Coporate Social Responsibility
Introduction
Corporate Social Responsibility (CSR) refers to voluntary actions undertaken by operating companies to either improve the living conditions (economic, social, environmental) of local communities or to reduce the negative impacts of industrial projects. By definition, voluntary actions are those that go beyond legal obligations, contracts, and licence agreements.
CSR programs usually invest in infrastructure (portable water, electricity, schools, roads, hospitals, hospital equipment, drainage repairs, etc.), building social capital (providing high-school and university education, providing information on HIV prevention, workshops on gender issues, information on family planning, improving hygiene, etc.), and building human capital (training local people to be employed by the industrial enterprise or to provide outsourced services, promote and provide skills on microbusiness, aquaculture, crop cultivation, animal rearing, textile production, etc.).
Common Components of Corporate Social Responsibility
It is challenging to outline a set of clear components that are common to all Corporate Social Responsibility programs. Each CSR program needs to be designed and continuously evaluated according to the needs of the community affected by a industrial project. Creating a successful CSR project is therefore usually a process of trial and error. However, most CSR projects focus and incorporate three mains areas: the environment, social, and economic factors.
International Promotion of CSR
The United Nations Global Compact initiative, in which companies self-evaluate and report their performance regarding 10 principles.
The European Commission’s Renewed EU strategy 2011-14 for Corporate Social Responsibility and Sustainable Consumption and Production and Sustainable Industrial Policy
The International Council on Industrial and Metals (ICMM), which is organized by the largest industrial companies in the world and has a variety of programs to enhance sustainable industrial.
Industrial companies are also pursuing certifications such as ISO 14000 (environmental certification), SA 8000 (working conditions certification), and AA 1000 (accountability certification). They are also making efforts to be listed in the Dow Jones Sustainability Indexes.
Measuring a CSR program’s success
It is difficult to precisely measure the success of a CSR program. This difficulty arises because the success of a CSR program is usually measured in terms of what doesn’t happen rather than what does. For example, the absence of local tension, time not spent in dispute litigation, or of not having to absorb unplanned costs.
Why are industrial companies engaging in CSR programs?
There are several ways to understand why industrial companies are engaging in CSR programs.
From the community’s perspective, the CSR programs of industrial companies provide a mechanism of compensation for the social and environmental costs associated with industrial. These costs are usually associated with environmental impact, higher food and housing costs, and social impacts from an increase in the number workers living in the area. In addition, a CSR program provides the community with a means through which it can be involved in and provide input into the industrial project. Since local communities may not see many of the direct benefits from the industrial industry, CSR programs are a means through which a industrial company can be seen to actively give back to the community.
Industrial companies also benefit from CSR programs in several ways. Firstly, they help build better relations with the local communities in which they operate. The economic risks of not having good community relations include project delays and even companies closure. Significant delays may cost up to two-thirds of the companies project’s initial value.
According to the World Bank, the industrial industry has become a very technologically complex sector which employs considerably fewer people than in the past and, therefore, needs to provide other benefits to local communities “in order to obtain a ‘social license’ to operate”.
Secondly, it provides a way of responding to increasing consumer concern about how the products they buy are produced, combined with the fact that the internet allows consumers to scrutinize industrial companies’ operations.
Finally, companies that are regarded as socially responsible may be more likely to be asked to do business with governments that are accountable to their citizens. These companies can also be more efficient in their recruitment processes because “access to the brightest and best in the labour market will depend upon the reputational status of the industry and the companies within it”.
Traditional CSR concepts in Africa
Traditional concepts in Africa has and was to built a school (because children need to learn) and a clinic (because Africans are sick). Nothing wrong with the concept and or idea, however there is more to it than those two.
Corporate decide where the structures must be built, these corporates are usually the product of 1st world economies and has never operated in 3rd world environment, the approach is usually very autocratic with a good intent, Central coordinated and controlled, strict budget, who can attend, who will be employed, where they will assist and what they will assist in. On the other hand it opens the door wide open to corruption, nepotism, fraud and mal practices that leads to huge operational and reputational risk.
So what do we learn from the old concepts, its not sustainable, its risky, it was not discussed and planned with the traditional leaders, it has a 1st world colour with lots of education directed at 3rd world with low education levels. It is not inclusive, it supply jobs for small amounts of external individuals that has a qualification in the medical/education disciplines. The individual on the ground does not benefit economical.
Good intent but with a risky outcome, financially and operationally.
New Tendencies and approach
Through the years and through experience we have learned that each region is unique with respect to, cultures, religion, language, traditions, society, environments, laws, race, family life, basically everything that you are used to in your environment is different in another. This must be factored into the surveillance before any plan is made.
For example the companies could be operationally for the next 12 years, what happens with the community after the resources has been companies and the hospital is no more and the school becomes a house for someone else. We know that companies in particular fluctuate their manpower as resource prices fluctuate, we need to calc this in. Clinics and Hospitals is not sustainable once the companies closes down and without government support. The latter never materialises and therefore the local population is worse off than before.
The answer is to build a mini economy, low cost but sustainable, with available resources, input from the community and managed with expertise centrally. The balance must be kept between the traditional leaders and the politicians. The value chain should be formalised and a plan with target dates made.
The fact is when you have an income you can contribute, if you don’t have an income you only receive and become the norm ie wait for hand outs, which leads to unproductivity, more sickness, social and welfare problems, hunger and malnutrition. Once there is a mini economy the school and clinic can follow.
We believe in having an anchor business in this mini economy. We propose the agricultural and fabrication way. Why? The traditional leaders can supply land and is usually the custodians of the land outside the companies lease area.
The companies has the land, water, machinery, ability to appoint a consultant, kitchens for product, logistic lines, and contacts with suppliers, contacts with other companies, and the list goes on. All the other services can be added and value added after the Agri project.
Through the years and through experience we have learned that each region is unique with respect to, cultures, religion, language, traditions, society, environments, laws, race, family life, basically everything that you are used to in your environment is different in another. This must be factored into the surveillance before any plan is made.
For example the companies could be operationally for the next 12 years, what happens with the community after the resources has been companies and the hospital is no more and the school becomes a house for someone else. We know that companies in particular fluctuate their manpower as resource prices fluctuate, we need to calc this in. Clinics and Hospitals is not sustainable once the companies closes down and without government support. The latter never materialises and therefore the local population is worse off than before.
Detail plans will cover who will do what, where, when, at what cost and what there after.
See Annex B for possible phase three engagement of community with regards to skills.
- Cost and Finances
The aim is not to have a huge capital expense, training and skills development should take place in existing facilities. Skills should not be for free, there must be a cost to the individual.
Progress is done on his or hers ability to progress at own pace. The qualification is recognised within the country specs for such a qualification and a certificate can be issued.
The CSR plan must be in accordance to all accounting rules and regulations.
- Operations
We believe that the agri project can be managed and coordinated with the company management. Support in terms of a established marketing is essential. This can be obtained from the catering contractors and must be part of their SLA.
A consultant, employed by the companies and reporting to the Environmental Manager drives the project. As the Agri project is established 2nd phase can kick in with skills training and development.
Conclusion
So we have seen that CSR is an ethical framework and suggests that an entity, be it an organization or individual, has an obligation to act for the benefit of society at large. Social responsibility is a duty every organization or individual has to perform so as to maintain a balance between the economy and the ecosystems. A trade-off may exist between economic development, in the material sense, and the welfare of the society and environment, though this has been challenged by many reports over the past decade.
This responsibility can be passive, by avoiding engaging in socially harmful acts, or active, by performing activities that directly advance social goals. Social responsibility must be intergenerational since the actions of one generation have consequences on those following