TrustWorks FCS Index 2024

Overview

The TrustWorks Fragile and Conflict-affected Settings (FCS) Index has identified and ranked 70 FCS as of 2024. TrustWorks has chosen to develop its own ranking – drawing upon the below internationally-recognized indices – with a view to providing companies and investors with a better understanding of the magnitude of their potential exposure to conflict risks.

Drawing upon international indices

The FCS included in the Index are identified on the basis of two highly recognised and established frameworks.

1. The Rule of Law in Armed Conflicts (RULAC) is an online portal that identifies and classifies all situations of armed violence and is updated regularly.[1] The RULAC classifies international conflict as either: International Armed Conflict (IAC), Non-International Armed Conflict (NIAC) or military occupation (MO).
2. The OECD States of Fragility Framework identifies fragile contexts by assessing the risk and coping capacities of countries across 6 dimensions: economic, environmental, human, political, security, and societal. In the latest edition of the framework, published in September 2022, the report identified 60 fragile contexts, with 15 being extremely fragile.[2]

We have a preference for using the RULAC and OECD indices as the basis for our own index over and above the Conflict-affected and High-risk Areas (CAHRA) index referenced by the EU (Annex 1, EU Regulation 2017/821). This is because the CAHRA index is primarily used for the sourcing of metals and minerals – referred to as “conflict minerals”; the CAHRA index (www.cahraslist.net), for example, does not include any countries from the Middle East despite the high number of violent conflicts there. We therefore believe the CAHRA list is too reductive to be useful for the majority of companies and investors.

Ranking system: Rationale and limitations

A ranking methodology has been developed by TrustWorks because RULAC does not undertake ‘ranking’ and the OECD framework does not distinguish between conflict-affected and fragile – an important distinction in international law. We have, therefore, combined the above two indices with our own methodology for ranking in order to be able to determine the severity of conflict risk in any given context.

It should be noted, however, that: i) ranking has no standing in international law (a country is not “more” or “less” conflict-affected); and, ii) at the sub-national level, a context may be determined as being “high-risk” irrespective of whether it is categorized here as being either conflict-affected or fragile. This latter point underscores the imperative for companies to develop their own internal monitoring mechanisms for ascertaining conflict risk based on the precise in-country location of their business activities and based on the nature of those business activities.

The TrustWorks methodology for the FCS Index

• The FCS Index ranking system begins with ranking (i.e., putting in order of severity) all classified conflicts: IACs, NIACs, military occupations; and fragile countries.
• The ranking of conflict-affected countries is based on the number of battle-related fatalities over the last 5 years per 1 million inhabitants. For population data we use worldometer, a non-profit, independent digital media company that provides real-time population statistics using live counters;[3] for data on fatalities, we use the Armed Conflict Location & Event Data (ACLED) database, which is the highest quality and most widely used data and analysis source on political violence.[4]
• Countries that are classified as both conflict-affected and identified as fragile will appear in the conflict-affected section of the Index given that fragility has no standing in international law, whereas countries that are classified as being ‘conflict-affected’ may have important implications for the companies and investors operating there.
• Fragile countries are ranked beneath those that are conflict-affected and in the same order as in the OECD States of Fragility Framework (minus those that are “conflict-affected”, see above point).
• In our map, conflict-affected countries are highlighted in orange and fragile countries are highlighted in yellow.

Exclusion criteria:

• TrustWorks’ FCS Index takes a people-centred approach i.e. what concerns us the most are the lives and livelihoods of these affected by conflict. Countries that are either parties to a conflict or occupying a territory in another country, per the definition from RULAC, are not a part of the TrustWorks’ FCS Index.
  • This is based on the argument that these countries are not classified as conflict-affected.
  • For example, Russia is not included in our Index as the war in Ukraine is classified as a conflict in Ukraine and not a conflict between Russia and Ukraine.
• States occupying territory in another state are not classified as being in conflict, and are, as a result, not included in the Index.
  • For example: Armenia is occupying territory in Azerbaijan, but Armenia is not classified as being affected by conflict, because the conflict itself takes place in Azerbaijan. Companies/investors operating in, sourcing from or investing in these contexts, however, will be subject to laws and other obligations as ‘responsible’ entities regardless of the fact that these are not ‘conflict-affected’ contexts.
• Countries classified as conflict-affected according to RULAC but with less than 100 reported battle-related fatalities over the last 5 years based on ACLED data are excluded from the Index.