Manufacturing Amnesia: Corporate Social Responsibility in

Manufacturing Amnesia: Corporate Social Responsibility in South Africa
Author(s): David Fig
Source: International Affairs (Royal Institute of International Affairs 1944-), Vol. 81, No. 3,
Critical Perspectives on Corporate Social Responsibility (May, 2005), pp. 599-617
Published by: Wiley on behalf of the Royal Institute of International Affairs
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amnesia:Corporate
Social
Manufacturing
inSouthAfrica
Responsibility
DAVID FIG
Under what circumstances
do South Africanfirmsact to improvethe country's
socio-economic and environmental
order?What do theseactionstellus about
the country'stransformation
process,aimed at eradicatingpastracialinequality?
And do theseactionscontributeto settingSouth Africaon a pathto sustainable
development?
This articleaims to use a national-levelcase-studyof an emergingeconomy
to interrogatewhat has become known as the sphere of 'Corporate Social
Responsibility'(CSR) in South Africa.'It showsfirstthatfirmsgenerallyprefer
the notion of corporatesocial investment(CSI) to thatof CSR. It goes on to
isolate some of the factorsthathave encouragedand stimulated'responsible'
corporatebehaviour. In analysingthisbehaviour,it stressesboth accomplishmentsand contradictions.
It thenraisesquestionsabout thosefirmsthatremain
outside the net of commitmentsto bettersocial and environmentalpractice.
with the
Finally,it arguesthatcorporatevoluntarismhas not dealt effectively
problemof redressand thatmore regulatorymechanismsmay be necessaryto
effectgenuine reconciliation.
Business,
apartheidand reconciliation
Scholarshipis dividedon the questionof whetherbusiness2contributedto the
downfallof apartheid.Liberalwritersattribute
to therole ofbusinessthe gradual
admissionofblackworkersintosemi-skilled
positions,theremovalofworkplace
segregationand the sponsorshipof urban reformin the face of government
Radical writersarguethatbusinesshad introducedthe migrant
intransigence.3
i My views owe much to my participationin the UN Research Instituteon Social Development
(UNRISD) project on promotingCSR in developing countries,led by Peter Utting and sponsoredby
the MacarthurFoundation (2000-2004), in which I jointly coordinated the South Africancase-study.
These views were formulatedin discussionswith co-researchersat the Sociology of Work Unit in the
Universityof the Witwatersrand,especiallyAndriesBezuidenhout, Ralph Hamann and Rahmat Omar.
2
While I recognize the heterogeneityof businessin South Africa,generalizationshere largelyreferto the
more formallyorganized partsof the privatesector.
3 Epitomized in the work of Michael Lipton, Merle
Lipton, Lawrence Schlemmerand R. W. Johnson.
International
8I, 3 (2005) 599-617
Affairs
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David Fig
labour system,single-sexhostels,workplacesegregation,the racialdivisionof
salaries.4Moreover,theypoint out, business
labour and raciallydiscriminatory
in
operations,receivedsubsidiesfromand paid taxes
helped sanctions-busting
to theapartheidstate,and providedservices,technologiesand weapons directly
used foroppression.Radicals feltthatbusinessinitiatives
counteringthepractice
of apartheidwere made onlyin responseto skillsshortagesand urbanunrest.
During the firstyearsof transitionto democracy,businesswas somewhat
or radicaleconomic change.It realizedthatit had to
nervousof anysubstantial
as to how farit
accommodatenew priorities,but therewas some uncertainty
Fromthelate I98os onwardsbusinessdelegationshad
would need to transform.
been going to see the ANC leadershipin exile in Lusaka,in orderto establish
common ground.Afterthe change of regimeoccurred,businesswas mollified
of fiscaland financialgovernance.The ANC initially
by the apparentcontinuity
made use of both politiciansand officialsattachedto the formeradministration
in the Departmentof Finance (now the National Treasury)and the Reserve
Bank, and when it eventuallyreplacedthemwith its own personnel,manyof
thelatterhad by thenbeen imbuedwiththeprinciplesof orthodoxeconomics,
having been trainedat universitiesabroad or served as internsat institutions
such as the World Bank.
Within two years of achieving power, the ANC had replaced its initial
plan-the Reconstructionand DevelopmentPlan (RDP)
populistredistribution
-with a monetarist
programmeforGrowth,Employmentand Reconstruction
(GEAR). GEAR foresawmore privatization,deregulationand tradeliberalization. It was formulatedunderWorld Bank influenceand implementedwithout any public debate. Althoughthisirked the ANC's communistand trade
measures
union allies,it reassuredtheprivatesectorthatwholesaleredistributive
were no longerlikely.
As the spectreof radicalredistribution
graduallyreceded,the privatesector
began to assertits prioritiesand identitymore strongly.It began to seduce
formerliberationfightersinto a cultureof golf days,cigar bars, conspicuous
consumptionand recognitionin thesocialpages.It alsobeganto collaboratewith
a numberof government
It stillretainedmisgivings
about thepace
programmes.
of privatization(whichit regardedas too slow) and black economic empowerment (which it thoughtwas too fast).It feltthat new legislationgoverning
working conditions,guaranteeingminimum wages for farmand domestic
action,was too punitive.It was also much
workers,and requiringaffirmative
more cautiousthangovernmentabout assigningeconomic riskto new investment. Nevertheless,in generalit regardedSouth Africaas a more favourable
operatingenvironmentthan had been the case duringapartheid,and exportorientedindustriesgainedwindfallsfromthe severelyundervaluedrand.
in thehearingsoftheTruthand
Businessalso escapedanyseriousretribution
Reconciliation Commission (TRC). The TRC heardmuch evidence of how
4 These writersinclude Harold Wolpe, MartinLegassick,John Saul, Stephen Gelb and Mike Morris.
6oo
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SocialResponsibility
in SouthAfrica
Corporate
largecorporationshad made profitson the back of humanrightsviolations,yet
did not seek to exact any recompenseforthe victimsof thisinjustice.Indeed,
some organizationsof victimshave had to litigatein otherjurisdictionsto
obtain compensation,with the South Africangovernmentstronglycontesting
theirrightto do so. The pervasiveideology of reconciliation-embodied in
the almost universallyrevered figureof PresidentMandela-embraced the
businesscommunityand absolvedit of any culpability.
Redefining
responsibility
Businessin South Africathereforegenerallyeschews the notion of 'corporate
and
social responsibility',
despitethe wide use of thistermamong practitioners
in the literature.Instead,it favoursconcepts of 'corporatesocial investment'
and 'corporate citizenship': concepts that ask no questions about legacy,
memory,history,
justice, or moraland ethicalresponsibilities.
A good corporatecitizenis definedby key South Africananalystsas 'One
thathas comprehensivepoliciesand practicesin place throughoutthebusiness,
thatenable it to make decisionsand conductitsoperationsethically,meetlegal
requirements,and show considerationfor society,communitiesand the enof corporatesocial
vironment',5while a corporation'stypicalself-definition
investmentrunsas follows:'CSI encompassesprojectsthatare externalto the
businessor outwardlooking projectsundertakenforthe purpose of uplifting
communitiesin generaland thosewhichhave a strongdevelopmentalapproach.
It also includesprojectswith a focus on social, developmentalor community
drivenas a marketinginitiative.'6
aspectswhere the investmentis not primarily
Both definitionstryto project ideas of good practice.Neither assignsto
firmsany moral or ethical responsibility
for past malpractice.There is little
of
of
the
social
and environmental
acknowledgement
legacies
injusticeperpetratedbybusinessunderapartheid.The CSI definition
seesbusinessand developmentas entirelyseparateactivities,
developmentor 'upliftment'
being 'external'
to business. This bifurcationsays much about the corporateperception of
productionsystemsas non-developmental,requiringbusinessto make separate
interventionsto address development. 'Responsibility'would imply taking
action to acknowledge,recognizeand offerredressforapartheid-eraviolations
of human rights.However, under post-apartheiddemocracy,firmsoperating
in South Africahave made no such admissions,nor any restitution.
Similarly,
apartheidgave firmslicenceto commitvastenvironmental
damage,
which includedcompromisingthe ecologyand thehealthofworkersand those
who lived near industrialplants.In most cases the victimswere black people.
Not onlyare firmsresisting
settlement
in classactionsbroughtin such cases,but
where settlement
has become inevitable,as forexamplein the case of Cape plc
s Trialogue,Thegoodcorporate
citizen:
sustainable
inSouthAfrica
business
pursuing
(Cape Town: Trialogue,
2004), p. 8.
6 Altron
document
andimplementation
AltronGroup,2004),p. 3.
Group,Policy
guidelines
(Johannesburg:
60o
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DavidFig
with respectto victimsof asbestosis(a case broughtin the UK courts),the
for
South Africanstateabsolved Cape and its successorsof any responsibility
environmentalrehabilitationof asbestos-blightedlands (on which people
continue to live and hence remainvictims).7South Africancourts,and the
have absolvedthe formerparastatal
and Forestry,
Departmentof Water Affairs
steel company Iscor (now privatizedas Mittal Steel South Africa) of any
forpollutingthe groundwaterof smallholdercommunitiesin the
responsibility
catchmentsurroundingits Vanderbijlparksteel mills. Other examplesof the
impunitywithwhich firmsin South Africacontinueto polluteseverelyoccur
in coal-firedpower generation,aluminiumsmeltingand other formsof ore
beneficiation,paper and pulp production,and petroleum refining.It took
more thana decade to resolvethe case of Thor Chemicals,a Britishcompany
thathad attemptedto use its South Africansubsidiaryto 'recycle' mercury.
Poor storageof the irrecoverablemercuryhad resultedin deaths,comas,brain
damage and other forms of mercurypoisoning to on-site workers and
downstreamresidents.8
The end of apartheidbrought some expectationsof an environmental
dividend.As noted above, the burdensof environmentalpollutionhad fallen
on the black community.To ensurea captiveworkforce,
disproportionately
of industries.
There
bleak townshipshad been placed close to themostoffensive
was hope thatnew legislationwould compel industryto limitthe pollution
which had created severe health problemsin communitiesaround the Vaal
Richard's Bay, the
Triangle, south Durban,9 Cape Town's Caltex refinery,
belt
and
elsewhere.
platinum
However, tenyearsof democracyhave passedand a major clean-up of such
areas is stillawaited. There has been no compulsionon firmsto change their
behaviour,and voluntarymechanismsprovidedforin the National EnvironmentalManagementAct (NEMA) havenotsucceeded.New air-quality
legislation
may have some effect,but thiswill depend on how the law is implemented.10
The price of coal remainscheap forbulk users,since the externalities
(health
and environmentcosts) have never been included; South Africanelectricity
7 SeeJockMcCulloch,Asbestos
andthestateinSouthAfrica
blues:labour,
(Oxford:
James
physicians
capital,
diseases:
whatdopeopleneedtoknow?
Asbestos
andasbestos-related
Currey,2002); L. BraunandJ.Trimbur,
theroleofforeign
direct
MissionTrust,2002); HalinaWard,Governing
multinationals:
(Kuruman:Moffat
RIIA EnergyandEnvironment
paper,n.s. 18 (London:ChathamHouse,
Programme
briefing
liability,
thestoryofan asbestos-polluted
andMarianneFelix,'Riskingtheirlivesin ignorance:
200I),
andenvironment
Cock andEddieKoch,eds,Going
inSouth
inJacklyn
green:
people,
politics
community',
Press,I991).
(Cape Town: OxfordUniversity
Africa
8 MarkButler,'LessonsfromThorChemicals:thelinksbetweenhealth,safety
andenvironmental
andtheenvironment
line:industry
in
in Lael Bethlehem
andMichaelGoldblatt,
eds,Thebottom
protection',
ofCape Town Press,I997), pp. I94-2I3.
SouthAfrica
(Cape Town: University
9 See David Wiley,Christine
theurbanindustrial
environment
in
Root andSvenPeek,'Contesting
in Bill FreundandVishnuPadayachee,
andglobalization',
SouthDurbanin a periodofdemocratization
ofNatalPress,2002), pp.
SouthAfrican
eds,(D)urbanvortex:
University
(Pietermaritzburg:
cityintransition
andthestruggles
ofthe
223-56;SvenPeek,'Doublespeakin Durban:Mondi,wastemanagement,
in
Environmental
SouthDurbanCommunity
Alliance',in David McDonald,ed.,Environmental
justice
SouthAfrica
Press,2002), pp. 202-19.
(Athens:Ohio University
News,I-7 Oct. 2004, p. 21.
'Tough newair-qualitylaw on theway',Engineering
OJillStanford,
602
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SocialResponsibility
in SouthAfrica
Corporate
utilityEskom continuesto burn the lowest-qualitycoal for domesticenergy
investmentin aluminium
generation.South Africahas attractedtransnational
smelting,despitenot having sources of the raw material,bauxite. The ore is
and largelyre-exported.The smeltingprocessis highly
imported,transformed
so the value added locally is mainlythe cheap electricity.
energy-intensive,
Firmsavoid having to pay the externalities,
thisburden to local
transferring
communities.Plantsin South Africawould not gain licencesin Japan,Canada
or EU countries;the questionthusariseswhetherenvironmental
arbitragehas
turnedthe countryinto a pollutionhaven forbeleagueredtransnationals.
On the one hand, firms-particularlythose in the minerals,energyand
chemicalsectors-have been reluctantto complywith new legislation,knowis weak. Simultaneously,
the statehas not been willingto
ing thatenforcement
confrontaberrantfirms,on the groundsthatstricter
enforcement
mightlead to
in
losses
or
disinvestment.
the
job
Proposed changes
legislationcoveringcomhave
been seen by the stateas a way
pulsoryenvironmentalimpactassessment
to 'streamline'development,T" but by criticsas an attemptto dilute environmentalstandards.
Many firmsoperatingin South Africahave implementedmore stringent
environmental
managementsystemssince the adventof democracy.However,
thesesystemshave not alwaysbeen applied in such a way as fundamentally
to
over
of
the
modus
For
cent
elec90
challenge
existing
operandi. example,
per
tricityproductioncontinuesto reston the burningof low-qualitycoal. Steel
and paper/pulpmanufacturing
techniquesare badlyoutdated,and the plantsat
which theyare used, built in the I950s, would not be permittedto operateif
theywere located,say,in the EU. The managementsystemsthemselvesoften
failto addressthe big picture;mostare voluntaryand self-regulated,
and so do
not applyany real pressureto complywith externallyset criteria.
Nevertheless,firmsdo implementthesesystemsbecause theyare keen to be
seen to care forthe environmentand the social fabricof the country.Some are
able, through corporate social or environmentalspending, to constructa
benignpublic image forthemselves.A key exampleis Sappi, a companywhich
growslarge tractsof alien eucalyptusand pine plantationsfortimberor conversioninto pulp and paper. Its plantationsare monocultureswhich squeeze
out biodiversity,
deplete local water resources,alienateland and compromise
ecosystems;it payspovertywages; itspaper millsrelyon extremelydirtytechnologies. Yet Sappi has a public reputationas green-oriented,because of the
resourcesit devotes to widely distributednaturepublicationsand numerous
other environmentalprojects. Its rival,Mondi, whose socio-environmental
practicesare similar,sponsors a major project on wetland protectionand
rehabilitation.
Firms'social responsibility
spendingis thereforeoftenaimed at
deflectingcriticismof theirunsustainablepractices.
I
and Tourism, Environmental
the
I South AfricanDepartment of EnvironmentalAffairs
impactmanagement:
to theNationalEnvironmental
secondamendment
Act (1998): a simpleguide(Pretoria:DEAT,
Management
n.d. [2004?]).
603
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David Fig
The constructionof reputation,whetherto evade historicalaccountingor
to disguise contemporaryviolations,favoursthe notion of 'corporatesocial
investment'.Under the new democracy,new privatedirectinvestmenthas
actuallybeen verylimited,and oftenthe statehas to lead the way, throughits
IndustrialDevelopment Corporationtakinglargestakesin new infrastructural
projects. Firms have neverthelessencouraged the impressionthat voluntary
social investmentis makinga significant
contributionto thewell-beingof their
stakeholdersand of the countryas a whole.
In truth,reviewsof corporategivinghave consistently
shownthattheextent
of such intervention
is ratherlimited.One complicationin settingout to assess
how much is being done is thatthereare no standardizedwaysto measuresuch
giving.Should it include sportssponsorship?Should it include acts of support
forsocial projectswhich may simultaneouslybe brand promotionexercises?
Notwithstandingthese and other methodologicalcomplexities,a number of
surveyshave triedto quantifyCSI in South Africa.
In thelate 199os the CentreforDevelopmentand Enterprise,
basedinJohannesburg,conductedtwo surveysto ascertainlevelsof corporatesocialspending.
The firstof thesetargeted75 largecorporations,elicitinga 34 per centresponse
rate.A secondsurveyrandomlychose 545 firms
ofall sizes.The first
surveyfound
thatan averageof R58o millionwas spentannuallyon CSI projects,12amounting to R7.7 million per firmin the 1997 financialyear. Extrapolatingthese
resultsto the entirecorporatesector,the CDE researchers
estimatedtheannual
totalat betweenR4 and R5 billion,amountingto 0.26 per centof turnoverfor
largecorporationsand 0.15 per centforsmalland medium-sizedenterprises.I3
socialinvestment
handbook,
Trialogue,publisherof a regularCorporate
surveyed
the 2002 spendingof 100 large South Africancompaniesand foundthatthey
had spenta totalofR2.2 billionon CSI thatyear.This was estimatedas a riseof
7.8 per cent on the previousyear,but was stillan increasebelow the rate of
inflation.Withinthe sample,it appearedthat5 per cent of theseleadingcompanieswere contributing
30 per centof thetotal,while 75 per centof thefirms
contributedless than a quarterof the spending.14The followingyear'sstudy
revealedthattheCSI spendingofthelargest oo00firms
had reachedR2.3 5 billion,
6.8 per centup on 2002, withaveragespendingon CSI perfirmofRI 3 million.
Althoughmorethanhalfthe 100oo
companiessampledhad raisedtheirspending,the
total
amounted
to
reported
just over 1.5 per cent of governmentexpenditure
on education,healthand socialservicesin the2003 financial
year(Ri 53 billion).15
This seemsa veryweak contribution,
even thougha keyobserverfeelsthatSouth
Africa'scorporatesocial spendingrecordis one of the highestin the world.i6
12
Although the rand (R) oscillatesin value, at the time of writing(early2005) therewere approximately
R6 to a US dollar,R8 to a euro, and RI I to a UK pound.
13 Centre for
Development and Enterprise,'Corporate businessin a wider role: briefresultsof two CDE
surveyson resourceflowsfrombusinessto societyin South Africa',CDE Focus,June I999.
14 BusinessDay
(Johannesburg),24 Dec. 2002.
socialinvestment
I5 Vanessa Hockey, ed., Corporate
handbook,6th edn (Cape Town: Trialogue, 2004).
I6 Comment to the authorby Paul Kapelus, Director, AfricanInstituteforCorporate Citizenship,
Johannesburg,9 Feb. 2005.
604
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in SouthAfrica
SocialResponsibility
Corporate
The perceptionthatbusinessprovidesonlyweak supportforcommunitiesis
reflectedin the resultsof a nationalsurveyon giving,in which two-thirdsof
the respondentsfeltthatbusinessshould pay more taxesto help the poor. The
author of the surveyreportremarks:'In a countrywhere between 45% and
55% of the population lives in poverty... [T]he link between past discriminationand currentsupportfora redistributive
projectis clear.'17
In fact,firmsget more creditthan theydeserve.FirstNational Bank, in a
exercisewhich resultedin a publicationbased on thepredicscenario-building
tionsof77 prominentSouth Africans,
statedthat'corporatesocial responsibility
are
a
to
alleviate
projects
going long way
poverty,and to prove that South
Africansdo not see thischallengeas one forgovernmentalone'.I8
The gap between companies' claims and theirpracticehas become more
evidentwiththeemergenceofnumerouscivilsocietywatchdogbodies.Coalitions
of organizations(includingtradeunions) came togetherto contestthe cases of
Thor, St Lucia, Cape plc and MittalSteel,while environmental
justice NGOs
and theminingindustry.I9
challengedthepollutionresultingfromoil refineries
Civil society organizationshave also challenged the notion of corporate
responsibility,
arguingthatthe term'accountability'is more appropriate.The
World Summit on SustainableDevelopment (WSSD) became a fulcrumfor
expressionof the contendingpositions.Business,backed in partby the UN,20
advocated an extensionof partnerships
with governmentsand NGOs. Many
demanded
that
businessaccount forits numerousenvironNGOs, however,
mentalcrimesand thatthe internationalcommunitydevelop a conventionto
and condemnedthe'greenregulatethebehaviouroftransnational
corporations,
wash' (use of pro-environmental
to
mask
bad practice)of the comlanguage
paniesand itsUN-backed version,'bluewash'.2' However it maybe redefined,
the practiceof CSR in South Africacontinuesto be informedby global trends
and attitudes.
CSRinSouthAfrica
Shaping
Companies oftenuse local spendingto tryto guaranteebroad acceptability,
givingthema 'social licence to operate'.Formerlythe offerofjobs was enough
17 David Everatt,A nation
ofgivers?SocialgivingamongSouthAfricans:findings
froma nationalsurvey
Johannesburg:SA Grantmakers'Association,National Development Agency, Centre forCivil Society,
2004), p. 30.
18FirstNational Bank of South AfricaLtd, SouthAfrica2014: thestoryofourfutureJohannesburg:FNB,
2004).
'9 The NGOs include
and Group forEnvironmentalMonitoring
groundWork (based in Pietermaritzburg)
20
2I
(Johannesburg),assistedby the Legal Resources Centre's EnvironmentalJusticeProject. See also the
articleby Peter Lund-Thomsen in thisissue of International
Affairs.
Anne Zammit, Development
at risk:rethinking
UN-businesspartnerships
(Geneva: South Centre/UN
Research InstituteforSocial Development, 2003).
groundWork was responsibleforcoordinatingSouth Africa'sfirstCorporate AccountabilityWeek,
which took place in the run-up to the WSSD. See also Ralph Hamann, Nicola Acutt and Paul Kapelus,
the World Summit on SustainableDevelopment fora
'Responsibilityvs. accountability:interpreting
synthesismodel of corporatecitizenship',JournalofCorporateCitizenship9, Spring2002, pp. 20-36.
605
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David Fig
to providesuch a guarantee.Oftenthe spendinghas been linkedto promotion
of the company'sreputationand specificcorporatebranding.However, external
pressuresalso providesome incentives.These can be loosely classifiedaccording to fivesources.
When there is pressure fromthe state
well developed,
functions
ofthestatearerelatively
In SouthAfricatheregulatory
perhapswith the exception of aspectsof environmentalgovernance.Regulation of the environmentis quite fragmented:functionsare split among a
and specialized
nine provincialdepartments,
numberof nationaldepartments,
biosafetyand nuclear matters.
regulatorybodies for competition,electricity,
Simultaneously,a numberof areashave experiencedderegulation,particularly
which has had a specificset of impactson food security
marketing,
agricultural
and the environment.
and poor coordinationof regulatorybodies, and the turf
The multiplicity
battlesamong them,make up only one aspectof the problem.Anotherone is
in theenvironmental
protectionbureaucracy.For example,
capacity,particularly
untilrecentlytherewere only five centrallybased air-qualitycontrolofficers
forthe entirecountry.22
The state has recognized to some degree its own incapacityto regulate
legislationprovisionsforvolunby placingwithinitsenvironmental
effectively,
taryconflictresolution.23In doing so, it was takinga leaf out of the book of
context.24
withoutnecessarily
Netherlands
enjoyingthesameinstitutional
practice,
was
instruments
of
introduction
behind
the
The reasoning
policy
co-regulatory
based on a critiqueof exclusiverelianceupon directive-based('command and
measures,which setstandardsforcomplianceand enforced
control')regulatory
them aftera monitoringprocess. The criticismis that enforcementis often
promoting'end-of-pipe'ratherthanholisticapproaches
inadequateor mechanistic,
andstressing
to wasteandpollutionmanagement,
innovation,
stifling
technological
supply-sidesolutionsratherthanbehaviouralchange on the partof firms.25
Known in the South Africanlegislationas environmental
managementcooperativeagreements(EMCAs), these new provisionsare seen as voluntary
22
This situationmay change with the passage of the Air Quality Act duringthe 2005 parliamentary
session.
23
The new South Africanlegislationwas formulatedin a multi-stakeholderparticipatoryprocess known as
the ConsultativeNational EnvironmentalPolicy Process (CONNEPP). The suggestionsforvoluntary
proceduresemerged fromthe businesssector,and were ultimatelyaccepted by the governmentdrafters.
The law became known as the National EnvironmentalManagement Act (NEMA), Act I07 of I998.
For an account of businessinterventionto remove the caveatsattachedto the EMCAs, see Chris Albertyn
inpollution:voluntary
and corporate
'South African
and Gill Watkins,eds, Partners
agreements
greenwash,
groundWork,2002), pp. 7-8.
People and Environmentin the Global Market' series (Pietermaritzburg:
24 See the Netherlands,Ministryof Housing, Spatial Planning and Environment,NationalEnvironmental
PolicyPlan (The Hague: VROM, I989), and subsequent iterations.
25 JonathonHanks,
and
what role for"self-regulatory"
'Promoting corporateenvironmentalresponsibility:
ofbusinessin
"co-regulatory"policy instrumentsin South Africa?',in Peter Utting,ed., Thegreening
countries:
rhetoric,
(London: Zed, 2002), pp. I91-3.
realityandprospects
developing
606
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in SouthAfrica
SocialResponsibility
Corporate
accords between the governmentand 'any otherperson-or community'for
the purpose of implementingthe law.26 To date two EMCAs have been
industriesrespectively.In
piloted, in the chemicals and petroleum-refining
of
environment
and
minister
the
2000
tourism,Rejoyce Mabudafhazi,
deputy
initiatedtheseagreementsin thecontextofincreasingpressureto respondto air
pollutioncrisesin southDurban, theVaal Triangleand Cape Town,27and also
to showcase effectiveType II agreementsin the run-upto the WSSD.28 The
between
in two tiers,first
EMCAs were constructed
creatingbilateralagreements
governmentand industry,and later adding site-level agreementsbetween
specificfacilitiesand individuallocal authorities.The aim was to improve
in theareasofwater,airand wastemanagement.
environmental
performance
Implementationof the EMCAs was attendedby a number of difficulties.
The Dutch model had not been well understood,and thedifferent
partieswere
uncertainof theirrivals'intentions.The bilateralphase of agreementbetween
centralgovernmentand industryattractedheavy criticismon the groundsof
exclusionof civil societyand othertiersof government,and forseekingbinding agreementsin the absence of detailedpollution controllegislation.Later
were, accordingto Acutt,'at
attemptsto engagewiththe excludedrole-players
best ad hoc,and led to perceptionsof regulatorycapture'.29Trusthad broken
down, mainlybecause theprocesshad been mismanaged,and NGOs responded
with a strongstatementagainstbilateralcollusion between governmentand
In
in thelead-up to the passageof anti-pollutionlaws and standards.30
industry
the face of waning confidencein the EMCAs as the WSSD approached,the
governmenthad to drop the idea, and littlemore has been heardof them.The
failureof theEMCAs meansthatvoluntaryagreementsof thiskindare unlikely
to be revived in the shortor medium term. Other mechanismsfor settling
environmentalconflictwill have to be perfected.
Anotherarena in which the stateis responsibleforurgingbusinessto act is
the formationof sectoralagreementson implementingblack economic empowerment(BEE). Detailed negotiationhas to dateproducedsuch agreements
in the petroleum,mining, finance and tourismindustries.In each sector,
government,labour and businessagree to the termsof a BEE charter,which
lays out specifictargetsfor the achievementof changes in spheressuch as
ownership,employment,tenderand procurementprocesses,and promotion
and trainingopportunities,as well as local economic development.Targets
26
andTourism,
Section35 ofNEMA. See alsoSouthAfrican
ofEnvironmental
Affairs
Department
anduse(Pretoria:
Environmental
a guide
DEAT, 2002).
fortheir
design
management
cooperative
agreements:
27 Nicola
withvoluntary
oncorporate
theSouthAfrican
initiatives,
experience
J.Acutt,Perspectives
responsibility:
ofEastAnglia,2003),p. I4. Acutt's
CSERGE WorkingPaperECM03-o05(Norwich:University
valuableresearch
on voluntary
initiatives
alsoforms
partofherdoctoraldissertation.
28
andWatkins,
inpollution,
to bindingconventions
Partners
Albertyn
p. 13. In contrast
(TypeI), TypeII
wereseenas voluntary,
betweengovernments,
business
andcivil
agreements
non-binding
partnerships
in advanceofthe2002summit,
andthusdidnotrequire
society.Theseweresupposedto be negotiated
theconsentofdelegations.
29 Acutt,
oncorporate
Perspectives
responsibility,
p. I6.
30 Albertyn
andWatkins,
inpollution,
p. I3.
eds,Partners
607
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David Fig
differfromsectorto sector,but are monitoredin the formof detailedscorecardsforeach firm.
In theminingsector,greatcontroversy
arosewiththeleakinginJuly2002 of
the targetsforthe draftBEE scorecard,which foresawthe accelerationof black
ownershipof the sectorto 5I per cent withinten years.The marketsreacted
to thisproposal.Withinone day,theJSE SecuritiesExchange fellto
drastically
itslowest level in eightmonths,with its resourceindex falling5 per cent and
the gold industries'index sheddingalmost I2 per cent.31These reductions,
amountingto R25 millionof shareholdervalue, were said to reflecta global
failureof investorconfidencein the charter'stargets.The governmentbacktracked,reopeningnegotiationswith a broad group of stakeholders,
including
traditionaland emergingmininghouses, and labour unions. The resultwas a
new scorecardpublishedin October 2002, which not only reduced the target
for black equity ownershipto 26 per cent within ten years,but espoused a
'broad-basedsocio-economic' versionof BEE which includedlocal economic
and communitydevelopmentas well as improvedhealth,safetyand environmentalpractice.32
The new scorecardgainedtheapprovalofall thestakeholders.
The debacle attendingtheminingcharterillustrated
thatalthoughtherewas
a role for the statein stimulatingbusinesspracticesin the directionof social
certain limitingfactors(in this case, internationalinvestor
transformation,
of thereluctantChamberofMines,
and
the
confidence
corporateconservatism
traditionalowners)impingedon theprocess.As in the case of the
representing
EMCAs and othervoluntaryagreements,while the statemaypropose,it is the
stakeholdersthatultimatelydispose.
Whenthestatefails
In the post-apartheiddecade business has responded in differentways to
perceived statefailureor incapacityto addressmajor social issues adequately.
was theformation
of a coalitionentitledBusinessAgainst
One suchintervention
aimed
at
extra
resources
to an underpaid,poorly trained
Crime,
providing
police service.South Africahas a high crimerateand a reputationforineffecadd huge coststo doing business.
tivepolicing.Privatesecurityarrangements
A farlargerproblemthancrimeis thehighincidenceofHIV/AIDS infection,
estimatedat I11.4 per cent of the populationover the age of two, and over 24
per cent of theworkforce.Over 4 millionout of a populationof 44 millionare
infectedwith the virus.33
31
32
33
in the miningindustryof
Ralph Hamman and AndriesBezuidenhout, 'Corporate social responsibility
South Africa',paper presentedat a workshop organized by the Sociology of Work Unit at the
Universityof the Witwatersrandin conjunction with the United Nations Research InstituteforSocial
Development, Johannesburg,22 May 2003, p. 4I-2.
For the finalcharter,see www.dme.gov.za/minerals/mining_charter.htm.
Duncan Innes, David Dickinson and Lindsey Henwood, 'Business responsesto HIV/AIDS in South
undated [2003?], pp. 1-2.
Africa'stop 25 companies', unpublishedreportto UNAIDS/UNRISD,
6o8
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in SouthAfrica
SocialResponsibility
Corporate
High levels of povertyand migrationaccount for the wide extentof the
infection.Continued use of migrantlabour,especiallyin the miningindustry,
has ensured the spread of the disease into every remote comer of the subcontinent.Despite enormouspublic educationprogrammes,ignorance,stigma
and a cultureof silenceremainin place.34Young women are believedto be the
most vulnerable demographicgroup, partlydue to entrenchedpatriarchal
attitudesthatgive women littlecontrolover theirmale partners'optionto have
unprotectedsex. Public figuresresistbeing tested openly for HIV, and a
number of key politicianshave died without disclosingtheir HIV-positive
status.PresidentThabo Mbeki has dabbled with the ideas of AIDS dissidents
who deny a link between the virus and the syndrome,and claim that antiretroviral
have securedplaces
drugsare toxic. A numberof dissidentscientists
on the presidentialadvisorycommitteeon AIDS. The ministerof health,
Manto Tshabalala-Msimang,herselfa medical doctor,has gone on record as
recommendinggarlic,olive oil and the Africanpotato as panaceas forpeople
infectedwith AIDS and adequate substitutesfor pharmaceuticals.There has
been huge governmentresistanceto the provisionof retroviraldrugsto seropositive individualswith a view to retardingthe opportunisticinfections
associatedwith AIDS. Challenges from civil society,in particularthe very
activeTreatmentAction Campaign,which has used litigationeffectively,
have
resultedin a reversalof the government'srefusalto provide anti-retroviral
medicationto people with AIDS. However, the implementationprocess is
available
likelyto takeyears,and it maybe 2008 beforethedrugsare effectively
throughoutthe country.
Because of itsimpacton the economicallyactivesegmentof thepopulation,
the effectsof the diseaseare likelyto lead to a decimationof the workforce,a
loss of skillsto the economy,and the removalof breadwinnersfrom
significant
households.The phenomenonof AIDS orphansand child-headedhouseholds
is alreadyveryextensive.In ruralareas,food securityis seriouslycompromised
by a majorloss of householdagricultural
producers.
to thepandemichave been 'slow,partialand erratic'.35
Responsesby industry
A 2002 surveyof businessresponseconductedby the South AfricanBusiness
Coalition on HIV/AIDS foundthata largeproportion(48 per cent) of companieswith over 500 employeeshave yetto conductactuarialriskassessments,
while only 22 per cent provide anonymousHIV testing,which gives more
reliablefeedback.Laterthe same yeara surveywithdifferent
respondentsconcluded that over 75 per cent of the companies surveyedhad no idea of the
prevalence of HIV/AIDS in theirfirms,and that over 60 per cent had no
34Someleadershave,to theircredit,
as
begunto speakout openlyaboutthedeathsoftheiradultchildren
a resultoftheinfection.
Theseincludeformer
President
NelsonMandela,andformer
Home Affairs
Minister
bothofwhomlostchildren
in 2004-5.
Buthelezi,
Mangosuthu
35David Dickinson,'CorporateSouthAfrica's
to HIV/AIDS: whyso slow?',Journal
response
ofSouthern
30: 3, 2004, pp. 627-50.
AfricanStudies
609
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David Fig
strategyto manage the disease in theirworkplaces.36These figuresindicatea
veryweak responseby the privatesector,despiteestimatesindicatingthatthe
economic costsof absenteeism,
illness,highturnoverand loss of skilledworkers,
and the drainingof employee benefitsas a resultof the disease will reduce
Dickinson has shown
profitsby 20 per centin thefirstdecade of the century.37
thatthe voluntaryactivitiesof staff(which he calls 'informalCSR') exceed the
formalcommitmentsof manyfirms.38
Nevertheless,because the state has been unable or unwillingto respond
to reducingthe impactsof the pandemic, the more farsighted
systematically
employershavebegunto act.39While thestatecontinuesto debatetheirtoxicity,
businesshas begun to provideHIV-infectedworkerswithanti-retroviral
drugs.
Other measurestaken include the introductionof voluntarycounsellingand
of opportunistic
diseases;
testing(VCT), issuingof freecondoms and treatment
firmshave also realizedthataction should not be confinedto the workplace,
but that help should also be offeredto partners,dependantsand local sex
workers,and shouldtakeinto accountrurallinkagesthroughlabourmigration.
There should be mechanisms for the emulation of the more successful
and forspreadingprogrammesto smalland mediumcorporateHIV strategies,
A more comprehensivedialogue shouldbe initiatedbetween
sized enterprises.
business and the state to clarifytheir respectiveroles in the provision of
preventionand treatment
programmes.
Sugar is a product contraindicatedby the medical professionfor cancer
patientsand thosewith compromisedimmunesystems.South Africanseat on
average3ikg perpersonperyear.The evidenceis visiblein highlevelsofobesity,
dentalcaries,highblood pressure,heartdiseaseand diabetesin the population.
None of these healthcosts are borne by the industry.This link is, of course,
which is not only one of the most important
contestedby the sugarindustry,
fundersof nutritionand dentalresearchin South Africa,but is also involvedin
genericadvertisingand promotionof the product.The South AfricanSugar
Association-which unitesgrowersand millers-uses itsown nutritiondepartment to 'addressmisinformation
about the link between sugar and health',
health
workers
and patientsin statehospitalsand clinics.It
targeting
journalists,
produceseducationalmaterialsto 'correctthe messageabout sugarand assistin
the overall education of the patient'.It also sponsoreda NutritionSociety of
Inneset al., 'Businessresponses',
p. 3.
D. Strugnell,
'The XIII International
AIDS Conference:
hasitbrokenthesilence?',InnesLabourBrief
12: I, Sept.2000, pp. 37-42.
38 David Dickinson,'Corporate
socialresponsibility
(frombelow)in theeraofAIDS', paper
commissioned
oftheWitwatersrand,
bytheSociologyofWorkUnit,University
2004.
Johannesburg,
39 Case-studies
thathavebeenconductedto datein somedetailinclude:AngloAmerican
De
Corporation,
to
Beers,Sasol(Inneset al., 'Businessresponses');
Anglocoal,Eskom(UNAIDS, Thebusiness
response
HIV/AIDS: impacts
andlessons
learned
[Geneva:UNAIDS, 2000]); BMW andUnilever(CarolineSchaer
andAnjaThomsen,'CorporateHIV/AIDS socialresponsibility
in SouthAfrica:
a comparative
case
CMI dissertation,
studyoftwomultinational
corporations',
unpublished
CopenhagenBusinessSchool,
contributed
to a surveyforUNRISD andUNAIDS,
companies
2004).In addition,I6 SouthAfrican
inJemBendell,Waking
toHIV/AIDS intheworkplace,
UNRISD
reported
uptorisk:corporate
responses
on Technology,
BusinessandSociety,paper12 (Geneva:UNRISD/UNAIDS, 2003).
Programme
36
37
6io
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SocialResponsibility
in SouthAfrica
Corporate
South Africasymposiumon the 'misinformation
about sugar'which it feelsis
spreadin HIV/AIDS education.40
Whenthereis pressurefrom
abroad
As the South Africaneconomy continues to liberalize,globalizationaffects
certain strata,in particularexportingcompanies, companies with external
investments,
companieswhich have relocatedoffshore(thishas been referred
to as the 'depatriation'phenomenon) and companieswhose chains of supply
extendbeyond nationalborders.All thesetendto be sizeable,leadingcorporations.In mostinterviewsconductedby Bezuidenhoutet al., respondentsrated
the pressuresof globalizatioinas a 'verysignificant'
contributorto CSR.41
The numberof largerSouth Africanfirmstryingto positionthemselvesas
which
global playershas increased.Examples here are Sasol (petrochemicals),
has spreadintoEurope, the United Statesand the Gulf;Sappi and Mondi (pulp
and paper), which are active in the United States and Europe; and Eskom
(power utility)and MTN (mobiletelephony),whichare moreorientedtowards
investmentin Africa.This ambitionhas playeda role in theirgradualshiftfrom
CSR towardsmakingreal changesin the intecosmetic,public-relations-type
and social issuesinto theircore activities.
grationof environmental
The depatriationof firmssuch as SA Breweries(renamedSABMiller, now
theworld'sfourthlargestbrewingfirm),AngloAmerican,BHPBilliton(formerly
Gencor), Dimension Data, Old Mutual and LibertyLife has createdfurther
to a triplebottomline approach.42
pressureson themto increasecommitments
to
on
The desire of such firms seek listing the London or New York Stock
withglobalreportingstandardsand
Exchange has mandatedexpressconformity
higherlevels of externalscrutinyand auditingof compliance.Both the listings
proceduresand the exigenciesof assetmanagersand otherpotentiallarge-scale
of CSR criteria.
investorshave set extensivepreconditionsbased on fulfilment
Global codes of conduct have also impactedon the more globalizedSouth
Africanfirms.Eskom and Sasol were among companiestojoin the UN Global
Compact, requiring conformitywith nine central principles.The Global
ReportingInitiative,which requirescomprehensivesocial and environmental
reporting,has also attractedadherentsamong largerfirms.In additionto these
codes, the second King reporton corporategovernanceforSouth Africahas
also recommendedthatfirmscomplywiththeAAiooo standardand the Global
40 SouthAfrican
Annualreport
2001 /2 (MountEdgcombe:SASA,2002),
SugarAssociation,
p. 22; David
in theSouthAfrican
foodanddrinksector',paperpresented
at a
Fig,'Corporatesocialresponsibility
oftheWitwatersrand
in
workshoporganized
bytheSociologyofWorkUnitat theUniversity
withtheUnitedNationsResearchInstitute
forSocialDevelopment,
22
conjunction
Johannesburg,
May 2003,pp. I8-I9.
41 Andries
David Fig,RalphHamannandRahmatOmar,'A politicaleconomyof
Bezuidenhout,
in SouthAfrica',
socialresponsibility
at a workshop
corporate
paperpresented
organized
bythe
oftheWitwatersrand
in conjunction
withtheUNRISD,
SociologyofWorkUnitat theUniversity
22 May 2003,p. 38.
Johannesburg,
42 The
mechanism
firms'
financial
which,in additionto recording
triplebottomlineis an accounting
alsomeasures
theirsocialandenvironmental
transactions,
performance.
6i
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David Fig
More popularare the
SullivanPrinciplesof CorporateSocial Responsibility.43
ISO I4000 seriesof environmentalmanagementstandards,and sectoralcodes
such as the ForestryStewardshipCouncil or the Responsible Care programme
in the chemicalindustry.
The problem with such codes is that theirtechnicalnature oftenmasks
broadersocial and environmentalproblems.An agreementto raise standards
does not challengethe fundamentalethicsof the industry.For
incrementally
for over 54 per
example, the timberproductsindustryreceives certification
cent of its South Africanforestsfromthe ForestryStewardshipCouncil. Yet
theindustrycontinuesto pay povertywages, outsourcesproductionto remove
effecton biodiversity,
land use,
employeesfromitsbooks, and has a devastating
and waterand air quality.None of theseissuesare reflectedin the certification,
whichprovidesSappi and Mondi withgreenlabelson theirproductsto reassure
consumersof theirenvironmental
bona fides.Similarly,Eskom, probablyone
of the keenestmembersof the Global Compact, is one of the country'sworst
polluters,undertakingmassive industrialburning of low-quality coal and
productionof nuclear waste in its power stations.In 2003, KPMG awarded
BritishAmericanTobacco South Africathe prize forthe best annual sustainabilityreport,withoutquestioningthe natureand impactof itsproduct.
below
Whenthereis pressurefrom
The politicaltransitionin South Africawas markedby a high degree of continuitybetween the old societyand the new. In consolidatingits controlover
government,the new rulingpartymade bureaucraticallianceswith old guard
of the apartheidera,and ultimately
officials
absorbedtheformerrulingNational
Partyinto itsown ranks.A numberof partyand tradeunion leaders,including
leadersof the once-militantANC Youth League, enteredthe businessworld,
to accumulatevastwealth.The finalyears
takingadvantageofBEE opportunities
of strugglehad seen the formationof an elaboratenetworkof 'civics',or comwhichfellapartonce theANC attainedpower. The trade
munityorganizations,
once
whistleblowers
enteredinto
unions,
vigilant
againstcorporatemalpractice,
an alliancewiththeANC in 1994whichhas tendedto weakenitspositionwhen
challengingcorporatemalpracticeor neo-liberalgovernmentpolicies.With the
massivesheddingofjobs in the firstyearsof democracyunions lost membership, which also tended to weaken their voices. A tripartitestructure,the
NationalEconomicDevelopmentand LabourCouncil (NEDLAC), was
statutory
createdto oversee economic legislation,but has been managedin such a way
that it seldom plays a watchdog role.44 One exception was the case of the
environmentalministerintroducinglegislationto end freeretaildistribution
of
43Institute
in Southern
ofDirectors
oncorporate
2002 (KingII)
Africa,
Kingreport
governance
forSouthAfrica
itself
to boardroom
ethics.
IoD, 2002), pp. 226-74. The first
Kingreporthadconfined
(Johannesburg:
44 'NEDLAC at ten',South
LabourBulletin
30: i, Feb.-March2005, pp. 28-32; EddieWebster,
African
'NEDLAC: corporatism
ofa specialtype?',
Labour
Bulletin
South
30: I, Feb.-March
African
2005,pp. 33-5.
612
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in SouthAfrica
SocialResponsibility
Corporate
Table I: Systematic challenges to corporate malpractice by South
African civil society
Corporation(s)/sector
Organization
Head office
Oil refineries
Nuclear industry
groundWork
EarthlifeAfrica
Pietermaritzburg
Johannesburg,
Cape Town,
Pretoria
Cape Town
Biowatch South Africa,
Safeage
Durban
Timber and pulp sector TimberwatchCoalition
South Durban industrial South Durban Community
EnvironmentalAlliance Durban
basin
Ecological debt
Jubilee2000 South Africa, Johannesburg,
Economic Justice
Cape Town
Network
Finance and industry
Khulumani(victimsof
Johannesburg
(claimsforreparations)
apartheid)
Gold mining
Group forEnvironmental Johannesburg
Monitoring
Coal mining
EnvironmentalMonitoring Cape Town
Group
Platinummining
North-WestEnvironmental Rustenburg
Alliance
Steel industry
Vaal Environmental
Justice Vaal Triangle
Alliance
Pharmaceuticalindustry TreatmentAction Campaign Cape Town,
Johannesburg
Privatizedwaterindustry Water Coalition,various
Johannesburg,
affiliates
Durban, some
district
municipalities
Soweto ElectricityCrisis
Soweto
Electricityutilities
Campaign
Biotech corporations
plasticbags,a highlyvisibleelementofthewastestream.NEDLAC intervenedto
ensurerelieffromthe moststringent
aspectsof thisproposaland to ensurethat
the 17,000jobs in the plasticbag industrywould have more protection.45
In general,South Africahas a weak traditionof independent,investigative
journalism.The majorprintand electronicmedia are owned bylargecorporate
45 ShirleyMiller, 'Corporate social responsibilityin the South Africanchemicals industry',paper presented
at a workshop organized by the Sociology of Work Unit at the Universityof the Witwatersrandin
conjunction with the UNRISD, Johannesburg,22 May 2003.
613
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David Fig
often
groups,linked to the commandingheightsof the economy.Journalists
merelyrewritecorporatepressreleasesratherthanquestioningcorporatepractice.
is verysmall.Even thesmall
The numberof crusadingjournalistswithintegrity
independentMail and Guardian,a nationalweekly,has distanceditselffromthe
criticalsocial movements,and sponsorsawardsunderthe bannerGreeningthe
often
Future,which go to theusuallargecorporationsfortheirCSR initiatives,
The
their
unsustainable
overlooking
fundamentally
practices.
paper also
an environmentalmagazine which relies extensivelyon
publishesEarthyear,
corporateadvertorial.
Thus it is leftto a numberof activistcommunityorganizationsand NGOs to
conduct a critiqueof the extensivecorporatemalpracticein South Africa(see
table i). These include groupingscriticalof the impactof privatizationof state
assets,thosechallengingthelegacyof apartheiddebt,urbanmovementsopposed
to the cuttingoffof water and electricitysupplies fromthe poor, and the
environmental
communities,
justice movement,which linkspollution-blighted
As PeterLund-Thomsen
tradeunion branchesand watchdogorganizations.46
points out,47they have used a numberof linked strategies-lobbying,campaigning,capacitybuilding,litigation-to drawpublic attentionto the culprits.
well resourcedto
The campaigninggroupshave not alwaysbeen sufficiently
takeon theircorporateopponentseffectively.
However, expertiseand pressure
alike are growing,with increasingresearchconducted by the NGOs themlaw firmstakingup litigation
selves and a growingnumberof public-interest
on theirbehalf.
Whenthereis peerpressure
A number of firmsand industrialassociationsare tryingto set standardsfor
othersto follow. The leading firmstend to be those tryingto globalize their
assets,or thoseheavilydependenton marketselsewhere.Led by Eskom, some
businessleadersin 1992 establishedthe IndustrialEnvironmentalForum,based
at Eskom's head officeand largelyresourcedby a fewlargefirms.In therun-up
to the WSSD, the IEF adopted the name of BusinessCouncil on Sustainable
Development-South Africa,stressingits affiliationto the World Business
Council on SustainableDevelopment. In thewake of the eventtheBCSD-SA
has undergone a third metamorphosis,this time becoming a desk of the
broaderrepresentative
body,BusinessSouth Africa.In some waysthisindicates
thatit not an externalprojectof a body based in London, but an integralpartof
the domesticbusinessculture.However, thecollapseofBCSD intotheNational
Business Initiativealso indicatesthat the few leading firmsat its head were
unwillingto bankrollthe project.
46
Fora listofkeycampaigns,
see tablei.
47 In thisissue:PeterLund-Thomsen,
in SouthAfrica:
theroleofcommunity
'Corporateaccountability
8I: 3, May 2005, pp. 619-3 3.
in environmental
mobilizing
governance', International
Affairs
614
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in SouthAfrica
SocialResponsibility
Corporate
One resultof the influentialsecond King reportmentionedabove, itselfan
initiativeby the Instituteof Directors,was a move by the JSE Securities
theJohannesburgStock Exchange) to take more account
Exchange (formerly
of the social and environmental
performanceof corporations.In May 2004 the
JSE launched a Social ResponsibilityInvestmentIndex (SRII), modelled on
and in conjunctionwith the FTSE4Good index. Parallelto this,the National
Business Initiativeis developing an index based on the UK Business in
EnvironmentIndex (BiE), which will applyto non-listedcompanies(and thus
cover the parastatalcompanies such as Eskom). Compliance with these new
indices,as withthe Global ReportingInitiative,is a complexprocesswhich has
spawneda numberof specializedconsultancyfirms.It is as yetunclearwhether
theindiceswill serveto directinvestmenttowardsfirmswhich can claimbetter
sustainability
practices.
Who remainsout of the net?Perhapstwo categoriesof firmsneed particular
scrutiny:the small and medium-sizedenterprises(SMEs) and the largerBEE
firms.
Jeppesenand Granerudpointout thatcloserscrutinyof SMEs is required
since theyemployapproaching50 per cent of the workforcein Africa.Many
embody patriarchalformsof management,theyargue, and could learn from
CSR models in order to modernize.48Currentlyit is likelythat,in general,
SMEs failto employCSR practices,remainingas theydo outsidethenetworks
of large employers,withoutthe same imperativeof protectingbrand reputation, and under littlecompulsion to deal with stakeholders.An exception is
when SMEs are linked to the supplychainsof big firms,and are requiredby
them to uphold certainstandards.This is relativelycommon in, forexample,
the food and drinksector.49
Companiesthathave scoredwell on BEE have tendednot to be big spenders
in termsof CSR. Southalland Sanchez show this,50 and also point to contradictoryviews in the black businesscommunity.One view sees emergentblack
as havinga responsibility
forcapitalaccumulationand expanding
entrepreneurs
blackownershipoftheeconomy,whileanotherarguesfora reciprocity
between
themand the communitiesfromwhich theysprang.Pressureto play the latter
role maybe seen in some quartersas distracting
black businessfromthe former
imperative,in a situationin which theirhold over capitalis stillfragile.Many
black entrepreneurs
see CSR as being for'white' firmsto atone forpast sins,
and thereforetheirown contributionto CSR spendingremainsminimal.5I
48 Soren Jeppesen and Lisa Granerud,'Does corporatesocial responsibilitymatterto small and medium
enterprises?The case of South Africa',unpublishedpaper, Departmentof InterculturalCommunication
and Management, Copenhagen Business School, 2004, p. 13.
49 Fig, 'Corporate social responsibility
in the South Africanfood and drinksector',p. 8.
50 Roger Southall and Diane Sanchez, 'Corporate social responsibility
and black economic empowerment
in South Africa',unpublishedpaper commissionedby the Sociology of Work Unit, Universityof the
Witwatersrand, 2004, p. 9.
51 Southall and Sanchez, 'Corporate social responsibilityand black economic empowerment',p. I I.
6I5
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David Fig
HasCSRbeeneffective?
From mostof the evidence presented,it seems thereare few groundsforcontransformation
fidencethatfirmswill carryout a more equitablepost-apartheid
the needs
when
the
state's
own
measures
behind
On
lag
voluntarily. occasion,
of business,as for example in the sphereof HIV/AIDS support,some firms
have takenlimitedinitiativesto introducenew social practices.However, even
these have been very selective,uneven and slow. In termsof employment
procurement,augmentationof black shareholdingand so
equity,affirmative
on, the statehas oftenhad to intervene,throughlegislationor throughthe
of sectoralcharters,to put businesson the road to transformation.
drafting
However, where thelaw providedforvoluntaryagreementson the curbing
of pollution,thesehave not worked out in practice.The two EMCAs put in
place have been abandonedforthepresent,mostlybecause of strongobjections
fromcivil society actors on the groundsthat the process was not inclusive
enough, and thatvoluntaryagreementscould not replacethe urgentneed for
and sanctionsfornon-compliance.
standard-setting,
adequatemonitoring
The environmentaldividendexpected afterapartheidhas not materialized.
While pious principlesare embodied in the democratic constitutionand
elaboratedin chapter2 of NEMA, in practiceit is stillextremelydifficult
for
citizensand communitiesto exercisetheirrights.Environmentallitigationis
stillin itsinfancy,and so fartherehave been fewinstancesof the courtsfinding
forenvironmental
justice. Politically,the environmentis stillsomethingof a
Cinderellasector,given verylittleattentionby the rulingparty,and thereis a
generalfailureto integrateenvironmentalconcernsinto mainstreamplanning,
development and macroeconomic policy. For example, the presidency
containsan elaborateshadow bureaucracywhich matchesall departmentsof
government,save forthe environment.
Firmsare stillreluctantto promotestrongenvironmental
standards.In their
absence, civil societyhas done some 'barefootmonitoring',discoveringthe
extentto which communitiesare bearinga heavyindustrialpollutionload. For
example,with assistancefromthe Bucket Brigades,the Zamdela community
adjacent to the Sasolburg oil-from-coal,chemicals and petroleum refinery
complexwas able to challengeSasol,whose scientists
reluctantly
agreedthatthey
had not detectedthe excessiveamount of benzine theirplantswere emitting.
Lobbyingforhigherstandardsin areassuch as airand waterqualitymaypay off
ifthe imminentlegislationis backed up withseriousimplementation
measures.
The politicalwill needs to be in place forSouth Africato createworld-class
standardsfor environmentalcompliance. Such standardsare not going to be
implemented voluntarilyby industry,which currentlyenjoys the global
advantageofbeing able to operatein a jurisdictionthatis laxerthanthosein the
OECD countries.It is onlyafterthesestandardshave been set and met thatwe
can begin to look seriouslyat CSR, and to discussthebenefitsfirmsmightgain
fromgoing beyond complianceon a voluntarybasis.
6i6
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SocialResponsibility
in SouthAfrica
Corporate
charterwhich will involveacceptanceby
Perhapsthereneeds to be a further
businessof itsrole in achievingenvironmental
justice: takingrealresponsibility
forsocial and ecological rehabilitationand the restitutionof resourcesto the
many South Africanswhose rightswere compromised;introducingcleaner
technologies;moving away fromdirtyenergyuse; developingan ecologically
fortrade,transport,
sustainableframework
services,miningand
manufacturing,
all
threats
to
food
and
securityand biodiversity.
eliminating
energyproduction;
in thesesortsofprojectwill
theirpartnership
Only when firmscan demonstrate
one be able to talkseriouslyof a CSR discourse.Meanwhile, what passesfor
thegullibleintobelievingthatbusinesshas
CSR is oftengreenwash,distracting
a serioussustainability
agenda.
Businessis powerfulenough to constructdiscoursesof itsown, even within
the termsof 'sustainability'
(itselfa highlyelasticconcept). It has used impornotionsof partnership,
tantglobal moments(Rio, WSSD) to set up irresistible
and compromise.The discourse
accommodation,win-win situations,
synthesis
overemphasizesthe extentof itsvoluntarycontributionto socio-economicand
environmentalprogress,while continuingto mask malpractice,and seducing
old scars,and-most resonant
South Africansintoforgetting,
absolving,effacing
here-reconciling. However, even South Africa'sTruth and Reconciliation
Commission played by certainrules, grantingamnestyonly afterfull confession.Firmsin South Africahave firstto confessand thento set out plansfor
theirown contributionto reconciliation.Until thattime, therewill be little
While businessin South Africauses CSR to
trustand few real partnerships.
manufacture
amnesia,the imperativeforothersectionsof civilsocietyremains
thatof keepingmemoryalive and continuingto tellthe truth.
617
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