AsiaLIFE

Corporate Social Responsibility has been blasted by critics as a “ludicrous” concept, but in Cambodia many companies are determined to make a difference. Ellie Dyer finds out more. Photography by Dylan Walker.

In the heat of the midday sun, hundreds of grinning schoolchildren race around the playground of Sansum Koshal International Language School in suburban Phnom Penh. When called into their lessons, their wide smiles remain. Like so many young Cambodians, these children - tightly clutching their pens and pencils - are eager to learn.

Though the school is government-run, around 800 of its 2,385 pupils are taught each day in the two-storey Sally Thompson building, one of the newest parts of the complex. The eight-classroom structure, packed with chanting pupils aged five and above, was built in 2009 using tens of thousands of the dollars from transportation giant Crown Worldwide Group, headed by James Thompson. The company donates up to US$2 million each year to good causes and has helped build two schools and a library in Cambodia.

Such corporate donations are becoming increasingly common. From school builds to tree planting schemes, improved working conditions to vocational training programmes, many businesses are out to prove a point - that they have a heart. Though dismissed by its harshest critics as a public relations ploy, Corporate Social Responsibility (CSR) is becoming a necessary part of modern businesses around the world, and Cambodia is no exception.

“Decent treatment of workers around the world is embedded in consumer choices, making it both a social and business imperative,” says Tuomo Poutiainen of the International Labour Organisation’s Better Factories Cambodia scheme, which monitors conditions in the Kingdom’s garment factories. “If Cambodian firms want to compete in the global markets… then just to comply to minimum standards and laws may not be enough.”

Investing in Society

Multinationals, which have traditionally led the drive towards CSR in Asia, seem to agree. Energy giant Chevron, currently developing oil resources off the Cambodian coast, has more than doubled its global community investment in the last five years to reach US$197 million in 2010 and is supporting HIV/Aids awareness projects and educational programmes in the Kingdom.

Australia-based ANZ bank, which operates a joint-partnership with local conglomerate Royal Group, runs domestic schemes to boost financial literacy and gives its employees paid leave for volunteer work, while the Cambodian branch of drinks firm Coca-Cola spends 1% of its pre-tax and interest earnings on CSR. Smaller businesses have also joined in by working with NGOs to help re-train victims of trafficking, providing resources for charities and donating to good causes such as flood relief.

But amid smiling portraits of CEOs and orphans, can CSR make a difference in a country where human rights abuses are rife, poverty is overwhelming, and corruption and exploitation commonplace? And why are such programmes being run? The answer, it seems, is complex.

Power of Philanthropy

Many corporate leaders claim that incorporating CSR into company operations is a decision born out of a wish to help the needy, whilst engaging with the communities in which they work.

Coca-Cola’s Country Manager Paul Popelier says that, “In a world where we are forced to do more with less, with populations growing beyond control, natural resources wearing thin... sustainability and social responsibility are core to our business continuity and survival.”

Philanthropy is also a means of making individuals “rich in other ways”, says Crowns Chairman James Thompson, who started his company with just US$500 in 1963 and has seen it grow to have assets of US$603 million today. Thompson launched a CSR scheme around 15 years ago and also talks to other Asia-based businesses about social responsibility policies.

“I’m one of a community whose purpose is to bring in businesses and share that it’s about what you can contribute to society,” Thompson says. Although not every business owner shares his philanthropic viewpoint, he is “hopeful CSR will develop” further in Asia.

In Cambodia, there is a belief that a new generation of businesspeople, who have been exposed to Western business practices through study abroad, are also strengthening CSR schemes.

“The younger generation moving up through the corporate ranks see this (CSR) as a natural thing. They are doing it because they want to do it,” says Frank May, Chief Operating Officer of telecommunications company Emaxx, a firm which has helped eye specialists come to the Kingdom and also led a safe driving campaign.

Making the Choice

For businesses, however, CSR is often inextricably linked with marketing and public relations – a relationship that can prove contentious. Last year, Chevron launched a global advertising campaign called “We Agree” that publicised its commitment to renewable energy and community support. Pranksters, however, set up a fake website that suggested Chevron agreed that oil companies should "fix the problems they create", highlighting controversies over the firm’s environmental record in Ecuador, South America. Chevron has branded accusations over its record in the country as “illegitimate” and is appealing a US$18 billion judgement made against it by an Ecuadorian court earlier this year over accusations that its subsidiary Texaco helped contaminate the Amazon.

But for CSR to be sustainable, many believe clear economic benefits are necessary. Stephen Higgins, chief executive officer of ANZ Royal Bank, says that while every employee wants to work for a company that passes “the barbeque test” – where you can admit to who you work for at a party – it is also important that social responsibility “makes business sense” by enhancing a brand’s reputation or creating a better public perception of that company. Many companies are answerable to shareholders, therefore it is important that the benefits of CSR are demonstrable for such schemes to continue in the long term.

“Business acting in self-interest is not necessarily a bad thing… the key is for businesses to realise that in the long term it’s in the interest of the business that it has a good reputation,” Higgins says, adding that many Cambodian firms make ad-hoc donations to good causes but have yet to put in place a set framework to manage such schemes.

Although in some Asian countries there has been “some trepidation about promoting these activities… when done as a part of an overall communications strategy, it is highly effective”, adds John Da Silva, project development manager for non-profit organisation and CSR training body Kenan Institute Asia.

The importance of a financial benefit to CSR can also be emphasised at a grass-roots level, where the choice of whether to invest in social causes can be dependent on both profitability and the attitude of the business owner.

David Jesze, Director of Hagar Social Enterprise Group, which helps Cambodian victims of trafficking and abuse earn livelihoods though Hagar’s catering businesses and work placements at medium-sized firms, says that CSR policy “lives and dies” with the philosophy of business owners and is to a certain extent dependent on a company’s financial position.

“If the money’s not there, they won’t [allow training placements],” he says. “It’s hard to fulfil a social element when money is lacking.”

Critics and Reality

Regardless of the motives or benefits surrounding CSR, some academics believe that such schemes are meaningless in an environment where a company’s drive for profit is paramount.

Australian academic Timothy Deviny wrote in his 2009 paper on CSR “it is the natural vice of corporations that they gravitate toward solving problems from which economic rents can be claimed.” The “holy grail of CSR—‘doing well by doing good’—is an illusory goal that is noble in spirit but unachievable in practice,” he adds.

Such criticisms have been taken even further by American academics Jessica C. Ludescher and Rubiná Mahsud who highlighted the “ludicrous nature” of CSR in their 2010 paper “Opening Pandora’s Box”. They wrote that “CSR becomes nonsensical when it is applied to businesses whose mission is to create products that are addictive, hazardous, or destructive,” using the defence industry as an illustration.

Although such viewpoints are controversial, with ANZ’s Higgins dismissing Ludescher and Mahsud’s premise as “a bit silly and short-sighted”, potential gaps between CSR policy and business reality are evident - especially within Cambodia’s garment industry, which is reliant on mass cheap labour.

Factories producing clothing for international brands H&M and Puma, which both advertise their commitment to social responsibility online, were hit by mass worker faintings this year – spreading pictures of wan employees attached to drips in Cambodia’s hospitals throughout the world.

A subsequent investigation into H&M’s case placed the blame on physical and psychological stress – sparking its global head of CSR Helena Helmersson to publically emphasise that “it is of high priority to ensure workers health, well-being and safety” and that “as a buyer H&M takes these incidents very seriously”. An independent report into the Puma faintings highlighted multiple breaches of Cambodian labour law and Puma’s code of conduct at the factory. The brand has pledged to tackle the issues within the sector on an industry-wide level. For CSR to make a real difference to workers’ lives, Lisa Misol, senior researcher for the Business and Human Rights Program at Human Rights Watch, believes that a proven commitment to rights and due diligence is key.

“Too often, we see that companies only pay attention to human rights in reaction after something bad has happened that causes controversy and forces them to rethink their approach,” she says. “Key questions to consider are whether they have any specific human rights commitments, how strong they are and what mechanism the company has in place—if any—to ensure compliance with those standards.”

Some believe that smaller companies find it easier to ensure that CSR policy matches business practises. Emaxx’s May believes large corporations are “like a big cruise liner, you can’t just turn around quickly” and that it is smaller and more flexible companies that “have a big role to play” in ensuring social responsible business is “not just a shop front”.

Sensible Investment

Criticisms aside, companies are pouring funds into society, and both NGOs and businesses agree that it is important that CSR programmes are well-thought out. For groups that can benefit from such schemes, seeing resources donated to the right projects is important.

Friends-International, an NGO that helps marginalised urban children and youth in Cambodia, says that well-meaning offers from companies to provide volunteers for projects can be misguided. Using non-skilled staff and outsiders to interact with vulnerable clients can be a disruptive process. “It’s useful for them [companies] to think about what they are doing: don’t just steam in and do it,” says communications director James Sutherland.

And while corporations bid to become, or at least be seen to become, responsible players in the business world, some NGOs are doing the same by building firms rooted in social work. In perhaps the purest examples of socially responsible business, a number of restaurants, fashion and food outlets are being run by NGOs. For Phnom Penh-ites, the existence of these social enterprises means guilt-free consumption, while for NGOs it means sustainable development in the face of diminishing funding opportunities.

Friends International runs two eateries staffed by disadvantaged youths in the capital as well as two shops and a stall in Russian Market. The NGO plans to open another restaurant in Siem Reap next year to add to its business stable - which generates around 46 percent of the organisation’s income. It is also launching a new project called TREE (Training for Employment and Entrepreneurship) to train other NGOs such as Sihanoukville-based M’lop Trapang to do the same.

For Friends - which has a close relationship with numerous businesses in Cambodia that provide sponsorship, resources and support for their projects – the move towards sustainable business is a no-brainer. “Otherwise you just become a charity and charity can sometimes keep people where they are,” says Sutherland.

But running a social enterprise, like creating a meaningful CSR scheme, is not an easy process. Jesze, who runs Hagar’s social enterprises as a separate tax-paying legal entity, warns that such businesses are “not just something you can pull out of the hat, it takes a long time and needs good businesspeople to be involved.” But despite the challenges, he is also hopeful for the future of CSR.

“There’s a new generation that have a bit of money who are saying, ‘money gives me more opportunity but does it give me fulfilment?’ There is a rewarding element of helping and giving back in a genuine way,” he says.

Making a Difference

Back at Sansum Koshal School, which is also supported by Catholic mission Maryknoll, the difference made by the good will of one company is evident. Since the Sally Thompson building was constructed, the school has been able to extend teaching hours. The extra rooms have allowed for the day to be split into two longer sessions - with enough room for one group of pupils to be taught in the morning and another in the afternoon. Three shorter lessons had been offered previously. In turn, school officials say this change has led to greater attendance. The day now fits in with parents’ working hours, so that they have time to bring their children to and from school.

For these children, many of whose parents have recently come to the capital in a bid to make a living in Cambodia’s growing metropolis, a little generosity is going a long way.