Humanitarian Aid – Business As Unusual?
ROME, Jun 9 2016 (IPS) – Big business is most often seen by human rights defenders and civil society organisations as “bad news,” as those huge heartless, soulless corporations whose exclusive goal is to make the biggest profits possible. Too often and in too many cases this is a proven fact.
Meanwhile, the United Nations was born after World War II as the best possible system to help improve the living conditions of the most needed. In fact, it started its mission by providing humanitarian assistance to war victims—mostly Europeans.
In the following years, the UN expanded its activities to help the emerging development needs in Africa, Asian and Latin American countries, which had just won independence from European colonizers. So far, big business had practically no role to play… at least directly.
This year as it turned 70, the UN system has become visibly and increasingly helpless to fulfill its mission due to the growing lack of funding by the richest countries and traditional donors.
Precisely now that the world faces the most staggering levels of human suffering since WWII, the private sector has jumped on the stage as an actor with strong funding potential.
For example, while the UN Refugee Agency (UNHCR) is starving for funds to assist the current 60 million refugees around the planet and with numbers growing, the widely known and largest ready-made furniture maker in the world—IKEA, has become through its Foundation, the largest private donor to this UN agency, with 150 million euro provided over the last five years.
The same Foundation has also become the biggest private donor to both the UN Children Fund (UNICEF) and to the UN’s largest funding umbrella for development programmes – the UN Development Programme (UNDP).
And on Match 22 this year, on the occasion of the World Water Day, IKEA Foundation announced a new grant of for 12.4 million euro to water.org to expand efforts to provide safe water and sanitation to one million people in India and Indonesia.
How does one explain this new phenomenon? IPS met Per Heggenes, Chief Executive Officer of IKEA Foundation on the margins of the World Humanitarian Summit (WHS) that took place in Istanbul on May 23-24.
“First of all, there is no conflict between making money and doing good,” says Heggenes. “If you look at IKEA Group, you will see that we care strongly about social responsibility and environmental responsibility—this is how they do business, how the business operates.”
According to Heggenes, the company takes responsibility for the communities where it operates. “And this is also good for business—if you do things in the right way, in a sustainable away, in a responsible way, you turn that into a good business.”
But what is this “right way”? “Look, we focus our investments on children and youth in the poorest communities in the world, simply because that is where we can have the biggest impact. Children and families are absolutely at the core of IKEA Foundation,” he answers. “Children are the most important people in the world and of course they are the future of this world.”
Therefore, he says, “we have decided our initiatives for children to have a place to call home, a healthy start in life, access to quality education, and take all that and turn it into a adequate livelihood that makes possible for them to live out of poverty… That’s the basic philosophy of IKEA Foundation and that’s how we operate.”
The Foundation is now present in 50 countries around the world with initiatives focused on children, aiming at helping children and their families help themselves out of poverty.
“In doing all that, we believe that our Foundation is also in a position to be able to take risks. We try to find new solutions, new ways of doing this kind of activities better. And we are always very focused on driving innovation and constant improvements, while taking responsibilities for the people and the environment,” says Heggenes.
How? “We look for ways to work with partners who are looking to develop new models, new ways of thinking, new ways of bringing aid and services to the people that we try to help… and we develop systems and structures that otherwise would not have not been there.”
And the budget? Heggenes responds that since 2009 when he joined the Foundation, “we have constantly increased the funding year by year. Specifically, in 2016 we will donate 160 million euro – a budget which will grow to 200 million euro annually by the year 2020.”
IKEA Foundation works with everybody—with both the private sector, the governments, the non-governmental organisations (NGOs) and the UN.
In the case of UNHCR, “we work specifically on what we call self-reliance, looking at refugees as assets instead of just as mere beneficiaries, on how we can engage refugees while they are forced to be in camps so that they can choose their future by themselves, so that they can have opportunities to work, to use their capabilities for something productive, rather than frustrations, instead of sitting and waiting—and we know that refugees now stay in camps for an average of 17 years.”
Heggenes then explains that “there we focus on education, children’s education is absolutely key when you think about the fact that many refugee children spend their entire childhood in camps. There, education is lacking often because of the lack of money.”
The second thing, he adds, is that a big part of the Foundation’s work with UNCHR is providing opportunities for refugees to work, to earn a living and take care of their families.
The third element of what the Foundation does is renewable energy. “We have a large commitment to do whatever we can to reduce climate change and use renewable energy in the refugee settings. This helps children to study at night or for women to feel safe after dark, and also to help small business with providing energy to them.”
As an example, he mentions that they are in the midst of finalising a large power plant in Jordan, which aims to cover the needs of the entire Asraq refugee camp.
The IKEA Foundation chief is skeptical about big summits, like the WHS in Istanbul. “But I believe that if we can use a summit like this to bring the different actors, so that the private sector can engage with the UN and with the NGOs to drive more efficiency and more innovation in this humanitarian role, then I think we can achieve something that would not have been otherwise achieved,” he says.
“It is all about collaboration, sharing of best practices, not only about providing financial resources. Business can also contribute valuable experience and knowledge. I personally have a big belief in business’ ability to help drive social change.”
Heggenes feels comfortable in reminding that IKEA is committed to provide 400 million euro to climate action through 2020. “We made a commitment last year before the Paris Summit to get IKEA in climate change related investments. Out of the 600 million euro the business sector will invest, IKEA Foundation will invest 400 million euro.”
“For us this is about helping the people who are the most impacted by climate change, that’s the poorest people in the world. we are investing in different programmes to help these communities fight the impact of climate change.
The investment will be directed to renewable energy. “Climate smart agriculture often combined with irrigation could maybe enable small farmers to have three crops a year. We are also looking into different ways to help people to find smart ways to cope with the impact of climate change, and most importantly, help them to fight prevent this impact and become more resilient.”
Heggenes repeats once and again the term “innovation.” What does this means for the millions of refugees?
“Five years ago we started developing a shelter that was meant to replace or be an alternative to tents, where most people are exposed to natural disasters, etc.” he says and add that living in a tent for years is not a way to live. It is also very expensive for the organizations that have to pay for the tents, because tents used to last six months, perhaps 12 months.
“So we decided to invest in developing something that can replace tents, at least in certain situations, that meet certain specifications when it comes to weight, price, mobility, and at the same time provide better life quality for the people. After five years we have been into a prototype testing. We have established a social enterprise that will manufacture this new kind of shelter.”
Just three days ahead of the WHS, IKEA foundation and Oxfam announced a 7.3 million euro partnership agreement to improve disaster response.
Through it, Oxfam partners with the Foundation to launch an innovative, three-year programme to ensure that local humanitarian actors in Bangladesh and Uganda are able to cope more effectively with crises, from severe flooding to large numbers of refugees fleeing conflict.