AICHR Thematic Study on CSR and Human Rights in ASEAN

Abstract

This is the official thematic study of the ASEAN Intergovernmental Commission for Human Rights (AICHR) that analyses the relationship between corporate social responsibility (CSR) and human rights. It provides a comprehensive assessment on CSR as it relates to the promotion and protection of human rights in the ASEAN region. Aside from providing a better understanding of the current state of play in relation to the nexus between the two variables above, including the application of international standards in ASEAN context, this Baseline Study also supports policy development in line with the ASEAN Socio‐Cultural Community Blueprint, which calls for CSR principles to be incorporated into the corporate agenda of businesses in the region and contribute towards the sustainable socio‐economic development in ASEAN Member States.

Full text

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2014
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ReportPreparedbyThomasThomas(Leader)andAlexanderChandra
(Member)oftheStudyTeamonBusiness&HumanRightsoftheASEAN
IntergovernmentalCommissiononHumanRights(AICHR)
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1. Background
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TheMemberStatesoftheAssociationofSoutheastAsianNations(ASEAN)arecollectively
undergoingaperiodofrapideconomicdevelopment.AsASEANcontinuestoimproveitscompetitive
strengthinthebusinessarenaandintegratesitselfintotheglobaleconomy,thereisaneedto
ensurethatstandardsincorporategovernanceandaccountability,transparency,andlegitimacyare
tobeobservedandmaintained.Businessesthatarebasedand/oroperatingintheASEANregionare
increasinglyfacingexpectationstodemonstratethattheyoperateinaresponsiblemanner.
Governmentsintheregionarebeginningtoprovideguidancetocompanies,includingthrough
agencies,suchasnationalstockexchangesandcorporateregulators,officialinvestmentinsuranceor
guaranteeagencies,andnationalhumanrightsinstitutions(NHRI).
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Paralleltothisdevelopment,thereisalsoagrowingrecognitiongiventothecorporatesocial
responsibility(CSR)asarelevantconceptandtoolforbusinessentitiestopromoteandprotect
humanrights.Inotherwords,goodbusinesspracticesdonotonlycontributetothepromotionof
andrespectforhumanrights,but,conversely,therespectforhumanrightsalsomakesverygood
businesssenseforcompaniesaswellasforStates.
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ItisagainstthisbackgroundthattheASEANIntergovernmentalCommissiononHumanRights
(AICHR)decidedtopursueabaselineanalysisonthenexusbetweenbusinessandhumanrights.
Accordingly,theCommissionsetupanad‐hocteam(hereaftertobereferredtoasthe‘StudyTeam’)
toimplementthesaidstudyabove.Morespecifically,theBaselineStudy,asarticulatedinitsTerms
ofReference,isexpectedprovideacomprehensiveassessmentonCSRasitrelatestothepromotion
andprotectionofhumanrightsintheASEANregion.Itwasalsoexpectedthattheoutcomeofthe
studycouldserveasthefoundationfortheestablishmentofacommonframeworktoacceleratethe
promotionofCSRandhumanrightsintheregion.Asidefromprovidingabetterunderstandingof
thecurrentstateofplayinrelationtothenexusbetweenthetwovariablesabove,includingthe
applicationofinternationalstandardsinASEANcontext,thisBaselineStudywillalsosupportpolicy
developmentinlinewiththeASEANSocio‐CulturalCommunityBlueprint.TheBlueprint’ssectionon
‘SocialJusticeandRights’callsforCSRprinciplestobeincorporatedintothecorporateagendaof
businessesintheregionandcontributetowardsthesustainablesocio‐economicdevelopmentin
ASEANMemberStates(AMS).
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Ithastobeemphasisedfromthebeginning,however,thatthisbaselinestudyshouldbeviewedin
lightofthefactthatASEANcomposesofMemberStatesthatareofdifferentlevelsofsocio‐
economicdevelopment.Inaddition,differentAMSalsohoststoavarietyofdifferenttypesof
businessenterprisesandindustrysectors.This,accordingly,necessitatestheStudyTeamtoemploy
aholisticandpragmaticapproachinitsassessmentontheCSRandhumanrightsnexus.TheStudy
TeamalsocallsforeffortstounderstandtheuniquesituationfacedbyeachAMSinthisfield,aswell
ascommonbasesforfutureguidance.WhilstacknowledgingtheuniquecharacteristicsofASEAN
anditsMemberStates,thisBaselineStudywillmakestrongreferencetoestablishedinternationally
recognisedframeworks,particularlytheUnitedNations(UN)“Protect,Respect,andRemedy”
frameworkforbusinessandhumanrights,thesubsequentGuidingPrinciplesforBusinessand
HumanRights,andotherrelevantinternationallyrecognisedtoolsandmeasurementstoregulate
corporateconducts.TheseincludetheUnitedNationsGlobalCompact(UNGC)Principles,ILO
DeclarationonFundamentalPrinciplesandRightsatWork,TheISO26000InternationalGuidance
StandardonSocialResponsibilityandtheGlobalReportingInitiative.
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2. AboutthisBaselineStudy
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ThisBaselineStudyonCSRandhumanrightsispartoftheFiveYearsWorkPlanoftheAICHR,1which
wouldallowtheCommissionabetterunderstandingontheemerginghumanrights‐relatedissues
pertainingtocorporateconductsintheASEANregion.AccordingtotheBaselineStudy’stermsof
reference,thespecificaimsofthisexerciseareto,interalia:(1)identifystatepracticesinfacilitating
orencouragingCSR,includingbusinessrespectforhumanrights,ineachoftheAMS,rangingfrom
policiesandprocessestoregulationandenforcementmeasures;(2)highlightCSRpracticesof
ASEAN‐basedbusinessesastheyrelatetohumanrights;(3)exploretheactivitiesofvariousactors
involvedinthepromotionofCSR,particularlywithreferencetohumanrights;(4)assessthelevelof
engagementanddialoguebetweenCSRpromoters,AMS,andbusinessentities,andidentifyareas
wherefurtherengagementwouldbemutuallybeneficial,aswellastoolsandmechanismsthatmay
helptofacilitatesuchengagements;(5)identifyvariousmechanisms,judicialandnon‐judicial,that
wouldallowthevictimsofhumanrightsabusesofcorporateconductstoseekeffectiveaccessto
remedy;and,finally,(6)formulateinitialrecommendationstotheregionasawhole,including
furtherworkstobecarriedout,todevelopacommonframeworktoacceleratethepromotionof
CSRandhumanrightsintheregion.
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TheimplementationofthisBaselineStudywascarriedoutbyaStudyTeam,whichcomprisestwo
primaryexpertresearchers,andtenmembersofNationalFocalPoint,eachnominatedbyeachof
theAICHRmembers.Asidefromsecondarysourcesavailablepublicly,whenandifrelevant,muchof
theinputsgatheredforthisBaselineStudywerecollectedthroughnational‐levelconsultations
carriedoutbyeachoftheNationalFocalPoint.Insomecases,inputsgatheringexerciseswerealso
madepossiblebytheparticipationofmemberoftheStudyTeaminvariouspublicpolicydiscussion
foraorganisedbyvariousstateandnon‐stateentitiesacrosstheregion.TheStudyTeam,
subsequently,consolidatedandperformedacomparativeanalysisofthedataandresearchcollected
bytheNationalFocalPoints.
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3. CSRandHumanRights:WhatandWherearetheLinkages?
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3.1. UnderstandingCSR
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Despiteitsastoundingascendancyinrecentyears,theprinciplesofCSRhaveactuallybeenan
integralpartofenlightenedbusinesspracticesforquitesometimenow(JamaliandMirshak,2006:
244).TheunfortunatelackofconsensusonthedefinitionofCSR,however,hasledexpertsand
practitionersdefineandinterpretthetermfreelyasbestfitstheirpurpose,resultingindefinitions
andinterpretationsthatareoftenbiasedbyunderlyingvalue‐judgementsandideologies
(Kristoffersenetal.,2005:2).Notwithstandingthisfact,CSRhasoftenbeenunderstoodasfirms’
responsibilitynotonlyfortheeconomicconsequencesoftheiractivities,butalsofortheirsocialand
environmentalimplications(AHRC,2008).Itencompassesnotonlywhatcompaniesdowiththeir
profits,butalsohowtheymakethem.ThecurrentunderstandingofCSRshouldgobeyond
philanthropyandcompliance,andaddresshowfirmsmanagetheireconomic,social,and
environmentalimpact,aswellastheirrelationshipinallkeyspheresofinfluence,suchasthe

1AICHR’sFiveYearWorkPlanalsoidentifiesotherninethematicstudiesontheissuesrelatingtohumanrights,whichare
eitherbeingcarriedoutatthemoment,ortobeconductedsometimesinthenearfuture.Theseadditionalthematic
studieswouldcoverissuessuchasmigration,traffickinginperson(particularlywomenandchildren),childsoldiers,women
andchildreninconflictsanddisasters,juvenilejustice,therighttoinformationincriminaljustice,therightstohealth,the
rightstoeducation,therightstolife,andtherightstopeace.FurtherinformationconcerningAICHR’sFiveYearWorkplan
canbeaccessedfromtheofficialwebsiteoftheCommissionat(accessed19December2013):http://aichr.org/documents/

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workplace,themarketplace,thesupplychain,thecommunity,andthepublicpolicyrealm(CSRI,
2008).2
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Thesedays,althoughthetermCSRisoftenusedinterchangeablywiththoseofcorporate
responsibility,corporatecitizenship,socialenterprise,sustainability,sustainabledevelopment,
triple‐bottomline,corporateethics,and/orcorporategovernance,eachwiththeirown
interpretationsofgoodbusinessconduct.Allthesetermspointtothesamedirection–thatisthe
increasingdemandforfirmstocontributetosustainabledevelopment,toengageinpublic‐private
partnershipandthenecessityforthemtobeaccountablenotonlytotheirshareholders,butalsoto
otherstakeholders,suchastheiremployees,consumers,suppliers,localcommunities,policy‐
makers,andsocietyatlarge(CSRI,2008).ThereisalsoarisingconvergenceinCSRprinciplesand
practiceamongtheslewofinitiativesandtools.
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3.2. WhyUseCSRasaTooltoPromoteandProtectHumanRights?
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ThereareatleasttwomajorreasonswhyCSRcanbeausefultooltoassistthepromotionand
protectionofhumanrights.Firstly,thereisincreasingevidencethatagrowingnumberoffirms,
especiallylargeones,areintegratingCSRintotheircorebusinessactivities.Theshrinkingroleand
resourcesofgovernmenttoadequatelyaddresssocio‐economicproblemsintheirterritoriesandthe
increasingdemandandpressuresfrominvestorsandconsumersforfirmstoactsociallyresponsibly
aresomeofthekeydriversthatencouragefirmstoutiliseCSRintheircorebusinessactivities.
Accordingly,theuseofCSRasatooltopromoteandprotecthumanrightsdoesnotnecessarily
createanadditionalobligationforfirms,but,instead,encouragesfirmstosharpentheirCSR
activitiestocovertheissueofhumanrights.
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Secondly,asinthecasewiththepromotionofCSRwithinthefirmsitself,increasedmediaattention
ontherolesthatfirmsplayininstigatinghumanrightsabusesgloballyhasalsoledtoincreased
awarenessamongstinvestorsandconsumerstopressurefirmstopursuebusinessconductsthatare
sensitivetohumanrights.Arecentsurveyamongst1,000adultsof18yearsorolderinNovember
2013bytheKPMG,forinstance,suggeststhatnearly70percentofconsumersundertheageof30
considersocialissues,suchassustainability,humanrights,andfairtradebeforemakingtheir
purchases.3Althoughtheabove‐mentionedsurveyfocusedonUS‐basedconsumers,theso‐called
Generation‘X’and‘Y’ofSoutheastAsiaarelikelytocatchupwiththistrendsoonerorlater.Overall,
thereiscertainlyanincreasingrecognitionamongstfirmsthattherespecttowardshumanrightscan
addvaluetotheirbusinesses.

Itispreciselybecauseofthisthattherearenowincreasingnumberoffirmsthatincorporatehuman
rightsconsiderationsintheirupstream(e.g.policy)anddownstream(e.g.practiceandevaluation)
CSRstrategy.TheJapaneseelectronicsgiant,Toshiba,forinstance,hasincorporatedhumanrightsin
itsCSR,aswellasitswideractivities.Itsso‐called‘StandardsofConduct’stipulatesthenecessityof
thefirmanditssubsidiariestoadhere‘toallrelevantlawsandregulations,respectforfundamental

2AmongstsomerelevantdefinitionsofCSRincludethatoftheUNGlobalCompact(2013:4),whichdefinesthetermas‘a
company’sdeliveryoflong‐termvalueinfinancial,social,environmental,andethicalterms’,andthatoftheEuropean
Union’s(EU)thatdescribestheCSRas‘aconceptwherebycompaniesintegratesocialandenvironmentalconcerninintheir
businessoperationsandintheirinteractionswiththeirstakeholdersonavoluntarybasis’(EuropeanCommission,2011:3).
AnotherrelevantdefinitionforCSRisprovidedbytheISO26000(n.d.),whichrefersCSRasthe‘responsibilityofan
organisationfortheimpactsofitsdecisionsandactivitiesonsocietyandtheenvironmentthroughtransparentandethical
behaviourthat[:(1)contributestosustainabledevelopment,includinghealthandthewelfareofthesociety;(2)takesinto
accounttheexpectationsofstakeholders;(3)isincompliancewiththeapplicablelawandconsistentwithinternational
normsofbehaviour;and(4)Isintegratedthroughouttheorganisationandpracticedinitsrelationship’.
3AsquotedfromthePRNewswire(2013).

5

humanrights,andprohibitionofdiscriminatorytreatment,childlabourandforcedlabour’.4
Moreover,despitebeingfrequentlyaccusedofbeingahumanrightsviolator,theoperationofthe
BritishPetroleum(BP)inIndonesiaisincreasinglyguidedbythefirm’shumanrightspolicywhichthe
firmclaimstobeinlinewiththeUNUniversalDeclarationofHumanRightsandtheVoluntary
PrinciplesonSecurityandHumanRights.5

Furthermore,formalcollaborationsamongstmajormultinationalcorporations(MNCs)toadvance
thepromotionofhumanrightsarealsocommonthesedays.Onesuchcollaborationcanbeseenin
theframeworkoftheGlobalBusinessInitiativeonHumanRights(GBI),whichwaslaunchedin2009
withtheaimofadvancinghumanrightsinabusinesscontextaroundtheworld.Ledbyacoregroup
of18majorMNCsheadquarteredacrosstheglobe,theGBI’sactivitiesarefocusednotonlyonthe
recognitionontheimportanceoffirmsfromallglobalregionstocommittohumanrightsprotection,
butalsoonthedeepeningofpeerlearningwherebythefirmsinvolvedintheinitiativecouldshare
bestpracticesintheadvancementofhumanrightsintheirbusinessactivities.6

Inadditiontotheseinitiatives,CSRactivitiestodayarealsocomplementedwitharangeofglobal
corporategovernancetoolsandmeasurementsthatcouldpotentiallyenhancefirms’commitments
tohighbusinesspracticesandstandards.Amongstsomeoftheseinitiativesinclude,interalia,ISO
26000,7theUnitedNationsGlobalCompact(UNGC),8GlobalReportingInitiative(GRI),9Extractive
IndustriesTransparencyInitiative(EITI),10and,ofcourse,thealreadymentionedUNGuiding
PrinciplesonBusinessandHumanRights(UNGP).11Recently,therehasalsobeenaneffortto

4AshighlightedintheCSRSectionoftheofficialwebsiteofToshibaat(accessed19December2013):
http://www.toshiba.co.jp/csr/en/performance/human_rights/policy.htm
5AshighlightedintheofficialwebsiteoftheBPat(accessed19December2013):
http://www.bp.com/sectiongenericarticle.do?categoryId=9004774&contentId=7009150
6TheactivitiesoftheGBIarebuiltonthepioneeringworkofthenowdefunctBusinessLeadersInitiativeonHumanRights.
AmoredetailedinformationconcerningtheGBIisavailableontheInitiative’sofficialwebsiteat(accessed19December
2013):http://www.global‐business‐initiative.org/
7Launchedin2010,ISO26000providesguidanceonthewaysinwhichbusinessesandorganisationscanoperateina
sociallyresponsibleway.UnlikeotherISOstandardswhichrequirescertification,ISO26000onlyworksasaguidanceto
assistfirmstoactinanethicalandtransparentwaythatcontributestosustainabledevelopment,includingthehealthand
welfareofsociety.Asidefromclarifyingthedefinitionofsocialresponsibility,ISO26000alsoassistsbusinessesand
organisationstranslateprinciplesintoeffectiveactionsandallowsthesharingofbestpracticesrelatingtosocial
responsibilityatthegloballevel.FurtherinformationconcerningISO26000isavailablefromitsofficialwebsiteat
(accessed2January2014):http://www.iso.org/iso/home/standards/iso26000.htm
8TheUNGCisastrategicpolicyinitiativebytheUNtoencoragebusinessestoaligntheiroperationsandstrategieswiththe
tenuniversallyacceptedprinciplesintheareasofhumanrights,labour,environment,andanti‐corruption.Itwasexpected
that,bydoingso,businesses,asprimarydriverofglobalisation,canhelpensurethatmarkets,commerce,technology,and
financeadvanceinwaysthatbenefiteconomiesandsocietieseverywhere.Itisthelargestcorporatesustainability
initiativeintheworld,witharond10,000signatoriesbasedinmorethan140countries.Furtherinformationconcerningthe
UNGCinitiativeisavailablefromitsofficialwebsiteat(accessed2January2013):
http://www.unglobalcompact.org/
9TheGRIisaleadingorganisationisanon‐profitorganisationthatpromoteseconomicsustainability.Morespecifically,it
promotestheuseofsustainabilityreportingasawayfororganisationstobecomemoresustainableandcontributeto
sustainabledevelopment.ItssustainabilityreportingisalsoknownastheEcologicalFootprintReporting,the
EnvironmentalSocialGovernanceReporting,theTripleBottomLineReporting,andtheCorporateSocialResponsibility
Reporting.FurtherinformationconcerningtheGRIisavailablefromitsofficialwebsiteat(accessed2January2014):
https://www.globalreporting.org/Pages/default.aspx
10EITIisaglobalcollaborationofgovernments,firms,andcivilsocietytoimprovetheopennessandaccountable
managementofrevenuesfromnaturalresources.CountriesthatimplementtheEITIstandardareexpectedtoensurefull
disclosreoftaxesandotherpaymentsmadebyoil,gas,andminingcompaniestogovernments.Thesepayments,
subsequently,aretobepblishedintheannualEITIreport,whichisavailablepublicly.FurtherinformationontheEITIis
availablefromitsofficialwebsiteat(accessed2Janary2014):
http://www.eiti.org
11TheUNGPsareaglobalstandarforpreventingandaddressingtheadverseimpactsonhumanrightslinkedtobusiness
activity.ItwasunanimouslyendorsedbytheUnitedNationsHumanRightsCouncilastheframeworkforcorporatehuman
rightsresponsibilityinitiativeoftheUN.Itencompansesthreemainpillarsonthewaysinwhichbusinessescould

6

developtwinstandardsforhumanrightsreportingandassurance.DubbedastheBusinessand
HumanRights‘ReportingandAssuranceFrameworkInitiative’(RAFI),theproject,whichiscurrently
beingdevelopedbyMazars,aglobalauditingandaccountingfirm,andShift,anon‐profitcentreon
businessandhumanrights,hasspecificaimstointroducenotonlyastandardforcompaniestoissue
aHumanRightsStatementthatstatestheextenttowhichtheirinternalpoliciesandprocessesalign
withtheNGP(the‘reportingstandard’),butalsoastandardforindependenthumanrightsassurance
providerstoprovideaHumanRightsAssurancethatatteststhatthecompany’sHumanRights
Statementisafairrepresentation(the‘assurancestandard’)(MazarsandShift,2013:3).12Overall,
allthesetoolsandmeasurementsdonotonlyassisttheimprovementoffirms’internalgovernance,
buttheycanalsoserveasvoluntaryplatformstoexpandfurthertheaccountabilityandtransparency
oftheircorporateconductsvis‐a‐visthewiderpublic.

3.3. PotentiallimitationsofCSRinaddressingbusinessandhumanrightsnexus

Whilstpossessingmuchpotentialtoserveasacorporategovernancetool,CSRmightnotbethe
mostcomprehensiveapproachtoaddressthecomplexrelationsbetweenbusinessandhuman
rights.Asidefromthefactthatmostfirmsarestillcomingtogripwiththeirhumanrights
responsibilitiesasaresultoftherelativelyrecentemergenceofacomprehensivelegalframework
surroundingbusinessandhumanrights(Johnson,2013),thereareatleastfiveotherpotentially
weakpointsofCSRasatooltobridgebusinessandhumanrightsrelationship.Someofthesepoints
canbeinterrelatedtooneanother.

Firstly,CSR,sinceitsinception,hasbeengenerallythoughtofasa‘voluntary’initiativeundertaken
byfirmstooperateinaneconomically,sociallyandenvironmentallysustainablemanner.Whilst
thereisincreasingevidenceofmultinationalfirms’willingnesstoadoptahuman‐rightssensitive
CSR,thereislittleguaranteethatall‘voluntary’CSRinitiativescanbehumanrightsfriendly.Indeed,
asarguedbyMiddletonandPritchard(2013:61),althoughCSRpolicieshavethepotentialtocommit
businesstohighstandardsofpracticeintheabsenceofrigorouslegalrequirementsbythestate,
theycanalsobeusedasameanstohidepoorpracticesbehindpublicrelationcampaigns.Toalarge
extent,thetruenatureofCSRactivitiesremainsambiguousinthemindofbusinessandpolicy
decision‐makersinAsiagenerally(Debroux,2006:17).Moreover,therelativelyhighlevelsof
corruption,weakcivilandpoliticalrights,andconstrainedmediainASEANmightrenderCSRan
ineffectivetooltoaddressthecomplexbusiness‐humanrightsrelationship(Middletonand
Pritchard,2013:61).

Secondly,andinrelationwiththefirstpointabove,themajorityofCSRactivitiescarriedoutbyfirms
inAsiaremainsphilanthropicinnature.Thoughitistruethat,inthecontextofAsia,theso‐called
‘classicalphilanthropy’,suchasbuildingschools,hospitals,andculturalinstitutions,isfarfrombeing
anadded‐onandisdrivenbysocialnecessity(Sharma,2013:29),firmsintheregion,byandlarge,
arestilllaggingbehindincomparisontotheirWesterncounterpartsintakingintoaccountwider
strategicsocialconsiderations,suchashumanrightsandemployment,intotheirCSRactivities
(Debroux,2006:19).13

implementtheframework,whichinclude:(1)statedutytoprotecthumanrights;(2)corporateresponsibilitytorespect
humanrights;and(3)accesstoremedyforvictimsofbusiness‐relatedabuses.FurtherinformationconcerningtheUNGPis
availablefrom,interalia,BusinessandHumanRightsResourceCenter’sofficialwebsiteat(accessed2January2014):
http://www.business‐humanrights.org/SpecialRepPortal/Home/Protect‐Respect‐Remedy‐Framework/GuidingPrinciples
12TheinitialconsultationsonthedevelopmentofthisprojecthasbeenfocusedonASEAN.Furtherinformationconcerning
RAFIisavailablefromtheofficialwebsiteoftheShiftat(accessed7January2014):
http://shiftproject.org/project/human‐rights‐reporting‐and‐assurance‐frameworks‐initiative‐rafi
13Elsewhere,however,Debroux(2008:25)alsoobservesthatrecentinitiativesfromAsianfirmsshowthattheybecome
moreactiveinthisrespect.Whilstforthetimebeingthefocusonenvironmentalissuesisdominant,agrowingnumberof

7


Thirdly,inlinewiththefirsttwopointsabove,althoughmanyofCSRactivitiesoriginateinthefield
orfromthestaffina‘bottom‐up’approach,manyofsuchinitiativesarealsodeterminedthrougha
‘top‐bottom’approach,withtopexecutivemanagementmakeskeydecisiononthewayinwhich
theirCSRinitiativesaretobeformulatedandimplemented(Rangan,2012:3).Incontrast,human
rights,byitsverynature,isa‘bottom‐up’process̶inthatitisbasedontheinherentdignityof
everyperson,andtheseincludebasicrightsandfreedomstowhichallhumansareentitled(Avery,
2006).Whenitcomestohumanrights,asAveryfurthermaintains,however,firmsdonotnecessarily
gettopickandchoosefromarangeofissueswithwhichtheyfeelcomfortabletoworkon.
Accordingly,whilstthereiscertainlyastrong‘businesscase’forrespectinghumanrights,firms
shouldbeobligedtorespecthumanrightsatalltimes,notjustwhenitsuitsthem.

Infact,fromtheperspectiveofhumanrightslaw,notonlyisitacomplextasktoidentifythehuman
rightscontentofCSR,itisequallychallengingtoidentifytheobligationsoffirmsinrelationtoissues
suchaslabourstandardsandinternationalcrimes,mostofwhichariseduetouncertaintyofrules
regulatingtheseissues,aswellasthenon‐legalnatureofthesubstantialpartoftheseobligations
(Ogutuga,2010:).Accordingly,asOgutugaemphasisesfurtherinhisargument,CSRdoesnot
necessarilyaddanyextra‘protection’intheprotectionofhumanrights.Sincetheapplicationof
internationalanddomesticconstitutionallawofhumanrightsintheterritoryofacountryis
unequivocalandapplicabletoallorganisations,suchasgovernmentbodies,firms,etc.,thescopeof
humanrightsnormsapplicationshouldbelimitedto‘humanrights’whichcanbedirectlyaffectedby
firms.

Fourthly,itisalsoimportanttostressthatcorporatebehaviourthesedaysarealsoaffectedby
internationalcommercialtreaties(e.g.tradeandinvestment).Unfortunately,theexistingtrendsof
CSRinSoutheastAsia(e.g.‘voluntary’,‘top‐bottom’,and‘philanthropic’)areinsufficientfor
businessestorespecthumanrights.Despitetheirapparentdifferencesofnormativepriorities
regardingefficiencyandjustice,thediscoursesoninternationalcommercialtreatiesandhuman
rightshavemultiplerelatedcontextsandmutualinfluences(Potter,2012:vi).Forinstance,States’
obligationsundertheWorldTradeOrganisation(WTO)andinternationalinvestmenttreatiesmay
constrainregulatorymeasurestoensurebusinessrespecthumanrightsandtopreventbusiness
activitiesthatcouldresultinsocialandenvironmentalharm(Lim2013:45).Twocasesbelow
highlightthewayinwhichinternationalcommercialtreaties,whichareessentiallegalframeworks
withinwhichtransnationalfirmspursuetheircross‐borderoperations,couldpotentiallyhamperthe
promotionandprotectionofhumanrights.

Thefirstcaselooksatthelinkagesbetweeninternationaltradeagreements,intellectualproperty
rights(IPR)andaccesstomedicine.Whilstitistruethatintellectualpropertyregimegenerallyseeks
tobalancethemoralandeconomicrightsofcreatorsandinvestorswiththewiderinterestsand
needsofthesociety(Chapman,1998:1),itisalsowidelyrecognisedthatthecallbymany
pharmaceuticallobbygroups,especiallythosefromdevelopedcountries,fortheexpansionof
patentprotectionthroughfreetradeagreements(FTAs)increasesnotonlythepriceofmedications,
butalsolimittheaccessibilityofaffordablemedicinesbythepoor.Unfortunately,fearfulof
sanctionsanddesiresofincreasedtariffliberalisation,developingcountriesoftentradeawayIPR
provisionswithimportantpublichealthimplicationsforostensibleeconomicbenefits(Brennanet
al.,2013:6).Forinstance,inthecurrentnegotiationsoftheUS‐ledTrans‐PacificPartnership(TPP),
majorhumanitarianorganisationssuchasMedecinesSansFrontier(DoctorsWithoutBorders)argue
thatthenewIPRrulestobeimposedbytheTPPcouldseverelyrestrictaccesstoaffordable,life‐

AsianfirmsarealsostartingtoadoptCSRpracticesandreportingstandardsembeddingabroaderdefinitionofCSR,
includingresponsibilityvis‐a‐visworkersandhumanrights.

8

savingmedicinesformillionsofpeople(MSF,2012:1),especiallythoseindevelopingandleast‐
developedcountries.

Theconcernovertheincreaseinpriceofmedicinesisnotonlyprevalentamongstthedeveloping
andtheleastdevelopednations,butisalsoincreasinglycommonevenamongstsomedeveloped
countries.ThePharmaceuticalBenefitScheme(PBS)isapharmaceuticalpricingschemethatwas
introducedbytheAustraliangovernmentin1948toaddressconcernsontheavailabilityofvitalnew
medicines,suchaspenicillin,toallAustralians.Overtime,theschemehasturnedintoamulti‐billion
dollarsubsidytohealthcareconsumerswherethefederalgovernmentwouldfundanydifference
betweenthemaximumco‐paymentandthefullpricepaidtothepharmaceuticalfirms.Ayear
leadingtothecompletionoftheUS‐AustraliaFTA,however,theUSpharmaceuticalindustrylobby
group,thePharmaceuticalResearchandManufacturersofAmerica(PhRMA),anditscounterpartin
Australia,MedicinesAustralia,mountedacampaigntoconvincenegotiatorsfrombothsidesthat
AustralianPBSisabarriertotrade.TheselobbygroupsarguedthattheAustralianPBSwasinneed
ofmajorreformsoastoallowa‘win‐win’FTAforbothsides.TheattackonthePBSprovidesa
compellingexampleonthewayinwhichfreetradeargumentsareenlistedtounderminesocial
policiesthatactnotasbarrierstotrade,buttopreventexcessprofiteering(Hamiltonetal.,2013:
373‐375).14

Anothercaseunderlinesthepotentialproblemsthatinternationalinvestmenttreatiesmayhaveon
thepromotionandprotectionofhumanrights.Asinthecasewithmanyofitsneighboursinthe
region,Australiahassignednumerousbilateralinvestmenttreaties(BITs)sincetheendof1980s.A
numberofitsFTAsalsocoverInvestmentChapter,whichincludetheso‐calledinvestor‐state
arbitrationprovisions(Mangan,2010).15Usingthe1993Australia‐HongKongBIT,PhilipMorrisAsia
(PMA),whichisbasedinHongKong,filedalawsuitagainsttheAustraliangovernmentoverthe
latter’sdecisiontomakeplainpackagingmandatoryforcigarettesfromDecember2012.16This
policywasaimedforthepurposeofcurbingcigarettesmokinginthecountry.WhilstCanberra
statedthatthelawwas‘oneofthemostmomentouspublichealthmeasuresinAustralia’shistory’
(BBCNews,2011),thePMAarguedthatthisnewpolicywouldhaveadverseimpactsontheindustry,
suchastheincreaseofcounterfeitcigaretteinthemarket,andconsequently,thelossofprofit
(PMA,2011).Thiscaseillustratestheabilityofgiantglobalcorporationstoabuseinternational
commercialtreaties,oftenattheexpenseofhumanrightsprotection.

Finally,muchofthecurrentdebatesonCSRandhumanrightsnexushavebeencentredonlarge
companies,withlittleattentiongiventosmall‐ andmedium‐sizedenterprises(SMEs).Indeed,not
onlyhasthevastmediaattentiongiventolargecompaniesmadethemparticularlyconcernedto
protectandenhancetheirreputation,theyarealsogenerallybetterresourcedtoinvestinCSR
activitiescomparedtotheirSMEcounterparts(Smith,2013).Withregardtohumanrightshowever,
SMEscanbeasresponsibleaslargecompaniesininstigatingtheinfringementofhumanrights.
GiventhelargeproportionofSMEsinmanyeconomies,theirpoliciesandactionscanhave
considerableimpactsonsocial(e.g.income,workingconditionsandworkingenvironment)and

14Forothercaseexamplescoveringtherelationshipbetweeninternationalcommercialtreatiesandhumanrights,see,
interalia,Lim(2013:45‐51).
15ISAprovisionnormallyallowsahomestate’sinvestortobringclaimsdirectlyagainstthehoststateforillegally
interferingwithitsinvestment,thusstrengtheningtheprotectionoftheformer’sinvestmentinthelatter.Accordingly,we
havewitnessedtheincreasepressuresfromforeigninvestorsforISAprovisiontobeaddedintheinvestmenttreatiesthat
hoststatesconcludewithhomestates(Nottage,2012:2).
16PhilipMorrisisaUS‐basedfirm.AlthoughAustraliahasanFTAwithAustralia,thisFTAdoesnotincludeaprovisionon
investor‐statedisputesettlement.Suchaprovision,however,isavailableinAustralia‐HongKongBIT.Preciselybecauseof
thisthatPhilipMorrisdecidedtouseitssubsidiaryinHongKongtofilethelawsuitagainsttheAustraliangovernment.

9

environmental(e.g.pollution)issues(Jeppesenetal.,2012:9).Small‐ andmedium‐sizedBatik17
producersinSolo,Indonesia,forexample,havebeenallegedtohavedumpedlargeamountsoftheir
wastetotheJenesRiverthatrunsthroughthecity.Thescaleofthepollutionintheriverprompted
thelocalauthoritytoinitiateacapacitybuildinginitiativetoallowSMEstobettermanagetheir
waste(SoloPos,2012).

WhilstsomeattentionhasrecentlybeengiventothepotentialroleofSMEstoprotecthumanrights
atthegloballevel,sucheffortsremainaworkinprogress.Thisperceptionis,ofcourse,changing.
SMEsareincreasinglyfindingthemselvesaspartofavaluechainprocesswherelargecompanies
demandtheirsmallandmedium‐sizedsupplierstopaymoreattentiontotheirsustainability
performance(Smith,2013).Notwithstandingthisfact,ifCSRistoserveasameanstoimprove
corporateconductsintheareaofhumanrightsinASEAN,itisimperativethatthisshouldcoverfirms
ofallsizes.

Itisnotsurprising,therefore,thattheuseofCSRasatooltoaddressbusinessandhumanrights
nexusisoftenviewedwithscepticism.Indeed,somenationalandregionalhumanrightsnon‐
governmentalorganisations(NGOs)andcivilsocietynetworksinASEAN,suchastheAsianForumfor
HumanRightsandDevelopment(Forum‐Asia)andtheSolidarityforAsianPeople’sAdvocacy(SAPA)
TaskForceforASEANandHumanRights,havecalledonAICHRandASEANtoadopttheso‐called
‘humanrights‐basedapproachtocorporateaccountabilityinASEAN’instead.Asidefromthefact
thatthereisnotyetanagreedupondefinitionofCSRandnoauthoritativeassessmentofthe
performanceofCSRinASEAN,thehightendenciestowardshighlevelofcorruption,weakciviland
politicalrights,andconstrainedmediawouldlikelyincreasetherisksofpoorbusinesspracticesin
theregion.Accordingly,theineffectivenessofthe‘voluntary’CSRapproachreinforcestheneedfor
strong,enforceableandcomprehensivecorporateaccountabilitystandardsatnationalandregional
levels(MiddletonandPritchard,2013:61).


4. DifferentapproachestoCSR:LearningfromOthers

CSRisincreasinglybecominganintegralpolicycomponentofmanyregionalinstitutionsacrossthe
world.Theapproachtheytakevariesbasedtheirexperience,valuesandnational/regionalpriorities.

AmongstregionalinstitutionsistheEuropeanUnion(EU),whichhassincetheearly1990s,urgedits
businesscommunitytotakeamoreactivestanceagainstsocialexclusion.Theformulationand
implementationofCSRpolicywasusednotonlytomaximisebenefitsandminimisenegativeimpacts
ofeconomicintegration,butalsotoachievetheoverallequitableandinclusivegrowth.(M.Mohan,
2011)

In2001,theEuropeanCommissionproducedagreenpaper,entitled:‘PromotingaEuropean
FrameworkforCorporateSocialResponsibility’whichoutlinednotonlythegrouping’sCSR
principles,butalsointroducedsometools,andsetoutnumerousquestionsforrelevantEU
institutionstoaddressinrelationtoCSRpromotionintheregion.Inits2008European
CompetitivenessReport,theCommissionalsodedicatedonewholechapteronthenexusbetween
CSRandcompetitiveness.TheReportspecificallyarguesthatCSRnotonlyhasasocial,moral,and
ethicalimperative,butisalsogoodbusiness(TheEuropeanCommission,2009).18


17BatikisanIndonesiantraditionalcloththatismadeusingamanualdyeingtechniquethathasbeenselectedinthe
culturalheritagelistoftheUnitedNationsEducational,Scientific,andCulturalOrganisation(UNESCO).
18See,inparticular,Chapter5ofthe2008EuropeanCompetitivenessReport.

10

Subsequently,inOctober2011,theEuropeanCommissionlauncheditsrenewedstrategyforCSRfor
the2011to2014periodasafollowupofitsearliercommitmentstoenhancethepromotionofCSR
intheregion.19Inthisstrategicdocument,theEuropeanCommission(2011:4)maintainsthat,whilst
theeconomiccrisisanditssocialconsequenceshave,tosomeextent,damagedconsumer
confidenceandleveloftrustinbusiness,therenewingeffortstopromoteCSRwereexpectedto
createsustainablegrowth,responsiblebusinessbehaviour,anddurableemploymentgenerationin
themediumandlong‐term(p.6).20

InordertoimprovethepromotionandimplementationofCSRacrosstheregion,theEUalsoholds
theso‐called‘EuropeanMultistakeholderForumonCSR’onaregularbasis.TheForum,whichwas
establishedin2002,ishostedandfacilitatedbytheEuropeanCommissionandbringstogether
representativesfromEuropeanbusinesscommunities,tradeunions,non‐governmental
organisations(NGOs),andotherstakeholdergroups.21 

Historically,Japanesebusinesseshavealsotakentheinterestofsocietyintheconductofbusiness.
ThetraditionalJapanesebusinessphilosophyforbusinesslongevity,“Sanpo‐Yoshi”findsitsrootsin
theOmimerchantsofover800yearsago.Ittranslatesas“goodfor3parties”,meaningtheseller,
buyerandsociety.22

TheJapaneseBusinessFederation(Keidanren),incontinuingwiththetraditionofbusinessaspartof
Society,playingaroleinaddressingsocialissues,incorporatesCSRvaluesintheir“Charterof
CorporateBehaviour”since14Sept1991.ThisCharterhasgonethroughseveralrevisionskeeping
uptodatewithsocietalexpectationsandtrends.Thelatestand6threvisiontookplaceon14thSept
2010,andincorporatesguidancefromISO26000,andinitsforewordstates“Inrecentyears,theidea
thatallorganisationsshouldrealizeanddischargetheirsocialresponsibilityforsustainable
developmentofSociety”.2399%ofJapanesecompanypublishesasustainabilityreportontheir
operationstoshowtheiraccordingtotheKPMGInternationalSurveyofCorporateResponsibility
Reporting2011.24

WithintheJapanesegovernment,leadershipinCSRcomesfromtheMinistryofEconomy,Tradeand
Industry(METI).TheycoordinateCSRworkwithothergovernmentagencies,conductresearchand
organizemultistakeholderroundtableconferencestoserveasaframeworkforcollaborative
efforts.25

19ForfurtherdetailsontheEU’srenewedstrategyontheCSR,seeEuropeanCommission(2011).
20InitsrenewedstrategyforCSRfortheperiodof2011‐2014,theEuropeanCommissionidentifiedeightmajoragendasto
bepursued,andtheseincluded:(1)theenhnacementofthevisibilityofCSRandthedisseminationofgoodpractices(such
asthroughthecreationofanEuropeanaward,andtheestablishmentofsector‐basedplatformsforenterprisesand
stakeholderstomakecommitmentsandjointlymonitorprogress);(2)theimprovementoftruststowardsbusinesses(e.g.
throughtheorganisationofpublicdebatesontheroleandpotentialofenterprises,etc.);(3)thedevelopmentofashort
protocoltoguidethedevelopmentoffutureself‐andco‐regulationinitiatives;(4)theenhancementofmarketrewardsfor
theimplementationofresponsiblebusinessconducts;(5)theimprovementoffirms’disclosureofsocialandenvironmental
information;(6)theintegrationofCSRintoeducation,training,andresearch;(7)theemphasistobegiventothe
importanceofnationalandsub‐nationalCSRpolicies;and(8)thealignmentofEuropeanandglobalapproachestoCSR
(EuropeanCommission,2011:8‐15).
21ForfurtherdetailontheEuropeanMultistakeholderForumonCSR,see,theEuropeanCommission(n.d.).
22SanpoYoshiisexplainedas:“Whenyougoabroadtodobusiness,itismostimportanttoalwayskeepinmind:‐Tomake
surethatthegarmentsyouaresellingsatisfyallcustomersinthatcountry;‐Thinkandactcustomersfirst;‐Neveraimfor
ashorttermhighprofit;‐BehumblethatyouaredependentonGod’sblessing;‐Dobusinesswithacaringmindforthe
peopleintheregion;‐NeverlosefaithinGodinordernottohaveamaliciousmind.
Bysodoing,youareinlinewithreasonandwillbeabletokeepahealthybodyandmind.”(source:
www.meti.go.jp/english/policy/economy/corporate_accounting/pdf/121114_11.pdf
23www.keidanren.or.jp/english/policy/csr.htm
24http://www.kpmg.com/TW/zh/Documents/ccs/KPMG‐international‐corporate‐responsibility‐reporting‐survey‐2011.pdf
25http://www.meti.go.jp/english/policy/economy/corporate_accounting/pdf/121114_11.pdf

11


IntheUS,theStateDepartmenthasaCorporateSocialResponsibility(CSR)teamintheBureauof
EconomicandBusinessAffairstoleadtheDepartment’sengagementwithU.S.businessesinthe
promotionofresponsibleandethicalbusinesspractices.EB’sCSRteamcoordinatesacross‐
functional,intra‐departmental,andinteragencyteamtoprovidesupportandguidanceonmajor
areasofresponsiblecorporateconduct.Theyworkwithbusinessestosupport,partnerand
promotetheruleoflawandrespectforhumanrights.“TheUSexpectscompaniestoactina
responsiblemannerthroughouttheiroperations”.ThegovernmentactivelysupportstheOECD
GuidelinesforMultinationalEnterprises.26

UScompaniesareglobalandhave,inreactiontoexpectationsofstakeholders,beenresponding
withresponsiblebusinesspractices.TheyhaveleadingexamplesininnovativeCSRpractices.

WithinASEAN,everyNationalFocalPointhasbeenabletocitegoodpracticesofcompaniesintheir
country.ThereisnoshortageofgoodpracticesintheAMS.Thismeansthatwecanlearnfromeach
othertoreachandgobeyondglobalstandardsonCSR.


5. ThegeographiesofcorporatesocialresponsibilityintheASEANregion:Policiesandpractices

Table1.SelectedbasicASEANindicators(asof31January2014)



Countries
Totalland
area
Total
population
Population
density
Annual
population
growth
GDPat
current
prices

GDP/capita
Km2ThousandsPersons/
Km2
PercentUS$millionUS$US$million
ppp
2012201220122012201220122012
Brunei5,769399.8691.716,969.742,445.555,399.6
Cambodia181,035 14,741.481 1.5 14,411.2 977.62,515.6
Indonesia1,860,360244,775.81321.5878,223.43,587.94,971.4
LaoPDR236,8006,514.4282.09,083.11,394.32,904.5
Malaysia330,290 29,518.089 1.6 305,154.4 10,337.916,975.4
Myanmar676,57760,976.0891.052,524.9861.41,450.2
Philippines300,00097,690.93261.9250,5422,564.64,339.4
Singapore7155,312.47,429 2.5 276,609.5 52,068.761,461.2
Thailand513,12067,912.01320.5366,126.65,391.29,610.8
Vietnam330,95188,772.92681.1141,669.11,595.93,706.5
ASEAN4.435,617616,613.7139 1.4 2,311,314.7 3,748.45,865.4
Source:ASEANSecretariat(2014).

Despitebeingaroundforquitesometimenow,CSRisrelativelyanewsubjectintheASEANregion.
AlthoughskepticsarguethatCSR,atleastforthetimebeing,isunlikelytobecomeadecisivesource
ofcompetitiveadvantageintheregion(Debroux,2006:21),itisgainingpopularityamongst
businesses,albeitslowlyandunevenly.Itisimportanttonote,however,thattheASEANregionis
extremelydiverseinmanyways,andtheseareevidencedintheregion’spolitical,economic,socio‐
culturalstructures.Table1highlightsthediversityoftheregion,intermsoflandarea,population,
andgrossdomesticproduct(GDP).




26http://www.humanrights.gov/2013/05/01/u‐s‐government‐approach‐on‐business‐and‐human‐rights/


12

Table2.MembershipoftheACNandtheUNGCbusinesssignatoriesacrossASEAN(asofMarch
2014)
CountriesMemberoftheACN?AnyUNGCbusiness
signatories?
NumberofUNGC
signatories
UNGCnetwork?
BruneiDarussalam NoNo1No
CambodiaNoNo 0No
IndonesiaYesYes111Yes
LaoPDRNoNo1No
MalaysiaYesYes 61 Yes
MyanmarYesYes65Yes
PhilippinesYesYes55Yes
SingaporeYesYes 65 Yes
ThailandYesYes36No
VietnamYesYes66Yes
Source:Authors’ownresearchfortheACN,andUNGC(n.d.).

Asinthecasewithitspolitical,economic,andsocio‐culturalstructures,thedevelopmentofCSRin
theregionisalsodiverse.This,toalargeextent,isareflectionofthefundamentaldifferencesin
economicandsocialdevelopment,aswellaspriorities,foreachoftheAMS.ThediversityofCSR
developmentacrosstheregioncanalsobemeasuredthrough,amongstotherthings,the
representationoforganisationfromeachoftheAMSintherecentlysetupASEANCSRNetwork
(ACN)27andfirmsfromeachoftheAMSsigninguptothe10PrinciplesoftheUNGlobalCompact
(UNGC).Table2illustratessuchadiversity.

InordertoeasetheanalysisofpoliciesandpracticesofCSRacrosstheASEANregion,theStudy
TeamgroupsthetenAMSintothreecategories:HigherIncome(SingaporeandBruneiDarussalam),
MiddleIncome(Indonesia,Malaysia,thePhilipppines,Thailand,andVietnam),andLowerIncome
(Cambodia,LaoPDR,andMyanmar).

5.1. ASEAN’shigherincomecountries:SingaporeandBruneiDarussalam

5.1.1. Theenablingenvironmentforcorporatesustainability

 NationalgovernmentsplayamajorroleinsettingtheCSRagenda

InSingaporeandBrunei,thetwosmallestandwealthiestcountriesintheASEANregion,the
governmentplaysalargeroleinthedevelopmentoftheCSRagenda.Withlowratesofpovertyand
comprehensivesocialservicesprovidedbythegovernment,theCSRagendaisfocusedonsupporting
nationalobjectivesandpolicies,especiallyintheareasofeconomicsustainabilityandnational
cohesion.

TheCSRmovementinSingaporeinvolvesvaststakeholderparticipation,andhastakenoffrelatively
well,particularlywiththeformationoftheSingaporeCompactforCSR.28Asanationalsociety
platform,themembershipoftheSingaporeCompactforCSRdoesnotonlyincludethoseof
corporatesectors,butalsocoversthoseofemployerfederations,non‐governmentalorganisations
(NGOs),andtradeunions.Theestablishmentofthisplatformhasledtorelativelystrongtakeupand
interestininternationallyacceptedprinciplesandstandards,suchastheUNGCandISO26000.In

27Launchedon11January2011,theACNisaregionalnetworkofCSRbodiesthatseektoserveasaplatformfor
networking,exchangeofbestpractices,andfacilitatingpeer‐to‐peerdiscussionsinASEAN.Italsointendstoserveasa
repositoryofASEANknowledgeonCSR,acapacitybuilderforCSRimplementation,andanadvocateforCSR‐relatedissues
intheregion.FurtherinformationconcerningtheACNisavailableinitsofficialwebsiteat:http://www.asean‐csr‐
network.org/c/
28FurtherinformationconcerningtheSingaporeCompactforCSRseeitsofficialwebsiteat(accessed5May2014):
www.csrsingapore.org

13

addition,guidancefromthestockexchangeencouraginglistedcompaniestoreportontheir
sustainabilityinitiativeshaspushedreportingnumbersup.

However,todrawmainstreamattentiontoCSRandsustainability,CSRadvocatesinSingaporeare
turningtotheirgovernment.TherehasbeenacallamongstCSRadvocatesinthecountryfora
nationalumbrellabodyasthefocalpointingovernmenttopromoteCSRofficiallyandprovidea
strategicandconsolidatedapproachtowardssettingnationalCSRpoliciesinlinewiththelong‐term
goalofeconomic,environmentalandsocialsustainability.29

Thesame,however,cannotbesaidforBrunei,wheregovernmentinfluenceoverbusinessaffairsis
strongandCSRisnotyetonitsagenda.ThismayyetchangeasBruneiattemptstodiversifyits
economyandattractmoreinvestmentsoutsideoftheoilandgassector.Duringitschairmanshipof
ASEANin2013,BandarSeriBegawanplayedinstrumentalroleinsettingupacommonagenda
amongsttheAMS,andthisincludedthepromotionofCSRasoneofthestrategiesundertheASEAN
Socio‐CulturalCommunityBlueprint.

 Strongregulationsandenforcementallowcompaniestofocusoninternalprocessesandrisk
mitigation

BusinessesinSingaporeandBruneiaregenerallyhighlycompliantwithexistinglawsinthecountry
asenforcementcapabilitiesofgovernmentarehighandcorruptionislow.Asaresult,businessescan
haveamoreforward‐lookingCSRphilosophythatfocusesonstrengtheninginternalcapabilitiesand
mitigatingbusinessrisksbeyondwhatisrequiredbylaw.Issuesthatmayhurtthefirms’reputation
orplacethefirmsatriskofgovernmentaction,suchasproductqualityandsafety,procurementand
sourcingpolicies,labourstandards,andworkplacehealthandsafety,aregenerallyhighonthe
agenda.ThishasbecomeevidentinrecentcasesinSingaporewhereallegeddiscriminatorypractices
attheworkplacewereexposed.

 CSRasatoolformaintainingbusinesscompetitiveness,fosteringinnovation

Withrelativelymatureandstableeconomies,higherincomeAMSarelookingtoboosttheirlong‐
termeconomicsustainabilityandcompetitiveness.Bynothavingtodealwithananti‐poverty
agenda,theirfocusisshiftedtowardsissuesrelatedtoworkforcedevelopment,shareholdervalue,
andproductinnovation.Singapore’srealestateindustryisanexampleofhowcompaniesareturning
toCSRandsustainabilityinordertoenhancetheircompetitivenessandboosttheirproductoffering.
Theindustry’stopplayerspublishextensivesustainabilityreportsandsubscribetotheGreenMarks
schemeoftheBuildingandConstructionAuthority(BCA),anindustrystandardforenvironment‐
friendlybuildings.‘Greenbuildings’areoneofthehottesttrendsintherealestateindustry.
Althoughitisunclearifdevelopersareabletocommandapricepremiumorlargermarketshare
becauseofthis,itisbeingusedheavilyintheirmarketingeffortsandhasbecomeanindustrynorm.

5.1.2. CharacteristicsofanASEANapproachtocorporatesustainability

 Anti‐corruption,transparencyhighontheagenda


29Thisview,forexample,wassharedbyKwekLengJoo,thePresidentoftheSingaporeCompactforCSR,inhisopening
speechatthe4thInternationalCSRSummit,whichtookplaceinSingaporeon27September2012.Thesummaryofthis
speech,andthatoftheSummit,isavailableattheofficialwebsiteoftheSingaporeCompactforCSRat(accessed5May
2014):http://www.csrsingapore.org/c/news?start=20

14

Singaporeconsistentlyranksasoneofthemostcorrupt‐freecountriesintheworld.30Bruneiis
likewiserecognizedasanexceptioninASEANwhenitcomestocorruption.Itisclearthatthe
governmentsofbothcountriesintendtosustainsuchcorrupt‐freeenvironmentbyenforcingstrict
regulationsandtoughpenaltiesonoffenders.Singapore’sCorruptPracticesInvestigationBureau
(CPIB),forexample,hasawideandstrongmandatetoinvestigatecorruption‐relatedoffensesin
boththepublicandprivatesectors.

Withbothcountrieshavingverylowpersonalincometaxpolicies,governmentsdependonbusiness
andcorporatetaxestofundsocialserviceprogramsandinfrastructuredevelopment.Corporations
areawareofthisrelationshipandtaketheobligationseriously.Thisextendstootherareasof
operationwheretransparencyandcompliancearekeys(e.g.employmentofforeignworkersand
contractswithgovernmentagencies).Forexample,Singapore’sconglomerateswhoareventuring
intoneighbouringmarkets,suchasChina,Vietnam,Indonesia,PhilippinesandThailand,oftenadopt
a‘wedonotpaytoplay’policywhenitcomestodoingbusinesselsewhere.Recognisingthat
corruptionisrampantindevelopingcountries,thesefirmsdevelopclearzero‐tolerancepoliciesto
guidetheirexecutivesandinformpotentialpartners.Businessexecutivesspeakofftherecordof
walkingawayfromdealsbecauseofdemandsforbribesandotherunethicalconsiderations.Thisis
drivenbytheiraccountabilitytoauthoritiesandshareholdersintheirhomemarket.

 MNCs,government‐linkedcompaniesleadingthewayinCSRpractice

MNCsarebringing‘Western’CSRpracticesandadaptingthemtothelocalcontext.Thisincludesthe
introductionof‘triplebottomline’frameworkthat,asmentionedearlier,emphasises
environmental,socialandeconomicsustainability.Theseprinciplesarelikewiseadoptedbylarge
localconglomerateswithaneyetowardbeingrecognizedasworld‐classcompanies.This
comprehensiveapproachgoesbeyondphilanthropicactivitiesthataremorecommonacrossAsia.

ManyhomegrownSingaporeancompaniesareincludedintheDOWJonesSustainabilityIndex‐a
strongrecognitionoftheirpractices.31Government‐linkedcompaniesandagenciesarelikewise
influencingtheCSRagendasignificantlyandhelpprovidestronglinkstothelargernationalagenda.
InSingapore,theNationalEnvironmentAgencywasthefirstgovernmentagencytoissuea
sustainabilityreport,amovethatissuretocatchtheattentionofprivatecorporationsitworkswith.
NTUCFairprice,aco‐operativeandthecountry’slargestgrocerychain,adoptsthenationaltrade
union’smissionofmoderatingfoodpricesandprovidingemploymentopportunitiesforthe
disadvantaged.

InBrunei,meanwhile,BruneiShellPetroleum,apartnershipbetweenRoyalDutchShellandthe
Bruneigovernment,isresponsibleforintroducingCSRpracticesintothecountry,withanemphasis
onenvironmentalsustainabilityandworkplacehealthandsafety.

 LowcivilsocietyparticipationandcollaborationinCSRspace;butconsumerexpectations
voicedthroughsocialmedia


30See,forexample,TransparencyInternational’sAnnualCorruptionPerceptionIndex,whichisavailableintheofficial
websiteoftheTransparencyInternationalat(accessed3January2014):
http://www.transparency.org/research/cpi/overview
31TheDJSIisagroupofindexesthatevaluatethesustainabilityperformanceofthelargest2,500companieslistedonthe
DowJonesGlobalTotalStockMarketIndex.Launchedin1999,itistechnicallytheoldestrunningglobalsustainability
benchmarksthathasbecomeareferencepointforinvestorsandcompaniesalike.FurtherinformationconcerningtheDJSI
isavailablefromitsofficialwebsiteat(Accessed3January2014):
http://www.sustainability‐indices.com/

15

NeitherSingaporenorBruneihasparticularlyvibrantcivilsocieties.Non‐Governmental
Organisations(NGOs)inthesetwocountriesarefocusedonprovidingsocialwelfareprograms,often
inpartnershipwiththegovernment,ratherthanonadvocatingforpolitical,environmental,or
consumerrights.Corporateengagementswithcivilsocietyaremostlylimitedtodonationsor
employeevolunteerprograms.

Consumers,however,arestillabletovoicetheiropinionsbothindividuallyandcollectivelythrough
socialmedia.Firmsindevelopedcountries,includingSingaporeinparticular,arebecomingmoreand
moreresponsivetoissuesbeingdiscussedinnon‐traditionalmedia.Thisextendsnotonlyto
complaintsorissuesrelatedtotheirproductsandservices,butalsototheiremployees,
management,andotherstakeholders.

5.2. ASEAN’smiddleincomecountries:Indonesia,Malaysia,thePhilippines,Thailand,andVietnam

5.2.1. Theenablingenvironmentforcorporatesustainability

 GovernmentsviewCSRascomplimentarytotheanti‐povertyagenda

GovernmentsinASEAN’smiddleincomecountrieshavejumpedontotheCSRbandwagon,andare
callingontheprivatesectortoprovidegreatersupporttothenationalanti‐povertyagenda.Seenas
anopportunitytolinkthesocialagendawiththebusinessagenda,governmentagenciesare
knockingoncorporatedoorstofillinfundinggapsinkeygovernmentprogrammesineducation,
livelihooddevelopment,andhealthservicesamongstothers.Financialdonationstogovernment
programmesarejustifiedbybusinessesasacontributiontowardsthecountry’slong‐termeconomic
viabilityandusedasmaterialforpublicrelationscampaigns.Moreover,effortsatlegislatingCSR
havealsofocusedonthebusinesssector’scontributiontothesocialagendathroughfundsand
expertise.Forexample,Indonesia’sCSRlawmandatesthatcompaniesthatusethecountry’snatural
resourcesshouldinvestaprescribedpercentageofprofitsinsocialdevelopmentprojects.Asimilar
lawwasauthoredinthePhilippineSenatebuthasnotbeenapprovedtodate.

 Strongcivilsocietyservesasboth‘watchdog’andstrategicpartner

ASEAN’sdevelopingcountrieshavestrongcivilsocietysectorsthatarehighlyvocalandvisible.This
presenceconstantlyputspressureoncorporationstobemoreresponsible.Negativeimpactsof
businessoperationsfindtheirwaytonewssitesandsocialmediaplatformsquickly.Civilsociety
groupsmayalsoleadcallsforboycottsorprotestsagainstcorporateoffenders.Inrecentyears,
however,manyNGOsarealsorealisingthepotentialthatCSRhasinaddressingcommonissues.
NGOsaresittingonthesametableascorporationstoexplorewaystoworktogether,byusingthem
eitherasasourceoffundingorwiththeintentofbuildinglastingpartnerships.Corporations,onthe
otherhand,arewelcomingthisopportunitytoworkwithNGOsinordertoboosttheirreputation
andleveragetheirresources.Thisshiftinstrategyonbothsides,fromconfrontationto
collaboration,providesaspaceforCSRtohavemorerelevanceandimpact.

 BusinessassociationsandnetworksactivelyadvocatingforgreaterCSR

EachofASEAN’smiddle‐incomecountrieshasanationalbusinessnetworkactivelyadvocatingfor
CSR,whetherasastand‐aloneCSRnetwork(i.e.UNGCLocalNetwork),oraspartoflargerbusiness
associations.Thisincludesmanagementclubs,foreignchambersandindustrygroups.Thenumberof
CSR‐relatedeventsandconferencesintheregionisanotherindicatorthattheCSRagendais
reachingawideraudience.EachASEANdevelopingcountrycurrentlyhasanationalCSRconference,
thoughvaryingwidelyinscaleandreach,andmosthavehostedregionalandinternationalCSR

16

events.Inaddition,stockexchangesintheregionhavealsoshownanincreasedattentiontoCSR.
TheMalaysianandThaibourses,forexample,haveissuedguidelinestoitsmemberstoencourage
thereportingontheirCSRandsustainabilityinitiatives.Ingeneral,thereisincreasedreportingon
CSRandsustainabilityacrosstheregion.Despiteactiveadvocacy,bestpracticescanstillbefoundin
onlyahandfuloffirms,withmany,especiallySmall‐ andMedium‐SizedEnterprises(SMEs),still
laggingbehind.Awareness‐raisinghastobecoupledwithmorefocusedcapacity‐buildingand
professionaltrainingeffortsifCSRpracticeistoreacha‘tippingpoint’andbecomeabusinessnorm
ratherthananexception.

5.2.2. CharacteristicsofanASEANmiddleincomecountryapproachtocorporatesustainability

 CSRpracticestartsoffwithphilanthropy,evolvestowardsstakeholderengagementand
‘licensetooperate’

Thestrongpresenceoffamily‐ownedandcontrolledconglomerateshaveastronginfluenceonthe
practiceofCSRinASEAN’sdevelopingcountries.Philanthropicinitiativesthatrangefrom
contributionstoreligiousorganisationsandsocialwelfareprogrammestoeducationalscholarship
fundsandthelikearethemostcommonformof‘CSR.’Thisemphasisonphilanthropyisattributed
tobothaculturalandsocietalexpectationforthebusinesstogivebacktosocietyandthedesireto
buildupthecontrollingfamily’snameandlegacy,ofteninhonourofthefoundingpatriarch.The
institutionalisationoftheseinitiatives,whetherasacorporatefoundation,underthemanagement
ofthecorporateaffairsteam,orthroughaseparate,dedicated,CSRdepartment,pavestheway
towardsevolvingandimprovingCSRpracticesthatareshiftingtowardslong‐termstakeholder
engagementandaddressingkeybusinessissuesinthevaluechain.

‘LicensetoOperate’remainsakeyfoundationofCSRpracticeasthebusinessenvironmentin
ASEAN’smiddle‐incomecountriesisriddledwithcorruptionandweakenforcementofregulatory
standards.Government‐issuedlicensesarenotenoughtopersuadeotherstakeholdersofa
business’trustworthiness.Corporationsareexpectedtogobeyondwhatthelawrequiresand
engageincommunitydevelopmentprojectsbasedonthelocalchallengesfaced.Theimportanceof
theseinitiativesismagnifiedinextractiveindustrieswherecivilsocietygroupsandlocalcommunity
stakeholdershaveakeeninterestintheoperationsofcompaniesandtheireffectsonlocal
communitiesandtheenvironment.

TheinternalisationofCSRisanotheraspectoftheCSRmovementthatisgainingattentionasCSR
practicesevolveinthesemiddle‐incomeASEANcountries.ThisreferstoCSRinitiativesthataddress
‘corebusiness’issuesandcanrefertoworkplacehealthandsafety,improvingenvironmental
footprints,andemployeeengagementanddevelopmentprograms.Generallyspeaking,thispertains
tothenotionthat‘CSRisnotabouthowyouspendmoneybuthowyoumakemoney’,
differentiatingCSRfromphilanthropy.ThisismoreintunewiththeEuropeanthinkingtowardsCSR.

 Innovative‘BottomofthePyramid’approaches,multi‐sectorpartnershipsemerging

ThereisanothershiftthatisbeingdiscussedinCSRforumsanddiscussionsacrossASEAN:how
businessescancreatevalueforthosethatareatthe‘bottomofthepyramid’whileturningaprofit.
Thediscussions,andemergingbusinessmodels,frequentlymentionMichaelPorter’s‘Creating
SharedValue’approachthatwasmadepopularinthecorporateworldbyNestle.32Whetherwithin

32‘CreatingSharedValue’isabusinessconceptfirstintroducedinHarvardBusinessReview’sarticle,entitled:Strategyand
Society:TheLinkbetweenCompetitiveAdvantageandCorporateSocialResponsibility.Theconceptwaslaterexpandedby
MichaelE.PorterandMarkR.Kramerinafollowuparticlethatprovidesinsightandexamplesofcompaniesthathave

17

largecorporationsorSMEs,theemphasisisshiftingtowardsfindingbusinesssolutionstopoverty.
Thisconceptisgenerallycalled‘StrategicCSR’,‘CSR2.0’,ora‘CSVapproach’,dependingon
preference.‘SocialEntrepreneurship’isalsolooselyused,especiallywhentheissueisdiscussed
withintheconfinedoftheSMEs.Inaddition,thisnewparadigmhasalsoprovidedaspaceforthe
corporatesectortopursuecollaborationwiththecivilsocietygroups.ASEAN’smiddle‐income
countrieshaveactivecivilsocietiesthatareshiftingtactics,from‘namingandshaming’corporate
offenders,towardsamorecollaborativeapproachwiththebusinesssector.

 Climatechangeandrelatedissuesbeingtakenseriously

Itshouldcomeasnosurprisethatamostlyarchipelagicregionisveryworriedabouttheeffectsof
climatechange.ThedebateregardingthescienceofclimatechangeisoverinASEAN,atleastamong
corporations.ThefocusisonpreparingforthefutureasASEANbracesforstrongertyphoons,
droughtsandalltheexpectedchallengesthatclimatechangebrings.Disasterpreparednessand
response,togetherwithfoodsecurity,areamongthetopclimate‐changerelatedconcernsinthe
region.ItisintheseareasthatfirmsarelookingtoengagemorewithgovernmentsandNGOstofind
long‐termpartnershipsthatcanhelppreparethemandtheirstakeholdersfortheworst.Experiences
fromthetsunamithathitIndonesia,massivefloodinginthePhilippineandThaicapitalsinrecent
years,aswellasnewsregardingothermassivedisastersaroundtheworldhaveexposednational
capabilitiestorespondtothem.

Allthesehavecertainlybeenawake‐upcallforallsectors,businessesincluded,oftheneedtowork
togethertoensureeconomicsustainability.Acrosstheregion,platformsforpublic‐private
partnershipshavebeenformedtoprovideavehicleforawide‐scaleandefficientresponseto
disastersthathavehappenedorareexpectedtohappen.ExamplesincludetheIndonesiaDisaster
ResourcePartnership,ThaiDisasterResponseResourceNetwork,andthePhilippineDisaster
RecoveryFoundationallofwhicharenetworksdesignedtobringtogetherthepublic,privateand
civilsectorsandmapoutastrategicmulti‐sectorresponsetoacommonconcern.Businessesare
alsobeefingupcapabilitiesinmanagingbusinesscontinuity,ensuringthesafetyofitsemployees,
anddisasterreliefefforts.

Acommonassessmentonallthesedevelopmentsisthatthereisaneedforgreatercommunication
andlong‐termplanningacrossallsectors,andthatthebusinesssectorhasanessentialroletoplayin
providingbothresourcesandexpertise.


5.3. ASEAN’slowerincomecountries:Cambodia,LaoPDR,andMyanmar

5.3.1. Theenablingenvironmentforcorporatesustainability

 Political,economicchangeisonthehorizon

IftherecentrevolutionsintheArabSpringareanyindication,politicalchangeinsingleparty
governmentsareinevitable.Somewilltakelongerthanothers,andeachwilltakeadifferentroute,
butitisboundtohappen.Myanmarhasalreadystarteditsunexpectedtransformationandthe
regioniscrossingitsfingersforitssuccess.Withpoliticaltransformationwillcomeanincreased
interestineconomicopportunitiesandanenhancedroleforthebusinesssectortoplayinnational
development.


developedstronglinksbetweentheirbusinessstrategiesandCSR.Forfurtherdetailsconcerningthisconceptsee,inter
alia,PorterandKramer(2011).

18

 Strongpresenceandinfluenceofinternationalagenciesinthedevelopmentagenda

AsASEAN’sleastdevelopedcountriesattempttotransformthemselvespoliticallyandeconomically,
internationalbodiesarecastingastrongpresencethroughdevelopmentaid,tradeagreementsand
externalpressuretoencouragethemtoconformtointernationalstandardsandnorms.Withdiverse
interestsandobjectives,itisinterestingtoseehowgovernmentswillrespondintermsofpolicies
andregulations.Myanmar’stransitionpresentsatoughtestforitsgovernmentaswellas
internationalstakeholders.ItsASEANneighbours,particularlyLaosandCambodia,arelikewise
watchingintentlyforanylessonstheymaygainandopportunitiesthatmayarise.

 CompetitiontoattractforeigninvestorsmayboostinterestininternationalCSRstandards,
frameworks

AsASEAN’sleastdevelopedcountriesincreasinglyopentheireconomiestotherestoftheworld,
therewillbestrongcompetitionamongsttheseeconomiestoattractinvestors.Thereisstronghope
thatforeigndirectinvestmentswillboosteconomicproductivity,injecttaxestofundgovernment
programmes,andliftpeopleoutofpoverty.However,thisalsopresentsthetangibleriskofopening
upitspeopleandresourcestoexploitation,andthatthetaxmoneyandothereconomicbenefitswill
findtheirwaytothepocketsofonlyahandful.Whilstlocalpoliciesarestilldeveloping,established
CSRstandardsandframeworkscanprovideaguideforgovernmentsandbusinesses.InMyanmarfor
example,fewfirmshavealreadysigneduptotheUNGlobalCompactandthereisinterestin
knowledgeandtrainingaroundCSRfromthebusinessfederation.Introducingtheseconceptsearly
intheireconomicdevelopmentmayprovidetheopportunityforamoresustainableandlong‐term
approach.



5.3.2. CharacteristicsofanASEANapproachtocorporatesustainability

 Verylowawareness,CSRinnascentstages

Withhighgovernmentcontrol,uncompetitivecorporatelandscapeandweakcivilsocieties,CSRhas
simplynotthrivedinASEAN’slowerincomecountries.Businessleadershavenothadanyincentive
orregulationtoencouragethemtopracticeCSR.Thiswillchangeastheeconomicandpolitical
landscapechanges.Governmentleadersarereachingouttointernationalgroupsandhaveshowna
willingnesstoexplorepartnershipandcollaborationintheareaofCSR.

 State‐controlledenterprisescaninfluence,setbenchmarksforthekindofCSRpracticeinthe
country

Withhighlyprotectionisteconomicpoliciesthatfavourlocalbusinesses,agoodnumberofwhichare
state‐owned,ashiftinmind‐setisneededinordertogrowlocalbusinessesandallowtheseleast
developedeconomiesintegratemorewithASEANandtherestoftheworld.CSRisoneoftheglobal
trendsthatwillhavetobeadaptedbylocalfirmsinordertoparticipateintheglobaleconomy.
Preciselybecauseofclosetiesthatmostlargefirmsintheseeconomiesformwiththeir
governments,itiswithintheirself‐interestandcapacitytoleadtheway.Internationalgroupsare
readyandwillingtoprovideguidanceandsupport,whilstnationalgovernmentshavemouthed
supportforCSRandsustainabilitypractices.Itisaquestionofhowandwhenstate‐controlled
enterpriseswillrespond.

 ForeigninvestorsmayuseCSRasa‘competitiveedge’ingainingentrytokeyindustries

19


AseconomiesinCambodia,LaosandMyanmaraimtoopenupkeyindustriestoforeigndirect
investments,acompany’strackrecordinCSRmayprovidethemanedgeingainingfavourwithhost
governmentsandtheircitizens.Thisisespeciallyimportantinindustriessuchasmanufacturing,
agricultureandmining,whichhavehistoriesinothercountriesofcreatingharshworking
environmentsanddepletingnaturalresources.PrivateenterpriseswhoareearlyadoptersofCSR
mayalsouseitasacompetitiveadvantageanddifferentiator.CSRcanhelppositionthemasideal
partnersforforeigninvestorslookingtoentertheirhomemarket.

5.4. Commonalitiesandimplications

5.4.1. Commonalities

 Philanthropyisstrong‐‐ingrainedinculturalexpectation,acceptedaspartofCSRagenda

ThelargepresenceoffamilyfirmsacrossASEANinfluencestheCSRlandscapesignificantly.With
strongemphasisonlegacybuildingcoupledwithpoverty‐relatedissuessurroundingfirmsintheir
areasofoperation,philanthropyisexpectedtoremainasabigpartoftheCSRagendainASEAN.In
addition,religionandculturalvaluesalsoplayakeypartindrivingCSRpracticesintheregion.Itisa
commonpracticeamongstThaibusinesses,forinstance,todonatetoBuddhisttemples,whilstfirms
inthePhilippinesprovidesupporttoCatholicchurchesandfestivities.Despitethediversereligious
andculturaltraditionsinASEAN,thelinkbetweencultureandCSRremainsacommonthread.Toa
largeextent,mostASEANfirmsacceptCSRaspartofitssocialresponsibilityandsustainability
efforts.Thechallengeisnottodisplacephilanthropybuttobuildonitasastartingpointformore
innovativeapproaches.



 CSRastrategyforregionalandglobalrecognitionandparticipation

AsmarketsintheWestgothroughaslowrecoveryprocessfromtheimpactoftheglobalfinancial
crisesofthelate2000s,ASEANbusinessesarepositioningtotakeadvantageofgrowthopportunities
inAsia,whilst,atthesametime,bracingforincreasedcompetitionintheirhometurf.Inaneffortto
furtherdrivethisgrowth,ASEANlaidaframeworkfortheformationofanASEANCommunity,
dubbedasthe‘RoadmapforanASEANCommunity’,in2009,whichistobecarriedoutupuntilthe
fullimplementationoftheCommunitybytheendof2015.AsASEAN’sgovernmentstrytoturnthis
intorealitybyloweringtradebarriersandinvestingininfrastructure,thepromotionofCSRhasalso
beenidentifiedasakeystrategyinensuringsustainablesocio‐economicdevelopment.33Itcallsfor
greatercollaborationbetweentheprivateandpublicsectorsandthedevelopmentofaCSRpublic
policyframeworkfortheregionwhichrecognizesinternationalprinciplesandstandards.

AsASEANtacklestheroadblockstoanintegratedeconomiccommunity,CSRwillcontinuetoemerge
asthebusinessresponsetohelpingsolvesomeoftheregion’spressingconcerns,suchasrampant
corruptionandextremepoverty.Regionalbodies,includingASEAN‐relatedorgans,suchasthe
AICHR,areworkingtoengagetheprivatesectormoreanddiscusshowbusinessescancontributeto
theASEANdevelopmentagenda,especiallyinareasnottraditionallylinkedbyASEANcompaniesto
CSR,suchashumanrights.

33ThisisreflectedintheASEANSocioCulturalCommunityblueprint(ASCC)2009‐2015.FurtherinformationontheASCC
BlueprintisavailablefromtheofficialwebsiteoftheASEANwebsiteat(accessed3January2014):
http://www.asean.org/archive/5187‐19.pdf


20


 GovernmentsstillfiguringouthowtopromoteCSR,experimentationtobeexpected

Whilediscussionsinbusinesscirclesareadvancingrapidly,governmentsarestillfiguringouthowto
takeadvantageofthisconceptthatisrelativelynewtothem.Manybusinessesarepushingformore
incentivesintheformoftaxbreaksandpublicrecognition.Ontheotherhand,somegovernments
areconsideringlegislatingformoreregulationsthatwillrequirecompaniestopracticeCSR,though
theyareequallyuncertainonhowtoproceed.Someexperimentationinthisregard–whetheritis
providingforincentivesormoreregulatoryrequirements–istobeexpectedasgovernmentstryto
updatetheirpoliciesandprogramstoaccommodatethegrowingdemandforCSR.Business
networkswillhavearoletoplayinkeepinganopendialoguewiththeirnationalgovernmentson
howbesttopushthenationalCSRagendaforward.

Meanwhile,atthegloballevel,thereisrecognitionthatresponsiblebusinessconductwillmakea
positivedifferenceinaddressingmanysocialandenvironmentalissues.TheGuidelinesfor
MultinationalEnterprisesoftheOrganisationforEconomicCooperationandDevelopment(OECD)
(2008),whichsetscomprehensiveguidanceforresponsiblebusinessconducts,isexpectedtoaffect
non‐OECDcountriesas85percentofglobalforeigndirectinvestmentsareeithercomingfromor
takingplaceinOECDcountries.Asmentionedearlier,however,thisisonyoneofmanyother
initiativesofCSRatthegloballevelthatAMScannotignore.

5.4.2. Implications

 CSRadvocatesneedtobridgegapbetweentopCSRperformersandthelaggards

AcrosscountriesinASEAN,andwithinthebusinessesamongeachcountry,thereisalargegapin
termsofCSRknowledgeandpractice.Multinationalcompaniesandconglomeratesaregenerallyin
tunewiththelatesttrends,althoughsomesmallandmediumenterprisesareprovidingreal
examplesofbusinessinnovationsthroughCSR.Accordingly,notonlythatthereisastrongneedto
increaseawarenessandeducationonCSR‐relatedissesgenerally,butalsototargetthisinformation
campaigninitiativetokeysectorsandgroups,suchasASEAN’sleastdevelopedcountries(Cambodia,
Laos,Myanmar),small‐ andmedium‐sizedenterprises(SMEs),andkeyindustries(e.g.agriculture,
miningandmanufacturing).Moreimportantly,ASEAN,asawhole,alsoneedstoimprovethe
documentationofbestpracticesandthesharingofknowledgeacrosscountriesintheregion.

 Non‐businessesstakeholdersneedtobeeducatedonCSRandsustainabilityissuestoo

AnemergingchallengeingettingtheCSRandsustainabilitymessageoutisthelackof
understanding,especiallyamongnon‐businessstakeholders.Businessleadersinterviewedshared
thatgovernments,NGOs,andmediaingeneralstilldidnothavethecorrectappreciationforCSR.
TheystillseeCSRsimplyasphilanthropy.GovernmentsandNGOsapproachcompaniesmerelyas
sourceoffunding,whilemediareportsprimarilyoncorporategivingandvolunteerefforts.
Consumereducationwillalsohavetoincreaseinordertoprovidecompanieswithanadded
incentivetopursueCSR.

 ASEANwillchartitsownCSRcourseandagenda,butcanlearnfromotherssuccessand
mistakes

WhetherasasourceofcompetitiveadvantageforASEANbusinesses,orameanstoproviding
businesssolutionstopoverty,theCSRlandscapeinASEANwillcontinuetoevolveaccordingtothe
changingpolitical,economicandsociallandscape.Astheregioncontinuesitseffortstointegrate

21

intoonemarketandonecommunity,CSRwillbedefinedandre‐definedbasedoncontextandneed.
However,theunderlyingprinciplesbehindCSRasespousedbytheUNGlobalCompactandother
internationalframeworkswillplayaprominentroleinprovidingguidancetocorporationsand
nationalgovernments.Likewise,experiencesofothercountriesandregionsintheirownCSRjourney
canprovidevaluablelessons.Thesecanbeunlockedthroughincreasedregionalandinternational
cooperationinCSRforumsandroundtables.


6. Conclusionandpolicyrecommendations

BasedontheassessmentontheCSRpoliciesandpracticesandtheirrelevancetothepromotionand
protectionofhumanrightsintheASEANregiondescribedinearliersections,theStudyTeam
proposesanumberofpolicyrecommendationstobeconsideredinthefutureworksoftheASEAN
(includingitsMemberStates)anditsrelevantorgans,includingtheAICHR,whichinclude:

1. MostAMSarealreadyinpossessionofrulesandregulationsthatattempttodirectlyorindirectly
addressthepotentialadverseimpactsofcorporateconductsonhumanrights.Whilstspecific
regulationsatbothnationalandregionallevelsthataddressCSRandhumanrightslinkages
wouldbewelcomed,theimmediatepriorityforAMSistoaccelerateandstrengthenthe
implementationandenforcementoftheexistingrulesandregulationsthatdealdirectlywith
suchadverseimpactsofbusinessconducts.

2. ThegovernmentsofAMSneedtotakeleadershipinencouragingandenablingbusinessesto
implementandembedCSRvaluesthroughouttheirorganisations.Businessescanbeaforcefor
goodandtheyhavetoconductthemselveswithresponsiblebusinessconductfortheirsocial
licensetooperate.CSRanditslinkstohumanrightscanbeacompetitivenessadvantageaswell
asaddresssocialandenvironmentalissuesinASEAN.Thegovernmentshavetakenafirststep
byincludingCSRasastrategicobjectivefortheASEANCommunity2015.Ithasthroughthe
ASEANFoundationformedtheASEANCSRNetwork.ThenextstepisforAICHR/ASEANto
identifyabody/organizationtotakeacoordinatingrole,takingintoaccounttherecently
establishedACN.

3. ASEANtodevelopaCSRstrategyforthegrouping.Thiswillbeanexpansionoftheobjectives
oftheASEANCommunity2015BlueprintandwillbringthevariousaspectsofCSRunderone
heading.Thepost2015ASEANagendahastoincorporatepeoplecentredandpeopleorientated
policiesandpractices.Itneedstheinvolvementofallstakeholders.Thisrequiresbetter
coordinationandalignmentofeffortsbydifferentASEANpillars,agenciesandAMS.
AICHR/ASEANcouldconsiderACNtotakethisrole.

4. AwarenessonbothCSRandhumanrightsinASEANremainslow.Asaresult,moreeffortsare
necessarytosocialisenotonlyCSR,butalsoitslinkageswithhumanrights,areneeded
amongsttheprivatesectors,morespecifically,andthewiderpublic,moregenerally.
AICHR/ASEANcouldconsiderACN,theorganisationthathadbeenformedtoachievethese
objectives.

5. Companiescanbeoverwhelmedwiththegrowingnumberofregulatoryandotherrequirements
thataresettoexaminetheirhumanrightsperformance.ForAICHR’sCSR‐humanrightsworksto
succeed,itisimperativethatASEANanditsAMSshoulddevelopanASEAN‐wideCSR‐Human
RightsGuidelinethatisinlinewiththeinternationallyacceptedbusinessandhumanrights
principles,suchastheUNGP,ISO26000andsoon.


22

6. GiventhepotentiallimitationthatCSRhasinaddressingtheincreasinglycomplexrelations
betweenbusinessandhumanrights,thereisastrongpotentialforthecurrentdiscussiononCSR
andhumanrightswithintheAICHR,morespecifically,andtheASEANregion,moregenerally,
tobebroadenedtoincludeotherstakeholders.

7. RecentregionaldebatesanddiscussionsonCSRandhumanrights,aswellasthewiderbusiness
andhumanrights,arestillverymuchfocusedonlargeandtransnationalcorporations.Small‐
andMedium‐SizedEnterprises(SMEs)makeupthebulkoftheeconomicplayersinASEAN,and
theiractivitiesalsohavethepotentialtounderminehumanrightsintheregion.Accordingly,
greaterattentionmustalsobepaidtotheseeconomicactorsinthecurrentdiscoursesonCSR,
aswellasthewiderbusiness,andhumanrightslinkages.Effortsneedtobeintensifiedtobuild
thecapacityofSMEstoembedCSRwithintheirorganisations.

8. Anotherstudyshouldbeundertakenin2to3yearstomeasureprogressinAMSand
recommendfurthersteps.

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