Wednesday, April 11, 2007

Behind the Veil: CSR, Corporate Philanthropy, etc.

Some months back, on another blog, I had written about the likely pit-falls of Development through Philanthropy (which would include large number of the corporate CSR efforts, funding agencies, "foundations", etc., etc.)...

To quote:

    "...the top-down nature of these initiatives can (and often does) make them vulnerable to many undesirable consequences. Often such blanket initiatives neglect the local issues, and divert the attention to more symptomatic solutions. For instance, a drip irrigation scheme may be advocated as a solution, while the actual local problem is the lowering ground-water level due to its extraction by commercial interests. Similarly, an AIDS prevention program can neglect that the larger causes of death are due to hunger and not disease. Often these initiatives can (and do) also become the vehicles for dumping of obsolete technologies and harmful drugs, or even in empowering non-democratic power-structures at the grass root level."

Here is an example, which corraborates this - and more:

    "Justice Eta, 14 months old, held out his tiny thumb... An ink spot certified that he had been immunized against polio and measles, thanks to a vaccination drive supported by the Bill & Melinda Gates Foundation.

    But polio is not the only threat Justice faces. Almost since birth, he has had respiratory trouble. His neighbors call it "the cough." People blame fumes and soot spewing from flames that tower 300 feet into the air over a nearby oil plant. It is owned by the Italian petroleum giant Eni, whose investors include the Bill & Melinda Gates Foundation....

    ...The makeshift clinic at a church where Justice Eta was vaccinated and the flares spewing over Ebocha represent a head-on conflict for the Gates Foundation. In a contradiction between its grants and its endowment holdings, a Times investigation has found, the foundation reaps vast financial gains every year from investments that contravene its good works...

    ...The Gates Foundation has poured $218 million into polio and measles immunization and research worldwide, including in the Niger Delta. At the same time that the foundation is funding inoculations to protect health, The Times found, it has invested $423 million in Eni, Royal Dutch Shell, Exxon Mobil Corp., Chevron Corp. and Total of France — the companies responsible for most of the flares blanketing the delta with pollution, beyond anything permitted in the United States or Europe.

    ...Like most philanthropies, the Gates Foundation gives away at least 5% of its worth every year, to avoid paying most taxes. In 2005, it granted nearly $1.4 billion. It awards grants mainly in support of global health initiatives, for efforts to improve public education in the United States, and for social welfare programs in the Pacific Northwest.

    It invests the other 95% of its worth. This endowment is managed by Bill Gates Investments, which handles Gates' personal fortune... By comparing these investments with information from for-profit services that analyze corporate behavior for mutual funds, pension managers, government agencies and other foundations, The Times found that the Gates Foundation has holdings in many companies that have failed tests of social responsibility because of environmental lapses, employment discrimination, disregard for worker rights, or unethical practices.

    ...In addition,... the Gates Foundation endowment had major holdings in:

  • Companies ranked among the worst U.S. and Canadian polluters, including ConocoPhillips, Dow Chemical Co. and Tyco International Ltd.

  • Many of the world's other major polluters, including companies that own an oil refinery and one that owns a paper mill, which a study shows sicken children while the foundation tries to save their parents from AIDS.

  • Pharmaceutical companies that price drugs beyond the reach of AIDS patients the foundation is trying to treat.
"etc. etc.

A well-meaning friend of mine who works with Bill & Melinda Gates Foundation, with whom I shared this news-item, wrote back:

    "Yes. Quite depressing, in fact. Anyway they are now planning to review their investments and take some decisions."
Hopefully, so...

er... no!, this posting is not about the Bill & Melinda Gates Foundation. That is just an example. Unless we look (and introspect) at the overall system of this issue of "doing business/living a good life" and "contributing to society" - and the trade-offs therein - this kind of inadvertant hypocracy will continue...

... at our own individual level, it often gets translated into personal paradoxes/ contradictions, e.g.,:

  • contributing to CRY (Child Rights and You), while simultaneously employing a child as a domestic help

  • appeiciating/applauding "Inconvenient Truth", but forgetting to switch-off fans, lights or AC

  • throwing litter on the street, while cursing the quality of municipal services



    Neeraj said...

    There was an interesting but unfortunate case of a Civil servant(officer)'s wife employing a child labour while she was waxing eloquent about Childhood protection!A journalist questioned her about the issue and the respected woman didn't know that it was illegal to employ child 'domestic' help!The message is that it is faishonable to talk about childhood protection etc. whuile missing the spirit.

    All this philanthropy is just that:Impression Management!And it is a good business in many cases, good politics in others.At the same time it may also be a case of Gulity conscience trying to compensate for their sins: A lot of money comes from the rich foreigners that lands up with the pseudo charitable trusts in India.And we definitely are not unaware.

    Suhit Anantula said...

    Dear Madhukar:

    Good point. In the case of Bill and Melinda Gates foundation, they infact pointed out that it is very tough to invest money taking into consideration all the factors or what can be called SRI investing.

    They wanted to separate the foundation work and the foundation money.

    For reasons like these I do connect with the word CSR and it makes more sense for businesses to move away from it.

    However, I like the way you have suggested the schism in our daily life.