Download Corporate Social Responsibility: Easy to criticise – but not that easy

Photo: Mark Lopatin
IAT01-09/4
Aid & Development
Corporate Social
Responsibility:
Easy to criticise
– but not that
easy to achieve
Emily Talmon-l’Armee, Head of Operations at the
Business Humanitarian Forum (BHF) in Geneva,
Switzerland
An Indian woman earning a livelihood making improved
cook stoves for a local entrepreneur who sells them in
nearby villages in the state of Maharashtra.
R
ecently, over what started as a rather pleasant
lunch, and after a description of the kind of work
I do, I found myself once again feeling backed into
a corner and losing my appetite. My dining partner
complained that large corporations are not really
interested in helping developing countries at all or
helping society, but are rather just hungry to make
money and exploit markets wherever they get the
chance. “...it’s all about profit and about selling more
hamburgers; more services... more of the American
way of life ...Companies are not very interested in
helping the people in the world at all, only taking
advantage of them!” How many times have I heard this
in my work by colleagues who work in humanitarian aid
for non-governmental organisations (NGOs) working
in developing countries? Even within the great halls
of government and multilateral donor agencies who
encourage development and aid and participation of the
private sector, there is a fear that the big multinational
companies are simply out to make a profit.
While people acknowledge that many corporations do
some good with their Corporate Social Responsibility
(CSR) activities, there is more evidence of finger pointing
and criticism than praise by organisations such as The
Economist and Christian Aid. Christian Aid wrote an article
in early 2004, highlighting the fact that corporations can do
a lot of harm, yet they mask it by pretending they are doing
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charitable and good work. The Economist also leans
toward the negative aspects of CSR, while acknowledging
some good. In January 2005, they wrote:
“...for most companies, CSR does not go very deep.
There are many interesting exceptions... practices that work
well enough in business terms to be genuinely embraced;
charitable endeavours that happen to be doing real good...
But for most public companies CSR is little more than a
cosmetic treatment. The human face that CSR applies to
capitalism goes on each morning, gets increasingly
smeared by day and washes off at night.
A reminder of the definition of CSR
As the name indicates, a CSR activity is defined as one
where a private corporation undertakes to help communities
in a responsible way and helps to relieve social ecological
or economic problems where the company is based or
where the company has corporate activities. These activities
can involve working to solve a local crisis or emergency,
improving the quality of local health or education, or
improving environmental or labour conditions in society.
The purpose of this paper is not to whole-heartedly
endorse each company’s CSR policy, but rather to show
examples of the tremendous amount of work involved in the
implementation of CSR projects. Following are examples
of how CSR activities are implemented in post-crisis and in
other challenging environments.
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DHL’s Story: Joining forces to establish a
disaster management air transport network
It took a human tragedy like the 2003 earthquake in Bam,
Iran to realise that coordinated airport emergency services
were necessary in order to respond quickly to help hundreds
of thousands of people in need. In early 2004, seven
companies gathered in Dubai, the United Arab Emirates, to
establish a volunteer force which would be able to respond
more quickly to emergency relief. Led by DHL, the other
companies are: TNT; Emirates Airline; Dnata (Dubai Airport’s
ground handling company); Aramex; Chapman Freeborn
(these last two are also mainly flight logistics companies);
and Dubai Aid City. After a period of ten months, 60 people
in Dubai had become trained in disaster preparedness – to
be able to deal with another crisis situation like that of Bam.
The training came none too soon, since the “Team” would
quickly be tested when the Tsuanami disaster struck
on December 26, 2004. Two days after the incident,
the Dubai team flew to Colombo, Sri Lanka to help local
airport authorities manage the transport and logistics of all
the humanitarian aid and to provide the most assistance
possible in the critical relief period just pursuant to the crisis.
Even though the Tsunami relief provided in Colombo was a
resounding success, it did not go as smoothly as the Team
would have liked. For example, DHL and its team were
prepared to work around-the-clock, in dual work shifts of 12
hours each to help with the emergency relief effort. The local
airport community, which had not been trained to handle this
kind of crisis, was not aware of the amount of effort needed. It
took nearly one day of extra effort and time in communications
to convince the local authorities to allow for and participate
in 24-hour work efforts. In addition, the Team was not aware
that the Colombo airport lacked some of the basic equipment
needed to off-load planes and transport incoming goods.
Extra forklifts were hard to come by and other material
handling equipment was also lacking. Other issues that
were not anticipated were the need for customs handlers to
clear the incoming goods through the Sri Lankan airport. It
would have been best to include communications and media
experts to handle all the journalists who had descended upon
the country. In addition, the Team had initially expected to
phase out their involvement after ten days. In this initial joint
effort, the hand-over to the local Sri Lankan officials took 20
days and more staff than originally anticipated.
For a company like DHL, this type of activity can and does
incur costs, however, as Chris Weeks, a Senior Manager of
DHL remarks, “It doesn’t cost the company a fortune to help
out in this type of operation and our involvement is very timely
and effective. We don’t stay involved for a long time and we
turn the operations over to the local handling company when
the surge has diminshed. However, we come in at a critical
time, and we know all about logistics and transportation
coordination. Therefore, we can help to bring in emergency
aid in the most efficient way possible with fairly little effort on
our part. This works well for all parties involved.”
The focus of the Team’s intervention at a critical time had an
extremely beneficial and life-saving effect on the ground. As
Weeks remarks, “Working with a team of other companies
and organisations required some extra coordination skills
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since the Team had not worked together previously in such
an effort. Nonetheless, everyone of the group just left his or
her corporate badge at the door and jumped in to get the
job done.” Without these efforts, the Colombo airport would
have been overstretched after a few days, with a possibility
that it would have had to shut down due to excessive freight
and lack of handling capacity. In that case, the loss of lives
after the initial crisis could have been even greater.
The Shell Foundation: Low cost clean stoves
tackle indoor air pollution
Given the parent company’s emphasis on oil, it is no surprise
that the Shell Foundation works to solve the problems of
affordable energy for the poor. Clean and affordable energy is
often inaccessible to billions of poor in developing countries,
either due to its high cost or due to the fact that power lines
simply do not stretch to poor, rural areas. In many countries,
women and children look for very crude solutions to solve the
problem of heating and cooking in their homes. They burn
anything from wood, to crop waste, to dung as a no cost or
inexpensive solution to heating and to survival. This causes a
great health threat, in particular to women and children who
breathe in the fumes from these indoor fires, causing both
pneumonia and chronic obstructive lung diseases. The WHO
has identified indoor air pollution as the fourth largest health risk
to people living in developing countries.
In order to solve this problem, the Shell Foundation launched
an Indoor Air Pollution (IAP) programme in 2003 called
“Breathing Space”. With a budget of $11 million, a handful
of people at the foundation and NGO partners in eight
beneficiary countries, the Shell Foundation intends to help
up to ten million people over the period 2003-2008. The
organisation is not interested in a one-time donation of
technical expertise or equipment to solve the problem. Rather
it seeks longer-term sustainable methods for the affected
communities to develop an alternative heating system. The
issue of affordability was central to the Shell Foundation’s
approach. So far, the project has assisted up to 200,000
households through pilot programmes in India and Guatemala.
The Shell Foundation staff and its partners did in-depth
work with impoverished households to determine whether
the people indeed perceived their heating and cooking
methods as a health dilemma. Interestingly, rural women
played down the health hazard, by complaining of smoke,
dirty kitchens and the time spent collecting wood. Once the
Shell Foundation took this on board, the right marketing and
cookstove solutions were combined. All of these steps add up
to an approach which brings together stove design, the role of
local entrepreneurs in making and selling the stove, as well as
the preferences and purchasing power of the customer.
Commenting on the progress of the Breathing Space
project, Ms. Westley, Programme Manager at the Shell
Foundation, remarks that “even the lowest price of a stove is
still sometimes just too high for the poorest of the poor in the
rural areas. Some of the people cannot afford micro-credit
payments to purchase the stoves, since they will not have
any means to pay back even these mini-loans.” Therefore,
the Foundation is currently working with implementing
partners to make links with women’s self-help groups and
co-operatives in countries such as India. These types of
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Aid & Development
Photo: E Talmon-l’Armee
IAT01-09/4
BHF staff with Dr. Karim Baz: Local partner at the generic medicines factory site in Kabul
grass root organisations can provide microcredit to their
members for the purchase of cleaner stoves.
Previously, the indoor air pollution problem had been tackled
with government subsidy programmes which had been
unsuccessful in the past. It is encouraging therefore to see
that the approach of the Shell Foundation has, to date,
been successful. The Shell Foundation has developed an
IAP toolkit based on the lessons from its pilot programs that
others in the field of IAP prevention can access.
European Generic Medicines Association
(EGA) works with the Business Humanitarian
Forum (BHF) to donate a factory to produce
much-needed medicines in Afghanistan
This project concept was born in early 2002, when the
EGA participated in a dialogue session held by the BHF in
Geneva. The session was held to find ways for the private
sector to partner with humanitarian aid organisations to
solve some of the biggest problems resulting from 23 years
of conflict in Afghanistan. The BHF facilitated discussions
to identify solutions to healthcare and other issues in the
country. EGA members agreed, as part of its “Access
to Medicines” programme, to donate all the equipment
necessary to establish a generic medicines production
factory in Kabul, Afghanistan. It was decided that two or
three members of the EGA (an association whose members
number approximately 400) would donate equipment, staff
time for training Afghan technicians, provide technical and
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mechanical expertise to calibrate and set-up the equipment
upon arrival in Kabul, and some of the initial materials to
produce the medicines. Upon completion the factory will
produce as many as 16 types of antibiotics and other
essential medicines, which are on the list of World Health
Organization’s essential medicines list.
While the idea may have seemed fairly straight-forward, as
a pure donation from a pharmaceutical association to a
post-conflict country, the actual implementation of the project
has taken over three years and is only now reaching the
completion stage.
Transport of the equipment from the donating EGA members
to Afghanistan involves many procedures in export, security
and customs clearances. Fortunately, project partners are
working to help with the logistics and the EGA has engaged
a specialist firm for procurement and loading of properly
sized special containers for getting the equipment ready for
safe transport to the Middle East. Due to security issues in
Afghanistan, the equipment cannot be brought in over land
by truck, but must be flown in from the United Arab Emirates,
a step not initially anticipated.
At the moment, the BHF is working with the local Afghan
owner on developing a marketing and sales plan for the sale
of the pharmaceutical products once the factory is built and
the production line is working. The BHF is coordinating with
the factory owner, NGOs and public government institutes and
ministries to obtain certification of the drugs so that they can be
licensed and sold legally and safely on the Afghan market. This
amount of detailed implementation work was not anticipated at
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the start of the project. This project is a showcase of what can
be achieved when the private sector (EGA) work with an NGO
like the BHF and with donor agencies like UNDP.
An important point to consider is that companies that
engage in CSR activities wish to ensure that they will not
fail for both humanitarian and financial reasons. Naturally,
companies wish to avoid failed CSR activities, since they
can lead to financial problems with clean-up solutions
and can lead to negative public relations for the company
in the future. Therefore, corporations often make an extra
effort (while needing to balance this by working within
budget limits) to guarantee that the project succeeds.
Companies and organisations like DHL, the Shell
Foundation, EGA, the BHF nonetheless really do care
about the humanitarian outcome of these projects or
they would not make the extra efforts described here to
find solutions to complex problems.
This paper has covered three CSR cases in detail. Many
more such examples exist. These can be via well-implemented
CSR programs of small firms working to help a group like
the Palestinians; of large companies like Coca-Cola Hellenic
Bottling Company, with headquarters in Greece (Coca-Cola
HBC) working in Bosnia and Herzegovina or in Africa or of
Microsoft’s work in countries world-wide. The Economist
writes that only 0.97 per cent of pre-tax profits world-wide
are spent on CSR activities. Upon reflection, one realises
that this is a great deal of money which is dedicated to
projects like those mentioned here. Before pointing the
finger again at the “big, bad multinationals”, one may wish
to take a deeper look into what such CSR work involves
and check the longer term effects of such efforts.
Maybe then we would realise that the human face applied
by companies engaging in CSR each morning, actually does
not “wash off” at the end of the day.
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ABOUT THE AUTHOR
Emily Talmon-l’Armee has been working in interational economic
development since the early 1990’s. Among other countries, she has
worked and lived in post-conflict Bosnia and Herzegovina, the Former
Yugoslav Repbulic or Macedonia and most recently in the Islamic
Republic of Afghanistan. Ms. Talmon-l’Armee has held advisory or
consulting posts with such organisations as the World Bank, the
European Commission, the United Nations Economic Commission for
Europe, and the Organisation for Security and Cooperation for Europe.
She specialises in small and medium-sized business development
and facilitating foreign direct investment into developing countries. Ms.
Talmon-l’Armee holds both a Bachelors degree and Master of Business
Administration from Cornell University.
ABOUT THE ORGANISATION
The BHF works to bridge the gap of understanding between humanitarian
organisations and private business, encouraging both sides to work
together to solve complex development problems. The BHF does this in
two ways: Firstly, it provides training and encourages dialogue between
humanitarian aid institutions and private companies. Secondly, this
non-profit organisation has become involved in the facilitation of CSR
activities and the implementation of projects, notably and most recently
in the Islamic Republic of Afghanistan.
ENQUIRIES
Emily Talmon-l’Armee
Head of Operations
The Business Humanitarian Forum
7-9 Chemin de Balexert
1219 Chatelaine
Geneva
Switzerland
Tel: +41-22-795-1803
E-mail: [email protected]
www.aidandtrade.org