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Article Released Fri-2nd-February-2007 12:49 GMT
Contact: Prof. Dr M A Miyan Institution: International University of Business Agriculture and Technology
 Dynamics of Corporate Social Responsibility – Bangladesh Context

Some untoward incident like boycott from the importer has taught the local business community about the immense importance of CSR and adoption of this modern and competitive practice is gradually increasing in Bangladesh.

Author: Professor (Dr) M Alimullah Miyan, Vice Chancellor & Founder of IUBAT – International University of Business Agriculture and Technology, Dhaka, Bangladesh


Summary
Apart from the benevolent social services by some business firms, the new concept of CSR is an emerging one. Businesses are driven by government, labor unions consumer groups and above all by considering CSR as a long time investment in PR. In the context of Bangladesh, it is more relevant for the export-oriented industry. Globalization has made CSR practice an imperative for Bangladesh business. CSR concentrates on benefits of all stakeholders rather than just the stockholders. Awareness and sense of necessity for practicing CSR is becoming more and more pronounced as the country has to adapt itself to the process of globalization. But the overall status of CSR in Bangladesh is still very meager. Lack of Good Governance, absence of strong labor unions or consumer rights groups, and inability of the business community to perceive CSR as a survival pre-condition in export and PR investment local market constitute some of elements undermining the evolution of CSR practices. Some untoward incident like boycott from the importer has taught the local business community about the immense importance of CSR and adoption of this modern and competitive practice is gradually increasing in Bangladesh.

Background
‘Corporate Social Responsibility’ or CSR for short is a relatively new term that has suddenly gained currency. Hundreds, indeed thousands, of companies are adopting ‘ethical policies’ or ‘codes of conduct’ saying how they intend to behave. More and more companies are signing up to such initiatives as the United Nations Global Compact or the Fair Labor Association. They are joining bodies such as World Business Council for Sustainable Development and CSR Europe. Take the example of McDonald’s. In the 1990s, the hamburger corporation took two campaigners through a long and exhausting libel court case in London after they criticized its corporate practices. Then there was the 2004 film ‘Super Size Me’. Its public image thoroughly dented, today McDonald’s leaflets in the UK show happy local farmers producing organic crops for healthy meals. Or the oil company Unocal, which was severely criticized for knowingly using forced labour to construct a pipeline in Burma, a country run by a vicious regime and subject to an international boycott. Labour rights’ groups in the US took Unocal through the courts. Unocal now has a huge area on its website devoted to CSR.

In fact, CSR means different things to different people. However, certain ideas are becoming commonly accepted. One is that CSR is not about philanthropy or charitable work. It refers to something much more fundamental. It is about how companies take responsibility for their actions in the world at large. Conventional CSR Watchdogs include Labor Unions, Consumer Groups, Environmentalists, NGOs and all ‘Stakeholders’ watching over their interest as opposed to ‘Stockholders’ only.

In essence, ‘CSR is positive rapport with the society’. In a Bangladesh context, several multinational companies and local companies practice CSR. Most of the business concerns in Bangladesh do not rate high in practicing CSR unless being pressured by the foreign buyers in case of export oriented business.

CSR in Bangladesh can also contribute a lot to community development. The corporate house can develop the community by creating employment, providing primary education, contribution to infrastructure development like road and high-ways and addressing environmental concerns. This is more relevant for a country like Bangladesh where the government interventions in these fields being augmented by corporate alliance can go a long way in developing the economy, society and environment.

In general, it is true that in Bangladesh, the status of labor rights practices, environmental management and transparency in corporate governance are not satisfactory, largely due to poor enforcement of existing laws and inadequate pressure from civil society and interest groups like Consumer Forums.

A focus on CSR in Bangladesh would be useful, not only for improving corporate governance, labor rights, work place safety, fair treatment of workers, community development and environment management, but also for industrialization and ensuring global market access. By now, many CSR dimensions are practiced in Bangladesh. The SMEs largely depend upon export. An Ideal example is the consumer boycott imposed on purchasing Bangladesh Readymade Garments on the ground that these are produced by under-aged child labor. The US and EU buyers set guidelines to Ready Made Garments (RMG) industry to ensure the standards. The 1992 Hrkin’s Bill and subsequent consumer and industry boycott of RMG products by USA and the consequent remedial moves by local RMG sector is one example. Moreover, some buyers from EU visited the sites of recently collapsed garments factories. A temporary ban was also imposed on Shrimp export to the EU on health and hygienic standard and appropriate remedial action followed in that instance too. But, some of the exporters found difficulty in convincing the US/EU buyers to have positive attitude towards Bangladesh due to inadequate CSR practices,

Lack of enforcement of Industrial Laws and Regulations, weak unions, absence of consumer rights groups and high level of corruption within the regulatory bodies make CSR violation rampant in Bangladesh. Two most significant foreign exchange sources is the RMG sector and the overseas manpower export. Unbelievably low compensation, working hours, health/hygiene/sanitation conditions, fire safety and various types of abuse are so common and to the extent of inhumanity that wild shock any conscientious individual to the core. Recently, the RMG sector employees have embarked on a industry wide movement to establish their rights.

Overseas workers are mostly exploited by recruiting agencies whereas these rural and mostly illiterate people have to sell all their belongings becoming paupers of lend money at very high interest. Owing to cheating by the recruiters and unlawful behavior by the overseas employers, many of them get compelled to come back as beggars, some after long confinement in overseas jails. Hardly any remedy is available from the law enforcing agencies.

Many industrial units run with half-century old machinery producing fatal air, soil and water pollutions. More modern factories also don’t care to install Effluent Treatment Plants.

Starting from FMCGs, vegetables, fruits and all other conveyable goods, adulteration, abnormal ripening at times with poisonous elements, keeping fish fresh with applying deadly Formalin and all other malpractice is rampant and carefree. Good Governance and efficient law enforcing agencies can only solve these plights.

Bangladesh is a developing country. Because of global competitiveness and demand, the CSR practices and standards are being implemented in Bangladesh. But we are yet go a long way. There are challenges to implement CSR properly in Bangladesh. Ultimately CSR practices should be better practiced in Bangladesh for better and enhanced performance.

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Meeting information

International Seminar on Corporate Social Responsibility, Cochin University of Science and Technology, Kerala, India. September 2006

Keywords associated to this article: Corporate Social Responsibility, Bangladesh
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