Business Respect - CSR Dispatches No#69 - 11 Jan 2004

An email newsletter with news and discussion focusing on corporate social responsibility globally, looking at the companies in the news and the emerging issues. Linked to the website at http://www.businessrespect.net and produced every two weeks.

This web page provides news stories and articles from the newsletters. Newsletters also include links to features on the internet, Mallen's blog, and other resources.

In this edition, we review our predictions for the next five years in corporate social responsibility.

Welcome

A happy new year to all our readers!

As with previous new year editions, this time around we turn our attention to review our predictions of the development of CSR over the coming few years.

One prediction that isn't on our list because it falls under the category of the totally obvious is the sad fact that during 2004 more company names will be added to the roster of infamy for corruption and fraud.

At the end of last year, we got our first case in point. The scandal of Parmalat, with its invented offshore assets and its apparent 8bn euros hole in its accounts, has started us off in the worst possible way. Whether or not all the goodwill generated by all the CSR activities in the world makes a jot of difference to the reinforcement of negative attitudes to business provoked when such cases emerge will remain a point of debate.

As with Enron, we here have a company that could be said to have had a considerable profile as a positive contributor to the community. Also, some have said that since, in this case, the people concerned did not salt away billions for their own personal use, but instead got engaged in an increasingly desperate attempt to keep loss-making concerns going, to keep jobs, and to keep community programmes, one might infer that the collapse had actually been caused by too much social responsibility.

That wouldn't be any definition of social responsibility that we recognise - we have always said that the first premise of corporate social responsibility is to be profitable. Although this on its own isn't enough, the case of Parmalat illustrates only too well the impact of the alternative. If it can't be done sustainably, it should be done differently.

Of course, not many people really believe Parmalat was just too socially responsible for its own good. Family owned responsible companies - such as Smuckers, this week reported as the number 1 best US company to work for, have proven that doing the right thing by your people can make for a healthier, more successful business. Not the reverse.

Finally, the issue re. companies outsourcing workers to locations with lower labour costs looks likely to become a big issue for the year. We have finally gotten around - as promised a couple of issues ago - to changing the vote on the website. It now reads:

Companies that seek to move jobs from the US / Europe to developing countries with lower costs

1. Can in no way be called socially responsible
2. Are right to stay profitable, but should pay attention to how they make the change
3. Should aim for maximum profitability, and not be hampered by unwarranted sentimentality.

We look forward to hearing your views.

For the record, the final tally on the previous vote was as follows:

In countries like Burma or Sudan where there are huge human rights challenges, companies should:

Withdraw - no company with a conscience should do business there - 191 (24%)
Do business there - but use its influence to try to make things better - 541 (69%)
Do business there - and keep out of interfering in politics - 57 (7%)

789 people in total voted. Thanks to you all.

Finally, December saw us cross the 3,000 line for subscribers to this newsletter! We are delighted as ever to have the opportunity to produce material of interest to so many. Who knows where we will be this time next year?

News

IBM Korea officials charged with corruption

48 government and IBM Korea officials have been indicted in the investigation of corruption in the bidding on government contracts.

Madagascar: Business initiative to tackle poverty launched by PM

A programme to involve business in alleviating poverty has been launched by the Prime Minister Jacques Sylla. The launch of the initiative, 'Growing Sustainable Business for Poverty Reduction', was organised by UNDP and brought together government, business and civil society.

Japan: Companies inundated by calls for social responsibility information

The increasing demand from western-based companies for information from their suppliers is leading to a huge growth in requests for information from Japanese companies, according to the news server Asahi.

UK: Barclays Bank agrees outsourcing jobs deal

Barclays Bank has signed a deal with the finance workers trade union that will see jobs moved from the UK to India or other locations with lower labour costs.

Australia: Corporate political donations halved

Contributions in Australia to the political parties by companies have halved over the last year - a change that is being widely credited to the growing importance of corporate governance good practice.

Saudi Arabia: Lucent faces lawsuits on two fronts

Lucent Technologies is being taken to court both in Saudi Arabia and in the US - in one instance for allegedly violating Saudi regulations, and on the other not following Equal Opportunities legislation.

CEOs believe mainstream investors will focus on CSR

The World Economic Forum has released a survey showing that over 70 percent of CEOs believe that mainstream investors - who have previously viewed issues around social responsibility as a minority interest only - will increasingly come around.

Australia: Animal trade companies told to improve

The Australian livestock industry has been told that it faces new legislation to require better animal welfare practice and to prevent a repetition of the scandal around the Cormo Express incident, where 57,000 sheep were stranded at sea for nearly three months in poor conditions.

US: Worldcom can again bid for government contracts

Telecoms giant Worldcom has been removed from the list of companies excluded from bidding for work from the US federal government following improvements to its accounting standards and "business ethics weaknesses".

US; Smuckers tops Fortune's list of Best Companies To Work For

J.M.Smucker, the century old family-owned food company, has topped the poll for the best company to work for - the first manufacturer to do so. The company is run by the two brothers, Tim and Richard Smucker, who remain committed to keeping the family tradition alive in a firm that now employs nearly 3,000 employees.

Hewlett-Packard wins case of diversity over religion

Hewlett-Packard has won a discrimination lawsuit in San Francisco, US, where an employee that had been sacked for not supporting policies on diversity had claimed religious discrimination.

Article

The next five years of CSR - some progress

Author: Mallen Baker, dated 11 Jan 2004

In our first new year edition of Business Respect, two years ago, we made a number - nine no less - of predictions about what would happen in the world of corporate social responsibility over the coming five years. Two years in, and in the spirit of accountability, let's see how we're doing.

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