Though this contract is not stated in black and white, it is very much implied and worth being pursued by all businesses. After over-concentration on rapid industrial and technological advancements, we have woken up to a new dawn in which we cannot afford to gloss over the need for sustainable development.
The future of humanity is being threatened by unprecedented social and environmental calamities. As a commentator put it, “the future of mankind is threatened by the degradation of the environment in which we all live and work.” The two incidents of heavy rains in Accra in the month of February –which is typically very dry- and the resultant havoc caused by the floods is just one such example serving as a wake-up call and a warning to us. The loss of property affected all living within the flooded areas – but the bus did not stop there. The numerous workers in these areas did not go to work. The businesses have lost precious person-hours.
Although our legal regulatory framework and contracts do not state much by way of social and environmental obligations, all businesses must assume a contract to search for means of improving the lot of their employees, local communities, country of operation, the global society, and the environment. This contract is even more so necessary in the case of developing countries like Ghana.
Need to give back to Ghana Decades after independence, the major business industries are still extractive and primary in nature. Extractive business poses a great risk of very severe local environmental consequences. The oil-spill in the Gulf Coast of America, a developed country with all the means for monitoring, is just one such example. It is for this and other reasons that local communities call for more local investment in development. This need is further accentuated by the funding-gap for development emanating from the local authorities and central government.
Natural resources are limited, they are finite. If alternatives are not sought, there is looming social disaster should these natural resources run out. The taking up of arms in the oil-rich Niger Delta of Nigeria is a case in point, and there are several other such examples of disadvantaged communities. The concept and practice of CSR and giving back to Ghana is more of a requirement than a luxury option that businesses can afford to ignore. The practice of CSR needs to be promoted to gain roots and ground deeper than exists in the developed countries currently.
Quite unfortunately, the drive by developing countries to attract more foreign direct investments and other forms of investment in this highly competitive environment results is some form of concessions here and there. The legal requirements or obligations are minimal indeed. With increasing democracy, we are hearing of investors receiving incentives such as tax-holidays and wavers, freedom to repatriate earnings, and others. This precarious situation is further worsened by the lack of political will and strong, independent, and resourced institutions to even enforce these minimal requirements. It is in the light of this that companies, especially the big multinational companies, need to do more to give back to developing nations.
Last, but not least, society expects that businesses which make huge profits should be ethically obliged do more to give back some of these gains. They are expected to be more responsible for their actions or take the blame for the outcomes. The society, social movements, and the press expect more than the minimal legal requirements – and this is the new standard for judging the performance of companies.
Giving back to Ghana is giving to oneself The sceptics continue to say that in these tough times it does not make sense to take hard-earned income and give to the society. However, giving back to society is giving back to oneself or one’s business. For a fact, the premium of companies comes not only on the back of the figures on their financial statement but also on the back of their reputation. Without doubt, the greatest image and reputation-building tool any business can have now is CSR. Moreover, in CSR the significant reputation-building component is the concept of ‘giving back’. According to the UK PR Week/Barkley survey, found that “more than ever, consumers expect companies to give back.”
Granted that the Ghanaian consumer may not have reached that level of sophistication, social and environmental problems are no respecter of persons, national or continental boundaries. The erratic climatic changes are affecting all continents. If it does not impinge on us directly, we pay for it indirectly via other routes such as increase in prices of commodities; such as wheat because of changes in the Russian weather, or increased petroleum prices because of civil unrest in oil-producing countries in North Africa.
How can we give back to Ghana?
Businesses can give back to Ghana in accordance with any of the means proposed by the academics. Carroll (1979) came up with the good old four-point matrix of CSR – that is, economic, legal, ethical, and discretionary responsibilities. This schema is no different to the two-dimensional scale based on altruism by Quazi and O’Brien (2000). From these schemes, it is obvious that CSR is not just for big multi-nationals or companies whose actions have more direct effects on the environment or society.
In reality, economic responsibility can arguably be said to be the lowest requirement of CSR. Companies living up to their economic or less altruistic responsibility are sort of going by the dictum of the Noble Laureate Milton Friedman (1970): “the business of business is business”. Businesses are to do business; but when business goes well, it is partly because Ghana allowed them to acquire property here, to operate in a peaceful environment without strife and war – and they had other resources from Ghana. It is therefore only right that they share some of this wealth with local businesses. If there is a problem with local businesses, they need not rush to get foreign businesses but to teach or train local business to acquire these new global standards and trends.
Economic responsibilities also imply that business is conducted fairly: paying fair and living wages, fair prices to suppliers; trying to save and use domestic financial services to boost the local economy, et cetera. In the case of wages, for instance, the new minimum daily-wage agreed by the tripartite committee this year is under GH¢4.00. Considering that most low-level employees in Accra may be commuting from peri-urban communities, the cost of transportation can easily wipe away over half of this minimum-wage. How is one expected to cater for basic necessities of life and save on the remaining meagre income? Economic responsibility engenders companies to get staff working, and when business goes well to overlook making more profits and pay their staff living wages.
Legal responsibilities are mandatory. As stated earlier, these are usually fundamental and, often, concessions are given. As the Ghanaian regulatory bodies are weak, it is imperative to legal CSR that companies give back to Ghana by fulfilling their legal obligations. If a company is licenced to produce a product of certain quality or standard, it should do so even though the Standards Board may not be able to come round often to ensure that standards are kept. Mining companies are also bound by law to reclaim mined lands – and too often we see pictures of damaged and un-reclaimed land because the Environmental Protection Agency is under-resourced. This, frankly speaking, amounts to ‘stealing’ from Ghana because the nation is robbed.
Ethical responsibilities of CSR raise the bar a little to levels of altruism. It involves companies going a little beyond the legal obligations placed on them by their own accord because they believe it is the right thing to do. This could be because it is in line with the businesses’ values, or its religious or humanistic beliefs. This could include a long list of activities which can be planned strategically and followed religiously as CSR.
For example, the incoming oil and gas companies can decide to offer more employment to Ghanaians beyond any quota or inclusion clauses, and can even go a step further to have many of these Ghanaians receive more specialised onsite and offsite training to handle increasingly greater aspects of the oil and gas industry. Mining firms can also decide to pay more than the stipulated 5% of sales royalties to the government, or set an additional percentage aside for the planned development of the local communities. The push by Chiefs of the Western Region to have 10% of oil revenues set aside for a regional development fund would have been misplaced if these multinationals were engaged in a planned local community development CSR using just a small additional percentage of their earnings.
The last part of giving back is the discretionary responsibilities. As the name implies, it is solely up to the business and is a voluntary responsibility originating purely out of altruistic motives as it is not required by law. It is using one’s resources to give something back to society when they least expect.
The big companies take on challenges such as sponsoring research, building massive community infrastructure, comprehensive supply chain enhancement et cetera. However, it is worth noting that discretionary CSR need not necessarily be the preserve of big companies. Every business can help in its own small way; nothing is too small. It can even come in the form of kind. Small-sized financial service institutions can volunteer their staff to offer financial literacy classes to organised groups in the communities. The low financial literacy rates are responsible for the poor culture of savings, under-utilisation of insurance, difficulty of SMEs in contracting loans, et cetera.
Conclusion:
Companies can give back to Ghana in several ways. Giving back to Ghana through CSR is something all companies must now get involved in without any excuses. CSR is synonymous with good corporate citizenship. Paraphrasing the famous January 20, 1961 Inaugural Address by John F. Kennedy, corporate organisations should on daily basis “Ask not what Ghana can do for them, but what they can do for Ghana.”
Read more: