Fewer than a quarter of companies in the oil, gas and defence sectors have declared policies on whistleblowing. Meanwhile Exxonmobil has received criticsim for overiding human rights in Chad and Cameroon.
Lobbying hobbyhorse
Responsible lobbying is possible and does still have a legitimate role to play in the 21st Century – if a company’s lobbying position is consistent with its own mission statements, codes of conduct and stated policies, and universal values such as the UNGC’s Ten Principles and UN’s Millennium Development Goals, says a new report. Towards Responsible Lobbying, published by the UN Global Compact and AccountAbility on September 8, says that benefits improved lobbying practices would benefit both government and civil society and sets out a six-step framework for organisations to assess their own lobbying practices and to identify areas for improvement. Contact Mirahv Joseph, AccountAbility 020 7549 0400 http://www.accountability.org.uk
Achilles heel
Fewer than a quarter of companies in the two sectors most exposed to risk from bribery and corruption – the oil and gas and the aerospace and defence sectors – have declared policies on whistle-blowing, bribery, political donations and compliance monitoring, according to recent survey by ethical investment research firm EIRIS. Corporate codes of ethics assesses the challenges facing business from bribery and corruption in 23 countries, using a sample of 2,400 companies. Dutch companies scored highest on the quality of their overall corporate codes of ethics – over 86% of Netherlands-based companies have meaningful ethical codes, as compared with 54% of companies globally. Hong Kong and Singapore, on the other hand, had the fewest companies with high standards of corporate codes of ethics. Contact Scott McAusland, EIRIS 020 7840 5703 http://www.eiris.org
Open books
Publish What You Pay, a coalition of NGOs including Care International UK, Global Witness and the Open Society Institute, are calling for companies in the extractive industry to disclose how much they earn and pay governments in every country in which they operate. The International Accounting Standards Board, which develops global accounting standards used in over 90 countries and followed by most of the world’s largest extractive companies, has initiated a process that will lead to the definition of new standards for the industry – an International Financial Reporting Standard. The coalition is making the case for the standard to include a requirement for upstream extractive industry operators to disclose revenue payments on a country-by-country basis, so that shareholders and other stakeholders can make informed decisions regarding companies in the sector. Contact Henry Parham, PWYP 020 7031 0204 http://www.publishwhatyoupay.org
Laws not voluntarism
The OECD Guidelines for Multinational Enterprises are not an adequate instrument for curbing corporate misconduct. This is the conclusion of not-for-profit coalition OECD Watch in its report, Five Years On: A Review of the OECD Guidelines for Multinational Enterprises and National Contact Points. The coalition is calling for legally binding international social and environmental standards for corporations to help stop corporate abuses, particularly in developing countries. It notes that although the voluntary set of guidelines is the most widely endorsed governance instrument in existence, few multinationals have actually adapted their behaviour to the guideline’s principles and standards for responsible behaviour. OECD Watch also finds no evidence that the guidelines have helped to reduce the number of conflicts between local communities, civil society groups and multinational companies. Contact Joris Oldenziel, OECD Watch 00 31 20 639 1291 http://www.oecdwatch.org
Global Compact governance
The Global Compact Office has announced a new governance framework, to promote greater ownership of the initiative by its participants and other stakeholders. The framework attempts to bring together global and local levels of Global Compact activities within a “coherent organisational structure”. The changes aim to protect the integrity of the initiative by encouraging participants to improve their CSR performance continuously, rather than being passive signatories to the compact. A policy to protect the Global Compact name and logo from misuse is also being put into place. Contact Gavin Power, UN Global Compact 00 1 212 963 4681 http://www.un.org
Overriding rights
Amnesty International has accused ExxonMobil and other oil companies of overriding human rights in Chad and Cameroon in a new report. Contracting out of human rights: The Chad-Cameroon pipeline project reveals that the two countries involved will have to pay large financial penalties if they interrupt the operation of the pipeline or oil fields, regardless of whether they are protecting human rights or enforcing other laws. Amnesty claims that human rights abuses have already occurred as a result of this project when farmers in Chad were denied access to their land, which ExxonMobil refused to compensate them for or return to them. In a statement regarding the project, ExxonMobil said: “It is ExxonMobil policy to conduct its business in a manner that is compatible with the environmental and economic needs of the communities in which it operates”. In addition, the company has created an Indigenous Peoples Plan with $600,000 that will be used to finance programmes dedicated to health, education, and agriculture. Contact Sarah Green, Amnesty International UK Press Office 020 7033 1549 http://www.amnesty.org.uk; Exxon Mobil 01372 222000 http://www.exxonmobil.co.uk
Corruption Perceptions Index
There are serious levels of corruption in over two-thirds of the 159 countries featured in Transparency International’s latest Corruption Perception Index. The CPI, a composite survey, reflects the perceptions of business people and country analysts and draws on 16 different polls from 10 independent institutions. The results indicate that poverty and corruption often coincide, with nineteen of the world’s poorest countries all scoring below 4 in the index, where a score of 10 is the least corrupt and 0 the most corrupt. Peter Eigen, Transparency International’s chairman said: “Corruption is a major cause of poverty as well as a barrier to overcoming it. Corruption must be vigorously addressed if aid is to make a real difference in freeing people from poverty.” The survey shows, however, that wealthy countries are not immune to corruption, as their companies may be involved in corrupt practices abroad. As a result of the findings, Transparency International has recommended actions all countries should take in order to curb corruption. Contact Barbara Ann Clay, TI 00 49 171 499 2061 http://www.transparency.org
Taxing matters
Companies currently disclose little on tax, despite the fact that their tax policies and changes in tax regulations can have a significant bearing on financial analysis and other stakeholders’ perceptions of them, according to a report by Henderson Global Investors. In Responsible Tax, Henderson recommends that all companies consider how tax should be covered in their Operating and Financial Review and that it be included in corporate responsibility reporting. In what is a follow-up report to February’s Tax, risk and corporate governance – findings from a survey of the Chairmen of the FTSE350, Henderson offers a self-assessment framework that companies could use to assess their approach. With a small number of notable exceptions, Henderson found little current involvement of CR professionals within companies in discussions about their organisation’s tax management. “This [CSR] represents a valuable but largely untapped resource that could be brought to bear to help companies ensure they can meet the challenges posed by the rising public and pressure group interest in tax”. Contact Rob Lake, Henderson Global Investors 020 7818 2163 http://www.henderson.com
Editorial Comment
Sticking with the theme of this edition, how are governments addressed in CSR reports? Badly, as a general rule. One reason is that too many reports are structured around the ‘triple bottom line’ or the ‘winning with integrity’ formula of marketplace / workplace / environment / community. The result seems to be a failure to think about all the stakeholders, to prioritise them and then to report impacts on and by each one.
After investors (who get a pretty raw deal out of most CSR reports considering they own the show), governments are arguably the next most important (and most neglected) group. Even customers / consumers who provide the money to run the show and employees who provide the labour do so within the context of rules and regulations set by governments. If you can’t get your goods out of the docks (without resorting to bribes) or face legislation rendering your business uncompetitive (without underhand lobbying), there’s not much point in having willing consumers and a factory full of workers. And when you examine the profit and loss account, governments are often the largest beneficiary of your economic activity, from corporate, employee, purchase, sales and local taxes, directly and throughout your value chain.
So three cheers to Henderson for pushing forward our understanding of CSR and taxation and for recommending better internal procedures and external accountability. Required reading for any CSR manager intent on making their CSR report a truly worthwhile document.
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