Remarks on Norwegian industry in Angola, CSR expectations and best practices

Excellencies, ladies and gentlemen,

I am pleased to be here in Luanda, on the first visit ever by a Norwegian Foreign Minister to Angola. Let that be an expression of both friendship and interest, and a reflection of the importance that the Norwegian Government attaches to our relations with Angola.

You may say it is high time that we increase our political contacts, and I agree. There are plenty of reasons. One is of course that outward-looking countries in today’s world should meet, should learn to know each other, should explore opportunities for cooperation and common responsibility, and should – when necessary – deal with differences.

We are drawn to Angola by the role this country plays in Africa. Norway’s policy on Africa is evolving from a historical focus on development cooperation towards an array of relations, including engaging in the broader spectrum of foreign policy issues, the politics of development, peace and democratisation processes and interaction with African actors on the international scene.

My main focus today will be on the economic relations between our two countries, which have developed rapidly in recent years. Key Norwegian companies are investing in Angola, seeking new opportunities, creating jobs, paying taxes and contributing to development and opportunity in this country. In short, they are driving our relations to a new stage.

One key figure is often referred to as an illustration of this stage: Last year Statoil paid taxes to Angola amounting to approximately twice as much as Norway’s total development cooperation to the whole of Africa. This in itself is a sign of change. It is an illustration of how a new bilateral relationship is taking shape. And I can add that it highlights why the Norwegian Government wishes to develop and deepen the political dimension of these relations.

I appreciated the political talks that I have had with President dos Santos and the ministers of foreign affairs, industry and energy today. We could have spent our time focusing on the differences between Norway and Angola. They are many, reflecting our different histories.

Angola has experienced colonialism and civil war, Norway gained its independence more than 100 years ago, and we have enjoyed peace for nearly 65 years.

Angola is working to stabilise a democratic political system. Norway has had the privilege of developing ours for decades, if not centuries.

As the President noted just a few days ago, Angola is focusing on how to create solid institutions that can ensure transparency and fight corruption. Norway has had the opportunity to develop such institutions over time.

When Norway discovered oil and gas, our state institutions were stable and well-anchored, and we had peace. When Angola gained access to the riches of its continental shelf, the country was at war and key institutions were weak.

Although Angola has experienced substantial growth, it is still struggling with poverty. Norway has made the transition from a poor European nation to a wealthy one.

Yes, we could have pondered on the differences between our two countries in our political talks, but these and other differences are not our focus today. They serve rather as a background. Our focus now is on the future.

How can we take our cooperation further with the point of departure that has been created over the past few years? How can we respect our differences while striving to explore common ground?

As I see it, Norwegian enterprises have the privilege and opportunity to join Angola in the next stages of development, and they will be doing so to a large extent in partnership with Angolan partners.

Some of our finest companies, such as Statoil, Hydro and Yara, have the opportunity to create wealth, jobs, welfare and opportunity for the people of Angola, which is facing yet more struggles ahead: the continued struggle against poverty, the struggle for better health and education, the struggle for decent work, the struggle against corruption, the struggle for democracy and human rights – in short, the struggle for modernity, which is within the reach of this great nation.

Our companies will engage on the basis of their skills, their investment and their experience. They will have to prove their qualities, as some of them have already done so well.

The Norwegian Government supports them in their efforts. Because Norway too had this experience: we emerged from poverty, we explored our national resources, we developed our human capital, we strengthened our national institutions – and the foreign companies that engaged and invested in Norway made a major contribution to all of this.

Despite the historical differences that I have mentioned, we see that there are a number of important similarities between our two countries that underlie the rapid engagement of Norwegian companies in Angola.

Both countries are rich in resources, both have long coastlines, and both have huge potential for hydropower development.

Thus, there is the potential of similarities and complementarities. Exploring this potential in the right way is both our challenge and our opportunity.

What, then, can we expect of Norwegian companies that engage in Angola? What should we, the Norwegian Government, expect of Norwegian companies present here in your country?

The bottom line is pretty clear. We expect them to succeed in their business, create jobs and bring in revenues. But we need to look further, and this brings me to the key message of my statement today: what responsibilities do companies have in today’s business environment beyond succeeding in their business efforts?

The notion of Corporate Social Responsibility, or simply CSR, encompasses companies’ responsibilities towards the society in which they operate. A company’s contact with the local community goes beyond the operations related to its core activities. It has a responsibility for ensuring sound, transparent business practices that take into account the well-being of employees, the local community and the environment.

In recent years a set of CSR standards and universal values has been codified and articulated. Companies no longer have an excuse for not paying attention to human rights or safeguarding the natural environment; and no company should be able to get away with not respecting key standards of decent work – just to mention a few dimensions.

Let’s be practical about it: there is no longer a real debate about whether companies have a responsibility; the debate is rather about how to implement good practices, and how far the responsibility of a company should extend – for instance in the supply chain – into companies they themselves do not own, but from which they purchase goods or services.

We have to acknowledge that fundamental realities in the various societies in which the companies operate differ considerably. How then can universal norms and standards be met?

I agree that this is a real issue. But at the same time I believe that the process in recent years has taken these dimensions into account.

We are not talking about an approach to societies’ development along the one-size-fits-all analogy. Rather, in this era of globalisation, the universal debate on CSR has acknowledged the differences while highlighting certain key principles that could and should apply in all countries.

For example, a Norwegian company operating in Norway will have to relate to Norwegian laws and regulations. They may differ from those of Angola. Yes, they may differ and they may be more stringent than those of the country they are operating in.

They may, of course, differ with regard to certain issues, but often they differ in the sense that Norwegian laws set higher standards for the participation of trade unions, for health and safety, for environmental issues. And clearly, a company operating in Angola is obliged to respect the laws of Angola.

But I also see it as part of a Norwegian social contract that Norwegian companies operating in other countries respect universal human rights, international norms and standards and key principles of decent work – regardless of how far these norms are reflected in local law.

Let me share with you the Norwegian Government’s approach to CSR. I can do so on the basis on a recent effort to update and focus our efforts. Earlier this year, the Foreign Ministry presented a white paper to the Norwegian parliament on this very topic.

This white paper on CSR is one of our first attempts to develop a comprehensive government policy on CSR. It also sums up the most recent developments in the global debate on CSR. The backdrop to this has two dimensions: first, the increased engagement of Norwegian enterprises in the global market. Second, the recognition that active cooperation with business is essential in addressing the challenges of our time – the financial crisis, climate change and widespread poverty.

We developed the white paper in close cooperation with the social partners. In fact I see such tripartite dialogue as a key component of succeeding in creating an enabling environment for corporate social responsibility. A major input to the white paper was the real-life experiences of companies and trade unions.

A number of leading Norwegian companies, several of them present here in Angola, have integrated CSR into their operations and decision-making processes. Each company gives priority to its own specific way of making a contribution to the society in which it operates. The list of engagements is long. I have been told that the sum of CSR engagements by private companies in Angola equals the total amount of foreign aid to the country. That is impressive, and I believe the trend will continue, because it is in the interest of each company, not only politically, but also commercially. We have found that those who have actively integrated CSR into their operations are at the same time the ones with the most visible commercial success.

In the white paper, we – the Norwegian Government – make our expectations clear with regard to how companies should conduct their operations:       

First, we expect companies to respect human rights in all their operations. Norway has supported the UN Special Representative on Business and Human Rights, a function that helps to clarify the human rights responsibilities of governments and companies.

Second, we expect companies to respect the rights of employees and provide decent working conditions.

Third, we expect companies to protect the environment and the climate.

Fourth, we expect companies to engage in fighting corruption and increasing transparency. Transparency about a company’s operations and their impacts on people and the environment is in itself a kind of “soft power”. We need soft, but firm, mechanisms driving voluntary responsibility, and transparency is one such mechanism. 

Then there is the other side of the coin. The requirements for social responsibility are, of course, highly relevant in public affairs and public administration as well. The Government not only expresses what it expects of companies and regulates them. It is an agent in its own right. If we expect companies to act responsibly, we must consider our own responsibilities and promote coherent policies.

For example, the government and its agencies must be at the forefront when it comes to socially responsible procurement, ownership and investment. 

I mentioned decent work. I believe this is of particular importance. A company’s success is dependent on the quality of its workforce. As agreed by the members of the International Labour Organisation, Decent Work must be an integral part of our policy on CSR.

Decent work can be summed up in four strategic objectives: first, respect for fundamental principles and rights at work and international labour standards; second, employment and income opportunities; third, social protection and social security, and fourth, social dialogue and what I called “tripartism”, which includes the right of workers to organise.

The financial crisis has made the decent work agenda even more important. A global ”race to the bottom” with deteriorating working conditions, weakened social protection and an undermining of rights, in addition to increased unemployment, must be avoided.

Gender equality is also at the heart of decent work. This includes taking action against forced labour and human trafficking.

To sum up, we learn that modern and successful companies integrate CSR into their strategic thinking, planning and operations. The leading Norwegian companies present in Angola are on this path. They are leaving a footprint well beyond their purely business interests, engaging in a variety of projects that benefit the local and national community.

Then there is the legal and political setting in which a company operates. The Norwegian Government expects Norwegian companies to refuse to accept that corruption should be part of day-to-day business anywhere in the world. Companies headquartered in Norway must abide by Norwegian anti-corruption laws as well as international anti-corruption conventions. We expect all Norwegian-owned commercial interests to stick to this approach.

Corruption is a cancer in the market place. Besides being a direct violation of most national laws and international conventions, it is a real obstacle to growth and serves to distort market signals that should guide economic operators to make the right decisions.

Angola has been, and is still struggling with these challenges, as highlighted by the President in his recent statements. I believe that a key to sustainable growth and progress lies in a determined effort to combat these phenomena. Norway stands ready to support any measure by the Government of Angola to turn this tide.

There are some positive signs. Angola has been commended for making its upstream oil activities more transparent.

Norway too has gone through this process, making transparency of the energy sector a key priority. From the outset, our policy was to have full transparency regarding the activities of the petroleum industry and its management. When the idea of an Extractive Industries Transparency Initiative (EITI) was launched, establishing standards for transparency, this was very much in line with established Norwegian policy.

Norway is now implementing the EITI criteria. We would encourage other countries to take part, both as a means of making the energy sector more effective, and as a means of contributing to development and poverty alleviation.

I would encourage Angola to consider applying to become an EITI candidate at its earliest convenience.

In doing so, Angola would join more than 20 other African states in this initiative for combating corruption and bringing full openness into the extractive industry. We are more than willing to share the experience we have gained from Norway’s EITI implementation with you.

Our companies are learning valuable lessons in Angola. And we stand ready to share them with the government, the private sector and the people of Angola. Let me mention a few:

We can share our experience of cooperative relations between companies and trade unions.

We can share our experience of Norwegian industry effectively cleaning up its waste and addressing its environmental impact in other ways.

We can share our experience of having a business environment with low levels of corruption. And we can share our experience of cooperation on how and why CSR matters, including valuable input from civil society.

Cooperative relations, an industry cleaning up its waste and respecting the environment, a non-corrupting business environment – none of these valuable development agents come out of the blue. They are the result of debate, hard work and dialogue.

Norway has several environmental NGOs. They claim that the fact that our oil companies can declare that they apply the most environmentally friendly practices is also thanks to their relentless criticism of lax practices. Such criticism from a wide range of civil society actors has in turn created an environment in which the Government has enacted more stringent laws, which have led to companies developing better practices.

We have different roles and this is why the social dialogue, admittedly sometimes rather painful for government, is so important. Governments have a responsibility to enact necessary laws, but businesses should not take advantage of situations where such laws are absent. Indeed, the concept of CSR is at least twofold: existing laws should be respected, but in addition there are ethical dilemmas that force companies to take a stand without the clear guidance of local laws.

I mentioned by way of introduction that Norway was already a mature, democratic state when oil resources were discovered. This made it much easier, I believe, to translate the newly discovered resources into development.

Rich and sudden inflows of revenues from natural resources may be a blessing, but they are also potentially a curse. We know that in order to translate revenues into real riches, i.e. into improvements in the lives of the many, a country must have high ambitions for social investment and income distribution.

This crucial development issue only highlights the potential for further political dialogue between Norway and Angola.

I find it interesting that Angola recently sent an expert group to Norway to learn about the Norwegian Government’s Pension Fund – one of the world’s largest sovereign wealth funds – and that you are now implementing a similar approach. We are prepared to continue this dialogue.

Let me sum up:

The Norwegian Government has clear expectations of Norwegian enterprises: to do their core business well, to respect basic human rights, to provide decent working conditions and to protect the environment. These expectations are as valid in times of crisis as otherwise, and they are valid no matter where in the world Norwegian companies are operating. 

We must continue to raise awareness of how companies can contribute to economic and social development in countries around the globe. I believe that active cooperation with the business sector is essential in solving the challenges of our time: the effects of the financial crisis, environmental meltdown and widespread poverty. Former UN Secretary-General Kofi Annan put it this way: “it is a utopian notion that poverty can be overcome without the active engagement of business.” I agree.

So let us look ahead to a situation where businesses, civil society and governments alike are playing their respective roles, but also seeking to explore the potential for cooperation. We all need to think bold thoughts and to explore business opportunities in countries or sectors that have yet to benefit fully from economic globalisation.

We have high hopes for the future of cooperation between Norway and Angola. Our companies are now the driving forces of an exciting relationship. In this context, corporate social responsibility is a resource.

The Norwegian Embassy is creating a forum for CSR in Angola, inviting companies to share their experience and compare notes.

I look forward to ever closer dialogue with the Government of Angola on these issues, and I appreciate the most useful discussions we have had on these issues today.

Thank you for your attention.