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Sun 12 Nov 2000 04:00 AM

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Embracing ethics in the Middle East

If Middle East businesses want to play a role on the global stage it is time they took a close look at their ethical codes of conduct, argues Alex Zalemi, MD for the Gulf Centre for Excellence in Ethics.

If Middle East businesses want to play a role on the global stage it is time they took a close look at their ethical codes of conduct, argues Alex Zalemi, MD for the Gulf Centre for Excellence in Ethics.

The Middle East has long-recognised that its future as a global player, beyond its oil and gas riches, lies with attracting inward investment from multi-national organisations. The opening up of Saudi Arabia’s economy to direct foreign investment is a direct recognition of this fact. Dubai’s Internet City and Jebel Ali Free Zones are equally targeted at attracting the cream of international companies to the region.

But the Middle East has challenges to overcome if it wants to stand out as a region in which companies are confident to invest.

The market is small and fragmented compared to trading blocks like Europe and North America. It has an image problem, with many US firms viewing the region as unstable and war-torn. And it has all the difficulties associated with emerging economies including an immature legal system grappling with the complexities of international and domestic business law.

In short, the Middle East needs to grow-up fast and present a positive and appealing exterior to the world at large. When CNN recently broadcast a report on the Dubai Internet City initiative; or when horseracing lovers from around the world watched the Dubai World Cup, these were all-too-rare glimpses of the Middle East in a positive light.

More often, the world is confronted by riots and battle scenes from the West Bank, or tales of human rights abuses written by Amnesty International. These are not scenes that inspire confidence in the world at large.

But winning a global public relations battle is a marathon, not a sprint, and governments and business leaders are working on short and long-term initiatives to shed the region in a more positive light.

As any good PR executive will tell you, you must deal with the fundamentals of a company — or sometimes a country — before you can properly deal with outside perceptions.

It was against this backdrop that the international Ethics Resource Center first found itself invited to the Middle East. The non-profit organisation originally came to the region to work with the Ministry of Health in Abu Dhabi, which was working on creating a set of medical ethics for the healthcare industry. Once on the ground, however, the Ethics Resource Centre realised that there was a wider potential for its services across the Emirates and the rest of the Middle East.

This led to the creation of the Gulf Centre for Excellence in Ethics (GCEE), a branch office of the Ethics Resource Centre.

Heading the local operation is Alex Zalami, who describes the need to address business integrity and ethical code of conduct issues as essential to the health and wealth of developing nations. “Let us take the case of Dubai,” he opines. “Dubai has a vision of itself and it recognises that in order to take a place in the global economy it has to address many things: among them, we propose, are issues of integrity in global commerce.

Local leaders agree, according to Zalemi. “What I find encouraging is that people in the UAE already understand that they have to address issues like these if they are to get where they want to go,” he says.

A recognition of the need to address ethical issues, and converting that recognition into action, are different things.

After all, some practices, which would be outlawed as unethical in the United States, give the Middle East a strategic advantage that would be hard to pass-up.

Employment laws are a good example. A company advertising in the United States for a young, attractive female receptionist of Lebanese origin (please attach passport photograph!) would be dragged into court for discrimination. Here it is common practice.

More significantly, the practice of employing expatriate workers from the subcontinent at significantly lower salaries than Arab nationals or Western expatriates are paid, would be illegal in North America. Yet cheap skilled labour is one of the key selling points of the Middle East.

Human rights and ethics are also hard to separate. Transporting fifty building labourers from site to site on the back of a lorry with no air conditioning would be deemed an abuse of human rights in any Western country. Here, it is merely an efficient means of transportation that makes contractors more competitive, right?

No, says the GCEE. “We operate with the axiom that good business ethics are good for business,” states Zalemi.

“In the end, whether you are talking about a country or an organisation, by adhering to high standards of business conduct, you can positively affect the bottom line of a company, and the economic development of a country.”

If companies are not entirely convinced by that argument, they may take more notice if they fall foul of the law. Multi-national companies operating in markets like the Middle East could find themselves sued in their countries of origin for legal breaches abroad.

For example, “if there are challenges associated with gender, a female employee may sue a company in the United States for its behaviour in this part of the world. Lawyers are very interested in this from a legal liability perspective,” says Zalemi.

Does that mean that eventually we will all simply be subjected to ethical standards dictated by the United States?

“Absolutely not,” argues Zalemi. In fact, the mandate for the GCEE is to create codes of conduct and ethical practice that embrace local cultural issues.

At the Abu Dhabi Ministry of Health, for example, the GCEE looked at the thorny issue of doctor-patient confidentiality and discovered that Western ethics on the subject simply would not work.

“In the West … it is inconceivable that a doctor would give medical records to anybody other than the patient. In this culture, the family is extremely strong so they may allow, within the code of conduct, for the husband to see his wife’s records,” he explains.

Zalemi would not be drawn on whether his organisation considered the Middle East to be top, middle or bottom of a world league table of business ethics compliance. No such table exists, he told Arabian Business.com.

Instead, he suggested that organisations like Transparency International, which looks at global corruption, or Amnesty International, which looks at global human rights, would act as some kind of guide.

“You cannot disassociate business ethics from human rights or democratic development of a society. It would be naïve to suggest that you can address the subject of business ethics in isolation,” says Zalemi.

Transparency International publishes a table called the Corruption Perceptions Index, which looks at the track records of 90 countries tackling corporate and government corruption.

Unfortunately, few Middle East countries were included on the list. Jeremy Pope, executive director for Transparency International explained that insufficient data was available to include every country on the Index. He points out, however, that countries not on the Index are likely to be poor, rather than good performers. “I believe that there are many countries which, if we had the numbers, would rank even below the lowest countries on today’s new Corruption Perceptions Index,” he said.

Of the Middle East countries on the Index, Jordan came highest in 39th place (tied with Italy); Egypt came 63rd (tied with China).

Amnesty International gave an equally damning account of the region’s human rights record, although its 1999 report (the most recent to have been published), deals with issues like executions, torture and unfair trials, rather than human rights issues within a normal business environment.

If government and business leaders in the Middle East accept there is a problem with ethical standards in the region, the first step on a road to improvement is to create a code of conduct that strives to meet globally accepted standards, while embracing local culture.

GCEE says it can help through consultancy and training. The organisation is also planning conferences aimed at local business leaders. Its first event in Dubai, the Gulf International Conference on Cyber Ethics, will be held next month in conjunction with the Dubai Chamber of Commerce and Industry.

The ultimate aim of this education and consultancy programme is to create a business environment that is conducive to attracting international investment to the Middle East; a mission that is shared by every government of the region. The message from Zalemi is that when governments want to move business ethics to the top of their agendas, the GCEE is ready and waiting to help.

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