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Christian Aid gets a little closer to the mark

Christian Aid has a track record of expounding its view that “CSR” has failed developing countries for years.

In recent years, the UK NGO, driven by some very left wing executives, has tried to score some points slamming CSR as an attempt to sidestep regulation in emerging economies.

This misses the point of CSR, now CR, by quite a long way.

The movement came from enhanced stakeholder pressure for companies to recognise their impact and begin to do something about it.

Societal pressure was a much bigger driver than dubiously-motivated corporate attempts to sidestep regulation.

One might argue that initiatives such as Responsible Care in the chemicals industry, post-Bhopal, were designed to discourage regulation. But I don’t really buy that.

The main purpose of Responsible Care, as an idea, was to attempt to rehabilitate the reputation of the industry for operating safely, which was much needed.

You can of course say that a benefit of doing that was to fend off new laws, but largely regulation, such as REACH, has happened anyhow, so I’m not sure the argument stands up most of the time. I would doubt that CSR had much effect on the delays of REACH, those were due to the complexities of the regulation.

So having slammed CSR for years for pretending to be a substitute for regulation, (which it was never really intended to be) Christian Aid has now put out a new ‘report’ (really a campaigning note), on its current views on CSR.

The NGO is maturing a tiny bit. Having taken a trade union like approach to the topic of CSR for years, (claiming it is a distraction) Christian Aid now wants to give it a tiny amount of credit:

“…it has to be acknowledged that it has made a contribution to development – albeit a patchy one” (P.19)

Although in a previous page it makes the extraordinary statement that: “it must be recognised that CSR is no longer a satisfactory substitute for national and international law” (p.18)

Who on earth ever said that it was? This is a straw man argument, creating something that doesn’t exist and then pulling apart a concept constructed of nonsense in an attempt to prove another point (that we need more laws).

Can Christian Aid, or anyone else, show us who is supposed to have said this? Only a lunatic of the far economic right would suggest that the CSR policies and actions of a particular company or industry are a substitute for “national and international law”.

But the rest of the report still misses the point about corporations and development in many ways.

It seems to try and equate business contributions to economic development with criticisms of the World Bank and Washington Consensus in general.

These are not the same things. Nevertheless the report make some useful points.

Although it misunderstands the complex benefits of business, it is worth a read.

The best thing about this report is that it does, in several places, talk about institutions.

Development of institutions and creating the social capital that enables them, are really the key for poorer countries.

And I don’t just mean institutions that create new regulations. These are of course, vitally important.

But as many of us know, having laws is not a problem in most countries. Enforcing them is the issue. And it’s institutions, and their development, that govern how well this happens.

I don’t just mean the courts, the police, parliament and the civil service.

I also mean free speech, the media, debate and information channels. I mean social institutions as well as traditional ones.

We need more debate about how these are created, strengthened, and maintained if we want to have a mature conversation about how companies and other actors behave in developing countries and elsewhere.

Campaigners might argue that is a distraction from talking about ways to prevent Western businesses from exploiting the third world. But Western companies are much less of a problem than local corruption, curtailment of free speech and yes, local companies who generally pollute much more.

In the meantime, is there a role for companies to encourage better institutions?

I would argue yes, if done in a very careful way.

Here’s an explanation of what I mean in an article we published last year. And here’s a much longer report on the topic.

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