Swedish firms must learn from Saudi business row

Swedish companies worried about the nation's business links with the Arab world should instead be focussing on their own responsibility to promote and demonstrate ethical behaviour, argues business rights advisor Ruben Brunsveld.

Swedish firms must learn from Saudi business row
A Swedish workplace. Photo: Suzanne Walström/Image Bank Sweden
During the last few weeks, Sweden has become the epicentre of a discussion on the role of the state, business and human rights.  After several other escalating steps, Foreign Minister Margot Wallström’s criticism of the human rights situation in Saudi Arabia was followed by the middle eastern country temporarily recalling its ambassador and refusing Swedish citizens business visas.  
With an export of $1.3 billion to Saudi Arabia last year, important actors within Sweden's business community remain deeply worried about the financial impact of the political feud. On March 6th, 31 Swedish business leaders published a statement saying that "Sweden's reputation as a trade and business partner is at stake”.  
But what these companies fail to recognize is that the real danger does not come from the Minister of Foreign Affairs criticizing another country, but from businesses not being aware of the true scope of their own responsibilities.
Over the last few years a considerable number of Swedish companies have been scrutinized by the media for unethical or even unlawful behavior. From corruption on the plains of Uzbekistan to land grabbing in Ethiopia. From using child labour in the production chain to mining conflict minerals for our smartphones. From destroying ecosystems in Brazil, to disrespecting Sami rights in Jokkmokk. Time and time again civil society and media find possible human rights violations linked to Sweden, Swedish companies and Swedish products. 
These examples beg the question that many companies have not yet answered: How far should corporate responsibility go when it comes to human rights? 
Since 2011 a new doctrine has evolved within the framework of the UN, which is spearheaded by the UN’s Guiding Principles on Business and Human Rights. 
According to these principles companies should:
(a) Avoid causing or contributing to adverse human rights impacts through their own activities, and address such impacts when they occur.
(b) Seek to prevent or mitigate adverse human rights impacts that are directly linked to their operations, products or services by their business relationships, even if they have not contributed to those impacts.
Companies should be aware that this means a large extension of their corporate responsibility. No longer can companies dodge the proverbial bullet by using contracts that outsource responsibility with suppliers, subcontractors or others down the supply chain. The simple fact of ‘being linked to’ is now enough to impose a duty of prevention and mitigation of effects. Even if a company has not contributed to the human rights breach themselves, they still bear the torch of responsibility by virtue of association. 
This doesn't make it easy for companies.
When a Swedish company operates in Saudi Arabia, it is faced with one of the most challenging human rights dilemmas; what should we do when the state we operate in not only goes below human rights standards, but actually requires and sanctions us to breach human rights standards in order for us to do business? 
It is not easy, but the UN Guiding Principles do not let companies off the hook by referring to 'the letter of domestic law'. If they want to do business in that country at all, companies must strive to honour the spirit of human rights.
In today's world, social media can change a story into a scandal before the company even knows what’s going on. "What did you know? Why didn’t you know? Shouldn't you have known?" are just some of the questions likely to be asked.
Activists are pushing procedural and legal boundaries in Sweden. What is only a principle today, can become a law tomorrow.
But why wait for tomorrow?
In the 21st century owners demand accountability, investors demand transparency and clients simply want to be sure that what they buy is produced in an ethical way. As the business case for respecting human rights becomes clearer every day, it is time for all companies to recognize that it is not Margot Wallström causing the damage, but their own inability to respond to a rapidly changing world.
When businesses fail to take human rights into account it is the market that will make them pay. And that price will be much higher than the cost of a business visa.
Ruben Brunsveld is a business and human rights advisor at at Enact Sustainable Strategies, a consultancy company focusing on responsible business

Ruben Brunsfeld. Photo: Private
For members


Gothenburg: is the dream of a new city turning into a nightmare? 

Sweden’s second city is the site of Scandinavia’s largest urban development project. But there is rising concern that the costs outweigh the benefits, says David Crouch

Gothenburg: is the dream of a new city turning into a nightmare? 

Last week, residents in the area of Fågelsången (birdsong), a quiet street at the very heart of Sweden’s second city, woke up to read the following news: “Explosions at Fågelsången: On August 8, week 32, we start blasting around Fågelsången and are expected to be done by week 40. When blasting, for safety reasons, no one is allowed to go out, open their windows or be within the blasting area. We will work weekdays 7am to 5pm.” 

Blasting deep holes in the granite – along with sprawling roadworks – has been the reality for central Gothenburgers for the past four years, as a vast rail tunnel is being dug to link the current terminus with other parts of the city and enable smoother connections with other routes. The aim is to triple rail passenger numbers and eliminate traffic jams on the main road through the city, at a cost of 20 billion crowns (€1.9 billion).

This railway, known as Västlänken (the West Link), is not the only big construction project in the city centre. It is just the largest element in a gigantic scheme to revive the docks area along the river, which was destroyed by a global shipping crisis in the 1970s. The great rusting cranes opposite the opera house and the disused Eriksberg gantry are an important aspect of Gothenburg’s skyline and self-image. The areas on the north bank were also home to many recent immigrants and a byword for poverty. The city’s mayor famously, and shamefully, referred to it as “the Gaza strip”.

So in 2012 the city launched an ambitious plan. Christened Älvstaden, the RiverCity, municipal investment aimed to build an attractive, modern waterfront while creating tens of thousands of homes and jobs. It is by far the Nordic region’s biggest urban regeneration project. A YouTube video commissioned by the city authorities a few years later neatly sums up both the breathtaking scope of this vision and the exciting / brutal (choose your own adjective here) nature of the transformation it would bring: 

The RiverCity revolved around two flagship projects: a new bridge over the river, the Hisingsbron (Hisingen Bridge), combined with major new office developments right in the centre; and Karlatornet, Sweden’s tallest skyscraper, which would literally tower over Gothenburg like a beacon of modernity in a city that traditionally has had strict rules against high-rise buildings. 

Add to all this a proposed high-speed rail link with Stockholm, and you have a recipe for quite spectacular urban upheaval involving billions of tons of steel and concrete. Visit Gothenburg today and much of the city seems to have been turned into a building site. There is a forest of cranes, while smart new office blocks puncture the skyline – a genuine metamorphosis is under way.

But many Gothenburgers are either uneasy or downright unhappy. The RiverCity is a vanity project to gentrify the docklands, they say. Karlatornet’s 73 stories of luxury apartments will be a scar on the landscape and a symbol of Gothenburg’s new love affair with finance and real estate, a slap in the face for the city’s proud industrial values. Västlänken is a vit elefant, a costly project that will deliver questionable benefits, many believe.  

Opposition to Västlänken was such that a new political party, the Democrats, took 17 percent of the vote in 2018 with its headline demand to stop the project immediately. This caused a revolution in local politics, overturning decades of Social Democrat rule. 

And now the gloss on these big-ticket construction projects is starting to fade. Karlatornet was the first to run into trouble. For most of 2020 building work was at a standstill, raising the threat that this flagship of regeneration would be nothing more than an unfinished stump, after American financiers pulled out of the project. The new Hisingen Bridge is open to traffic, but its construction was fraught with setbacks and the final cost to the taxpayer is still unknown. “There has been an awareness from the start that this was a high-risk project,” one of the project’s bosses said ominously this spring.

RiverCity is more than two billion kronor over budget, and facing accusations of mismanagement that evoke Gothenburg’s old nickname of Muteborg, or Bribetown, after a proliferation of municipal companies in the 1970s led to conflicts of interest, with politicians sitting on company boards. Opponents of the scheme argue that in any case it is unlikely to solve any of the city’s fundamental problems, such as the ethnic segregation that has created immigrant ghettos in outlying suburbs.  

In May, Swedish newspaper Dagens Nyheter published leaked minutes from Västlänken management meetings in which one of the main contractors on the project said it would be delivered billions over budget and four years later than its official 2026 deadline – in other words, four more years of earth-shattering explosions, roadblocks and associated upheaval. With local elections only months away, the Democrats have taken out advertisements on billboards and in local media demanding that top politicians tell the truth about what is going on. For opponents of the scheme, this is exactly what they have warned of all along

Next June, Gothenburg will officially celebrate its 400th anniversary, postponed from 2021 because of the pandemic. Visitors will experience a city on the move, with pristine new motorways and sparkling office blocks. So for Gothenburg’s urban planners, there is light at the end of the development tunnel. In the case of Västlänken, however, they will be hoping that the light is indeed that of an oncoming train. 

David Crouch has lived in Gothenburg for nine years. He is the author of Almost Perfekt: How Sweden Works and What Can We Learn From It, a freelance journalist and lecturer in journalism at Gothenburg University.