Corporate Social Responsibility seems to be now a buzz word in Mauritius. The government would like to see the involvement of the private sector in shouldering the burden of the social pains. Is not the responsibility of the government to look into this aspect through the ministry of social affairs? It would appear that by lowering the taxes, the government would be introducing some other types of revenue earning devises through compulsory payment. Is it fair or not? At this stage I would stay on the fence. We have still to evaluate the use of the compulsory tax levied on training and the benefits derived from it. How can we break the ingrained mentality that is prevailing in the public sector that tenure is over riding productivity?
However, this article which was published on the Guardian in January 2009 is enlightening and has some food for thoughts. Is it possible to start Social enterprises in Mauritius?
Think bigger and better
Social enterprise is not just about tiny community projects: it is a model for running big business and public services alike
Have you noticed how everybody talks about us as if the words “charity” and “competence” don’t go together? This indicates to me that the first battle for social enterprise is a psychological one. I would like to think that companies such as Unilever, Shell and BP could be social enterprises – and that anyone running a social enterprise should aspire to be good enough to run organisations like that well.
It is my view that there are a number of private businesses that should be social enterprises: water, energy maybe, and railways?
One of the real big cons about social enterprise is that there is a belief that the private sector is rigorous and professional and dynamic. But many of the best charities are run like very, very fine businesses, and a lot of companies I come across are run like accidents.
Innovation comes from the confidence to trust your instincts, having the bravery not to believe that hidden in the endless array of business management manuals is the secret to being Gordon Gekko. The truth is that they are all bibles, they are all motherhood and apple pie, and they are all bollocks. When you read The Harvard MBA in 10 Days, it does not tell you anything about attitude. But it is attitude and values that should distinguish a social enterprise.
Transformative power
Social enterprise is hugely important, but we need to be more bullish about its potential – to understand its transformative power, not in terms of getting jobs for people who previously found it difficult. That’s kind of a loser’s mentality. What we should be about is talking about how we can transform services in this country to act efficiently and how we can bring wealth back to a wider stakeholder group.
We’ve got to get the news out to the people about social enterprises, but there is no definition of a social enterprise. The soppy one is: it is an organisation with the rigour of the private sector and the citizenship values of the public sector. But the real battle for us is to think of rules of engagement that can actually bring that welding power of private and public together for a greater good.
Last year I spoke at the 40th anniversary of Resurgence magazine, and asked the audience if they believed that everybody on Earth should have access to clean drinking water. They all put their hands up. I asked them who supported WaterAid, a fabulous charity, and almost everybody put their hands up. Then I asked who believed WaterAid could provide clean drinking water to everybody on Earth. Nobody put their hands up. I laid into the audience. I said: “The problem is you’re in love with hippie shit.”
The truth is that the very organisations that make your tummy turn, because your politics suggest you shouldn’t be supporting them, are the only people capable of it. Shell, ExxonMobil: these companies have the project management, the drilling skills to actually do this stuff.
That is our battle ground. It’s to grow up and not take the baggage of the 60s – the radical chic of being pro-business or anti-business – with us into the next phase of our development. We need to understand that there is a new configuration developing, and if we can’t bring business together with the sort of value driven systems that we have, that will be our failure.
So if we are going to talk about innovation, the starting proposition is to leave some of that old baggage behind, and not to demonise any particular sector, but to look at how we can do things better.
Eden is a social enterprise, which we built out of innocence. We were fortunate that it was in a place of great deprivation, which meant there was a predisposition in government officers who were looking after that area to look at anything that might bail us out of a really awkward situation. But it was built completely out of innocence. I went to the local development committee and said I had this great idea to build the eighth wonder of the world [in Cornwall]. I had no business plan, but said they had to believe me that it was going to be absolutely fantastic. They gave me £25,000 to go away. Then I raised a bit more money, and very soon we had a little fighting pot and went to see the Millennium Commission. It, eventually awarded us half of the then project cost of £74m.
We brought the Eden Project in on time and on budget, and have since invested £130m.
If you were to ask me, if you were to put a rusty razorblade to my throat and say, you have one minute to say why you did it, it would be that we wanted to find the most derelict place on Earth and create life in it. We then wanted to show how clever human beings are, by building something totally fit for purpose, which I hope we did.
I wanted to run a place that had the values of sustainability. We do fantastic local sourcing – 90% of everything we consume at Eden is locally sourced, our waste strategy is highly regarded, waste neutral. It is a lot easier than people say. But ultimately, I wanted to see how we could answer the question, what does a great place to work feel like?
Piddling little things
Our social enterprise at Eden cost £130m and has already put £800m back into the Cornish economy – which is more than double the entire money that has come from Europe for the whole of the south-west. So to think of social enterprises as being piddling little things that you have to talk about in hushed library tones is nonsense.
All over the country, as a result of the climate change debate, there is going to be an opportunity for starting new energy companies that will link agricultural production with all sorts of different aspects of the economy. These drivers of energy are fantastic areas for social enterprise. And they’re social because if you set them up regionally then everyone who lives in that region is likely to buy their energy from that company, and if they know that their purchases will create profits that can be used to pay for social benefits in those areas, it is a wonderful virtuous circle that means the revenue is going back to stakeholders, and so on.
I think it’s fantastically exciting, because we can do it and it works. I think social enterprise is the future model for organising our collective state assets.
· Tim Smit is chief executive and co-founder of the Eden Project in Cornwall. This is an edited extract from his speech to the Social Enterprise Coalition Voice 07 conference last week.
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L’Express 4/sep/09
The government’s 2% tax on profits for CSR has been abitter pill for the private sector to swallow. Yet the two sides have alot more in common than they may think.The government’s 2% tax on profits for CSR has been abitter pill for the private sector to swallow. Yet the two sides have alot more in common than they may think.
THREE words, much ado. Corporate Social Responsibility ( CSR) has proved quite the bone of contention these past few months. The 2% levy on profits announced during the last budget did not go down very well with the private sector, which strongly believes that CSR should be conducted on a voluntary basis. In the coming weeks, the committee entrusted with the task of establishing the guidelines for CSR funds. Many firms have put their CSR activities on hold until these are made public in order to be sure of their eligibility under new legislation. The question remains though, should CSR be voluntary or does the government have a point in imposing a levy? In the last budgetary exercise, the minister of Finance, Rama Sithanen, explained that these funds were to be “ used in the fight against poverty†. The weapons in this fight against want were indentified by the Finance Bill 2009.
“ Every company shall, in every year, set up a CSR Fund equivalent to 2 per cent of its book profit derived during the preceding year to – ( a) implement an approved programme by the company; ( b) implement an approved programme under the National Empowerment Foundation; or ( c) finance an approved NGO.†Literacy, social housing, assistance to abused women and children as well as AIDS prevention and support are some of the issues that these funds will be used to tackle.
Unsurprisingly this move, which effectively made CSR mandatory, prompted its fair share of criticism from the private sector. The Mauritius Employers’ Federation ( MEF) responded to the budget almost immediately by publishing a one- page document entitled, “ CSR Ten Fundamentalsâ€, in which it fiercely reaffirmed its conviction that CSR is a “ voluntary enterprise- driven initiative†. In particular, the last two “ fundamentals†were unequivocally against the sort of diktat imposed by Rama Sithanen: “ CSR cannot be subject to a tax imposed on enterprise†and “ CSR cannot be regulated and enforced by legislationâ€. Unfortunately for the MEF, the minister of Finance evidently holds a very different opinion of the dos and don’ts of CSR.
“ Friend or foe of businessâ€
Although this might look like a habitual private sector knee- jerk reaction against any form of regulation, the MEF does actually have a point. Strictly speaking, CSR must be voluntary. Slapping the CSR label on a compulsory 2% levy on profits is a bit misleading, semantically at least. There’s also the fear that the imposition will push firms to eschew an active involvement in social and environmental projects. Indeed, CSR is a very broad concept that is used to describe contributions for everything ranging from employee benefits to environmental protection.
By forcing companies to stick to a narrow list of programmes or NGOs, the authorities might be sacrificing certain valid causes that could’ve done with private sector assistance.
Yet the resistance to the compulsory CSR levies seems to have a deeper, even ideological dimension. If certain commentators are to be believed, the whole capitalist system is at stake. In an ominously named article ( CSR: Friend or foe of business ) published in The African executive , the director of Pluriconseil, Eric Ng Ping Cheun, claimed that this imposition would have a dastardly effect business everywhere.
“ In so far as firms are denied the freedom to choose, because of their legal obligations, their performance will instead be weakened, market opportunities curtailed, and competitive pressures reduced. Adoption of the CSR approach by businesses everywhere rather than just by vanguard firms will have an economy- wide impactâ€, he wrote. If this is true then the question that begs is, why is the government being so mean to the poor, downtrodden private sector? Its motivation is actually threefold.
Firstly, the legislation was deemed necessary because many companies were simply not pulling their weight when it came to contributing to the “ fight against povertyâ€. This is made clear in Review of CSR actions and policies in Mauritius and Rodrigues , a report compiled by Deloitte and the European centre for not- for- profit law ( ECNL) last year. Apparently better use had to be made of the “ stick†to make the carrot more effective. “ It can be strongly argued that the extent to which such laws and regulations are actually being applied in order to sustain and enhance corporate social responsibility is not enough.†An adviser to the Finance ministry, Benu Servansingh, confirmed the existence of this shortcoming in l’express a couple of weeks back. Certain companies, he said, engage in CSR “ just because they have to include it in their annual report. This kind of CSR is usually not well thought- out and in most cases does not have the desired impact on the beneficiaries.†Secondly, it could be argued that by centralizing funds and efforts, the authorities and the private sector would have a far better shot at significantly denting national scourges, such as poverty. Even though there have been some incredibly worthy CSR projects in the recent past, in general efforts are rather scattershot. Thirdly, the levy ( or “ gesture of compassion and solidarity†, as Rama Sithanen poetically put it) was a political move aimed at defusing criticism of the government being soft on big business. Indeed, a bit of pre- election “ democratization†of the economy can go a long way.
And the mandatory CSR levy might not lead to the imminent demise of the private sector as some people would like to believe. In its review of CSR, Deloitte and ECNL revealed that there is “ an established link between engagement in CSR endeavours and competitive advantage.
Most organizations ( 69%) in the Republic of Mauritius acknowledge having benefited from CSR activitiesâ€. Still, some questions persist. How will the funds be allocated? What sort of projects will it sponsor? What are the guarantees that the funds will be used “ in the fight against poverty†? Doubtless, the CSR committee’s guidelines will go a long way to dispel these grey areas.
Like everything else in this country however, the success of the regulation depends on the people and processes meant to implement it.
Yet there is hope that if the public and private sectors can work together in a constructive way, the country as a whole will benefit. Indeed, if the private sector can inject its vim and efficiency into proceedings, and if the public sector can fight for the welfare of the population, then this revised form of CSR could actually be quite a find, especially for those who need it most.
Nicholas RAINER
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