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Home » Corporate Social Responsibility (CSR) » Bangladesh & CSR
Bangladesh & CSR
Corporate social responsibility (CSR) and its practices in Bangladesh have a long history of mainly philanthropic activities.

CSR as the concept is understood today i.e. including health & safety, human rights, child labour, environmental and climate issues is relatively new but there are a number of signs that it is becoming increasingly important in Bangladesh in all businesses but particularly companies with international business & export. CSR cannot be ignored because Bangladesh depends on its export i.e. a global market.

Some of obvious signs are:
  • The newspapers are writing about CSR,
  • training/studies are being offered both at university level and professional training,
  • an increasing number of companies are signing up for Global Companies
  • an increasing number of companies are being certified (CSR related certifications) for examples: SA8000, ISO26000, GRI ma.
  • A non profit CSR company has been established
  • The Bangladesh enterprise institute (BEI) has had a roundtable discussion on CSR
Here some examples:
Professor (Dr) M Alimullah Miyan writes in a paper:
"Because of global competitiveness and demand, the CSR practices and standards have to be gradually implemented in Bangladesh. But it has a long way to go. There is no denying of better enforcement requirement of CSR practices in Bangladesh".

"...some of the exporters found difficulty in convincing the US/EU buyers to have positive attitude towards Bangladesh due to inadequate CSR practices. Businessmen need to recognise the implications of CSR for business activities. Companies are facing the challenges of adapting effectively to the changing environment in the context of globalization. "

"...CSR concentrates on benefits of all stakeholders rather than just the stockholders. Awareness and sense of necessity for practicing CSR is becoming more and more pronounced as the country has to adapt itself to the process of globalization. But the overall status of CSR in Bangladesh is still very meagre".Wrote Professor (Dr) M Alimullah Miyan

Vice Chancellor & Founder in Sept 2006.
(http://www.researchsea.com/html/download.php/id/57/research/Dynamics_of_CSR.doc?PHPSESSID=5idoocjkitqqlp5p1pbgcaheg2)
The whole article is here:
Edward Probir Mondol
Concepts of corporate social responsibility (CSR) and its practices in Bangladesh have a long history of philanthropic activities from time immemorial. Such philanthropic activities included donations to different charitable organisations, poor people and religious institutions. Until now, most businesses in Bangladesh are family owned and first generation ones. They are involved in community development work in the form of charity without having any definite policy regarding the expenses or any concrete motive regarding financial gains in many instances.

Moreover, most of the small and medium enterprises (SMEs) fall under the informal sector having low management structure and resources to address the social and environmental issues. These limitations drive the top management of local companies to think only about the profit maximization rather than doing business considering the triple bottom line: profit, planet and people (CSR definition of Lotus Holdings). The discussions on CSR practices in Bangladesh in its modern global terms, are relatively new, but not so for the concept itself. Because, being a part of the global market, it is difficult to ignore CSR standard specifically in the export sector. In general, it is true that in Bangladesh, the status of labour rights practices, environmental management and transparency in corporate governance are not satisfactory, largely due to poor enforcement of existing laws and inadequate pressure from civil society and interest groups like consumer forums.

Globally, CSR practices are gradually being integrated into international business practices and hence are becoming one of the determining factors for market access. They are also equally instrumental for better local acceptability on the part of businesses. A focus on CSR in Bangladesh would be useful, not only for improving corporate governance, labour rights, work place safety, fair treatment of workers, community development and environment management, but also for industrialisation and ensuring global market access. Since, CSR entails working with stakeholders, it is important to work from within and diagnose the stakeholders' concerns so that CSR is truly embedded in the companies.

By now, many CSR dimensions are practised in Bangladesh. The SMEs largely depend upon export. The US and European Union (EU) buyers set guidelines to readymade garment (RMG) industry to ensure the standards. The 1992 Harkins Bill and subsequent consumer and industry boycott of RMG products by the USA and the consequent remedial moves by local RMG sector are examples here. Moreover, some buyers from the EU visited the sites of recently collapsed garments factories. A temporary ban was also imposed on shrimp export to the EU on grounds of health and hygienic standards; appropriate remedial action followed in that instance, too. But, some of the exporters found difficulty in convincing the US/EU buyers to have positive attitude towards Bangladesh due to inadequate CSR practices. Businessmen need to recognise the implications of CSR for business activities. Companies are facing the challenges of adapting effectively to the changing environment in the context of globalization and in particular in the export sector.

Although consumer rights movement, enforcement of government regulations and a structured view regarding the economic importance of CSR are not yet so widespread in the corporate world in Bangladesh, companies have gradually been attaching more importance to CSR in the local market as well. They are increasingly aware that CSR can be of direct economic value. Companies can contribute to social and environmental objectives, through integrating CSR as a strategic investment into their core business strategy, management instruments and operations. This is an investment, not a cost, much like quality management. So, business organisations can thereby have an inclusive financial, commercial and social approach, leading to a long term strategy minimizing risks linked to uncertainty.

CSR in Bangladesh can also contribute a lot to community development. The corporate house can develop the community by creating employment, providing primary education, contribution to infrastructure development like roads and highways and addressing environmental concerns. This is more relevant to a country like Bangladesh where the government interventions in these fields augmented by corporate alliance can go a long way in developing the economy, society and environment.

Lack of enforcement of industrial laws and regulations, weak unions, absence of consumer rights groups and high level of corruption within the regulatory bodies make CSR violation rampant in Bangladesh. Two most significant sources of country's foreign exchange earnings are the RMG sector and the overseas manpower export. Unbelievably low compensation, working hours, health/hygiene/sanitation conditions, fire safety and various types of abuse are common and prevail to the extent of inhumanity, that will shock any conscientious individual to the core. Recently, the RMG sector employees have been carrying out their movement to establish their rights. Overseas workers are mostly exploited by recruiting agencies whereas these rural and mostly illiterate people have to sell all their belongings becoming paupers and borrow money at very high rate of interest. Owing to cheating by the recruiters and unlawful behaviour by the overseas employers, many of them are compelled to come back as beggars, some after long confinement in overseas jails. Hardly any remedy is available from the law enforcing agencies. Many industrial units run with half-century old machinery producing fatal air, soil and water pollutions. A good number of them including more modern factories, also do not care to install effluent treatment plants. Adulteration, abnormal ripening of fruits and related consumable items at times with poisonous elements, keeping fish fresh with applying deadly formalin and all other malpractices are rampant. Only good governance and efficient law enforcing agencies can only solve such deadly problems.

Because of global competitiveness and demand, the CSR practices and standards have to be gradually implemented in Bangladesh. But it has a long way to go. There is no denying of better enforcement requirement of CSR practices in Bangladesh.

Fara Azmat and Ken Coghill in one of their publications -- Good Governance and Market -- Based Reforms: A Study of Bangladesh-- have tried to relate good governance with CSR by discussing the good governance indicators of regulatory quality, rule of law and control of corruption in the context of Bangladesh. The writers have analysed how lack of good governance indicators affects the success and sustainability of reforms and contributes to the lack of business ethics and CSR in Bangladesh.

CSR in general terms is defined as the obligation of the firm to use its resources in ways to benefit society, through committed participation as a member of the community, taking into account the society at large and improving the welfare of society at large independent of direct gains of the company.

In this respect, CSR, as can be related to the problems of the agricultural input sector of Bangladesh, is used to explain the need of the businesses to be socially responsible and focus on economic, social, legal, ethical and environmental issues. Farmers are being cheated through buying underweight goods and supplies of low quality inputs sometimes at higher prices which do not benefit yields. The contaminated inputs also cause damage to soil fertility, which eventually results in decreased yields. While the economic aspect is represented by the resultant effect of a price hike, the social impact is due to the decrease in farmers' income. The legal and ethical components are represented by the private sector not complying with the laws and rules and not meeting the obligations placed on them by the state and the society. Finally, the environmental consideration is also important because of the effect of contaminated and unbalanced inputs on the soil and on soil fertility.

The key idea behind CSR and corporate citizenship is that responsible behaviour makes good business sense. In Bangladesh the private sector seems to focus on earning profits in the short term, ignoring the issue of responsible behaviour and the desirability of earning the trust of consumers which are important for the long-run success of their operations. The incidence of selling adulterated, under weigh and low quality products at high prices and, above all, hoarding to reap dishonest profit, do confirm this. In the absence of socially responsible behaviour in the private sector, there is need to enhance capacity-building on the part of the state to intervene and implement sanctions effectively to enforce compliance.

CSR does not develop and is not sustained independently of the context in which business operates. Importantly, the context includes the legal infrastructure created by the state and the enforcement effort imposed by the state. In the absence of an effective state intervention in the public interest, private entrepreneurs are less constrained to behave in the public interest and in conformity with CSR. Thus lack of capacity or lack of will, or both, by the state weakens the incentives for private sector entrepreneurs to practise CSR. In addition, private sector entrepreneurs lack expertise and are not efficient and competent enough to take advantage of an open economy. The government has recognised the need for educating the private sector and is undertaking some programmes. However, this is not done on a large scale. This heightens need for educating business leaders in CR as sustainable and profitable business models. This will help direct efforts towards promoting CSR for better business in Bangladesh to meet global and local needs. The non-governmental organisations (NGOs) need to be involved to educate the private sector on business ethics and issues of CSR. (The writer is Executive Director of CSR Bangladesh. He can be reached at epmondol@csrbangladesh.org)
http://www.thefinancialexpress-bd.com/more.php?news_id=88734
This is another article on CSR in Bangladesh
Some untoward incident like boycott from the importer has taught the local business community about the immense importance of CSR and adoption of this modern and competitive practice is gradually increasing in Bangladesh.

Author: Professor (Dr) M Alimullah Miyan, Vice Chancellor & Founder of IUBAT International University of Business Agriculture and Technology, Dhaka, Bangladesh

Summary

Apart from the benevolent social services by some business firms, the new concept of CSR is an emerging one. Businesses are driven by government, labor unions consumer groups and above all by considering CSR as a long time investment in PR. In the context of Bangladesh, it is more relevant for the export-oriented industry. Globalization has made CSR practice an imperative for Bangladesh business. CSR concentrates on benefits of all stakeholders rather than just the stockholders. Awareness and sense of necessity for practicing CSR is becoming more and more pronounced as the country has to adapt itself to the process of globalization. But the overall status of CSR in Bangladesh is still very meager. Lack of Good Governance, absence of strong labor unions or consumer rights groups, and inability of the business community to perceive CSR as a survival pre-condition in export and PR investment local market constitute some of elements undermining the evolution of CSR practices. Some untoward incident like boycott from the importer has taught the local business community about the immense importance of CSR and adoption of this modern and competitive practice is gradually increasing in Bangladesh.

Background Corporate Social Responsibility or CSR for short is a relatively new term that has suddenly gained currency. Hundreds, indeed thousands, of companies are adopting ethical policies or codes of conduct saying how they intend to behave. More and more companies are signing up to such initiatives as the United Nations Global Compact or the Fair Labor Association. They are joining bodies such as World Business Council for Sustainable Development and CSR Europe. Take the example of McDonalds. In the 1990s, the hamburger corporation took two campaigners through a long and exhausting libel court case in London after they criticized its corporate practices. Then there was the 2004 film Super Size Me. Its public image thoroughly dented, today McDonalds leaflets in the UK show happy local farmers producing organic crops for healthy meals. Or the oil company Unocal, which was severely criticized for knowingly using forced labour to construct a pipeline in Burma, a country run by a vicious regime and subject to an international boycott. Labour rights groups in the US took Unocal through the courts. Unocal now has a huge area on its website devoted to CSR.

In fact, CSR means different things to different people. However, certain ideas are becoming commonly accepted. One is that CSR is not about philanthropy or charitable work. It refers to something much more fundamental. It is about how companies take responsibility for their actions in the world at large. Conventional CSR Watchdogs include Labor Unions, Consumer Groups, Environmentalists, NGOs and all Stakeholders watching over their interest as opposed to Stockholders only.

In essence, CSR is positive rapport with the society. In a Bangladesh context, several multinational companies and local companies practice CSR. Most of the business concerns in Bangladesh do not rate high in practicing CSR unless being pressured by the foreign buyers in case of export oriented business.

CSR in Bangladesh can also contribute a lot to community development. The corporate house can develop the community by creating employment, providing primary education, contribution to infrastructure development like road and high-ways and addressing environmental concerns. This is more relevant for a country like Bangladesh where the government interventions in these fields being augmented by corporate alliance can go a long way in developing the economy, society and environment.

In general, it is true that in Bangladesh, the status of labor rights practices, environmental management and transparency in corporate governance are not satisfactory, largely due to poor enforcement of existing laws and inadequate pressure from civil society and interest groups like Consumer Forums.

A focus on CSR in Bangladesh would be useful, not only for improving corporate governance, labor rights, work place safety, fair treatment of workers, community development and environment management, but also for industrialization and ensuring global market access. By now, many CSR dimensions are practiced in Bangladesh. The SMEs largely depend upon export. An Ideal example is the consumer boycott imposed on purchasing Bangladesh Readymade Garments on the ground that these are produced by under-aged child labor. The US and EU buyers set guidelines to Ready Made Garments (RMG) industry to ensure the standards. The 1992 Hrkins Bill and subsequent consumer and industry boycott of RMG products by USA and the consequent remedial moves by local RMG sector is one example. Moreover, some buyers from EU visited the sites of recently collapsed garments factories. A temporary ban was also imposed on Shrimp export to the EU on health and hygienic standard and appropriate remedial action followed in that instance too. But, some of the exporters found difficulty in convincing the US/EU buyers to have positive attitude towards Bangladesh due to inadequate CSR practices,

Lack of enforcement of Industrial Laws and Regulations, weak unions, absence of consumer rights groups and high level of corruption within the regulatory bodies make CSR violation rampant in Bangladesh. Two most significant foreign exchange sources is the RMG sector and the overseas manpower export. Unbelievably low compensation, working hours, health/hygiene/sanitation conditions, fire safety and various types of abuse are so common and to the extent of inhumanity that wild shock any conscientious individual to the core. Recently, the RMG sector employees have embarked on a industry wide movement to establish their rights.

Overseas workers are mostly exploited by recruiting agencies whereas these rural and mostly illiterate people have to sell all their belongings becoming paupers of lend money at very high interest. Owing to cheating by the recruiters and unlawful behavior by the overseas employers, many of them get compelled to come back as beggars, some after long confinement in overseas jails. Hardly any remedy is available from the law enforcing agencies.

Many industrial units run with half-century old machinery producing fatal air, soil and water pollutions. More modern factories also dont care to install Effluent Treatment Plants.

Starting from FMCGs, vegetables, fruits and all other conveyable goods, adulteration, abnormal ripening at times with poisonous elements, keeping fish fresh with applying deadly Formalin and all other malpractice is rampant and carefree. Good Governance and efficient law enforcing agencies can only solve these plights Bangladesh is a developing country. Because of global competitiveness and demand, the CSR practices and standards are being implemented in Bangladesh. But we are yet go a long way. There are challenges to implement CSR properly in Bangladesh. Ultimately CSR practices should be better practiced in Bangladesh for better and enhanced performance.

http://www.researchsea.com/html/article.php/aid/1340/cid/4/research/dynamics _of_corporate_social_responsibility _____bangladesh_context.html
Other CSR related initiatives in Bangladesh
The Bangladesh enterprise institute
The Bangladesh enterprise institute (BEI) which is a -profit, non-political research centre established in October 2000.The Institute promotes issues of importance to the private sector and seeks to initiate essential measures and influence policy for the development of a market-oriented economy. Through the promotion of sustainable growth in domestic trade, commerce and industry, BEI hopes to address the enormous challenge for Bangladesh in securing a fair share of the global market.

BEI has organised a Roundtable discussions on CSR Practices and Challenges in Bangladesh. The roundtable was part of a dialogue series on CSR in Action that BEI organizes every month to hear the perspectives of key stakeholders and raise awareness on CSR practices and implementation challenges in Bangladesh. (http://www.bei-bd.org/searches/index)
CSR Bangladesh (CSRB)
CSR Bangladesh was established in 2008 to facilitate, expand and encourage CSR practice in Bangladesh. The CSRB is a non profit organization and its objective is to become the source of information, resources and advisory services on CSR in Bangladesh. http://www.csrbangladesh.org/index.php
CSR related Certifications in Bangladesh
There are a number of private consultants and NGOs offering advice on certifications related to CSR for example: SA8000, ISO26000, GRI ma.
CSR Image of Bangladesh
In connection with export it is of key importance to understand the image (strength & weaknesses) of your home country. This is helpful because the foreign buyer may have a completely (and often wrong) picture of life in Bangladesh and of the working conditions in the IT industry than you have. You cannot take for granted that they know that for example the health & safety problems, child labour problems are limited and that the industry/companies in many ways are modern.

The key exporting industry in Bangladesh is the Textile & Garment Industry. When the world hear about Bangladesh it is to often either issues related to floods & poverty or breach of CSR issues in the Textile and Garment factories. The latest scandal was the collapsing building. The industry is working with CSR mainly because it is a demand from buyers but also to improve the conditions. A number of analyses of CSR in this industry are available. Here is an example (summary) of the key problems found made by Ethical Trade initiative.
Occupational Health and safety
Bangladeshi industry has been plagued by allegations of poor safety and security standards, which have resulted in several accidents in recent years causing death and permanent disabilities. Once of the most tragic health and safety risks in Bangladesh are factory fires. Poor building safety combined with lax enforcement of the fire regulations mean that factory fires are not uncommon.
Working hours
Across Bangladesh, workers work long hours.
Workers representation
The Bangladeshi constitution supports the rights of workers to join unions. However, unionised factories are extremely rare in Bangladesh. Although still uncommon, effective unions with a sound co-operation with management do exist in Bangladesh. One of the reasons for the rare unionisation of workplaces in Bangladesh is that neither management nor workers know the positive role of trade unions. This could be because they are not aware of a unions genuine roles and responsibilities or that the union representatives are not elected by or truly represent the workers.
Child labour
Child labour is endemic in Bangladesh. Because of widespread poverty, many children begin to work at a very young age. According to the Bangladesh Bureau of Statistics (BBS) in 2003 there were 4.9 million working children in Bangladesh - 14.2% of the age group of 5-14 years. The total working child population between 5 and 17 years old was estimated at 7.9 million.

Ethical Trading Initiative -Norway/Danish-Ethical Trading Initiative: Good Practice Guide, Chapter 1: Occupational Health and Safety: Bangladesh. http://www.ethicaltrade.org/in-action/projects/purchasing-practices-project

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