On Corporate Social Responsibility

Channel News Asia reports:

Campaigners representing the rural poor, the environment and organised labour blasted the communique as a sideshow, stage-managed for corporations who are major contributors to the World Water Council, which organises the Forum…

"We demand that the allocation of water be decided in an open, transparent and democratic forum rather than in a trade show for the world’s large corporations."

Full article here.

Interestingly, Ethical Corporation Institute says that big businesses like Rio Tinto, SAB Miller, Coca-Cola, Intel and Molson Coors are "leading the way in water management" (link here) and saliently, Jeff Conant said last year:

As we learn from the WWF website, “One of the benefits of joining the WWC is the Council’s ability to influence decisions related to world water management that affect organizations, business, and communities.” Perhaps their secret meetings will also be attended by executives of the Worldwide Fund for Nature, whose recent partnership with Coca-Cola aims to help the global soft-drink giant become “the most efficient company in the world in terms of water use,” with “every drop of water it uses… returned to the earth or compensated for through conservation and recycling programs.” And, with this blending of fact and fiction, it would hardly be surprising to find Greene’s signature on the CEO Water Mandate, which has companies with such devastating environmental track records as Dow Chemical, Shell Oil, Unilever, and Nestlé pledging to “help address the water challenge faced by the world today.”

Full article here. The italicized names are linked to rather interesting pages in the original article. Greene here refers to James Bonds’ villain in Quantum of Solace.

What does one make of it all? Alas, these great tides of information and opinion indeed confound the mind.

Here are some excerpts from a 20 Dec 08 NYT article I chanced upon while absent-mindedly clicking through the net:

Mr. Siekaczek (pronounced SEE-kah-chek) says that from 2002 to 2006 he oversaw an annual bribery budget of about $40 million to $50 million at Siemens. Company managers and sales staff used the slush fund to cozy up to corrupt government officials worldwide.

The payments, he says, were vital to maintaining the competitiveness of Siemens overseas, particularly in his subsidiary, which sold telecommunications equipment. “It was about keeping the business unit alive and not jeopardizing thousands of jobs overnight,” he said in an interview.

…

[Debevoise & Plimpton] and its partners dedicated more than 300 lawyers, forensic analysts and staff members to untangle thousands of payments across the globe, according to the court records. American investigators and the Debevoise lawyers conducted more than 1,700 interviews in 34 countries. They collected more than 100 million documents, creating special facilities in China and Germany to house records from that single investigation.

Full article here.

Bribes went to people in Venezuela, China, Iraq, Israel, Vietnam, Italy, Argentina, Nigeria, Norway and Russia. The money trail led through Austria, Liechtenstein, Switzerland, Dubai and the British Virgin Islands. There are probably more places left unmentioned by the article.

Ouch. For so many reasons.

Here’s something related. I had the benefit of a chat with a businessman in Singapore last month, one of those older men who laugh at the silly ideals of young rascals like me. He has business links to various parts of Asia and Southeast Asia. He pointed out something darkly funny. We here in Singapore are raised on the values of transparency, accountability and honest business practices. But, he said, that’s not how the world works, especially in the countries around us. Does this set our businesspeople back when they head into the other Southeast Asian countries? Should we really be judging corruption to be an irrevocably bad thing in places that depend on it for some measure of decent living?

I don’t know.

The Business Times (Singapore) today has a student article on "green funds".

Typically, two categories of green funds exist in the market. The difference between them lies in the way these funds select their stocks.

The first category takes the direct approach. Funds in this category are made up of companies that produce goods or services aimed at solving environmental problems. They normally invest in alternative energy, recycling and pollution control. For example, LSB Industries provides geothermal and water source heat pumps to multiple markets in the United States. Geothermal energy sources are environment-friendly alternatives to the burning of fossil fuels, a contributor to environmental pollution.

Funds in the second category take the ‘best-in-breed’ approach. These funds seek out various sectors or industries for their respective industry leaders in terms of employing environmentally-conscious business practices. Unlike funds that take the direct approach, funds in this category may invest in an oil company, for example, as long as it is considered the cleanest oil company of the lot."

 It’s a rather superficial article.

Environment-friendly investments can achieve two objectives. Investors will be injecting capital into companies that help slow down Earth’s degradation. Also, the more investments go into companies that engage in green practices, pressure is put on others to clean up their act in order to attract further investments. Therefore, by investing green, investors are also indirectly pressuring more companies to think about Mother Earth.

Click here for a talk by the esteemed Dr Ashok Khosla held in the Lee Kuan Yew School of Public Policy. It’s entitled "The Future of Business and the Business of the Future". It’s not organized by us. It’s probably by the LKYSPP.

Anyway, Dr Khosla says a lot in it, but I’ll just point out one little point he stated. That is, social enterprises require a longer time-horizon than normal businesses.

A couple of friends from the NUS Business School opine that business shouldn’t think beyond a year or two because so many things change in a year that business strategies for the long term often become obsolete very fast. I do wonder how social enterprises adapt to new conditions and still keep to their original goals under such conditions.

Friday 17th October 2008, 600-830pm. Venue: NUS Business School LT17.
To register, go to http:// www.CSRSM.org. For more information, please email nus.csrsm@gmail.com

Mr. Tan Kin Lian writes a blog at www.tankinlian.blogspot.com to educate the public on insurance and financial planning. His blog now receives 3,500 visitors a day. The current hot topic is on minibonds, high notes and other structured products. Many investors have lost a lot of money in investing in these structured products. Mr. Tan is helping them to seek compensation.

Here’s a short article describing a very, very interesting correlation between CSR and geopolitics:

Results show that firms with high CSR ratings are more likely to be located in states with Democratic majorities, and firms with low CSR ratings are more likely to be located in states with Republican majorities.

Corporate executives tend to reside near a firm’s headquarters. It seems logical that corporate decision makers would align their policies with the views of their stakeholders in order to reduce conflict and create value for the firm.

Full story here.

Since I’m in Indonesia right now, I’ve been reading the papers here. The Jakarta Post reports an interesting case today:

Subarkah said it was unfair to make a smoking haram on the basis that it could be bad for some people. In fact, he said, forbidding smoking would only cause pain and suffering to tobacco farmers and their families.

"There are 1,367 tobacco factories in East Java, employing thousands of workers," Subarkah said.

According to the association, tobacco farmers in East Java supply 53 percent of the country’s total tobacco consumption with a total investment value worth Rp 682 billion.

Full story here.

I’m guessing that this might be a more general theme although I’ve not researched it much. But with more and more people quitting plastic bags and other packaging, a similar effect might be hitting the people who produce them. Is this necessary? Of course, I’m speculating a little right now.

Here’s an unrelated article that’s very pertinent too, and which might be a tad sensitive especially for bodies on the receiving end. Is corporate philanthropy CSR? Is it an important question at all? Coming from a student population with so many societies getting funds from corporates, I can’t quite tell if corporate money is a good thing. Our own CSR Student Movement does research sponsors a little and have rejected sponsorship offers for various reasons before, but we were always keenly aware of how much good we could potentially do with that money. Painful sometimes.

I’m finally done with the Annual Report! It looks rather nice, I think. I used some of my own photographs, in it, including the one with a beetle eating bread. Anyway, click here to download our Annual Report for the academic year 2007/2008. I’ve left the bleeding in because I like a little bit of raw construction… and it’s tedious to remove. ("Bleeding" is the border around the document that printers chop off when they send it to print. I’ve no idea why it’s called that.)

All in all, it’s been a pretty good year. I even have some confidence that we now have a somewhat stable core of members, which is something we’ve never had before. I’m really heartened by it. We can now go on to do even more substantial things!

Also, I must say, we welcome feedback and ideas from anyone. Mail us at nus.csrsm@gmail.com to do so or just to talk to us or even simply to say hi. Have a good day, everybody! 

Well, here we are at the end of another semester. To be exact, it’s been one week into the holidays and I’m supposed to get some things done for the Student Movement but unfortunately, I have been afflicted by what Renny, our former vice-president, diagnosed as "Post-Examination Slack Syndrome" (PESS). It seems to be very common among NUS students.

Anyway, I’ll be posting our Annual Report up soon enough. In the meantime, here’s an intriguing excerpt that overturns the conventional way we think about MNC-government relationships:

The company was also put to good political use by the president. To all intents and purposes Freeport became a quasi-state organization for Jakarta in West Papua as the principal developer and administrator of its project area and surrounds. At the same time, through support for the transmigration settlements and the military the company assisted Jakarta in its policy of "Indonesianization" of the area. Finally, back in the United States, Freeport became an influential public relations agent for the regime. Thus, far from Suharto’s being a puppet of the company, as was the general perception in Indonesia, Freeport had become a compliant and valuable asset that, with the company’s complicity, was exploited by the president.

- "The Politics of Power: Freeport in Suharto’s Indonesia", by Denise Leith, 2003

We normally think of the state as subservient to the mighty corporation, but here’s a case wherein Goliath has been tamed. Of course, there’s much more to the story than just this little excerpt. The Freeport-McMoRan case involves collusion, corruption, human rights violations and devastating environmental impacts, all of which were made possible within a special kind of dynamics with the Suharto regime. It’s almost a classic potboiler.