HOW  GOOD  CORPORATE  SOCIAL RESPONSIBILITY  EXPANDS

THE FRONTIERS OF HUMAN RIGHTS OF CITIZEN:

THE NIGERIAN EXAMPLE

PAPER PRESENTED BY:

DELE KELVIN OYE, ESQ.

2009
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The constitution of the Federal Republic of Nigeria, 1999 provides under part 11 Chapter 2, Section 13-24 for fundamental objectives and directive principles of state policy that: “it shall be the duty and responsibility of organs of government, and of all authorities and persons, exercising legislative, executive or judicial powers, to conform to, observe and apply the provisions of this chapter of this constitution.

It should be noted that these fundamental objectives and directive principle of state policy is aimed at promoting: political, economic, social, educational, environmental, culture and foreign policy of the entire Nigerian citizenry.

The constitution under chapter IV further strengthen the position of it chapter 11 by conferring on every citizen of Nigeria the inalienable fundamental rights in consonance with the United Nations Charter and the African Union Charters on Human Rights.

It is view of the foregoing that I will examine the topic of my lecture before this distinguish and enlightened gathering.

ABSTRACT

DEFINITION

Corporate Social Responsibility (CSR), is the set of standards to which a company subscribes in order to make its impact on society, has the potential to contribute to sustainable development and poverty reduction in the world.
What can be questioned though is if the corporate Social Responsibility models developed in the West are the best suited for CSR implementation in all parts of the world. Today there is knowledge that western institutional and management models exported to other regions of the world are not always very successful (Wohlgemuth, Carlson & Kifle ed, 1998).

Research also indicates that the understanding and partial of CSR is socioculturally framed (Amaeshi, Adi, Ogbechie & Amao, 2006). Despite this knowledge, surprisingly very little of mainstream literature and research focus on how other regions than regions from the West embed the CSR agenda. This paper therefore, takes its focus on Africa in general, and on Nigeria specifically.

The purpose of this paper is to investigate and analyze the concept of CSR from a Nigerian perspective to form a baseline to enable companies operating business within Nigeria to employ the use of good corporate social

Responsibility for the expansion of the frontiers of the respect of the rights of Nigerian citizens. This purpose also is to examine how Nigerian organizations view their role and part in reaching sustainable growth and development in Nigeria.

Field studies that CSR as a concept is relatively new in Nigeria and started off as a response by multinationals to remedy the effects for their extraction activities on the local communities. CSR from a Nigerian perspective can be viewed as two-fold. Firstly, there is the recent development of formal CSR practices mainly driven by Small and Medium Enterprises (SMEs) and large national companies. These initiatives are mainly philanthropic with practices and understanding to a large extent “imported” from the West.

Secondly, field study also manifests the existence of informal CSR practices that are linked to cultural Nigerian traits, mostly found in the formal and informal sector of Nigeria. Traditional valves such as people/employees being treated as ends in them, as well as values like sharing and consensus are still strongly manifested in business life in Nigeria.

While many pre-colonial systems of organizing have ethics and values embedded and which are loosely in usage today they have not been consciously evolved in Nigeria so that the capacity to benchmark them is still at very early stages. Therefore, I recommended further research exploring the formal and informal CSR practices within the SME sector in Nigeria. The results can be used to promote a dialogue between multinational/large companies and SMEs to share experience and leanings with the purpose of creating a CRS framework that can be embraced by all stakeholders.

THE DRIVERS FOR CORPORATE SOCIAL RESPONSIBILITY

 CUSTOMERS
In the following paragraphs I will give examples of CSR business drivers expressed in literature and research:

According to Lohman & Steinholtz (2004) the customers is the main CSR driver for the companies. The requirements from the customers today are strong and the increased competition has driven companies towards the creation of new values. The companies must now understand their roles in society and more and more consumers require that companies have responsible products and principles that are of value for the consumer.
An American study, “the Cone Corporate Citizenship Study 2002” showed an immense increase in American’ expectations of companies’ social role. After September 11th, more American than ever said they were making investment- purchasing- and employment decisions to reward companies that support community needs.

This trend seems to have been scandals in the business community as the Enron collapse and the WorldCom financial situation. According to the above study, 89 percent of Americans said it is more important than ever for companies to be socially responsible.

According to a follow-up study, the “Cone Corporate Citizenship study 2004” a company’s negative corporate citizenship practices may have the following consequences:

• Consider switching to another company’s products or service (90 percent)
• Speak out against that company among my family and friends (81 percent)
• Consider selling my investment in that company’s stock (80 percent)
• Refuse to invest in that company’s stock (80 percent)
• Refuse to work at that company (75) percent)
• Boycott that company’s products or services (73 percent)
• Be less loyal to my job at that company (67 percent)

According to a European study “European Survey on Consumers attitudes towards Corporate Social Responsibility” 70 percent of European consumers says that a company’s commitment to social reasonability Is important when buying a product. The majority of European citizens believe that industry and commerce do not pay enough attention to their responsibilities.

In the master Thesis “Why and how Corporate Social Responsibilities” {Loimi, 2002}, the influencing drivers are divided between internal and external drivers. The study identifies a number of external drivers namely globalization, environmental problems facing the earth, the international initiatives taken by the business community to address sustainability, political actions in governments playing a significant role in complementary initiatives regarding sustainability management guidelines, and pressures from the investment community as well as from NGOs (non governmental organizations). The internal drivers identified in the study are risk management and brand value, revenues ands costs, pressure from employees and customers, And customers, and finally competitive advantage.         

External “Pushers”

Strategic “Motivations”
Globalisation
Environment
International Initiatives
Political
NGO’s and Media
Investment Community
Risky Management
Revenue and Costs
Employees 
Customers Competitive Advantage

In “Making globalization good, the moral challenges of global capitalism “, Davies explores how (2003) corporate responsibility has emerged in response to one or a combination of five forces.

• The push of top-down compliance Such as reporting requirements or government regulations which introduce a compulsory approach on top of which good companies will tend to innovate.

• The working of markets where customers, employees, or capital markets exert some form of preference or pressure.

• The “reputation pull” where companies are motivated to behave well to promote and safeguard their reputation, or ability to attract investment

• Ethics, in the form of values of business founders or leaders, codes of practice or individuals judgments.

• The impact of shock and crisis as for example scandals   

The membership organization, EFQM (The EFQM Framework for Corporate social Responsibility, 2004) presents a number of direct benefits for the organization:

• Increase brand value
• Greater access to finance
• A healthier and safer workforce
• Stronger risk management and corporate governance
• Motivated people
• Customer loyalty

• Enhanced confidence and trust of stakeholders
• An enhanced public image

A verity of stakeholders have been involved in framing the CSR agenda in the West such as NGOs, consultants, researchers, governments and similar.

A part from realizing that there are different ways to frame the business benefits from working with CSR it is also important to recognize that the different facts are often interrelated.

Cultural and managerial influences on Corporate Social Responsibility   

There are many factors influencing how nations and organizations address their CSR agendas. In the theoretical framework I have chosen two aspects, namely; cultural and managerial traits, to get6 a deeper understanding of how companies in Nigeria address CSR and why. The reason for choosing cultural and managerial traits is the impact of these traits on management and organizational processes, and consequently also on how CSR is management and processed within organizations.

What is meant by culture?

To be able to understand cultural and managerial traits from a Nigerian perspective t can be useful to address the concept of culture to gain an understanding of its meaning.

Cultural refers to patterns of human activity and cultural includes codes of manners, dress, language, religion, rituals and norms of behaviors such as law and morality and systems of beliefs. Difference definitions of culture reflect difference theoretical bases for understanding.

The research project GLOBE (House, Hanges, Javidan , Dorman & Gupta, 2004) defines culture as “shared motives, values, beliefs, identities, and interpretations or meaning of significant events that result from common experiences of members of collectives that are transmitted across generations”

With regard to organizational culture there is an enormous variation in definitions of the term. According to Alvestam (2002) the concept of organizational culture “is a tricky concept since it is easily used to cover everything and consequence nothing”            

   
Corporate Social Responsibility from a Western Perspective

CSR as a concept emerged in the 1960s among internationalizing companies from America and those involved in formal colonial states in Africa and Asia. The CSR movement has since then had a rapid development and a number of stakeholders have been involved in the development of the CSR agenda including government, NGOs, researchers and consultants resulting in a myriad of definitions integrate the three dimensions: economic, environmental and social aspects into the definition.  

A number of business drivers for implementing CSR strategies have emerged, including increased brand value, stronger risk management and corporate governance, enhancing public image and customer loyalty. Apart from realizing that there are different ways of framing the business benefits from working with CRS it is also important to recognize that the different factors are often interrelate. There are many factors influencing how organizations address their CSR agendas. I have in the theoretical framework chosen two aspects, cultural sand managerial traits, to get a deeper understanding of how companies there is an enormous variation in definition of the term but basically we can address organizational culture as the personality of the organization. Different cultural dimension have been developed by for example Trompenaars and Hofstede and some of these dimensions wills be examined from a Nigerian perspective in the next section. The next section will be also providing information on definition, driven and development of CSR from a Nigerian perspective.

Corporate Social Responsibility from a Nigerian perspective

The aim of this section is to provide a theoretical by providing information on definition, drivers and development of Corporate Social Responsibility from a Nigeria Perspective. This chapter also presents cultural and managerial traits that might influence the CSR agenda in Nigeria. To be able to understanding CSR from a Nigerian. Perspective it is of value to explore the drivers for, and the history and development of CSR in Nigeria.

The World Business Council for Sustainable Development ha discussed CSR with business and non –business stakeholders in a number of countries in the world with the objectives of understanding local perspectives better and to get  

Different perceptions of what CSR should mean from a number of difference societies.

One important finding in this study was that people were taking about the role of the private sector in relation to a social agenda and they saw role as increasingly likened to the overall well-bei9ng o society. Therefore the chosen priorities differed according to the perception of local needs. The key CSR issues identified in the study were:

• Human rights
• Employee rights
• Environment protection
• Community involvement
• Supplier relations

Even though stakeholders across the world agreed on the importance of theses issues there were regional differences with regard to priorities and understanding. For example, the understanding and definition of human rights varied between the regions. Company relations with suppliers and contractors were not always viewed as priority. In Asia and African, although recognizing the importance, many felt that other issues are more important..

Africa’s Corporate Social Responsibility Pyramid (Rahbek Pedersen & Hunche, 2006 modification)

Philanthropy gets a high priority in Africa. According to the report there are many reasons for this. Firstly, the socio-economic needs of the African societies in which companies operate are so huge that philanthropy has become an expected norm. companies also understand that they cannot succeed in societies that fail. Secondly, many African societies have become dependent on foreign aid and there is an ingrained culture of philanthropy in Africa.

A third reason, according to the report, is that CSR is still at an early stage in Africa, sometimes equating philanthropy.

It is important to stress that in Africa philanthropy is more than charitable given. HIV/AIDS is an example where the response by business is essentially philanthropic but clearly in companies own economic interests. The low priority for legal responsibilities is, according to study, not due to the fact that African companies ignore the law but the pressure for governance and CSR is not so immense.

Ethics seems to have the least influence on the CSR agenda. This is not to say  that African businesses are unethical. For example, the king Report in 2003 (http://www.corporatecompliance.org) was the first global corporate governance code to talk about stakeholders and to stress the importance of business accountability beyond the interest of shareholders.

Since the views across the world of the understanding of CSR differ considerably it is of value to try to understand how CSR is perceived in Nigeria and what the specific driving forces are. According to a study on CSR in Nigeria “Corporate Social Responsibility in Nigeria: Western Mimicry of indigenous influences?” (Amaeshi, Adi, Ogbechi & Amo, 2006) it was found that indigenous Nigerian companies perceive and practice CSR as corporate philanthropy aimed at addressing socio-economic development challenges in Nigeria. CSR was  mainly seen from a philanthropic perspective as a way of “giving back” to the society.

The reasons for this included for example the need for private companies to complement the government in providing for the people. Some also argued that many of the companies in Nigeria make huge profits and ought to give back to society to gain legitimacy.

Ajadi (2006), in a concept paper on Coporate Social Responsibility in Nigeria delivered to British Council on CSR in nigeria 2006, specifies some additional specific drivers for CSR in Nigeria:

        *  The failure of centralized, government controlled economy to develop the country.
        * The extraordinary transaction cost to business of corruption and other failures of social capital.
        * The  history of conflict and waste in the extractive industry exemplified by the Niger Delta.
        * The Nigerian population whose majority is under the gae of 25 and is largely ignored despite the fact that they are critical            to the survival and future prosperity of business and the country at large.
        * The potential benefit of a commercially active and productive country of over 120 million potential consumers.

Corporate Social Responsibility – Development in Nigeria

The debate over Africa’s future has been on the agenda recently with the publications of “Our Common Interest”. The report calls for “improved governance and capacity building, the pursuit of peace and security, investment in people, economic growth and poverty reduction, and increased and fairer trade”. Business obviously have an important role in this transformation process, where a lot of efforts can be embedded within the framework of CSR.

Even if Africa has its battles to fight with poverty and social injustice, Africa has according to many international human rights treaties. The government of Nigeria is one of the governments together with Azerbaijan and Ghana, Kyrgyzstan who have committed to the UK-led Extractive Industries Transparency Initiative, where they have committed to making public all theiur revenues for oil, gas and mining.

Building on the united Nation declarations, conversations and efforts of constituent especially the International Labour organization, the ISO has continued a process towards a harmonized approach under the leadership of both the Swidish Standards Institute and Brazilian Association of Technical Standards. This process has active participation of Nigeria where the National Mirror Committee on Social Responsibility is working to contribute towards the completion of ISO26000 by 2008. the aim is to encourage voluntary commitment to social responsibility and will lead to common guidance on concepts, definition and methods of evaluation.

The Nigerian government has also through its NEEDS strategy (Nigerian National Planniong Commission 2004) set the context by defining the private sector role as by stating that “the private sector will be expected to become more proactive in creating productive jobs, enhancing productivity and improving the quality of life. It is also expected to be socially responsible, by investing in the corporate and social development of Nigeria…”

Further a Global Compact network was officially launched in Nigeria during the 12th Annual Nigerian Economic Summit in Abuja in 2006. several Nigerian companies have already signed on to the Global Compact. The companies include Coca Cola – West Africa, BHL Holdings Nigeria Ltd, MTN Nigeria Communication Ltd., Okunnade Sijuade Holding Limited (OSHL), Equity Line Insurance Company Ltd, SAP Nigeria, SANTON Nigeria Ltd, Super power Nigeria Ltd, Neimeth pharmaceuticals Plc and Shell Petroleum Development Company of Nigeria Ltd.

The Nigerian oil sector is dominated by multinational companies. To compensate for the governance failures and to protect their own business interests, the companies often engage in CSR. The history of formalized CSR in Nigeria can be traced back to the CSR practices in the oil and gas multinationals. The CSR activities in this sector are mainly focused on remedying the effects of their extraction activities on the local communities. The companies provide pipe-borne waters, hospitals and schools. Many times these initiatives are ad hoc and not always sustained (Amaeshi, Ogbechie & Amao, 2006).

According to a study on CSR in Nigeria (Amaeshi, Adi, Ogbechi & Amao, 2006) it apopears that Nigerians companies are engaged in one CSR activity or the other. However, 85 percent of the respondents said that there is an awareness of CSR in Nigeria but without significant actions, while 7.7 percent either claimed there is almost no awareness with significant actions).

The study revealed that there is more emphasis on community involvement, less on socially responsible employee relations and almost none with regard t socially responsible products and processes (Amaeshi, Adi, Ogbechi & Ameo 2006)

Unlike in many other countries the Nigerian consumer is not as empowered and is just beginning to have the basic safety of products by the National Agency for food and Drug Administration and Control (NAFDAC), and the Standards Organization of Nigeria (SON).

As to environmental protection, prior to oil, agriculture (before 1970) was the economic mainstay in Nigeria. When financial resources became available from oil and with no development policy, unguided urbanization and industrialization emerged which led to degrading the environment.
When the illegal dumping of toxic wastes took place in koko, in 1987 the Nigerian Government promulgated the harmful waste decree. This decree provides a legal framework for control of disposal of toxic and hazardous waste in any envirionment within Nigeria. After the decree, the Federal Environmental Protection Agency (FEPA) was established in the 1988, charged with the responsibility of protecting and developing the Nigeria environment.

The principal legislation with regard to environment is Decree 86 of 1992 which makes Environmental Assessment (EIA) mandatory for both public and privates sectors for all development projects.

Even though progress is made, researchers claim that when examining the various status, the framework for the EIA process, and the entire environmental regulatory process, it reveals that many of the statutes are not working according to intentions due to duplication of the functions in the processes which results in serious bottlenecks and bureaucratic confusion in the environmental process of Nigeria.

Summarizing above, there are positive trends with anumber of national initiatives regarding corporate governance and environmental initiatives. At the same time, it still seems to be bureaucratic and institutional hindsrances for the effective implementation of many of these initiatives.

OTHER PROBLEMS ASSOCIATED WITH THE EXPANSION OF CORPORATE SOCIAL RESPONSIBILITY IN NIGERIA.

Cultural traits in Nigeria

We have in earlier section, addressed the meaning and understanding of culture in general. So how do the described culturals traits manifested themselves in Nigeria? The importance of power distance and collectivism in Africa is well documented in for example Bitnets research on economic psychology in Africa. Binets work established socio-cultural values and behavorial traits that in view of their prevalence in a sample of fifty-six ethnic groups in different pars of Africa appear to distinguished African economic psychology (Jackson 2004).

Binet’s findings show that African Economic psychology can be described as having very strong connections between objects, human beings and the supernatural, with the urge for equilibrium with both the supernatural and other human beings. Collective preferences are not strongly separated from individual ones group loyalty and the need to belong is more important than the individual interests.

The key cultural traits Binet identifies in Africa are sharing, deference to rank, sanctify and personal relations. Sharing is justified by a need for security which means that those who share their wealth can expect to be repaid if the need ever arise. Defence to rank (power distance) particularly between employer and employees, is of great importance in African societies which tend to be paternalistic and hierarchical. Intra-group relations tend to be egalitarian but group-togroup relations are usually determined by hierarchy.

Africa has strong consensus thinking and Africans tend to strive for unanimity (win-win) even if this results in, what appears in what appears, never0ending discussions. According to Jackson the cultural need in Africa to recognize people as having a value in their own right as a part of a social community may sometimes be in contradiction to a western view where people are regarde as means to reach the objectives of the organiztions (Jackson 2004)

With regards to Nigeria, the research of Trompenars (1993) presents the following cultural dimensions. In some cultures people see rules and regulations as applying universally to everyone, independently of whom they are. In cultures that are particularistic, people see relationship as more important than the fact that the same rule applies for everybody. The culture of Nigeria appears to be moderately particularistic.

People get status according to what they achieve in their careers and lives (achievement) or who they are and where they come from (ascription). Nigeria appears to be highly ascription based on family background.

People tend to believe that what happens to them in life is their own doing (internal locus of control), or they have noe or little control over what happens to them (external locus of control). Nigeria appears to be high on external locus of control. Individualism can be viewed as an orientation to the self and collectivism as an orientation to common objectives. On at least one question, on working alone versus working inb a group together, Nigeria has a high score on collectivism.

In a specific-oriented culture managers differentiate different parts of their life, such as work and family life. In a difuse-oriented culture this distinction is not not made. Nigeria appears to be a fairly diffuse culture. According to the research of Hofstede (1991) Nigerian managers view their organization more from a social rather than a task focus than do managers from Faso and Ethiopia. Nigerian managers also seem to have a tendency to be more collective\istic than managers from example Burkina Faso. With regards to long term orientation index Nigeria had a score of 16, which was second lowest to Pakistan’a score of 0.

Managerial traits in Nigeria
This section examines the general management traits in Nigeria since leadership and management is culturally contigent and consequently has an impact on the CSR management as well. Research has shown that the status and influence of leaders in which the leaders operate. Many leadership attributes are culturally contigent and they can be desirable in some cultures and undesirable in others (House, Hanges, Javidan, Dorman & Gupta, 2004).

Due to lack of documentation and the destruction of indigenous administrative systems during the colonial period very little is known about organizational and leadership in pre-colonial Africa. According to Blunt, Jones and Richard (1993) it seems that the typical administration system in Africa were small, homogenous, used local technology and indigenous knowledge systems and co-existed in relative harmony with the environment. The kings had both secular and divine authority and they had administrative officials who helped them with their daily duties. A kind of democracy existed that had checks and balances that made it possible for the community to remove unsuited rulers.

The system was generally governed by consensus and broad participation – through group representation at the central level and village councils at the local level. The rulers had autority but shared power. Rulers were selected by specific bodies whose choices then had to be approved – usually by a council of elders or similar (Dia 1996).

There is a prejudice that there was no organised African political economy before colonial period but different parts of Africa had long periods of political stability and social economic development. This led to the rise of empires such as Ghana and Mali.

Ccording to Blunt, Jones and Richard (1993) it is important to understand the historical context since it gives and understanding of the fact that Africa is still deeply rooted in the past. With regard to management development before colonialisation it seems to have been informal, mostly done through on-the-job training and young managers having lifetime mentors. It appears that most of this has disappeared in recent times since most managers are being trained abroad where managerial contexts are very different. Further, the training of Africans during trhe colonial period was concentrated on lowe-level administrative functions. Senior management development was neglected because Africans were not expected to have managerial responsibilities (Blunt, Jones & Richard 1993).

*        More control focused than managers in most other countries
*        Not focused towards people
*        Not consultative
*        Not managing diversity
*        Having little results focus
*        Undergoing rapid change                                 Up
*        Having weak trade unions
*        Not having or little family influences in their organizations.
*        Having a moderate amount of restriction through government legislation
*        Having a low level of risk taking

Ideally the managers in this study would like to see their organizations more results and more oriented which is in accordance with the most of the other African countries in the study. One additional result in the management and employee survey of Jackson Nigeria was the absence of significant difference among the different ethnic groupings. Although little systematic cross-cultural studies have been undertaking    in Nigeria organizations, Nigeria is an ethically divided nation that  was artificially created through the political power with no consideration to previous traditionally territories and ethinc and language division. Depite this Nigeria as a nation has managed to cohere throughout its short history after independence.
                                                                            
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