At an interaction programme with Federation of Nepalese Chamber of Commerce and Industry (FNCCI)

Remarks by Kul C. Gautam  At an interaction programme with
Federation of Nepalese Chamber of Commerce and Industry (FNCCI)

Kathmandu, 19 October 2006

Thank you for this opportunity to interact with Nepal’s business leaders, industrialists and entrepreneurs represented in FNCCI – the Federation of Nepalese Chamber of Commerce and Industry.

Collectively, you are a major pillar of Nepal’s economy, and potentially a great positive force for Nepal’s transformation into a modern and prosperous nation.

If we look at the world’s most developed and prosperous countries, we always find that a secret to their success is a thriving corporate and business sector engaged in commerce and industry in an atmosphere of market-driven competition.

The job of the government is to invest in key basic social services and infrastructure, provide a fair and transparent regulatory framework, and create a conducive environment for ordinary citizens, farmers, businessmen and industrialists to use their latent human entrepreneurship to meet consumer demands for goods and services.

As we are about to embark on building a new, post-conflict Nepal, the leaders of industry and commerce represented in FNCCI have a major role to play in this country’s rapid and progressive transformation.

I have had the chance meet some of you at the NRN Day functions a week ago, and to familiarize myself with some of FNCCI’s work, through these interesting brochures and publications.

It is clear to me that you are ready to play your part in building a new Nepal. With your presence in 88 districts and municipalities, 58 commodity and sectoral associations, and 360 leading public and private sector undertakings, you already have an impressive outreach.

With your vision of “leading the nation’s economic progress” and mission of “facilitating Nepalese business become globally competitive”, you seem to have set your goals and priorities right.

With initiatives such as your young entrepreneurs’ forum, women entrepreneurship development forum, the NRN cell, the trade and skill development forum, the South Asian alliance for responsible business, the corporate ethics forum and your FNCCI anti-corruption project, you seem to be responding to the central issues of human resource development and corporate social responsibility.

I congratulate FNCCI for these progressive initiatives.

With such portfolio of diverse activities, FNCCI seems poised to contribute significantly to Nepal’s reconstruction and development.

But I am aware that you face significant hurdles in playing your role effectively. A major constraint is that the rule of law is extremely weak at present in Nepal. The most dramatic manifestation of this is the extortionist demands for forced donations by cadres of a political party, and the double taxation to which business and industries are subjected in this country at present.

This led to the unprecedented call for a general strike across the nation by FNCCI earlier this week. It was both an irony and an indicator of the extremely serious situation of lawlessness in the country that the business community, which historically strongly opposed strikes and bandhs in the past, found itself calling for a general strike.

A related issue is the trend by some political parties to forcefully enlist labourers into their trade unions and incite them to agitate with unreasonable demands leading to closure of some industries and businesses.

While the right to organize trade unions and engage in collective bargaining is a characteristic of a modern democracy that we must all support, enlistment into trade unions through coercion or false and exaggerated promises, is in itself a form of corrupt behaviour that must be deplored.

When it involves school children being coerced or enticed into joining political party affiliated unions, mass rallies, “cultural” programmes or political campaigns without parental knowledge and approval, that actually is a violation of child rights under the Convention on the Rights of the Child.

As a senior official of UNICEF, I strongly endorse the call by Nepal’s Coalition for Children as a Zone of Peace that such abuse of children be stopped forthwith.

And the business community has the legitimate right and responsibility to demand and expect that all arbitrary, extortionist, lawless actions be stopped.

At  the same time, the business community also has the responsibility to expect and encourage its own members to be law-abiding citizens.  One would therefore like to see FNCCI taking a stronger stand that all defaulters of bank loans payoff their debts promptly.

It is unconscionable that well to do businessmen, industrialists and investors abuse the banking system and get away with impunity, while small borrowers are deprived of loans and penalized for delayed payment.

On a positive note, I have noted with great interest, FNCCI‘s collaboration with UNDP on public private partnership for improving urban environment. This is an excellent example of innovative partnership involving municipal governments, local business community, civil society and the United Nations system to alleviate poverty, upgrade urban basic services and improve the environment.

I see such partnership between the UN and the business community as part of a growing trend in the UN to collaborate with the corporate sector for the achievement of certain common goals.
As some of you may know, UNICEF has a long history of partnership with the private sector. Fully one-third of UNICEF’s annual income globally – now amounting to a half-a-billion US $ – comes from the private sector.
We cooperate with a range of businesses from small mom and pop stores, to major global companies like Uniliver, Procter and Gamble, Coca-Cola, British Airways, Sheraton Hotels, Deutsche Post, IKEA, etc.
This cooperation involves not just UNICEF getting financial contribution from the companies, but UNICEF and the companies working together on cause-related issues such as ending child labour; promoting sanitation; disaster relief, health and education projects of mutual interest to both parties.

Indeed the United Nations as a whole is engaged in working with private companies to promote corporate social responsibility.

A few years ago, the UN Secretary-General Kofi Annan launched the UN Global Compact – the world’s largest corporate social responsibility initiative, now involving some 3000 major corporate partners and stakeholders from all parts of the world.

The Global Compact is guided by 10 key principles of good corporate behaviour in the areas of human rights, labour, environment and anti-corruption. The compact is not a policing or monitoring instrument. It relies on voluntary public accountability, transparency, and enlightened self-interest of companies, labourers and civil society, supported by the United Nations.

The 10 principles of Global Compact include:

  • respect for universally agreed human rights
  • freedom of association and collective bargaining
  • elimination of child labour, forced and compulsory labour
  • non-discrimination in employment
  • protection of the environment
  • and work against all forms of corruption, including extortion and bribery
  • We find that for ethical as well as commercial reasons, more and more
  • companies embrace corporate social responsibility, and find it very helpful for them to manage global risks.

If FNCCI is to help Nepalese businesses to become globally competitive, I would urge it to disseminate the 10 principles of the UN Global Compact, and urge its members to apply them in their work as a voluntary code of conduct of good corporate citizenship.
As we meet here today, our political leaders are in the middle of important negotiations for restoring peace, a genuine democracy, and progressive restructuring of our state institutions and system of governance.
We wish our leaders success and wisdom in rapidly concluding a negotiated political settlement that would be in the best interest of Nepal.
But I have been advising our leaders that while a political settlement is urgent and vital, we must also simultaneously work towards developing an ambitious post-conflict reconstruction and development plan.
Experience of other countries coming out of protracted conflict suggests that a peace settlement cannot be durable, unless it is accompanied by rapid improvement in people’s living standards as the tangible fruits of peace and democracy.
It is therefore urgent that our own peace process is now accompanied by detailed planning for reconstruction and development. It is not enough to cite populist slogans. We need a carefully prepared investment plan that can galvanize broad national consensus and international support.

Key components of such a plan will need to include massive employment creation, investment in infrastructure, rural development, empowerment of women and youth, affirmative action in support of historically deprived and discriminated communities – all aimed at achieving the Millennium Development Goals.

FNCCI and its members can make an important contribution in helping draft and implement such a plan. I would urge you to nudge the government and other key players to expedite the preparation of such a development and reconstruction plan, and offer your help.
In the past decade, Nepal has gone through painful, turbulent times and we have missed important opportunities for development. Members of FNCCI have been among those who have suffered.

But the historic jana-andolan of April 2006 has given us new hope for an end to regressive and repressive political tendencies – whether from the left or the right.

Let us use this historic moment to forge national unity and solidarity to build a new Nepal of our dream – a Nepal that is not only sundara, shanta, bishaal, but a prosperous Nepal in which all our children can grow up to their full human potential.

Thank you.