It is commonplace to hear (especially amongst budding entrepreneurs) the proverbialism, ‘the sole purpose in business is to generate profit’, allow me to add, ‘at the expense of every other factor’, as the social character of businesses is usually the debated matter when this is mentioned. Whether this is a veridiction or a verity is not the question today, but what is pertinent that we debate is this; people. Should the welfare of the individual be put into consideration in the ruthless pursuit of profit? Departing from logicism to reality depicts the facts without contradiction¹.
Now in the quest to satisfy both ends [profit vs people], world bodies have come up with the entity called Corporate Social Responsibility². Social scientists have tossed this around with a variety of definitions, but essentially all definitions convolute around these four influence spheres; the economical, the legal, the ethical, and the philanthropic.
Fig 1: The Pyramid of Corporate Social Responsibility (with modifications from Carroll, 1991)
The stated parameters are echoed principally in majority of the definitions, but are noted especially by Carroll in his thesis of the Pyramid of CSR in 1979.
Carroll’s procession is quite amenable in respect to our earlier dichotomy of veridiction and verity, as its realism does not shy away from the profit basis of business(by it pointing out the economical firstly) as that foundationally empowers other stratums of influence. It further highlights the importance of the legal, denoting that corporations despite wanting to make profit should ‘play by the rules’. However, the law is not exactly human, and legal rectitude does not translate directly into acceptable societal conduct. This takes Carroll’s analogy in the final two phases; the ethical(which has a purview circumventing business to business relations, and business moral conduct)and the philanthropic (which actually is at the root of any business motive; service to mankind, profit being merely the reward for this. Taking this service via a different and more direct vein translates into infrastructure for local communities, scholarships for indigenes, free basic education, etc).
Now with CSR dymystified, it is key that we identify this truth; CSR IS NOT THE PRIME
RESPONSIBILITY OF BUSINESSES BUT RATHER THAT OF THE GOVERNMENT. The welfare of the people is basically why the government exists. This is so easy to forget that we often begin to laden corporations with finite resources with responsibilities that outweigh their capacities. Forgetting that COMPANIES are not CHARITIES and unlike nation states, corporations; do not run well on bad debt, do not have the luxury of relatively infinite debt ceilings, have to be dissolved when financially stretched beyond their capacities(unlike nations who can have their debts cancelled), and on and on the list of disparities run. Let us note that in respect to their direct relationship, governments are rather independent bodies in the sense that they can survive without businesses. However, businesses exist because governments allow them to – this is a maxim when grasped affords us clearer understanding. Because, as far as corporations can go, they can only walk the rope afforded them by governments. We can choose to hail and haul all the blame on ‘cupidinous’ corporations and adjudge them to be greedy and avarice driven, but the apple hardly ever falls too far from the tree. Testimony to this is the fidelity to irresponsibility of the Nigerian government over the years as regards improving the living standards of the people in the Niger Delta(preceding and succeeding oil wealth). The squalidity in the Niger Delta is first the FG’s fault. Proof of this lies in the Petroleum Trust Fund’s expenditure between 1994 to 1998³. And also in the fact that Nigeria has no exact legal construct supporting CSR, therefore, every attempt at CSR have been more like benevolent gifts rather than legal obligations(unlike other African countries)⁴.
With all the above stated, we can now ratify a[an] policy [initiative] that would be much more than a placebo. It is obvious that we need to create a legal system that would not only obligate corporations to engage in CSR, but would also guide them in it. Popular of St. Paul is the saying “where there is no law there is no offence”, and this cannot be farther from the truth. But by what metrics would such a policy be constructed? Which sectors should first be influenced? It would be grossly impartial to impose a one-size-fits-all rule on all companies as they differ based on a plethora of standards(like profit margins, debt profiles, etc). However, below are few of my suggestions about creating a policy that can allow expression for all businesses.
• Profit(should dictate participation/non-participation, with the exception of environmental damage): After debunking the myth about companies being (solely) avaricious, it becomes clear that imposing CSR on a business with a profit deficit is dictatorial. As without the resources to engage in CSR, (laymanizing our analogy) businesses would have to utilize capital to engage in CSR. This is with the exception of cases where the business’ operation effects environmental damage(e.g oil spills, air pollution, etc). However, it would be appropriate to institute a legal policy based on profit percentages(rather than volumes) as companies vary based on financial portfolios, thereby making CSR ‘generally affordable’.
• Tax Incentivization: Furthermore, tax incentives should be afforded companies that engage in CSR. This would not only encourage more CSR, but also more business. Leading to greater national prosperity and therefore better living standards(in other words, more CSR). The effect is cyclical.
• Project Assistance Instead of Manning: Finally, as already ratified, governments possess primary responsibility as regards the welfare of their citizens. It would therefore be appropriate that companies rather than initiate, assist the government in its quintessential responsibility of improving the welfare of the state. This would allow for programmed, predictable, and consistent improvement in the welfare of the state, instead of these ‘hit-and-run’ attempts by various corporate bodies. Let’s not push the blame and ensure the government plays its part by drafting plans towards general development, while corporations assist with their execution.
In summary, let’s allow the government to do their jobs, and also the companies do theirs.
1. It has been estimated that between 9 million to 13 million barrels have been spilt since oil drilling started in the country in 1958. The government estimates that about 7,000 spills occurred between 1970 and 2000. The spills have caused severe loss in plant and aquatic life, especially with the loss of masses of mangrove forests.
2. It could be said that the actual concept of CSR has its beginning in 1948, after World War 2, when the United Nations created the Human Rights Declaration. This doctrine was followed by the ILO Declaration on Fundamental Principals and Rights at Work in 1972. However, several other organizations like the World Business Council for Sustainable Development (WBCSD), Amnesty International, European Foundation for Quality Management(EFQM),etc.
3. The Niger Delta region generates over 80% of Nigeria’s revenue, yet between 1994 and 1998, out of a total of 18,310.9km of road rehabilitated by the Petroleum Trust Fund (PTF) the
North received 13,870.47km (76%) while the Southern States got 4,440.43 (24%), the Niger Delta received 1,479.03km (8.07%). Similarly out of the contract package of 475 for the PTF National Health Rehabilitation Programme, the North was allocated 318 (80%) as against 94 (20%) for the Southern States. The Niger Delta got 63 (13.26%). For the Educational Rehabilitation Programme, the North received 687 (71%) out of a total contract package of 965. The South got 278 (29%) and the Niger Delta States got 188 (19.48%).
4. Chapter 11 of the 1999 Constitution of Nigeria is not justiciable. A comprehensive study of other constitutions, even in Africa reveals that there are provisions for environmental rights as distinct from directive principles of state as contained in the Nigerian Constitution. For example, the Constitution of Congo 1992 provides that every person shall have the right to a satisfactory and sustainable healthy environment and shall have the duty to defend it and that the State shall supervise the protection and conservation of the environment. Also Article 35 of the Ugandan Constitution 1995 provides for the right to a clean and healthy environment, to protect and preserve the environment from abuse, pollution and degradation; to manage the environment for sustainability. In the same vein, Article 15 of the Constitution of Mali, 1992 provides that every person has a right to a healthy environment and defence of the environment, and the promotion of the quality of life are a duty of all and for the State. However, in the Criminal Code, section 234 provides that any person who violates the atmosphere in any place so as to make it noxious is guilty of a misdemeanor and liable to imprisonment for six months. This obviously is legally, logically, and morally deficient.