BUSINESS RESPECT - CSR Dispatches#35/28-Jul-2002

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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/csr and produced every two weeks.

In this issue, we consider the role of BHP Billiton at the OK Tedi mine, and we review Oxfam's challenge to the pharmaceutical industry.

In the news:

1. UK retailers blacklist harmful chemicals
2. Malaysia: MTUC hits 18 foreign multinationals for labour breaches
3. Japan: Honda, Toyota in last lap of fuel-cell race
4. Iceland: Environmentalists attack Alcoa smelter plan
5. US: 3M relaunches "greener" Scotchguard
6. UK: Greenpeace and Npower criticised for misleading advertising
7. Western firms look warily towards Sudan oil
8. UK: Think tank argues for CSR link to business innovation
9. Johnson & Johnson under investigation
10. European Commission considers chemical company influence
11. ExxonMobil to phase out MTBE in California early
12. Japan: IT companies in shift to eco-friendly transport
13. US: JP Morgan Chase defends role in Enron accounting
14. New Zealand: Telecom adopts tough audit policy
15. CSR shining lights are being hidden

Feature articles on the internet:

1. Firms re-evaluate plans to give - July 27, 2002 FROM The Daily Star (Lebanon)
2. A bad year for FTSE4Good - July 27, 2002 FROM The Guardian
3. Deadline has CEOs quivering - Jul 26, 2002 FROM Sunspot.net
4. Corporate Russia reaches into its pockets - July 21, 2002 FROM The Russia Journal
5. There won't be a British Enron - 21 July 2002 FROM The Telegraph
6. Business chiefs grapple with ethics of corporate behavior - July 20, 2002 FROM The Japan Times

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Topics:

Welcome
CSR News 28-Jul-2002
CSR FEATURES from the internet
CSR – Does It End At Home?
Beyond Philanthropy - Pharmaceuticals challenged to go further

Want to read a hyperlinked version of this issue? You can find one on the website at http://www.mallenbaker.net/csr/nl/35.html.

Copyright 2002 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

Thanks to all those who have contacted Mallen with compliments / comments on his recent web project the virtual conference (http://www.bitc.org.uk/anniversary/offsite). It was great fun to do, but it's rather good to have life back to normal!

Welcome to Simon Divecha from the Mineral Policy Institute, who contributes an article for this issue on the BHP Billiton OK Tedi mine issue, which we've covered in the news section of several previous editions. His piece underlines the rather harder edge that comes with the growing demand for corporate accountability.

No less challenging has been the contribution to the debate on the role of pharmaceuticals in a world of poverty and disease by Oxfam, Save the Children and VSO. Although space has been tight (we do restrict the size of each edition, in spite of what you may think!) we've tried to cover some of the key points and provide some thoughts in response.

Meanwhile, voting on the website for the most recent poll has begun.

The question: "Can a company be socially responsible if its main product is harmful to health or the environment?". So far, 82 people have voted, and the results roll out as follows:

Yes, if it works to reduce the harm and to run all other aspects of the business ethically 43 (52.44%)

Yes, but only if it aims to stop selling the harmful products and leave them to less responsible businesses 5 (6.1%)

No, under no circumstances 34 (41.46%)

As ever, we look forward to seeing your views!

Rupesh Shah was prompted to wonder whether such surveys are valuable. "The point I hear you making is that the issue is a hugely complex one that cannot really be narrowed down to three possiblilities; that there is no real "solution", since as is the nature of dilemmas - there are contradictory and paradoxical elements, which render it unsolvable. What the reductionist approach does here, it seems to me, is fragment the issues and leave them subject to appropriation through sound-bites."

It's a problem inherent with these kinds of surveys. The truth is that we've never promoted one of these votes as being a representative statement of the public view, or even the sole way of looking at the issue in question. They do, however, give an interesting barometer of opinion of the Business Respect readership on some of the questions covered in the journal. The instant votes so far are the most popular way in which people participate. We'd love to think we could have active discussion forums with the nuances of the questions being explored, but would such forums actually be used? Sites that have tried them, with the exception of technology sites, have generally found not.

It does occur to us though that a discussion forum that brought together CSR change agents from inside and outside of business would be a fascinating place to be. If we get a few requests for such a facility, we would be delighted to oblige ...

Mallen Baker
Vanessa Wood
editors@mallenbaker.net

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CSR News 28-Jul-2002

UK retailers blacklist harmful chemicals

Boots, Marks & Spencer, the Co-op, B&Q and the Early Learning Centre have said that they will eliminate potentially harmful chemicals from the products they sell within five years.

The companies will review the chemical composition of their own products, and will put pressure on key suppliers of other products to do the same. Chemicals under focus include certain pesticides found in fruit and vegetables and phthalates in plastics, cosmetics and toys.

Mike Barry, environmental systems manager at Marks & Spencer, said: "Both the current benefits and future potential of chemistry is being put at risk by the use of a small number of chemicals that may have a long-term adverse impact on the environment.

"We are committed to phasing out the use of any such chemicals in our product ranges." (Ananova)

Malaysia: MTUC hits 18 foreign multinationals for labour breaches

The Malaysian Trades Union Congress (MTUC) has said that it will be filing complaints against 18 foreign multinationals for breaching labour guidelines.

MTUC secretary-general G. Rajasekaran said the biggest culprits were 12 Japanese companies, followed by three American companies, two Korean companies and one Swedish company. The complaints include not respecting the basic right of workers and closing down plants without notice. (The Star)

Japan: Honda, Toyota in last lap of fuel-cell race

Japan's top two car manufacturers are in the advanced stages of the race to become the first company in the world to roll out a commercial fuel-cell vehicle.

Honda Motor Co, which is distinguished in the US by its refusal to join the coalition lobbying against increased fuel efficiency standards, has said that it will market a fuel-cell car at the end of 2002, one year ahead of its original schedule.

This announcement came just weeks after a similar statement from Toyota Motor Corp, which was the first company to commercialise a gas-electric hybrid vehicle. General Motors Corp has also said it intends to test fuel-cell cars in Japan by the end of the year, with mass production coming in 2008.

Fuel cell vehicles are powered by hydrogen and produce no emissions. They are generally likely to become the more environmentally friendly alternative to conventional motor vehicles. (Asahi / Reuters)

Iceland: Environmentalists attack Alcoa smelter plan

Environmentalists are lobbying the Iceland government to prevent Alcoa inc from going ahead with the building of a smelter which will be fuelled by a huge hydropower plant.

The World Wide Fund for Nature (WWF) conservation group said it wanted Iceland to declare the eastern highlands a national park, saying they would be irreversibly damaged by dams and reservoirs in the multi-billion-dollar project.

Alcoa has said that the project, on which the company signed a memorandum of understanding with the Reykjavik government, would create little pollution and have limited impact on local ecology.

But WWF said dams and a 43 sq km (16.6 sq mile) reservoir would flood regions used by reindeer and pink-footed geese in glacier-fringed highlands. The reservoir would drown parts of the spectacular Dimmugljufur canyon. (Reuters)

US: 3M relaunches "greener" Scotchguard

3M is relaunching the Scotchguard brand with an environmentally friendly product two years after voluntarily pulling it for environmental reasons.

As a result, 3M hopes to boost Scotchguard's annual revenues to $500 million in the next three to five years from $100 million currently.

"I don't think I've ever seen a company pull a product off proactively like they did and replace it with completely new chemistry as fast as they have done," said John Roberts, a partner and analyst with Buckingham Research, New York. "It demonstrates a capability here that's pretty powerful."

3M decided to end production in 2000 when it discovered the product was breaking down into a substance known as perfluorooctanyl sulfonate or PFOS, which lingers in the environment. The company's action has helped to secure the strong brand reputation of Scotchguard.

A poll conducted for 3M by Total Research Corp. found that Scotchguard was rated in the top 4 percent of 1,000 major brands for quality among U.S. women ages 25-54. (Reuters)

UK: Greenpeace and Npower criticised for misleading advertising

The UK's Advertising Standards Authority has criticised Greenpeace and Npower over a newspaper advertisement for its joint energy venture "Juice".

The advert, featuring a tree blowing in the wind and the text "Plug your washing machine into this at no extra cost" suggested that the product offered clean electricity, generated by wind and water power. Following a challenge to the ASA, the producers conceded that customers got their power from the national grid like everyone else, and that the description could therefore be misleading.

Npower pointed out that for every unit of electricity Juice customers use, it buys an extra unit from a wind farm which they then put back into the National Grid.

Greenpeace described itself as "relaxed" about the finding. (Ananova)

Western firms look warily towards Sudan oil

Western companies are focusing on potential new opportunities from Sudan's undeveloped oil reserves following the agreement between the Sudanese government and main rebel groups that could end the civil war.

Companies are likely to remain slow to move before a full peace deal is finally signed, however, which for the time being leaves the field dominated by Asian and East European companies which have generally been less sensitive to criticism from human rights groups.

Ironically, the move has come just as it has become increasingly likely that Talisman Energy - the focus of vociferous attacks for its involvement in Sudan - is about to pull out of the area. The company used its CSR report last year to defend its presence in the region. India's Oil and Natural Gas Corp is likely to take its stake. (Reuters / Business Report)

UK: Think tank argues for CSR link to business innovation

The corporate sector is well placed to produce new thinking on social problems but it must be part of core business development Companies should be as innovative in their approach to corporate social responsibility projects as they are in their core business if CSR is to deliver on its initial promise, says a new Demos report called Getting down to business.

Public-private partnerships will become more effective if business focuses on ‘corporate social innovation’ (CSI). This approach plays on the corporate sector’s ability to innovate in community projects without risk to the statutory responsibilities of the public sector.

‘Companies can try out new ideas on the fringes of mainstream public provision, partly because they are not subject to the same level of constant expectation and accountability as public service providers,’ said Rachel Jupp, the author of Getting down to business. (Demos)

See: http://www.demos.co.uk

Johnson & Johnson under investigation

Johnson & Johnson says it's under investigation by the US Food and Drug Administration. The company says the probe is "presumably" related to a lawsuit filed by an ex-employee in which he made allegations about the company's record-keeping.

Johnson & Johnson says it intends to vigorously defend itself against the employee's lawsuit. It will also fully cooperate with investigators.

The New York Times named the employee who filed the lawsuit as Hector Arce, a former worker at the Puerto Rico factory.

Arce, who was fired in March 1999, claims he was pressed to falsify data to cover up manufacturing lapses and then was suspended a few days before an expected interview with FDA inspectors, said the paper. (Ananova)

European Commission considers chemical company influence

The European Commission has launched an investigation into whether multinational companies have obtained undue influence on the committees that set standards for cooling equipment.

Complaints have been made to the Commission by a group of independent analysts, green groups and companies selling what they describe as cheaper and environmentally benign alternatives.

The dispute focuses on HFC gases, which have been widely introduced as the substitute for CFCs, outlawed by the Montreal Protocol due to their devastating affect on the Earth's ozone layer. HFCs have much less impact on the ozone layer, but are powerful contributors to global warming, being up to 2,400 times more potent than carbon dioxide.

The majorities of all the committees deciding on refrigeration and cooling standards in Europe are dominated by representatives of chemical companies which own lucrative patents on HFCs. The four key committees are weighted 12 to four, nine to three, 12 to 0 and 15 to four in their favour. (Guardian)

ExxonMobil to phase out MTBE in California early

ExxonMobil has set an early date for phasing out methyl tertiary butyl ether (MTBE), a fuel additive that has contaminated ground water.

Exxon said that it would phase out MTBE and convert to ethanol by early 2003, nearly a year ahead of a deadline set by California Gov. Gray Davis in March.

The move by Exxon follows that of BP and Shell, who both announced that they would switch additives ahead of the deadline earlier in the year.

Critics have hit at the companies suggesting the corporations simply want higher gasoline prices through shortages to boost profits. Environmentalists also called ethanol a "mixed blessing" saying that, although ethanol has been praised for lowering carbon monoxide emissions in winter, it can actually contribute to low level smog in basin areas like Los Angeles. (Reuters)

Japan: IT companies in shift to eco-friendly transport

Many IT companies, including NEC Corp and Canon Inc, plan to shift from use of trucks and aircraft to trains and ships for domestic and overseas product shipments to reduce emissions of greenhouse gases, the Nihon Keizai Shimbun reported, citing industry observers and company sources.

It said the moves represent a major change from earlier policies prioritising speed. Most personal computer makers, for example, currently ship their products by air to keep their inventories small.

It quoted company sources as saying that NEC will from this year stop using aircraft and instead use ships to transport China-made desktop computers to Japan. The move is expected to reduce carbon-dioxide emissions to less than one-thirtieth of current levels.

Canon said it intends to replace about 20% of truck-based transport with trains and ships during the current business year. The measure is estimated to reduce CO2 emissions in Japan by 550 tons a year.

Fujitsu and Matsushita Electric Industrial Co have also suggested they will be aiming to improve performance in this area. (Ananova)

US: JP Morgan Chase defends role in Enron accounting

JP Morgan chief executive told a US Congressional Hearing that his bank did not knowingly help Enron hide debt.

"We acted properly and with integrity in all the Enron matters," he said, criticising a "political media frenzy that is quite extraordinary".

He said that all the bank's dealings with Enron had been fully entered into JP Morgan's own accounts, which complied with audit rules.

Shares in JP Morgan Chase closed 16% higher after the hearing. (BBC)

New Zealand: Telecom adopts tough audit policy

According to PricewaterhouseCoopers, Telecom's auditors for 12 years, the company is tightening up more than any other New Zealand company in refusing to allow auditors to carry out non-audit work.

The move comes in the wake of the Enron and Worldcom scandals in the US, where the role of auditors has been highlighted, leading to the downfall of Anderson.

Telecom Chairman Roderick Deane, announcing the revised audit policy, said that after PWC had completed the June 2002 year audit they had agreed to resign, and KPMG would be appointed Telecom's auditors for the 2003 year.

PWC will continue to do the more lucrative non-audit work including financial and tax consultancy, and the company stressed that the decision did not reflect any concern with PwC's performance. (Stuff)

CSR shining lights are being hidden

Social responsibility has become a priority for many companies, according to a new study published by a consultancy company. Of 120 senior managers surveyed, 88% were "actively and voluntarily seeking to contribute to a better society and a cleaner environment".

Corporate social responsibility (CSR) focused predominantly on areas such as the workplace (82%), the environment (75%) and the local community (71%), although 61% of managers also cited ethics and 32% human rights, according to research by Springpoint Consultancy.

The main driving forces behind CSR were company culture (51%) and a desire to enhance the brand (29%). Only 11% of managers stated that campaigning by NGOs influenced their company. One in ten cited current or forthcoming legislation as a factor in CSR programmes. (Edie)

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CSR FEATURES from the Internet

Firms re-evaluate plans to give - July 27, 2002 FROM The Daily Star (Lebanon)

Trying to find out why the events of Sept. 11 occurred has seen thousands and thousands of words printed and countless debates and discussions throughout the world’s media. “Evil” Islamic militants, deep anti-American feeling among the less developed nations of the world, an attack on Israel via its closest ally - all have been cited as causes of the attacks.

But one reason less often put forward is the idea that world trade itself was a target of the terrorists. Was not the attack on the Twin Towers, in part, a culmination of an anti-globalization, anti-multinational corporation campaign that had been smoldering throughout the 1990s? ...

http://www.dailystar.com.lb/business/27_07_02_a.htm

A bad year for FTSE4Good - July 27, 2002 FROM The Guardian

Mixing profits with principles can be a tricky business, as the events of the past 12 months have shown.

This coming Wednesday marks the first anniversary of the launch of a FTSE stock market index of ethical companies. The FTSE4Good UK index and its sister index, the FTSE4Good UK 50, were designed to make it easier for investors to track the performance of, and invest in, "socially responsible" companies - those that have a positive record on environmental issues, workplace practices and human rights ...

http://www.guardian.co.uk/guardian_jobs_and_money/story/ 0,3605,763628,00.html

Deadline has CEOs quivering - Jul 26, 2002 FROM Sunspot.net

While keeping one eye on the stock market ticker, major corporate chief executive officers and chief financial officers are probably keeping the other eye, with some trepidation, on Aug. 14. That's the deadline imposed on them by the Securities and Exchange Commission to, in the SEC's words, "personally certify - in writing, under oath, and for publication - that their most recent reports filed with the Commission are both complete and accurate. Officers who make false certifications," the notice specifies, "will face personal liability." ...

http://www.sunspot.net/news/opinion/oped/bal-op.witcover 26jul26.column?coll=bal%2Dnews%2Dcolumnists

Corporate Russia reaches into its pockets - July 21, 2002 FROM The Russia Journal

Donations to a variety of charitable organizations are catching on among Russian corporations. Visit a McDonald’s restaurant in Moscow and, if you happen to glance down as you’re wondering where your Big Mac and fries have got to, you’ll see a charity box attached to the counter. The boxes earn around $8,000 a year for good causes – a valuable addition to the $4.5 million the company has donated to various charities in Russia since 1990.

But the really good news, observers say, is that the fast food giant is not alone in its efforts. After a slow takeoff in the years following the fall of the Soviet Union, spending money on charity is fast becoming the thing to do in corporate Russia ...

http://www.russiajournal.com/weekly/article.shtml?ad=6381

There won't be a British Enron - 21 July 2002 FROM The Telegraph

Large business disasters like Enron and WorldCom have seriously damaged trust in US public companies. Investors, analysts and the media are questioning the quality of earnings for many corporations. Certain commentators have blamed a culture of greed, a belief in profits at any cost.

Unquestionably society's morals have an influence on commercial ethics and behaviour. But the system also matters, and a number of critical differences between the US and the UK lead me to believe that we will not suffer similar disasters to the two mentioned above ...

http://money.telegraph.co.uk/money/main.jhtml?xml=/money/ 2002/07/21/ccluke21.xml&sSheet=/money/2002/07/21/ixcoms.html

Business chiefs grapple with ethics of corporate behavior - July 20, 2002 FROM The Japan Times

Business leaders grappled Friday with the question of what principles should guide corporate behavior.

On the second and final day of the annual gathering organized by the Japan Association of Corporate Executives (Keizai Doyukai), participants discussed what kind of management models they should pursue, following the recent accounting scandals in corporate America ...

http://www.japantimes.co.jp/cgi-bin/getarticle.pl5?nb20020720a5.htm

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CSR – Does It End At Home?

Simon Divecha, the Campaign Coordinator for the Mineral Policy Institute, argues BHP Billiton's recent actions on the OK Tedi mine serve as a case study for CSR double standards.

There is no doubt that there are many decisions a company makes that it would rather the public was kept in the dark about - particularly where there is a strong concern that such a decision may not stand up to the so-called 'sunlight test'. That is "are we happy now everyone knows what we did?” Of course, very often the decisions never become public - especially when the company's operations are overseas in remote regions or poor countries.

So when a Western company places a major operation in such a region is it still obliged to live up to the same standards as it would at home - even if government standards in the country of operation are much lower? Is it, in fact, even possible for the company to do so? If it is not, do the double standards mean it shouldn't be there in the first place?

Take the case of Australian/British company BHP Billiton and its Ok Tedi mine in Papua New Guinea.

In 1984, BHP was allowed to open Ok Tedi and commenced dumping 80,000 tonnes of waste directly into the Ok Tedi River every day. Ok Tedi flows into PNG’s second largest river, the Fly River. Not surprisingly, this huge amount of waste is having a devastating impact on the environment and the communities along the Fly/Ok Tedi. The company acknowledges it will kill over two thousand square kilometres of forest, and possibly cause a total collapse of the fishery, in addition to the 70 to 90% of fish that are already dead in the Ok Tedi River.

The damage will force villagers to hunt and fish over larger distances and so make it difficult for them to get enough food to eat. It will likely lead to protein deficiencies, while destroying every sago tree, the staple food, for at least half of Fly River. The damage is increasing, the waste continues to go into the river every day, and the devastation will last for the better part of this century at least.

BHP sought to be out of Ok Tedi, with government legislation passed in PNG in December 2001 granting it a full legal indemnity for the damage it had created. In exchange it limits company costs to the future profits from this mine as it continues to operate (and pollute) for the next ten years. As compensation for the ongoing environmental impact of this mine, villagers will receive compensatory damages and access to a development fund. This 'assistance' works out to be the equivalent of about four tubs of margarine a month per person for the next ten years.

Is there a fundamental double standard? There is no doubt that BHP would not be allowed to dump its waste directly into a river in Australia. Yet it will leave its majority share of Ok Tedi in PNG while the mine continues to dump its waste.

Similarly, if this mine were in Australia the company would be required to clean up the damage, no matter how far the damage spreads.

To justify its actions the company argues that its preferred solution was to close the mine early, and the PNG government rejected this. However, as was noted by the World Bank, the options, including early closure, that BHP proposed to deal with the mine, were aimed at minimising the risk to BHP shareholders. The options were not focused on benefit to PNG people and communities.

Does such action stand up to the 'sunlight test'? When is it reconciled with the stated values of a company, with BHP - it's "overriding commitment to…environmental responsibility", its "accepting the responsibility to inspire and deliver positive change in the face of adversity", its integrity - "doing what we say we will do"?

Many people feel that western companies should be bound by western standards of behaviour wherever they operate. But do they know of what’s happening next to Australia, caused by one of our largest companies?

In the case of the Ok Tedi mine, clearly few would agree that people in PNG are getting the same deal as an Australian or British citizen would get. In fact under the legislation passed to let BHP out, the PNG government has sacrificed its sovereign right to protect its citizens through its legal system. It has also agreed to deprive PNG people of their rights to choose their own representatives, allocating decision making to people who can be handpicked by BHP.

BHP’s espoused mission is to "earn the trust of employees, customers, suppliers, communities and shareholders by being forthright in our communications and consistently delivering on commitments". Throughout most of the last few years you will find a little such forthright communication from this company about its disasters in poor and remote regions.

Would companies be able to operate like this if there was a real concern over exposure of its practices to the sunlight?

Simon Divecha is the Campaign Coordinator for the Mineral Policy Institute. Full details, background and source documents to the article are at http://www.mpi.org.au/analysis.html

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Beyond Philanthropy - Pharmaceuticals challenged to go further

Oxfam, Save the Children and VSO have released a new report that seeks to set out the terms of reference for pharmaceutical companies grappling with the issues around corporate social responsibility.

After all, if you're a corporation seeking to make a positive impact on society, you could not have much more scope to do so. Every year, infectious diseases kill 14 million people. Most of these deaths are of poor people living in developing countries, particularly children under the age of five.

The majority of these diseases are preventable or easily treatable. Treatments are available for many of the biggest killer diseases. Yet many medicines that could prevent people dying and suffering ill-health are not available to the people who need them - and the obvious starting point is to conclude that the medicines are too expensive for developing countries to afford, and that the companies should be in the front line of addressing this.

The report authors believe that a responsible company should have policies on access to treatment for developing countries which include the five priorities of: pricing; patents; joint public private initiatives (JPPIs); research and development (R&D); and the appropriate use of drugs. They argue that the industry currently defines its policy on access largely in terms of philanthropic ventures, hence the title.

The report's main call is for a systematic approach to drugs pricing that would lower prices for poorer countries on a permanent, across- the-board basis. It says that "Recent price reduction offers represent a welcome step forward, but as ad-hoc commitments, they cannot achieve the predictability, sustainability and efficiency necessary to meet the needs of developing countries."

A number of benchmarks are proposed, against which a company's commitment to CSR should be measured. There are quite a few of these, but they include:

• The company supports calls for a systematic, global approach to pricing, overseen by an international public health body, to address the needs of developing countries.
• The company’s policies support substantially lower prices of medicines in developing countries.
• Price reductions are not limited to one or two "flagship" drugs but cover a range of products that are relevant to health priorities in developing countries.
• The company refrains from enforcing patents in developing countries where this will exacerbate health problems.
• The company publishes target expenditure for its R&D on infectious diseases.
• The company foregoes patent rights in developing countries of drugs developed under JPPIs for infectious diseases.

It's an interesting wishlist, but one which ultimately misses the main point of its own position. That is to say that if you believe that pharmaceutical companies should pursue research and development based on the needs of poorer countries, you then do not enforce patents in those countries (meaning effectively that you give your product away) and in any case you reduce the price of your drugs to the point where you make no return - what you do not have is a private company that can exist and survive in the marketplace.

Such a company would be abandoned by shareholders, since it could never be profitable. It would probably end up being beaten in key markets by competitors who play by other rules, and end up laying off employees if not actually going under. And it would probably end up courting the opprobrium of customers in the developed world who would put pressure on the company to reduce prices at home to be more in line with those charged in developing countries.

The fact is that the Oxfam / Save the Children / VSO report misses one of the basic tenets for CSR - that it should spring from some sort of business case that makes the positive impact of the company sustainable. Otherwise, it becomes philanthropy of the worst sort - the sort that loses jobs, and doesn't actually provide a solution.

If the report's implied premise is correct - that one should never make a profit from providing goods / services that are desperately needed but that many cannot afford - then the logic of that position is that new bodies are set up with public funding to produce medicine on the basis of need. How such bodies would work internationally, and whether they would actually be even remotely effective at the task is another matter, but it would at least be an arguable case consistent with the values put forward.

It's a shame - a thoughtful contribution to the CSR debate around pharmaceuticals is desperately needed. There's no doubt that the current situation is deeply unsatisfactory, and some new contract between the private sector and governments is needed to find a way forward. Unfortunately, benchmarks that put the entire weight of the solution onto the companies, and bear no relation to the reality within which those companies have to survive, are unlikely to provide a useful tool against which to measure success.

Beyond Philanthropy: the pharmaceutical industry, corporate social responsibility and the developing world

http://www.oxfam.org.uk/policy/papers/beyphil/
beyond_philanthropy.pdf

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In the news from the latest issue

UK: Tesco to stop sourcing from Zimbabwe

British American Tobacco under fire for practices in Africa

Japan: Index to be introduced to rate companies on environment

Punitive damages on Exxon Valdez slashed

... more news stories

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Business Respect - most recent edition added on 22nd June 2008