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Analysis: How the Private Sector Can Help Tackle the Refugee Crisis

World leaders are increasingly calling on businesses to play their part in meeting the global displacement crisis. Amid criticism that corporate social responsibility is merely reputational, we look at the evolving forms of private-sector engagement.

Written by Daniel Howden Published on Read time Approx. 4 minutes

It has become popular to suggest the private sector should play a bigger role in addressing the global refugee crisis. When refugee experts descended on New York for the U.N. General Assembly and slew of special refugee side events last month, private sector engagement was one of the buzz topics.

Almost all the conversations had one thing in common: They were talking about entirely different actions while at the same time casting them as private sector engagement on migration and refugees.

When a group or an individual decides to sponsor a refugee to come to Canada, this is a private-sector action. Just as it is when a Greek yogurt factory in the U.S. decides to employ a refugee. When George Soros pledges $500m of his own money to address the crisis surrounding migration and refugees, this also comes under the rubric. When charitable foundations borrow the intellectual clothes of venture capitalists to think about “social returns” on their money, it can also be talked about as the influence of the private sector. Just as it can be when an insurance company steps in to offer health insurance to recently resettled refugees. Ditto when a tech company partners with an international NGO to make a multilingual app to help refugees and migrants understand their rights in the country they find themselves in.

While all of these approaches are valid, there are big differences in their scope and impact.

By far the most influential role for the private sector so far has been in sponsoring refugees. This route has seen hundreds of thousands of refugees resettled and a host of countries copy the policy. Pioneered in Canada in the 1970s, the idea centers on individuals, families or other private groups agreeing to shoulder the costs of newcomers for the first year – up to a limit of $12,600 in the Canadian case. As well as improving outcomes for refugees who are more likely to integrate in their host countries with the help of an initial support group, sponsoring can have a long-term impact on public attitudes. Canada, where more than a quarter of a million refugees have been resettled via the private route, has among the most positive public attitudes to refugees anywhere.

Versions of the Canadian scheme are operating, or are in the pilot phase, in another 13 countries, with the U.K. the latest to follow suit.

An even more direct way for the private sector to get involved is to create jobs for refugees. In its simplest form, an example would be a business owner such as Hamdi Ulukaya, who has employed hundreds of refugees in his U.S.-based Chobani yogurt factories and called on his counterparts to follow suit.

In more highly regulated labor markets like Germany, the absorption of refugees has proven more complicated. German chancellor Angela Merkel called in business leaders in September after it emerged that the country’s top 30 businesses had employed fewer than 100 of the nearly 1 million refugees who entered the country last year.

An effort titled We Together is underway in a bid to integrate new arrivals into Germany’s economy, where entry is controlled by guilds and assorted gatekeepers via internships and apprenticeships.

Public-private partnerships, where governments focus on removing barriers to work, are also being piloted in Jordan, where Syrian refugees are being given the right to work in special economic zones (SEZ). The incentive for Jordan is that the companies in the SEZs receive trade concessions when dealing with markets in developed countries in return for employing a certain percentage of refugees.

Filippo Grandi, the head of the U.N.’s refugee agency (UNHCR), acknowledges that his organization can learn from the business community.

“We’re not very good at innovation,” he told delegates at the private sector forum on migration and refugees at the Concordia Summit. “We have to learn to be more agile, more effective. In comparison to the private sector, we are bureaucratic and slow.”

One of the private foundations that the UNHCR has turned to is Ikea, the multinational furniture retailers. The company helped to raise $34 million to provide renewable energy and lighting to refugee camps, primarily in Africa. But the differing approaches of big business and large-scale international bureaucracies can be tough to reconcile.

“When business meets the U.N., we need time to understand each other,” said Per Heggenes, CEO of the Ikea Foundation. “We’re not in the aid business; we’re investing. But we’re looking for social returns, not financial ones.”

Many influential figures involved in philanthropy would like to see a decisive break from the days of quarterly reports and the requirement to embroider them with a section on corporate social responsibility (CSR). “The days of check-writing are over,” says Clare Woodcraft, CEO of the Emirates Foundation, a philanthropic fund in Abu Dhabi. “CSR is useless; it’s purely reputational.”

Taking its place is “venture philanthropy,” which borrows its language and methods from venture capital – identify the problem, create prototypes of solutions until you have a working model, then scale it up.

“It’s about taking philanthropic capital and deploying it in a systemic way,” says Woodcraft.

The opposite approach, where organizations seek opportunistically to associate themselves with the humanitarian response, has been privately compared by some experts to seeking a “refugee selfie.”

Some of the 51 companies who lent their names to the White House call for action for private sector engagement on the global refugee crisis, will face this kind of scrutiny. That job will fall to Tent, a charitable foundation set up by the yogurt tycoon Ulukaya.

Ziad Haider, the U.S. state department’s special representative for commercial and business affairs, who is trying to bridge government and business, is not shy in laying it on the line: “Not tapping the talent would be a brain waste, the private sector has to come into play. There’s a recognition that the scale of this crisis requires all hands on deck.”

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