Happy New Year!

Wishing you all a very Happy and Successful New Year!

Ethics and politics of sourcing from Sri Lanka

Three weeks ago I wrote on this blog how the apparel manufacturers in Sri Lanka have embraced social and environmental responsibility and have benefited from it by way of increased productivity and peaceful industrial relations. I also mentioned how high-street retailers are failing to recognize the Sri Lankan garment industry's leadership in social responsibility.

Now a political action by the European Commission threatens the very existence of the garment industry in Sri Lanka. The Commission recently recommended temporary suspension of preferential trade terms for Sri Lanka because of the country's "poor human rights record." If approved by the Member Council, Sri Lankan garment industry's duty-free access to Europe will come to an end, a benefit the country has enjoyed since 2005. The Council has two months to decide by way of voting. If the Council accepts the recommendation, the suspension of benefits will become effective after six months.

The withdrawal of Generalised System of Preference benefits would mean garments exported from Sri Lanka will attract 9.6 percent duty in Europe, making made-in-Sri Lanka garments comparatively more expensive.

European retailers are maintaining a silence on the matter. Will they continue to source from Sri Lanka even if it means the products will cost 9.6 percent more? Or, will they move their orders to other low cost countries ignoring the excellent work Sri Lankan factories have done to improve working conditions?

European Commission's reference to "poor record of human rights" relates to the government's handling of ethnic violence in the northern part of the Island. But the industry has a clean record of human rights. Garment industry in Sri Lanka, like many other apparel producing nations, is the largest employer. European Commission's action could mean hundreds of thousands of innocent workers will lose their livelihood.

While politics has its own dynamics, it will be interesting to see how retailers view the situation and whether they do the right thing.

Merry Christmas!

Wishing you all a blessed Christmas!

Taiwan's unhealthy food tax

Taiwan may become the first country to impose "unhealthy food tax," to discourage consumption of junk food. Taiwan's Bureau of Health Promotion says it is drafting a bill that will tax unhealthy food including canned beverages, fast food, biscuits, cakes, alcoholic products, confectionery etc. The revenue raised will be invested in health promotion campaigns. It plans to introduce the bill next year. The finance minister has already said he would support the bill.

The bureau says it will begin by targeting the packaged food which is easier to monitor and control. The bureau officials believe some of the top health problems in Taiwan such as cancer, diabetes, heart conditions and obesity can be tackled by changing food habits of people.

It's estimated that 30 percent children in Taiwan are obese, a trend blamed on the growing habit of eating junk food, largely sold by western multinational companies.

Health activists have long targeted multinational fast food chains and packaged food manufactures for dishing out unhealthy high calorie food which is fast becoming popular in Asia. Some companies have responded by introducing low-calorie variants of their popular products or by introducing labels that mention the calories in the product. But their actions have varied from country to country, depending on the intensity of regulatory or stakeholder pressures.

If Taiwan succeeds in passing the bill to tax junk food, similar demand can erupt in other countries. A copy cat regulation in other countries could spell a big trouble for food and beverages companies.

There could be serious legal implications of such legislation for companies. Once a particular food product, for example a certain burger, gets legally classified as unhealthy to slap a tax, the company can potentially be dragged to court by existing and past consumers seeking compensation for alleged health damage.

I wrote a feature in Ethical Corporation magazine's Nov 2008 issue on junk food marketing in Asia after a report from UK pressure group Consumers International, published in September 2008, claimed that multinational brands were taking advantage of lax laws in Asian countries to promote calorie-dense and nutrition-poor foods to children.

The Ethical Corporation magazine feature concluded that "fast-food brands in Asia face the quandary of having to meet the rising demands of non-governmental organisations to address healthy-eating concerns, while catering to Asian customers’ known preferences for salty, spicy and oily food. Companies will be more inclined to offer healthier choices,and market them, when more customers demand these options. For now at least, Asian customers seem less aware of the adverse health effects of a high intake of salt, sugar and fat than activists feel they should be."

Taiwan's intended regulation aims to educate consumers using the tax proceeds. If consumers get the message right and start shunning junk food, companies will be forced to offer healthy alternatives.

Sustainable palm oil: A pipe dream

So where is sustainable palm oil? The Roundtable on Sustainable Palm Oil, a multi-stakeholder initiative, was founded in 2003 with a promise to establish a mechanism for sustainable palm oil production. An impressive number of multinational companies and NGOs signed up to the initiative to work together to find ways to produce palm oil sustainably.

The RSPO finally came up with a certification scheme to certify sustainable palm oil in 2008 generating hopes that soon sustainable palm oil will start flowing.

But WWF, a key NGO in RSPO, lamented in May that only one percent of the total sustainable palm oil produced was actually bought. It said out of 1.3 million tonnes of certified sustainable palm oil produced, only 15,000 tonnes was sold. By the way, the world produces 43 million tonnes of palm oil annually. Only 1.3 million tonnes of this was certified sustainable palm oil.

A media report recently pointed out that only three palm oil producers have managed to obtain the RSPO certification so far. And seems they are now stuck with unsold stock of sustainable palm oil which no one wants to buy. Why should other producers make the mistake of going through the trouble of RSPO certification?

Surprisingly, when I visited the RSPO website today, I could not find any list of certified palm oil producers. Rather, I found several isolated announcements mentioning names of companies which have been given interim approval, based on self-assessment, to claim compliance with the certification criteria of RSPO. Now this is scary that a RSPO member can be allowed to claim its palm oil from sustainable sources based on self-assessment.
The actual certification though is given only after a third party audit which, it appears, only three producers have managed to get so far.

I wrote about the RSPO initiative in Ethical Corporation magazine in the July 2008 issue. The report mentioned Unilever’s lead (after they were embarrassed by a high-pitch campaign by Greenpeace) by committing to the tough goal of buying all palm oil from certified sustainable sources by 2015. I concluded the feature by saying “Though Unilever has taken the lead, the rest of the industry will have to act as well in order to make any real impact. A public commitment by large companies to purchase palm oil only from certified sources will send a clear signal to producers on the ground. Failing to act may turn sustainable palm oil into a pipe dream.” And sadly, a pipe dream it remains.

Waking the dead for Disneyland

This one is for those of you who live in the more privileged part of the world such as the US or the UK or France or other developed European nations. How would you react to the idea of digging up your family graves in order to make way for a Disneyland? And getting paid $60 per grave you dig up to move the remains of your deceased family member to some other place? No, you will not be given a choice of staying put. There will be a deadline by which you must move the dead to a new abode- heavenly or not. If you don't, you are a dead duck. You lose $60. And may lose the last remains of your beloved as the government clears the grave.

Well, this is exactly what is happening in China. Chinese authorities want to move 1200 tombs from a cemetery in Shanghai which is part of the site where China's first Disneyland is to be built. The government wants the cemetery cleaned up before the construction begins. The local municipal authorities are offering $60 compensation for relocating each tomb elsewhere.

The family members are not happy. There dead may already be turning in their graves. After all, the Chinese don't like to disturb their sleeping ancestors. I don't know who does. The Chinese belief is that if you don't ensure your ancestors are resting in peace, their ghosts will bring misfortune on the generations to come.

The question is: how is Disney viewing the issue? Do they think this is a grave matter?

Otto raises the bar for retailers

A new model for producing clothing responsibly is taking shape in Bangladesh. Germany's Otto Group, the world's largest mail order company, has partnered with Nobel Laureate Muhammad Yunus' Grameen Trust to set-up "the factory of the future."

Otto and Grameen have formed a joint-venture to establish Otto Grameen Textile Company in Dhaka, Bangladesh. The factory will produce clothing for export under socially and ecologically sustainable conditions, according to Otto.

Otto is providing interest-free loan for the project to cover the cost of setting up and running the factory. The loan will be paid back in 10-15 years from the profits of the factory. The factory will initially hire 500-700 workers with plans to expand in phase-two.

The company says that the profits will not be distributed to shareholders. The profits will serve to expand and modernise the company, and to pursue social objectives locally. The earnings will be used to offer healthy lunch for workers, set-up daycare centres for workers' children, and launch educational and health care initiatives for workers and their families.

On the environmental front, the factory will be carbon neutral. The company says that the ecologically-optimised, CO2 neutral building will be fitted with the most up-to-date insulation, energy-saving lighting and optimised air-conditioning systems, paying special attention to the use of renewable energies.

Dr. Michael Otto, Chairman of the Supervisory Board of the Otto Group says: "The Grameen Otto Textile Company will show that it really is possible to reconcile ecological and social criteria with economic goals. It should become a model for textile production in Bangladesh and for similar factories all around the world."

The plan includes expanding the number of factories across Bangladesh over time and even spread to other countries.

What Otto has committed to do is revolutionary and sets a new benchmark for retail brands who often don't do more than lip service when it comes to the welfare of workers and their families. The big question is: will socially conscious customers flock to stand behind Otto?

Kraft Foods transportation sustainability initiative

Kraft Foods is one of those companies which pursues ambitious sustainability goals rather quietly. As a result, the company's path-breaking initiatives often go unnoticed by the CSR media. I therefore decided to write a bit about their sustainability programme on this blog.

In one of the key initiatives, the company has eliminated more than 50 million truck miles since 2005 through transportation sustainability efforts.

Here are some of the things the company has done:

• In North America, the company saved more than 1.5 million km, replaced 10,000 truck shipments and reduced 2,000 tons of CO2 emissions by shipping wheat via waterways to its Toledo, Ohio, flour mill. Now, ships make bigger deliveries less frequently.
• In Brazil, employees saved nearly 390,000 miles and reduced 300 tons of CO2 emissions by using boats to send products to distribution centers. In just six months, the change saved more than 125 truck shipments.
• In Germany, the company transports coffee beans from Bremen to its Berlin roasting plant, saving about 2.8 million km and eliminating 2,300 tons of CO2 emissions. And the project took 7,000 trucks off the road.
• In Austria, it saved more than nearly 250,000 km by sending products in refrigerated containers on rail cars, eliminating 400 truck shipments and reducing 250tons of CO2 emissions.
• In the United Kingdom, the company now sends products to one of its key customers by train instead of truck, saving more than 70,000 km and eliminating 120 truck shipments.
• In Europe, the company is modernizing its transportation network by establishing a single hub in Bratislava, Slovakia to make 20 percent fewer trips between its European plants and distribution centers. And in the Philippines, the company now uses a national distribution center so customers receive shipments 20 percent faster than before, saving miles and fuel.
• In North America, it has purchased 11 hybrid direct store delivery vehicles for frozen products. The hybrid power train and electric refrigeration technology use up to 30 percent less fuel than a traditional truck.
• And in Mexico, the company has pioneered a double-decker transport system that allows trucks to safely carry up to 56 pallets in one load – twice as many as before.
  

More on Kraft Foods sustainability initiatives here.

Source: Kraft Foods

Amazing Disg-Race

I was appalled to see the contestants of the current season of the Amazing Race, a reality TV show, sitting in the middle of mountains of electronic waste in a tiny scrap shop in Vietnam and using bare hands to dismantle electronic waste items looking for the clue which was hidden inside one of the waste items. Once they found the clue, they hurried out of the shop to their next destination, leaving behind heaps of torn apart pieces of electronics on the uncemented dusty floor. The shopkeeper, obviously dazzled by being under the spotlight, proudly watching over with the family which included children!

Showing electronic waste piles in dingy shops in the narrow lanes of Vietnam must have sounded a sexy idea to the producers of the show. After all, they can't find such exotic locations in western Europe or the US where electronic waste is strictly regulated!

Developing and poor countries, including many in Asia, are being used as dump yards for the developed nations' electronic waste. We all know that. Unsuspecting communities in the host nations are becoming victims of toxins released from electronic waste. Some of these toxins are deadly such as lead, cadmium, beryllium and mercury.

The toxic materials are released when local operators exploit valuable metals from the electronics scrap using crude methods. These include burning in the open, disassembling electronic gadgets with bare hands to extract precious metals, and dumping the left-overs on public lands which then may be sent to landfills with the rest of the city garbage. This lays ground for the poisoning of water and soil for future generations as well.

Wondering if the folks behind The Amazing Race show have any clue to sustainability or basic environmental responsibility.

Garments Without Guilt don't fit in with retailers' conscience

Sri Lanka is a small island nation in the Indian sub-continent. The country's economy heavily relies on apparel exports. Sri Lanka has done well in the apparel sector even though it has to mostly rely on imported input including fabrics, machinery and other raw material. Good quality, cheap and disciplined workforce is the only significant resource available within the country. Then how the nation managed to do well?

To begin with, the government worked with the industry to ensure decent working conditions in garment factories. The industry itself paid early attention to improve productivity to off-set higher input costs resulting from the need to import almost everything to sew a garment. Sri Lanka has the highest productivity levels among Asian garment producing nations due to heavy investments in training over the years.

Early on, Sri Lankan factory owners realized that decent and comfortable working conditions contribute to increase in worker productivity. So, it's not uncommon to find centrally air-conditioned production floors in garment factories, something unheard of in other countries where only the owners or top managers have the privilege to sit in an airconditioned office.

Sri Lanka was also the first country where the garment industry openly embraced sustainability. So, the world's first eco-factory came up in Sri Lanka last year with support from Marks & Spencer. The success has inspired other factory owners to set-up green-factories and many are in the pipe-line.

In the same spirit, three years ago, Sri Lankan apparel industry came up with a great-looking idea to differentiate itself from other garment producing nations. It launched a path breaking scheme: Garments Without Guilt. The idea was to reassure retailers and consumers in the western markets that clothing in Sri Lanka was made in factories with decent working conditions and not in sweatshops. The local apparel industry wanted to position the country as a destination for ethical production; free from child labour and other abuses so common in several other garment producing countries.

A brilliant idea. Usually retailers drive the labour compliance programme through a social responsibility code of conduct and repetitive factory audits and monitoring. They often complain that the suppliers are slow to take the ownership. But Sri Lankan manufactures decided to change that and take the lead.

Over 130 factories -about 90% of all factories in the nation - agreed to participate in Garments Without Guilt scheme. They submitted themselves to an independent audit, to be conducted by SGS, of their factories for working conditions.

Then the industry approached multinational brands with a request to allow the participating factories to attach a Garments Without Guilt hand tag on the garments. Guess what? All retailers have turned down the request though they refuse to confess it publicly. Privately, they say that the scheme is problematic. If they allow such hand tag for garments from Sri Lanka, then what will consumers think of garments produced in other countries such as China but stocked in the same store? Since factory owners in other countries cannot guarantee guilt free garments, Sri Lanka cannot be allowed to claim guilt free products, is their logic. Ill conceived? Well, I will be happy to hear what you think.

A must read speech text by the Coke president

I stumbled across this wonderful speech by Muhtar Kent, the president of the Coca Cola Company, on sustainability and what companies can do to lead the world to a sustainable path. Though over a year old, the speech is worth reading (yes, text is available). Here.

Asian workers face HIV risk in Arab countries

A report by UNDP says that Asian women migrant workers in the Arab states face increasing HIV vulnerability. The report focuses on the working conditions of these workers in Bahrain, United Arab Emirates and Lebanon.

Every year, hundreds of thousands of migrant workers head to the Arab states from Asian countries mainly from Bangladesh, Sri Lanka, the Philippines and Pakistan. A significant majority of these are women. And a large number of them are employed as domestic workers. These women make a significant contribution to their home country's economy by sending remittances. For example, remittances from Filipinos working in the Arab States in 2007 amounted to $2.17 billion. In Bangladesh, migrant workers sent back close to $1.4 billion from Saudi Arabia and $637 million from the UAE. Current remittances by migrant workers from Sri Lanka amount to $3 billion.
The report says that despite this substantial contribution, migrant workers, especially women, often migrate under unsafe conditions, live in very difficult circumstances, and are targets of sexual exploitation and violence. "Unsafe migration, duress in the workplace, sexual exploitation (both in the home and host country), lack of legal coverage, and limited or no access to health and social services tend to make female migrants, especially in the domestic sector, particularly vulnerable to HIV," says the report.
And when these workers are tested positive for HIV in the host country, they are simply deported back to their home country. As a result, the number of HIV cases are rising in the Philippines, Bangladesh, Pakistan and Sri Lanka, which are otherwise low HIV prevalence countries. The report says that returning migrant workers often figure in the national HIV registry of these countries.
The report has recommended a number of steps that the host countries as well as the origin countries should take to prevent the abuse of migrant workers in general and spread of HIV in particular. If the Arab states don't take preventive measures to stop the abuse of foreign workers, they may see supply of cheap labour drying up in near future. For example, the Philippines has banned its workers from traveling to Iraq and Lebanon.
The origin countries need to take measures including bilateral agreements and education of their workers to prevent an HIV epidemic which can be catastrophic for their feeble economies.

Brands rally behind Cambodia

Leading US brands including Nike, Gap, Levi Strauss, JC Penney, Jones Apparel, Phillips Van- Heusen, Americal Eagle Outfitters and The Walt Disney Company have urged the US lawmakers in a jointly sent letter to quickly pass a legislation granting Cambodia immediate duty-free and quota-free access to the US market for all apparel products.
The letter says that US imports from Cambodia have dropped 30% this year as compared to 2008, resulting in the loss of tens of thousands of apparel jobs.
The US administration is already considering duty-free access to textile products from Least Developed Nations which include Cambodia. But brands say while they welcome such access for all the LDCs, Cambodia needs such assistance immediately. Brands also point to the ILO Better Factories Cambodia programme which has helped improve working conditions in apparel factories. Improvement in working conditions is likely to be a key requirement in the planned legislation to to grant duty free access to LDC countries.
Cambodia is one of the poorest nations in the world. But it's apparel factories are good examples of decent working conditions, thanks to the ILO programme. The question then is why these factories are not competitive enough to retain orders? Why have barnds reduced their orders from the country when they recognize the fact that factories in Cambodia have relatively better working conditions. What is then the incentive for factory owners to ensure better working conditions?
While brands' effort to pursuade the US lawmakers to agree to some immediate trade benefits for Cambodia is commendable, they must try to hold on to the country in the interim period. They should also actively participate, and invest, in improving productivity in Cambodian apparel factories. An improved productivity will reduce the cost of production and make the factories more competitive.

Fiji garment factories opposing wage hike, what are brands doing?

Garment factory owners in Fiji are asking the government to exempt the sector from the new wage order. They are complaining that the recent government order to raise mininum wages for workers is making their business uncompetitive. They say brands are moving their orders elsewhere as revised wages have increased the cost of production in Fiji. This has forced factory owners to retrench workers. They are threatening more lay offs and shut downs if the government does not back track on wage hike.
Fiji's Reserve Bank also recently reported that the garment exports from the country slipped in the first quarter.
The new wage order, which came into force on the 1st July, was originally scheduled to be implemented from the 1st January. But the labour ministry agreed to six months extension under pressure from business lobbies. The wage hike covers nine industries that include garment, security, printing, building, road transport, saw milling and retail. Even after the raise, garment workers will remain the lowest paid in the country.
A large number of garment factories in Fiji are owned by suppliers from Australia and New Zeland who took advantage of massive tax incentives in the early 1990s offered by the local government to boost foreign investment.
Workers in the garment and security industries are the lowest paid in Fiji. Wages in Fiji's garment industry have comparatively remained low since early days. Currently, average wage of a garment worker in Fiji is below the national poverty line. The new wage rate of $1.38 per hour is significantly lower than other sectors. Compare this with the mining sector which will be paying $2.57 per hour for unskilled workers under new wage order.
Last month, the labour ministry launched an investigation into complaints that most garment factory owners were not complying with the new wage order.
The question is what should brands do in this situation? Should they leave the country and move orders to cheaper destinations? What stand should they take when their suppliers are lobbying with the government to keep the wages low? Suppliers cannot pay higher wages if brands are not willing to pay higher price. And why should brands pay a higher price when suppliers in Bangladesh, for example, are willing to offer much lower price for the same garment?

New book on CSR stories from Singapore

A new book containing a collection of 10 Corporate Social Responsibility case studies from Singapore - I am a co-author - will be launched by the Minister of Manpower Mr. Gan Kim Yong during the inaugural session of International Singapore Compact CSR Summit on the 6th Oct, 2009. The event is organized by Singapore Compact, a tri-partite national forum to promote Global Compact principles among Singapore businesses.

Published by Marshall Cavendish, CSR For Sustainability And Success is the first book on local CSR case studies in Asia. CSR initiatives of ten companies have been described in the book. Most of these companies are local and Singapore headquartered such as telecom firm Singtel, union-run co-operative retailer Fairprice, utility company Power Seraya, real estate developer City Developments Ltd, utilities and marine group Sembcorp Industries and food and health supplements manufacturer Cerebos. Among the multinational companies operating in Singapore and included in the book are the Swiss cement and building materials supplier Holcim, India's Tata Steel's local subsidiary NatSteel, US banking giant Citibank and energy major Shell.

The last session of the CSR conference on the 7th Oct is dedicated to a panel discussion about the lessons from the case studies.

After the launch, the book will be available in all book stores. CSR Summit delegates will receive the book during the conference.

How to embed Corporate Responsibility across your company

A common problem that companies face is that their corporate responsibility intentions do not trickle down the organization. Functional departments do not understand how their company's CR initiatives strengthen their own performance and how these contribute to overall business goals. As a result, even key managers perceive CR as a public relations exercise. Even worse, many employees may perceive CR programmes as wasteful if they do not understand how CR goals are aligned with their business goals.

CR professionals know this. But embedding CR across the organization is a complex and time consuming task. No wonder many either do not know how to go about it or simply do not have the resources and mandate to do it.

A new guide by Ethical Corporation on How to Embed Corporate Responsibility Across Different Parts of Your Company provides useful tools for those who wish to see CR truly embded across the organisation. Here is more..

Mindless consumption of mobile phones

My current mobile phone is only the fourth phone I have owned in the last 15 years. And this phone still does its job very well. I don't see why I should change my phone. But my 12 year old does not share the view. He already owns his fourth mobile phone and looking forward to the fifth one next month. He is already cribbing that his is the most old-fashioned phone in his group of friends. Everytime a new mobile is launched and backed by sexy advertising, he and millions others like him, want to throw their otherwise perfect phones and buy a new one. Just to stay with the fashion! It's obvious that the old phones are dumped in poor countries or simply trashed adding to landfils.
I don't see any attempt by mobile phone manufacturers (and why should they?) or telecommunication service providers to promote a responsible consumption of mobile phones.

Ethical Corporation online debate on mobile companies and climate change

Ethical Corporation magazine is organizing a live online debate on how mobile companies can enable a low carbon economy. The first session begins in a few minutes with two more sessions today to accomodate different time zones.
The debate is triggered by a new report Carbon Connections: Qualtifying mobile's role in tackling climate change. The debate will be moderated by Toby Webb, founder and managing director of Ethical Corporation, Simon Propper, Managing Director, Context Group and Pam Muckosy, Head of Research, Ethical Corporation. Speakers are from Vodafone, SAP and the Climate Group.
Join the debate if you are interested here

India trying to soften environment rules?

"Calling the Bluff: Revealing the state of Monitoring and Compliance of Environmental Clearance Conditions" is a new report on how the Indian government is rushing to soften environmental rules for project developers.

Kalpavriksha says the Ministry of Environment and Forests (MoEF) is on the verge of deciding on whether to grant a self certification option to project proponents so that project expansion and modernization proposals can be exempt from seeking environment clearances. This is one of the major amendments proposed to the Environment Impact Assessment (EIA) notification, 2006 which delineates a legal process for the grant of environment clearances to industrial and infrastructure projects.

The report includes examples and statistics on how the government agencies have failed in the past in enforcing compliance. Some of the points are:

• Ministry of Environment and Forests (MoEF) clears 80-100 projects every month with a range of environment and social conditions.
• At present MoEF has over 6000 projects to monitor through 6 regional offices and a staff of 2-4 officers per office for the task.
• Projects granted environment clearance are monitored once in 3 to 4 years.
• No centralized record of non-compliance is maintained by the MoEF
• Less than 50% of the projects cleared in 2003 had monitoring reports generated by the MoEF
• Only 150 of the 223 projects cleared in the year 2003 had atleast one compliance report submitted by project authorities.

The NGO says that Despite the dismal state of compliance, the MoEF continues to propose amendments such as the latest one rather than address the fundamental problems of impact assessment as a science and as a process of decision-making.

Development at any cost may sound appealing to some, it is definitely not sustainable and not a wise one.

A new report on understanding and preventing greenwash

A new report by BSR and Futerra says that a framework that incorporates impact, alignment, and communication can help companies stop greenwash and begin using effective environmental communications. Download the report here.

Hide and Bill, Time to Change the Ugly Box

Minimizing electricity consumption is one of the simple ways people can contribute to climate change mitigation. But the location and design of electric meters don't help. For strange reasons, electric meters are hidden somewhere far away from the users' eyes. And why not? That is where they serve the power producing and distribution companies best. Hide and bill!

The time has come that we innovate a green electric meter. Some of the features in the new meter should include: Good designs so that it can be installed inside the house/offices (the current ones are really ugly), Large display of meter reading with illumination (we want to be able to see it even in the dark), provision to set limit-alarms for various appliances/electric points, provision to set a total cap on the electricity that can be consumed (the system will shut off the suppy when the cap is breached) and show the total amount ($$) spent as well (showing only the units consumed is not good enough).

The question is why power producers and suppliers will do this which will potentially shrink their sales? Fair enough. Then governments should legislate requiring installation of such meters. Civil society too can campaign for such a legislation.

Smart electricity companies should pre-empt legislation and civil society campaigns by taking a voluntary action.

The New Normal for Innovation, Technology and Leadership

I will be moderating an upcoming conference "The New Normal for Innovation, Technology and Leadership" in Singapore on Nov 16-17 this year. Here is what the conference invitation says:

"The global financial crisis is a teachable event, one that is going to result in a NEW NORMAL for everyone. The NEW NORMAL will require new skill sets, including understanding advanced critical thinking, sustainable solutions and how to make your technology spend an investment, rather than a liability. Becoming not just a player but a thought leader in the new epoch arising out of the financial crisis will require leadership based upon tomorrow’s metrics of success, not today’s. Is your organization positioned to capitalize on the opportunities that will emerge as the world recovers from the global financial crisis?

The NEW NORMAL in Innovation, Technology and Leadership is designed to provide valuable knowledge and insight enabling you to be not only ready when the economy recovers, but emerge as tomorrow's leaders. To gain the most from this series, participants will be expected to undertake preparation works and during the event, will be involved in hands-on activities to test their present strategies and develop new ways of engaging and doing business; to take back to their organization. Delegates will be given the opportunities to interact one-on-one with the invited speakers and moderators.

Bring your 2010 business plan, but be prepared to tear it up and start again with your newly acquired knowledge of the coming norms."

For more information and/or registration, go here

CSR Social Evening, Singapore

Here is an invitation from Singapore Compact:

"Singapore Compact is pleased to invite you to attend CSR Social Evening on 2 July 2009 (Thursday), 6pm-8.30 pm, the venue is at Union Square (Amara Shopping Centre), and drinks are available at low prices and foods will be provided.

Please circulate this among your colleagues and friends and we encourage you to bring someone along. They need not be the members of Singapore Compact. We look forward to see you at the networking event."

Hope you can make it to this great monthly networking gathering of CSR folks in Singapore.

Shell pays millions to settle human rights lawsuit

The oil giant Shell has avoided a potentially embarassing court proceeding by agreeing to pay $15.5 million to settle a lawsuit alleging complicity in murder, torture and other abuses by Nigeria's former military government.
The settlement comes after a more than decade-long legal battle by relatives of Nigerian writer and activist Ken Saro-Wiwa and others executed in 1995 after trial in a military court. Saro-Wiwa was leading a non-violent protest against Shell accusing the company for environmental destruction and abuses of the Ogoni people.
The lawsuit brought by US-based human rights lawyers and activists on behlaf of the victims' families said the repression of activists by the then military rulers of Nigeria was backed by Shell.
The lawyers used a relatively unknown US law called Alien Tort Claims Act, 1789 which allows non-U.S. citizens to file suits in U.S. courts for international human rights violations, and the Torture Victim Protection Act, under which individuals can seek damages in the U.S. for torture or extrajudicial killing, regardless of where the violations take place.
Shell denies all accusations and says it decided to settle the case on humanitarian grounds. The company said: "While we were prepared to go to court to clear our name, we believe the right way forward is to focus on the future for Ogoni people. We believe this settlement will assist the process of reconciliation and peace in Ogoni land, which is our primary concern."
The settlement however is likely to encourage many more such lawsuits against multinational companies which operate in countries ruled by repressive regimes.

A full story on the Shell saga is in the current issue of Ethical Corporation magazine here.

BT's philanthropy project for China

Britain's telecommunications giant BT has collaborated with Unicef to bring technology to schools in the rural China.

The initiative, launched two weeks ago, aims at providing computers, internet access, multi-media projectors and other educational materials in up to 40 rural schools which are under-resourced and have severely limited access to modern teaching aids and equipment.
BT says it is investing £500,000 (RMB5 million) to benefit up to 6,000 students and 1,700 teachers across four provinces - Qinghai, Ningxia, Yunnan and Jiangxi - where there are high-levels of digital exclusion.

The initiative represents the third phase of BT and UNICEF’s Inspiring Young Minds programme, a £1.5 million global development partnership designed to bring education, technology and communication skills to children from disadvantaged backgrounds in South Africa, Brazil and China.

A press release by BT states that activities supported by BT will include establishing an online learning community to enable teachers to explore information from the internet, to learn from each other and to share teaching resources. Training in computer skills and how to develop innovative teaching methods using information technology will be provided to 40 per cent of teachers in project schools.

I recently wrote an article in Ethical Corporation magazine about how BT conducts its corporate social responsibility in Asia. Read the full story here.

Nigeria plans CSR Tax

The Nigerian government's decision to introduce a CSR Tax is being opposed by business groups. The government is considering a CSR bill which proposes a levy of 3.5% on gross profits.
The proposal also includes setting up a CSR Commission which will supervise CSR programs, prepare a CSR ranking of companies, develop standards, engage in research and development and international trade talks involving social responsibility.

Business groups are worried that the new tax will increase the cost of doing business in the country. The president of Lagos Chamber of Commerce and Industries has said that CSR is not an issue for legislation, but for voluntary action by companies.

But their critics say that companies in Nigeria have not voluntarily adopted CSR and a legislation is the only way to make them do their part toward society. Even those few companies which have done something in the name of CSR have restricted their activities to mere charity.

There is a growing trend among governments of developing countries to slap "CSR Tax". A couple of years ago, Indonesia introduced a law asking companies in environmentally sensitive industries to pay 5% environment tax. India imposed a 2% education levy on top of income tax a few years ago saying the money will be used on beefing up the country's educational infrastructure.

If companies wish to avoid CSR legislations, they need to take a convincing voluntary action. And their CSR program should be broadbased and aligned with business operations.

Why US companies don't invest in Africa

The corporate America has so far given a cold shoulder to Africa when it comes to investing. Asia remains a choice destination for the foreign direct investment by US companies.

Africa is the most poor and underdeveloped continent. With one billion people, it accounts for 14% of the world's population. Still the region's share of the global foreign direct investment is only 2.2% as against Asia's 17.3%.

A new survey report by a consulting firm Baird's CMC and the US Chamber of Commerce says that US companies are now taking interest in Africa but African governments needs to build a favorable environment in order to attract investment from foreign companies. The report is based on behind closed door interviews with senior executives of 30 top multinational companies.

The survey points to the following main reasons why US companies don't consider Africa an attractive investment destination:

• a week rule of law
• The middle class is not large enough (who will buy our goods?)
• Political instability in the region
• Corruption
• Prohibitive taxes
• Poor transportaion and communcation structure
• Insufficient trained human resource

The African countries that hold most interest are South Africa and some countries in the North, like Egypt; there are also some pockets of interest in West Africa, most notably Ghana, Nigeria and to some extent Angola; while some in the South (Botswana and Mozambique) and East (Uganda and Kenya), are also being watched.

According to the survey, US companies would consider investing in Africa if the African governments took the following steps:

• Invest in education , health and infrastructure
• Ensure the rule of law and a business-friendly climate for all investing companies
• Show it is serious about attracting foreign investment
• Market itself as aggressively as other regions of the world
• Demonstrate opportunity cost of not investing

The US buisness wish-list for Africa includes:

• Invest in the health and education of the African people to create a large pool of
  skilled and productive human resources.
• Invest in and maintain infrastructure—transportation, communications, electricity, and
  security—so that there will be a reliable society in which to operate.
• Build a functioning legal system to ensure the rule of law, transparency, and fair play.
• Create a positive climate for foreign investments by reducing bureaucratic processes,
  eliminating corruption, and reforming tax systems, irrespective of country of origin.
• Ensure stable political environments—that may or may not be based on
  western democratic principles—that work toward the common good of all
  stakeholders in society.

The problem is that most African countries don't have the resources and/or political will to take these steps. But the question is whether multinational companies are doing everything they can to find ways to invest in Africa. African communities may be poor. But smart companies can innovate to develop products and services that can be sold to poor people while uplifting their socio-economic lot in the process. This, then can lead to the creation of a swelling middle class which in turn can bring in higher profits.
The bigger question is whether large multinational companies can legitimately call themselves socially responsible by not investing in a region where communities really need them.

CSR Social Evening, June 09

Singapore Compact's CSR Social Evening will be held on the 4th June (Thu). The venue will be at the Union Square (Amara Shopping Centre). Drinks are available at low prices and some food will be provided. The networking event is open for all. Just walk in if you have interest in CSR and would like to meet up with CSR folks.
CSR Social Evening is an informal opportunity for CSR professionals and enthusiasts to network.

More MPs with criminal record in Indian parliament

Indian parliament now has the highest ever number of MPs with criminal background. In the just concluded parliamentary elections, 153 candidates with criminal charges against them have made it to the lower house. This is up from 128 candidates with criminal background who won in the last elections held in 2004.

According to a report by a non-profit organization National Election Watch, 73 out of the total 153 tainted MPs who won this year have serious criminal charges being investigated against them. This number is also up from 55 in 2004.

The largest opposition party BJP has the highest- 43 MPs- who have criminal investigations pending, followed by the ruling Congress party which has 41 MPs with criminal charges.

The only silverlining is that 26 candidates with a criminal record lost in this year's elections. Most of them were either sitting MPs or were former MPs. Partly, this was a result of a natiowide campaign by National Election Watch asking voters to reject dubious candidates.

An increasing number of MPs with criminal record is not a good sign for Indian businesses and economy. These criminal-politicians will breed even more potent corruption and undermine the rule of law. Unfortunately, corrupt companies will be able to find more friends among the lawmakers to influence government contracts while those companies which prefer to run a clean business will be at a disadvantage. More MPs with criminal histories will also mean more businesses receiving more extortion calls.

Complexities of handling corruption in Asia

Suicide committed by South Korea's former president Roh Moo-hyun points to socio-political complexities involved in addressing high-level corruption in Asia. Roh, who was being tried, and was facing a potential arrest over bribery charges, has suddenly become a national hero garnering sympathy from the man on the street.
Roh's suicidal death has created nationwide waves of anger among the opposition parties and Roh's supporters. They are blaming the conservative government headed by president Lee Myung-bak for Roh's death. They say that the government treated Roh harshly which pushed him to commit suicide.
Roh had won the presidency in 2002 on the promised agenda of cleaning up the government of corruption. In fact, he later took pride in claiming that his government was one of the cleanest in South Korea's history.
But he lost elections to Lee last year and himself came under investigations for bribery. Damaging details of the investigation were fed in to the local media on daily basis. The local media, which operates like a powerful cartel, has little regard for the former president as he unsuccessfully tried to break media cartels during his reign.
The result was a total loss of face for Roh. Found guilty of corruption, his brother is already serving a jail term. His other family members, including his wife, are under investigation. In fact, earlier this year, Roh publicly apologised for his involvement in a bribery case.
The loss of face is the most terrible thing to happen to someone in Asia. Roh perhaps found the humiliation too much to live with. And decided to end his life.
Now the tables have been turned. The backlash against the current administration is so threatening that President Lee's government is planning a state funeral for Roh in an attempt to control damage from anti-government protests.
In Asia, high-level corruption invariably involves high-level politicians and bureacrates. Many of these politicians belong to powerful political dynasties. They enjoy unprecedented privileges and luxuries of life. South Korea's powerful business heads, called Chaebols, are usually at the centre of large corruption scandals. Regulators rarely touch these big-wigs, irrespective of who is in power. But when any administration does so, the issue can transform into a socio-political crisis as is happening in South Korea.

Governments worried over ISO 26000

Some governments, including the US and China, are growing discomfort with the upcoming ISO 26000, a global standard on social responsibility.
An article in Ethical Corporation magazine says that "Most controversial is a proposal for text outlining a globally applicable set of minimum norms for organisational behaviour and setting a principle on how these should be applied. Most ISO 26000 participants believe this is necessary for the standard to reflect good practice in social responsibility. However, since the norms currently proposed draw on international laws in areas such as labour, environment and human rights, the guidance is threatening to countries whose national laws differ."
ISO 26000 has been in the making for quite some time and is expected to be rolled out in 2010. ISO 26000 will be a volunatry standard and thus will not be certifiable. In December 2008, the ISO circulated a draft ISO/CD 26000 Guiddance on Social Responsibility for comments.
Yesterday, the Working Group began its meeting in Quebec to consider the comments received on the draft guidance document. This meeting is likely to witness louder voices of concerns from the US, China and other governments which are worried by the prospects of a global standard on social responsibility.

The Code of Conduct Pandemonium

This feature in the current issue of Ethical Corporation magazine examines the confusion, cluatter and chaos in the market resulting from a multitude of voluntary sector initiatives in corporate responsibility.

And an entry on the UNGC blog rightly asks whether we need a code of codes?

What do you think? Is there a need to standardise the standards? Or, do we need a super standard- the mother of all standards?

New President for Singapore Compact

Singapore Compact for Corporate Social Responsibility has a new president. Ms. Olivia Lum, Group CEO and President of Hyflux Ltd has been elected as the new president for a 3 year term from 2009 to 2012. Ms Lum takes over from Ms. Claire Chiang, Senior Vice President, Banyan Tree Hotels and Resorts who was the first president of Singapore Compact.

Let's hope that Ms. Lum- the Water Queen of Singapore- will provide the much needed boost for CSR in Singapore.

Other members of management committee include Ms April Lee from SembCorp Industries, Mr Chan Tee Seng from SNCF and Mr Sean Tan from AUPE. Other members are Mr Seah Kian Peng from NTUC Fairprice, Mr John Lim from SID, Ms Esther An from CDL, Madam Halimah Yacob from NTUC, Ms Mavis Kuek from Shell, Mr Peter Heng from Singtel and Mr Koh Juan Kiat from SNEF. See annex for list of office holders and members in the new management committee.

A must read article on responsible business behavior

Thanks to Toby Webb, founder of Ethical Corporation for linking this brilliant 1998 time-defying article The Role of Business in Society by John Kay on his blog.

A must read. You will want to read it again and again!

Ethical Corporation's new-look website

Ethicalcorp.com, the world's leading resource on responsible business has a new all spruced-up website now. Neater, crispier and sharper. The new-look website has thousands of free articles, a free newsletter, and links to cutting edge conferences and research.

Ethical Corporation Podcast: April 2009 issue

In the April 2009 issue pubcast, Ethical Corporation's editors John Russell and Toby Webb, in Ethical Corporation's local pub, The Gramaphone, discuss some of the biggest ethical business stories in April 2009's issue of Ethical Corporation's print magazine. These include:

• GlaxoSmithKline and access to drugs
• BT in India
• CSR champions
• Social enterprise marketing

To download or listen to the pubcast, click here

Industry Dialogue on ISO /CD 26000- Social Responsibility

Spring Singapore is hoting an industry dialogue on ISO/CD 26000- Social Responsibility. The intent of the dialogue is to seek feedback on potential critical issues in this future international guidance standard that might potentially impact our industries.

Date: 5 May 2009, Tuesday
Time: 0900-1130
Venue: Training Room #09-05,
SPRING Singapore, 2 Bukit Merah Central, Singapore 159835
Fee: FREE

Deadline for registration: 28 April 2009, Tuesday


For registration, please contact Ms Christie Thong, (christie_thong@spring.gov.sg)

CSR Event: Seminar on CSR Trends in Europe

In partnership with SNEF, Singapore Compact will be organizing a seminar on ‘Emerging CSR Trends in Europe and Its Implications for Asia’.
Peter Brew, Director for Asia Pacific, International Business Leaders Forum will be sharing his insights on the CSR trends in Europe just before the world economic crisis and the business failures that had created the crisis. He will also examine some new business practices, in particular CSR practices, in the new economic landscape. He will explain how these new CSR practices will potentially affect Asia.

Date: 28 April 2009 (Tue)
Time: 3:30pm-5:30pm (registration starts at 3pm)
Venue: Level 22, Singapore Business Federation Seminar Room 1,
Keppel Towers, 10 Hoe Chiang Road
Fee: Free for SC and SNEF Members, Non-member rate: $30 nett


For registration, please contact Emily at 6827-6825 or email at info@csrsingapore.org

CSR Social Evening -May 2009

Singapore Compact's CSR Social Evening will be held on 6th May (Wed) instead of the usual first Thursday of the month. The venue will still be at the Union Square (Amara Shopping Centre). Drinks are available at low prices and food will be provided. The networking event is open for all. Just walk in if you have interest in CSR and would like to meet up with CSR folk.

Unfair contracts

Have you ever noticed how several businesses expect customers to sign one-sided contracts? These contracts leave the customer at the total mercy of the business. A large portion of such contracts is painfully devoted to explaining the rights of the business. The remaining part is dedicated to telling the customer that s/he has no rights whatsoever.

Then, to add insult to injury, the final clause will read something like this (taken from the terms & conditions of a famous tuition centre): "WE reserve the right to vary, modify, add or delete any of the above trems and conditions." Thus not leaving you in any doubt that you don't have any rights in dealing with this business entity.

And, if you point out such ridiculous contract clauses, the stock answer is: "This is our standard contract. Can not change. Company policy lah." What a standard! And some of them will have a look in their eyes which kind of says: "Accept this or get lost."

A contract by a 'reputed' car dealer which I saw vividly mentions penalties for the customer if s/he cancels the order. But, another clause made it clear that the dealer had unlimited rights to cancel the order without any notice and without any liability whatsoever.

A contract by a maid agency endlessly mentions the rights of the agency and the duties of the cutomer. Upon reading the contract, you will have no difficulty in understanding that if anything goes wrong, the agency will bear no responsibility.

The reasons are obvious. These contracts are drafted by lawyers who get paid by the businesses. Unsriprisingly, the lawyers will tend to protect their client while writing the contract rather than protecting the clients' customers. So, who protects the hapless customer then?

If you have come across such unilateral contracts shoved by businesses, please share.

The Future of Green Building in China

My most recent article published on www.climatechangecorp.com explores the Future of Green Building in China.

China’s green building demand is mainly driven by multinational companies - to achieve the country's energy saving targets local companies need to commit to green building standards too.

Nearly half of the world’s new building construction will be in China by 2015, estimates the World Bank. A forecast by McKinsey Global Institute last year said that China will build a massive 40 billion square feet floor area over the next 20 years adding up to 50,000 new skyscrapers. Energy consumption by buildings in China grew from 10% of the national total in 1970s to 20% in 2006 and is estimated to shoot up to 35% by 2020, according to a study by the Asia Business Council, an association of chief executives of companies with business interests in Asia.

Read the full story at: http://www.climatechangecorp.com/content.asp?ContentID=6023

Outsourcing jitters for JP Morgan

Americans are now outraged by the news that their banks are quitely shipping thousands of jobs overseas. The latest target is JP Morgan Chase. Press reports originating from India suggested that JP Morgan is working out a $400 million deal to outsource jobs to India. Interestingly, the US press did not get a whiff of the plan.

Reports have led over three dozen members of Congress to write to the bank to explain the outsouring plans. JP Morgan received $25 billion in bail out money from the TARP fund. The Congressmen have written in a joint letter to the bank that "“taxpayers of the United States of America contributed $25 billion to your company to help stabilize our economy – not send jobs overseas.”

Some bloggers were quick to call for all Americans to close their account with the bank. "Hello America!Its time to take a stand.If you really feel like you're being screwed by these big money boys, then quit whining,do something.If you have an account with chase, close it tomorrow.The only thing they understand is their bottom line.We need to let them know that enough is enough," wrote a blogger on http://columbus.bizjournals.com/.

Another blogger's posting said, "if the story is true, you, Chase, should be ashamed. Ashamed for considering outsourcing during these troubled economic times. Ashamed for letting the story get out from India, not the U.S. Shows me a total disregard for corporate etiquette and responsibility."

JP Morgan has not offered a comment on the matter so far.

What will be a responsible act in this situation? Should JP Morgan keep jobs in the US and forego cost savings from outsourcing? Failure to cut costs will make the bank's survival even more difficult. JP Morgan is a global bank. How should it deifne its stakeholders? Should it consider only Americans as its stakeholders, because it's headquartered in the US? Or should it consider a wider worldwide stakeholder base because it's a global bank?

Japanese Cars Race Ahead for World Green Car Award

After two years of German dominance, Japanese automakers have made an impressive comeback in the green car segment of the World Car Awards.

Mitsubishi iMiEV, Honda FCX Clarity and Toyota iQ have made it to the top three finalists for the coveted honour of The 2009 World Green Car Award announced. The awards are a program initiated by, organized by, and conducted by automotive journalists from all over the world. The awards will be given out at the New York International Auto Show on the 9th April, next month.

Honda Civic Hybrid was the first winner in 2006 when the awards started. The 2007 award went to Mecedez Benz E320 Bluetec and the last year's prize went to BMW 118d with Efficient Dynamics.

More at http://www.wcoty.com/media/?release=44&year=2009

Next CSR Social Eve on 2nd April

The first CSR Social Evening hosted by Singapore Compact on 5th march received an enthusiastic response from the CSR fraternity here. In attendance were over 40 participants from NGOs, unions, companies, academic institutions and consulting firms.

According to Singapore Compact, 'there was much networking and the feedback was good. Drinks were available at low prices and much food was provided. A number of attendees indicated that they will bring along others the next session.'

So expect a bigger gathering on the 2nd April, the next CSR Social Evening. At the same place: Union Square (The Amara Hotel Shopping Complex). The same time: 6pm.

The participants have access to drinks at discounted rates. A mug of draft beer or a pour of whiskey or a glass of wine goes for $5.35. There are a lot of other options, of course.

CSR Social Evening

Singapore Compact-the national tripartite body for CSR-is launching CSR Social Evening, a networking event which will take place on the first Thursday of every month begining 5th March, 2009.
Singapore Compact's new initiative meets a long felt need for a regular and independent forum where CSR practitioners, business leaders, academics and students can exchange ideas and network.
Participants need to buy their own drinks. But Singapore Compact has managed to get concessional rates for drinks for participants which is great!

Important details:
Venue: Union Square (The Amara Shopping Complex #02-05, 165 Tanjong Pagar Road)
Time: 6pm-8.30pm
Frequency: The first Thursday of every month.