New guide on social responsibility for Chinese contractors abroad

December 14, 2012

The China International Contractors Association released its Guide on Social Responsibility in September. The text, which is bilingual and clearly adapted to the lingo of international CSR, mostly sticks to generalities and exhorts companies to obey laws — for example, by paying taxes (article 4.7.3).

Nonetheless, some parts go beyond the language we have been used to. For example, article 4.2.1 recommends treating job applicants of “different ethnicites, genders, races, nationalities, age, religions, disabilities, marital status and sexual orientation equally.” Such language is unusual in China, and although hiring disabled candidates in the construction industry may not be very realistic, it is nonetheless a nice idea. The same article also advises against the use of child labour, but since this is illegal in China, it is already covered by the Chinese government’s requirement that Chinese companies abroad comply with Chinese as well as local laws. Article 4.4.3 recommends localised procurement, and article 4.4.2 advises incorporating CSR standards into subcontracting arrangements.

According to International Rivers’ (IR) useful guide to the state of China’s international dam building industry, The New Great Walls, an updated version of which has just been released, Sinohydro’s 2011 policy, developed in consultation with IR, goes far beyond these guidelines: it adopts the World Bank’s principles on infrastructural projects, mandates “community” consultation and access to social and environmental impact assessments, commits  to a dialogue with NGOs, and requires at least equal income and livelihood levels for those displaced by projects. It also required informed consent by “Indigenous Peoples” where applicable, an interesting fact as China is not a signatory to the UN convention on indigenous peoples and the term is not used in China.

According to The New Great Walls, there were “at least 308 dam projects … in 70 different countries” being built with the help of Chinese contractors or financiers as of August 2012.

Chinese corporation sponsors Chinese courses at Hungarian university

April 20, 2012

The Hungarian radio station Gazdasági Rádió reported on 19 April that Wanhua-Borsodchem, a chemicals manufacturer in northeastern Hungary that was purchased by the Chinese plastics company Wanhua in February 2011, is sponsoring courses in Chinese language and “social sciences” for all students of Miskolc University, a major regional university.

The news is interesting because it is the first instance I have come across of corporations funding such initiatives directly, rather than going through a “Confucius Institute”. It seems an example of “corporate citizenship” that is akin to the activities to some Chinese state enterprises in Southeast Asia and Africa, which help offer Chinese-language classes on a much more local, typically village, scale, but this initiative is much higher-profile. Interestingly, it is taking place in the region of Hungary where support for the extremist xenophobic party, Jobbik, is strongest.

Gezhouba Group on overseas CSR

April 20, 2011

In an exercise that is becoming increasingly common in China, Gezhouba Group, one of the major hydropower contractors in Southeast Asia and Africa, has released its 2010 corporate social responsibility report. Chapter 6 of the report is entitled “Overseas CSR.”

The report singles out Gezhouba’s second place in CCTV and the China-Africa Friendship Association’s China-Africa Friendship Award contest (see News, 22 December 2010) as proof of its social engagement. Going into detail — the section is about half a page long — the report first states that the construction of hydropower stations and roads contributes to the recipient countries’ economic development, and that Gezhouba “actively pays all kinds of tax” and “enthusiastically accepts the supervision of recipient countries’  tax and audit authorities.” In other words, its major CSR achievement is its core activity itself, and the fact that it conducts it lawfully.

Next, the report states that Gezhouba has provided 10,300 local jobs Not an insignificant number, but not very high either considering the number of countries and the fact that most jobs are unskilled.

Next, the report contains details of what it calls “participating in charity building” 参加公益建设. These include drilling four wells in Malabo, the capital of Equatorial Guinea and donating cash, as well as Lenovo computers and writing implements to schools and orphanages in Kashmir, Ethiopia, and Libya. The most surprising item is a donation of 10 million kip (about 850 euro) to the Lao ministry of energy and mines.

Chinese and US companies meet on Africa policy

March 25, 2010

According to a press release,

the Leon H. Sullivan Foundation announced that it is partnering with the Council on Foreign Relations, the Brenthurst Foundation of South Africa and the Chinese Academy of Social Sciences and organizing a conference to discuss how companies can contribute to economic and social development in Africa.

The meeting, which will take place in Monrovia, Liberia. on February 24-25, will include representatives from Chevron Corporation, the CocaCola Companies, Marathon Oil, DeBeers
Debswana (Pty) Ltd., Fina Bank, Rwanda, the China
Export-Import Bank, the China-Africa Development
Fund and the China Henan International Cooperation Group (CHICO).

The goal of the dialogue is to engage corporate leaders and analysts from Africa, China and the U.S. on lessons learned in corporate social responsibility and the best strategies to pursue accelerated economic development.

President Ellen Johnson-Sirleaf will address the conference.  Liberia is the first African nation to be validated by the Extractive Industry Transparency Initiative.

One prominent African acedemic who writes on China-Africa issues reacted sharply to this news in private correspondence, rejecting the idea that Africa needs to be discussed as a patient by two doctors and expressing fears that corporations from both countries might wish to agree to avoid undercutting each other, with Africa getting a worse deal as a result.

Social responsibility guidelines for Chinese banks

January 24, 2009

The Chinese blog of International Rivers reported that the China Banking Association published a set of social responsibility guidelines for its members on 12 January. (A full translation has since appeared on their English site; the quotes below are my translations.) Article 20 specifies banks’ obligations towards the projects they finance:

Banks and financial institutions, through credit and other financial instruments, should support clients in conserving resources [and] protecting the environment; guide and encourage clients in increasing social responsibility awaraness […]; actively train clients in environmental protection; trainings should include, but not be limited to, concrete procedures for environmental impact assessment. […] It is encouraged to conduct independent assessments of projects’ environmental impact; decisions cannot be based solely on the environmental impact assessment reports or other documents submitted by the client.

This is of course already a legal requirement in China, so let us see whether it will now be enforced for international projects. No similar requirements refer to social impact assessment, and only this article refers to safeguards for lending. The rest of the document refers to measures to be taken by the banks within their own organisations. Like other documents on CSR coming out of Chinese state institutions so far, it is strikingly different from what this term covers in Western parlance and fits more into the state discourse of “harmonious development” (which, according to Article 1, the document intends to serve). 

Thus, Article 3 defines social responsibility as “economic, legal, moral and charitable responsibility to shareholders, employees, business partners, government and community.” It is not something that has to be considered additionally to and possibly in conflict with business interests and legal obligations, but rather their expansion.

The rest of the document details these responsibilities in a vague and tautological fashion, without proposing standards or measures. Thus, social responsibility is said to entail “actively protecting the social public interest [sic] of consumers, workers, and the community masses in accordance with the requirements of social morality and public interest; promoting charitable responsibility, actively throwing oneself into activities for the public good” (Article 3, Section 2).

Articles 6 to 10 discuss “Economic responsibility;” this includes “opposing unfair competition,” “protecting the interests of shareholders, especially medium and small shareholders;” “creating value” for shareholders and employees; and protecting consumers. Articles 12-15 deal in more detail with “Social responsibility.” This includes educating consumers, popularizing financial knowledge, “promoting ‘people at the centre’ [the current Party leadership’s slogan], taking employees’ health safety to heart, caring about employees’ lives […] fanning employees’ work enthusiasm, initiative and creativity. It also includes “supporting the economic development of the community, […] enthusiastically donating for charitable and volunteer activities, […] making an effort to build social harmony and social progress.”

The final articles propose that banks audit their own social responsibility and report on it.