Corporate Eye

The Sharp End of CSR

mobile phone explosion

It’s not beyond the realms of imagination to say that on 10th March 1876, in a small electrics shop in Boston, Massachusetts, one of the bloodiest conflicts in African history received a significant boost.

On that day, Alexander Graham Bell said “Mr Watson, come here. I want to see you.”  In the next room Thomas Watson heard these words through the magic of the telephone.

Nearly 100 years later, on June 30th 1960, The Republic of Congo gained independence from Belgium and a long tussle over its mineral wealth began.  This has been especially intense in the past decade, with over 3 million people lost as a result.

What links the two events are four elements: tin, tantalum, tungsten and gold.  These are found in rich deposits in the east of the country where the fighting is at its most intense.  They’re also key elements in mobile phone handsets.

There is no co-incidence here.  Congolese rebels are encamped on the deposits precisely because they can sell them for money and arms.

Corporate mobile phones are, quite literally, fuelling a war.

The Difficulties of International CSR

CSR has taken many twists and turns through the last decade or so, passing through environment, health and safety, child labour and a host of other concerns on the way.

Right now, everyone’s deeply worried about climate change, and rightly so.

A piecemeal approach has evolved to tackle these issues.  It relies on all companies applying comparable standards within their own individual domain, engendering a sense of confidence that those standards are being maintained across the board.

This is progress insofar as it goes and it works very well when all the companies involved are operating under the same legislative umbrella.

However in a multinational context it doesn’t work: legislation, morals and ethics will (and should) always be different.  And so will standards.

Big Failures Across Industry

Shifting A Responsibility“Shifting A Responsibility”
from “Squibs of California, Or, Every-day Life Illustrated”
by Palmer Cox, pub.1874

For example, many of the world’s IT and telecoms colossi are signatories to the Electronic Industry Citizenship Coalition (EICC) and have adopted its Code of Conduct.

Yet because most of the actual manufacturing is subcontracted to factories on the other side of the world, standards are notoriously difficult to enforce and auditing can be fairly easily fixed.

A staggering 90% of EICC signatories say working hours in their supply chain are a problem.  One factory was found to be operating two 12-hour shifts seven days a week, with each shift including two half hour breaks.  That’s a 77 hour working week.

It’s not just the electronics industry which is plagued by such revelations.  In the fashion industry there are persistent issues with child labour and in Holland a new “Child Labour Free” fashion shop has recently opened.

Then there was the spectacular news that a leading international bank had invested in a landmine manufacturer, despite having a clear “no landmines” clause in its investment policy.

The Sharp End Of CSR

Within the CSR movement there is a fundamental message which is gradually becoming engrained into every branch of corporate life: every one of your decisions affects someone somewhere, possibly more than you could ever know.

To date the piecemeal approach has meant companies have only looked at their own communities and suppliers, considering that to be satisfactory.

It’s now time to take this a step further.  CSR companies need to look not just at their suppliers and their local communities, but also their suppliers’ suppliers, and their communities.

A healthy market is one where commercial pressure is brought to bear.  Faced with the discovery they’d just bought raw materials gained through murder or extortion, most company directors would cancel the contract immediately.

Why should it be any different for mobile phone handsets and computer keyboards, just because the murder and extortion is happening a few steps away?

Active companies who see no further than their own corporate battlements will not help to establish a responsible business model across the commercial world.

We need activist companies, who will join up the dots and take responsibility for every effect their actions have, no matter where that is or how many steps removed.

Picture Credits: Bakalov-mobile-phone-explosion-cc-by-sa-4032x2996px by christo.bakalov under Creative Commons Attribution Share Alike License; Shifting A Responsibility by indiamos under Creative Commons Attribution License.  Both from flickr.

The following two tabs change content below.
A former CTO, Chris has a broad and varied background. He’s been involved with blue chips, consultancies & SMEs across a wide variety of sectors and has worked in Europe, the Middle East and Australia. In 2007 he decided to combine his knowledge of business and IT with his passion for all things sustainable and has been busy writing ever since. However, his greatest ambition remains to brew the perfect cup of coffee.

“CSR companies need to look not just at their suppliers and their local communities, but also their suppliers’ suppliers, and their communities”

I couldn’t agree more with this. The ‘network model’ of Rowley’s stakeholders’ theory (1997), mentions that all stakeholders, such as customers, suppliers, employees, government, competitors, can have their own set of stakeholders. Hence, when a firm starts to perform ethically this should have an impact on its stakeholders, and in turn on its stakeholders’ stakeholders, thus creating a ‘multiplier effect’, one that bears radical changes upon society in a chain sequence (I think a paper by Preuss in 2000 offers more info on this). CSR cannot be isolated in western societies, but it should take into account the global environment, trying to create an ‘ethical chain reaction’ among all stakeholders.

Thank you for your comment Konstantinos!

One thing I think CSR practitioners and ethical advocates need to be careful about is cultural differences.

There are people far better positioned than I to address this in detail, but my brief opinion is that while a CSR company can choose not to do business with another company for ethical reasons, it should not assume that its own ethics are “better” than any other.

Diversity is the key, and in order to support diversity the primary CSR requirement of transparency has to be adopted.

I wonder if anyone has any examples of such a “you go your way, I’ll go mine” approach to CSR?

Good article. I wish more of the PEOPLE who run corporations saw these issues as their personal responsibilities, not just as a “corporate standard”. There is a difference in energy when one sees an issue as an extension of one’s personal responsibility and lifetime legacy, as opposed to a company policy that is 90% for meeting “industry standards” and 10% because people care.

I myself know that we have a limited number of chances in our lives to make a difference, and if I was in the corporate world (which fortunately I got out of more than 25 years ago) I would do my damndest to have ethical principles a vigorous part of the overall corporate behavior.

Whoah. It seems just another Giant Corp. say one thing and do another. I’m not surprised by the ethics, but I am surprised, and struggle to comprehend, the scale at which this operates.

(Perhaps I missed the obvious, but what’s “CSR”?)

great piece. thank you for bringing this to light. as you seem to say, we really have to bring the reality of the situation to the forefront of our mind and not just let it slip away because it is so easy and convenient to. and companies must do the same as well

thank you for this, Chris

Obviously, this sounds like a terrific strategy, but the problem is that, even in my small business, there would be no end. What about the suppliers’ suppliers’ suppliers? No matter what his or her intentions, ultimately a CEO is responsible for making a profit, protecting shareholders and securing the jobs of the folks who work for the company.

Don’t get me wrong, I agree that corporations should give a high priority to social responsibility, but if the bar is always moved higher or further away, there will be a point where stockholders (including pension funds, 401Ks, etc.) will revolt or the companies will go out of business.

Greed by large companies. as long as the consumer doesn’t realize where or how they get their product.

Although, I am no longer surprised to read about such goings on, I have yet to develop a thick enough skin to protect me from the hurt such revelations engender. I appreciate that people living in desperate situations are driven to terrible acts. However, ignorance and avoidance by wealthy individuals and organisations is almost as disturbing as conscious complicity.

I recently spoke with someone who fervently believed in the nexus of contracts perspective and felt that corporations only did what customers demanded. I disagree. Even so, if he was correct, I feel most customers do not know HOW the corps. go about meeting demand. Unless the customers are informed they cannot be held solely responsible. And it appears many, many are invested in maintaining consumer ignorance.

Blood diamonds, sweat-shop and child labour, toxic floristry, mobile phones and arms etc. Sometimes I struggle simply to read about such goings on, but I also acknowledge the fact that blowing the lid on systemic abuse and corruption is the beginning of the only way to address the issues and move towards anything verging on authentic, enforceable, holistic CSR, from concept to consumer.

Thanks for the comments everyone, some wonderful points made all round! In general, I think the example of mobile phones really brings home how much our business and personal lives are founded on some very questionable practices (to out it mildly).

To pick up on a couple of :

@S.Smith CSR=”corporate social responsibility”, Steven, a convenient hook which many (myself included) hang their own opinions on how business should operate on. Some will include environmental issues in CSR, some will not.

@Jim McClellan the issue of how small businesses deal with CSR is a very valuable and pertinent one; many of the leading standards are simply out of the financial reach of small enterprises. Naturally the article was targetted and muh larger enterprises but this does not mean smaller enterprises should not make responsible business decisions as well.

@Alex Radway I agree, the contract nexus argument only works if consumers are fully informed but (alot like politics) most don’t want to be that fully engaged. However I’m always a little edgy about “enforcement”: surely once something is enforced it is no longer genuine or authentic?

Greed by large companies…

Comments are closed.