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Unformatted text preview: Singapore Management University Institutional Knowledge at Singapore Management University
Lien Centre for Social Innovation: Research Lien Centre for Social Innovation 4-2013 Contextualising CSR in Asia: Corporate Social
Responsibility in Asian economies
Bindu Sharma Follow this and additional works at:
Part of the Business Administration, Management, and Operations Commons
Sharma, Bindu. 2013. Contextualising CSR in Asia: Corporate Social Responsibility in Asian economies. Singapore: Lien Centre for Social
Innovation. This Book is brought to you for free and open access by the Lien Centre for Social Innovation at Institutional Knowledge at Singapore Management
University. It has been accepted for inclusion in Lien Centre for Social Innovation: Research by an authorized administrator of Institutional Knowledge
at Singapore Management University. For more information, please email [email protected] This publication seeks to present a narrative about the practice of CSR in ten Asian
economies – China, India, Indonesia, Japan, Malaysia, Philippines, Singapore, South
Korea, Taiwan and Thailand. The aim is to present a uniquely Asian perspective on
the CSR story in these countries that will inform CSR practitioners, researchers and
interested corporate stakeholders.
Drawing on historical and traditional notions of business responsibility and
engagement, the research looks at modern day drivers of CSR in these countries such
as the government, civil society, globalisation and enlightened self-interest. The
research also throws light on other underlying influences and looks at frameworks
such as ISO 26000 for Social Responsibility. Contextualising CSR in Asia ABOUT THIS PUBLICATION Lien Centre for Social Innovation Social Insight Research Series ABOUT THE LIEN CENTRE FOR SOCIAL INNOVATION The Lien Centre for Social Innovation, a partnership between the Lien Foundation
and Singapore Management University, was established in 2006 to advance the
thinking and capability of the non-profit sector. Based in Singapore, the Lien Centre
seeks to enable global thinking and the dissemination of best practices related to
social innovation in Singapore and beyond.
The Lien Centre works through the diverse range of stakeholders in the social
ecosystem, in particular the Lien Foundation and SMU students and faculty, nonprofits and non-profit leaders, socially responsible corporations, and the community
The Lien Centre’s Social Insight Research Series is a series of commissioned
research papers which explore topics of contemporary interest. All publications in
this series are available on the Lien Centre website at . Contextualising
CSR in Asia Corporate social responsibility in Asian economies and
the drivers that influence its practice ABOUT THE LEAD RESEARCHER Bindu Sharma is Asia-Pacific Policy Director at the International Centre for Missing
and Exploited Children (ICMEC), based in Singapore.
Bindu serves on the Advisory Council of the International Centre for Not-for-Profit
Law (ICNL), USA. She has previously served on the ICNL Board: from 20042010, during which time she was Vice-Chair from July 2006 to July 2010; and
earlier from 1994-1997.
Bindu has consulted for a broad range of international and development
organisations, Pact, Inc. USA; the Aga Khan Foundation, USA; Canada’s
International Development Research Centre; the Foundation for Development
Cooperation, Australia and the Lien Centre for Social Innovation, Singapore.
Areas of research and consultation included corporate social responsibility and
public-private partnerships, regional trends in microfinance; governance and civic
accountability of the State; trends in donor priorities in development research in
Asia and programme evaluation and assessment.
Earlier in her career, Bindu was based in Washington DC with Pact, Inc. a US-based
international development organisation, as the Regional Director for Asia. Prior to
working in the development field she worked in the corporate sector in India with
Vam Organic Chemicals Ltd, now Jubilant Organosis Ltd.
Bindu holds Master of Arts degrees, in Public Policy and International Development,
from the Sanford School of Public Policy, Duke University, USA, and in Economics,
from the Delhi School of Economics, Delhi University, India. Contextualising CSR in Asia
Corporate social responsibility in Asian economies
and the drivers that influence its practice BINDU SHARMA A research study commissioned by
the Lien Centre for Social Innovation
April 2013 Copyright © 2013 by Lien Centre for Social Innovation.
All rights reserved.
Published by the Lien Centre for Social Innovation.
No part nor entirety of this publication may be reproduced or
transmitted in any form or by any means, or stored in any retrieval
system of any nature without the prior written permission of the
Lien Centre. The views expressed by the author do not necessarily
reflect those of the Lien Centre.
Readers should be aware that internet websites offered as citations
and/or sources for further information may have changed or
disappeared between the time this was written and when it was read.
Limit of Liability/Disclaimer of Warranty: While the publisher and
author have used their best efforts in preparing this publication,
they make no representations and/or warranties with respect to the
accuracy and/or completeness of the contents of this publication
and specifically disclaim any implied warranties of appropriateness,
merchantability and/or fitness for any particular purpose. No
warranty (whether express and/or implied) is given. The advice and
strategies contained herein may not be suitable for your situation.
You should consult with a professional, as appropriate.
Cover design by Make Design
Printed and Typeset by Green Prints on
Indonesia Woodfree Paper (ISO14001 certified) Contents PREFACE 5 ACKNOWLEDGEMENTS 6 RESEARCH APPROACH 8 EXECUTIVE SUMMARY 9 1 INTRODUCTION 12 • What is CSR? 12 • Why CSR? 14
• Global History and Trends 15
• Civil Society – The Rise of a Countervailing Power? 17 2 THE ASIAN CONTEXT 19
• Cultural Influences 19
• Traditional Philanthropy 20
• State Capacity 21
• Global Supply Chains 23
• Corporate Misdemeanours 23 3 FACTORS INFLUENCING CSR IN ASIA 25
• State Regulation 25
• Policy Guidelines 26
• Institutional Self-regulation 27
• Civil Society 28
• The Informed Consumer 29
• Globalisation – Access to Markets and Investors 30
• Enlightened Self-interest 32 4 CSR CHALLENGES 34
• Corruption 34
• CSR as Cost 37
• Capacity of Business 37
• Civil Society Expectations 37
• Measurement and Impact 38 5 ISO 26000 COUNTRY COMPARISONS 39
• Organisational Governance 41
• Human Rights 43
• Labour Practices 44
• Environmental Management 46
• Fair Operating Practices 48
• Consumer Issues 50
• Community Involvement and Development 52 6 MOVING FORWARD IN ASIA 55 7 CHINA: THE HARMONY APPROACH 57 8 INDIA: DISCOURSE OVER ACTION 84 9 INDONESIA: A GOTONG ROYONG CSR 110 10 JAPAN: THE KAIZEN MEASURE 126 11 MALAYSIA: CSR ON THE WAY 147 12 PHILIPPINES: THE BAYANIHAN WAY 164 13 SINGAPORE: SINGAPORE INC. PRAGMATISM 182 14 SOUTH KOREA: CHAEBOL 2.0 201 15 TAIWAN: RIDING THE CSR SUPPLY CHAIN 222 16 THAILAND: THE SUFFICIENCY ECONOMY 238 ENDNOTES 258 Preface
It has long been construed that corporate social responsibility, as a series of principles
and practices, is hegemonic in nature, imposing a distinctly Western sensibility upon
Asian economies, especially those from developing countries. Which leads us to ask
the question – is there an indigenous “Asian” form of corporate social responsibility?
While various forms of corporate philanthropy and community investment have been
practised by Asian companies, long before it was termed so in the West, can they be
said to form a distinctly Asian sensibility towards CSR?
Are there particular cultural and societal norms which have influenced its development
in this region? And if so, what does this teach us (and especially corporations) about
how CSR can be better practised in the different countries that they operate?
These are some of the questions that we tried to answer through this commissioned
piece of research. The Lien Centre for Social Innovation Acknowledgements
This study started as a conversation with the board of the Lien Centre for Social
Innovation in 2008. I would like to sincerely thank them, especially then-Chairman
Willie Cheng, board member and the then-Honorary Centre Director Robert Chew
for initiating this research.
From the outset, I was aware that a 10-country study on the Asian context of CSR
was an ambitious undertaking and I am grateful for the unstinting support of the Lien
Centre. Special mention goes to the team at the Lien Centre – Jacqueline Loh, Jared
Tham, Prema Prasad, Sharifah Binte Mohamed and Farheen Mukri - the collegial
work place they provided was the most pleasant part of the research project. Others in
the SMU family - especially professors Thomas Menkhoff and Eugene Tan - provided
valuable input at the design and initial stages.
My sincerest thanks go to Jared Tham, at the Lien Centre. One could not have asked for
a more diligent and resourceful Research Assistant. Jared’s commendable perseverance
in the face of endless web-searches and copy edits was essential to the project and his
input and commentary were invaluable as I progressed with my writing.
My journey into the CSR space started with Professor Robert Fleming who kindly
allowed me to audit his course at the National University of Singapore Business School
in 2008, for that I will be ever grateful.
Around the same time, the opportunity to be part of the Singapore Compact’s first
publication “Corporate Social Responsibility in Singapore: CSR for Sustainability
and Success”, a compilation of case-studies on the CSR journey of a select group of
Singaporean and Singapore-based MNCs presented itself. For that I would like to
thank Thomas Thomas, Executive Director of the Singapore Compact and his thenteam comprising Evelyn Wong and Kim Minju.
I benefitted greatly from the many conversations with Singapore Compact and the
group that authored the case-studies - Mark Chong, Rajesh Chhabara, Christine Davis,
Bob Fleming, Nancy Frohman, Jean-Pierre Dalla Palma and Gilbert Tan. In addition,
conversations with Paula Bennett, Erin Lyon, Melissa Ong and others in the small
CSR community in Singapore helped shape the research. 6 CONTEXTUALISING CSR IN ASIA Within a few weeks of starting this research, I was offered the position of Asia Pacific
Policy Director at the International Centre for Missing and Exploited Children
(ICMEC). Sincere thanks to Ambassador Maura Harty, the then-Senior Policy Director
at ICMEC and to Willie Cheng and Robert Chew for their foresight in agreeing to
my doing both tasks.
Others that merit special thanks are Ann Florini, Professor of Public Policy, at the
School of Social Sciences, SMU, for reading endless copies of my manuscript, and R.
Admiral O.P. Sharma, my father, who diligently supported my research by keeping
track of all media reports and research on CSR coming out of India.
This research project was the starting point in my journey back to the workplace after
having spent several years at home with my daughters in their formative years. I would
like to thank my two daughters Gayatri and Geetanjali, and Mani, my husband, whose
patience and forbearance saw me through this project. I would also like to thank all
my friends for their support and encouragement, and for always being there when I
needed them most.
Needless to say, the responsibility for errors of fact and interpretation, as well as the
inadequacies in the research, evidence and reasoning is mine and mine alone. Bindu Sharma 7 Research Approach
This research seeks to shed light on CSR as practiced and reported by companies in the
Asia region. The ten countries researched are spread across Southeast Asia (Indonesia,
Malaysia, Philippines, Singapore, and Thailand), Northeast Asia (China, Japan, South
Korea, and Taiwan) and South Asia (India). Countries were chosen primarily on the
basis of availability of relevant CSR research.
The study relies on secondary research available in each country. As there is a
considerable lack of consistent research on CSR in and across countries in Asia, the
study does not make any attempt to measure how each country performs relative to
the others. The study also looks at broad-based discussion within civil society actors
in each country - industry associations, independent think tanks, centres of excellence
in academic institutions, independent consultants, and in some cases in bilateral and
In addition, the study entailed a review of individual company CSR initiatives as
reported in company annual or sustainability reports. In each of the ten countries, the
top five companies by market capitalisation were chosen to ensure a random selection
(rather than a selection of companies with the best CSR record, which would bias
the study) and with the underlying assumption that the CSR uptake among the wellresourced companies would perhaps reflect where on the CSR spectrum companies
or countries are placing themselves. 8 CONTEXTUALISING CSR IN ASIA Executive Summary
Society’s expectation of responsible behaviour by business, generally referred to as
corporate social responsibility (CSR), has become more explicit for Asian businesses
in recent years. The 1997 Asian financial crisis moved Asian governments to tighten
company law, competition law and corporate governance requirements of listed
companies and put new pressures on businesses operating in Asia.
In addition, the rise of corporate Asia has taken two forms, both of which have
come up against the global expectation of corporate responsibility: first, as growth
of Asian-based supply chains to Western multinationals; and second as expansion
overseas (especially Westward) by Asian-based firms in order to access larger financial
and retail markets.
CSR refers to a wide spectrum of activities, ranging from philanthropy, legal
compliance, self-regulation and most recently new business models responding to
social needs. There is little consensus in Asia about where on this spectrum of social
responsibility Asian corporations wish to be. Furthermore, little is yet known about
where Asia currently fits in this spectrum, or indeed whether the spectrum needs
to be redefined to fit Asian conditions.
To help remedy this lack and spur broader debate on Asian CSR, this study provides
an overview of results of a two-year inquiry into the status and experiences of CSR
in ten1 major Asian countries. The study relies on secondary research available from
each country, but remains constrained by a lack of consistent research on CSR in
and across countries in the Asian region.
The study is organised by starting with several chapters on the general context of
CSR followed by country specific reports. Chapter 1 gives a brief synopsis of what
is CSR, why it is important today and the Western trajectory of CSR and the rise
of civil society as a countervailing power. Chapter 2 looks at factors unique to CSR
in the Asian context. Chapter 3 outlines the factors influencing the adoption of
CSR in Asia. Chapter 4 briefly deliberates on the challenges faced by the Asian
corporate sector in embracing CSR. Chapter 5 presents a cross-country analysis of
the CSR efforts of the top five companies, by market capitalisation, in each country
studied through the lens of the ISO 26000 core categories. Chapter 6 attempts
to capture what Asian governments and industry need to do on the CSR front to
meet global expectations. 9 The 10 country chapters each report on the historical or cultural antecedents of
CSR, the development of CSR in the last decade or more in the country, the active
promoters of CSR, and a snapshot of industry awareness and active implementation
of CSR by companies.
Asian entities are picking up the conversation upstream by virtue of the discourse
on CSR globally being Western-led. In particular, the nascent Asian debate is
following the Western model of looking at what corporations should do beyond
complying with the laws and regulations already on the books. The Asian debate
focuses on philanthropy, voluntary action and new business models. But in much
of Asia legal compliance is still in question, and hence deeper questions remain as
to the uptake and implementation of CSR.
The potential exists to reap formidable benefits from enforcement and compliance
of existing legal statutes in Asia. As with many countries across the world, Asia also
needs to bring its legal framework into the 21st century to meet the challenges of a
globalised and increasingly interdependent business climate.
In Asia, socio-cultural features, the business-government relationship and the State’s
financial capacity all influence the CSR discourse and action. During the course of
the study some highlights emerge:
–– Asian tradition has much to offer to guide the CSR discourse. There is much
discussion around CSR, in the region, as it gains prominence on the global
stage. Yet CSR is not new to the Asian business community, where traditions
and cultural practices give CSR a unique identity in some countries.
–– Classical philanthropy, for example the giving of funds to establish schools,
hospitals and cultural institutions, is already very much a part of Asian business
–– Globalisation has played a role in pushing business in Asia up the CSR ladder,
from one of charity to that of strategic philanthropy based on a company’s core
competencies. In addition, the uptake of CSR in some nations has come in
light of the fact that explicit CSR standards could potentially be used as a soft
trade barrier in global commerce.
–– Asian consumers are still not a force to reckon with, but are increasingly finding
their voice, as exemplified by the citizen response to the Sichuan earthquake
in May 20082 and consumer response to the Sanlu milk scandal in September
20083, both in China.
–– China also stands out as the only country where the financial sector is being
10 CONTEXTUALISING CSR IN ASIA targeted to take on a role in the uptake of CSR in the wider corporate sector.
–– Industry associations, most prominently the stock exchanges in more than
half of the countries studied, have taken the lead in holding business to
higher standards of governance, operational accountability and disclosure or
transparency of corporate data.
–– As in Europe, governments in Asia are playing a role in drawing up policy
guidelines and voluntary codes of conduct. The business community in all
countries, with the exception of Japan, has demanded that the state play a role
in creating an enabling environment that encourages and facilitates business’
adoption of better CSR. Indonesia, to date, is the only country that has passed
legislation mandating CSR among companies operating in the natural resource
sector. In India, Malaysia and the Philippines, state bodies are considering
regulations requiring CSR action and setting standards for reporting.
–– Although the public debate remains muted, there is a realisation among
corporations in Asia that taking responsibility for production externalities
upfront is beneficial to both shareholders and stakeholders in the longer term.
The twin challenges of corruption and compliance however, dog the CSR discourse
in Asia. Corruption within many Asian governments and business sectors hampers
business’ ability to articulate and implement an uncompromised and thus credible
CSR strategy. In addition, state corruption short-circuits compliance and this
undermines the very basis of social responsibility required of corporations. Also,
often states lack the resources to enforce legal statutes even if the political will to
do so exists.
In Asia, most importantly, governments need to find their voice and build the
capacity to ...
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- Summer '18
- Felix Cena
- Corporate social responsibility