Student ID: 9297731 1 | P a g e

CSR – Environmental Protection or Creating Disguise?

By Shahadat Hossain Shakil

1. Choice of Governance Mechanism: Command & Control Approach or Voluntary Measures by Corporations

The promotion of environmental responsibility amongst transnational corporations (TNCs) has become an important

topic of debate in recent years. Should environmental responsibility measures be imposed in the form of strictly

monitored government regulations? Or should environmental responsibility be left to firms to work out on their own,

through voluntary measures? While government regulation and oversight might achieve these environmental goals in

a blunt manner, the business community argues that systems that incorporate voluntary measures can also achieve

them, but in a more efficient way (Utting & Marques, 2010).

This basic policy debate has been a central feature of global discussions on environmental protection since the

Stockholm Conference in 1972. While the 1970s saw many governments pursue a regulatory command-and-control

approach, the emphasis shifted in the 1980s and 90s to an approach to regulation where voluntary corporate

mechanisms play a key role. This voluntary approach was endorsed by the Rio Earth Summit in 1992, and recently

was boosted by the World Summit on Sustainable Development in 2002.We have now had at least 15 years of

corporate voluntary measures as a prominent mechanism by which to achieve environmental responsibility amongst

firms. But have these measures lived up to their promises? (Clapp, 2005)

2. Legal Framework for the CSR

Formal efforts to promote better environmental practices by TNCs that originate outside of corporate circles have been

stepped up in recent years, alongside industry driven efforts (ISO 14000, Responsible Care, individual pledges of

corporate social responsibility). Recent efforts along these lines include the UN’s Global Compact, the Organization

for Economic Cooperation and Development’s (OECD) Guidelines for Multinational Enterprises, as well as

calls for an international treaty on corporate accountability. While these external efforts are still voluntary, they do

have the potential to become stronger if they are incorporated into a legally binding treaty, as some NGOs are

currently proposing. Such an agreement would have enormous significance for the countries of the Global South as it

is often difficult for these countries to monitor and enforce environmental regulations, particularly in a climate of

regulatory chill (Clapp, 2005).

3. Case Study: CSR Activities of British American Tobacco Bangladesh (BATB)

“Success and responsibility go together” is the philosophy that has driven British American Tobacco Bangladesh.

British American Tobacco believes that Corporate Social Responsibility is vital in ensuring that their business is

sustainable for long-term shareholder value. They also believe that the business has a key role to play in helping

society to achieve the necessary sustainable balance of economic growth, environmental protection and social

progress. The CSR activities which are being controlled by BAT Bangladesh are given below:

3.1 Afforestation: British American Tobacco Bangladesh initiated this program with Forest Department of GoB to

create mass awareness of the need for afforestation with the free sapling distribution program in 1980. Today, af ter

more than two decades, BATB have contributed more than 4 crore 60 lac saplings to the country‟s afforestation

initiative. As a mark of national recognition, the company received the Prime Minister‟s 3rd

prize in 1993 and 1st prize

both in 1999 and 2003 for tree plantation.

3.2 Safe Drinking Water - ‘Probaho’ : For millions of people in Bangladesh, the only available drinking water is

laced with arsenic and therefore extremely hazardous to health. Having recognized the gravity of the issue, BATB

have stepped forward with the „Probaho‟, Bangla for „flow‟, project. Through Probaho, they aim to provide rural

communities with safe drinking water. This initiative is also aligned with the Government‟s aim to achieve the

Millennium Development Goals (MGDs). Using Government approved community based water filtration technology,

their 34 water filtration plants provide approximately 175,000 litres of pure drinking water for around 87,500 people

daily.

Student ID: 9297731 2 | P a g e

3.3 Sustainable Agriculture: BATB supply chain works around 34,000 registered farmers within the village

community. Therefore, they try to ensure that their sources are sustainable. Initiatives include Green Manuring with

Dhaincha (Sesbania aculeata) - an effective approach in enriching soil health and fertility. Dhaincha is also promoted

as alternate fuel in leaf growing areas. Moreover, they have introduced Integrated Pest Management Clubs and

Farmer Field Schools in collaboration with the Department of Agriculture Extension, GoB to educate farmers about

the adoption of Good Agriculture Practices.

It is important to mention that 70% of FCV tobacco in Bangladesh is grown at Kushtia. Through concerted effort and

with the growing interest of the farming community, alternate fuel is increasingly becoming popular in Chittagong leaf

growing region as well. At present, alternate sources are being used as wood fuel substitute. To meet the demand for

wood fuel, every year BATB distribute 25 lac saplings free of cost in Chittagong (BATB, n.d.; Ahmed, 2012, pp. 20–

28).

3.4 Claims:

Over the period, the company successfully replaced almost 100% of Flue Cured Variety (FCV) curing at Kustia by

alternates such as jute stick, dhaincha sticks, paddy straw, industrial waste, sugarcane bagasse, rice husk etc.

Offsetting the loss of trees through afforestation program

Reducing the detrimental effects on ecology (occurring through tobacco cultivation and drying) via sustainable

agriculture practices.

Decreasing the health risk of the farmers through monthly health check-up and sanitation support (Ahmed, 2012)

3.5 Adversaries

In Bangladesh, BAT participates in annual reforestation programs, donating saplings to be planted and touting its

responsible agriculture. However, cutting down trees for fuel during the tobacco curing process accounts for 30%

of annual deforestation in Bangladesh, making BAT‟s contribution of saplings a superficial attempt to draw

attention away from the environmental problems it is causing.

Tobacco consumption negatively affects those living in poverty, and any financial contribution made by

companies responsible for increasing the health harms and financial burden of this population will not

alleviate poverty, environmental, or health issues and is likely to make them worse (TFK, 2011).

3.6 Facts

The Framework Convention on Tobacco Control (FCTC), the world‟s first global public health treaty, establishes

a policy framework aimed to reduce the devastating health, economic, and social impacts of tobacco. Article 13 of

the FCTC requires Parties to implement and enforce a comprehensive ban on tobacco advertising, promotion, and

sponsorship, including a complete ban on CSR (TFK, 2011).

Bangladesh signed this Framework on 2003 and entered into the force at 2005 (WHO, 2013)

4. Critical Analysis

4.1 Who profits from the Environment?

Tobacco companies claim that they engage in CSR because they are concerned corporate citizens. However, tobacco

company internal documents reveal the true goals of industry-sponsored programs, which are to boost profits and

drive company interests. In reality, CSR activities cost tobacco companies very little in relation to their annual profits.

For example, in 2009, Philip Morris International (PMI) charitable contributions amounted to USD $22.7 million,

while its profits were USD $6.3 billion, and British American Tobacco (BAT) spent USD $22.3 million on CSR

compared to the USD $4.8 billion it earned in profits (TFK, 2011).

One of the commercial drivers of private forms of (self) regulation, such as ISO 14001 standards, is the desire to keep

smaller firms out of profitable markets by raising the barrier to entry and increasing the costs of compliance with

standards (Clapp, 1998, cited in Newell & Levy, 2006)

Student ID: 9297731 3 | P a g e

4.2 Is there a role for corporations in protecting the environment?

„Corporations performed as shapers and negotiators of environmental rules as well as play central position in informal

governance of the environment that derives from their daily operations. Corporations play multiple and potentially

conflicting roles as lobbyists, experts, (self) regulators and providers of the capital and technologies necessary to

realize environmental policy goals‟(Newell & Levy, 2006).

Corporations can also serve as powerful engines of change, with the potential to redirect their substantial financial,

technological, and organizational resources toward addressing environmental concerns (Newell & Levy, 2006).

Industry's involvement is a critical factor in the policy deliberations relating to climate change. It is industry that will

meet the growing demands of consumers for goods and services. It is industry that develops and disseminates most of

the world's technology. It is industry and the private financial community that marshal most of the financial resources

that fund the world's economic growth. It is industry that develops finances and manages most of the investments that

enhance and protect the environment. It is industry, therefore, that will be called upon to implement and finance a

substantial part of governments' climate change policies (International Chamber of Commerce, 1995, cited in Newell

& Levy, 2006)

From a position of clearly defined antagonism, there is increasing emphasis on partnerships and more institutionalized

forms of collaboration that seek to mobilize the respective skills and expertise of corporations and NGOs towards the

management of specific environmental problems (Bendell 2000; Newell 2001 cited in Newell & Levy, 2006)

4.3 Is there no need for regulation if corporate environmental responsibility prevails?

Recent years have seen a number of cases of „accidental‟ or „unintentional‟ releases of genetically modified organisms

(StarLink, Bt10 maize, Liberty Link RICE 601) that were not approved for human consumption or in some cases

even for commercial planting in the country in which they were released. Behavior of the firms responsible for the

illegal releases in these three cases raises important questions about the effectiveness of voluntary corporate

responsibility measures. In particular, application of the precautionary principle and internalization of environmental

costs appear not to be high on these firms' agendas (Clapp, 2008).

Corporations and corporate advocacy groups lobby governments and international treaty processes. They also use their

structural power, and threat of relocation, to encourage governments to loosen regulations or to not enforce those rules

on the books (encouraging a regulatory chill), They also have enacted voluntary environmental and social codes of

conduct, organized primarily through industry, such as ISO 14000, Responsible Care, and individual pledges of

corporate social responsibility (CSR) (Clapp, 2005).

5. Conclusion

Further Debate:

Ban CSR or ban activities of TNCs that is harmful for the environment?

Strict Regulation or Command and Control Approaches are the solution?

Question of Accountability and Legitimacy of the TNCs

Student ID: 9297731 4 | P a g e

References:

Ahmed, M. (2012). The Evaluation of the CSR Activities of British American Tobacco Bangladesh. Dhaka: Business School,

BRAC University. [online]. Available from: http://dspace.bracu.ac.bd/handle/10361/2460 [Accessed: October 20, 2013].

BATB. (2010). British American Tobacco Bangladesh - Our corporate social responsibility. British American Tobacco

Bangladesh. [online]. Available from:

http://www.batbangladesh.com/group/sites/BAT_85DJTR.nsf/vwPagesWebLive/DO87ELS5?opendocument&SKN=1

[Accessed: October 28, 2013].

Clapp, J. (2005). Global environmental governance for corporate responsibility and accountability. Global Environmental Politics,

5(3), pp.23–34. [online]. Available from: http://www.mitpressjournals.org/doi/abs/10.1162/1526380054794916 [Accessed:

October 5, 2013].

Clapp, J. (2008). Illegal GMO releases and corporate responsibility: Questioning the effectiveness of voluntary measures.

Ecological Economics, 66(2-3), pp.348–358. [online]. Available from:

http://linkinghub.elsevier.com/retrieve/pii/S0921800907004843 [Accessed: October 28, 2013].

Clapp, J. (1998). The Privatization of Global Environmental Governance: ISO 14000 and The Developing World. Global

Governance, 4(3), pp.295–316. [online]. Available from: http://www.jstor.org/stable/10.2307/27800201 [Accessed: October

28, 2013].

Newell, P. and Levy, D. (2006). The Political Economy of the Firm in Global Environmental Governance. In C. May, ed. Global

Corporate Power. International Political Economy Yearbook. Boulder: Lynne Rienner, pp. 157–181.

TFK. (2011). Advertising, Promotion and Sponsorship: Corporate Social Responsibility. [online]. Available from:

http://global.tobaccofreekids.org/files/pdfs/en/APS_CSR_en.pdf [Accessed: October 15, 2013].

Utting, P. and Marques, J.C. (2010). Introduction: The Intellectual Crisis of CSR. In P. Utting & J. C. Marques, eds. Corporate

Social Responsibility and Regulatory Governance: Towards Inclusive Development? International Political Economy Series.

Plagrave Macmillan.

WHO. (2013a). Banning Tobacco Advertisement, Promotion and Sponsorship : What You Need to Know. Geneva: World Health

Organization. [online]. Available from: http://apps.who.int/iris/bitstream/10665/83779/1/WHO_NMH_PND_13.1_eng.pdf

[Accessed: October 10, 2013].

WHO. (2013b). Parties to the WHO Framework Convention on Tobacco Control. World Health Organization. [online]. Available

from: http://www.who.int/fctc/signatories_parties/en/index.html [Accessed: October 28, 2013].