Business Respect - CSR Dispatches No 105 - 12 Nov 2006

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An email newsletter with news and discussion focusing on corporate social responsibility globally, looking at the companies in the news and the emerging issues. Linked to the website at http://www.mallenbaker.net and produced every two weeks.

In this issue, we look at anti-corruption as part of responsible business practice drawing on some reflections from Nigeria by David Grayson.

In the news:

Feature articles on the internet:

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Topics:

Want to read a hyperlinked version of this issue? You can find one on the website at http://www.mallenbaker.net/csr/nl/105.html.

Copyright 2006 Mallen Baker. All rights reserved. For information on how to subscribe, go to http://www.mallenbaker.net/csr/nl/subscribe.html

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Welcome

The best laid plans occasionally go awry. An unwelcome but persistent stomach bug rather interfered with the feature that had been intended for this issue. Fortunately, I had already discussed with author and BITC associate director David Grayson (http://www.davidgrayson.net) his sharing some thoughts from his recent trip to Nigeria. So this issue I am delighted that we have his piece on the focus on anti-corruption as an integral part of responsible business practice. Rarely can there have been a more timely commission!

Normal service should be resumed next issue.

Mallen Baker
mallen@mallenbaker.net

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CSR News 12 Nov 2006

Vodafone overtakes BP on Accountability rating

Vodafone has been ranked number one in the annual Accountability Rating - a benchmark that compares a range of companies against a number of accountability measures. The company, which has had troubled times financially, overtakes the oil giants BP and Shell, which become numbers two and three respectively.

The Rating, run by Accountability and the CSR consultancy csrnetwork, assessed the top 50 companies from the Fortune Global 500 plus a number of country-specific lists from Russia, South Africa and Hungary.

The recent results suggest that in spite of the two major high-flyers, the oil sector generally had seen its ranking drop to become the bottom sector, due mostly due to poor performance from companies including China National petroleum and Sinopec.

Other companies that made it to the top ten were Electricité de France, Suez, Enel, HSBC, Veolia Entertainment, HBOS and Carrefour.

Australia: Gunns fights environmentalists over pulp mill plan

Timber giant Gunns has attacked environmentalist claims that its proposed $1.5bn pulp mill in Tasmania will provide to be an environmental disaster, and has defended its pursuit of legal action against 20 environmentalists that may ultimately cost up to $2m.

Gunns chairman John Gay argued that the pulp mill would be "as good as any in the world" on its environmental outcome, and said that the company had the right to defend itself against the actions of environmentalists that could damage the company and the industry.

The legal actions, labelled as the "Gunns 20" case has been attacked for being a waste of money and poor governance by the company. Shareholder activist Stephen Hayne commented that it was better for a company to aim to get on with its community and dealing with people constructively.

Starbucks in row over Ethiopian trademark move

Oxfam has launched an attack on Starbucks for what it says is an attempt by the company to oppose a plan by Ethiopia to trademark speciality coffee names that it believes could bring farmers nearly 50m uk pounds.

According to the campaign group, the Ethiopian government's intent to trademark its most famous coffee names, Sidamo, Harar and Yirgacheffe, will enable farmers to receive a greater share of the retail coffee price and Starbucks, it says, has acted to protest against the applications, successfully blocking the bids for Sidamo and Harar.

Oxfam claims that Starbucks acted through the National Coffee Association of USA, of which it is a member to oppose the trademarks.

For its part, Starbucks has said that press coverage on the case has been inaccurate, and the company has not been recognised for the premium its pays to farmers in all the countries where it buys coffee.

Starbucks said it had never filed an opposition to the Ethiopian trademark application, although it said that it believed that there was a better approach to increasing benefits through a geographic certification programme.

BP knew of safety concerns according to US

US safety investigators have said that they believe that BP's global management team was aware of safety problems before the explosion took place last year.

In a statement, the Chemical Safety Board said that the management was aware of problems but had focused its safety efforts on improving procedural compliances and occupational injury rates. Meanwhile, flammable gases were discharged often from the same tank that caused the March 2005 explosion.

BP has seen its earnings fall in the latest quarter due largely to the shutdown of its operations in Prudhoe Bay following the accident.

BP said that it stood by the findings of its own review that showed that budget cuts at the site had not been a factor in the explosion.

China: CSR federation established

A new coalition to promote corporate social responsibility in China has been established, the Chinese Federation for CSR. The group has held its inaugural meeting at Beijing University.

The group brings thirteen businesses together as founders, including China Merchants Bank, China Vanke Company, HP, IBM, Junyao Group, Nokia, Ping An Insurance and TCL.

The stated aims of the organisation are to support sustainable development in underprivileged areas.

The chairman on CFCSR and the president of China Merchants Bank, Mr Weihua, said that CFCSR would create a platform for Chinese businesses to collaborate to make a positive impact on society and to alleviate poverty.

Total bribery investigation under way

French oil company Total has said that its head of exploration and future CEO Christophe de Margerie is being investigated for claims that he paid bribes in order to win bids in the Iraq oil-for-food programme.

The move is the latest in an ongoing saga of corruption around the oil-for-food programme which had been dogged with what an independent panel has described as "illicit, unethical and corrupt" behaviour.

Total has said that it fully supports Mr de Margerie, and states that it had always followed the rules during its participation in the oil-for-food programme.

Disney to end associations with fast foods

Disney has announced a change of policy that means it will no longer allow its characters to be associated foods that fail to meet certain nutritional requirements.

Current associations include those between Disney's The Incredibles and Pop Tarts, and for a "Pirates of the Caribbean" cereal. It intends to shift these towards items such as fresh fruit and mineral waters. Its new criteria will stipulate that it will only market foods where fat content does not exceed 30 percent of the total calories, and added sugar does not exceed 10 percent of the calories.

The company has also made a strong move to introduce healthier meals at its Disneyworld sites.

The move is the latest to reflect the growing concern over higher rates of childhood obesity.

Shell says Sakhalin-2 environment concerns have been resolved

Shell has said that concerns from Russia over the environmental impact of its Sakhalin-2 energy project have been "fully and transparently addressed".

The statement from the group's CEO Jeroen van der Veer was, according to the BBC, immediately countered by a Russian official that said that no plans had been received. Russia has threatened to withdraw Shell's licence to operate the oil and gas field, a move which some have suggested comes down to Russian politics more than genuine environmental concerns.

Shell has until the end of the month to show that it has met concerns over violations.

UK: Compass Group settles corruption UN lawsuits

Compass has settled a lawsuit with two of its competitors over allegations of corruption in the awarding of contracts in Liberia to supply UN peacekeepers with provisions.

The claims by ES-KO International and Supreme Foodservice stated that Compass got insider details about contracts, constituting a "criminal scheme and conspiracy to rig bidding".

Compass has said that the settlement has been reached purely because of its interest in avoiding a prolonged legal battle - it does not admit liability. CEO Richard Cousins said that the company needed to learn the lessons and put in place the systems and controls to ensure it could not be repeated.

DuPont announces big focus on responsibility in the marketplace

DuPont has announced that it is to considerably strengthen its marketplace activity to offer products that address social and environmental challenges. The company said it has a forecast for $6bn additional revenues from the move.

The plans were unveiled by DuPont chairman and CEO Chad O. Holliday Jr, as part of an overall announcement of the DuPont sustainability goals. The company has a long history of innovation in areas such as bio-fuels, energy-efficiency, safety and protection products.

Under the initiative, the company aims to:

* Double R&D investment in environmental technologies and products.
* Increase annual revenue $2bn from products that increase energy efficiency or reduce greenhouse gas emissions.
* Introduce at least 1,000 new safety products or services.

In addition to the marketplace measures, DuPont has also updated its goals for reducing its own environmental footprint by making its processes efficient. The company has already reduced its greenhouse gas emissions by 72 percent since 1990.

Wal-Mart ordered to pay $78m to workers

Wal-Mart has been ordered to pay compensation to workers who were forced to work during breaks by a US court in Pennsylvania. The company was found to have broken state law by refusing to pay employees for extra work they carried out by demand.

The order was the outcome of a class action lawsuit brought by around 187,000 staff who worked for the company over the last ten years. It stated that the company had routinely gotten hourly staff to work extra hours "off the clock", and that this represented one of the company's "undisclosed secrets" for profitability.

Wal-Mart has said that it will appeal the decision.

Grameen Bank and its founder awarded Nobel Peace prize

Muhammad Yunus and the Grameen Bank which he founded has been awarded the Nobel Peace prize for his pioneering work as one of the first micro-credit lending schemes aimed at alleviating poverty.

The Grameen Bank in Bangladesh has been recognised for its work in lending money to some of the poorest in society to enable them to launch their own businesses.

Mr Yunus said the award was a great honour for the bank and for Bangladesh.

According to the BBC, the announcement caught many people by surprise, since the expectation had been that the winner would be someone involved in peace talks. The awarding of the prize to an economist represents a widening of the scope of the prize to embrace those that help to create the conditions within which peace can be achieved - including poverty alleviation.

South Africa: AngloGold Ashanti suit over employee lung disease could open floodgates

A lawsuit brought against AngloGold Ashanti has been initiated that could set a precedent that would lead to a raft of further actions.

The R2.6m suit has been brought by a former employee whose failing health due to silicosis and tuberculosis has left his family destitute. He was paid R16,300 in compensation.

The suit aims to challenge a South African law that limits payouts to mineworkers suffering illness or injury to a fraction of that available to workers in other industries. Applying the higher rate to all mine workers suffering from health effects could produce a huge cost for the industry.

CSR FEATURES from the Internet

Leaders challenge 'business as usual' - 6 Nov 2006 FROM The Guardian

Al Gore has challenged businesses to put sustainability at the centre of their operations. Speaking at the summit of the Global Reporting Initiative in Amsterdam last month, the former US vice president, now an environment adviser to the UK government, said that the days of sustainability reporting being labelled a niche are gone. "It is not a niche. The old way of measuring value is becoming irrelevant," he said.

Read full story

Candidates Taking Aim at Lobbyists - 15 Oct 2006 FROM The Washington Post

The dirtiest word on the campaign trail this year is "lobbyist."

In close contests from Connecticut to California, Republicans and Democrats are attacking each other for getting too close to "special interests" and lobbyists. The accusation, a longtime election staple, is carrying greater heft than usual, election experts agree, thanks to the guilty plea of disgraced lobbyist Jack Abramoff in January and the recent e-mail scandal of former representative Mark Foley

Read full story

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Tackling corruption - an integral part of the responsible business agenda

Article by David Grayson

You are approached by a business-person from Nigeria with a request to do business. Do you (a) listen carefully and positively; or (b) run a mile? Stereotypes are hard to break; but a small, committed NGO in Nigeria: CBi: the Convention for Business Integrity aims to do just that.

CBi (www.theconvention.org) is chaired by Dr Christopher Kolade – the former chairman of Cadbury Nigeria and now Nigeria’s High Commissioner in London. It is the brainchild of Soji Apampa from SAP, Nigeria.

Soji is also co-chair of the Nigerian chapter of the Global Compact (along with Coca Cola’s local Director for Public Affairs and Communications). CBi has several multinational signatories including Cadbury, Pfizer, Dunlop and SAP; and several Nigerian smes as well as the Lagos Business School (started by IESE, Spain), and several prominent individuals. CBi also acts as the Nigerian delivery arm of the Commonwealth Business Council’s "Business Action against Corruption” – which is also closely linked to Business Action on Africa. Transparency International – Nigeria - is a signatory of CBi.

I was in Nigeria a few days ago to help CBi to produce a toolkit for smes and other potential signatories to CBi to help them to integrate their commitment against corruption into their business purpose and strategy; and to achieve the CBi "Big Tick” accreditation. This is an assignment funded by the Global Opportunities Fund of the UK FCO. The toolkit will be launched in Lagos later this year.

To illustrate the scale of the corruption challenge facing Nigeria: "Despite billions of petrodollars flowing in since the 1970s, Nigerians are considerably worse off today than they were in 1980. About 71% of them live on less than $1 a day, infant mortality is high and the country is unlikely to achieve any of the UN's millennium development goals by 2015… Corruption may have cost the country as much as $400 billion since independence, equivalent to about two-thirds of all the Western aid given to Africa during the same period." (Capping the well-heads of corruption – The Economist – 21 Oct 2006).

An oped piece in the Nigerian "Guardian" newspaper (Oct 31st), made a similar point, quoting the recent disclosure by the Chairman of Nigeria’s Economic and Financial Crimes Commission (EFCC): Mallam Nuhu Ribadu that about N65 trillion (£220 billion) has been stolen by past Nigerian leaders over the 45 years since independence.

I met / spoke to about 20 businesses – mainly smes. I am in awe of the courage that these owner-managers are showing in trying to fight corruption – and the every-day horror stories of lost business and intimidation to succumb to the pervasive bribery culture. A journalist - asked to cover a "Business Action against Corruption" event in Abuja recently - phoned one of the CBi staff team the night before and said: "we normally charge one million naira to cover a story – but I’ll do it for 500,000 – just make sure you bring along the fee in cash tomorrow and then we can split the money!" This to the CBi staffer! Needless to say, no fee was paid, no story was filed! (250Naira = one pound). My talk to small businessmen and women in Lagos on Oct 31st is posted on my website under speeches / 2006: www.davidgrayson.net

Whilst intellectually, I always knew that corruption is a fundamental part of the CR / responsible business agenda, this really was a wake-up call in understanding just how central to CR, the anti-corruption commitment has to be, in many cultures.

The goal – as Soji Apampa describes it - "My vision is that I will be able to walk in to a stranger’s office in London or New York, hand over my visiting card, and – instead of the mental barriers shooting up because of my Nigerian address – the person I am meeting, is ready to trust me and wants to do business with me, because he sees the Big Tick of CBi on my visiting card – immediately recognizing what it takes to achieve. Our goal is that the CBi Big Tick will become so well-known and respected, that it will be as though organisations which have it, don’t need strangers to do further due diligence on them. The Big Tick should be a kite-mark for honesty and integrity."

Any international business with operations in Nigeria, should consider asking their subsidiary to sign up to the Convention on Business Integrity. If your business is doing business with Nigerian firms, you could similarly encourage your customer / supplier in Nigeria to join CBi. And anyone interested in Responsible Business internationally, could consider what practical tools and resources to fight corruption that you have and which might make available to CBi for the resources section of their toolkit.

David Grayson – November 2006
David.grayson@bitc.org.uk

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In the news from the latest issue

Nepal: Relatives of killed workers sue US firm KBR for trafficking

US: Proposed Alaskan mine survives people's vote

Merck accused of dressing marketing up as science

Australia: Business lobby group warns over carbon trading

India: Tata Motors threatens pull-out from West Bengal

US: Climate change resolutions making impact on companies

Japan: Details of carbon labeling confirmed

Canada: Wal-Mart has union contract imposed

India: Rising protests against factory building

US: Fraud will cost firms $994bn this year

US: American Airlines accused of safety breaches

Ghana: Call for companies to help clear up electronic waste

US: Disneyland demonstration over hotel worker benefits

Uzbekistan: Major retailers call for end of child labour in cotton

... more news stories

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