Institutionalizing Peace through Commerce: Engagement or Divestment in South African and Sudan

Peace through Commerce literature has discussed how business can engage in more responsible behavior in order to mitigate conflict risk and promote conflict resolution. However, in many conflict situations, the question arises at what point does it become impossible for a firm to remain engaged on the ground and still function as an ethical business? This article discusses the role of divestment activist groups in changing institutional norms among MNCs operating in conflict situations. Institutional norms shift from firms conducting “business as usual” without heed to conflict impact, to engagement policies promoting more responsible business practices, to divestment from conflict zones when circumstances are seen to preclude ethical business conduct. Engagement and divestment are explored as tools for discouraging unethical and promoting ethical business activity, considering conflict situations in South Africa and Sudan as case examples.