Corporate Social Responsibility In Pakistan

Corporate Social Responsibility (CSR) is the continuing commitment by businesses to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large. As argued by Ambreen Waheed in her report on CSR for UNO in 2005, CSR is now moving towards Responsible Competitiveness, a precept that implies that there is a role for business in influencing policy for business success. The global CSR movement has passed through varied phases in time and in concept with regard to the implementation of CSR.

Initially grounded in corporate philanthropy, it moved on to solidarity movements or environmental activism with citizen sector movements taking on business. At the same time, governments and courts have laid down more stringent parameters of corporate behavior, compelling business towards legal compliance, damage control for civil society and consumer reactions, and then on to efficiency gains and differentiation for competitive advantage.

CSR Practices in Pakistan is still in its infancy. Only few companies have an existing CSR strategy and mostly they are the multinationals who follow their own CSR policies and standards. Unfortunately, the local industry is either unaware of the benefits brought by CSR or they feel that even if they do not adopt such policies, they are not in any state of danger. The apathy of the local business sector was highlighted in the 1996 by the breakdown of the local carpet industry and the threat of damage to Sialkot’s sports industry. Labour exploitation, child labour, inadequate employee benefits and unsuitable working environment were few areas pinpointed by the international eye. Though taking the reactive measures, the joint effort of the industrialists saved the greater damage foreseen, but not much has been done to take more proactive measures.

In 2003 a multi stakeholder forum “Pakistan Compliance initiative” was launched with support from international buyers, the textile sector, and the Ministry of Commerce. A draft national standard was developed for use as compliance standard approved by Government to replace many International social and environment compliance standards and buyers code of conduct. The result of this effort was inclusion of social compliance in the trade policy and initiation of a project proposal by Ministry of Science and Technology to European Union for encouraging SA800 implementation by subsidizing consulting and implementation cost.

In Pakistan CSR is frequently equated with corporate philanthropy, the terms being often mistakenly used synonymously. Some consider CSR to be a simple compliance with law.

This creates a difficulty because top management is still uncertain about the true meanings of CSR. This indicates the need for a mass awareness campaign supported by the government, targeting businessmen, entrepreneurs and customers so that they are able to appreciate CSR and also the general perils of non-compliance in today’s environment. Frequent and open discussion defining and understanding CSR, detailing its nature and promoting and developing methodologies on how local businesses adopt and manage their CSR obligations would be a useful first step.

Initiatives by Support Organizations in Pakistan

Since the inception of the concept of CSR and the awareness, several organizations have evolved over the period of time that have played a major role in creating the awareness, pointing out the issues and fighting the injustice. In Pakistan, this activity has not been encouraging so far. Although, the idea is hardly two decades old, but very few organizations have been formed to work on different issues incorporated in CSR.

There is a slow growth of the ‘CSR industry’ of consultant firms who are charging highly to corporations who want to ride the CSR bandwagon. They pose a risk of misguiding corporations to get involved in “green washing” by doing token efforts or replicating policies and projects done by other Global Corporations or their competitors without realizing the real impact of their initiatives. These corporations sometimes claim that the driving force actually comes from their stakeholders.

Role of Pakistani Academia in CSR

Let us have a look how Pakistani Academia is playing its role in implementation of CSR in Pakistan. Academia has a very important role in shaping the future Business Leaders in Pakistan. Ambreen’s research (2005) shows that there is no CSR department or unit in any academic institution of Pakistan and no faculty member carrying out primary research on CSR issues. However, now a day, situation is different. In IQRA University Islamabad, Mr. Raja Mazhar, Associate Professor is conducting extensive research on CSR in telecommunication sector of Pakistan and his research is going expected to be a breakthrough in CSR in Pakistani academia.

Moreover, at Institute of Administrative Science at the Punjab University where a special elective is offered, this study found no CSR courses being taught. There are examples of conferences where CSR is made a topic for panel session, but it is often observed that the focus of these presentations labelled as CSR tends to examples of corporate philanthropy and the examples cited as CSR best practice often describe charitable acts by companies. In a situation where there is a lack of both theoretical and practical CSR knowledge and experience, this attitude invariably goes unchallenged.

Role of Pakistani Media in CSR:

The Media plays a large role in consumer awareness and in creating demand for responsible behavior from business on globally accepted parameters. In Pakistan, the Tele Media as well as newspapers are often silent on these imperative issues. We see a few programs or interviews on some television channels, but the focus is often limited to elements like labour rights or environmental compliance. A few supplements on related topics like environmental reporting and CSR best practices mainly write about the odd corporate community project or environmental reports. Main CSR parameters are still missing from media.

CSR in the Light of Islam

Islam favors fair and ethical business as the best source of income. It aims to promote mutual benefit in business interactions. Islam reinforces transparent and corruption free written contracts, acceptable working conditions, fair exchanges for both natural resources and human effort. It advocates “Tazkiyah”, through active participation in this life and by behaving ethically in the midst of the tests of this dunia (world). Muslims prove their worth to Allah by upholding Huquq-ulIbad (Individual Rights) and care for society, and sharing wealth with poor and underprivileged. Actions and decisions are judged to be ethical depending on the intention of the individual. God is omniscient, and knows our intention completely and perfectly.

Meanwhile, In Pakistan:

The conduct of for-profit businesses in Pakistan is regulated through comprehensive principal legislation in the form of the Companies Ordinance, 1994, overseen by a statutory body like the SECP, and business interests are represented by duly recognized representative bodies such as trade associations or chambers of commerce. This structured and supervised mechanism imparts strength to the concept of process integrity by instituting transparency and accountability. The following are core initiatives:

• SECP is reviewing corporate governance legislation and regulations that will bring into focus elements of corporate disclosure, shareholder liability and transparent accountability. 
• NAB has unveiled a national anti-corruption strategy that lays down parameters for corporate compliance. 
• The State Bank has outlined new regulatory frameworks on financial responsibility and probity. 
• Internationally recognized guidelines such as SA8000 is getting support from 
• Government of Pakistan.

Concluding I maintain that CSR and role of cooperation, national and international is not encouraging in Pakistan. The corporations focus more on private profits instead of contributing towards causes of community development. In spite of all the above said so called developments, I underlined that “Reality is different” and one of the its biggest examples can be seen in latest business adventures of Nish at Group in rural areas of District Hafizabad, totally focused on Private Profits and significantly ignoring the illiterate local people in expected danger of fatal diseases through dirty, polluted and contaminated water draining out of those firms.