Behind the Mask the Real Face of Corporate Social Responsibility Contents Christian Aid/Liz Stuart

Behind the mask The real face of corporate social responsibility Contents Christian Aid/Liz Stuart Above: People from communities living around Coca-Cola’s bottling plant in Kerala, India, protesting about the company’s use of their ground water. Front cover: A Shell oil spill in Ogoni. Loveday Fomsi looks into a polluted stream, formerly a source of drinking water. Front cover photo: Sophia Evans/NB Pictures Behind the mask: The real face of CSR 1 Section 1 Unmasking CSR 4 Section 2 Sustained misery: Shell in the Niger Delta 22 Hooked on tobacco: BAT in Kenya 34 Living its values: Coca-Cola in India 44 Section 3 From CSR to corporate social accountability 50 Notes 60 Behind the mask The real face of CSR ‘We have lived so long at the mercy of uncontrolled economic forces, that we have become sceptical about any plan for human emancipation. Such a rational and deliberate reorganisation of our economic life would enable us, out of the increased wealth production, to establish an irreducible minimum standard which might progressively be raised to one of comfort and security.’ Lord Harold Macmillan, UK Prime Minister 1957-631 All day a steady file of people make their way up and Sadly, this story of failure is not new. In 1990, when 1 down the potholed main road running through the country was under military rule, local young Umuechem, going to and from a polluted stream people mounted a protest about the lack of such that is now their only source of water. Large trucks facilities. Shell called in the police, most of the thunder by at regular intervals, on their way to and town was burned to the ground and 80 people from the oil pumping station on the outskirts of were killed. To this day, no one has received a town. For, despite the lack of basic amenities, this is penny in compensation and the basic amenities the oil-rich Niger Delta of southern Nigeria. are still missing. As well as taps that are dry, this town of 10,000 This is the story of corporate social responsibility – people also has a hospital that has never treated a or CSR – writ large. Certainly, it is a story that patient, a secondary school where no lessons have stands in stark contrast to Shell’s professed ever been taught, a post office that has never commitment to ‘core values of honesty, integrity handled a letter and a women’s centre that has never and respect for people’. held a meeting. All were supposed to have been supplied under ‘community development’ schemes, Outside certain areas of business and investment funded from oil money – local wells produce 15,000 and supporters in the public sector, few people will barrels a day. But all have failed or remain unfinished. know much about what CSR is, where it comes from and how it works. If they have ever heard of it, Four of these projects were ‘generous’ gifts from the they will probably just think that it sounds like a Shell Petroleum Development Company of Nigeria – good thing (which it does, that is part of the point). the oil giant’s subsidiary that runs the flow station But this is now a big, and growing, industry, seen as near Umuechem and is the country’s dominant oil a vital tool in promoting and improving the public company. The others, including the water system, image of some of the world’s largest corporations. came from the state-financed Nigeria Delta Development Corporation, which works alongside In simple terms, companies make loud, public Shell – to similar effect. commitments to principles of ethical behaviour and Christian Aid: Behind the mask undertake ‘good works’ in the communities in which • British American Tobacco stresses the they operate. It sounds and looks like a modern importance of upholding high standards of version of selfless philanthropy and no doubt in health and safety among those working for it, many individual cases is motivated by a genuine and claims to provide local farmers with the wish to help and has led to some benefits. The necessary training and protective clothing. But problem is that companies frequently use such contract farmers in Kenya and Brazil say this initiatives to defend operations or ways of working does not happen and report chronic ill-heath which come in for public criticism. related to tobacco cultivation. ‘We can’t be so bad,’ would go a company’s • Coca-Cola emphasises ‘using natural clichéd CSR-backed response. ‘Look at all the resources responsibly’. Yet a wholly owned nice things we do.’ subsidiary in India is accused of depleting village wells in an area where water is CSR, in other words, can become merely a branch notoriously scarce. of PR. Sometimes this looks like the only reason for spurts of development activity by large companies. Christian Aid is saying that CSR is a completely Shell, for instance, was at the forefront of CSR in inadequate response to the sometimes devastating 2 Britain, following the joint public relations disasters impact that multinational companies can have in an of the Nigerian government’s execution of human ever-more globalised world – and that it is actually rights activist Ken Saro-Wiwa and the row over the used to mask that impact. Those who suffer the company’s plan to dump the Brent Spar North Sea most as a result are the poor and vulnerable people oil platform – both in 1995. Certainly for some, such in developing countries and the environments in as those living in Umuechem, Shell’s CSR which they live. programme has brought no tangible benefits. Business, moreover, has consistently used CSR to Christian Aid, of course, supports responsible and block attempts to establish the mandatory ethical action by business. The problem with CSR, international regulation of companies’ activities. Its we say, is that it is unable to deliver on its grand basic argument is that CSR shows how committed promises. The case studies in this report highlight corporations already are to behaving responsibly and that the corporate world’s commitments to that introducing mandatory regulation could destroy responsible behaviour are not borne out by the this good will. Business leaders are also constantly experience of many who are supposed to benefit saying that regulation is bad for their profits – the two from them. In some cases, the rhetoric and the statements are, of course, not unconnected. reality are simply contradictory. Modern CSR was born during the 1992 Earth • Shell claims that it has turned over a new leaf Summit in Rio de Janeiro, when UN-sponsored in Nigeria and strives to be a ‘good neighbour’. recommendations on regulation were rejected in Yet it still fails to quickly clean up oil spills that favour of a manifesto for voluntary self-regulation ruin villages and runs ‘community put forward by a coalition of companies called the development’ projects that are frequently World Business Council for Sustainable ineffective and which sometimes divide Development. Its version of events was endorsed communities living around oilfields. by the US, the UK and other western governments. The British government, for example, is still a vocal supporter of voluntarism. Christian Aid: Behind the mask Such resistance to regulation, this report argues, At a national level, we want the UK government to: has left the worst corporate abusers effectively unrestrained, and the victims of their actions • adopt new laws to make corporate social and without adequate means of redress. Whatever environmental reporting and disclosure responsible initiatives companies choose to carry mandatory for British companies – including the out on their own behalf, binding international disclosure of payments to overseas standards of corporate behaviour must be governments, information on the social and established to guarantee that the rights of people environmental impact of overseas operations and the environment in developing countries are and details of legal actions against companies properly protected. • frame new responsibilities for company ‘There are some companies that will only take social directors to give them a ‘duty of care’ for responsibility on board if they have to,’ one retail- communities and the environment, making them sector source told us. ‘You’ve got to use regulation legally accountable for the actions of their to make them.’ companies overseas This is not pie-in-the-sky wishful thinking. There is • change the law to enable people harmed by already a model of how such regulation could work British companies’ overseas operations to seek 3 in moves currently being made to curb bribery. redress in UK courts and to provide the Since 1997, some 35 rich countries of the resources to enable them to do so. Organisation for Economic Cooperation and Development (OECD) have signed up to a The European Union also has a critical role to play convention that outlaws the bribery of foreign public internationally, as its member states are home to officials by business people. This is the first modern some of the world’s largest and most influential example of internationally agreed, legally binding multinational corporations. regulation for non-financial reasons. Christian Aid, then, wants to give companies’ Britain, after a bit of OECD prodding, has now ethical commitments ‘teeth’ by underpinning them fulfilled its obligation by enacting new anti-bribery with binding regulation. We are advocating a move laws. More than 100 UN member states appear beyond corporate social responsibility to corporate likely to take this one stage further and have already social accountability – meaning that companies in signed a UN convention on bribery. These activities future will have a legal obligation to uphold have already led business to take a far greater international standards.

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