Voluntary approach for CSR ‘does not work’

Date: 28/03/02

CSR - Campaign groups say the Commission's paper on CSR fails to live up to the ambitions of EU leaders, reports David Cronin

WAY back in 1995 the world's media were gripped by a 'David and Goliath' struggle between environmentalists and executives.

Greenpeace demonstrators occupied the Brent Spar oil rig in protest at moves by multinational Shell to dump the highly toxic oil platform in the north-east Atlantic.

Their action spawned a mass public boycott of the company's products; the decline in Shell's profits eventually forced it to abandon its plans. The Shell climb down may not have been as dramatic as the fall of the Berlin Wall or collapse of apartheid in South Africa. But it was a defining moment nonetheless, proving that when a 'critical mass' of ordinary people set out to affect a company's revenues they can wring massive concessions.

And for a short time, newspapers eagerly devoted column inches to that previously nebulous idea of 'corporate social responsibility' (CSR).

Arguably the lesson of the Brent Spar saga is that Shell had to be compelled into capitulating as most profit-hungry firms will only improve their behaviour when they are under immense pressure to do so.

Campaign groups feel that the lesson has not been learned by the team which drafted the European Commission's green paper on CSR. In a hard-hitting critique of the document, the World Wide Fund for Nature (WWF) condemns it for placing too much emphasis on the importance of asking companies to comply with voluntary codes of conduct, rather than subjecting them to legally-enforceable rules.

As the green paper's introductory remarks say: 'Corporate social responsibility is essentially a concept whereby companies decide voluntarily to contribute to a better society and a cleaner environment.'

The WWF believes the paper does not live up to the ambitious target in the Amsterdam Treaty - reiterated at last year's EU summit in Göteborg - of putting the principle of 'sustainability' at the heart of all the Union's policies. 'These are...political declarations at the highest level in the EU. And their non-achievement only adds fuel to the sceptics and disbelievers in the European ideals,' said spokesman Tony Long.

Relief agency Save the Children has been at the forefront of a campaign to make baby food manufacturers such as Nestlé desist from flooding hospitals and clinics in poor countries with free samples of their products. It believes that such promotional activities undermine efforts by health professionals to encourage young mothers to breast-feed.

Theoretically, those companies are subject to the UN-supported code for marketing breast milk substitutes.

Yet a recent Save the Children paper says its own research shows that 'in the absence of penalties for non-compliance, most of the large manufacturers continue to market infant formula in ways which violate the code'.

Commenting on the Commission's green paper, the group adds: 'There is a very real risk that without specified, unified objectives, independent monitoring of implementation and penalties for failure, voluntary approaches become no more than a public-relations exercise with little basis in reality. CSR standards need to be made more binding on companies in a consistent way and there is a valuable role for the EU to play to ensure this.'

Human rights watchdog Amnesty International also berates the Commission for linking CSR with voluntarism. 'Such a conception of CSR is flawed in that it fails to take account of the reality that voluntary approaches are generally implemented in response to consumer and community pressures, industry peer pressure or the threat of new regulations or taxes,' reads a submission which the group made to the EU's executive.

Christian Aid feels rules on CSR are most effective when applying at multilateral level. It cites the example of the Philippines, where mining is the fastest growing sector in the economy.

Despite a law saying firms must gain the consent of communities before they can start digging their land, evidence has shown that it is being circumvented through bullying or bribing whole towns and villages.

The firms know the chances of them being brought to book for such actions are remote, says a study by the charity: 'There is no mechanism in international law to hold the companies or their parent companies to account for their complicity in human rights and other abuses so as to make them responsible for the repercussions of their activities.' Even when companies decide to establish 'progressive' credentials, they can still be browbeaten back to their old ways.

London-based Global Witness, which explores the links between big business and conflict, has been calling for details of transactions between companies and repressive regimes to be made public. It welcomed the February 2001 decision by British Petroleum (BP) to publish details of what deals it has done with the Angolan authorities. But the prospect that the promise would be fulfilled was called into question when state-owned company Sonangol threatened to tear up a lucrative contract with BP.

Global Witness campaigner Simon Taylor said: 'Our dialogue with many of the major oil companies operating in Angola suggests that if they had legislation forcing disclosure to fall back on, they would be able to claim to all protesting governments 'sorry we have no choice but we have to do this for the following reasons'.

Regulations forcing disclosure would level the playing field and prevent companies that do not disclose payments from being undercut by less scrupulous competitors.'

Campaign groups say the European Commission's green paper on corporate social responsibility fails to live up to the ambitions of EU leaders.

http://ec.europa.eu/comm/employment_social/soc-dial/csr/greenpaper.htm http://ec.europa.eu/comm/employment_social/soc-dial/csr/greenpaper.htm

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