Global Compact International Yearbook 2013
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With the fall of Apartheid in 1994, did South African companies im-
plement CSR programs voluntarily or did they rather feel the pressure
of democratization and the need to comply with international labor
standards?
After 1994, many companies were keen to build their legiti-
macy and create a good impression with the new government.
Much of this was done through CSI, as mentioned above.
Many companies built schools, for instance. In parallel, the
new government embarked on an ambitious policy and
law review, based on the 1996 Constitution. These included
progressive labor relations, occupational health and safety,
anti-discrimination, environmental and natural resource
laws (most of which were published in the latter half of the
1990
s). These have had an important impact on the regula-
tory pressures on business, though the state’s enforcement
capacity has been limited. I have argued that there is thus
a quasi-voluntary character to legal compliance, especially
if companies attempt to comply with the spirit of this new
legislation, rather than merely the letter.
Then, of course, there was the black economic empowerment
policy, which was also promulgated as an act, as well as subject
of numerous sector-specific “charters.” This sought to address
the racially skewed ownership and management structures in
the economy. One of the most prominent charters was the one
in the mining industry (2002), and a bit later in the finance
sector. Many of these charters were the result of corporatist
(
business-government-stakeholder) negotiations, and they
identified sector-specific targets for ensuring: ownership of
companies would be transferred to black people; management
positions would be held by black people; and employment
equity / affirmative action. There were also sector-specific tar-
gets – for example, conversion of hostels in the mining sector,
increased access to banking in the finance sector. Generally,
there was an expectation that about 1 percent of profit would
go toward socio-economic development, that is, CSI.
What are the drivers of CSR in South Africa? Is it merely voluntary?
Or is it the government, for example by regulating the Johannesburg
Stock Exchange (JSE) or labor laws?
There is a confluence of drivers, and their influence also var-
ies, depending on the sector and size of the company, as well
as the specific social or environmental issue that is at stake.
I think state regulations have been very important, especially
in areas such as labor relations and environmental protection.
The state’s enforcement capacity has been a problem, especially
in small, dispersed operations. Public regulations have also
been important. This includes the JSE’s listing requirements,
which rely on the King codes of corporate governance. The lat-
ter has been very influential in driving sustainability reporting
and, more recently, integrated reporting. There have also been
international pressures, including regulations of the London
and New York stock exchanges, which have influenced some
of the big South African companies that have listed there,
and which have provided some “best practice” leadership in
South Africa.
Human Rights
In a report, you said that UN attempts to formally apply international
human rights laws in the private sector in 1990 and 2003 were un-
successful. What does the link look like in sub-Saharan Africa today?
Well, those earlier attempts subsequently led to the appoint-
ment of John Ruggie as UN Special Representative on business
and human rights. His “three pillars” framework has been
very helpful and influential, in that it clarifies and codifies
what is expected of business. The second – and final – re-
port by Ruggie was published in 2011, and since then there
have been numerous initiatives to provide companies with
more detailed guidance. There is more scope, however, for
companies to recognize human rights as the overarching
framework that guides their CSR activities. At the same time,
the human rights framing emphasizes “do no harm,” and it
leaves out the opportunities for business to make positive
contributions through processes, products, business models,
or systems innovations.
In conflict zones, such as in parts of the Democratic Republic of Congo
(
DRC) and Rwanda, we experience the problem of “limited statehood”
and hence a lack of human rights and responsibility toward communi-
ties. Can and should companies’ CSR fill this gap?