British mining conglomerate Anglo American PLC has extensive operations in Africa, and it knows the devastation caused by AIDS. It estimates that 30,000 of its 125,000 employees in South Africa are infected with HIV. That's not unexpected, given that at least 22% of South Africa's entire workforce is HIV positive. Anglo American isn't counting on the foot-dragging South African government to solve its problems, however. In the early 1990s, the company started its own AIDS treatment and prevention program for workers and their families. And in 2002, Anglo American began administering highly effective anti-retroviral drugs to its infected employees -- medicines that are still rare in Africa. It expects to treat 3,000 people this year, up from 223 in 2003. In a report delivered to the International AIDS Conference held in Bangkok in July, the company said the treatment costs were "offset by the sharp decline in mortality -- from 30% to 3.4% in the first year -- and in absenteeism due to illness."
Anglo American is operating out of enlightened self-interest, and it is not alone. A handful of other multinationals have realized that the governments of many developing nations lack the resources or the will to mount effective AIDS programs. Nike (NKE), ChevronTexaco (CVX), BMW, Heineken (HINKY), and Coca-Cola (KO), among others, have concluded that they must take it upon themselves to control AIDS among their own employees in Asia and Africa, or profits and economic progress could be severely hampered.
Unfortunately, far more corporations are doing nothing. According to a report by the World Economic Forum, two-thirds of 1,620 companies operating in Africa expect AIDS to affect their profits over the next five years, but only 12% have an AIDS policy. A U.N. survey found that just 21 of 100 large multinationals have AIDS programs.
Such apathy is self-defeating. If multinationals don't embrace aggressive anti-AIDS tactics, both their employees and their customers in emerging markets will inevitably fall victim to the epidemic. The dimensions of the disaster are laid out in a new study by the U.N.-affiliated International Labor Organization (ILO), which estimates that, out of 38 million people infected with HIV globally, at least 26 million are workers.
The economic toll of AIDS is already well demonstrated in sub-Saharan Africa. There, 7.7% of the workforce is infected with HIV, according to the ILO, with rates in Swaziland and Botswana as high as 38%. South Africa, the region's economic anchor, saw its economy lose $7 billion -- roughly 2% of its gross domestic product -- every year from 1992 to 2002 because of AIDS-related workforce deaths.
Asia could soon go the same route. In China and India, HIV infection rates are beginning to rise at the same pace seen in Africa 20 years ago. The ILO predicts that by the end of this decade, 6 million workers in India and an additional 1.8 million in China will have been killed by AIDS. "HIV/AIDS is not only a human crisis. It is a threat to sustainable global social and economic development," warns Juan Somavia, ILO director-general.
Few governments are adequately addressing the crisis. The U.N. predicts that global spending on AIDS by governments and nongovernmental organizations (NGOs) will total only half of the $12 billion needed by 2005. Will companies respond to entreaties from AIDS organizations to pick up the slack?
It is not an easy sell. "The last things most companies want to discuss in the workplace are sex and death," says Diana Barrett, until recently a senior lecturer at Harvard Business School, who has done extensive surveys on AIDS in the workforce. When a company does start down that road, there is no easy exit strategy. "You can't just hand out condoms or offer testing," says Barrett. "Once you offer testing, you have to provide anti-retrovirals, and that means you have to rethink your whole medical capability. You also have to guard against workplace stigma."
There are successful models out there, however. Two years ago, General Motors Corp. (GM) set up a pilot AIDS program in Thailand, where it has 2,500 employees, with an emphasis on prevention. All employees receive training about how to protect against the disease and avoid discrimination against infected co-workers. Condoms are regularly distributed -- 1,000 condoms attached to key chains with the Chevrolet logo were handed out during one Family Day alone in 2003. GM provides voluntary and free on-site testing and counseling and pays for treatment at local hospitals for employees with AIDS. The company next plans to expand the program to operations in India, Indonesia, and China.
The cost of such an effort is far lower than might be expected. GM budgeted $50,000 over two years for Thailand and India, about $8 per year per employee. Still, plenty of companies hesitate to make even that small commitment. "We often get the comment that 'It's not our problem. We're not an NGO, we're a business,"' says Simon Graham, regional program coordinator of the Thailand Business Coalition on AIDS.
But it is their problem. Lafarge Group (LR), a French building materials multinational, says AIDS is the leading cause of death for its 7,500 employees in Africa and a major industrial risk in terms of absenteeism, loss of skills, and reduced productivity. Other multinationals must be suffering the same losses -- or soon will. NGOs and local clinics are eager to help companies develop AIDS programs. The alternative -- doing nothing -- is too terrible to consider.
By Catherine Arnst With Bruce Einhorn in Hong Kong