Corporate Social Responsibility (“CSR”) is a relatively modern term, first coined by American economist Howard Bowen in 1953, in a book entitled Social Responsibility of Businessmen. Bowen considered the roles and responsibilities of businesses in society, and posed the question: What responsibilities to society may business people reasonably be expected to assume? The development and recognition of the concept has spread globally since then.
With greater global recognition, varied interpretations of what CSR programs should entail have developed between countries and cultures. In many places, such as Australia and New Zealand, CSR is typically associated with philanthropic contributions through volunteering schemes and donations to community charities. CSR programs focused on philanthropic acts can make great contributions to local and international communities, but often fail to take a holistic approach encompassing the concepts of corporate accountability and human rights, which should be embedded throughout all of a corporation’s activities, from the financing of infrastructure development projects or sourcing of goods from developing nations, to ensuring the reduction of carbon footprints by reducing waste and pollution.
In preparing a CSR policy, companies should have regard to the United Nations Guiding Principles on Business and Human Rights, which set out a practical approach to the integration of human rights principles into their operations. The guidelines state that the responsibility to respect human rights is a global standard of expected conduct for all business enterprises wherever they operate, which exists over and above compliance with national laws and regulations protecting human rights. CSR models that promote respect for human rights should take into account all aspects of a business, from labour rights including decent working conditions, entitlements to holiday, sick, and maternity leave and realistic living wages, to the assessment and management of supply chains to avoid negative impacts on local communities and the environment.
Cambodia, with its thriving garment industry characterized by low wages and unsafe working conditions, is a prime example of where companies’ CSR programs should embrace corporate accountability and human rights principles. While on the one hand some companies and factories appear to have no regard for health and safety standards or realistic living wages, others naively see themselves as leaders in the garment industry because they provide “unlimited rice” to workers for lunch or pay US $15 above the minimum wage. This month, Cambodia’s government agreed to raise the minimum wage for garment workers to $128 US per month; that’s a 28 % increase, but falls short of the $140 that some labour unions had been asking for during negotiations. Reportedly, the poverty wage in Cambodia is $120 US per month according to the Ministry of Planning. By that assessment, garment workers will now be earning $8 above the poverty line, while according to the Asia Wage Report, a real living wage in Cambodia is approximately US $360 per month.
While debates on wage levels and working conditions continue, companies, particularly those with an international presence who have greater influencing power, have an opportunity to lead by example to ensure fair and safe conditions for workers and respect for human rights all along their supply chains.
There are clear marketing advantages for businesses that adopt an ethical approach to CSR, as global consumers become ever more aware of and concerned with the impact they have on people and the environment. In implementing a CSR policy the business community must recognize that CSR is about more than ad hoc charitable acts; it’s about human rights.
Ellie Setakeh, Professional Volunteer, contributed to this blog.