January 26, 2012 / 11:13 AM / 7 years ago

Business expertise tapped for smarter disaster aid

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

A shopper pushes goods at the Wembley branch of the Swedish international furniture and home accessories company Ikea in west London October 15, 2010. REUTERS/Toby Melville

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

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

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

“There is certainly a lot of value for industries to engage with humanitarians,” said Frank Clary, who manages disaster relief contributions at the company, which is based in Kuwait and the Middle East’s largest logistics provider.

“It is something employees want to do ... and it doesn’t cost too much.”

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

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

The U.N. refugee agency, the U.N. High Commissioner for Refugees (UNHCR), alone has managed to increase corporate-sector income to $32 million in 2011 from $3.7 million in 2006.

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

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


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

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

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

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

The relatively new concept of cash transfers is also proving fruitful.

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

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

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


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

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

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

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

Others regard suspicion of commercial agendas as outdated.

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

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

But researchers argue more evaluation is needed to determine which types of corporate contribution save most lives.

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

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

(AlertNet is a humanitarian news service run by Thomson Reuters Foundation. Visit www.trust.org/alertnet)

(For more on the future of humanitarian aid, including info-graphics, videos, stories, blogs and results of AlertNet's poll of experts, visit futureofaid.trust.org)

Editing by Katie Nguyen and Sonya Hepinstall

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