How conflicting views of conflict lead to further conflict

How do businesses resolve conflict with the communities in which they operate when they can’t agree on what that conflict is?

Josep F. Mària, SJ

The generally accepted model of dispute resolution used in business is not only insufficient, says Esade’s Josep F. Mària – it can actually create additional conflict. 

Mària, together with co-author Jennifer Goodman (Audencia Business School, France), has developed a revised model that applies to the framing of conflict with specific relevance to the relationship between businesses and communities. The research, published in the Journal of International Development, has implications for both theory and practice. 

Investing in the community 

When the nature of a business sets it within a community, particularly one within a developing country, there can be significant culture clashes. To overcome these potentially damaging clashes and support local communities, firms often operate community investment (CI) programs. These discretionary investments into local causes are usually unrelated to the operation of the business and instead aimed at enhancing the population’s income, life quality and wellbeing. 

However, the inevitable presence of wide cultural gaps between business managers and community stakeholders can lead to disagreements about the beneficiaries of these funds and how they are managed. How a solution to these disagreements is sought can cause further friction, with each side preferring to adopt its own sets of rules.  

When the nature of a business sets it within a community, particularly in a developing country, there can be significant culture clashes

Within a business setting, a widely accepted model of dispute resolution frames conflict within the context of three sets of rules: power struggles (resulting in winners and losers), rights claims (legitimate, formal and fair standards) and interest negotiations (needs, desires and wants). 

Power, rights and interests 1

A new framing of conflict

However, when facing a specific conflict around an investment in the community, each party may prefer a specific set of rules (power, rights or interests) that is different from the other party’s option. For instance, the company may frame the issue in terms of interests and prefer to resolve it with negotiations; but at the same time, community stakeholders may instead seek to assert their rights through the justice system. In other words, seeking a resolution to the conflict can itself create conflict.  

To shed light on this contentious issue and explore a more comprehensive set of solutions, Mària and Goodman studied the governance of a social community fund (SCF) devoted to community investment (CI) and operated by a multinational mining company in the Katanga Province of the Democratic Republic of Congo, one of the poorest and most corrupt countries in the world. The firm's activity was to extract, process and export copper and cobalt; and its mining area is huge: it includes two small towns, 43 villages, 1500 Km2 and around 150.000 inhabitants. 

Seeking a resolution to the conflict can itself create conflict

The research – which included analysis of the company’s documents and policies, a critical analysis of similar companies, and several site visits for in-depth interviews – identified different examples of conflict between the company and local community actors.  

The fact that triggered the formulation of a different model from the concentric circles (Figure 1) is that Mària and Goodman could not include such conflicts in a single area of Figure 1: because – for instance — the same conflict was framed by the company as an interest negotiation, but the community was framing it as a rights claim.  

This led the authors to design a modification of Figure 1 and present Figure 2. A conflict that is framed as interest negotiation by the company and as rights claim by the community cannot be represented in Figure 1, but instead has a specific area to be included: area 6.  

Power, rights and interests 2

Disputing the type of dispute

The SCF operated by the mining company (anonymously referred to as MIN) is overseen by a board of trustees that includes a board of directors, a secretariat and a stakeholder forum. The board of directors includes four representatives from MIN, two members elected by the stakeholder forum (who have the right to veto decisions), and a representative from the Provincial Government of Katanga. 

The secretariat is a technical body comprised mainly of MIN employees, which ensures compliance with policy and procedure. The stakeholder forum consists of 40 members of the community drawn from local health development committees, religious groups, local chambers of commerce and civil society groups.  

At the level of the board of directors, MIN’s majority led to conflict between the company and community stakeholders. The company framed this conflict within a power context (retaining control limited the likelihood of corruption of community stakeholders), while the community saw it as a rights issue — specifically their right to benefit from a democratically operated fund, not subject to the decisions of MIN. 

At the level of the stakeholder forum, a new conflict arose. In fact, local groups not represented within the Forum — particularly those from indigenous communities — felt ignored. The members of the stakeholder forum viewed this as a conflict of interest. The community members who felt they had been sidelined saw it as a power issue, describing forum members as acting in a superior manner and stifling legitimate concerns. 

Finally, the specific community investments designed and implemented by the SCF (for instance electricity plants and healthcare facilities), were seen by the community members as their right. In the preceding decades, infrastructure and services had been delivered by the state-owned mining company which operated in the area before MIN took over. MIN, meanwhile, saw its role as providing projects in which the community had an interest and could be maintained by local authorities. The company disagreed that access to its SCF and the services it delivered was a right. 

Make space for conflict

These three examples highlight the limitations of the original model of power, rights and interests and open a space for observing “conflicts in the framing of conflict”, say the researchers. By recognizing that such contradictions exist, relevant solutions can be explored.  

Companies need to invite community actors to make decisions, but need also to avoid elite capture

There are several important practical implications to consider, the authors say. Companies need to invite community actors to make decisions about investments that will affect them; but need also to avoid “elite capture” — this is, the dovetailing of powerful local actors who will attempt to personally accumulate the company’s funds that are devoted to all the community. In addition, well-meaning training sessions developed to impose the set of norms chosen by the company could be seen as an attempt at domination and control by the company — thus not respecting the community’s rights and approaches.  

Further measures should examine how community involvement in the distribution of funds respects the complexities of local inter-community relations, and mediators should play a crucial role in seeking solutions that address co-existing views. 

The case of MIN, the researchers conclude, highlights the complexities at play in the relationship between firms and communities. Future research could examine the way in which community stakeholders are prepared for involvement in community investment fund governance, they suggest. 

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