Myanmar's Long Road to National Reconciliation (37 page)

Richard Jones

The non-financial responsibilities of organizations (environmental, social, economic and ethical responsibilities) have become increasingly scrutinized by stakeholders across the globe. Such obligations are felt especially keenly by international firms active in “difficult” countries like Myanmar. This paper will explain how even a small company like Premier Oil made a notable, and disproportionate, contribution.

In
The Millennium Poll on Corporate Social Responsibility,
which surveyed 25,000 consumers in twenty-three countries, nearly 50 per cent of respondents said that social responsibility is
the most
important factor influencing individual impressions of companies. The findings showed further that two in three citizens want companies to go beyond their historical role of making a profit, paying taxes, employing people, and obeying laws; they want companies to contribute to society.

Some areas of economic, social, ethical, and environmental responsibility require companies to comply with the law (for example, in relation to health and safety regulations, environmental protection, or corporate
governance issues). Others are discretionary, such as commitments (and consequent activities) to maintain and demonstrate a positive economic, environmental, and social performance over time. In situations when the decision about what action to take is at the discretion of the particular company, how much or little it does, and what it chooses to do, all have a bearing upon the way it wishes to be perceived. In other words, the company’s approach to its environmental and social responsibilities will help to define its corporate reputation.

Corporate social responsibility (CSR) is a concept which has both practical and ethical dimensions. It includes fundamental business concerns such as risk-avoidance and protecting reputation. But it can also mean “doing the right thing”, investing in the community, or creating a place where people simply feel good about working for that organization or firm.

Companies at the forefront of implementing corporate social responsibility principles, which I will term “Leadership Companies”, see corporate social responsibility as more than a collection of discrete practices, occasional gestures, or initiatives that are motivated by marketing, public relations, or other business benefits. Rather they view it as a comprehensive set of social, ethical, and environmental policies, practices, and programmes, including decision-making processes, that are integrated throughout a company’s business operations, and which are supported and rewarded by top management.

Today, increasingly, the idea of corporate social responsibility focuses on a company’s relationship with its stakeholders, those groups who affect, and/or are affected by, the organization and its activities. At the heart of this approach is a commitment to:

•   an interactive dialogue with stakeholders in order to align business principles and practice with the reasonable expectations of the outside world;

•   transparency and accountability, which mean saying exactly what the company believes in, what it has done, where it has done it, and then measuring performance by comparing results year on year, and striving for continuous improvement across the company’s non-financial performance.

Global companies need, furthermore, to ensure that they promote a consistent approach to corporate social responsibility across all their
member companies, with minimum standards that are applicable to all members, complemented by initiatives, programmes, and activities specifically tailored to local conditions and issues. This is manifestly a more pressing requirement in countries like Myanmar, where the overall operating environment for a foreign company is significantly complicated by the larger political problem, by allegations of widespread human rights abuses, and by the low level of development within the country.

For those like myself who labour at the coal-face of corporate social responsibility, it is good to have a chance such as this presentation to stand back from the daily commercial swirl and to think anew about the basic corporate social responsibility principles that are or should be guiding us, and about the potential benefits that could accrue to multinationals from consistent implementation of these principles.

On that basis, therefore, I would like to test three working propositions. In a sense they all hinge on the notion that the interplay between entrepreneurship, corporate social responsibility, and globalization is indeed dynamic and involves new interactions, inviting new definitions, requiring constant fresh analyses.

I want to pose three basic propositions about corporate social responsibility:

1.   That the big challenge now for practitioners of corporate social responsibility — that is, for those advising leadership companies and others — is not only to convince corporate leaderships of the basic case for corporate social responsibility (for many, that phase of conversion has passed), but also to devise new ways of realizing and retaining the value of corporate social responsibility. This may sound simple and obvious, but it is in practice a very substantial intellectual and practical task;

2.   That the goal for what I will call the corporate social responsibility community is to assist companies to engage in corporate social responsibility not at the point of minimum cost but at the point of maximum opportunity. This means not just converting the basic principles of corporate social responsibility into operational practices — though this will remain a crucial function — but also
realizing the value of what I will call “incremental stakeholder engagement”: the inclination to navigate beyond formal commitments and to take advantage of other resources, such as the knowledge-banks and the supportive presence of NGOs or the different perspectives offered by varied shades of political opinion.

3.   That, in this new more sophisticated phase in the development of corporate social responsibility, the imperative remains: to build a stronger future focus into our thinking. It is the forecaster’s cliché that the future is bound to be different. But, from all manner of empirical evidence, this is bound to be true for us. In its first phase, corporate social responsibility has clustered round simple principles and a limited number of issues. In that phase too, the relationship between NGOs, stakeholders, and companies has often been based on mutual suspicion, adversarial postures, jerky moments of strained cooperation. One has to wonder how many of these features will characterize the corporate social responsibility landscape in ten years’ time. Of course, there is a very clear and present danger that too many companies will fail to put social responsibility programmes into operation, and will suffer as a result. We “corporate social responsibility doctors” still have our day jobs to do. But, as we run, we have to build into our work an active appreciation of how our issue, and the world around it, is changing. This proved especially the case in a country like Myanmar, where the corporate motives for engaging in corporate social responsibility are very transparent to sceptical outside observers.

Any high-impact company that is investigating development of a corporate social responsibility programme, perhaps in response to pressures from various stakeholders, will typically be confronted by the following questions: If we decide to invest in corporate social responsibility, will the company’s share-value be affected? What is the real cost of not “doing” corporate social responsibility? What is the real value of doing it? How much is this social licence to operate going to cost us? Can we measure the benefits?

But the key question can be put another way: Does putting corporate social responsibility into practice offer cumulative, long-term protection to the company brand, protection strong enough to withstand even the most seismic media eruption? Does it provide a “stock-of-goodwill” that will stand the company in good stead?

It is my contention that as companies increasingly take actions in line with what they perceive to be their corporate social responsibility, there will be a corresponding demand for more sophisticated value-measurement devices. As time passes, more companies will be reflecting not on basic concepts of corporate social responsibility, but on which
model
of corporate social responsibility, which particular interventions and initiatives, and which
mix
of investments, will serve them best within their competitive landscape.

Once the commitment to corporate social responsibility actions is made, the issues that matter are those of delivery and measurement. Just how
good
a good thing is stakeholder dialogue? It is indeed fascinating to watch how inventive and sophisticated are some of the measurement models now being put in place by companies that are serious about corporate social responsibility, in order to try to capture the incremental value that accrues to the company name as a result of corporate social responsibility practices.

I turn now to the question of corporate social responsibility and the “point of maximum opportunity” theory. How, in practical effect, can companies lead the corporate social responsibility debate, build new and special interactions with governments, NGOs, and supra-national companies, and do it so that the companies and these stakeholders, especially stakeholders in the developing world, come to see one another as a mutual resource?

Let me give you a practical example by referring to some areas of the work of Premier Oil in Myanmar.

I have argued above that corporate social responsibility is now firmly on the global public policy agenda. It is only natural that once we embrace
corporate social responsibility, we like to see positive vectors. For Premier Oil, a company that I advise on corporate social responsibility issues and related matters, this reality was and is a key business driver. As with other major multi-national companies, Premier Oil’s recognition of the complex nature of corporate social responsibility meant that the implementation of programmes to both predict and mitigate the impacts, social and environmental, of what the company was doing needed to be embedded within the core of its business. The board-level decision to proceed along this path was accelerated by the fact that, as the operator of a world-class gas project in Myanmar, the company needed to make a careful assessment of what its responsibilities were, what impact the company’s operations would have in both Myanmar and at the home end, and of what expectations stakeholders had, if the potential for corrosion of the company’s reputation was to be avoided.

But what exactly should companies be responsible for? Many have wrestled with this concept, and for some the debate has not yet been resolved. Premier Oil, however, decided to clarify its position. This decision was partly driven by the risk imperative — that is,
not
to take positive action in regard to its responsibilities might have meant that the company would be held responsible for “everything” that happened in Myanmar — and partly by the recognition that it is very attractive to have the company’s values (“what we believe in”) drive the development of clear policies (“what do we do about what we believe in”). These policies then became the DNA strands for Premier Oil’s operational policies (“the way we work”), which set the boundaries within which Premier Oil’s management and workers were expected to operate.

•   Returning value to shareholders (that is, making money);

•   Ensuring that the company and its workers act legally and lawfully, wherever they operate;

•   Providing a safe and healthful working environment for all employees;

•   Articulating the company’s “rules of the road”, those principles and policies that the company establishes to guide the behaviour of their employees;

•   Understanding and testing
(and
then demonstrating through
monitoring and reporting) how the company continues to operate within those boundaries.

The next challenge that Premier Oil faced was to embed the ownership of these corporate social responsibility systems within the core of their businesses. This meant that the top-level policies, first principles, and best intentions had to be turned into a practicable business tool that identified risks, listed all stakeholders, and devised a strategy that would enable and sustain business operations. The development of practical rules and guidelines was especially important in a developing country such as Myanmar.

Premier Oil chose to embed the new competencies required to implement corporate social responsibility by introducing a Social Performance Management System (SPMS), which is not unlike the environmental management systems with which some people will be familiar. Such a system, supported by targeted training, can provide a framework for auditing and reporting on, and for managing, social performance, through the establishment of a defined set of indicators, of clearly delineated roles and responsibilities, and of practical “how-to-do-it” tools. This framework is what SPMS provided, and still provides, for Premier Oil.

As a recipe for acting in accordance with principles of corporate social responsibility, this would help to clarify why human rights and related issues became part of the company’s operational landscape in Myanmar. Once the company had engaged with the various stakeholders in Myanmar, to do nothing was not an option. But how to proceed?