CORPORATE SOCIAL

RESPONSIBILITY
What is Corporate Social Responsibility?

• CSR can be viewed as a comprehensive set of policies,

practices, and programs that are integrated into business
operations, supply chains and decision making
processes and include responsibilities for current or past
actions.
• CSR is the continuing commitment by businesses to
behave ethically & contribute to economic development
while improving the quality of life of the workforce &their
families, local communities and the society at large.
-(World Business Council)
CORPORATE SOCIAL RESPONSIBILITY

• Corporate Social Responsibility (CSR) is a broad

concept that can take many forms depending on the
company and industry.

• CSR is a voluntary social and environmental positive

initiative to establish an image of environmentally and
Socially Responsible Businesses (SRB).
• Under the CSR concept, companies decide to
voluntarily contribute to a better society and a more
sustainable development.

• Through CSR programs, philanthropy, and volunteer

efforts, businesses can benefit the society while
boosting their own image.
 APPLE INC. CSR PRACTICES
 Steve Jobs wasn’t known for philanthropy. While
he was their CEO, Apple’s China-based
suppliers of iPhones and iPads have drawn
international attention with their unsafe work and
ill-treatment of workers. Because of these, there
have been 23 deaths and 273 injuries from a
combination of factory accidents and suicides.
 However, with Tim Cook assuming leadership in
2011, the focus on CSR aspect of the business
was increased to a considerable extent.
 Apple Suppler EHS Academy
 Investigated cases of abuse of foreign
workers
 GOOGLE LLC CSR PRACTICES
 Google Green is a corporate effort to use
resources efficiently and support
renewable power.
 But recycling and turning off the lights
does more for Google than lower
costs. Google has seen an overall
drop in power requirements for their
data centers by an average of 50
percent.
 These savings can then be redirected
to other areas of the business and to
investors.
 CORPORATE SOCIAL RESPONSIBILITY IN A
GLOBAL CONTEXT
CSR IN DEVELOPING COUNTRIES
• CSR practices are largely market-driven and responsive to rich
stakeholders.
• CSR agendas in middle and low income countries has been less
visible internationally.
• CSR programs by developed countries have been adapted by
middle and low-income countries.
• Black Economic Empowerment in South Africa
• Presidential encouragement of business efforts in the Philippines
JUSTIFICATIONS FOR CSR

• There are two broad sets of justifications in middle and

low-income countries:

Defensive Proactive
 DEFENSIVE APPROACH
• The defensive justification relates to minimizing the potential
adverse effects of CSR on local communities, environments
and markets when it is imposed through international supply
chains and investment.
• This ensures that CSR practices with impact on their
countries are tailored to national economic and social
interests.
• One example of this a popular case in Africa where a
certain company in the United States implemented a CSR
agenda of donating used computers to several schools in
Accra, Ghana in West Africa.
 PROACTIVE APPROACH

• The proactive approach to engage in CSR is provided by

the opportunity to increase domestic benefits of CSR
practices.

• Foreign investment offers potential to transfer technical

expertise to local enterprises.

• Corporate Social Responsibility Act of 2011

• LGU’s shall provide assistance for CSR programs in
their jurisdiction
POTENTIAL ROLES OF GOVERNMENT

• Public sector engagement with CSR addresses issues

of corruption, poverty reduction and human rights.

• The goal of public engagement in CSR is the alignment

of business activities and public policy to achieve
societal goals.
A MULTIPLICITY OF POLICY INSTRUMENTS

Five Distinctive roles for public sector engagement with CSR:

• 1. Regulation
• 2. Facilitation
• 3. Partnership
• 4. Endorsement
• 5. Demonstration
 CORPORATE SOCIAL
RESPONSIBILITY IN
INTERNATIONAL BUSINESS
Practicing CSR on a level of sincerity
that satisfies the minimum based on
shareholders’ opinion can make the
company noticeable in local and
international markets which leads to
stakeholders’ confidence.
RANGES OF APPLICATION FOR CSR IN
INTERNATIONAL BUSINESS
• Sustainable Development
• Human and Labor Right
• Local Economy and Society
• Transparency
• Legality
• Consumers
• Supply Chain
SUSTAINABLE DEVELOPMENT
AND ENVIRONMENT
There is a pressing need to promote a new
economic development model

That would secure the needs of the current

generation without giving any concession on the
chance of future generation to enjoy theirs

The state regulations cannot always guarantee that

the entrepreneurial conducts of these big
enterprises are all compliant with such
developmental model
SUSTAINABLE DEVELOPMENT
AND ENVIRONMENT

This model will bring out about better:

• Consumer favor
• Product innovations
• Process innovations
• Raw materials
HUMAN AND LABOR RIGHT

Corporations have significant influence not

only in the economy but also on the social
and political life of the country in which they
operate

Corporations should be consistent with the principle

of fairness and respect of basic rights
HUMAN AND LABOR RIGHT

The entrepreneurial strategy of these large enterprises

should be based on the following CSR demands:
• Be Compliant
- Operational conduct of the enterprise should not be
lower than the standards of the host country

• Be Consistent
-MNCs in host countries should press hard on their
partners to adopt the same observance and recognition of
rights the enterprise is following when it does business
HUMAN AND LABOR RIGHT
To be specific, an enterprise must protect the primary rights of
its workers wherever it operates and strive to observe the ff:

• Be an advocate of the abolition of child labor

• Respect the right of privacy and freedom of opinion
• Respect the exercise of the political rights and of trade union
activities
• Refrain from discriminatory treatment
• Provision for fair compensation
• Provision for a healthy and safe working environment
LOCAL ECONOMY AND SOCIETY

It is undeniable that large enterprises can bring

extraordinary impact on the development of less-developed
countries.

This is however not without obstacles. For instance:

• Disparity on technological capability
• Local entrepreneurship might be overwhelmed
LOCAL ECONOMY AND SOCIETY

It is necessary to involve the stakeholders in those

relevant decisions that would contribute to the
development of the territory or to the host country in
particular.

Involving the stakeholders produce local consensus which

reduces investment risks.
 LOCAL ECONOMY AND SOCIETY

“CSR in action”
- they are manifested by giving out a portion of their
income for projects like maintenance of road, adoption of
school, etc.
- these kind of activities would:
• Give a good feedback from the community
• Create a good reputation for the company
• Propel the societal integration consolidation of
stakeholders and the enterprise
TRANSPARENCY

Corporate Transparency
- is a form of deep-rooted managerial initiative which
evolved into a philosophy of removing walls and
facilitating free and easy public access to corporate
information.

The success of a corporate policy is closely tied to its

“accountability”.
 LEGALITY

The adherence to the applicable set of laws is the minimum

requirement.

The prerequisite of CSR is to go beyond the law provision in

order to contribute to the establishment of fair and
sustainable development.

The enterprise that prefer CSR strategy declares to the public

and to the stakeholders that they do not participate to illegal
engagements
 CONSUMERS

Consumers’ movement have begun to assert themselves

at international level.
Consumer Organizations
-point out the importance if a reliable information on
the condition of production and sale of the products

All enterprises know that their reputation and success

depends on their commitment towards consumers
 CONSUMERS

Consumer-stakeholder not only as a client but also as a

“collaborator” in pursuing CSR strategy.

“AWARE CONSUMPTION”
- new approach
- acquiring growing importance in the market by
promoting a production that is safe and compatible with
a sustainable and fair development.
 SUPPLY CHAIN

Due to globalization, supply chains

have become complex.

This situation represents a critical point for enterprises that

have chosen to adopt a socially-responsible conduct
 SUPPLY CHAIN
Positive effects of observing ethical behavior and binding all
their supply chain partners to their ethical code are:

 Improvements in market reputation through specific

certifications or quality labels
Confidence of the ethical investors and of the
consumers
Good relations with institutions and social
organizations
CORRUPTION IN INTERNATIONAL
BUSINESS

“THERE IS ALWAYS SOMEBODY

WHO PAYS AND
INTERNATIONAL BUSINESS IS
GENERALLY THE MAIN SOURCE
OF CORRUPTION”
- George Soros -
GLOBALIZATION OF CORRUPTION
WHAT IS CORRUPTION?

• Routine cases of bribery or petty abuse of power

• Amassing of spectacular personal wealth through
embezzlement or other dishonest means
GLOBALIZATION OF CORRUPTION
Bribery
• It enables companies to gain contracts.

• Bribery may be pervasive, but it is difficult to detect.

• Bribery was seen as a normal business practice.
 EXPORTING CORRUPTION
The Effects of the Corrupt Practices Committed by
Multinational Companies (MNC) to other Countries
1. They undermine development and exacerbate inequality and poverty.
2. They disadvantage smaller domestic firms.
3. They transfer money that could be put towards poverty eradication
into the hands of the corrupt.
4. They distort decision-making in favor of projects that benefit few rather
than the many.
5. They also increase debt; benefit the company, not the country; bypass
local democratic processes; circumvent legislation and promote
weapon sales
 Increasing Debt
When projects are paid for with money borrowed
internationally, bribery adds to a country’s external debt.

BATAAN NUCLEAR
POWER PLANT
CONTRACTOR:
Westinghouse Electric Corp.
CONTRACT PRICE:
$2.3 billion
 Benefiting the Company, not the Country
Bribing high-level officials ensures profits and helps off-
load risks.

 Bypassing Local Democratic Processes

Bribery can be a useful way of getting around local
opposition to a project and of bypassing the usual democratic
processes.
NICKEL AND COBALT STRIP
MINING ON THE PHILIPPINE
ISLAND OF MINDORO
Company Name: INTEX Resources
(MINDEX)
 Destroying the Environment and Getting Around
Regulations

Some companies use bribes as a

way of getting around environmental
regulations.
 Promoting Arms Sales
Half the bribery complaints received by the US
Commerce Department concerns international defense
contracts.
 HIDING THE LOOT
 Western Banks and Third World Assets
Private banking services and offshore financial centers
are the major conduits and repositories for bribes and corrupt
gains.

 Private Banking
It is increasingly used for confidential services to
international elites and is experiencing phenomenal growth.
 Offshore Banks and Companies
Offshore banks and companies are another part of the
system through which money is siphoned out of poor
countries and hidden well away from its citizens.
 RECOVERING STOLEN WEALTH

International pressure has been mounting in recent

years to return money which has been stolen from
public treasuries and stashed away in Western
banks and offshore tax havens.
EXAMPLES:

• 1998 - Former President Ferdinand Marcos

US$500M = Php 27B
Total amount recovered:
US$1B = Php 54B
Total amount stolen:
US$5B = Php 270B
• 1999 - Former Nigerian ruler Seni Abacha's Family
Total amount recovered:
US$700M = Php 37.8B
Total amount stolen:
US$1.5B = Php 81B

• 1999 - Freezing of bank accounts of Angola's rebel

leader, Jonas Savimbi
 CLOSING THE LOOPHOLES
Loopholes - a means of escape; especially : an
ambiguity or omission in the text through which the
intent of a statute, contract, or obligation may be
evaded.

 More sweeping attempts to recover stolen money

will require both promulgating an international
convention and closing loopholes that allow ill-gotten
gains to leave countries in the first place
 BLACKLISTING COMPANIES
 "The World Bank Listing of Ineligible Firms"
- a comprehensive list of debarred firms published by The
World Bank.
- 54 companies in the list, 36 of them British
 Actions of the UK government
 Creating an International Database of 'Blacklisted'
companies
 NGOs calling for an international public index or
ranking of corrupt companies
 GOVERNMENT ACTION
"Action programmes need to be designed to meet the
expectations of citizens, who need to be informed about
the national strategy to combat corruption. Effective
action to fight corruption is most likely through programs
which are nationally owned, designed to meet national
circumstances and built on the foundation of popular
empowerment."

• Ministry of Ethics and Integrity (Uganda)

 "where governments are less than enthusiastic in
tackling corruptions, popular support and the agencies
of civil society can be mobilized in support of an anti-
corruption agenda."
• Citizen Action Against Poverty and Corruption
(Nicaragua )
• Uganda Debt Network ( Uganda )
• International Anti-corruption Theatre Movement
(Uganda )
• Mazdoor Kisan Shakti Sangathan (MKSS) (India)
 DETERRENTS

Economic punishment
Opening Development projects to more public scrutiny

• State of Kerala in South India

 RESISTANCE
Fighting corruption is increasingly engaging the energies
of civil society groups around the world. To be effective,
they must:
a. Mobilize Ordinary People
b. Push for Freedom of Information (FOI)
c. Help increase Citizen Participation in Decision-making