Business and Human Rights in a Time of Change (Christopher L. Avery, Nov. 1999)
7. Companies in the developing world: Projects promoting human rights
In 1996 and 1997 I travelled to South Africa, India, Thailand and the Philippines to look at what business is doing to promote development and human rights in the wider society. In each country I met with companies, development organisations and human rights organisations, and saw a number of the initiatives that were underway. My findings:
7.1 Varying track records
In each country I visited I found some very impressive business-supported projects promoting sustainable development, education, health, poverty alleviation, environmental protection, child welfare, women's issues, and civil/political rights. The best programmes I saw were aimed at helping people and communities become economically self-sufficient, rather than providing charity and creating dependency. Many of the best programmes were partnerships between companies and development organisations, human rights organisations, and/or local communities. Some of the better projects I saw, and others I did not see, are described in case examples presented in two books:
i) Business as Partners in Development: Creating wealth for countries, companies and communities, by Jane Nelson/The Prince of Wales Business Leaders Forum, in collaboration with The World Bank and The U.N. Development Programme;[495] and
ii) Foundations for a New Democracy: Corporate Social Investment in South Africa, by Myra Alperson.[496]
However, I also found that many companies are doing very little. One reason for the shortcomings is that corporate community programmes promoting development and human rights receive relatively little external scrutiny and therefore are given relatively low priority within many companies.
In some cases company community programmes have been criticised as misguided and ineffective. In South Africa the Mail and Guardian newspaper publishes once or twice a year a supplement entitled "Investing in the Future: Special Focus on Corporate Responsibility." Its October 1997 supplement highlighted some of the better community projects supported by South African companies, but also contained an article entitled "Corporate do-gooding 'suspect'",[497] written by Horst Kleinschmidt, Executive Director of the Kagiso Trust[498] (a large South African NGO which promotes grassroots development programmes). He wrote that he considers corporate social investment programmes in South Africa to be, in terms of their output and relevance to development, "in the main, inappropriate, inadequate and often thoroughly misguided":
First, it is my impression that South African corporates who have a CSI [corporate social investment] programme play their cards extremely close to their chests. Very often it is the chairman's (and I emphasise man in this connection, because he is a man and invariably a white man) domain to decide who will get what kind of support. The knowledge or understanding of the development needs of the recipients eludes him in general. Far too often this type of chairman is far more motivated by the publicity his company may attract, or the photo opportunity it may give him, than the real developmental need….
My greatest concern is that most corporates cannot distinguish between publicity for themselves, charity handouts and developmental objectives. The upshot is a mélange of confused thoughts, mixed with the desire to impress the government that they are doing something and hoping thus to stave off government's inclination to legislate what companies might do with their CSI contribution….
[W]hat eludes most corporates is any sense of commitment in their CSI. Most of it is cheque-book project support. The notion of involvement with a beneficiary community eludes most corporates. Where it exists it is mostly of a patronising kind. I have come across few companies that see their CSI as an encounter through which they learn about the environment in which they live and understand better the appalling gap between rich and poor in this country.
[A]ll CSI programmes that engage management and staff in a debate on the purpose and meaning of CSI and then proceed to outline what the company may be doing in relation to potential beneficiaries, begin to tackle the CSI debate seriously.[499]
Horst Kleinschmidt concluded that in South Africa the corporate sector, NGOs and the government need to engage with one another more closely "for the better exchange of ideas and experiences in the CSI and development field." In particular, he urged companies and NGOs to work as partners, rather than behaving "as though they are ships passing in the night, the one not aware of or caring about the other." He noted that this increased co-operation should not aim to "cajole anyone into one development straightjacket," but rather the "starting point should be: development is difficult and we all make mistakes. What are we learning in the process and what can we do to ensure that our collective effort, diverse as it is and will remain, contributes to real development and real reconstruction?"[500]
A 1999 book edited by the Federation of Indian Chambers of Commerce and Industry includes a chapter that recognises the achievements of company-supported social programmes in India, but also acknowledges shortcomings:
Though there is undoubtedly greater interest in becoming better corporate citizens, few companies take their commitment seriously enough to make an annual allocation, earmarking a defined percentage of their profits. Very few have a proper strategy and plan of work, and community betterment is yet to be integrated into mainstream operations. Companies have yet to professionalize their community betterment work, much of which suffers from ad hocism. And forming partnerships [with NGOs] is still an exception rather than a norm.[501]
There is a pressing need for sustained independent monitoring of this area of corporate performance, in order to give more public recognition to those companies that are making a meaningful contribution, and to provide an incentive for other companies to do likewise. Such monitoring should assess corporate programmes both quantitatively and qualitatively.
7.2 Organisations promoting business partnerships for development
Some of the best company-supported social projects are being facilitated by organisations that assist member companies to form partnerships with NGOs and communities, and that promote "best practice" aimed at ensuring projects are implemented effectively. These organisations include:
i) India: Partners in Change/ACTIONAID[502]
ii) India: Business Community Foundation (formerly India Business and Community Partnership)/The Prince of Wales Business Leaders Forum[503]
iii) Philippines: Philippine Business for Social Progress[504]
iv) South Africa: National Business Initiative[505]
v) Thailand: Thai Business Initiative in Rural Development[506]
7.3 Standards of good practice
The aforementioned publication Business as Partners in Development (see section 7.1), in a chapter entitled "Learning from 'good practice,'" sets forth and explains the following factors that have been crucial to the success of multi-stakeholder partnerships involving companies:
i) Clear and common goals based on mutual benefit;
ii) Role of intermediary leadership;
iii) Understanding and consulting beneficiaries and stakeholders;
iv) Clarity of roles and responsibilities;
v) Understanding resource needs and capacities;
vi) Communication;
vii) Evaluating and celebrating progress; and
viii) Continuous learning and adaptation.[507]
The Center for Corporate Community Relations at Boston College has published "The Standards of Excellence in Community Relations: Guiding Principles for Community Relations Practice," a set of benchmarks for corporations to use in developing their community programmes.[508]
As discussed in section 2.6, Oxfam has set forth six principles for accountable development derived from internationally-recognised human rights standards.[509]
In a 1999 issue of Harvard Business Review, Harvard Business School professor Rosabeth Moss Kanter discusses six characteristics of successful business-government and business-NGO partnerships aimed at addressing social issues: "a clear business agenda, strong partners committed to change, investment by both parties, rootedness in the user community, links to other community organizations, and a long-term commitment to sustain and replicate the results."[510]
7.4 Indigenous companies leading the way
I found that corporations with the most extensive and innovative programmes tended to be indigenous companies rather than multinationals from Western Europe or North America, though some of the multinational companies also have excellent projects underway.
7.5 Varying support for projects promoting civil and political rights
In South Africa and the Philippines a number of companies are willing to sponsor programmes aimed at promoting civil and political rights as well as economic, social and cultural rights. For example, in the Philippines the Ayala Foundation (the foundation of the Ayala Corporation) has backed an important initiative, the Barangay Human Rights Action Program.[511] Under this programme, the Ateneo Human Rights Center organises human rights experts to train local "human rights officers" who then help people at the grassroots level learn about and protect their civil, political, economic, social and cultural rights. The human rights officers also help resolve conflicts by mediation and conciliation. One component of the initiative is human rights training of the police. The programme is also supported by the national Commission on Human Rights and the Philippines Government. A joint statement by the President of Ayala Corporation and the Executive Director of the Ayala Foundation explained that Ayala considered this human rights project to be important because it is "a step in giving the poor better access to better justice."[512]
In India and Thailand many companies support ambitious development projects, but for various reasons they are somewhat reluctant to support programmes promoting civil and political rights. There are signs that this may be slowly changing, for example in Thailand several corporations are now sponsoring Pollwatch, the respected independent organisation working to ensure fair elections and to stop vote-buying by politicians.
7.6 Non-governmental organisations' attitudes towards working with business
The vast majority of the development and human rights organisations I met in the four countries were either already working in partnership with companies in some of their projects, or were eager to do so. Partly this is a matter of economic survival, because in a country like South Africa aid to NGOs from Europe and North America has been drying up since the end of apartheid, and many of the most respected NGOs are struggling financially while they try to address overwhelming needs. Of course NGOs do insist on certain preconditions for working in partnership with a company on a project, to ensure that the project is not commercialised, and to ensure the company is committed to carrying out the project in a way that addresses the real needs of the beneficiaries. They also want to avoid working with a company that may be supporting a project with the aim of covering up its poor record of exploiting workers or damaging the environment. Several NGOs told me that under no circumstances would they work with the private sector, but these represented a relatively small proportion of a broad spectrum of NGOs I encountered.
7.7 Companies and the social agenda
Another issue of concern is whether companies involved in social programmes may try to take over the agenda or dilute the message. Companies do not have a democratic mandate to direct the social agenda, and are not subject to democratic accountability. While this risk needs to be borne in mind and guarded against, in the countries I visited the problem had not tended to arise much in practice, partly because NGOs and governments were aware of the risk, and partly because most companies recognised their limitations in the social arena and showed little eagerness to take control.
7.8 Globalisation: A threat to company-supported social development programmes?
An important question arose during my trip to India: How will globalisation impact the ambitious rural development projects sponsored by some Indian corporations? A case in point: Tata, India's largest industrial conglomerate, comprising about 85 companies.[513] Since its founding in the 1800s Tata has had a reputation for social responsibility, and its rural development projects reach thousands of villages throughout India, including isolated tribal communities. Some Tata companies have hired leading NGO experts in rural development to run their community programmes.
But Tata increasingly has to compete with multinationals coming into India, and many of those multinationals will not have the same commitment as Tata to social programmes aimed at the development of India. Drucker notes that "every knowledge organisation is of necessity non-national, non-community."[514] Lester Thurow agrees:
For the first time in human history, anything can be made anywhere and sold everywhere. In capitalistic economies that means making each component and performing each activity at the place on the globe where it can be most cheaply done and selling the resulting products or services wherever prices and profits are highest….Sentimental attachment to some geographic part of the world is not part of the system.[515]
Social critic Charles Derber noted recently: "The multinational corporation has become less geographically anchored than ever before, prospering with diminishing loyalty to individual workers, communities, and the nation-state itself."[516] Multinationals can move anywhere and won't necessarily feel any deep ties to the places where they locate their operations.
Will Tata be forced to cut back its rural development programmes because of increasing competition with multinationals? Will globalisation mean companies have to reduce their development and human rights programmes to the lowest common denominator? Or can a way be found to encourage multinationals coming into the Indian market to learn lessons from Tata in terms of their social contribution?