Companies, as commercial providers of products and services, have always played a significant role in the humanitarian system, in particular local companies in communities affected by crises. Humanitarian organizations regularly subcontract such firms in a commercial, for-profit manner to implement a vast array of humanitarian services, such as construction, logistics and security and monitoring services. They have been and remain critical in providing services that either humanitarian organisations are unable to provide themselves or companies are simply better placed for. Companies have also long been involved in the humanitarian system in a non-commercial capacity – for example, as philanthropists that donate money to humanitarian causes or as partners to international and non-governmental organizations.
This study analyses both commercial and non-commercial business engagement in humanitarian response and disaster risk management.
While there are a number of benefits and risks for donors and relief agencies when it comes to engaging with the private sector, developing a clear and accepted policy for strategically engaging with the private sector in either commercial or non-commercial relationships can mitigate many of these risks while maximizing the benefits. The strategy should not only make clear what the desired organizational and humanitarian outcomes are and what role the private sector can play in different types of engagement to help achieve these outcomes, but also serve to generate internal buy-in and support from organizational stakeholders. Moreover, in the case of non-commercial partnerships, it is essential that the necessary internal resources are dedicated to implementing the strategy in global and country offices, as appropriate. One of the key pitfalls experienced by organizations aiming to work more effectively with external partners is the lack of dedicated staff capacity or, particularly, the lack of expertise in areas such as donor relations, corporate culture and partnership management.
For donors, the risks associated with corporate engagements are similar to the risks faced by relief agencies, namely reputational risks, the risks of failed expectation management, and the risk of increasing transaction costs. They should also invest in the development of strategies and ensure that the required resources and management support for implementing these strategies are in place. Even though strategies aimed at guiding engagement with the private sector do exist, it often remains unclear what partnership models a donor wants to promote and in what way. This is highlighted, for example, by the sometimes-blurred distinction between the desire either to mobilize resources from companies or to contract them to implement humanitarian services – or both. Moreover, donors often focus on both development and humanitarian response, but fail to clearly pinpoint in their strategies the difference in their approach to both areas.