The way each company articulated its CSR policies can be different from one another. An extent to which a company engages in CSR is determined by a number of variables, among which we can find its legacy, affiliations with the government and other stakeholders, values and others. The link between the governments and companies cannot be underestimated and often determines the extent to which the company is engaged in CSR practices. The more authoritarian is the government, the less it is likely that corporations operating under such government would engage in substantial CSR practices. We can see this with the example of Russia’s Gazprom.
Gazprom, headquartered in Moscow, Russia, is one the world’s largest gas and oil companies with approximately 457,000 employees. The enterprise operates Russia’s domestic gas pipeline network, delivering gas to countries across Central Asia and Europe, whereas Europe is the principal customer. It was nominated as one of the 10 companies with “worst corporate social responsibility records” for 2014 Public Eye Awards. The World Economic Forum grants this award annually to the most irresponsible multinational corporation (Public Eye Awards, 2019). Despite this, Gazprom does have a Corporate Governance Code and a Corporate Ethics Code, which means that Gazprom does engage in CSR practices (Gazprom website, 2019).
Taking into account that Russia’s regime is considered hybrid (a mixture between authoritarian and democratic tendencies), the Russian government plays a big role in controlling Russian corporations. This influence reaches and determines the CSR practices of these corporations. This is confirmed by the Corporate Governance Code of Gazprom that states: “Gazprom will secure the Company’s active cooperation with investors, creditors and other stakeholders for the purpose of increasing in the Company’s assets, value of stock and other securities of the Company” (Gazprom website, 2019). This clause means that the corporation will ensure the biggest effort in protecting and increasing its own interests rather than anyone else’s. Since Gazprom’s main-stakeholder is the Russian Federation government, this clause implies that the interests of the Russian government will be secured. At the same time, the power of other stakeholder groups is relatively low. This completely undermines the idea of a multi-stakeholder approach, which is what CSR is about. CSR is meant to be a way to exchange views, to find solutions and to engage into mutually beneficial activities for multiple stakeholders. This evidently does not occur with Gazprom as it only takes into account the interests of the Russian government.
Moreover, there has been numerous accusations of Gazprom and the key players in the Russian government of being involved in bribery and corruption. Furthermore, Gazprom is accused of using anti-competitive practices in their business operations, for instance overcharging customers and blocking rival suppliers. Finally, to further investigate the strong bond between the Russian Government and Gazprom, there has been discussions of Gazprom being a ‘foreign policy weapon for Russia’. Stegen mentions that one of the characteristics of an organisation turning into a ‘resource weapon’ is when “A state must use energy resources to advance further its own political objectives through threatening, punishing, or rewarding a client state and to cause a compliance reaction of the dependent government to the threats, price hikes or cut-offs” (Stegen, 2011). This has occurred numerously with gas. For the first time Moscow stopped gas supply to Ukraine in 2006. The three days without gas were enough to make Ukraine accept bigger prices and renew the contract with Moscow, even on unfavorable terms, because Ukraine had no alternative (RIA News, 2006).
The Russian government has been able to use Russia’s energy sector as a tool to advance its interests in global politics, by affecting energy exports, and using energy as leverage in its foreign policy decision-making. This, again, goes against the idea of CSR.
Russia’s CSR practices seem to be present on paper, however, they do not have any substance in reality: the Russian government is the one that determines the extent of Gazprom’s engagement. This proves that there is a link between corporations’ CSR practices and authoritarian regimes that control these corporations.
By Elizaveta Chmykh
