Vignettes

VOLUNTEERS ARE BETTER FIGHTERS

We hear a lot these days about privatization the desire, nay need to shift services from the public sector (read inept government bureaucracies) to the private sector (read efficient, well-managed organizations). If it goes on for too much longer you’ll begin to wonder what you are paying taxes for.

Governments were created to hold societies together in a (relatively) harmonious manner and ensure they were given the basic necessities of life: food, water, housing, education, and now electricity, water, and public infrastructure.

Well they couldn’t do the job despite all the money they ripped out of our pockets — so privatise. Today companies compete to give us water and telephones, even now, roads and bridges. Hospitals and schools, the  list goes on. I’m all for it, the less politicians and bureaucrats  have to do in interfering in our lives the better.

The PPP (Public-Private Partnerships —or is that Power Point Presentations) is a refined version of privatization that  makes good sense. The private sector pays for it, builds it, operates it for a (hopefully) modest profit and decades later turns it over to government, if there’s one left by then. But in doing this the private sector party makes an income for the service he provides. All of that should be enough, but it isn’t. Revenues into government coffers even with all these “transfers” still can’t provide for everyone a decent life. So they appeal to us to help, and nice people that we are, we do. We feed children, we regrow forests, we clean up lakes, we build schools. We do many, many things to help those less fortunate than us.

We do so out of compassion, out of a desire to help those less fortunate. But it’s not our primary role. We are in business to provide a product or service the general public needs, or we convince it that it does ( daddy I want McDonalds) . To do so we need to charge for it. And in order to grow our business to meet growing demand, and to  research for and provide an ever widening range of what people need plus lead a decent life we need to make profit. The people who fund us (investors and banks) need to get a return for the confidence they’ve expressed in us with their money. It’s called Open Market Capitalism and as South vs North Korea  ever so dramatically demonstrates, it just works.

We did not go into business to be a charity. Some people did, it’s what they do.  So let them, assist them with all the government support you can muster. But it’s not something a widget builder has expertise in, or went into business for. So why is Congress wanting to mandate it? Mind you they have some strong points to make viz: Corporate Social Responsibility is defined by the World Bank as “the commitment of business to behave ethically and to contribute to sustainable economic development by working with all relevant stakeholders to improve their lives in ways that are good for business, the sustainable development agenda, and society at large.”  Congress then takes it further by saying in its introduction to the bill: “It is observed, however, that many corporations and other business organizations really care little for the welfare of society, community where they operate and the natural environment around them. Their sole purpose is to maximize their respective returns on investment totally disregarding the impact of their activities on customers, employees, shareholders, communities and environment.”

Isn’t that always the way, some  unscrupulous people spoil it for all the rest of us? So the bill if it is passed into law would mandate “all business organizations … to consider the interest of society by taking responsibility for the impact of their activities on customers, employees, shareholders communities and environment.”

Fair enough and any responsible company will take all these into consideration in running its business. But I maintain mandating it is not the way to go. It will create more problems than it solves. I think there are enough of us doing good to more than compensate for the bastards who aren’t. The bastards will find a way of getting around the law anyway. They always do.

And what happens if you’re losing money, or close to it. Must you drive yourself quicker out of business? The bill too is  unclear as  to what CSR is. It says: “ business in the country are (sic) hereby mandated to observe its corporate social responsibility or the obligation to consider the interests of society by taking responsibility for the impact of their activities on customers, employees, shareholders, communities and the environment in all aspects of their operations.” How on earth (deliberate environmental choice of word) do you define and measure that?

Helping others should be a voluntary action, one you want to do—not forced to do at gunpoint. What would help is to make CSR tax deductable (which is part of the bill), but that does result in lower revenues due to a government already in too much debt. Nonetheless in this case I’d suggest a fair trade-off.

My company undertakes several projects to help others as we think it’s the decent thing to do. Force me to do so by law and I’ll be much less incentivized to want to help.

One of them is we’ve taken up government’s excellent concept of “One town, One product”. Around “our” lake there has been much deforestation (Philippine forests used to cover some 21 million hectares of land, today they cover a mere third of that, only 7.2 million hectares)

as locals struggle to survive in an environment that doesn’t create enough jobs. In Caliraya they chop down trees to  make charcoal, what a waste.

So we’re introducing bamboo as the “one product.” It’s fast growing—you can start selling after just a year. It’s highly versatile — you can add considerable value by making all sorts of things from handicrafts to furniture to more sophisticated, processed bamboo products later on. Its extensive root system holds soil together preventing erosion and siltation of the lake (I’ve no desire to emulate Christ). It should bring   wealth in a greener environment.

We support an orphanage run by, of all things, an Irish priest where kids are given a life they wouldn’t otherwise have. And an education to prepare them for that life.

Then my family’s love of animals (10 dogs, 4 pet-morning kisses are the norm –birds, and a range of other animals) led us inevitably to support for the zoo  (read my column of July 22 on this one). Taronga Park does it magnificently, Manila Zoo doesn’t because of just one thing: money. The root indeed of all evil. The flowering of that root is what Manila Zoo needs. We’re trying to raise it through corporate philanthropy.

If you are going to enter into CSR, the decision to make is, into what? Pure altruism is fine, but choice should not be arbitrary. Rather it should express itself in an interest you have (I’d hoped to get financial support for a love of mine, chess, by wanting to support Wesley So, the young Philippine Chess Grandmaster but the interest earlier expressed never eventuated), or in something related to what your business does. Boysen is painting  EDSA walls with pollution-absorbing paint. It’s business is paint. Holcim is lending infrastructure assistance through concreting rural roads, it’s a cement company. A construction company, Leighton, is providing scholarships in mining engineering and lends assistance in emergency response through road clearing. Some mining companies build schools, hospitals, roads where their mine is.

Nothing wrong with any of this, it’s the eminently sensible thing to do. It means you don’t just throw money at it but also become involved. And how rewarding is that. You’ll do a far more effective job of  helping if it’s what you want to do, not forced to do.

A law has no place in CSR, encouraging voluntarism does.