Sexual harassment at workplace seminar

Association of Women for Action and Research (AWARE), a Singapore-based rights organisation, is organising a free seminar on "sexual harassment: protecting your organisation" on the 22nd April. The event is to launch AWARE's training programme for companies on sexual harassment.

The event is particularly useful for HR policy makers, corporate responsibility professionals, corporate counsels and anyone with an interest in the workplace harassment issue. For more details, see here.

Aware is the first women rights NGO in Singapore to have developed a workplace sexual harassment training programme for companies after several years of research.

In 2007 and 2008, AWARE conducted a survey of sexual harassment at the workplace. The NGO also gathered information about companies’ sexual harassment practices and policies, and recommendations on legal recourse for victims of workplace sexual harassment.

Key survey findings were:

-More than 50% of respondents said they had experienced some form of sexual harassment at their workplace.

-1 in 4 knew of people who had experienced some form of sexual harassment.

-Of those who experienced sexual harassment, 34% of women respondents and 19.2% of men respondents reported being harassed several times.

Singapore companies have shown remarkable reluctance to recognize that sexual harassment is a real issue that needs to be addressed by way of a firm policy and action.

AWARE's new training programme is an opportunity for all companies to make use of the training and introduce long overdue policy on sexual harassment.

NGOs ask IFC to improve standard of its standards

A group of 94 civil society organisations from 38 countries are demanding that the International Finance Corporation should strengthen its environment and social performance standards for loans given to private sector.

IFC, which is under pressure to improve its environmental and social performance standards for project financing, is currently reviewing the standards.

In a joint submission early this month, the civil society organisations describes that IFC's lack of transparency and supervision, failure to recognize human rights, and inadequate climate change policies, undermine IFC's ability to achieve its poverty alleviation mission.

The civil society letter points to a number of cases in which IFC-investments have had devastating impacts on local populations.

"IFC is becoming more like a commercial bank, but failing to incorporate lessons learned from the financial crisis in its lending practices. Standards for its clients are less clear, monitoring and supervision is reduced, and benefits to local communities and countries questionable. This is not how public money should be spent," Anne Perrault of the Center for International Environmental Law, a Washington D.C.-based legal advocacy organization, says.

The letter says that the recent financial crisis underscores the need to provide clear expectations and standards for private sector actors, as well as adequate transparency, due diligence, and oversight procedures to ensure that risks are assessed and addressed fully.

The letter then adds that the approach assumed by IFC in 2006, prior to the crisis, to introduce greater flexibility in IFC standards and to shift monitoring and supervision responsibilities to private sector clients, is clearly inconsistent with new hard-learned lessons about how to deal with financial risks and poses problems for securing strong development outcomes.

The NGOs have also slammed the IFC for approaching only the private sector for feedback on the effectiveness of the IFC environmental and social performance standards.

"The failure of IFC management to interview a single community for the report, despite the opportunity to do so provided by the 182 projects that have been under IFC’s supervision for over a year, is a strong indication that IFC is not, in practice, committed to ensuring that the Policy and Performance Standards are implemented effectively to protect communities and the environment, as intended," the letter says.

Key concerns raised by the organizations include those related to environmental and social due diligence and oversight; accountability; development outcomes; human rights; biodiversity; climate change; financial intermediaries; and disclosure of information.

I wrote a feature on responsible project finance in Ethical Corporation's current issue which investigates the project finance practices, including that of IFC, commercial banks and export credit organisations, and gaps in responsibility.

IFC's own credibility is at stake. It has a good opportunity, while it's reviewing the standards, to honestly consult the civil society organisations and carry out independent impact assessments of current and past IFC funded projects in order to realign the performance standards that truly meet its stated objectives; benefiting the local communities and the environment.

If your are interested in reading more about responsible finance, here is a good resource.

A new break for printer speeds

If you have to choose between Printer A which promises 16 ppm and Printer B that offers 24 ppm and both have the same price, which one will you buy assuming both are equally respectable brands? If you said "B", you may end up with a printer which actually has a ppm lower than 16.

Many consumers were not even aware that several printer manufacturers were fooling them all this while using the ppm trick.

An average printer customer, I include myself in that category, would generally look at the ppm or Page Per Minute speed of the printer for comparison between two makes. Common sense would dictate buying the one which offers the highest ppm so that you can print faster. And how did customers came to know about the term ppm?

Well, ppm was the term that all companies were, and are, using to advertise their printers. And there was a competition to outspeed the rivals by promising relatively higher speed. The trick was to state the "maximum ppm". How did they do this?

Simple. They defined their own page. So, if a manufacturer defined his "page" included only 15 lines and no images, his ppm would appear relatively higher. If another manufacurer decided to act more ethical and assumed that a typical real world A4 page would have a text of 25 lines and would include at least one chart or a graphic, their resulting ppm speed would appear lower. That would be a competitive disadvantage. This is how a ppm-war started among the printer brands.

But now there is a speedbreaker in the form of a new ISO standard on printing speed. The ISO/IEC 24734 standard defines the ppm and ipm (image per minute) for back and colour prints in a default single sided mode. The ISO standard allows customers to do an apple to apple comparison.

Cannon, Epson, Kodak, HP and Lexmark were the companies that worked with the International Standards Organisation to develop the standard. ISO ppm was finalized last year.

So, when you buy a printer next time, find out if the brand has signed up to ISO ppm and follows ISO ppm guidelines to state the real ppm.

Will Nestle budge?

A Greenpeace campaign is in full swing against Nestle on palm oil sourcing. Greenpeace has released a report "Caught Red-Handed: How Nestlé's Use of Palm Oil is Having a Devastating Impact on Rainforest, The Climate and Orang-utans," which says "Nestlé is using palm oil from destroyed Indonesian rainforests and peatlands in products like PowerBar, Nestlé Crunch Crisp, and Coffee Mate, pushing already endangered orangutans to the brink of extinction and accelerating climate change."

Will Greenpeace succeed in extracting a commitment from Nestle on sourcing sustainable palm oil the way they did against Unilever two years ago?

In early 2008, environmental campaigner Greenpeace targeted Unilever over unsustainable sourcing practices of palm oil. The dramatic campaign, in true Greenpeace style, saw activists dressed as Orangutans and making jungle noises descended on the offices of consumer goods giant Unilever. The campaign coincided with Greenpeace releasing a damning report "How Unilever suppliers are burning up Borneo.”

The campaign brought Unilever on their knees within days. A deal was stuck. And Unilever committed buying all its palm oil from certified sustainable sources by 2015. The consumer goods giant also promised to have all palm oil it uses in Europe from certified sustainable sources by 2012. See the complete report here that I wrote for Ethical Corporation magazine then.

Unilever has since taken a leadership role on moving toward sustainable palm oil. Nestle, another company named in the Greenpeace report then, watched from the fence. Until then, Nestle had not even joined the Roundtable on Sustainable Palm Oil, a multistakeholder forum to develop a certification scheme for sustainable palm oil.

After securing a commitment from Unilever, Greenpeace then said they would turn their attention to other companies, one by one. So now it is Nestle' turn, it seems. This time, Greenpeace is using the power of social media to attack Nestle.

While Unilever responded to the crisis with a certain grace, Nestle has adopted a hostile approach. Within hours, Nestle got YouTube to remove the video that Greenpeace had uploaded as part of the campaign. Greenpeace now accuses Nestle of censoring the campaign advertisement.

Nestle' actions will be closely watched in the coming days and weeks. Will they act by committing to sustainable palm oil? or will they create a reputation mess and offer new lessons in mismanaging a crisis?

A word with Prakash Sethi

"Prakash is one of those slightly hidden gems in corporate responsibility," wrote Toby Webb, the founding editor of Ethical Corporation magazine, on his blog last week, referring to Prakash Sethi.

Prakash is president of non-profit think-tank Sethi International Center for Corporate Accountability, Inc. and University Distinguished Professor at Zicklin School of Business, Baruch College/CUNY, New York. He is also advisor to a large number of international organisations and companies.

Toby says he recently spent almost a day with Prakash discussing corporate responsibility, taped a podcast on 'the business case for NGO accountability' and asked him to talk to the class he teaches.

A couple of months ago I had the opportunity to speak with Prakash over the phone for my feature on ethics of takeovers for Ethical Corporation. It was a lengthy conversation, mostly listening to his beautifully articulated and passionate views on the ethical issues involved in takeovers (Kraft's takeover bid for Cadbury was the trigger).

But the conversation left me frustrated. I had a limit of 2,000 words for the feature. I was tempted to include every word Prakash said in response to my questions- what he said was so powerful. But couldn't. If I did, I would have ended up writing a mini-book on takeovers. So I had to reluctantly settle to using only some of his quotes, something that space-constrained mag writers often are forced to do. I haven't apologized to him yet. What a pity!

So, don't miss this podcast with Prakash Sethi. He is a rare thought leader on responsible business.

Indian companies should act on gender diversity

The upper house of Indian parliament has passed the historic Women's Bill which aims to reserve 33% of the seats in the parliament and state legislatures for women. People with any sanity should welcome this. And those who tried to stop the bill should be condemned.

It has taken over 10 years for the bill to reach this landmark no thanks to protests by male-dominated political parties. Now the bill needs to be passed by the lower house before it is sent to the president for signing into a law.

Ruling Congress party and the main opposition party BJP as well as the leftist parties supported the bill. Most likely the bill will see through the lower house.

India already has such quota for women in village councils which has improved the governance of these councils. But women in India face severe discrimination in other spheres of life. Last year, India ranked the 114th among the 134 countries in The Global Gender Gap Index computed by the World Economic Forum.

What it means for businesses?

While politicians have taken the step to bring more women in the mainstream of governing the country, what are companies doing to improve gender equality? Women remain largely unrepresented in the middle and senior management in businesses in India, except, perhaps, in the IT outsourcing industry. Women are rarely included in the governing boards of Indian companies.

Once the Women's Bill becomes law, the focus will be on businesses to introduce policies to ensure gender diversity. With 33% of lawmakers being women, businesses will have to rethink their attitude toward women. Business groups will also need to develop new skills and managers for effectively lobbying with female lawmakers.

If companies don't take proactive measures to enhance gender equality and diversity across organisation and supply chains and vigorously protect women's rights, new women lawmakers may push for a regulation for a similar reservation for women in private employment.

Should companies wait for the government to pass a bill to ensure women are fairly represented in companies' management? Or should they voluntarily, and sincerely, start promoting gender equality and gender diversity at all levels in the company? The choice is theirs. We all know voluntary action is the smart thing to do.

Asia's economy rising but women falling behind

Asia Pacific is rapidly turning into an economic powerhouse with a vibrant growth story in spite of the global recession which has crippled the conventional economic powers in the west. But when it comes to the development of women and protecting their rights, Asia Pacific continues to be at the bottom of the pile, according to a new report by the UNDP.

The report titled Power Voice and Rights: A Turning Point for Gender Equality in Asia and the Pacific , says that discrimination and neglect are threatening women’s very survival in the Asia-Pacific region, where women suffer from some of the world’s lowest rates of political representation, employment and property ownership. Their lack of participation is also depressing economic growth.

The Report focuses on three key areas —economic power, political decision-making and legal rights— to analyse what holds women back, and how policies and attitudes can be changed to foster a climb toward gender equality. Asia, the Report asserts, is standing at a cross-road and by putting the right policies in place now, countries in the region can achieve positive change.

Some of the major challenges women face include lower pay than men for the same work, forced to accept lowly paid jobs that men don't want to undertake, widespread illiteracy, poor representation in politics and legislatures, shorter life expectancy, female infanticide, domestic violence, low ownership of property and inadequate laws to protect their rights.

The report recommends removing barriers to women’s ownership of assets, such as land; expanding paid employment; making migration safe and investing in high-quality education and health to address the problems women face in the region.

While the local governments have to accept much of the responsibility to actively promote the well-being of women and protect their rights, businesses too can play a significant role in the development of women.

Non-discrimination in employment, ensuring gender diversity, protection from sexual harassment, protecting rights of migrant women workers, reasonable maternity benefits, work-life balance policies, training and career growth opportunities and developing women managers are some of the things companies can do to contribute to the development of women.

At the community level, companies can consider actively investing in women education which in turn will ensure more number of educated women are available for jobs.

Apple Computers find labour violations in supply chain; sets new benchmark for disclosure

In its 2010 Supplier Responsibility Progress Report, Apple Computers has disclosed that their auditors continued to find serious labour violations in supplier factories around the world last year.

Apple audited 102 suppliers in 2009, up from 83 in 2008. Eighty of these were audited for the first time while the remaining 22 were repeat audits. The computer giant requires its suppliers to comply with the Apple Supplier Code of Conduct.

The report says: "In 2009, our audits identified 17 core violations: eight violations involving excessive recruitment fees; three cases where underage workers had been hired; three cases where our supplier contracted with noncertified vendors for hazardous waste disposal; and three cases of falsified records provided during the audit."

Then the report goes on to inform what remedial actions Apple has taken to correct these violations. For example, audit findings led to reimbursement of $2.2 million to foreign migrant workers who had paid the sum to middlemen in illegal recruitment fee over the past two years.

Apple's simple to read, and understand, annual report sets a new benchmark for reporting on supply chain responsibility. Something that fashion retailers have failed to do. And other electronics peers have not bothered to match.

Apple started paying attention to supply chain responsibility after several high profile cases were reported highlighting labour and human rights violations in its supplier factories in Asia. Though the electronics industry has introduced Electronics Industry Code of Conduct, a voluntary initiative, the uptake has been frustratingly slow.

While the mainstream media has taken interest in exposing bad working conditions in fashion retailers' supplier factories, electronics supply chain has generally remained off their radar. But Apple's report, as well as several other reports by activists, indicate that electronics supply chain potentially poses serious social and environmental risks which must be managed effectively by the brands to prevent reputational damage.

Here is an interesting report "Silicon Sweatshops" which alleges poor working conditions in supplier factories of some of the largest electronics brands.

Happy Holi!

To all my Indian readers, a VERY HAPPY AND COLORFUL HOLI! But please play with eco-friendly colors. Here is the environmental side of Holi.

To non-Indian readers, just in case you want to know more about Holi- the festival of colors-here is the link.

Human rights risk in Myanmar

A new report by human rights campaigner Amnesty International says that the government of Myanmar continues repression of political opponents, activists and ethical minorities. The report casts doubt if the elections in Myanmar later this year will be free and fair at all.

Myanmar has said it would be holding national and local elections this year, the first since 1990. But human rights campaigners say the country's military regime has embarked on repressing opponents to eliminate any potential challenge during the elections.

Myanmar's 50 million people suffer extreme poverty and lack of access to health care. The country had a dismal per capita GDP of $239 in 2007. About 35% of the population are ethnic groups who face greater threats from the military regime's repressive tactics.

The report authors want the Myanmar government to lift restrictions on rallies and political assemblies, release political prisoners, remove restrictions on media, and stop harassment of ethnic and religious minorities.

The report also asks China, India and ASEAN to press Myanmar to respect internationally agreed human rights principles. The report also recommends that China should conduct full human rights and environmental impact assessments of all Chinese investments in Myanmar, particularly with a view toward minimizing human rights violations of ethnic minority groups.

Thailand, India, China, Japan and the United Kingdom are the main destinations for Mynamar's exports. The country mainly imports from China, Singapore, Thailand, Republic of Korea and Malaysia.

Amnesty's new report suggests the companies hoping to enter Myanmar after this year's elections may need to use extra caution in assessing human rights risks in Myanmar.

Messing up, the Toyota way

World's number one car maker Toyota's handling of the crisis has produced a new case study that will be discussed in B-Schools and by corporate responsibility professionals for years to come.

When the company started receiving safety complaints from customers in the US last year, it decided to play it down. The company executives refused to accept that Toyota cars could have safety lapses. Arrogance? Soon there were fatal accidents involving Toyota cars, allegedly because of faulty brakes and accelerators. The company still did not budge.

Then the US Highway Safety Officials took up the matter with Toyota's US-based executives. Nothing happened. Then, the US officials even made a visit to Toyota's head office in Japan to convince the company that some of their models may have faulty components resulting in fatal accidents. After a lot of effort, the company decided to announce the first recall late last year. The US Transport Secretary called Toyota "a little safety deaf" referring to their feet dragging over the issue.

Even then, there was no clear statement from Toyota on the problems. Soon, more models were discovered having safety problems. More recalls followed, totalling to 8 million cars, roughly the same as the number of total cars sold by Toyota in 2009.

Somewhere, in between, the company attempted to imply that the problem lied with its American component supplier CTS Corp. But CTS promptly denied any responsibility by saying that it had produced the component exactly to the design and specification provided by Toyota.

Then, the company made an interesting decision. It decided to repair the faulty components rather than replacing them, apparently to save costs. There was customer outrage. The company was then forced to change its position and agree to replace the faulty components.

But no statement from the company management was forthcoming to reassure million of Toyota car owners worldwide. And then there was a statement by senior executives, not by the head of the organisation, that only cars in the US and Europe were affected. Customers in the rest of the world need not worry.

Very soon more models were added to the recall list affecting the entire world. Even Toyota Prius, the celebrated hybrid car, was added to the list.

While the company's recall list was growing by the weeks, no apology was forthcoming. Finally, after much PR disaster, the president of Toyota who is a grandson of Toyota's founder, called a press conference in Tokyo to publicly apologise. And when he did it, he did so in Japanese, even though all the affected customers were in the US and Europe. When a few journalists asked him to speak in English, he only offered a few broken words of English. Hardly a confidence inspiring gesture by the head of one of the world's largest companies who is trying to address customer concerns in the US and Europe.

The president appeared the second time to apologise within weeks after the Toyota Prius recall, mainly because this recall affected the Japanese customers as well. Before this, the company maintained that cars produced in Japan had no quality problems, a PR pitch implying that the company only had quality problems in overseas plants. In a way, saying that the employees and suppliers overseas are not able to meet the stringent quality parameters that the company maintains in its home country.

In his apology appearances, the company president tried his best to instill confidence. He asked customers to have faith in Toyota and believe that Toyota has customers at the centre of business model. Talking about the brake-failure problems in some of the models, he suggested that the driver should not panic if the brakes are not behaving. The driver, he advised, should continue to press the pedal and eventually the car WILL stop.

The US Congressmen want the Toyota president to attend a hearing in the Congress on the issue. This was a great opportunity for the company to honestly explain what had gone wrong and how they planned to fix it. But the company told the US Congress that the president is not available and can travel to the US only in April. The company instead offered to send some other executive for the hearing. This again attracted huge criticism, including by US politicians and Japan's transport minister. Finally, after some flip-flop, the president has agreed to attend the hearing. Wonder who are his PR advisers!

Even US president Barack Obama has issued a statement asking the company to fix its problems quickly. Perhaps, it's the first time that a US president has singled out a foreign company to express concerns.

It is being speculated that Toyota's recalls have not ended and there may be more recalls in the pipeline. There are also rumors that the company has been hiding the problems for a long time. Already, Toyota's sales figures have plunged. The stock price has crashed. The company is even considering closing down US plants for a few weeks to prevent an inventory pile up. It also faces potential law suits in the US, including class action, and penalties by the authorities. The company, which prided itself for quality superiority, is now a laughing stock.

There are people who say Toyota will eventually recover from the mess. But the company has not shared, or demonstrated in anyway, how it plans to come out of it. It is still trying to figure out how they landed into this mess in the first place. Most believe that ambition to become number one led to "growth at any cost" approach. And Toyota lost control over quality. Now they are losing market share, every hour.

So, the largest market share does not mean a company is sound and sustainable. The Toyota incident (or should we call it a scandal?) has also raised several new questions about the way the automobile industry operates. More on this later.

Disclosure: I drive a Toyota and I don't know if my car is safe.

American supplier let Toyota down

The world's largest carmaker Toyota (yes, they left GM behind in 2008) is in trouble in the US after some of its models were found to have faulty accelerator pedals. Last week, the problem forced Toyota to recall 2.1 million vehicles in the US market. The carmaker has also suspended sales of eight models in the US which used these pedals. It has halted production in five plants in the US for a week to fix the problem.

Last year, Totota had to recall 4.2 million vehicles due to a risk of pedals getting trapped in lose floor mats.

The interesting bit here is that the faulty accelerator pedals were produced by an Indiana-based US company called CTS Corp, a key supplier to Toyota since 2005. Wondering what would have been the reaction if the faulty part had been produced by a Chinese manufacturer in China? But as the fact of this case is, the crazy pedal (it tends to accelerate on its own!) was produced in the US by a US company. So, everyone is now blaming Toyota for quality and safety failure. See, this is what happens when you stop buying GM and run after the Japanese cars, they seem to be saying.

Toyota shares are down on stock markets and so are the stocks of its partner suppliers. While Toyota nurses its wounds, GM, Volkswagen and Honda Motors are likely to benefit.

A market growth at break neck speed may have caused quality lapses at Toyota. But now they have hit the speed breaker. This episode has only added to an already growing belief that quality of Japanese products is not the same what it used to be. Japanese companies will have to work harder to protect their image. Their market-share leadership will be short-lived if they ignore safety, quality, and business responsibility (yes, they are mostly laggards in CR).

McDonald's lawyers at it again

Another interesting episode of McDonald's lawyers going after someone who tries to use the prefix Mc. I came to know of this after Elainecohen's tweet this afternoon.
While McDonald's has the right to protect its brand and trademark from unscrupulous potential rivals, legal action against any and everyone who tries to use the prefix Mc even for things totally unrelated to burgers and fries may be called harassment.
But McDonald's lawyers are not always successful. For example, McDonald's was not lucky in Malaysia. A humble McCurry won the battle against McDonald's.

How to rile both Google and China with one click

A fake YouTube site created by a Chinese young man is challenging both Google and Chinese authorities. Interesting piece on The Christian Science Monitor "Want to rile Google as well as China? Create a fake YouTube site." That is some example of putting pirated intellectual property to some good use!

McDonald's Says "Sorry"

American fast food chain McDonald's has said sorry to Singapore for excluding the pig toy from its collection of 12 animals from the Chinese zodiac. The company apologised in an advertisement published in a prominent local newspaper and said the pig toy will be available soon for buying.

McDonald's had replaced the pig- one of the 12 animals in the Chinese zodiac- ostensibly out of respect to Muslims. Its outlets in Singapore are Halal Certified, meaning the food served is in compliance with the Islamic code. The company presumed -without consulting key stakeholders -that offering a pig toy will annoy its Muslim customers. But the gesture offended some Chinese customers who thought the pig was an integral part of their zodiac and should not be removed. Worse, McDonald's replaced the pig toy with a Cupid thinking that offering Cupid will make a great marketing move as the Valentine Day coincides with the Chinese New Year. Chinese customers were not pleased. They started writing letters to local newspapers and soon various social media forums were buzzing with criticism of the company. Finally, McDonald's realised it had bungled. And ended the controversy with a public apology. The right thing to do.

Companies can avoid making this kind of costly mistake by injecting corporate responsibility into the DNA of the organisation. Embedding corporate responsibility throughout the organisation can equip functional managers to think holistically when making choices or decisions. Corporate responsibility should not be run like a show by the PR guys who have no idea what corporate responsibility is. Going beyond writing cheques to charities or PR generating sponsorships takes more than spin skills. Hiring a competent CR professional may be the first important step companies serious about responsible business should consider. Commitment and support from the top executive and the board are of course pre-requisits.

Google's threat to China not surprising

Wondering why people are surprised by Google's threat to withdraw from China. Agreed, the open threat is unusual given their past feet dragging on privacy issues. But what Google has done now is very much what they committed to doing when they signed up the Global Network Initiative, a multi-stakeholder initiative launched in October 2008 to protect online freedom.

I wrote a feature in Ethical Corporation (Strategy & Management section, Sept 2009 issue) on GNI which is worth revisiting now to understand where Google is coming from and what future course of action it might consider. The feature mentioned examples of what Google, Microsoft and Yahoo (the three first companies which signed up) are doing to implement the GNI principles.

Also worth reading is GNI's statement on Google's new approach to China. The statement begins with "Google’s decision to reconsider its business in China is an indication of the tough choices information and communications technology companies face around the world where respect for human rights is at risk."

Vedanta not out of the woods yet

Vedanta is allegedly illegally constructing structures in the reserved forest area for bauxite minining in India. If true, this can be disastrous for their reputation. The company has not been given a license yet.

The environment and forestry minister says the mining license to Vedanta will be considered only if the company complies with the forest rules and respects the rights of local people.

Conc solar power can solve MENA's water woes

In recent decades,fast-growing demand for water in the Middle East and North Africa MENA)region has translated into a heavy reliance on seawater desalination plants. The resulting increase in energy consumption from fossil fuels is, simply put, unsustainable.

Compared to nuclear, concentrating solar power provides a more effective solution to resolving water, energy and environmental issues in the Middle East and North Africa region.

Read more here.

Chinese authors challenge Google

As an author, Google's arrogant assumption that they have the right to copy any author's work for free to their digital library (Google Books) worries me. Unsurprisingly, Google's action is being challenged everywhere.

In the latest case, Mian Mian, a famous Chinese author has sued Google for an alleged copyright infringement in a Beijing court. She has accused Google of illegally copying her novel Acid Lovers into their digital library. She is seeking $8000 in compensation.

Google is already under attack by the Chinese authors' association who are accusing the search giant of illegally adding hundreds of thousands of Chinese-written books to Google Books, a highly controversial digital library project.

Publishers and authors in the US, Germany, France and other countries have also objected to Google's plan to digitize millions of books for free. Google reached a settlement with the US authors in 2005 when it agreed to pay $125 million to resolve pending cases and agreed to pay part of the revenue to authors and publishers from advertising and sales resulting from their books included in Google Books.

This followed, last year, by a very controversial step by Google where it declared that it will unilaterally digitize books unless the respective authors decide to opt out. In other words, the onus lies on the author or publisher to opt out. If the author does not opt out, his/her book will be digitized by Google without consultation or permission. And Google went ahead with this plan devised by its lawyers.

China Written Works Copyrights Society, a non profit group for protecting authors' rights, has challenged Google's heavy handed approach to digitize books in this fashion. The Society wants Google to apologize and pay compensation for copying its members' books. Google has had multiple rounds of negotiations with the Society to resolve the matter, the latest meeting scheduled for coming Tuesday. If the Chinese group manages to force Google to pay compensation, that will encourage writers associations in other countries to sue and seek a rightful compensation.

Critics of Google's scheme say that rather than automatic Opt In, Google should have adopted an automatic Opt Out plan. In other words, it should not copy a book to its library unless it obtains a written Opt In from the author or the publisher, depending on who owns the copyright.

Google is not the only company which is using automatic Opt In trick to further its own cause. There is a growing trend among companies to use this as a short cut to shore up their profits and undermine the consumers or other stakeholders.

What is ethical way of doing it? What is the right thing to do? Automatic opt in OR automatic opt out?

McDonald's pig in a poke

An unfolding controversy involving McDonald's in Singapore indicates how important it is for multinational brands to have corporate responsibility managers with deep local insight on the ground.

McDonald's rolled out a promotion in the run up to the Chinese New Year, an important sales period for eateries.' The promotion included offering a collection of 12-character Doraemon set representing the animals of the Chinese zodiac calendar. A clever idea from the marketing perspective, indeed. Chinese love collecting the zodiac animal toys, especially during the Chinese New Year. McDonald's offered these collectibles at two dollars a piece if the customer buys a meal.

Somewhere in the middle of the campaign, Chinese consumers discovered that the collection had one animal missing- the pig. The collection would be incomplete without the pig. McDonald's had replaced the pig with a cupid. This upset the Chinese consumers. But McDonald's says it decided to exclude the pig to respect the sensitivities of its Muslim customers. All McDonald's outlets in Singapore are halal certified and the company thought offering a pig toy would be inappropriate.

But it seems McDonald's assumed a bit too much. It has now ended up annoying Chinese consumers. Local blogs and media reports are questioning McDonald's insensitivity toward the Chinese consumers. To make the matter worse, a number of media reports have quoted Muslim consumers and scholars who say there is nothing wrong with offering a pig toy in a halal certified outlet. After all, it's a toy, they explain.

McDonald's lack of cross-cultural understanding points to a common trend among multinational companies who often neglect to deploy corporate responsibility managers with local insight in Asia even though their significant growth comes from the region. Majority of them have left poorly-defined corporate social responsibility functions in the hands of public relations managers who don't view it beyond charitable giving or public relations gimmicks.

What McDonald's should have done was to engage with the Muslim community's leadership to discuss the promotion and the dilemma it faced. It should also have understood that an incomplete collection of zodiac toys will offend the Chinese customers. But an organization can think like this only if it has corporate responsibility drivers on the ground and principles of responsible business integrated into the day to day working of the organisation.

CSR Training Workshops

Here is the link to high quality CSR Training Workshops, launched by Ethical Corporation

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.