Response: Aron Cramer

Dear Mr. Silverstein:

We read with interest your article on the social development fund to be implemented in Equatorial Guinea.

Contrary to the assertions made in the posting, this initiative creates a promising new model for ensuring that Equatorial Guinea's oil reserves are developed with a view to addressing the country's most pressing social needs.

Your posting focuses solely on the role played by government officials, including President Obiang in the development fund. Government involvement is considered critical to ensuring the official processes are focused on critical human needs. For this reason, as well as legitimate concerns about sovereignty, the government will play a significant role. But while it is true that the government plays a critical role in this effort, that is hardly the whole truth.

What was missing from your posting was recognition of the clear and significant involvement of other institutions in the governing board and all the committees that will operate the fund. Attached is the document that describes the mechanisms of governance of the Social Development Fund. As you will see, a diverse range of stakeholders (NGOs, companies, multilateral organizations and other experts) will also participate in decision making. This will bring substantial expertise and transparency into the process.

The fund therefore reflects a model that will have the direct benefit of allocating Equatorial Guinea's oil wealth to the most pressing social needs. And, if implemented well, the structure developed here could be applied as an innovative new model of shared governance that can be implemented in other locations where the same problems exist.

It is clear to all that existing models of revenue allocation has too often failed the populations of resource-rich states. Only by developing and implementing innovative models like the one in Equatorial Guinea can we lay to rest the notion of the “resource curse.”

It may be too soon to declare this experiment an unqualified success. But it is certainly far too soon to declare it a failure.

Lastly, I would like to provide some clarity about the role BSR plays in working with companies. It is inaccurate to state that companies join BSR to “demonstrate their social consciousness.” On the contrary, membership in BSR does not constitute an endorsement of a company, its policies or practices. BSR is neither a certification nor advocacy organization.

BSR maintains an open membership policy, and welcomes companies into its membership so long as the reason for their joining is to improve their policies and practices. This means that our membership may include companies that are often the targets of criticism. A closed membership limited only to a charmed circle of companies that are universally hailed as getting most things right would severely limit our ability to make change happen.

Our philosophy is: engagement works. This is not the only way to approach transforming business conduct, but it is a legitimate strategy that complements the work of many others who also recognize the power, influence and potential of business in our contemporary global society.

I encourage you to contact us if you have further questions.

Sincerely,

Aron Cramer

President and CEO

Business for Social Responsibility

111 Sutter Street, 12th Floor

San Francisco, CA 94104, USA

Tel: +1 415 984 3214

Fax: +1 415 984 3201

www.bsr.org