NGO engagement with Business in the

context of “Governance, Accountability, and

Organisational Effectiveness.”

APPC Conference, Manila. Sept. 2003.

Slide 1
 Stages in Evolution of CSR
• The only social responsibility of businesses is to make
money for owners and stockholders and obey the law.
• Businesses must also be “ethical” in the ways they make
money and not engage in bribery, fraud or corruption.
• Businesses must also protect the environment and
biodiversity.
• Businesses must also protect and promote human rights,
labour rights, and sustainable development. (“triple
bottom line”)
• Businesses must adhere to a global standard for CSR
enforced by law. (future?)

Slide 2
 Signs of the times
• Multi-stakeholder conferences and contact groups.
• Proliferation of corporate codes dealing with human
rights and labour rights.
• Media attention to corporate misdeeds.
• Increased attention to TNC policies and practices by
NGOs and consumer groups.
• Trade sanctions against some countries.
• Shareholder resolutions calling for greater CSR.
• Law suits against TNCs for human rights violations.

Slide 3
“Globalisation and continuing rapid technological advances
offer unprecedented opportunities for social and economic
development. At the same time, they continue to present
serious challenges, including widespread financial crisis,
insecurity, poverty, exclusion and inequality within and
among societies. Considerable obstacles to further
integration and full participation in the global economy
remain for developing countries….Unless the benefits of
social and economic development are extended to all
countries, a growing number of people in all countries and
even entire regions will remain marginalised from the global
economy.”

UN “Globalisation and its Impact on the Full Enjoyment of

Human Rights” (August 2000)

Slide 4
 Problem of Poverty

• 800 million people suffer from malnutrition

• 900 million people are illiterate
• 20% of the world’s population lacks access to safe
drinking water.
• 1 billion people live on less than $1 a day.
• 250 million children work.
• 120 million children receive no schooling.

Slide 5
 Global Governance
• Emerging global system is redefining roles of state,
business, and civil society in the protection of human
rights and the promotion of sustainable development.
• Multi-stakeholder dialogue involving all three sectors is
seen as key to make globalisation work for all.
• No single actor or sector can be expected to provide for
the fulfilment of all human rights, or the solution to all
social problems, but if business, government and civil
society organisations work together to address these
problems progress is possible.

Slide 6
 The Business case for CSR
• Enhances compliance with • Address shareholder
local and international laws. concerns.
• Benefits from promotion of rule • Builds community goodwill.
of law. • Applies corporate values.
• Better internal control and • Reduces operating costs.
control over supply chain. • Enhance financial
• Protection of reputation and performance.
brand image. • Increases stock value.
• Enhances risk management. • Enhanced ability to attract
• Increases worker productivity, quality workforce.
morale, and loyalty. • Improve business
• Provides management tools. relationships.

Slide 7

• Globalisation of production.
• Privatisation of state-owned
industries in some cases.
• Communications and IT.
• Calls for greater corporate
transparency.
• Threats of trade sanctions,
boycotts and divestment
campaigns.
• Threats of negative publicity
and damage to reputation.
Push factors
• Desire to address concerns of
consumers and active
shareholders.
• Desire to address concerns of
NGOs, Trade Unions, and
Faith-Based organisations.
• Desire to address concerns of
local communities.
• Desire to respond to CSR
initiatives by governments.
• Desire to keep up with industry
leaders in CSR.
Slide 8
NGO Strategies and Tactics for Promoting CSR
• Research and Reporting – media exposure
• Social Responsibility – dialogue with TNCs
• Social Accountability – standards and audits
• Shareholder Activism – shareholder resolutions
• Economic Pressure – boycotts
• Sanctions/Divestment – selective purchasing.
• Government Regulation – supporting legislation.
• Litigation – bringing law suits.
• Norm Creation – development of international law.

Slide 9
 The Way Forward
• More Companies must get past “why should we?” to “How can we?”
Don’t wait to be “shamed” for bad practices.
• More NGOs need to lose their ‘ I don’t need to engage with
Business” mindset.
• More NGOs need to review ideological anti-for-profit/business bias
and begin to distinguish between the difference between
responsible and irresponsible business. More NGos need to
experiment with tri-sector partnership initiatives.
• Companies need to being to think about CSR compliance as a
normal part of the cost of doing business, and as providing a
competitive advantage.

• Ultimately, Governments, in order to promote CSR/SRB, will need to

provide the necessary mix of Regulatory and Enabling environment.

Slide 10
 Barriers to Partnerships – the Business
perspective
• NGO credibility: need for standards
• Lack of familiarity with Business contexts
and processes
• Bound to traditional views of Business:
limited role in development
• Bound to ideological views of Business:
necessary evil
• Inability to discern between
responsible/irresponsible Business
Slide 11
 Contd.
• Viewing Business as either something to
be fought or as a source of funds
• NGO support for exclusively compliance-
driven SR
• Lack of NGO support for pro-SR enabling
environment, including Govt. policy
• Overall- NGOs as a minor driver for SR

Slide 12
 Barriers to Partnerships- the NGO
perspective
• Vast majority of Business either irresponsible,
indulge in green-washing, or at best only
practice philanthropy.
• Self-regulated SRB not acceptable.
• Concerns about globalization widening gap
between poor and rich
• Concern about privatisation of essential services
• Lack of understanding of Poverty issues by
Business
• Lack of equity in Partnerships
• Lack of disclosure on CSR issues by Business

Slide 13
 Partnership issues
• Lack of understanding of what Partnerships are
and are not
• Insufficient Partnership skills
• Lack of Govt. support to/role in facilitating
Partnerships
• Most Partnerships non-strategic project related
• Most Partnerships driven by outcome, not
process
• Most Partnerships not monitored or evaluated
• Insufficient fora dedicated to sharing and
learning from Partnership experience.

Slide 14