Wednesday, June 24, 2009

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.

Tuesday, June 09, 2009

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.

Sunday, June 07, 2009

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.

Monday, June 01, 2009

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.