Do your duty: CSR in Arab World

My professional life requires a constant updating of the reality of various subjects, including CSR, and in that sense I came across some information about this topic in the Arab world. The theme in general is always very interesting and dynamic anywhere in the world, and this area of ​​the globe is no exception. In this theme the social aspect is central and therefore the search for information on cultural research becomes even more interesting. Another aspect, in my opinion, for this type of theme in a society increasingly globalized, is the need to learn and understand fairly different issues, cultural differences and factors that impact the implementation and operation of the CSR.

So when searching for information, through some contacts, I came across some issues I think are interesting to underline and analyze, and in this case, CSR in the Arab world.

Starting with some statistic from Ambreen Waheed and Faiz Shah article “Can Faith Build Competitiveness?”, included in AccountAbility’s “The State of Responsible Competitiveness 2007” report: «The fifty-seven member countries of the Organisation of Islamic Conference (OIC) are home to 20% of the world’s population. Between them they provide 70% of the earth’s energy resources, and 40% of the raw materials that global industry relies on. Yet the collective Gross Domestic Product of all OIC members put together accounts for less than 5% of the world’s GDP, and their mutual trade is a mere 7% of the volume of international business. It is not surprising then, that 31 out

of the 57 (54%) are classified as “least developed low-income” countries.» This citation gives us some data about the reality in the Arab or Islamic world. But some of you can start to question “can we even think in CSR issues in these countries, with these numbers?”   

To answer some of these questions we can look at the Second Annual CSR Middle East Survey, conducted by Sustainability Advisory Group (SAG) in 2010. One of the key conclusions from the survey is that regional businesses are increasingly recognizing that Corporate Social Responsibility (CSR) is a business imperative rather than a philanthropic add-on. Maria Sillanpaa, Founding Director of SAG, said the survey covered public and private sector organizations in eight countries in the region. More than 60 percent of the respondents are based in UAE and the rest are located in Saudi Arabia, Bahrain, Oman, Qatar, Yemen, Jordan and Egypt.

«We are clearly witnessing a shift in attitudes towards CSR in the region – previously CSR was perceived as a bit of a fringe issue, perhaps a ‘nice to do’ activity if time and resources allowed. Now executives are increasingly agreeing that it should be integral to their business strategies. We see this reassuring level of sophistication in the regional understanding of CSR as a sign of maturity and a wish to keep up with the powerful international trend.», said Sillanpaa. However, beside these positive signs, there are some issues not so important for businesses in the region, like environmental issues related to water, waste management and climate changes. But in an overall point of view «People issues such as employee well-being, health and safety, recruitment and retention, ethical practices, governance and transparency continue to be rightly recognized as the critical CSR issues businesses within the region must tackle.»

You might say: “OK, but where’s the different aspects?”, “What’s the point?”. Jumping to Sillanpaa’s “My Middle Eastern Sustainability Journey”, that highlights the religion aspects, with the dominant Islamic tradition. Sillanpaa writes: «Although corporate responsibility defined in a Western ‘modern’ sense is still in its infancy, some core ideas are not new to Arab cultures guided by a strict allegiance to Islam as a deep rooted sense of personal duty towards the community and wider society. Therefore the term ‘corporate responsibility’ is still often understood as synonymous with charity – an extension of individual Zakat (One of the Five Pillars of Islam that wants Muslims to donate part of his income to the poor and needy).» Some sources, like the 2007 background paper from “Corporate Social Responsibility and Corporate Citizenship in the Arab World” conference in Cairo, Egypt, say that «CSR has typically been introduced by multinationals, and passed on through subsidiaries in the region.» And if we think that Corporate Responsibility and Responsible Competitiveness are based on values, the search for values can lead us to culture and religious aspects. Going back to Waheed and Shah’ essay «that looks at the way Islam has sought to enshrine societal good within the paradigm of economic activity.» The authors add that «Islamic teachings seek to encourage the spirit of entrepreneurship, but define clear moral and societal limits, to prevent exploitation. Social responsibility is central to Islamic business principles, with well defined responsibilities for entering into contracts, guaranteeing quality, ensuring ethical dealings, and securing accountability.»

Recently, ArabCSR.org (The Arab Encyclopedia of CSR) announced that is to launch “The First Arab Social Responsibility Report” in 2011. ArabCSR.org chairman, Buthaina Hasan Al-Ansari, highlights that the importance and benefit of Arab Social Responsibility «deprive from its ability to entrench the values of CSR in the Arab region, which in its turn will support the national attitude of the countries seeking to accomplish the millennium goals». The report reveals the growth of SR initiatives in the Arab countries, and demonstrates the increasing importance of SR to nation leaders. It underlines some very good examples such as Saudi Arabia, with special attention to CSR activities supported by kingdom rulers. Qatar, that attained most of the Millennium Development Goals, and the launching of the first Arab network dedicated to social responsibility. The UAE, where SR gained an increasing importance over the last 5 years, adopting SR within the strategic view of the federal government. Egypt, with SR enhancing, highlighting the launching of Egypt’s CSR Index in 2010; and Syria, with an unprecedented attention of SR concept supported by launching CSR Syria network. The report doesn’t cover 7 of the 22 Arab countries due to lack of information.

Of course some of this information can start discussions about various points of view. But till now, in a general perspective, we can summarize most of the information as follows:

-     - The Arab world encompasses some regions and a number of countries with huge potential for growth and wealth, as statistics show;

-     - Religious and culture aspects can enhance CSR growth, making it more natural to evolve;

-     - CSR evolution started somehow with west influence, through west companies, but rapidly Arab social responsibility took it own course.

But one of the aspects that call out my attention was an article published in The National, a newspaper from the UAE, had the following title: “Do your duty is the message to business in Emirates”. The article written by Neil Parmar, covered the 8^th CSR Summit in Dubai last April, and had an highlight that says «Companies urged to overcome cost fears and restore projects that help their employees». It called my attention because it focused on employees, it focused on employee’s related projects, and the need to concentrate efforts on that path. The author highlighted what experts were saying: «Businesses can start small socially responsible programmes by focusing on their own employees». And in the Summit’ advertising there was a phrase that means a lot in this theme, from Lebanese explorer Maxim Chaya: «there’s no profit without people or planet».

Just remember on so many CSR programmes, more focused on corporate priorities than on real Social Responsibility issues, some of them forgetting that organizations are about people and not profit, and if you still want to focus on profit, just remember Chaya’s phrase. Remember also that CSR can and should be based on values and culture values, and can even make some bridges with religious values, because their ultimately culture values. We can learn some much from others.

Bruno Slewinski
Orex SM | Sustainable Marketing
www.orexsm.yolasite.com

Public Business Social Responsibility

Social Responsibility issues can and must extrapolate beyond the business universe. It's not something only for the private business sector, it apllies also to the public business sector. But even within this universe there are not only matters of initiatives or intents, but issues related to social impact - positive or negative - of a company's business. It’s good to note that most of any organization’s activity has an impact on social level and beyond, of course. However much of this may seem obvious, but the reality is that even though we they talk about it, certainly do not practice it.
To better explain this idea I will illustrate using the context of the in Portugal at various levels, with some questions for reflection on their social impacts.
This past Thursday, October 13, the Portuguese Prime Minister, presented the new state budget, expressing a series of austerity measures, especially violent. The measures include reducing wages and cutting benefits, raising taxes, increasing the workload, among others. How to calculate - and it’s not necessary to know the country’s reality – the way measures such as these affect brutally most of population, or have consequences at the social level but also at the economy’s level.

Cases: 

A recent report, evaluating most of large public Portuguese companies - most of them with severe losses - found that the monthly costs per employee in 12 companies on average are 3.500 Euros. Other two were even above that salary average. Compared with the Portuguese gross average wage, which is 900 Euros, the issue can become shocking. But the problem is not in this comparison, but the finding that these companies do not have enough income to even support their personnel costs, much less all costs. Since this is an absurd on management logic, automatically infers an untenable situation.
Portuguese State and Portuguese families have in recent years living beyond their real financial resources, resulting in the country’s current situation.
In this example, if we think in social responsibility issues, we can see that these companies’ employees may even have good benefits and conditions, a minority in any way compared to the negative social impact caused by this business posture. These conditions are unrealistic, given the reality of the organization, cause an impact that goes far beyond the activity itself, upsetting expenses, and affecting taxpayers in general. Ultimately the benefit employees will suffer consequences sooner or later, as well as creating false expectations for themselves and others interested.

Another case, more international, related to the social impact of rating agencies. In Portugal’s case, with last rating downgrade, the country was faced with a 4 level fall. Not questioning directly the reasons for this decision, I’ll throw it for discussion, if these decisions should not consider their social impact?
Rating a company that pays to see their condition evaluated is one thing and has more limited impact. Now a country’s rating should be weighted differently, especially because of social issues. What is the Social Responsibility of these assessments and how can it be assessed? Does the impact of these decisions is really considered? Is it not time to start thinking about the social impact of activities that affect entire countries and populations? If the ratings are produced by default as a benchmark for investments and investors, shouldn’t the impact and risks be confined to this area? Probably it’s not possible, but the scope of rating agencies assessments should consider the actual impact of the decision, because the effects of the rating downgrade are always bigger, broader, beyond its financial, economic and social development.

One case, crossing recent Eurostat information, where it is pointed out that in 2010, Portugal has only five countries less productive, within the 27 European Union countries. This is even more relevant knowing that in Portugal people work more hours than the European average. Thus, one of the measures imposed by the current Portuguese government is the extension of working hours for the private sector. This has its advantages and can increase productivity and competitiveness. But the relevant SR issues on this subject are on both sides, from corporate responsibility for a change, to the workers who will have to become more aware of the importance of productivity. In the end, investing all in a mix of mutual or complementary responsibility.

Another case, also related to situations that can easily become unbalanced, in this case because instead of investing in means and tools for a sustainable and balanced way, on the contrary, means and conditions are provided for total neglect. This is the case of an audit report of the Court of Auditors on the management of Portuguese public hospitals administrators, which are referred to several questions about the wages system of the administration members. Soon, one of the issues is unclear which are to set their own fees, even if delimited by statute, but that are unable to manage sustainably, when the imbalance begins in them. Another is when some doctors of these hospitals receive more than double those administrators. Not being into question the fairness of certain people to make good, the question is, once again, the balance between revenue and costs/ expenses.
About social responsibility in the public sector, especially around ​​health, hospital management, when the priority seems to be the management and not to those who need aid. How can you put CSR at this level? What are the responsibilities?

Finally, please note that, in terms of justice, for the first time, authorities are speaking to find out who and what has been contributing to public accounts imbalance. Although it is still something in the intentions field, the way it is stated already, in itself, is extremely positive. Where possible, the problems cause identification and for itself, is a great way for Social Responsibility. 

The Obvious Revolution

Orex SM

www.orexsm.yolasite.com