Companies face a moral dilemma in helping expats over local national staff in conflict zones.
As the world watches Russia’s brutal war in Ukraine and its humanitarian implications, the response of companies with operations in both countries is being put in the spotlight. But experts say that attempts by many corporations to evacuate workers and their families from Ukraine have differed for expatriates and local Ukrainian nationals.
“Most large Western firms out of Europe and the US were ahead of the curve, at least at some level, in getting their expats out [of Ukraine],” says Dale Buckner, the chief executive of Global Guardian, a private security group that has helped multinationals extract their staff from Ukraine ahead of and since the invasion on February 24.
However, “most firms did not have a plan for their local nationals”, he adds. “It was almost an afterthought.”
Global companies have become more assertive in taking sides in conflicts and crises. Some have shown a sense of duty towards their local workforce that arguably would not have been there a few decades ago. However, the boundaries of their responsibility, and commitment, remain blurred.
Duty of care
Dan Arenson, an associate director at political risk consultancy GPW Group, which is working with corporate clients trying to extract their assets and workforce from Ukraine and Russia, says that the situation is “unprecedented” due to the pace at which businesses have responded.
“There have obviously been many countries where war has broken out suddenly, but not where there is such an intense Western business presence,” he says. Multinationals have by-and-large been able to extract their non-Ukrainian staff with some ease, adds Mr Arenson.
Among the largest foreign investors in Ukraine, many have announced their dismay at the invasion and their intentions to keep staff safe in the country. ArcelorMittal, which operates one of Europe’s largest steel mills in the central Ukrainian city of Kryvyi Rih, announced on March 3 it will idle its operations “in order to ensure the safety and security of our people and assets”.
Germany-based ProCredit Group, which has 328 banking staff in Ukraine as well as 65 employees at its IT subsidiary Quipu in the capital Kyiv, said in a statement on February 25 that “all possible precautions are [being] and will be taken to ensure their [staff’s] safety”. No further detail was given on these precautions.
Salil Tripathi, a senior adviser on global issues at the Institute for Human Rights and Business, says companies are expected to have a duty of care under international humanitarian law and practices to ensure the safety of those they have brought into foreign countries, which includes evacuating them to safety. “But that takes into account only expatriates or third-country nationals,” he says. “The dilemma is acute with employees who are local nationals. [Multinational companies may] not have a legal obligation to evacuate them, but the situation needs to be seen from a humanitarian perspective.”
More than 2.2mn people have fled Ukraine since the Russian invasion began, in what the UN terms “the fastest-growing refugee crisis” in Europe since the second world war. Most have found shelter in Poland and other neighbouring countries, including Hungary, Slovakia, Romania and Moldova, while men between the ages of 18 and 60 have been ordered to remain in Ukraine and be ready to fight against the Russian invasion.
Similar playbook
Buckner says that with every crisis, whether natural or man-made, “the playbook is the same”. The first mode of transport to disappear in Ukraine was charter and commercial aviation – as seen in previous crises such as the back-to-back Caribbean hurricanes of Irma and Maria in 2017, as well as in Afghanistan in 2021, when people fled after the Taliban retook power.
Buckner adds that these dwindling exit options are “almost uniform in every crisis”, with public transport services becoming very limited, leaving vans and 50-person buses as the only mass transportation options left. “Everyone is fighting over those assets to get their people out as fast as they can. That’s where the friction comes,” he says.
Global Guardian currently has a 175-person security team on the ground in Ukraine, running numerous daily missions to get people out of the country on behalf of its corporate clients, which include 18 Fortune 500 companies. Buckner says the company is currently able to transport people freely out of Ukraine in areas without Russian military presence, although that situation may not last.
A variety of responses are usually used by companies to help employees on the ground in crises. This includes flights to safety, as seen with the helicopters used by oil companies to evacuate workers during sectarian violence in the Niger Delta.
Tripathi says the pace at which companies have responded in Ukraine should be compared to other crises, such as Syria, Yemen, Myanmar and the Eritrean–Ethiopian war. But while companies have the resources, technical capacity and capability to act quickly, the safety of civilians is the primary responsibility of states.
“In a context like Ukraine’s, there may be Ukrainian employees who wish to leave, and companies are caught in a bind – the humane decision [is] to help them leave, but companies cannot compel other nations to host people they fly out of a war zone. The best a company can do is to assist safe transport for those employees to shelters of the International Committee of the Red Cross,” says Tripathi.
Tech support
The war has begun to upend Ukraine’s booming technology industry, which serves numerous multinationals. More than 100 of the Fortune 500 companies use Ukrainian IT services through their own offices or other vendors, including Nasdaq, Amazon, Adobe, SAP and Microsoft, according to Ukraine’s ministry of foreign affairs.
Microsoft president Brad Smith wrote in a blog post on February 28 that the tech giant is devoting efforts “to help our employees and families, including those who have needed to flee for their lives or safety”.
Buckner says there has been a growing trend of corporate headquarters feeling responsible for their local national employees in foreign markets, but the extent of help given differs by industry. “Some of the biggest finance and consulting firms in the world will spend and do whatever it takes. But if you’re in manufacturing or rural agricultural businesses, I don’t think that mentality exists. Ultimately, it comes down to the ethos and culture of the company,” he says.
Tripathi notes that the legal obligation to staff should apply at all levels – not only to white-collar expatriate staff, but also contractual labourers and the blue-collar workforce. “Even if companies may not have a strict legal obligation – and that depends on contracts – they have the responsibility to protect or evacuate employees of their suppliers, in particular those who have come to the country to support the company’s business,” he adds.
Social reckoning
A far greater awareness among companies of how their actions are perceived in terms of environmental, social and corporate governance (ESG) factors has led many firms to decry the invasion. Numerous multinationals have already announced their intention to halt and divest from their operations in Russia.
“There is a sense in the corporate world that companies do need to take sides for moral reasons and political reasons,” said economist and author Michael O’Sullivan in a recent LinkedIn Live event hosted by fDi Intelligence.
However, investors are likely to encounter significant hurdles to exit the country in the face of sweeping Western sanctions on Russia, as well as capital controls implemented by Moscow.
As the situation continues to develop, analysts say that companies will be scrutinised for how they both react and help their staff on the ground. “If companies are not genuinely committed to ESG values [including the support of their employees], they are going to find themselves subject to a backlash,” says Arenson.
This article first appeared on fDi Intelligence