Socially Responsible Nepali Corporates

By Sameer Shukla

Globalization, progressing at a rapid rate, has changed the way economies were run traditionally. As a result, there has been a transformation in the roles, relationships, demands and expectations of various economic stakeholders. With the private sector steering the economies in every country of the world, they have increasingly been seen as a potent agent in the pursuit to social development – a sector that was supposed to be exclusively the governments’ domain, till few decades ago.

At the same time, increasing awareness among consumer groups is making demands on the corporate sector to adopt business practices that are socially and ethically responsible. The case in point is the devastation faced by Nepali carpet industry in 1990s following the news of child labour used in this industry. As a result, Corporate Social Responsibility (CSR) is no longer something that a corporate can safely put on the backburner. Moreover, it is becoming recognized as an important driver of innovation, a new way to get into fresh markets, a means for companies to differentiate themselves and attract investors. CSR is also a good way for businesses to engage staff and the community and, if properly implemented, it can lead to reduced costs and improved profitability.

Corporate Social Responsibility& Charity

The concept of social responsibility of business, though might appear to be a phenomenon of recent times, has been in practice since ancient times. Philosophers like Kautalya from India and pre-Christian era philosophers in the west preached and promoted ethical principles and controlled greed while doing business. Social responsibility of business had been incorporated in the various religious laws where a part of one’s earnings were to be donated towards the welfare of the poor and the disadvantaged. The Hindus called it the ‘Dharmada’, the Sikhs ‘Daashaant’ while Muslims called it the ‘Zakaat’. CSR is, according to Wikipedia, taking responsibility for the impact of the company’s activities on customers, employees, shareholders communities and environment and taking steps to improve situation going beyond the statutory obligations. The word ‘stakeholders’ is nowadays used to denote that the company is owned not only by the shareholders but also by others on whom the company’s activities cause an impact. Some companies of the world have these days started reporting compliance of CSR standards as they do about compliance of the statutory standards. Some most respected CRS standards are: a. Account Ability’s AA1000 stancard based on John Elkington’s tripple bottom line reportig (the three bottom lines are people, planet and profit) b. Global Reporting Initiative’s Sustainability Reporting Guidelines c. Verite’s Monitoring Guidelines d. Social Accountability International’s SA800 Standard e. ISO 14000 Environmental Management Standard f. UN Global Compact’s Communication on Progress (COP) Some people view that CRS is different from charity. In their view CRS is a business strategy aimed at making gains on the long-run, if not in the short-run, while charity is purely giving away without any gain in return either in the short-run or in the long-run. Business can gain in the following areas by CRS a. Get best human resource and retain them b. Managing risks by improving firm’s social prestige c. Vrand differentiation d. Avoiding interference in firm’s business from regulators, media, NGOs (Based on information posted on Wikipedia)

Asia, in general, and Nepal, in particular, faces many critical issues in the context of globalization, varying from internal social conflicts to terrorism, corruption, widening gap between rich and poor, environmental pressures and poor access to infrastructure and basic services such as health, clean water, education and housing. Business can play key roles as corporate citizens in contributing to human resource development, technology access, sensitive and creative industrial restructuring and inclusive economic development as well as respecting human rights.

In a recent Asian conference on CSR (Delhi 2005), the Chairman Emeritus of NASSCOM - an apex body of the Software development industry of India - emphasized that, '…corporates don't just make money; they create wealth. Unless wealth is created, there will be nothing to distribute.'

Although best-practices in CSR in Nepal may not be as developed as it is in the Western world, it is important to recognize that considerable differences exist between different countries and that stakeholder expectation and demands are culturally specific and require CSR solutions that reflect that difference and context specificity.

Some of the worth-mentioning examples of CSR in Nepal have been outlined here:

The Handwash Initiative has been an example of CSR success in the country where Unilever Nepal and Aarti Soaps aligned with UNICEF, the World Bank and USAID to contribute towards the reduction of diarrhoeal incidences through hand washing with soap at critical times and by using correct techniques.

CSR & Nepali Guthi

“Guthi” tradition (a type of trust) in Nepal was built up on lines of CSR. A well-organised and diversified objective of “Guthi” is to contribute more to the society. It is desired and believed that collective business community effort is more useful for achievement of corporate social responsibility in poorer sections of society. (Source: A Paper on CSR presented jointly by Badri Prasad Ojha (Director General) and Binod Bahadur Shrestha (President) of FNCCI).

However, this was an one time initiative as the same was not continued by the two organizations in later years. Still this may serve as one of the alternate models of CSR initiative. The major striking feature in this example is that two competing companies joined hands to pursue a single CSR initiative. Hence, the learning: Competing companies can take joint CSR initiative. For that matter, all the member of a particular chamber or commodity association can jointly promote a CSR initiative.

Surya Nepal (SNPL), as a part of its CSR initiatives, has worked in various areas through its initiatives, viz. Asha, Khelparyatan, Prakriti, and Suswasthya.

Under the 'Suswasthya' initiative, SNPL has been supporting primary health services to deprived members of society by enhancing health awareness levels, and enabling access to use of quality health services and check-ups. SNPL has also been constantly working on developing the capacity of local volunteers and women to increase health awareness and promote preventive measures for local health problems. SNPL has also provided two ambulances and has been helping make available anti-venom and oxygen cylinders that are essential for saving lives in times of medical emergency.

.'Asha' initiative has the following components:

ITC Ltd. of India and its Nepali Subsidiary Surya Nepal

ITC Ltd.’s e-choupal initiative in India has tapped the immense potential lying buried in Indian agriculture that prevents the realization of its full potential. Project ‘e-Choupal’ places the technology of the Internet at the ready disposal of the farmer in his village. The farmer thereby enjoys the incredible facility of immediate on-line access to expert advice on agriculture, through either e-mail or the chat mode on the worldwide web. ITC has formulated clear plans to rapidly scale up this ‘e-Choupal’ initiative to cover one sixth of rural India in 16 states across the country. But the same has not been replicated in Nepal. Giving the reason, Surya Nepal’s high officers say, ITC is a strong player in the Food Category, and as per backward integration strategies they have been engaging with the rural community in sourcing and tech transfer for assured and quality agri-based products for a long time now. This is one side of it. On the other, as the rural India grossly missed the retail revolution – ITC, through its Choupal Sagar initiative, could link the retail offering to the rural masses making it a symbiotic connection. And of course, the initiative was well supported by the rural connectivity infrastructure. While Nepal also has some of the matches, the time has not yet matured for such initiative here on the company (product profile) and infrastructure fronts.

 Support educational institutions to enhance quality of primary education for deprived members of the society.

 Support Self Helf Groups (SHGs) of poor women and farmers, to create sustainable income-generating opportunities by developing market needs-based small and micro enterprises.

 Empower needy women through vocational trainings as per the local market needs such as garments sewing, weaving, agarbatti, bindiya, candle-making, local handicrafts, dairy products etc.

 Create rural prosperity by helping enhance agriculture and livestock productivity for sustainable livelihoods. To achieve this objective, SNPL has been providing training on latest agriculture technology, vegetable farming, cultivation of leaf tobacco, livestock rearing, poultry farming, etc.

 SNPL has signed a Memorandum of Understanding with the Chamber of Industries Morang (CIM) for providing financial and technical support towards imparting sewing training to underprivileged women from the nearby locations.

Two Corporates Joined Hands for One CSR Initiative

The first phase of the Nepal Handwashing Initiative (NHI) comprised of a consumer baseline survey and the development of a Business Plan. Based on the findings of the survey, a marketing strategy was developed including Information, Education & Communication (IEC) and promotional materials viz. posters, brochure, flip chart, radio spots/jingle and a TV commercial. NHI was launched nationally in October 2004 followed by the district level launches, using mass media advertising (TV, Radio) and social mobilization, which included training of frontline workers (Female Community Health Volunteers, Sanitation Motivators and Community Based Organizations etc.), door-to-door visits, hand washing demonstrations and activities in schools and communities, and local event promotions in the focus program districts. The two key major soap manufacturers in the country - Nepal Lever Ltd. (a subsidiary of Unilever Inc.) and a local soap company, Aarti Soap and Chemicals supported the campaign by providing free media airtime in prime time television and radio programs, soap samples and school promotions. During the National Sanitation Action Week in May 2005, hand washing with soap promotion was incorporated as an integral component, particularly among the school children, in a majority of the districts.

 'Khelparyatan' is a sports and tourism initiative, which includes providing Nepali athletes with international exposure and a platform such as Khukuri Cup to showcase their prowess, as well as to promote and support the tourism industry through restoration of heritage monuments and high-profile sporting events such as the Surya Nepal Masters - Nepal's only International Masters golf tournament and part of the prestigious PGAI tour.

 'Prakriti' initiative drives afforestation activities through providing free saplings and enhancing awareness in the local community for sustainable environmental development through tree plantation.

There has been a plan at concept level where one of the largest business houses plans to tie up wit Micronutrient Initiatives and an I-NGO to provide infant cereals through social marketing route. However, the company does not want to be named in this article.

Dabur Nepal (P) Ltd. provides a very good example in CSR. The guiding force behind Dabur Nepal's growth and success has been the wealth of nature and its limitless capacity to support life. The company claims to be constantly working towards preservation of nature. With the overall vision of eco-sustenance, Dabur Nepal has established a unique bond of technology and preservation.

Nabil CEO Speaks about CSR

“The Bank’s philosophy towards Corporate Social Responsibility goes deeper than just providing funds for an event or project. Just like with all our other stakeholders, hereto we believe in building long term sustainable relationships. “To this end, our approach to being a great corporate citizen is built on three pillars; Health, Education and Sport. In Health, we have partnered with the Glaucoma Center at the Tilganga Eye Hospital to increase overall knowledge about this blinding disease. In Education, the Bank is supporting the education of underprivileged girl children at the Mary Ward School. And in Sport, we have entered into a partnership with Nabil Three Star Club to promote the spirit of sport.”

 The hoardings around the streets of Kathmandu where the younger generation of top Nepali business entrepreneurs and professionals are seen standing together against the menace of HIV/AIDS is a testimony to Nepali Corporates coming forward together as an example of social responsibility. This initiative is driven by ILO and promulgates to adopt HIV work policies among leading corporates. As of now, there are nine signatories to the effort that is supported by Ministry of Health, GoN. Through these hoardings, the corporate leaders, mostly young, give the following message to the masses:

 The corporates that they represent strongly back a cause - here against the social menace of HIV/ AIDS

 It's the youth (most vulnerable to the menace) in this young country that needs to pay attention

 Its not a problem that should not only bother the have-nots; it is equally important for all sections of the society

 If the elite youth of this country is not hesitating in aligning with this (usually perceived as not to be discussed) topic - we should open up on the subject that may affect any of us, and in that process create due awareness and desired practices.

Dabur Nepal’s CSR Initiatives

Medicinal Plants Initiative: Given the critical nature of medicinal plants, Dabur Nepal initiated the Medicinal Plants Project in the mountain regions of Nepal. Under this project, the Company provides modern scientific support for the cultivation and processing of these plants by local farmers. They are provided saplings through local community development agencies and the harvested plants are bought by Dabur Nepal at prevailing market prices. This system of contract cultivation has been a great success in Kusumphool, Silybum and Mentha areas of the Terai region. The project assures the community of a sustained source of income while it also provides Dabur a resource base for their raw materials. Nursery Program: Dabur Nepal’s efforts at supporting community level cultivation of medicinal plants and conservation measures needed the backup of an extensive network of nurseries for saplings. Under the Nursery programme, high altitude satellite nurseries have been set up in Marpha, Manang, Sindhupalchowk, Nuwakot and Dolakha districts. These nurseries grow and propagate over 1.5 million saplings of high value medicinal plants including Loth Salla. As an extension to the nursery programme, Dabur Nepal is also working on a project for development of Agro-forestry systems using critical medicinal plants. This new initiative has been undertaken in collaboration with an INGO. Bee-keeping Development: Honey is a core aid in herbal remedies and Dabur has a strong brand presence through its pure bottled honey. To augment and better manage sourcing of the best Himalayan honey, Dabur Nepal initiated the bee-keeping development programme 3 years ago. This programme was implemented in collaboration with the Department of Forest through the Forest User Groups in the western Terai region. Over the years, the project has taken off successfully, increasing the yield of honey while providing gainful employment to farmers in the region. (Source: Dabur Nepal)

Global Compact:

CSR in India: Wipro

Azim Premji Foundation set up with financial resources contributed by Azim Premji, Chairman, Wipro Corporation, is another glaring example of initiatives which are very strategic and systemic in nature. Wipro Corporation is ranked 1,362 in the Forbes magazine’s top 2000 corporate titans in the world (Garavi Gujrat, Asian Newsweekly, GG2.NetNews 06/04/2005). Its vision is to significantly contribute to quality universal education as a foundation to a just, humane and equitable society. It is also one of those very few initiatives with children as major focus of its work. The foundation aims at making a tangible impact on identified social issues by working in active partnership with the Government and other related sections of the society. The Foundation, believes that education is the vital element in the development and progress of India. The foundation has stated objectives to influence Policy and Systemic Issues. It also aims at capacity building of a variety of stakeholders. The programmes, initiatives and efforts of the Azim Prejmi Foundation revolve around creating effective and scalable models that significantly improve the quality of learning in the school and ensure satisfactory ownership by the community in the management of the school.

In an address to the World Economic Forum on 31 January 1999, UN Secretary-General Kofi Annan challenged business leaders to join an international initiative - the Global Compact - that would bring companies together with UN agencies, labour and civil society to support universal environmental and social principles. The Global Compact's operational phase was launched at UN Headquarters in New York on 26 July 2000. Today, many hundreds of companies from all regions of the world, international labour and civil society organizations are engaged in the Global Compact, working to advance ten universal principles in the areas of human rights, labour, environment and anti-corruption.

Through the power of collective action, the Global Compact seeks to promote responsible corporate citizenship so that business can be part of the solution to the challenges of globalisation. In this way, the private sector - in partnership with other social actors - can help realize the Secretary-General's vision: a more sustainable and inclusive global economy.

The Global Compact is a network. At its core are the Global Compact Office and six UN agencies. Out of these the nodal UN agency for Nepal is UNDP. There are 15 organizations from Nepal that have signed this Compact.

CSR in India: ICICI Bank

ICICI Bank is the second largest banking institution in India. It has been ranked 757 in the Forbes magazine 2004 list of top 2000 corporate giants in the world. (Garavi Gujrat, Asian Newsweekly. GG2.NetNews 06/04/2005). The Bank promotes its CSR initiatives through a well established department called the Social Initiative Group (SIG). The mission statement of the SIG is ‘to identify and support initiatives designed to improve the capacities of the poorest of the poor to participate in the larger economy.” Its social initiatives programme is also one of the few corporate programmes in the country which has children as major focus of its work. The SIG believes that the three fundamental capacities any individual should posses to be able to participate in the larger economy are in the areas of health, education and access to basic financial services. With this belief it aims to resolve some of the most fundamental developmental problems facing India, by bridging knowledge and practice gaps in specific thematic areas-early child health, elementary education and micro-financial services. (www.icicisocialinitiatives.org). The SIG operates as a funding agency and implements its programme in partnership with local NGOs, academic institution, micro-finance institution and international agencies. Its operating principles are:  The initiatives must cater to the poorest  They should be cost effective  Time bound  Capable of large scale replication  Impact assessment of the programme should be measured

There as well have been some success stories with regard to Public Private Partnerships (PPP) in Nepal. PPP is increasingly being looked upon as a highly feasible and attractive development modality in various spheres of social development and it is one of the ways through which the businesses can fulfil CSR. The essence of PPPs is that the advantages of the private sector innovation, access to finance, technological knowledge, managerial efficiency and entrepreneurial spirit are combined with social responsibility, social justice, public accountability and expertise on local knowledge represented by the public sector. The cooperative functioning of the two allows for potent and effective solutions to address pressing socio-economic and environmental challenges.

Federation of Nepalese Chambers of Commerce and Industry (FNCCI), and Municipal Association of Nepal (MuAN) have led an initiative named Public-Private Partnerships for Urban Development (PPPUD) that works for improved access to basic services for urban citizens, creation of a healthy environment and to improve the living conditions in the urban and semi-urban areas.

PPPUD in the first phase was initiated in five Municipalities of Nepal- Biratnagar, Bharatpur, Butwal, Hetauda and Pokhara. In the second phase, it has been extended to additional five Municipalities - Mechinagar, Dhulikhel, Bhaktapur, Kathmandu and Siddharthanagar. One of the important components of PPPUD is to provide required technical support (pre-investment supports) to its stakeholders to initialize the PPP projects at the local level. PPPUD facilitates and provides technical support to partner Municipalities, local chambers and local civil society in different phases of project identification, formulation, implementation and evaluation as and when deemed necessary.

Another success story of Public-private partnership is in tuberculosis (TB) control where a group of private practitioners, nongovernmental organizations and the public sector formed a local working group to deliver the internationally recommended TB control strategy, DOTS (Directly Observed Therapy). The initiative targeted Lalitpur municipality, where it is estimated that more than half of the total reported cases of TB get treated in the private sector.

CSR in Bangladesh: Unilever

Unilever in Bangladesh supports a variety of social activities under its CSR portfolio. It provides support in the field of education, women’s empowerment, health, hygiene and personal care. UBL helped to set up modern operation facilities in Port City Hospital. Since 2004, UBL is supporting Shathee Samaj Kalyan Samiti (SSKS), an NGO working for the slum residents in the city’s posh residential area-Banani. SSKS provides free primary education to over 300 underprivileged children of lowest income families. In January 2005, Unilever Bangladesh initiated the sponsorship of the schools’ major expenses. The sponsorship helps to cover salaries for the teachers and staff, uniforms and books for the students and other administrative outflows. Moreover, given the proximity of the school to UBL’s corporate office, company managers volunteer to spend time with the children and take innovative learning sessions. These include origami, good behaviour, electricity and safety, etc. The children eagerly await such visits which inspire their creative thinking and are a break from the everyday school work. Unilever’s ‘Pepsodent Dentibus’ visits the school premises to create awareness about good oral hygiene. The existence of the school is a great support for the children living in Banani, Gulshan, Badda, slum areas and UBL provides support for opportunities such as training for teachers and sports lessons for the students. Nurturing the intellect and dvelopment of the children coming to this school can help build a strong example of conscientious involvement of the privileged society in support of the needy.

Standard Chartered Bank in Nepal has supported an education programme for young girls through the United Nations Women's Organisation project 'Kamlarni Scholarship Programme' to help the girls of the Kamaiyas who have been recently emancipated from multigenerational debt bondage. In addition to that, the bank has been helping the orphan and girls rescued from the clutches of women traffickers and the disabled children in addition to various helps to the schools in general. Providing the bank is also conducting various programmes under its parent organization Standard Chartered PLC's slogan of "Seeing is Believing" by helping the people to get cure or other assistance to fight blindness. The bank is also conducting various programmes to enhance awareness about HIV/AIDS. One of the regular programme under this is Living With HIV (LWHIV) initiative.

Asian Paints, the leading paint company in Nepal has been cognizant of its responsibilities towards the community since its inception - over two decade ago. Its engagement with the community focuses on three areas: Heritage Protection; Promotion of the culture of Nepal; and Help Governmental Agencies and Reputed NGOs.

Details of its activities in these areas are given below:

Protecting the Architectural Heritage of Nepal: The contribution of Asian Paints is usually in the form of paints and sometimes, assistance in the restoration process. The key heritage sites where the company is currently involved in preserving include:

 Dharahara Tower, Ranipokhari Temple; and Baieesdhara Park in Kathmandu

 Shaheed Smarak Park in Hetauda

 Vindyabashini temple in Pokhara

Promotion of the culture of Nepal: Activities in this area include,

 Beautification of the entire lakeside of Pokhara during Pokhara Street Festival (December);

 Assistance to concert of renowned singers;

 Assistance towards the filming of the award-winning documentary film "Bhedako Oon Josto";

Assistance given to Governmental Agencies and NGOs: Activities include,

 Traffic road signs and messages, in collaboration with the Valley Traffic Police in Kathmandu;

 Extensive traffic road signs and painting of road dividers in Biratnagar;

 Thamel area road signs and area map, in collaboration with the local ward committee;

 Assistance in restoring buildings of Maiti Nepal, an NGO working in the area of women and child trafficking;

 Painting assistance given to the “Family Volunteer Services”, an NGO working in the area of child education and development

Nabil Bank too has some initiatives under CSR as part of its strategy to be the bank of fist choice. As the bank's CEO Anil Shah says, the CSR initiative of the bank is focused on three pillars - health, Education and Sports.

There are other Nepali corporates as well that are doing their little or more in CSR, but the overall trend does not differ much from what the foregoing examples suggest. For example, Toyota's distributor United Traders Syndicate (P) Ltd. is working on various environment-related activities. Himalayan distillery has been maintaining various gardens. Similarly, DHL Nepal too is maintaining public gardens in Kathmandu and Lalitpur, supporting Room to Read activities and providing help to the visually impaired at Maitri Nepal Samaj besides sponsoring a group of volunteers to help Kathmandu’s road traffic management. Though traditional business houses like Chaudhary Group, Golchha Organisation and other have been running various charitable organizations, Nepal Industrial and Commercial Bank is perhaps the only example of modern corporate body to go for CSR by setting up a charitable foundation on its own. The bank says, it is in the process of such foundation. At present the bank is supporting underprivileged and meritorius girl students of community-run schools in Kathmandu.

Conclusion:

Corporate Social Responsibility is the commitment from business enterprise towards sustainable economic development, creating good working environment for employee & their families, and community at large, to improve their quality of life. It could be displayed by any corporate action that is either preventive or proactive.

Rapid social change towards achieving Millennium Development Goals (MDG) can be affected when benefits flow from the top down, which is why CSR has potential to be the most significant human force in the 21st century Nepal.

Going forward, in order to survive and excel, it will be necessary for Corporates to have a social impact - working for the society will no more be an option, rather a necessity.

From the Corporates point of view, it is imperative that CSR be aligned with the business models in order to make it sustainable and not perceived as just a mode of philanthropy. Thereby, greater public leadership needs to be shown by those at the top of Corporates in Nepal, so that CSR can be seen with credibility, and not cynicism.

One major weakness among the Nepali corporates in CSR field is that it is very hard to find any corporate with a separate department or cell dedicated to CSR initiative.

Walking the talk is harder than mouthing the slogans; obviously we need good walkers.

Also worth mentioning are several initiatives from the banks. While Nabil has sponsored football club Three Star, Himalayan Bank has sponsored Himalayan Bank Cup Football Championship. Similarly, Nepal Industrial and Commercial Bank has provided help to students at Tilingtar Higher Secondary School.

(Shukla is Country Manager of ACNielsen Nepal Pvt. Ltd.)

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