Corporate Social Responsibility Should be Compulsory in Bangladesh

Source: http://csrcentre-bd.org

Source: http://csrcentre-bd.org

So far we know Corporate Social Responsibility (CSR) is a part of good corporate governance system. As the corporations run in society, they must have some responsibilities towards it. In Bangladesh, it is optional for corporations and that’s why they may find a scope to avoid CSR for making more profits.

 

According to the DSE (Dhaka Stock Exchange), there are 22 different sectors totaling 535 companies that are listed in DSE. In fact, there are no specific guidelines for CSR for them. On 13th May, 2014, the governor of Bangladesh Bank (BB) said on the launching ceremony of “Report on CSR in Bangladesh 2014” organized by CSR center, “It is global survival urgency in the face of looming risks from social inequity, environmental degradation and climate change threats arising mostly from the global economic output practices.” He also added that BB will issue a specific CSR guideline for financial and non-bank financial institutions. After the collapse of Rana Plaza and fire accident in Tazreen Garment, Bangladesh government took some initiates for upgrading the working environment for the workers, though no specific CSR guidelines are set up.

Source: http://csrcentre-bd.org

Source: http://csrcentre-bd.org

If I represent the CSR in Bangladesh based on 22 different categories, it may not be possible to represent the condition properly as hardly 4 or 5 categories of corporation do the CSR activates. Considering all corporations’ CSR activities in 4 categories like as Business, Environment, Social and Economic CSR. Now take a brief look about the CSR that are done by various corporations:

  • Business CSR: GrameenPhone Limited, one of the leading mobile phone operators in Bangladesh, sent 40 employees to the different rural areas of Bangladesh in 2012 to train up the people about business including IT, marketing, product distribution and pricing. It ensures the communication between the community and GrameenPhone and also the development of the employees. In case of IDLC Finance Limited, it has already reduced the employee turnover by 3% in 2 years and Carbon-Di-Oxide (CO2) by 16 tons each year. One of the leading tea manufacturing corporations named Ispahani, has trained its employees in tea states which includes how to increase production. It has also provided pure drinking water and sanitation facilities in tea states which play an important role to develop the living standards.
  • Environment CSR: To protect the environment, Standard Chartered Bangladesh (SCB) and in association with British Council, have completed 3 road shows in 64 districts of Bangladesh named “3000 Miles to Go” which have included a day long program with schools incorporating educational documentary and postcard competition on which the top 100 postcards will be exhibited globally in Standard Chartered Bank’s offices. Recently SCB has introduced the climate award and CSR award in Bangladesh. Viyellatex Group, one of the textiles, agro, logistics and power generating corporations, has saved over 100 million of ground water each year by harvesting rain water. It also saves energy and reduces carbon emissions by reusing exhaust from a gas generator for cooling process.
  • Social CSR: With a view to serving the society, City Bank Limited, in partnership with Management and Resources Development Initiatives, has trained up the village women to earn new skills and income which provide them to find an alternative livelihood and increase the living standards. “Seeing is Believing”, a global initiative by Standard Chartered Bank, has prevented blindness among 28 million people worldwide and in case of Bangladesh, in partnership with local NGO’s to train up healthcare workers, provide Vitamin A capsule to children and increase access to medical services to the poor. Since 2003, SCB has performed 24300 cataract surgeries and has provided eyeglasses to 75000 people in Bangladesh. Qubee, one of the WiMax operators in Bangladesh, is currently working with Jaago Foundation to provide computers and high speed internet at schools for slum children in Dhaka.
  • Economic CSR: To boost up the economy, Rahimafrooz (Bangladesh) Limited, one of the power supplying companies in Bangladesh, has established a trust named Rural Services Foundation to implement Solar Home Systems in rural communities. This project has created 3103 direct employments and 10000 indirect employments. Brac Bank Limited has helped 320000 people in 2012 through SME loan with the lowest interest rates. 51% of the lending must be in SME sector which states in its charter. This bank also introduced Green Banking by not to finance sectors that hampers the environment. Another bank named Mutual Trust Bank Limited also helped approximately 60 handicapped people by trained up about poultry farming, cattle rearing and shop keeping.

Another thing I cannot ignore which is about the CSR in textile sector. After the collapse of Rana Plaza and fire accident in Tazreen Garment, a recent study by the Transparency International Bangladesh (TIB) found that the stakeholders of this industry took 102 initiatives of varying dimensions against 54 out of 63 types of governance challenges. According to TIB, 31% of the initiatives are being completely implemented while 61% are being in progress and rest 9% are being unaddressed. It is important to mention that a new salary structure for the workers was implemented from December 2013, though the workers have raised many problems regarding their salaries.

Photo: Fire on Tazreen Garment, Source: http://www.businessweek.com

Photo: Fire on Tazreen Garment, Source: http://www.businessweek.com

CSR is Bangladesh is closely related to the MDGs (Millennium Development Goals). In my opinion, some steps should be taken by the government as well as the corporations.

Here they are:

  • A specific CSR guideline need to be issued by government in cooperation with corporations
  • A monitoring body should be established to monitor whether the CSR would be done in accordance with guideline
  • Failure to perform CSR should be penalized if the corporation is capable of performing CSR
  • To motivate, government need to give award to the top performers
  • Corporations need to be positive about CSR

Bangladesh has enough opportunities in business sector. The day is not so far when the world see, Bangladesh will achieve MGDs through CSR!

References: