HIV/AIDS

Business Must Do More

Prepared for the HIV/AIDS Colloquium

Hosted by Eskom Holdings Ltd

By Carol O’Brien

The Global AIDS Crisis

AIDS is the worst health crisis in all of human history

30 million people have died

Source: UNAIDS, AIDS Epidemic Update 2005

Total: 40 million Adults and Children living with HIV/AIDS at the end of 2005

Western Europe610 000610 000

North Africa & Middle East540 000540 000

Sub-Saharan Africa25.4 million25.4 million

Eastern Europe & Central Asia1.4 million1.4 million

South & South-East Asia

7.1 million7.1 million

Australia & New Zealand

35 00035 000

North America1 million1 million

Caribbean440 000440 000

Latin America1.7 million1.7 million

East Asia & Pacific1.1 million1.1 million

Global Epidemic Overview

The Global AIDS Crisis

Over 13,000 people are infected every day

The Global Business Coalition on HIV/AIDS

The GBC is perhaps the most important coalition that we have operating on the face of the earth today.

-Colin Powell, Former U.S. Secretary of State

Mission: To harness the power of the international business community to end the HIV/AIDS pandemic

Membership: The GBC is a coalition of almost 210 International companies from a diverse range of industries

Leadership: Ambassador Richard Holbrooke, CEOMark Moody-Stuart, Chairman Anglo AmericanBertrand Collomb, Chairman LafargeCyril Ramaphosa, Chairman, Shanduka South Africa

GBC Overview

Helen’s Legacy

C a rl

S am

S ue

Joel T im

JG Ja m es T o m

S h irle y C in d y

A nton B il l

L ily L inda

V a l

D e on

D en

T o m

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S im on

H e len

Prevention is Failing

Over 90% of people do not know they have the virus

HIV/AIDS Affects Business

Why should business take action against HIV/AIDS?

• Macro-economic

• Socio-economic

• Your company : direct and indirect costs

AIDS Decimates Economies

-1.6

-1.4

-1.2

-1

-0.8

-0.6

-0.4

-0.2

0

0 5 10 15 20 25 30 35

HIV Prevalence Rate (%)

Red

uct

ion

in

gro

wth

rat

e G

DP

p

er c

apit

a (%

, p

er y

ear)

Source: R. Bonnel (2000) Economic Analysis ofHIV/AIDS, ADF2000 Background paper, World Bank. Slide adapted from UNAIDS: “Socio-Economic Impact of HIV/AIDS in Africa,” presented by Anita Alban and Lorna Guiness, ADF 2000.

Growth Impact of HIV (1990-97) for 80 developing countries

• Health consumes more of government budget• Declines in family savings and disposable income • Shorter Horizons reduce investment information and networks • Foreign investment and tourism decline• Tax revenues fall• Skilled workers & professionals die or flee: brain drain• Decrease in demand for specific products

Socio-Economic Impact

• group life cover and disability cover

• medical benefits

• retirement benefits

• cost of absenteeism (usually significant)

• cost of recruitment and training to replace employees who retire due to ill-health or died in service

• cost of compassionate leave, including time to attend funerals of colleagues and family members

• Credit risk for those businesses providing credit to customers and employees

Your CompanyIncrease in Direct Costs

(More difficult to quantify as these costs increase expenditure and reduce revenues)

Include:

• Business risk

• Legal risk

• Reputation risk

• Accounting risk

Your Company - Indirect Costs

BUSINESS RISK

• Reduction in staff productivity / loss of workforce morale

• Increased supervision required (higher levels of absenteeism and less experienced staff)

• Increases in the cost of salaries where skilled staff lost

• Loss of ‘institutional memory’ or intellectual capital

• Loss of client relationships especially where the disease affects key persons

• Potential increase in non-Aids infectious diseases such as tuberculosis or influenza - may infect HIV negative staff

Your Company - Indirect costs

LEGAL RISK

• Increased litigation – discrimination

• Risk of vicarious liability for managers/fellow employees falling foul of HIV/AIDS laws

ACCOUNTING RISK

• Financial statements inaccurate - lack of information on HIV/AIDS exposure or risks inaccurately disclosed

REPUTATION RISK

• Bad publicity - inappropriate treatment of an HIV+ employee

• Public concerns about prevalence in certain sectors

Your Company - Indirect Costs

Is a mechanism to utilise existing business infrastructure to provide expanded access to HIV

prevention, testing and treatment to the communities in regions heavily impacted by

HIV/AIDS

Global Business Coalition on HIV/AIDS

Co-Investment

Combine Business interests of private sector with development goals of country or region

Key Elements

• Long term economic engagement in partner countries

• Substantial contribution by private partners

• Efficient distribution of tasks between different partners

• Achievement of developmental benefits

• Sustainability and long term effects

Private Sector contribution

• Expertise in running Work Place Programmes

• Existing infrastructure

• Business expertise

• Management expertise

Public sector contribution

• Policy development and regulation

• Leadership

• Financing

• Access to various development partners

• Overall co-ordination of HIV response

Accessing Financial Resources

Global Fund to fight AIDS, Tuberculosis & Malaria

• proposals via CCMs

• www.theglobalfund.org

World Bank

Multi-country HIV/AIDS Programme for Africa (MAP)

• $1 Billion to 32 countries in Sub-Saharan Africa

• Apply through NACS but process differs per country

•www.worldbank.org/afr/aids

PEPFAR

(President Bush’s Emergency Plan for AIDS relief)

$15 Billion

www.usaid.gov

Bilateral Development Agencies

•GTZ (German Technical Co-operation)

•USAID

•DFID

•Other

• Antagonism between public and private actors

• Lack of information / best practices

• Complexity of donor procedures

• Fear of financial liabilities (limited time horizon of donor support)

• Lack of trust (main barrier on part of government)

Barriers to co-investment

Business must do more

“Our company does not have any AIDS related products, therefore we have decided not to be involved in the issue”

“Our local stores and employees are involved in a variety of important causes but HIV/AIDS does not fall within our focus areas”

“Our company does not have employees in Africa, India or China”

“We employ primarily white collar workers so its not an issue for us”

Thank you!

www.businessfightsaids.org

Presentation Source : Making Co-Investment a Reality (Dec 2005)

Published by the GTZ and GBC