The term Corporate Social Responsibility (CSR) appeared more than 50 years ago in Howard Bowen’s publication: Social Responsibilities of the Businessmen (1953). The term has evolved for years, but there is an overall understanding among scholars that CSR is the result of the moral obligation that companies have within the society in which they operate. As such, CSR has been framed as the solution to regulate the behaviour of large companies within open market rule with aim of reducing their detrimental impact on the local communities exposed to their activities.
The decade of the 2000s allowed the emergence of frameworks coordinated and monitored by state actors. This trend was influenced both by the increase in direct international investment and the growing number of transnational NGOs. Furthermore, this multiplication of state-sponsored frameworks was encouraged by the sustained efforts of state-actors traditionally involved in peace-building mechanisms and mediation (Norway, Switzerland, Sweden). Private security was the first market sector to willingly implement and normalize responsible business practices – meant to discourage abuses leading to loss of market share – under the supervision of a sovereign State. Drawing on the example of the Montreux Document of 2008 which set guidelines for private military and security companies in war zones, a group of companies united under the expertise of the Swiss government to sign the International Code of Conduct (ICOC) in 2010.
The ICOC can be considered a historical landmark in the evolution of peacebuilding and Corporate Social Responsibility due to its far-reaching and easily-replicable nature. Following that example, several business fields implemented self-regulating measures, including that of extractive industries. In 2011, the BetterCoal initiative was established by a group of major coal buyers. It was aimed at promoting “continuous improvement of corporate responsibility in the coal supply chain” as well as “in the areas of ethical, social and environmental performance of global supply chains”, according to Security Sector Reform specialist Pedro Rosa Mendes.
These frameworks draw much of their inspiration from smaller initiatives previously launched by the jewellery and precious metals sectors, such as the Sustainable Development Framework launched by the International Council on Mining and Metals in 2001, or the Responsible Jewellery Council Certification of 2005. These normative instruments have in common a voluntary basis, a horizontal dimension, as well as a multi-stakeholder nature. In addition to that, they all address “global and intergenerational” issues.
Corporate Social Responsibility suffers from four major flaws that hinder its implementation and limit its efficiency:
1) Human rights were originally absent from the concept of CSR. This major conceptual deficit has limited a wide acceptance of CSR as an indispensable tool among traditional non-state actors of mediation and peacebuilding (NGOs, humanitarian organizations, civil society-driven frameworks). A progressive integration of the concept of human rights in CSR efforts (thus creating the new notion of “business and human rights”) during the 1990s has nonetheless led to a “noticeable increase in human rights-related publications in the field”, according to scholar Florian Wettstein.
2) The impact of CSR is often difficult to measure since a certain number of factors surrounding large scale business activities in conflict-prone environment can sometimes bring short-term benefits to local communities without necessarily having anything to do with the social or environmental measures implemented by companies. Yet, businesses which do implement CSR programs are often prone to take ownership of all of the positive effects experienced by communities.
3) Corporate Social Responsibility remains essentially a self-regulated business practice. This prevents any unified and transnational CSR framework from emerging. It also renders it impossible to make any of the self-imposed regulation binding, due to the lack of enforcement mechanisms. In addition to those inherent flaws, many scholars consider that CSR has mostly been used as an advertisement tool to promote the public image of companies. This marketing trend commonly known as “green washing” consists in manipulating or influencing the public perception of a company’s products through minor social or environmental gestures, cosmetic change in their communication strategy or a blatant exaggeration of that company’s CSR achievements.
4) The last pernicious aspect of CSR is the porosity between local community’s interest or needs and an enterprise’s short to medium-term interest and goals. Indeed, oil extracting corporations need a stable and “pacified” environment within the premises of their infrastructure in order to protect their equipment and secure their investment. The same goes for large scale agricultural exploitation (like palm oil production in South-East Asia or soybeans culture in South-America) which requires a relatively peaceful and ecologically sustainable environment to become profitable.
It is nevertheless undeniable that Corporate Social Responsibility has produced measures, guidelines as well as projects beneficial to many local communities in the “Global South”. Those successes have been driven to a large extent by the consumer’s desire to favor responsible business practices. It is therefore likely that growing awareness of social and environmental business-related conflicts and issues in the general population will prompt more consumers to subsidize responsible companies.
Concrete examples of successful CSR implementation include cases as different as:
The mitigation of the oil extraction conflict in Colombia, within the extended context of armed struggles
Barrick Gold keeping the country’s need for increased decentralization at the core of its development strategy in the Dominican Republic
Extraction companies cooperating to create a mediation commission within the Ministry of Energy and Mines in Peru
Corporate Social Responsibility is not without intellectual merit and objective efficiency. Designed to meet the needs of local communities rather than the image that a multinational company seeks to give to its potential customers, CSR can sometimes be an effective tool in mitigation of business-related conflicts. However, reports by both scholars and the majority of non-government actors indicate that any new transnational peacebuilding initiative based on Corporate Social Responsibility should both stress the importance and push for the implementation of at least five crucial concepts in order to achieve lasting results:
Human rights due diligence
Public expenditure management
Empirical evidence suggests that CSR, despite its numerous successes, fall short of the objectives formulated by its many advocates. Indeed, while many responsible businesses are overwhelmed with willingly-implemented regulations they’re having a hard time following, other that chose to ignore them in the first place often thrive. The current trend observable in the mining industry, where corporations move from increasingly regulated environments (like South Africa) to less regulated ones (like Guinea), highlights the limitations of any framework based on the assumption that an industry will simply regulate itself if given the opportunity.
For an optimal functioning, CSR must be integrated in frameworks having a sufficient impact at the political level to regulate corporate access to what enterprises are after: profit. A growing number of scholars, including Brian Ganson from Stellenbosch University, suggests that the pressure instruments available to UN agencies and the Bretton Woods institutions should be more widely used to promote access to transnational capital for responsible companies, and hinder access to important contracts for less responsible ones. They also emphasize the pivotal role played in global trade by various intermediaries such as insurance providers and shipping companies. Any disruptive change in coverage policy implemented by those actors would undoubtedly provide “rogue” transnational businesses with strong incentives to revise their operational strategy.
It is in fact the lack of enforcement mechanisms, rather than the lack of new frameworks, that prevents Corporate Social Responsibility from achieving replicable and sustainable results. Political willpower at the local, national and transnational level is crucial to transform Corporate Social Responsibility into an obligation rather than a choice. Consequently, the political field is the battlefield where the fight for responsible business practices will be lost or won in the decades to come.
Sources & Further readings
– Carbonnier, Gilles et al. 2011. “Global and Local Policy Responses to the Resource Trap”. Global Governance: A Review of Multilateralism and International Organizations: April-June 2011, Vol. 17, No. 2, pp. 247-264.
– Ganson, Brian, and Wennmann, Achim. 2015. “Responses to Conflict That Work.” Adelphi Series 55 (457–458): 165–200.
– Ganson, Brian, and Wennmann, Achim. 2016. Business and Conflict in Fragile States: The Case for Pragmatic Solutions, Routledge for the International Institute for Strategic Studies
– Mason, David & Meernik, James. 2006. Conflict Prevention and Peace-building in Post-War Societies: Sustaining the Peace, Routledge
– Mendes, Pedro Rosa. 2015. “Business and Security Sector Reform: The Case for Corporate Security Responsibility”, DCAF, Ubiquity Press Ltd
– Ruggie, J. G. 2007. “Business and Human Rights. The Evolving International Agenda”. in American Journal of International Law 101: 819-840.
– Wettstein Florian. 2012. “CSR and the debate on business and human rights”. in Business Ethics Quarterly, 22(4): 739–770.
Author: Boris Bertoli