When bullets fly, some firms swoop in

In Congo, for example, where 3.8 million people have died in six years of violence, foreign firms have jostled over access to coltan, a metallic ore.

From the Western end, "[t]he first investors are often risk-taking 'pioneers' who understand that local conditions mean cutting corners," he writes in an e-mail. Locally, he notes, the shakeout after a war often leaves power initially in the hands of a few who might not have the interests of the many in mind when striking deals.

Sometimes the businesses create more problems than they solve, experts say.

"There's a long tradition of quasiphilanthropic social enterprises getting poor people to make things that in the early stages find a market niche, and over time that market niche, like all market niches, disappears," says Simon Zadek, who heads AccountAbility, a London institute that promotes accountability for sustainable development. "And if those producers have not evolved to really understand their circumstances ... then all too often what starts off as a successful enterprise ends up leaving producers high and dry."

Companies also need to approach conflict opportunities with the right frame of mind.

"If your priority is to serve the good of all your constituencies, then you move into a situation with that in mind," says Chand. "If you're only really focused on your shareholder and your return on investment, that's problematic."

Shareholder pressure and consumer preferences for products with low social cost could support the rise of such tactics, experts say.

Further, firms of all sizes are now coming to terms with the inevitable involvement of ethics auditors, points out Le Billon. Major oil-industry players, for example, should see scrutiny by such groups as the Open Society Institute's Iraq Revenue Watch.

More important, internal policing remains essential at the most basic levels. "You have to know that you don't know everything," says Rapaport. "You can't go in there as a company, wave your American flag around, and make magic." Instead, he says, an incoming firm should think small, "think about people in villages and towns, [groups of] 20 people."

Drawn to compete, other outside firms will rush to help other cooperatives, he maintains, and use the new relationships to gain advantage in the marketplace.

"You know, DeBeers has that saying, 'A diamond is forever,' " he says. "What Rapaport is trying to say, is 'This diamond makes the world a better place.' "

To deliver on such a promise, he says, his and other companies must work to avoid creating dependencies and inefficiencies. Toward that end, he says, the Rapaport Group and its partners have worked to keep the diamond operation local, insourcing as many levels as possible, sticking to a facilitator role, learning - and remaining patient.

That may represent the most promising formula.

"The cases to me that work best are very often ones [in which firms] don't expect things to work quickly, [that] invest in capacity development of small-scale producers, and understand that over the longer term, unless producers at the very minimum understand their whole value chain, it won't work," says Mr. Zadek.

And the better ventures, he adds, hint at a gradual shift in economic incursions by multinational firms.

"Some of them are very clumsy, and some of them are OK, but rather patronizing, and some of them are very exciting and fail," Zadek says. "But what's interesting is when you step back and look at the whole, what you've got is a whole generation of attempts to innovate the underlying modern economic model, to innovate beyond the basic, transactional buy/sell model. And to build ... relationships into the system."

"I'm kind of hopeful," adds Rapaport, who says he has already been asked about organizing the alluvial- diamond trade in other countries. "What we're doing is very small, but it's going to change the 'world' in this one little community."

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