●​ CORPORATE SOCIAL RESPONSIBILITY

-​ It is not about philanthropy or charitable work.

-​ It is about how companies take responsibility for their actions in the world at
large.
-​ Means different things to different people.
-​ Can be viewed as a comprehensive set of policies, practices, and programs, that
are integrated into business operations, supply chains, and decision making
processes.
-​ Not a legal obligation but rather a voluntary social and environmental positive
initiative to establish an image of environmentally and Socially Responsible
Business (SRB).
-​ Through CSR, enterprises are intent to strike a balance between economic and
social goals, where resources are used in a rational manner and social needs are
addressed responsibly.
-​ Can be viewed as a comprehensive set of policies, practices and programs that are
integrated into business operations, supply chains and decision making processes
throughout the company and include responsibilities for current and past actions
as well as adequate attention to future impacts.
-​ Most of the rising companies practice CSR to enhance the image and acceptability
in the community (Green Paper, 2001)
-​ CSR Watchdogs - individuals, organizations, or groups that monitor and evaluate
the corporate social responsibility (CSR) practices of companies. The role of CSR
watchdogs is to scrutinize the activities of companies to ensure they are adhering
to ethical standards, fulfilling their commitments to social and environmental
responsibility, and being transparent about their impacts.
-​ Labor unions
-​ Consumer groups
-​ Environmentalist
-​ NGOs
-​ Stakeholders

●​ CORPORATE SOCIAL RESPONSIBILITY IN A GLOBAL CONTEXT

○​ CSR AND DEVELOPING COUNTRIES
-​ The concept of CSR aims to examine the role of business in society and to
maximize the positive societal outcome of business activity
-​ National CSR agendas in middle and low-income countries have been less visible
internationally, and have not been labeled CSR. Over the past years, companies
and NGOs in these countries have adapted developed-country-driven CSR
agenda through greater direct engagement
-​ CSR movements and initiatives have emerged in countries such as China, India,
South Africa, Philippines and Brazil.
 -​In developing countries too, there is increasing recognition among companies
that a “one-size fits all” approach to CSR operations around the world is
ineffective.
○​ JUSTIFICATIONS FOR CSR
-​ Two broad sets of justification for public sector
-​ Defensive justification - relates to minimizing the potential adverse
effects of CSR on local communities, environments and markets when it
is imposed through international supply chains and investment
-​ Proactive justification - provided by the opportunity to increase the
domestic public benefits of CSR practices in economic, social and
environmental terms. It also increases the domestic public benefits of
CSR in economic, social, and environmental terms.
-​ Business to business standards - cost and benefit tend to not be equitably
distributed along value chains, with costs of private standards borne by producers
whereas benefit accrue to the retailer.
○​ POTENTIAL ROLES OF GOVERNMENTS IN THE CSR AGENDA
-​ Public sector engagement with CSR potentially spans social, economic, and
environmental spheres, including issues of corruption, poverty reduction and
human rights
-​ The goals of public sector engagement in CSR are likely to differ from country to
country since each country has its unique socioeconomic context, including
levels of economic development, income inequality, and social challenges. The
public sector's goals in CSR may be shaped by the specific needs and priorities of
the society it serves. For example, in developing countries, the focus may be on
poverty alleviation, education, and healthcare, while in developed countries,
issues like environmental sustainability and labor rights might take precedence.
-​ Potential trade-offs between social and environmental considerations may
increase the likelihood of success of corporate contribution to national
development.
○​ A MULTIPLICITY OF POLICY INSTRUMENTS
-​ Five distinctive roles for public sector engagement with CSR: regulation,
facilitation, partnership, endorsement and demonstration
-​ The range of policy instruments for promoting CSR varies widely, reflecting
different policy approaches and economic circumstances.
-​ Some governments favor interventionist approaches, while others prefer working
with market drivers like consumer interest or civil society pressure.
-​ Factors influencing government action include capacity constraints, domestic
market size, export orientation in affected sectors, presence of
change-championing enterprises, and stakeholder comfort with partnerships.
-​ Social and environmental legislation embodies public sector engagement with
CSR, alongside competition policy, investment frameworks, and rights to access
information and participate in decision-making.
●​ CSR IN INTERNATIONAL BUSINESS
-​ Globalization has heightened the influence of the international market on CSR
development.
-​ Multinational enterprises encounter diverse legal systems and increasing public
demands for social responsibility, sustainability, and transparency.
-​ Sincere CSR practices meeting minimum shareholder expectations can enhance a
company's reputation in local and international markets, bolstering stakeholder
confidence.
-​ Internationally, CSR can increase stakeholder acceptance and includes various
applications for socially responsible corporate conduct.
○​ SUSTAINABLE DEVELOPMENT AND ENVIRONMENT
-​ Urgent need for a new economic development model balancing current needs
with future generations' rights.
-​ Emphasis on investing in the future rather than squandering present resources.
-​ State regulations may not always ensure big enterprises' compliance with
sustainable development.
-​ Outsourcing practices may lead to lower standards than in home countries.
-​ Corporations urged to exceed minimum standards; research suggests
medium-term benefits including consumer favor, product and process
innovations, and raw material savings.
○​ HUMAN AND LABOR RIGHTS
-​ Corporations, particularly the larger ones, have a significant influence not only
on the economy but also on the social and political life of the country in which
they operate. It is therefore expected from a socially responsible behavior
standpoint that corporations should be consistent with the principle of fairness
and respect of basic rights. In affirmation to this, the entrepreneurial strategy of
these large enterprises should be based on the following CSR demands:
■​ BE COMPLIANT
●​ The operational conduct of the enterprise should not be lower than the
standards of the host country; for example, compliance with
environmental laws, commercial laws, salaries, benefits, working
conditions and many other things directly or indirectly related to any
stakeholder of the enterprise.
■​ BE CONSISTENT
●​ Have partners of the same kind. Human and labor rights are ought to be
respected anywhere and therefore, multinationals in the host countries
should press hard on their partners, both local and international, to adopt
the same observance and recognition of rights the enterprise is following
when it does business. In this way, businesses will move on the same
path towards genuine CSR practice.
●​ To be specific, an enterprise must protect the primary rights of its
workers wherever it operates and strive to observe the following:
○​ Refrain absolutely from making recourse to forced or obligatory
labor and intimidation of any form
 ○​ Be an advocate of the abolition of child labor.
○​ Respect the right of privacy and freedom of opinion.
○​ Respect the exercise of political rights and of the trade union
activities
○​ Refrain from discriminatory treatment by reason of sex, race,
religion, political opinion, citizenship, or social extraction.
○​ Provision for fair compensation.
○​ Provision for a healthy and safe working environment.
○​ LOCAL ECONOMY AND SOCIETY
●​ Large international enterprises have significant potential to impact the
development of less-developed countries.
●​ Challenges include technological disparity and the host country's limited
capacity to adapt to advanced technologies.
●​ This gap may hinder the local country's ability to fully utilize the benefits
of advanced technologies.
●​ Local entrepreneurship may face challenges such as entrepreneurial
crowding and increased competition from multinational corporations.
●​ It is necessary to involve the stakeholders in those relevant decisions that
would contribute to the development of the territory or to the host
country in particular. Involving the stakeholders produces local
consensus which reduces investment risks. The following are the typical
examples of conduct of multinational companies considered to be
responsible and have gained wide positive recognitions:
○​ Transfer of technology;
○​ The grant of licenses for the use of intellectual property rights at
costs products and brands that are protected compatible with the
local market; Granting authority to manufacture under
international IP laws;
○​ Training for the development of local skills;
○​ Development of new products by means of local knowledge and
skills;
○​ Creation of viably durable forms of collaboration with local
partners; this will encourage them to gain access to the global
market
○​ Corporate venture investment in the local start-up capital.
●​ CSR in action are good number of international companies have visible
initiatives manifested by giving out a portion of their income for projects
like maintenance of roads, improvements of public hospitals, adoption of
a school and many other activities that should have been rendered by the
government These kinds of activities would give good feedback from the
community, create a good reputation for the company and at the same
time, propel the societal integration and consolidation of stakeholders
and the enterprise.
○​ TRANSPARENCY
●​ Corporate transparency entails open access to corporate information,
fostering accountability and communication.
●​ Measures include financial disclosures, freedom of information
legislation, budgetary reviews, audits, and compliance with reporting
requirements.
●​ Accountability is crucial for corporate success, reflecting the enterprise's
responsibility for its objectives, activities, and outcomes.
●​ Transparent policies help prevent arbitrary decision-making and enhance
stakeholder trust and confidence.
○​ LEGALITY
○​ The adherence to the applicable set of laws in force is the minimum requirement.
○​ The prerequisite of CSR is to go beyond the law provisions to contribute to the
establishment of a fair and sustainable development.
○​ A socially responsible enterprise rejects conducts and practices such as unfair
competition, corruption and tax evasion that put at risk the growth and development of
societies.
○​ Enterprises prioritizing CSR affirm to the public and stakeholders their non-involvement
in illegal financial market manipulations, insider trading, and tax evasion via
transfer-pricing facilitated by transnational structures.

○​ CONSUMERS
○​ Since the 1960s, environmental movements have emerged, followed by consumer
movements, gaining international traction as these highlighted the harmful effects of
certain productions on both humanity and the environment.
○​ Consumer organizations emphasize the need for accurate information regarding product
production and sale conditions, including potential risks as they must view consumers not
only as clients but also as collaborators in advancing their CSR strategy.
○​ "Aware consumption" promotes safe production aligned with sustainable and equitable
development. Consumer demands extend beyond health and eco-sustainability to
ensuring products are not made through human resource exploitation.8

○​ SUPPLY CHAINS
○​ Market globalization has led to intricate supply chains, often outsourced to countries with
weak human rights protections or no environmental regulations, where labor exploitation
is common. This poses challenges for enterprises committed to socially responsible
practices.
○​ Companies ensuring ethical practices throughout their entire production cycle by holding
all supply chain partners to their ethical code can yield numerous positive outcomes if:
➢​ improvements in market reputation through specific certifications or quality
labels;
➢​ confidence of the ethical investors and of the consumers;
➢​ good relations with institutions and social organizations.
 ●​ CORRUPTION IN INTERNATIONAL BUSINESS
According to George Soros, International Financier, "There is always somebody who pays, and
international business is generally the main source of corruption."

○​ GLOBALIZATION OF CORRUPTION
○​ Corruption - takes many different forms, from the routine cases of bribery or petty abuse
of power that are said to "grease the wheels" to the amassing of spectacular personal
wealth through embezzlement or other dishonest means.
○​ Bribery - enables companies to gain contracts, particularly for public works and military
equipment or concessions. Every year, Western businesses pay huge amounts of money in
bribes to win friends, influence outcomes, and win contracts. Such bribery may be
pervasive, but it is difficult to detect, as it is also increasingly subtle. It often takes the
form of semi-legal fees or "commissions" and inflated or marked-up prices. Until
recently, bribery was seen as a normal business practice as many countries treat bribes as
legitimate business expenses which could be claimed for as tax deductions.

○​ EXPORTING CORRUPTION
Effects of corrupt practices of multinational corporations
➢​ They undermine development and exacerbate inequality and poverty.
➢​ They disadvantage smaller domestic firms.
➢​ They transfer money that could be put towards poverty eradication into the hands of the corrupt.
➢​ They distort decision-making in favor of projects that benefit the few rather than the many.
➢​ They also increase debt; benefit the company, not the country; bypass local democratic processes;
damage the environment; circumvent legislation and promote weapons sales.

■​ INCREASING DEBT
Bribes increase the prices of projects. When these projects are paid for with money borrowed
internationally, bribery adds to a country’s external debt. Ordinary people end up paying this back through
cuts in spending on health, education, and public services. Often, they also have to pay by shouldering the
long-term burdens of projects that do not benefit them and which they never requested

Westinghouse won a contract to build the Bataan nuclear plant in the Philippines, allegedly paying
President Ferdinand Marcos US$80 million. The plant cost US$2.3 billion, never produced electricity due
to its risky location, and incurred US$1.2 billion in debt servicing.

■​ BENEFITING THE COMPANY, NOT THE COUNTRY

Bribing high-level officials ensures profits and helps off-load risks. In many power projects in Asia, for
example, there has been, according to the World Bank, both "a high level of corruption" and a tendency to
overestimate demand for electricity.

In 1998, Pakistan's anti-corruption agency probed 21 Western firms for alleged kickbacks to Benazir
Bhutto's government and overpricing. Bhutto's administration signed numerous power contracts, leading
to excess energy production. Despite denials, six companies admitted to bribery. Western governments
cautioned Pakistan against pursuing corruption charges, even linking IMF loans to dropping charges,
highlighting international pressures undermining anti-corruption efforts.

■​ BYPASSING LOCAL DEMOCRATIC PROCESSES

Bribery can be a useful way of getting around local opposition to a project and of bypassing the usual
democratic processes involved with awarding contracts.

Take for example, the Norwegian mining company, MINDEX, that wants to carry out nickel and cobalt
strip mining on the Philippine Island of Mindoro but people believe the mine will seriously damage the
environment and ruin their communities.

Subsequently, MINDEX attempted to influence local leaders by gifting gold watches during the
Environmental Impact Assessment, critical for social acceptance. It financed luxurious trips for district
leaders, constructed a house for a priest, and paid journalists for favorable coverage. While MINDEX
claimed these were gestures of friendship, locals opposed to the company saw them as manipulative and
potentially illegal under Filipino law, exploiting the tradition of "utang na loob" (debt of gratitude).

■​ DESTROYING THE ENVIRONMENT AND GETTING AROUND

REGULATIONS
Some companies use bribes as a way of getting around environmental regulations.

In Papua New Guinea, it was reported that companies were "roaming the countryside with the
self-assurance of robber barons: bribing politicians and leaders, creating social disharmony and ignoring
the laws in order to rip out and export the last remnants of timber."

Meanwhile, the Asian Development Bank warned that the forests in Cambodia were in an "alarming
state" because of corruption as at the current rate of destruction, Cambodia's forests will be gone by the
year 2003.

Sometimes such bribes come in the form of illegal political donations.

In Nicaragua, it was revealed that a Canadian mining company donated US$20,000 to Nicaraguan
President Arnoldo Aleman, with alleged further contributions to his party and local officials where
Greenstone was mining. Hence, this violated Nicaraguan law as Greenstone evaded environmental
regulations, engaging in illegal logging and polluting water sources, harming local communities' health.

■​ PROMOTING ARMS SALES

Half the bribery complaints received by the US Commerce Department concerns international defense
contracts.
●​ Bofors - a Swedish armaments manufacturer was involved in "the biggest bribery scandal in the
history of independent India". In 1986, they were paid US$1.3 billion for 400 Howitzer field guns
for the Indian army. Subsequently, there were claims that £30 million worth of kickbacks had
been paid to Prime Minister Rajiv Gandhi and his associates. The scandal escalated with the
revelation of shell companies involved in pay-offs. In October 1999, the Indian Central Bureau of
 Investigation brought charges of "criminal conspiracy" against Indian businessmen and Bofors
employees.

●​ HIDING THE LOOT

■​ WESTERN BANKS AND THIRD WORLD ASSETS
○​ Money laundering facilitates international corruption by providing safe financial channels
for bribes and corrupt gains.
○​ Bribers and bribe-takers often utilize private banking services and offshore financial
centers to launder money.
○​ Around US$40 billion from poor and former communist economies is estimated to flow
into US or European banks annually, much of it obtained illegitimately.
○​ Approximately US$30 billion of Western aid intended for Cold War alliances ended up in
Swiss bank accounts alone.
○​ Notorious figures such as Haiti's "Baby Doc" Duvalier and Philippine President Marcos
are known to have stashed away hundreds of millions to billions of dollars in offshore
banks.

■​ PRIVATE BANKING
○​ Private banking is valued at around US$17 trillion globally, with rapid growth predicted.
○​ Originating from the debt crisis, private banking targets wealthy individuals in Third
World countries to deposit their wealth, leading to continued indebtedness.
○​ International loans meant for developing countries often end up in private banking
accounts, sometimes in the same banks that issued the loans.
○​ US banks have been major beneficiaries of the private banking boom, becoming the
largest repository of ill-gotten gains globally.
○​ Lax oversight contributes to the situation, with US banks like Citibank being implicated
in facilitating the transfer of corrupt funds.

■​ OFFSHORE BANKS AND COMPANIES

○​ Offshore banks and companies serve as conduits for siphoning money out of poor
countries and hiding it from citizens.
○​ Growth in offshore financial centers has been significant, with deposits increasing from
US$11 billion in 1968 to US$8 trillion in 1999 across 61 offshore centers.
○​ Offshore centers are notorious for facilitating money laundering, with estimates ranging
from US$500 billion to US$1,500 billion annually.
○​ Offshore havens make it difficult for governments to combat corruption, leading to the
growth of crime mafias and the potential transformation of countries into "mafia states."
○​ Setting up companies in offshore havens is quick and inexpensive, often with minimal
disclosure requirements, allowing for easy concealment of ownership and facilitating
illicit financial activities.
○​ RECOVERING STOLEN WEALTH
○​ Pressure has increased to return stolen funds hidden in Western banks and offshore tax
havens.
○​ Precedents include the return of US$500 million of Ferdinand Marcos' money from Swiss
banks to the Philippine government in 1998.
○​ In 1999, accounts belonging to former Nigerian ruler Sani Abacha's family were frozen in
London and Switzerland, with hundreds of millions of dollars believed to be plundered
from Nigeria's central bank and oil revenues.
○​ The Bank of England froze the London bank accounts of Angola's rebel leader, Jonas
Savimbi, in November 1999.

○​ CLOSING THE LOOPHOLES

○​ Recovering stolen money requires both an international convention and closing loopholes
allowing funds to leave countries.
○​ Closing offshore centers is crucial to stop money laundering and resource drainage from
Third World countries.
○​ The process of closing offshore centers should be gradual in poorer countries to allow
time for the development of other local industries.
○​ Public disclosure of offshore corporate ownership and filing of company accounts are
urgent necessities.

○​ BLACKLISTING COMPANIES
○​ In 1998, the World Bank established a sanctions committee to investigate corruption by
companies involved in bidding for or carrying out World Bank-backed contracts.
○​ The committee reviews investigations regularly and debarred firms found guilty,
publishing a list of debarred firms known as "The World Bank Listing of Ineligible
Firms."
○​ As of May 2000, there were 54 companies on the list, with 36 of them being British, the
largest representation by country.
○​ The UK government could take action against sanctioned companies and ensure that they
are not awarded contracts by other international or national institutions.
○​ Measures could include implementing binding anti-corruption clauses or corporate
compliance programs in contracts.
○​ Suggestions for international action on corruption include creating an international
database of 'blacklisted' companies, possibly managed by organizations like UNCTAD.

○​ GOVERNMENT ACTION
○​ Successful anti-corruption programs must be developed at a national level and be
supported by government employees.
○​ Strategies imposed through loan conditions may undermine anti-corruption efforts.
○​ Popular support and civil society agencies can mobilize for anti-corruption agendas, even
if governments lack political commitment to reform.
○​ NGOs monitor debt relief funds and mobilize ordinary people to hold local governments
accountable.
 ○​ Examples include Citizen Action Against Poverty and Corruption in Nicaragua, and local
civil society organizations in Uganda.
○​ The Indian Mazdoor Kisan Shakti Sangathan (MKSS) in Rajasthan exposes corruption
through public hearings.

○​ DETERRENTS
○​ Economic punishments are effective deterrents to corruption, as seen in Singapore where
five companies were banned from government contracts for paying bribes.
○​ Opening development projects to public scrutiny can deter corruption, as exemplified by
Kerala's decentralization program in India, involving massive public participation and
transparency.
○​ Kerala's system includes devolution of funds to local meetings, requiring plans for fund
deployment, and prioritizes maximum public attendance.
○​ Key democratic principles include maximum direct participation, accountability through
continuous social auditing, and transparency via the right to information.
○​ Transparency minimizes corruption potential, with all documents and decisions made
open to the public.
○​ In Thailand, a new constitution strengthens democratic rights, requiring public hearings
and local council consent for large development projects.

○​ RESISTANCE
○​ Fighting corruption is increasingly engaging the energies of civil society groups around
the world. To be effective, they must:

■​ MOBILIZE ORDINARY PEOPLE

-​ Civil society groups will need to be prepared to take on governments in
innovative and sometimes confrontational ways. They will also need to be
committed to being transparent and accountable themselves.

■​ PUSH FOR FREEDOM OF INFORMATION (FOI)

-​ Enable ordinary people to use information. Only if they have the relevant
knowledge can citizens hold their governments accountable and ensure that
resources that belong to them are used in the right way.

■​ HELP INCREASE CITIZEN PARTICIPATION IN DECISION-MAKING

-​ In Uganda, the phrase "abantu babisi" reflects mistrust of government decisions
due to lack of transparency.
-​ Greater participation of groups representing the poor is essential in
decision-making at all levels.
-​ Civil society groups play a crucial role in holding the state accountable to poorer
citizens through critical auditing functions.
-​ Opposing privatization can remove potential sources of corruption.
-​ It's vital to ensure public sector bids are made alongside private contractors' bids
to prevent cartel manipulation and inflated prices.
 -​ Cracking down on bribery sends a clear message that the international
community aims to restrict the "supply side" of bribery.

●​ Questions - Dani, Karen (need tomorrow morning)

●​ Script - Karlla, Tine - main writer
●​ Edit - Raf, kung sino pwede

Theme: It’s Showtime

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