A business ethic to change the society
Corporate social responsibility (CSR) can be defined as social the responsibility of the corporate sector in making changes in socio-economic aspects.
CSR is considered as an instrument for making business more committed towards social needs and national development through ethical, legal, social and commercial conduct.
The context of Bangladesh:
Historical perspectives
CSR concepts and practices in Bangladesh have a long history of philanthropic activities from time immemorial. These philanthropic activities included donations to different charitable organisations, poor people, and religious institutions. Till now, most of the businesses in Bangladesh have been family owned and first generation businesses. They are involved in community development work in the form of charity, without having any definite policy regarding the expenses or any concrete motive regarding financial gains in many instances. Moreover, most of the SMEs fall under the informal sector, and do not have the management structure and resources to address the social and environmental issues. These limitations drive the top management of local companies to think only about profit maximisation rather than doing business considering the triple bottom line: profit, planet and people (CSR definition of Lotus Holdings). The discussions on CSR practices in Bangladesh are relatively new, but not the concept itself. Being a part of the global market, it is difficult for businesses to ignore CSR standards, specially in the export sector. In general, it is true that in Bangladesh labour 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, labour rights, work place safety, fair treatment of workers, community development and environment management, but also for industrialisation and ensuring of global market access. Nowadays, many CSR dimensions are practiced in Bangladesh. The SMEs largely depend upon export. The US and EU buyers set guidelines to RMG industry to ensure the standards. The 1992 Harkin's Bill, the subsequent consumer and industry boycott of RMG products by US, and the consequent remedial moves by the local RMG sector is one example. Moreover, some buyers from EU visited the sites of the recently collapsed garments factories. A temporary ban was also imposed on shrimp export to the EU on health and hygienic grounds, 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. CSR implications on corporate sector
Speakers from different roundtables identified dearth of expertise and poor accountability as major obstacles in practicing CSR in Bangladesh. The roundtable on CSR, titled "Corporate social responsibility practices and challenges in Bangladesh," was a part of a "Dialogue series on CSR in action." The private sector enterprises will remain weak unless and until they practice CSR in their ventures, the speakers said. CSR impact on community development
CSR in Bangladesh can also contribute a lot to community development. The corporate houses can develop the community by creating employment, providing primary education, contribution to infrastructure development like making roads and highways, and addressing environmental concerns. CSR in health sector
Historically, Bangladesh has been follwing philanthropic practices for health sector support since the 15th century. Our tradition of running charitable dispensaries, and herbal and homeopathic clinics, was part of social obligation and dignity for the rich people, and many of them were from the business community. In the 20th century some business and social entities like Ispahani group, Kumudini trusts, and Kundesweri herbal medicines are notable for their contribution to the health sector. Since its inception, the Ispahani group has been extending its cooperation with the idea of "corporate community coalition" apart from the contemporary notion of CSR, and was an inspiration for emerging businesses to engage in CSR interventions. The group mainly focused on specific social arenas, like health, education, relief, rehabilitation, where business engagement was an urgent need. An institution like the Islamia Eye Hospital illustrates their commitment to health sector. Current trend of CSR practices in Bangladesh
According to the business community, there have been significant numbers of CSR practices in the areas of social benefits, response to emergency or immediate needs, crisis management, education, environment, human rights, and health. Particularly in the health sector, the priority in establishing hospitals and medical colleges, and getting donations for building hospitals and supporting health awareness programs is not high. Corporate governance and CSR in Bangladesh
Lack of effective good governance in Bangladesh has resulted significantly in lack of business ethics and poor CSR culture. In Bangladesh, the private sector seems to focus on earning profits in the short term, ignoring the issue of responsible behaviour and the desirability of earning the trust of the consumers, which are important for the long-term success of their operations. Selling of adulterated low quality products at high prices, cheating in weight, and above all, hoarding to reap dishonest profit, all confirm this. In the absence of socially responsible behaviour in the private sector, there is need to enhance capacity building on the part of the state to intervene and implement sanctions effectively to enforce compliance. The following recommendations have been made to consolidate the objective of this article:
Historical perspectives
CSR concepts and practices in Bangladesh have a long history of philanthropic activities from time immemorial. These philanthropic activities included donations to different charitable organisations, poor people, and religious institutions. Till now, most of the businesses in Bangladesh have been family owned and first generation businesses. They are involved in community development work in the form of charity, without having any definite policy regarding the expenses or any concrete motive regarding financial gains in many instances. Moreover, most of the SMEs fall under the informal sector, and do not have the management structure and resources to address the social and environmental issues. These limitations drive the top management of local companies to think only about profit maximisation rather than doing business considering the triple bottom line: profit, planet and people (CSR definition of Lotus Holdings). The discussions on CSR practices in Bangladesh are relatively new, but not the concept itself. Being a part of the global market, it is difficult for businesses to ignore CSR standards, specially in the export sector. In general, it is true that in Bangladesh labour 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, labour rights, work place safety, fair treatment of workers, community development and environment management, but also for industrialisation and ensuring of global market access. Nowadays, many CSR dimensions are practiced in Bangladesh. The SMEs largely depend upon export. The US and EU buyers set guidelines to RMG industry to ensure the standards. The 1992 Harkin's Bill, the subsequent consumer and industry boycott of RMG products by US, and the consequent remedial moves by the local RMG sector is one example. Moreover, some buyers from EU visited the sites of the recently collapsed garments factories. A temporary ban was also imposed on shrimp export to the EU on health and hygienic grounds, 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. CSR implications on corporate sector
Speakers from different roundtables identified dearth of expertise and poor accountability as major obstacles in practicing CSR in Bangladesh. The roundtable on CSR, titled "Corporate social responsibility practices and challenges in Bangladesh," was a part of a "Dialogue series on CSR in action." The private sector enterprises will remain weak unless and until they practice CSR in their ventures, the speakers said. CSR impact on community development
CSR in Bangladesh can also contribute a lot to community development. The corporate houses can develop the community by creating employment, providing primary education, contribution to infrastructure development like making roads and highways, and addressing environmental concerns. CSR in health sector
Historically, Bangladesh has been follwing philanthropic practices for health sector support since the 15th century. Our tradition of running charitable dispensaries, and herbal and homeopathic clinics, was part of social obligation and dignity for the rich people, and many of them were from the business community. In the 20th century some business and social entities like Ispahani group, Kumudini trusts, and Kundesweri herbal medicines are notable for their contribution to the health sector. Since its inception, the Ispahani group has been extending its cooperation with the idea of "corporate community coalition" apart from the contemporary notion of CSR, and was an inspiration for emerging businesses to engage in CSR interventions. The group mainly focused on specific social arenas, like health, education, relief, rehabilitation, where business engagement was an urgent need. An institution like the Islamia Eye Hospital illustrates their commitment to health sector. Current trend of CSR practices in Bangladesh
According to the business community, there have been significant numbers of CSR practices in the areas of social benefits, response to emergency or immediate needs, crisis management, education, environment, human rights, and health. Particularly in the health sector, the priority in establishing hospitals and medical colleges, and getting donations for building hospitals and supporting health awareness programs is not high. Corporate governance and CSR in Bangladesh
Lack of effective good governance in Bangladesh has resulted significantly in lack of business ethics and poor CSR culture. In Bangladesh, the private sector seems to focus on earning profits in the short term, ignoring the issue of responsible behaviour and the desirability of earning the trust of the consumers, which are important for the long-term success of their operations. Selling of adulterated low quality products at high prices, cheating in weight, and above all, hoarding to reap dishonest profit, all confirm this. In the absence of socially responsible behaviour in the private sector, there is need to enhance capacity building on the part of the state to intervene and implement sanctions effectively to enforce compliance. The following recommendations have been made to consolidate the objective of this article:
- Create primary awareness about CSR among academics, managers, stakeholders and students.
- Comply with the standards of CSR, following international firms and organisations.
- Increase understanding and visibility of CSR.
- Develop institutional capacity on CSR, and its management for social causes.
- Develop professionals in resource mobilisation and development.
- Facilitate CSR culture among corporate bodies for good causes of development issues.
- Build NGO-Corporate partnership to exchange resources and expertise for social development.
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