CSR: Not a substitute for regulation

This post is part of an aid blogging forum, started by J. at Tales From the Hood.

As with most development jargon, the term Corporate Social Responsibility (CSR) is absurdly vague. In the broadest sense, I hold it to mean any action taken by a private corporation, for a perceived social good, that it would not otherwise have cause to perform. The specific actions described as CSR appear to fall into two camps: philanthropy and altering existing practices to do no harm (or even do some good). The former is most often donations to charities, including development organisations; I am concerned more with the latter. This type of CSR is seen in certain industries voluntarily creating standards of best practices that do less harm to society (and in this I include the environment), though at greater cost. This type of CSR is self-regulation, but by another name.

Corporations are rational actors that seek to maximize their profit within the prescribed rules of the game. Some may disparage corporations for practices that harm the environment or 'exploit' poor third world farmers. In the case of environmental harm, these practices may be industrial processes that pollute the atmosphere, or even processes that consume too much electricity; in the case of the farmer, the so-called exploitation may be paying the farmer the legislated minimum wage. In both these examples, corporations are seeking to maximize their advantage over competitors while still obeying the law. However, corporations are often condemned by people who view their lawful practices as harmful to society. Civil Society Organisations (CSOs) organise boycotts, protests and letter writing campaigns with the goal of shaming firms into changing their business practices (e.g. popular movements against sweatshops / whaling / Shell in Nigeria). These campaigns have been viewed as successes because the target company ceased its socially undesirable practice. But do not think that the firm has abandoned profit considerations: it has merely decided that the cost of maintaining the status quo has become too expensive, thereby making the practices proposed by the civil society organisations the profitable choice.

This type of regulation -- powered by mob mentality vice sober legislative debate -- causes market disequilibrium and does little to actually regulate the practices. When civil society picks up on a cause and organises campaigns for change, they direct their campaigns at the big MNEs that have global brand identities. The campaigns feed off the high profile exposure gained from outing a large MNE. If enough pressure is maintained for long enough, these campaigns can effect change on their targets. But the smaller entities are ignored by the campaigns: they are too small and are too many for the campaign to effectively target, and there is no incentive to do so since it would not galvanize the public into action. So while these campaigns may succeed in changing the practices of some MNEs, it does not outlaw the behaviour in the way a law would. This causes market distortion: the large MNEs with brand recognition are shamed into adopting practices that are more socially responsible (expensive), while the smaller players can keep to the old ways (cheaper). The result of these campaigns is that operating costs increase for the large firms and the small firms are handed a competitive advantage; the practices endure.

For the few large MNEs that are corralled into adopting new practices, the outcome is less stringent and less enforceable than a government alternative. When an industry gathers to self-regulate, their incentive is to adopt a policy that goes far enough to quiet civil society, but only just: regulate as little as possible. When a parliament considers legislation, its goal is enacting laws that strike an equitable balance between business concerns and social outcomes. Achieving this balance places a greater cost on business; thus, left to their own, industry will always choose less socially desirable regulation. Self-regulation is also less enforceable: it is by definition voluntary. There is no police or regulatory watchdog with any teeth. Firms are left to watch over one another. Psychology and basic economics tells us that free riders will game this system for advantage over rivals. But ultimately, once one firm (or even an entire sector) experiences an economic slump, the costly practices adopted under this self-regulation will be the first thing to cut. Voluntarily choosing to do nice things for society is great when profit margins are up, but if they are not required to do so by law, when the books hit the red that firm will immediately adopt more cost-effective practices.

Government is the great referee. It expresses the will of society in the form of laws and regulations. They are published openly for all to see. Government has a monopoly on the legitimate use of force, power it uses to enforce laws and ensure compliance. I am not advocating that government interfere in the economy where it is not required. However, when society decides that it will not tolerate certain behaviour by business, it is the sole responsibility of the government to enact laws that strike a careful balance between society and business. Business will push back, because they do not wish to adopt more costly practices, but that is to be expected. Like the hockey player who just elbowed someone in the head, he knows he belongs in the penalty box, but he's going to make a fuss anyway. Moreover, businesses prefer government to make the rules: they are clearly defined, universally applicable, and effectively enforced. But until that time comes, business will do all they can, within the rules of the game, to gain a competitive advantage.

Petty Theft

It's gone: there remains a laptop cable, my mouse, my notebook -- but not my $1800 laptop. With a sinking feeling in my stomach, I ask my co-workers where my laptop is. They look surprised and reply that they don't know. They talk swiftly in Swahili to one another, and by this time I know it is stolen, though I don't want to believe it.

It is around 1:30. I had stepped out for lunch, heading to a street meat vendor and then to my flat to watch T.V. I always leave my laptop and my other belongings on my desk during lunch; we also have 3 other laptops, 4 desktop computers, and other items of value. The office is quite secure and my co-workers stay there every day to eat lunch. I never thought that someone could waltz in during the middle of the day and make off with some property.

I slump down in a chair in the hallway, still in disbelief. Many thoughts run through my head. The report I'd been working on for three weeks is gone; all my personal photographs from the past 10 years are gone; what am I going to do for the next six months at work?; forget work, how am I going to entertain myself? I'll only have my books and the T.V. It will be like the 90s -- how depressing.

My co-workers (two elderly Zanzibari women) explain that while they were having chai mchana, two youths came in looking for TB shots. Our office oversees five front-line health facilities, but we don't offer any services here. At first they viewed these youths' request as odd, but now they see it as highly suspicious. My co-workers describe how, when the youth were refused TB shots and instead directed to the clinic, they asked for the cell phone number of a nurse whom they know. Our accountant then comes to the office to take me to the police station to make a report. My co-workers say they will go to the clinic to talk to that nurse and see if she knows the youths.

I walk to the police station to make a report, though I know it is futile. There are so many people living here, why would the police care about some foreigner's expensive computer? The accountant describes to the police the situation and the thieves. The police take my particulars and say they will call if they find out any information. I walk back home.

At home I change out of my work clothes, grab some cash, and head to a bar down by the beach. Not the best way of dealing with stress, but I can't just sit at home. I order a beer and sit outside. I try to read some of my book (The Sun Also Rises), but I'm too distracted. I'm mostly upset that I've lost the personal data from my computer. I keep all my photos on there, and I've now lost irreplaceable ones from the war, from my travels and from significant events in the past. Also on the computer is my journal, my financial records, past school work; thinking through everything that is lost, I start to feel stupid for not keeping a backup. I've never had a need in the past, but I reckon backups are one of those things you don't need until you do. I start to feel silly for how upset I am over losing a piece of electronics. What is a laptop in the grand narrative of life? I'm still alive, I'm living in what amounts to a beach paradise, and am now sitting but 10 metres from the Indian Ocean sipping a beer in the sun - and I'm letting a screen and a keyboard ruin my day.

Just as I'm starting to feel better about it all (or is it the beer?), I get a text on my phone:

"We have got thief and now chasing your laptop"

It's from the police. This makes me laugh for a few reasons: firstly, the police are texting me, a medium normally reserved for the banal; secondly, I am picturing a police officer sprinting through the streets of Stone Town literally chasing after my laptop as it scurries away (it must be the beer); but lastly, I laugh out of amazement that I may actually have it returned to me. Not five minutes later I receive a phone call from the police. They have the laptop and ask me to come back to the station.

When I get to the station I see my two co-workers and they recount their story to me. They are laughing and very animated telling me how they chased the thieves across the city. They had gone to the clinic to follow up with the nurse whom the youths had inquired about. The nurse told them that one of the young men is from Zanzibar but lives on the mainland. My co-workers thought that perhaps the thief would be trying to flee the island, so they hopped in a taxi and booked it to the ferry terminal.

They stood at the entrance to the ferry keeping an eye out for the thief. They spotted him and tried to block him from getting on, while yelling at him to give back the laptop. They tell me that the thief must have been quite shocked, because though he could easily have outrun my two elderly co-workers, he did not try to. The thief insisted he did not have the laptop and just wants to go home. My co-workers convinced him to get in a taxi and come to the police station. At the station, two officers got into the taxi with the thief and they all went to find the other young man that still had the laptop.

They finish recounting their story. The police officer brings in the laptop and has me verify that it is the correct one: it is. After some paperwork I leave to go home.

I am amazed that the police were able to recover it. In Canada, if one reports a stolen laptop, there is hardly a chance that it will be recovered. My co-workers acted quickly and were able to find the thieves, for which I am very fortunate and grateful.

This morning I backed up my data.

Crossroads

The differences between the 'West' and the developing world are many, and the two can be divided along various lines. On the quantitative side there are vairables such as infant mortality or GDP per capita, while more theoretically one can speak of the core and periphery, or even yet divide the two geographically as The North and The South. Whatever your preferred descriptor and methodology, international aid organisations lie at a peculiar crossroads of the two worlds.

A typical international aid organisation has its headquarters in a glamorous city (Geneva, Brussels, New York), Western-country offices for coordinating bilateral aid and private donations (London, Ottawa, Washington), and in-country offices ("the field" -- Lilongwe, Dhaka, Delhi, etc) for implementing projects. The staff at the Western-country offices and the HQ are who you would expect: experienced aid professionals sporting post-graduate degrees from prestigious universities, uniformly residents of the West themselves. The working culture is one familiar to most residents of the West: deadlines, clear job descriptions, hierarchical management structure that provides direction and supervision, etc.

The in-country offices lie at the intersect between the West and developing countries. The offices are physically located in the developing world, but they are part of an international organisation's hierarchy that adheres to Western business practices. It is common in the industry to have Western citizens in senior positions (such as the country director), while the mid-level employees and below are residents of the country itself. The employees are the product of the host country's culture, language, social norms, and business practices, while the senior staff are from another culture entirely.

I'll preface this by saying that neither method of doing things is necessarily 'better'; both can probably accomplish organisational objectives equally well, minus the outlying cases of just outright poor management. However, at the in-country offices, the two ways of operating clash directly, as there is a disconnect between the objectives and procedures of the senior management (hailing from The West) and the lower level implementing staff (residents of the host country).

This disconnect can be bridged if it is acknowledged and mitigated. However, more often than not, it is ignored, allowing poor management practices to flourish. The senior management gets fed up with staff failing to meet deadlines and seemingly ignoring work directives. As they grow increasingly frustrated, they abandon their supervisory roles of ensuring tasks are being completed to standard along the way. Instead, they wait until the deadline arrives, and demand from the staff why the task hasn't been completed. When the task is completed, the supervisor may be surprised to discover it was not done to the standard or according to initial instructions, and then blame the staff; however, it is more likely a result of the supervisor failing in his duty to monitor the progress of his employees, since he found it too difficult to adapt.

Western aid workers should pay more attention to accomplishing their own job description -- providing effective management -- if they want tasks to be completed on time and to standard.

Forget the soldiers-- save the bureaucrats!

This afternoon I tuned into the CBC Ottawa morning show on the internet (I'm living and working in Zanzibar). When the host announced the snippets of the upcoming stories, she said "We've all heard the problems of soldiers coming back from Afghanistan, but this morning we'll talk to a civilian who says the problems are even worse for them." Immediately I groaned and got ready for what was sure to be an interesting story.

The guest spent the first few minutes talking up the danger she and her colleagues faced as civilians stationed in Afghanistan. This was necessary because without establishing herself as a battle-hardened super-bureaucrat, the rest of the story would be a moot point. She admitted that while she was stationed at Kandahar Airfield (KAF) -- where the biggest danger is the Tim Horton's running out of boston cream donuts -- "most of our public servants were stationed at the Provincial Reconstruction Team". She told the listeners that the PRT was based "right in the middle of Kandahar City", emphasizing that this smaller base is in the city and implying that there's some greater danger here.

First, the PRT is probably safer than KAF because it is in the middle of the city and therefore the insurgents cannot lob improvised rockets at the base like they do at KAF. But both are incredibly safe. Second, the civilians in the PRT live in private, bomb-proof shelters, with max 2 people to the room. There's wireless internet, 3 fresh meals a day at the mess, beer call once a month, movie nights, and free laundry service. The guest's attempt to portray the PRT as some sort front-line base where civilian-warriors are living in trenches fighting the Taliban is absurd.

The host attempted to clarify the supposed risk faced by the guest, and asked two probing questions.

Host: "So, you were outside the wire then?"

Renée Filiatrault: "Absolutely, absolutely."

Host: "So you were just as, or even more vulnerable to IEDs [than the soldiers]"?

Renée Filiatrault: "Yes, yes, absolutely."

Hearing this just makes me sick. Civilians based at the PRT go on "patrols" to other sites within the city. These short trips are so short and safe that when I was in Kandahar, my friends who were assigned to protect the civilians referred to themselves as a glorified taxi service. The roads in Kandahar City are paved and full of people, meaning that IEDs are never planted there and the risk of vehicle-borne IEDs is similarly low.

But the real gem of her statement is when she says she's MORE vulnerable to IEDs than the soldiers. How is that possible, Renée? Were you going for strolls outside the wire by yourself? No, you were escorted around in heavily armoured vehicles by Canadian soldiers. So how that makes one more vulnerable I cannot understand.

Some civilians, on the rare occasion, get posted to the forward bases. But even these bases are quite safe from the inside, and the civilians still do not go outside on extended dismounted operations. Renée also made mention of the risk she faced "on the roads" going from KAF to the PRT and back. Of course anything can happen, but this route is travelled multiple times per day by the Canadians and is openly called the "milk run" (my friends and I called it the kessel run, and we could make it in less than twelve parsecs). The idea that she was dodging IEDs every time she took this trip is laughable.

Sightseeing trips inside Kandahar City hardly count as being outside the wire, and certainly does not in anyway expose one to the level of danger experienced on a daily basis by those of us out in the rural districts. Did you ever go on a foot patrol into a village and have an IED planted behind you, which subsequently exploded on your walk back? Did you ever turn up to a district police station only to have a suicide bomber blow the whole place up? Did you get caught in a Taliban ambush, taking small arms fire from three directions? I'm not seeing all these happened to me, but they happen on a regular basis to soldiers who are out fighting the war.

Civilians provide invaluable addition to the mission. They certainly do face reintegration issues, and Renée's point about the need for more services is one that needs making. But it is shameless of her to make her point at the expense of the hard work and sacrifice of me and my fellow soldiers. In doing so, she is drawing attention away from the real issue at hand, and provoking backlash from the people who risked their lives protecting her.

 ****

You can listen to the interview here: http://www.cbc.ca/ottawamorning/episodes/ "Bureaucrats returning from Afghanistan"

Renée was also interviewed for this Maclean's article: http://www2.macleans.ca/2011/07/18/our-best-and-brightest-now-forgotten/