Global Business Ethics AIDS

GLOBAL CITIZENSHIP Global Business Ethics: AIDS Why should executives be concerned about AIDS? HIV/AIDS 1980 • first reports of a new and deadly immunological disorder • around 225,000 people infected with HIV, the virus that causes AIDS • 22 million people have died of AIDS, 40 million infected with HIV • AIDS has gone from being the scourge of relatively small groups, such as homosexuals and intravenous-drug users in rich countries, to arguably the biggest threat to life and prosperity in the developing world 2004 AIDS in the West • • • • Slowly evolving from an exotic plague to a normal—and treatable—disease Relatively small groups affected, such as homosexuals and intravenous-drug users – Dirty needles account for a third of all reported AIDS cases For the first time since AIDS was identified, the number of Americans dying from the disease fell instead of rising in 1998. Infection rates still rising, but treatment has improved – – triple-drug therapy, at $16,000 a year AIDS becoming a chronic, rather than an acute disease; HIV infection becoming something that people die with, rather than of. • Prevention is cheaper than treatment – The US AIDS-prevention budget (a little over $600m a year) has to prevent only 4,000 infections a year to show a profit Condoms for males Condoms for females 95% of all infected with HIV live in poor countries Sub-Saharan Africa USAID estimates: • In 2010, the life expectancy of somebody born in Botswana will have fallen to 29 • In 2010, life expectancy in Zimbabwe and Namibia will be 33 • In 2010, life expectancy in South Africa will be 35 • In 2020, the old will outnumber the middle-aged UN estimates: Orphans of the storm • • Arguably the epidemic’s cruellest legacy is the orphans it is leaving behind Around 11m children in sub-Saharan Africa have lost at least one parent to AIDS. This is 11 times the number in 1990 By 2010, there could be as many as 20m AIDS orphans in sub-Saharan Africa (UNICEF Report) In Zambia, more than two-thirds of the child prostitutes are AIDS orphans • • Asia The hydra-headed monster • AIDS is the most political disease around • Exceptional disease: • Like war, kills those in the prime of life. • But it is worse than war – kills young women, too • Exceptional by creating orphans on an unprecedented scale • Exceptional, in modern times, in the attitudes of the healthy towards the infected • silence • stigma • discrimination • denial Good science and sensible public policy can defeat the epidemic Models for cutting off the hydra’s heads • Reduce transmissibility • through sex: •use condoms •develop a vaginal microbicide •treat other sexually transmitted diseases • from mothers to their children at birth: •give infected pregnant women a short course of an antiviral drug just before they give birth •not breast-feeding to avoid infection through mother’s milk • Reduce rate of acquisition of new and uninfected partners • better education • give women more power • Reduce length of time that somebody is infectious • requires a vaccine •a 60%-effective vaccine introduced now would stop nearly twice as many infections as a 90%-effective one introduced five years hence Annual condom use in Senegal: 1988: 800,000 1997: 9 million Science: better luck next time The first big phase III‖ clinical trial of an AIDS vaccine – in the private sector – has ended in failure Issues: an AIDS vaccine is an international public good • A truly free market will not produce an AIDS vaccine for Africa – customers cannot afford the product • Public-sector research and development become the appropriate route • The public sector, however, has had 20+ years since the discovery of HIV, and not a single phase III trial has emerged from it • Are market-like mechanisms still appropriate? • a new style venture capitalists that measure returns in scientific success, rather than dollars, are needed; one such exists at the moment: the International AIDS * $3 billion plus is spent on AIDS treatment drugs Vaccine Initiative (IAVI) in North America and Europe • create the right incentives for the private sector to * a mere $300m is spent on AIDS vaccine research produce a vaccine A vaccine will be a crucial part of the anti-AIDS arsenal * gathers money from foundations and other donors, and signs contracts with small firms of AIDS researchers * a successful firm can keep all its profits but there are tight restrictions on the price for which any vaccine might be sold in the poor world * if the firm breaks the contract, IAVI can give the patents to somebody else Puncturing AIDS through public policy Creating partnerships • international organizations • governments in rich countries • governments in poor countries • drug companies • other companies • charitable organizations The AIDS epidemic has risen to the top of the development agenda Anti-AIDS public-health policies: • (1) Based on the exhortation of people to behave better • (2) Based on the recognition of human frailty and an attempt to ameliorate it In your view, which type of policy would be more effective? (1) (2) One of the first AIDS prevention posters in the UK, 1984 South Africa, 1999/2000: promotes a campaign to encourage young men to stay sexually healthy by only having one partner, so that they may have a chance of representing their country in a large football tournament USA, 1986: Highlighting the risks to drug users Perspectives on Stakeholder Roles • Private sector – The business sector can act as a lobbyist and play a vital role in bringing the issue of AIDS to the attention of government • Government – It is the government’s role to pave the way for all sectors of society to contribute to the response • Donor – to motivate the private sector to act as a catalyst to scale up health sector responses through support of national policy – to create mechanisms that accelerate the involvement of the private sector in the fight against HIV/AIDS • NGO – NGOs have the trust of the community and their main mission is in service provision and representing the interests of the community In order for HIV to be effectively tackled on an international level: • End the discrimination against people with HIV and AIDS • Educate people in safer sex and drug use, using appropriate media • Provide condoms freely to people in the developing world • Provide financial and medical assistance so that people with HIV and AIDS can be treated The global effort • National anti-AIDS strategies in sub-Saharan Africa • More money available (UNAIDS): • 2003: $4.7 billion spent on AIDS; 1996: $200 million spent on AIDS • UNAIDS, Global Fund to Fight AIDS, Tuberculosis and Malaria (2002) • World Health Organization: plan to provide anti-AIDS medicines to 3 million people in developing countries by 2005 • US government: $15 billion, five-year anti-AIDS program • Significant boost to the prospect of providing anti-HIV medicines • World Trade Organization: compulsory licensing agreement to let poor countries import generic AIDS drugs they cannot manufacture • pilot programs run by Medecins Sans Frontieres (Doctors Without Borders) that have thousands of people on generic fixed-dose combination drugs • Partners in Health, a vanguard program in Haiti • pharmaceutical companies' promises to offer patented medicines free or at cost Issues * No international framework exists to delineate public and private sector roles in responding to HIV/AIDS * More money needed * Lack of administrative capacity to absorb and properly distribute donor funds - Donors emphasize the importance of a sound national strategy on HIV/AIDS and seek out programs that are aligned with these strategies Impediments to Partnerships • Different organizational culture and belief systems • ―What’s in it for me?‖ syndrome • Absence of common goals / shared values Scope and limits of the business response Major issues • HIV/AIDS is a long-term issue that requires long-term strategic responses • HIV/AIDS programs involve a spectrum of interventions that require thinking beyond treatment • Programs need leadership from CEOs and Boards • One must think strategically about the relationship between the company’s strategy and the national strategy • One must address stigma to encourage employee participation in programs Business Involvement in HIV/AIDS: Prevention • Pros: – cost effectiveness; – primary care provision is most effective; – employee morale • Cons: – HIV/AIDS is not an occupational illness; – companies are wary of intruding into personal sphere (i.e. talking about sex) Australia, 1989 Business Involvement in HIV/AIDS: Testing • • Pros: – the right thing to do Cons: – trust issues connected to confidentiality; – potentially changes the dynamic between employer and employee; – liability of false positives and false negatives South Africa, 2002 Business Involvement in HIV/AIDS: Treatment • Pros: – limited public sector capacity to provide treatment; provides space and medical equipment that can support public sector; – cost effectiveness: reduces death benefits – increases employee morale • Cons: – health care provision is not a core competency; – comprehensive care for HIV and AIDS requires primary, secondary, and tertiary care; – hard to manage employee expectations and set limits on scope of program USA, 1988 Business Involvement in HIV/AIDS: Building Public and Community Capacity • Pros: – employees get better care; – business has experience building coalitions for other purposes; – public sector needs support in the short run to build greater capacity in the long run Cons: – no road map exists; – requires huge personal commitment; – business cannot be expected to take on the responsibility of government; – companies reluctant to launch farreaching campaigns because of the ―S‖-word: sex • USA, 1987: One of the most recognized AIDS posters ever produced World Economic Forum Business and HIV/AIDS Survey Key findings • Of the 7,789 business leaders polled in the World Economic Forum’s Global Competitiveness Report 2003 Executive Opinion Survey: 47% of firms felt HIV/AIDS is having or will have some impact on their business, with firms more worried about HIV/AIDS than tuberculosis or malaria; Most business leaders put their estimate of HIV prevalence rates among their workforce lower than UNAIDS figures for adult prevalence. Firms that have conducted workforce prevalence surveys report lower infection rates than those that have not; 20% of firms believe HIV/AIDS is or will seriously affect their communities, while few believe the epidemic will strike the community, but not their company; 16% of all firms provide information about the risks of infection, while 5% claim to provide anti-retrovirals for all HIV-positive staff; Fewer than 6% have formally-approved written HIV policies; Only 28% of executives believe their response to the epidemic is insufficient, although 56% of those who expect a serious impact on the business from the epidemic are dissatisfied with their companies’ response. • • • • • • General conclusions • Firms are not particularly active in combating HIV/AIDS, even when they expect the epidemic to cause serious problems for their business. • Businesses appear to be making decisions based on a fairly patchy assessment of the risks they face. • Firms seem to favor a broad social response to the epidemic, even if only a small number of businesses currently see themselves as an integral part of that response. Anglo American’s AIDS Strategy in South Africa * South Africa has more HIV positive citizens than any other country: 5.3m, out of a population of 45m. * 600 people dying of AIDS every day * Heading for an economic collapse within three generations, as wage-earners are wiped out and parents die before they can teach their offspring the basics of how to get on in life * November 2003: long-term plan of the Southern African government for treating its sick citizens with anti-retroviral drugs * Distribution of free anti-retroviral drugs to poor people suffering from HIV/AIDS had been long delayed while the government questioned their efficacy and safety Treatment of Employees •Global mining giant, third biggest in the world, 40% of operations based in South Africa. •Employs 90,000 people in South Africa alone, where HIV rates are the highest in the world. •20,000 to 30,000 of those staff are probably infected. •August 2002: plan to give anti-retroviral drugs to HIV-infected employees; importance – put the government under more pressure to follow suit for the 5 m HIV-infected South Africans. •It now costs Anglo American $4,000 annually to treat a worker but the company believes that gains to staff morale and productivity will outweigh drug and other health costs. •Just 750 of the firm's 30,000 infected South African employees now get treatment, but 97% of them are back in full-time work, including heavy-duty physical labor •In contrast, HIV-infected workers who get no treatment typically take 55 days of sick leave in their final two years at work •The virus adds as much as $6 to the roughly $170-180 overall cost of producing an ounce of gold. Why did Anglo American offer expensive AIDS drugs to its employees? It now costs more not to treat than to treat The AIDS ―Tax‖ Building Public and Community Capacity • October 2003: three-year $4.5m plan to pay for the rehabilitation of 900 South African clinics where HIV testing and treatments for AIDS and tuberculosis are carried out; • The expansion is seen as a ―logical extension of everything we have been doing in the workplace.‖ Why move on from caring for its workers to helping fund public health? – Firms find it difficult to give tests, counseling and drugs to an employee, while doing nothing for his sick wife or their ailing children – Workers also fear that losing a job means a death sentence, as treatment would stop – By funding clinics, especially in rural communities where the company is the main employer, such problems can be eased – The clinics are designed to attract, test and treat young teenagers, the only age-group in South Africa that has shown, for three years running, a sharp decline in HIV infection rates. This is also the pool from which firms will have to replenish their workforces Beyond multinationals Breakdown of South African Labour Force, 2000 34% 39% Informal and mico (1-19 employees) Small and medium (20-200 employees) Large (over 200 employees) 27% Source: Patrick Connelly Center for International Health and Development, Boston University, 2003 Multinationals employ a tiny percentage of the labor force in South Africa • SMEs and the informal sector employ the vast majority of the labor force • Some SMEs are interested in providing HIV/AIDS services, but cost is a barrier • Many SMEs are not thinking enough about the long term consequences of HIV/AIDS on their business Strategies for extending programs beyond the multinationals • Multinationals could function as vehicles to share ideas, practices, and reduce costs among SMEs • They could provide SMEs with a means to lobby government and work with other stakeholders • Supply chains could offer another existing network through which HIV/AIDS programs could be extended • Loose umbrella associations exist in the informal sector (i.e. market associations), and could be leveraged to extend programs