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Pakistani firms must put csr in practice to help reduce poverty

Published on 29th Feb, Edition 9, 2016

 

There have been certain important organizations that have taken the lead and they must be lauded for their efforts to a certain extent in reducing poverty in an attempt of doing Corporate Social Responsibilities (CSR) in Pakistan, but many firms in a country still lacking CSR practices.

The international market is adopting newer and innovative ways for the wellbeing of the poverty stricken people. It is obligatory that the business community in Pakistan in their dealings behave ethically and contribute to economic development while improving the quality of life of the employees and their families as well as of the local community and society at large.

In Pakistan, more than 60 million people are living below the poverty line and they are unable to afford the expense of basic food, clothing and shelter. Half of all Pakistani men and two-thirds of all women are unable to read and write. Insufficient healthcare remains another major obstacle. About 81 out of 1,000 children die before their fifth birthday and 2,000 mothers die during childbirth annually. Pakistan is ranked 146th among 186 countries on the Human Development Index (HDI). Economic growth estimated at 4.4 percent remains insufficient to reduce poverty. So in this situation Pakistan is unable to give its best.

Unfortunately about 40 percent of the corporate companies in Pakistan are of the view that Corporate Social Responsibility means merely paying taxes, 30 percent believe that it is contributing to community welfare or donating to organizations for social development purposes and community development, while 15 percent think that CSR equates employee welfare, and 10 percent think CSR means working in areas where the company’s interests lie. Only five percent clearly understand CSR means directly implementing social development activities and projects.

Pakistan fulfils its financial needs by taking loans from local banks, International Monetary Fund and World Bank. After taking these loans, the government spends this money in different sectors of its choice. In this situation, corporate social responsibility is of utmost importance and can bring a positive change. There are many organizations that spend their profits on the welfare of society or for their business benefits.

CSR is passing through a transmutation stage in Pakistan. CSR has been renewed through professional bodies in Pakistan. The Asian Institute of Management initiated CSR activities by regulating the Asian Forum on CSR. The forum meets annually, perceives and awards Asian companies that promote health, take care of the environment, extend help to reduce poverty and support education.

Pakistan has a long way to go in CSR activities. It has taken initiatives and promises to take further steps in helping society and the environment .CSR advantages are for both firms and society. CSR is also helpful for a sustained socio-economic development, green environment and poverty alleviation for employees and local communities. Businesses that are involved in CSR perform financially better than those companies who do not perform CSR. Those organizations that perform CSR can get greater freedom and facilities from the provincial and federal governments.

A good corporation treats consumer fairly and strives to satisfy their changing needs. Corporations must have a sense of responsibility towards the society from which they earn their profits. Executives of the corporations must be men of ethics, with strong social commitments, who transform their ideas and vision of corporate ethics into corporate responsibility.

In developed countries, where there are numerous brands and products to choose from, there is harsh competition and companies realize the strength of the consumers. As such they try and provide a quality product at a fair price to them. Unfortunately in developing countries like Pakistan, where there are just a handful of companies and no consumer protection laws or effective price control, this emphasis on quality and pricing is not there and many companies compromise on these issues.

There are few known organizations that have taken the lead and they must be praised for their efforts in contributing to the welfare of the society and people of Pakistan.

Award to Samsung electronics

The Corporate Social Responsibility initiatives of Samsung Electronics (Pakistan) Limited won two prestigious accolades at the ‘5th Annual CSR Summit and CSR Gallery’, organized by ‘The Professionals Network’ (TPN) and ‘Ethical Business Update’ (EBU) in Karachi, recently. This is the first and only CSR awards forum in Pakistan which is officially registered with IPO.

Samsung’s ‘Public Health and Safety’ initiatives include its donation of 2 hi-tech Echocardiography units and one Ultrasound Color Doppler machine to Jinnah Hospital, Karachi. Samsung is also donating well equipped mobile health units, to the Punjab and Khyber Pakhtunkhwa governments, for providing Free-of-Cost treatment to thousands of poor patients.

The Crisis/Disaster Assistance Award was granted as Samsung Pakistan has always been at the forefront of large-scale relief and rehabilitation activities, whenever the country has suffered from natural disasters like earth-quakes or floods. Over the years, Samsung has helped in fulfilling the basic food and shelter needs of thousands of families, left homeless after such calamities.

Ghotki in Sindh is one of the biggest industrial hub with largest reservoirs of natural gas but there is not a single technical training institute. Engro is the only one which recently established a technical institute for the local community.

Best example

Unilever Company in Pakistan is the best example of CSR initiative. CSR programme titled the Unilever Sustainable Living Plan has covered a wide domain of areas that has considerably impacted the society and the underprivileged people. According to the Sustainable Living Plan, the company has outlined a number of goals to be achieved by the year 2020.

Unilever Pakistan’s Sustainable Living Plan focuses on reducing the Environmental Impact of products through reduction of greenhouse gases, optimization of water usage and waste management.

Enhancing Livelihoods by rural programmes and creating opportunities through enhanced distribution and empowerment through education Improving health and hygiene OGDCL is the largest exploration and production company in the country, which is listed in all three stock exchanges as well as on the London Stock Exchange. The company is responsible to plan, promote organize and implement programs for the exploration and development of oil and gas resources. OGDCL is operating in the remote areas of Pakistan and is fully committed to local communities. The commitment of dedicated workforce of OGDCL had established its credibility in every sphere of its activities and has enabled to earn the goodwill of stakeholders. The company allocates sufficient amount with regard to corporate social responsibility.

Contribution of PTCL

Pakistan Telecommunication Company Limited as a socially aware and responsible entity is determined to do its utmost in furthering worthy causes that contribute to the lives of individuals and help better the standards of society as a whole.

Corporate Social Responsibility is a way of life at PTCL which focuses on the areas of Health, Education, Environment and Community Development. PTCL holds Eco-hike and tree plantation drive to preserve environment

PTCL has opened its doors to the talented youth of Pakistan through its One-Year Paid Internship Program 2014. PTCL has held an innovative program for children of PTCL employees, aimed towards nurturing the children to be more responsible, creative and tolerant of differences. PTCL awarded ‘Best HR Practices in Telecom Sector’ award. Pakistan Telecommunication Company Limited (PTCL) has been presented with the ‘Best HR Practices in Telecom Sector” award at the 4th Global HR Excellence Awards 2013 held in Karachi.

Future measures

The government must play a positive role in promoting Corporate Social Responsibility (CSR) in Pakistan by creating an environment conducive to investment, and by working with the corporate sector for the implementation of community development programs at the grassroots level.

The Holy Qur’an states that all business transactions should be done within a clear and transparent ethical framework (2:282), corruption, deception and bribery are outlawed, and shareholders, suppliers and competitors must be treated fairly and with respect.

The Holy Qur’an also states that Allah has appointed man as his vicegerent on earth, therefore expecting him to protect the environment from abuse (2:30).

As for quality standards, the Qur’an states to “Give just measure and cause no loss (to others by fraud). And weight with scales true and upright. And withhold not things justly due to men, nor do evil in the land of working mischief.”

Prophet Muhammad’s (PBUH) teachings also encourage fair treatment in the workplace and discourage discrimination against minorities or other groups.

These four criteria, ethics, environment, quality and employee treatment, are exactly those in CSR which are mentioned above. It is advised that all Pakistani companies based on above criteria operate in the general international trend of voluntary CSR initiative.

Responsible corporations must step forward, be leaders, set an example and voluntarily observe the principles of business ethics.

The Securities and Exchange Commission of Pakistan (SECP) has approved the Corporate Social Responsibility Voluntary Guidelines, 2013 for public companies, which would be a significant step towards streamlining reporting requirements and corporate accountability of the CSR activities by public companies.

The commission also approved the constitution of CSR Forum having the mandate of gap analysis, raising awareness among businesses regarding CSR issues, CSR reporting and assurance reporting framework in view of the international best practices.

While most businesses give charity and make donations for noble causes, the reporting and accounting mechanism for stakeholders is still vague. The commission under the guidelines, the board of directors of registered entities is encouraged to take ownership for formulation, adoption and implementation of CSR policy of a company.

The private sector is now recognized as a critical driver of economic growth, which contributes significantly to poverty reduction and higher living standards for poor people. The private sector is responsible for around 90 percent of employment in the developing world, which include both formal and informal jobs. It provides critical goods and services; is the source of most tax revenues; and is key to ensuring the efficient flow of capital.

The public and private sectors can be most effective when they work together, and the public sector has a critical role to play in creating a healthy environment for investment and business activity.

Role of private sector

Both local and international enterprises are paying great attentions on CSR in the country and had developed their CSR departments for effectively implementation of CSR policy by providing shelters, medical aids, food and clothing to the displaced and needy people.

The country is facing various challenges including energy crises and law and order situation, adding, the present government was working to overcome these problems. Political parties of the country should also be held responsible regarding CSR which was a basic component for making improvements in the society.

The corporate sector in Pakistan must play a strategic role and address some of the main socio-economic issues contributing to conflicts such as poverty and unemployment. The corporate sector must have congenial relations with the community. The government, corporate sector and civil society must work together for an effective implementation of corporate social responsibility concept.

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