Making Business Work for Development

This article by Jem Bendell describes a recent trend where corporations are taking responsibilty by helping contribute to development challenges such as poverty, human rights abuses and environmental destruction. According to the article, the number of 'transnational corporations' (TNCs) has risen ten-fold since 1970 and the concept of corporate social responsibility (CSR) has grown. There is one key question posed by Bendell that frames this article. He asks, "Most codes are developed by industrialised nations: how appropriate are they to local conditions and concerns in developing countries?

Bendell points to The 2002 World Summit on Sustainable Development in Johannesburg as a turning point because CSR was put on the international policy agenda for the first time. Since CSR standards have become more widespread, it leads us to wonder what they really mean. In exploring this question, Bendell makes reference to 24 million hectares of forest certified under the voluntary Forest Stewardship Council (FSC). He points out that 84 percent of FSC-endorsed forests are in industrialised countries, where large companies find it easier to meet certification requirements - and therefore nothing has been done to help with the issue of tropical deforestation.

According to Bendell, there are 65,000 TNCs worldwide of which only around 4,000 produce reports on their social or environmental performance. He describes that in some cases TNC's exist as a way to escape USA state regulations - and this leads back to the question of TNC accountability.

One of the key issues, according to Bendell, is how companies influence the frameworks within which governments, communities and families can act to protect themselves. It is the companies with high-profile brands, or those which supply to companies with high-profile brands, that are affected by public concern, according to Bendell. CSR does not cover, and nor can it, every important issue, every company or every region: "enforcement is in the hands of markets and public pressure."

The article suggests that the majority of CRS efforts are overlooked or not understood by many people. For example, the fact that lower-income markets involve products such as cell phones rather than the provision of basic nutrition, sanitation, education and shelter. Or, the idea that empowering people by enabling them to consume certain products is a solution. What needs to occur, according to Bendell, is an examination of the environmental impacts of changing consumption patterns rather than thinking these issues can be solved by financial advancements however they are defined.

Manuel Riesco of the United Nations Research Institute for Social Development contends that corporate taxation is what should be central to this discussion. His suggestions are:

• "Development practitioners must now engage CSR on their own terms and map out an agenda that addresses corporate responsibility for 'bad' development on

  one hand and corporate opportunities for sustainable development on the other.

• CSR must distance itself from neo-liberal economic assumptions of development and how to attain it. Governments are crucial for ensuring civil and

  political rights that allow public pressure to influence firms and provide education and infrastructure for them to do business with poor people.

• If CSR holds promise for development it must address how companies can support, rather than undermine, governments in performing these roles.

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While this topic is generally focused on how to make businesses less harmful, Bendell asks, is it possible for businesses to contribute to development?