CSR (And MNCs) On Trial

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Corporate social responsibility (CSR) is a big issue in China for many reasons – because it should be, because the market is developing and becoming more complex, because it is a defense against bad PR, and…because the government (via an NPC official) recently said that it is a requirement.

This message was re-iterated at the recent National People’s Congress where, as China CSR reports:

    “Shen Aiqin, a deputy at China’s National People’s Congress and the board chairman of Wensli Group Company in Zhejiang province, appealed to delegates to formulate a national criterion for corporate social responsibility in China…As an example, Shen presented SA8000, a global system for CSR established by the Social Accountability International, to the delegates at the assembly. SA8000 is an international standard for improving working conditions…Shen suggests that some common principles like environmental protection, economic sustainability and benefits for employees need to be taken into consideration before the establishment of a Chinese CSR criterion, and the government should also issue relevant policies to support companies that carry out CSR.”

This call to arms follows a government-driven initiative that was developed last year. China Development Brief noted at the time that:

    “China’s National Textile and Apparel Council, a government-led industry association, is piloting a Corporate Social Responsibility (CSR) standard among ten member enterprises and is likely to extend this to the whole industry, a Council leader revealed at a EU-China symposium on CSR held in Beijing in July…Formulated last year, the China Social Compliance standard for the industry (CSC9000T) is one outcome of a five-year EU-China Trade Programme that, since June 2004, has worked to support China’s integration into the world trading system. The European Commission has committed EUR 20.6 million (USD 26.4 million) to the programme, making it the EU’s largest ever trade-related technical assistance project.”

The article notes that the textile sector employs around 20 million people in thousands of enterprises, and that it has been a point of friction between China and the EU in the past (remember the “bra wars”?).

China CSR has also reported that the NDRC is supporting the initiative, and is targeting 10 textile groups for a trial, while also aiming to implement it in 100 key enterprises and 1,000 small firms.

Textiles is taking the lead, but other sectors are sure to follow, and foreign companies would be wise to review (or set up) CSR strategies, and to learn from the pain already suffered by companies like Apple. Indeed, as this post goes live, news is coming in that McDonald’s, KFC and Pizza Hut are all under investigation in Guangzhou for paying part-time workers at rates below the city’s new minimum wage – of RMB7.5 (US$0.97) an hour.

(Updated 3/4/07)

2 Responses to “CSR (And MNCs) On Trial”

  1. Archive » Would You Like Fries With Your Guilty Innocence? | China Business Blog Says:

    […] g-name MNCs in China again over the past couple of weeks. As mentioned in a recent post on corporate social responsibility (“CSR”), three big, foreign fast-food chains were accused of […]

  2. Archive » | China Business Blog Says:

    […] and corporate agenda. While foreign firms are getting a lot of the public flak (as in the recent case over the minimum wage), it is clear from the survey that domestic companies are ofte […]

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