where they enable media freedom. Unfortunately, the 2010 annual Freedom House survey of press freedom only ranked key African countries, South Africa, Nigeria, and Kenya, as “partly free”. In Africa, PPPs need to deliver benefits that are “bankable” for generations to come not only to the incumbent policymakers, regulators or financiers. Many forget that the fundamental definition of Sustainability developed by the Brundtland Commission in 1987 relies upon the two key concepts that relate directly to PPPs and infrastructure: “the concept of ‘needs’, in particular, the essential needs of the world’s poor, to which overriding priority should be given; and the idea of limitations imposed by the state of technology and social organization on the environment’s ability to meet present and future needs.” Institutional investors express the preference to better understand the developmental impact of their portfolio, but few may be expected to attach the ESG criteria to their investments without better empirical evidence of how these affect financial performance. Sustainable investments by institutional investors is a very powerful tool to keep PPPs accountable and to have African institutional investment assets coinvested, a pattern being tested by

investment vehicles such as the PanAfrican Infrastructure Development Fund, the African Finance Corporation and Pan-African private equity funds or listed equity funds such as Sustainable Capital based in Mauritius. With more pension funds, seeking the long-term returns that infrastructure can offer, the PPP model can be applied to roads, hospitals and even airports . It is expected that more pension funds in Africa can join their peers outside Africa in making allocations to the asset class and driving the PPPs as an investment vehicle to meet both investor and societ goals. Developing infrastructure, for the benefit of current and future generations, using next generation lifecycle analysis of products/services and funded by a holistic value-added analysis offers a direct approach to making Sustainable Development a reality. PPPs may play a role in reducing information costs, policy, structural or behavioural barriers to the scaling of growth investment in Sustainable Development” Without due care, PPPs can become another means for the private sector to internalize the benefits and externalize the costs.” Local frustration, resulting from the failure of PPPs to deliver on promises, caused popular protests such as the reaction to toll roads in Nigeria (Lekki, Lagos; 2011) and South Africa (SANRAL, 2012), two of Africa’s largest economies -economies most looking to PPPs to leverage infrastructural development. Will increasing the role of the private sector in the provision of public infrastructure and services benefit Africa? PPPs have yet to deliver on their full potential for long-term sustainable infrastructural provision. A substantial rethinking of the business models/ contractual relationships may be needed to ensure this future direction, according to some Sustainability analysts. Active stewards of capital are a positive contributor to this virtuous cycle, moving institutional investments beyond “investment-asusual”. Graham Sinclair is a sustainable investment architect and global project leader at SinCo, the sustainable investment consulting firm. He models investment architecture integrating environmental, social and governance (ESG) factors into investment strategy, processes and indexes. SinCo is a leading sustainable investment advisory boutique that, since 2006, designs and develops sustainable investment architecture for institutional investors, international organizations, stock exchanges and asset owners at the frontiers of sustainable investment. He is also the President, Africa Sustainable Investment Forum (AfricaSIF). He can be reached on: gs.africasif@gmail.com.

cover story References • Mapping global capital markets 2011 by Charles Roxburgh, Susan Lund, John Piotrowski, McKinsey Aug. 2011. The total value of the world’s financial stock, comprising equity market capitalization and outstanding bonds and loans, has increased from $175 trillion in 2008 to $212 trillion at the end of 2010, surpassing the previous 2007 peak. Similarly, cross-border capital flows grew to $4.4 trillion in 2010 after declining for the two previous years. 2011 updated analysis of more than 75 countries on the size of their outstanding equity and debt, cross-border capital flows, and the stocks of foreign investment assets and liabilities. • Global Standards and Emerging Markets: the institutional investment value chain and CalPERS’ investment strategy, by Tessa Hebb, School of Geography and the Environment, +Jesus College, University of Oxford and Dr. Dariusz Wójcik+,*Rothermere American Institute, For presentation to: New School Conference on “Pension Fund Capitalism and the Crisis of Old-Age Security in the United States”, New York September 10th and 11th 2004 • - WORLDWIDE MUTUAL FUND ASSETS AND FLOWS, First Quarter 2011 http://www.iifa.ca/documents/1314132526_2011_ Q1%20International%20Media%20Release%20Text. pdf accessed 5 May 2012. Institutional clients account for 66 percent of AUM in Europe, although the percentage varies from Belgium’s 38 percent to the United Kingdom’s 79 percent. Revisiting the European Asset Management Industry (Digest Summary) • Elias Bengtsson and Bernard Delbecque, Financial Markets, Institutions, & Instruments, Vol. 20, No. 4 (November 2011): 163-190, Summarized by Priyanka Shukla, CFA, CFA Digest, February 2012, Vol. 42, No. 1: 82–84 http://www.cfapubs. org/doi/full/10.2469/dig.v42.n1.49 • “Western funds in ‘tug of war’ over Asia’s $4 trillion savings,” Mark Cobley,Financial News, 31 October 2011 • Ban Asks Private Sector to Invest In Sustainable Development, UN News Department of Public Information • News and Media Division • New York, Monday, 16 January 2012, 2:03 pm, http://www.un.org/News/Press/docs/2012/ sgsm14054.doc.htm Accessed 16 January 2012 • See Investing In Socially Responsible Companies Is A Must For Public Pension Funds - Because There Is No Better Alternative, S. Prakash Sethi, Journal Of Business Ethics 56: 99-129, 2005 • “MGI Lions on the Move: The Progress and Potential of African Economies”, McKinsey, June 2010. • Véronique Riches-Flores, “African Acceleration,” Société Générale, Cross Asset research, October 2010. • “MGI Lions on the Move: The Progress and Potential of African Economies”, McKinsey, June 2010. • MGI Lions on the Move: The Progress and Potential of African Economies, McKinsey, June 2010. • The gateway to Africa? South Africa’s business pre-eminence is being challenged, The Economist, Jun 2nd 2012 • The hopeless continent, The Economist, May 13th, 2000, http:// www.economist.com/printedition/2000-05-13 • The hopeful continent: Africa rising, The Economist, Dec 3rd 2011 http://www.economist.com/node/21541015 • Five-year return and Sharpe ratio of the iShares MSCI South Africa Index exchange trade funds [NYSE:EZA] were respectively +7.7% and 0.36; vs iShares MSCI 500 Index exchange traded funds [NYSE: IVV] were +2.28% and 0.13 respectively (Morningstar date accessed on March 29, 2011). • May 2012, Mapping Support for Africa’s Infrastructure Investment, Aid for investment in infrastructure in Africa, http://www.oecd.org/document/8/0,3746, en_2649_34893_47030856_1_1_1_1,00.html accessed 12 June 2012. • Pension funds tipped for $3.5trn infrastructure spree by Sebastian Walsh, eFinancialnews,16 Apr 2012 • “On 20 March 2007, the OECD Council approved the OECD Principles for Private Sector Participation in Infrastructure to help governments work with private sector partners to finance and bring to fruition projects. They offer a checklist of policy issues to consider in ensuring that citizens get the services they need at a fair cost and with viable returns to private sector partners. Adopted on 4 May 2012, an OECD Recommendation provides guidance to policy makers on how to ensure that Public-Private Partnerships represent value for money for the public sector. • Public-Private Partnerships in Africa, Part I – Infrastructure, 24 Feb 2012, http://www.polity.org.za/article/public-privatepartnerships-in-africa-part-i-infrastructure-2012-02-24 • Water & Sanitation PPPs, http://ppp.worldbank.org/publicprivate-partnership/sector/water-sanitation • “A comprehensive 2009 study by the World Bank [Gassner, Popov, and Pushak(2009) Does Private Sector Participation Improve Performance in Electricity and Water Distribution Trends and policy Options. No 6, Public Private Infrastructure Advisory Facility (PPIAF), World Bank] analyzed the effect of introducing private sector participation through concessions or full privatization of utilities. The study used econometric analysis to assess performance of over 1,200 water and electricity utilities, in 71 developing and transition countries. The study found significant efficiency gains when private sector participation was introduced—including reduced water losses, and increased staff efficiency. These gains came alongside improvements in service delivery, with increased coverage and daily hours of service” • Public-private partnerships for sustainable development http://www.commonwealthministers.com/articles/ public-private_ par tnerships _for_sustainable_ development/ • Inverse of crowding out, when investment opportunities and economic activity is dominated by public sector, to the exclusion of private sector. • Sustainable Development: Is there a role for public–private partnerships? A summary of an IISD preliminary investigation, by Samuel Colverson with Oshani Perera, October 2011 http://www.iisd.org/markets/procurement

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accessed 13 June 2012 Public-Private Partnerships Can Deliver Critical Infrastructure if Developing Countries Tackle Financing and Governance Issues, Press Release No:2012/292/WBI, GENEVA, February 24, 2012, http://go.worldbank.org/APLQASD570 Public-Private Partnerships Can Deliver Critical Infrastructure if Developing Countries Tackle Financing and Governance Issues, Press Release No:2012/292/WBI, GENEVA, February 24, 2012, http://go.worldbank.org/APLQASD570 The Global Fund to Fight AIDS, Tuberculosis and Malaria, annual report, 2008. Public-Private Partnerships Can Deliver Critical Infrastructure if Developing Countries Tackle Financing and Governance Issues, Press Release No:2012/292/WBI, GENEVA, February 24, 2012, http://go.worldbank.org/APLQASD570 Public-private partnerships for sustainable development, Geoffrey Hamilton - United Nations Economic Commission for Europe (UNECE) and Vanessa Holcomb - Duke University , United Nations Economic Commission for Europe (UNECE) http://www.commonwealthministers.com/articles/publicprivate_partnerships_for_sustainable_development/ Africa needs ‘new ways to fund energy projects’, By Joshua Howat Berger (AFP) – Feb 23, 2012 http:// www.google.com/hostednews/afp/article/ALeqM 5g4DXIZLTqh315vJnZqUhw5nSx0gA?docId= CNG. c76f4c1c2c6085b688da0758c40aed34.151 Private-investment opportunities for public transport: Publicprivate partnerships represent a significant opportunity for private investors—but pose worrisome risks as well, Benjamin Cheatham and Walter Oblin< McKinsey Quarterly, APRIL 2007 Leader’s mission to change the course of Rivers State, Dianna Games, Business Day, 7 September 2009 http://www.africaatwork.co.za/?p=170 accessed 12 June 2012 Basel III: A global regulatory framework for more resilient banks and banking systems - revised version June 2011 http://www.bis.org/publ/bcbs189.htm accessed 12 June 2012. Public-Private Partnerships Reference Guide, Version 1.0, http://wbi.worldbank.org/wbi/news/2012/04/10/nowavailable-public-private-partnerships-reference-guideversion-10 For example, the private sector is also not immune to optimism bias. “The Standard & Poors analysis described above shows lenders make more realistic assumptions than public agencies, they still overestimate traffic forecasts. The more conservative traffic forecasts commissioned by banks still overestimate traffic by almost 20 percent.” [Bain and Polakovic (2005) Traffic Forecasting Risk Study Update 2005: Through Ramp-Up And Beyond Standard & Poor’s]” The Framework of PublicPrivate Partnerships by Richard Norment, NCPPP, ncppp.org, http://ncppp.org/ publications/Dallas_1205/Norment_Dallas1205.pdf http://www.polity.org.za/article/public-private-partnershipsin-africa-part-i-infrastructure-2012-02-24 Building Public-Private Partnerships to Invest in Infrastructure, Washington, D.C., October 8, 2008, World Bank’s Africa Region Vice President. Obiageli Ezekwesili. http://web. worldbank.org/WBSITE/EXTERNAL/COUNTRIES/AFRICAEXT /0,,contentMDK:21935582~menuPK:2246551~pagePK:28 65106~piPK:2865128~theSitePK:258644,00.html http://www.pencom.gov.ng/ accessed December 6, 2010. PM News Nigeria, Dr. Musa Ibrahim, Nigeria National Pension Commission, August 11, 2010. Note: Exchange rate 151.25 Nigerian naira = 1 $. Nanno Klieterp, CEO of FMO, keynote speech, African Venture Capital Association Annual Conference, Accra, Ghana, March 2012, correspondence with author, March 2012. Sustainable Investment in Sub-Saharan Africa report, 2011: Investment practitioner views of sustainable investment in private equity and asset management in South Africa, Nigeria, and Kenya, published July 2011 http://www. sincosinco.com/siinssa.php accessed 12 June 2012. Sustainable Investment in Sub-Saharan Africa report, 2011: Investment practitioner views of sustainable investment in private equity and asset management in South Africa, Nigeria, and Kenya, published July 2011 http://www. sincosinco.com/siinssa.php accessed 12 June 2012. This study took a conservative approach to estimates based on the limits of self-reporting. The actual prevalence of DFIfunded PE over the past decade may be as high as 60-70%. Media release comments on launch of Sustainable Investment in Sub-Saharan Africa Report, July 2011 (IFC + SinCo) http://www.sincosinco.com/siinssa.php accessed 15 June 2012. http://www.mckinsey.com/Features/Resource_revolution, accessed 7 December 2011 CB Bhattacharya, Daniel Korshun, and Sankar Sen, Leveraging Corporate Responsibility: The Stakeholder Route to Maximizing Business and Social Value, New York: Cambridge University Press, November 2011. Our research examines the two most important stakeholder groups— consumers and employees—to understand how and why they react to corporate responsibility initiatives. The insights we gained helped us show how companies can develop, implement, and evaluate social responsibility programs that foster stronger relationships with stakeholders and thus create value for them and companies alike. “Sustainable Investing: Establishing Long-Term Value and Performance”, DB Climate Change Advisors (DBCCA), 13 June 2012 http://www.dbcca.com/dbcca/EN/investment_ research.jsp accessed 14 June 2012. SinCo - sustainable investment consulting - is a boutique investment advisory firm specializing in sustainable investment architecture in frontier and emerging markets. www.unpri.org https://www.cdproject.net/en-US/Pages/About-Us.aspx accessed 12 June 2012. www.un.org/millenniumgoals/ accessed 12 June 2012. DIRTY FEET: Portfolio Carbon, January 2012- Portfolio risks and opportunities from the carbon intensities of the 40 largest

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listed companies in South Africa, by Graham Sinclair, Stefano Dell’Aringa and Liesel van Ast http://www. sincosinco.com/portfolio-carbon.php Global, Regional, and National Fossil-Fuel CO2 Emissions. Boden, T.A., G. Marland, and R.J. Andres. 2010. Carbon Dioxide Information Analysis Center, Oak Ridge National Laboratory, U.S. Department of Energy, Oak Ridge, Tenn., U.S.A. doi 10.3334/CDIAC/00001_V2010. The PPP potential Posted by Kyra Choucroun, Tuesday 21 September 2010 16.08 BST http://www.guardian.co.uk/ sustainable-business/blog/combined-heat-power-plantppp-liverpool-museum-comment-21sep10 Global carbon-dioxide emissions increase by 1.0 Gt in 2011 to record high, 24 May 2012 http://www.iea.org/ newsroomandevents/news/2012/may/name,27216,en. html accessed 12 June 2012. “In 2011, a 6.1% increase in CO2 emissions in countries outside the OECD was only partly offset by a 0.6% reduction in emissions inside the OECD. China made the largest contribution to the global increase, with its emissions rising by 720 million tonnes (Mt), or 9.3%, primarily due to higher coal consumption.” Rio+20, United Nations Conference on Sustainable Development, will be held in Rio de Janeiro, Brazil, on June 20-22, 2012. www.uncsd2012.org/ accessed 12 June 2012. Global carbon-dioxide emissions increase by 1.0 Gt in 2011 to record high, 24 May 2012 http://www.iea.org/ newsroomandevents/news/2012/may/name,27216,en. html accessed 12 June 2012. “In 2011, a 6.1% increase in CO2 emissions in countries outside the OECD was only partly offset by a 0.6% reduction in emissions inside the OECD. China made the largest contribution to the global increase, with its emissions rising by 720 million tonnes (Mt), or 9.3%, primarily due to higher coal consumption.” Beyond Public-Private Partnerships, Ashok Khosla, Development Alternatives, July 2001 http://asiasociety. org/business/development/ashok-khosla-beyond-publicprivate-partnerships http://www.equator-principles.com/index.php/membersreporting accessed 12 June 2012. “The Equator Principles is a credit risk management framework for determining, assessing and managing environmental and social risk in project finance transactions.” IFC sustainability framework http://www1.ifc.org/wps/wcm/ connect/Topics_Ext_Content/IFC_External_Corporate_ site/IFC+Sustainability/Sustainability+Framework accessed 29 May 2012 http://www.brettonwoodsproject.org/art-566442. Accessed January 11, 2011. IFC chief executive Lars said that, “The Chinese worry about their reputation and the fact that there has been a lot of criticism. This gives a stamp of approval which will help them mobilize money from other international financial institutions and commercial banks.” Shi Yuan, Managing Director of CRJE Estate, the company behind the Tanzanian project, said that, “IFC has been tremendously helpful in supporting the environmental, social, health, and safety design of our project.” Sustainable Development: Is there a role for public-private partnerships? A summary of an IISD preliminary investigation, by Samuel Colverson, Oshani Perera, IISD, 2011. See also Programme Social and Environmental Standards On behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ), the GIZ Programme Social and Environmental Standards advises and supports different actors in the development and implementation of sustainability standards.http://www.gtz.de/en/themen/ uebergreifende-themen/sozial-oekostandards/28456.htm http://www.freedomhouse.org/template. cfm?page=350&ana_page=371&year=2010 accessed December 6, 2010. The Role and Importance of Independent Advisors in PPP Transactions, IFC Senior Investment Officers Jumoke Jagun and Isabel Marques de Sa lay out the key roles and responsibilities of PPP transaction advisors, http:// www.ip3.org/the-role-and-importance-of-independentadvisors-in-ppp-transactions.html “The Commission focused its attention on the areas of population, food security, the loss of species and genetic resources, energy, industry, and human settlements realizing that all of these are connected and cannot be treated in isolation one from another” (1987: 27). The Report of the Brundtland Commission, Our Common Future, Oxford University Press, 1987. Rockefeller Foundation/This Is Africa Magazine, 2010 http://www.rockefellerfoundation.org/news/news/ development-investors-show-growing accessed December 20, 2010. Global Green Growth Forum (3GF) and its partners have identified PPPs in biorefining, energy, trade, cities, finance, procurement, water. The Global Green Growth Forum and the UN Global Compact invitation to Corporate Sustainability Forum, Windsor Barra Hotel, Rio de Janeiro, “Accelerating Green Growth through Public-Private Partnership, 18 June 2012, http:// www.globalgreengrowthforum.com/wp-content/ uploads/2012/06/Invitation-Accelerating-Green-Growththrough-PPP.pdf. The Global Green Growth Forum in Copenhagen on 9-10 October 2012 will carry forward the discussion and provide a high-level platform for some of the PPPs featured in this workshop as well as other collaborative efforts, for a focused discussion on their respective business case and economic growth potential. http://asiasociety.org/business/development/ashok-khoslabeyond-public-private-partnerships Occupy Lekki: Lagos Protests Against Lekki Toll Gate, Posted: December 17, 2011 - 12:49 http://saharareporters.com/ news-page/occupy-lekki-lagos-protests-against-lekkitoll-gate Sustainable Development: Is there a role for public-private partnerships? A summary of an IISD preliminary investigation, by Samuel Colverson, Oshani Perera, IISD, 2011.

TIME LINE

HISTORY OF SUSTAINABLE DEVELOPMENT 1987

: The United Nations Brundtland Commission (1987) report, “Our Common Future” defined Sustainable Development as “development which meets the needs of the present without compromising the ability of future generations to meet their own needs”

1992:

Earth Summit. UN Conference on Environment and Development (UNCED) is held in Rio de Janeiro. Agreements are reached on the action plan Agenda 21, the Rio Declaration and the non-binding Forest Principles. Two “Rio Conventions” are opened for signature: the Convention on Biological Diversity and the Framework Convention on Climate Change. Negotiations on a third, the Convention to Combat Desertification are called for.

1993:

1988:

Inter-governmental Panel on Climate Change (IPCC) is established to assess the most up-to-date scientific, technical and socioeconomic research in the field. Regional Environmental Centre for Central and Eastern Europe is established to address environmental challenges across the region with an emphasis on the engagement of business as well as governments and civil society.

1990:

UN Summit for Children is held, an important recognition of the impact of the environment on future generations

1991:

Global Environment Facility is established, and, in 1994, restructured to give more decisionmaking power to developing countries over billions of aid dollars for work on biodiversity, climate change, water, land degradation and pollutants.

1992:

The Business Council for Sustainable Development publishes Changing Course, establishing the business interest in promoting Sustainable Development.

First meeting of the UN Commission on Sustainable Development; established to ensure follow-up to UNCED/enhance international cooperation and rationalize intergovernmental decision-making capacity.

1994:

China’s Agenda 21, a white paper on the country’s population, environment and development, is published. China sets an international example for national strategies for Sustainable Development.

1995:

World Trade Organization (WTO) is established with formal recognition of trade, environment and development linkages.

1995:

World Summit for Social Development is held in Copenhagen. It is the first time the international community has expressed a clear commitment to eradicating absolute poverty.

1995:

Fourth World Conference on Women is held in Beijing. Negotiations recognize that the status of women has advanced, but obstacles remain to the realization of women’s rights as human rights.

1996:

ISO 14001 is formally adopted as a voluntary international standard for Corporate Environmental Management.

1995:

Execution of Ken Saro-Wiwa in Nigeria brings international attention to the links between human rights, environmental justice, security and economic growth.

1998:

Multilateral Agreement on Investment (MAI). Environmental groups and social activists effectively lobby against the MAI. This, along with disagreement by governments over the scope of the exceptions being sought, leads to the demise of the negotiations.

1999:

Third WTO Ministerial Conference held in Seattle. Thousands of demonstrators protest the negative effects of globalization and the growth of global corporations.

TIME LINE UN Millennium Development Goals. The largest ever gathering of world leaders agrees to a set of time-bound and measurable goals for combating poverty, hunger, disease, illiteracy, environmental degradation and discrimination against women to be achieved by 2015.

2004:

Wangari Muta Maathai is awarded the Nobel Peace Prize. Founder of the Green Belt Movement in Kenya, she was the first environmentalist to be awarded a Nobel Prize.

The Economics of Ecosystems and Biodiversity final report calls for wider recognition of nature’s contribution to human livelihoods, health, security and culture by decision-makers.

2010:

2001 9/11:

2005:

Kyoto Protocol enters into force, legally binding developed countryparties to goals for greenhouse gas emission reductions and establishing the Clean Development Mechanism for developing countries. Emission reduction obligations expire at the end of 2012.

2006:

NASA reports that the ozone layer is recovering due, in part, to reduced concentrations of CFCs phased out under the Montreal Protocol.

2008:

World food, fuel and financial crises converge. Global food prices increase 43% in one year; growing energy demand in China, India and elsewhere sends energy prices soaring; financial institutions falterover the collapse of mortgage lending in the United States and markets tumble, sending the world into a recession.

2009: 2002:

World Summit on Sustainable Development is held in Johannesburg, marking 10 years since UNCED. In a climate of frustration at the lack of government progress, the summit promotes “partnerships” as non-negotiated approach to Sustainability.

Nobel Prize in Economics awarded to Elinor Ostrom for her work on the economic governance of the commons. Ostrom is the first woman to receive the award.

2010:

MILLENIUM DEVELOPMENT GOALS

Terrorists, representing antiWestern, non-state interests and ideologies attack the World Trade Centre and Pentagon, marking the end of an era of unhindered economic expansion. Stock markets and economies stumble and the United States gears up for a war on terrorism.

2009:

G20 Pittsburgh Summit: G20 nations provide guidance for a 21st century global, sustainable and balanced economy. Leaders call for phasing out fossil fuel subsidies and seek measures that will lead to sustainable consumption while providing targeted support for the poorest people.

BP Deepwater Horizon oil rig explosion leaks 5 million barrels of crude oil into the Gulf of Mexico for 87 days before the well is sealed, damaging wildlife habitats, fisheries, tourism and the economy throughout the region.

2011:

The world population reaches 7 billion and is increasingly interconnected; one third of those have internet access; 80 per cent have mobile phones. Increasing the population by 1 billion took only 12 years.

2012:

One of the first of the Millennium Development Goal targets is achieved in advance of the 2015 deadline: the percentage of the world’s people without access to safe drinking water is cut in half.

2012:

Rio +20: Fifty years after Silent Spring, 40 years after Stockholm and 20 years after the Earth Summit, the global community reconvenes in an effort to secure agreement on “greening” world economies through a range of smart measures for clean energy, decent jobs and more sustainable and fair use of resources. Source: http://blogs.reuters.com/reuters-money/files/2011/08/charity.jpg

2000:

2002:

Global Reporting Initiative releases guidelines for reporting on the economic, environmental and social dimensions of business activities.

SPECIAL REPORT

2011 ANNUAL CSR REVIEW

he global practice of CSR has come a long way. The past few decades have seen a steady evolution of its practice from a form of corporate philanthropy to a more structured and all-encompassing model. Though Nigeriaâ&#x20AC;&#x2122;s private sector seems to be lagging behind in the understanding and practice of standard CSR, there is reason to believe that there has been an increased interest in the subject and that Nigerian corporate establishments have begun to take it seriously. However, a few studies have been carried out to determine the extent to which standard CSR has been accepted. This survey is aimed at identifying the state of the practice of Corporate Sustainability and Responsibility in corporate establishments of all sizes and structures in Nigeriaâ&#x20AC;&#x2122;s private sector. The study is designed to assess the level of understanding of Corporate Sustainability and Responsibility (CSR) and to gauge the perception of leaders of small, medium and large enterprises as to what constitutes Corporate Sustainability and Responsibility. It seeks to offer an overall view and to answer the question of whether organizations in Nigeria still practice CSR as a form of philanthropy or rather as a complete practice that conforms to an all-embracing standard. The first chapter of the survey provides background information on the private sector in Nigeria and the major factors that necessitated the conduct of the survey. It provides a brief explanation of the idea behind CSR and the Evolution of CSR both worldwide and in Nigeria.

KEY RESULTS OF THE SURVEY Do you have a CSR department?

Yes

Does you organisation have a CSR Policy? Is it documented or assumed?

Yes, Documented

No, Assumed

SPECIAL REPORT The first chapter goes on to elucidate the objectives, methodology, scope and limitations of the survey. 325 questionnaires were sent to various corporate organizations, Non-Governmental Organizations and Faith-Based Organizations. Then, the responses were collated and analyzed. The survey was hampered by a low number of responses; an indication that CSR may not be taken seriously by many organization in Nigeria. The second chapter contains the results of the survey while the third and fourth chapters contain the analyses of the results and the conclusions respectively. The challenges faced during the conduct of this research require further examination. For instance, the few responses to the survey by corporate organizations indicate that CSR may not be taken as seriously as it should. Some of the reasons put forward by some organizations for refusing to participate are also indicative of the wrong perception of what the survey is meant to achieve. In an emerging industry such as this, it is important to obtain an assessment of current trends with a view to identifying the weak spots and areas that must be given attention in order to reach an acceptable standard. The survey was not designed to analyze or criticize the CSR activities of individual companies, but to obtain an overall view of the current state of CSR in Nigeria. These challenges notwithstanding, this survey has been able to fulfill its main objective of gauging the level of acceptance of international standard CSR values in Nigeria. Subsequently, there will be more surveys on an annual basis to obtain a comparative assessment of the growth of CSR in the country. This survey will provide a starting point on which future studies on this topic will be made.

Which areas are your organizationâ&#x20AC;&#x2122;s strategy integrated?

Do you publicly record the total amount of the companyâ&#x20AC;&#x2122;s community investment in terms of a percentage pre or post tax profits

I donâ&#x20AC;&#x2122;t Know Other (Pls Specify) Post-

Pre-

SPECIAL REPORT Does you company release CSR/ Sustainability Reports?

Other

Yes

Which of these Programs/Projects does you company carry out?

Scholarships Books Sponsor sports and recreational activities Conduct livelihood trainings Other (please specify) Donate medicines/ equipment Conduct clean-up campaigns Practice solid waste management Conduct medical missions Classrooms

From the survey, the following can be concluded: • Although the responses were few, they came from a wide range of organizations in Nigeria, meaning that CSR is being practiced in a variety of sectors. • Both large and small organizations participated in the survey, although more responses came from the smaller organizations. • Many CEOs are directly in charge of matters, concerning CSR within their organizations and most organizations have not created specialized departments for CSR. • Most of the participants claimed to have a well documented CSR policy in their company framework. • The organizations listed initiatives in education, health, sports and other areas, which they have actively engaged in. It appears that CSR is still thought of as a philanthropic venture in many establishments. • Most of the organizations do not dedicate a specific percentage of their profits to CSR. • Most companies are aware of national and international development programmes and consciously use their CSR initiatives to facilitate the achievement of these goals. • A little over a half of the participants have monitoring systems in place to systematically measure the impact of the company’s community investment initiatives. However, more than a half of these organizations do not use Sustainability reports. • Public attitude/trust, relationship with stakeholders and company reputation were identified as the main motivation for engaging in CSR activities. • While some respondents perceived the current state of CSR in Nigeria to be quite poor and not very effective, others felt that it is developing and beginning to gain prominence. Strategy/Framework Formulation, Project Monitoring/Evaluation and Stakeholder Engagement were identified as the top three services that organizations think would be of benefit to them.

All other Responses

in print Title:

AR-CSRâ&#x201E;˘ 2011 Report

Publisher:

ThistlePraxis Consulting Limited

he Africa CEO Round-table and Conference on CSR, AR-CSRTM; is an industry flagship event and platform aimed at engaging stakeholders from all over Africa; working on issues of Corporate Sustainability and Responsibility, with a view to creating an enviable operational framework that African countries can aim for. Resolutions bother on the urgent need for more business leaders to pay attention to issues of CSR and sustainability as well as for more businesses to pursue sustainable practices by clearly reflecting Sustainability practices in their policies. The participants also urged the conveners to reflect more experiential aspects of CSR through practical experiences on the challenges faced in the course of proper practice of CSR - in topics and sessions in order to balance out the academic concepts in subsequent editions. The need for follow-up events in the space of 12 months between the 2011 and 2012 editions of the AR-CSRâ&#x201E;˘ so as to sustain the momentum was also advocated. Catalytic philanthropy, which goes beyond doling out money as it lays emphasis on solving problems were discouraged and clear Public-private partnerships (PPPs) or other such collaborations, should no longer be neglected. Health and safety, product responsibility, human rights, financials and the environment were highlighted as some of the major challenges facing CSR. In addition, Corporate

Social Investments, Corporate Social Responsibility and Sustainability were adopted as related terms only, which should never be mistaken for one another. Delegates also alluded to reporting, as a tool for improving outcomes on Sustainable Development because it allows organizations to measure, track and improve their performance. In conclusion, the impact of funds committed to CSR was rated more important than the amount of funds spent in undertaking such activities. Four strategic objectives of Sustainable Development which the continent must pay earnest attention were listed as: knowledge, performance, dialogue and transparency.

9 Questions

Global Leaders Speak on Sustainable Development This special edition, 9 leaders share thoughts about various issues on Sustainable Development. They now take 9 Questions.

How can Africa achieve Economic Growth? “Today, Africans would like to move from primary modes of production to more sophisticated forms. To do this, we need leadership that is decisive, practicable, deliberate and consistent. We can leverage all people into growth. I am very optimistic as an African.”

What is the Significance of Gender Equality as a Millennium Development Goal? “Gender equality is more than a goal in itself. It is a precondition for meeting the challenge of reducing poverty, promoting Sustainable Development and building good governance.”

What opportunities exist for small scale agricultural producers in Africa? “In Sub-Saharan Africa, since 2009, over 265 million people are estimated to be malnourished and 30 percent of the population suffers hunger. The recent global economic crisis has placed Agriculture and food security at the heart of national and regional development policies and programmes, which allows to look to the next decade with greater optimism. This new order of priorities should be an opportunity to support small producers and strengthen family farming.”

Monhla Hlahla, CEO, Airports Company of South Africa Chairperson, Industrial Development Corporation (IDC), South Africa

What role does the Private Sector play in achieving development? “Without the private sector, there is no development. Our policy is to have fast and equitable growth, but you cannot have that without a clear division of labour in partnership with the public and private sectors. If we don’t use this opportunity to build our economies, particularly the manufacturing sector, we will be lost.” Meles Zewani Prime Minister, Ethiopia

Jacques Diouf Former Director-General, Food Agriculture Organization (FAO)

Kofi Annan Former UN Secretary-General UN-Arab Special Envoy on Syria

and

What are the potential effects of climate change? “Climate change is a risk multiplier. It has the potential to take all the other critical issues we face as a global community and transform their severity into a cataclysm. Reducing poverty, increasing food production, combating terrorism and sustaining economic development

9 Questions are all vital priorities, but it is increasingly clear how rapid climate change will make them even more difficult to address. Furthermore, because climate change is intimately connected with our systemic, unsustainable consumption of natural resources, any decline in the ecological resilience of one resource base or ecosystem increases the fragility of the whole.”

HRH Prince Charles Prince of Wales

How role does Corporate Governance play in Sustainable Development? “Corporate Governance is concerned with holding the balance between economic cum social goals and between individual/communal goals. The governance framework is there to encourage the efficient use of resources and equally to require accountability for the stewardship of those resources. The aim is to align as nearly as possible the interests of individuals, corporations and society.” Sir Adrian Cadbury Chairman, UK Commission Report on Corporate Governance Former Chairman, Cadbury Schweppes Plc)

How can we harness alternative energy sources to ensure preservation of scarce resources?

“... each day brings further evidence that the ways we use energy strengthen our adversaries and threaten our planet ... We will harness the sun, the wind and the soil to fuel our cars and run our factories ... And to those nations like ours that enjoy relative plenty, we say we can no longer afford indifference to those, suffering outside our borders; nor can we consume the world’s resources without regard to that effect. For the world has changed and we must change with it.”

Is Social Entrepreneurship a new concept? “Social entrepreneurs have existed throughout history. St. Francis of Assisi, the founder of the Franciscan Order, would qualify as a social entrepreneur, having built multiple organizations that advanced pattern changes in his “field”. Similarly, Florence Nightingale created the first professional school for nurses and established standards for hygiene and hospital care that have shaped norms worldwide. What is different today is that social entrepreneurship is developing into a mainstream vocation, not only in the United States, Canada and Europe, but increasingly in Asia, Africa and Latin America. In fact, the rise of social entrepreneurship represents the leading edge of a remarkable development that has occurred across the world over the past three decades: the emergence of millions of new citizen organizations.”

Barack Obama President, United States of America

How can corporate organizations make social impact while pursuing their primary goal of profit making? “We need to reverse three centuries of walling the for-profit and nonprofit sectors off from one another. When you think for-profit and nonprofit, you most often think of entities with either zero social return or zero return on capital. Clearly, there’s some opportunity in the spectrum between those extremes. What’s missing is the for-profit finance industry coming in to that area. Look at the enormous diversity of the for-profit financial industry as opposed to monolithic nature of the non-profit world; it’s quite astonishing.” Bill Drayton CEO & Founder, Ashoka

David Bornstein Author, How to Change the World: social entrepreneurs and the Power of new ideas