Business Respect - CSR Dispatches No#91 - 26 Mar 2006

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 issue, we consider the emerging issue of tax and CSR, and we reflect on the new EU business alliance.

Welcome

The launch of the European Alliance for CSR has predictably led to a great deal of noise and fuss from some of the NGOs complaining that a business-led approach is somehow a bad deal, and that the real agenda should have been new legislation to force businesses to be responsible.

The dialogue is as depressing as it is predictable. It should surely be straightforward enough to understand that legislation and CSR are two different things. Legislation is designed to enforce minimum standards. CSR is about best practice, and finding opportunities to engage the things that business traditionally do best in the solving of problems. A government can no more legislate for best practice than it can repeal the laws of gravity.

There is no moratorium as far as I am aware against new legislation where it is shown that existing measures fail. The problem of course is that framing good quality legislation is a lot harder than it looks. It's all very well to say that companies should be held accountable for doing bad things abroad. However, legislation that, for instance, seeks to hold companies accountable when states refuse to meet their human rights obligations is problematic if it by implication puts the companies into a role they are neither practically nor democratically suited to play. Legislation in this area is not slow in coming because bodies like the EC go for voluntary CSR action instead - it is slow in coming because it is genuinely hard to do.

The fact that the UN special representative on business and human rights, John Ruggie, has - to the NGOs dismay - effectively buried the UN Norms precisely because of such problems highlights the need to move beyond the sterile voluntary vs statutory debate.

The fact is that a business-led movement to address corporate responsibility may make some real progress if it is well implemented. The NGOs should welcome the European Alliance as potentially making a positive contribution. Likewise, the debate around well crafted and effective legislation to establish minimum standards will continue unabated. But it seems to me there are now more examples of good business action on CSR than there are of thoughtful proposals on legislation.

The trouble is that many of those NGOs are simply anti-corporate, and this makes it difficult to see how they will ever understand what good legislation could look like. Friends of the Earth, for instance, in a recent corporate campaign leaflet said that 'business can never voluntarily be part of the solution'. On that basis, it is not surprising that it would look to every initiative, every panel, every proposal, as an opportunity to get through measures that will force business to do what they want it to. The fact that such an approach may not be the best way to achieve the desired ends is obscured by the lack of clarity with which the other side is viewed.

Ultimately, social and environmental sustainability is a shared objective. Solutions will either be common solutions, or they won't be solutions. It's time to move on.

In the mean time, other areas are emerging into the CSR arena. Most recently, Sustainability launched its new report on why tax payment is about to take its place as a central CSR issue. The report is reviewed this issue.

On the website, the section devoted to CSR resources has been updated. Resources added this fortnight are links to the following:

* Equator Principles - March 2006 Revision
* John Ruggie's interim report
* The New IFC Standard - Will It Raise or Lower the Bar?, Michael
Warner, Overseas Development Institute
* Under the Influence - Exposing undue corporate influence over
policy-making at the World Trade Organisation, Action Aid

Voting on the current poll continues. The current tally stands at:

Internet companies faced with demands of censorship by China:

Should do whatever they are required to do by the Chinese government
28 (10 percent)
Should obey laws but do whatever they can to uphold their home values
146 (53 percent)
Should refuse to compromise even if this means not doing business in China
100 (37 percent)

Thanks to the 274 people that have voted so far. Still time to make your view known!

News

Australia: Computer game banned for 'promoting crime'

Australia's review board for computer game classifications has published its reasons for withdrawing the MA15+ rating for the game 'Getting Up: Contents Under Pressure', suggesting that the game promoted illegal activity.

Indonesia: President orders a probe into Freeport following protests

President Susilo Bambang Yudhoyono has ordered an investigation into Freeport Indonesia after protests calling for its mines in Papua New Guinea to be shut down resulted in four deaths.

Chile: Ripley withdraws adverts using torture images

Ripley, the Chilean department store has said that it will withdraw controversial advertisements showing men with hoods over their heads hanging from the ceiling from their legs after attacks by Amnesty International.

Philip Morris finally loses appeal over record damages to smoker's widow

Philip Morris USA will have to pay damages of over $82m to the widow of the smoker of its cigarettes following the refusal of the US Supreme Court to review the verdict in the case. The damages are the highest ever for a case involving an individual smoker.

Former Yukos executives to complain to human rights court

Lawyers for Mikhail Khodorkovsky and Platon Lebedev have said that they are to take an appeal against the former Yukos executives to the European Court of Human Rights complaining of violations of due process in their trial.

Executives to plead guilty in Samsung price-fixing case

Three former executives of Samsung have agreed plead guilty to a price-fixing conspiracy involving Samsung, Infineon Technologies, Elpida and Hynix Semiconductor.

BP, DuPont top climate change ranking

A greater number of global companies are addressing greenhouse gas emissions, according to a new report produced by Ceres on the climate change performance of the top 100 companies. BP and DuPont lead the pack with companies such as ExxonMobil and Newmont named as laggards.

European CSR Alliance launched to NGO catcalls

The European Commission has announced the launch of a new European Alliance for Corporate Social Responsibility which will act as an umbrella organisation for new or existing CSR initiatives by large or small companies. The move has been criticised by NGOs who have argued for more regulation.

Draft Equator Principles revision produced

The Equator Principles have been revised to reflect the experience of the last few years as well as to incorporate the recent updated International Finance Corporation (IFC) standards.

Business collaboration on carbon capture and storage

A new business association has been launched to promote carbon capture and storage technology, and has started by calling for greater government leadership on the issue.

Article

In search of the business case for responsible tax

Author: Mallen Baker, dated 16 Mar 2006

How companies engage in tax planning has become one of the emerging issues in corporate social responsibility. Certainly the heat around the debate has risen in recent months, with NGOs, regulators, the media, investors and businesses engaging in heated debate.

Previous edition - No 90 | Following edition - No 92

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