Position Statement on Corporate Social Responsibility

In many Asian societies, Corporate Social Responsibility (CSR) is generally understood as being no more than corporate-run community development projects to compensate for social and economic injustices. Most of such projects, like constructing schools and health care centres, have been effectively hegemonic, providing strong legitimacy and extensive license to corporations to sustain the exploitation of the human and natural resources in many countries. A further implication of CSR is that it makes people think that it is the company’s obligation to meet people’s rights to a better education system, clean water, health care, etc., instead of the State or government. At the same time, this has allowed the State to escape from its obligations towards society.

CSR is a simple but effective method for corporations to obtain legitimacy as a responsible social actor. It is also a status-enhancing way for them to acquire an excellent and clean image in the public. For many corporations, the implementation of CSR can increase the sales of their products and market share. CSR can also help the brand attain a good reputation and promote workers’ productivity. It can reduce production costs, attract more investment, and achieve more favourable credit and ratings. In this respect, there is no doubt that CSR is a vehicle for increased corporate power in society.

There are many actors involved in CSR activities: NGOs, government, and international institutions, which eventually make CSR an emerging industry itself, valued at US$ 31.7 billion in 2007. CSR-driven initiatives such as Multi-Stakeholders Initiatives (MSI) claim to have an impact on core labour issues such as freedom of association and collective bargaining. However, the reality has proven that CSR has done more harm than good.

In the labour movement, CSR has transformed itself into a mechanism called the Code of Conduct. The Code of Conduct is a fundamental manifestation of the CSR, which corporations consider as part of their business public relations in response to accusations made by activists. Certainly, corporations by nature do not see CSR as their obligation, but as a business strategy to achieve greater profit by fulfilling its social responsibility.

By promoting Codes of Conduct, employers alter labour relations in the factories towards a harmonious industrial relation to sustain their violations against labour rights without facing any resistance. Codes of Conduct are aimed at making people feel good and pacifying labour, consumer, and civil society movements. It has the mission of protecting multinational corporations’ interests in international sub-contracting. The way that Codes of Conduct domesticate the movements is that it serves as the basis for NGOs, and even labour unions, to be engaged in the supervision work of the manufacturing process of multinational corporations. In the end, many NGOs and labour unions participate in the bandwagon of Code of Conduct monitoring, taskforces, stakeholders’ roundtables, etc., forsaking their core work at the grassroots.

Codes of Conduct create the privatization of labour law and promote self-regulation in the factories. By promoting Codes of Conduct, employers divert the focus of labour and consumer movements into setting up localized regulation, but at the same time neglect the national constitution and the labour law. Employers try to convince us that voluntary standards are better than the existing labour law, which suffers from a lack of implementation. Thus, the Code of Conduct logically has an inherent contradiction in itself: it suffers the same root problem as the labour law, which is the failure to be implemented and enforced. For that reason, we are very doubtful that local labour laws will be improved and properly enforced under the Code of Conduct influence.

Moreover, Codes of Conduct and other types of CSR have the ‘divide and rule’ effect. At the workplace level, CSR hampers the development of genuine, free and independent unions, which are further stigmatized as trouble-makers in society. At the community level, CSR affects the loss of harmony within society, as a number of people get benefits through jobs, gifts or trade opportunities, while others get none; some people are even deprived, such as when they have to give up their land. At the national level, the impact of CSR is obviously seen as the rupture between the proponents and opponents of CSR is ever widening. Meanwhile, at the global level, Northern and Southern workers become less and less likely to reach out each other, as they get co-opted by multi-stakeholder initiatives and become more invested in them, rather than in seeking the solidarity of other workers. In a nutshell, CSR undermines solidarity between workers.

At the moment, CSR has won the battle of ideas and serves the neoliberal agenda of a reduced role for the state in favour of an expanded role for the corporate sector. To respond to the facts, we are challenged to face it in several ways. First, we have to demystify CSR. Many experiences show that CSR fails to produce concrete improvement in working conditions, but also diverts movements’ attention away from real issues. Second, we have to strengthen unity between workers, to have better communication with one another, and a united front against extensive promotion of CSR. Third, we have to establish more effective international solidarity.

On this occasion, we are calling everyone who shares the above-stated perspective about CSR and its impacts on society, to endorse this statement to confirm that CSR activities are detracting from labour unity and failing to contribute to sustained worker empowerment; and that labour groups must focus on increasing the collective power of workers to assert their labour rights, not relying on what is granted voluntarily by corporations.

Works cited and further readings:
Dae-oup Chang, ‘The Strategy of Triangular Solidarity: What is International Solidarity for Asian Workers in the Global Factory’, Asian Labour Update, Issue 65, October - December 2007, http://amrc.org.hk/alu_article/labour_resurgence_under_globalization_ii/the_strategy_of_triangular_solidarity_what_is_i

Apo Leon and Ka-wai Chan, ‘Critical Refl ection on CSR: A Labour’s Perspective’, Asian Labour Update, Issue 60, July-September 2006, http://amrc.org.hk/projects/Critical_%20Reflection_%20on_%20CSR

Hilde van Regenmortel, ‘Corporate Social Responsibility (CSR): A Vehicle for International Solidarity? Asian Labour Update, Issue 75, April-June 2010, http://amrc.org.hk/node/1022

The statement was drafted following a consultation of labour groups and activists in May 2010, which had been reported about in the previous issue of ALU, Issue 75, ‘Corporate Social Responsibility: A Vehicle for International Solidarity?’. The statement is intended to stimulate labour groups to reflect and take a position on the role and impact of ‘corporate social responsibility’ on the labour movement in Asia.

To endorse the above statement as individual or as organization, or to share your own opinion or experience, please reach me at: fahmi@amrc.org.hk

See: http://amrc.org.hk/node/1004
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