Business, CSR, Economy, Human Rights, Law, Nigeria, Poverty, Social Justice, Social Responsibility, Sustainable Development, Uncategorized

Privatisation vs. Commercialisation – The Sustainability Issue.

Developing country rules are different from established developed country rules, this is due to various factors which include, but not limited to poverty, lack of institutionalised processes, corruption, nepotism, weak institutions etc.

The question has always arisen about what is the best form of economic model to adopt in running Government enterprises, ‘Privatisation’ or ‘Commercialisation’ (especially in light of government failures in running enterprises in developing countries). The phrase “government enterprises’’ explains itself, it means a government-sponsored business activity, such as a public utility. It is an enterprise set up by the government for the provision of goods and services, for the benefit of the people. The writer has always advocated for any other model except privatisation, for developing countries.

Privatisation as a model elicits selling government enterprises to private business concerns, usually owned by very rich individuals, who are mostly motivated by profit, at the expense of the people in the country. The arguments for privatisation include that the companies would be better run, provide jobs to the benefit of the society. Inspite of the stated reasons, from hindsight, these are not enough reasons for the case, in under-developed countries. In a country with weak institutions, how do you control unbridled capitalist tendencies i.e excessive increase in prices of goods and services. America cannot be compared with Nigeria, esp when comparing GDP and minimum wage issues.

It is the opinion of the writer that the model of commercialisation as adopted in the U.K, is better for developing countries to adopt.

What is Commercialisation, in this context? Commercialization is a system of leasing out govt enterprises for a few years to the best and most capable hands. This is a better model, in the sense that government enterprises still belong to the state and those holding the leases would not take permanent control which would give them a sense of superiority, which could lead to them riding roughshod over the populace. Commercialisation is more advantageous because it can help governments protect the people by getting a better deal for the people at the expiration of a lease, before the renewal of another. Developing countries rarely learn from second hand experience i.e experience of other countries. Russia and Britain have experienced both models and have totally rejected privatisation. One of the advantages of commercialisation of government enterprises is education and technology acquisition, upgrading standards, learning new work ethics and management cultures and skills acquisition. These are important because the major problems with government enterprises, in developing countries, is motivation and job satisfaction which is lacking in most cases. Inculcating a new mind-set is fundamental to a developing country’s progress. Inevitably, this would lead to a more sustainable economic environment where both the country and people can benefit. Instead of a privatised system that creates oligarchs (a new level of super-rich) which goes against the new ethos in the world which is bridging the gap between the rich and the poor by creating a more solid middle class. It has always been the view of the writer that those who profess privatisation as a system, lack adequate understanding of sociology, motivational psychology, political philosophy and positive socio-economic theories that hinge on socio-capitalist initiatives such as social welfare, CSR and community development in a protected and better monitored environment.

It should be noted that governments that privatise their enterprises give control of their economies over to private individuals and when this happens, chaos would be the end result, because this erodes democratic ideals, where the people lose the right to run/ decide their economic destiny, because those elected lack the power to implement the people’s wishes. So the real power would reside in the owners of factors of production/ the commonwealth. If the government controlled its own enterprises and partook in the same economic environment as privately run companies, this would create competition which could spur a rejuvenation of government enterprises and the government could control prices of its goods and services which would also have an effect on prices in society, which could defeat any cartel arrangement in fixing prices to the benefit of the cartel.

In short the espoused phrase of ‘Government having no business in business’ is totally flawed and wrong for developing countries. It can even be said to be wrong also for developed nations in light of the recession of the 2007-8, where due to the collapse of major enterprises, the governments of USA and UK not only gave out bailout funds, but even bought stakes in some banks in the UK, as well. This is the result of unbridled capitalism.

It should also be noted that Foreign Direct Investment (FDI) is different from Indigenous Privatization of Government enterprises and the excuse of the issue of frustration of FDI initiatives, such as the Richard Branson’s debacle in Virgin Nigeria (Note: Not Virgin Atlantic business in Nigeria) should not be used as a yardstick for privatization in Nigeria. When individuals own all the companies in a developing country, no one can hold them back from maximising profit, over public interest. To whose detriment is this? Answer: the people, citizens and consumers.

Can this bring about sustainable progress/ development for the majority or only for a few?

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Business, CSR, Dangote, Human Rights, Law, Nigeria, OXFAM, Poverty, Public Relations, Social Justice, Social Responsibility, Sustainable Development, Uncategorized, Warren Buffet

Injustice and Inequity: the Bane of Under-Developed Nations. (Nigeria as a case study)

‘For the same reason that a Dangote is great, is the same reason why underdevelopment persists in third world countries.’

Why in the midst of so much riches, is a society so poor? There are a few reasons – inadequate distribution of resources, corruption, insincerity and the prevalence of an individualistic nature.

Inequality has become a global phenomenon, in today’s world, but it is a lot worse in developing nations, where there exists various forms of cultural, political, social, legal and economic imbalance and injustice.

The writer has on numerous occasion attempted to enlighten at various fora, the unnecessary nature of having too much in an under-developed nation. Why should one man have over 10 billion dollars, in a country, where some cannot even afford to feed on 1 dollar a day. It is the belief of the writer that no man should aspire to over 1 billion dollars, if their society is bereft with poverty and under-development. The logic behind this is that the more a man takes out of an under-developed environment/ market, the less for the people of the country.

This would somewhat explain the philanthropic nature of billionaires in more developed climes e.g Warren Buffet. These set of men understand the essence of money and money-making. In better climes, there is something extra to having money. Developed and more enlightened societies develop strategies and systems that instil a sense of responsibility on the rich e.g through charitable organisations like OXFAM or by the rich setting up their own foundations e.g Bill and Melinda Gates Foundation. This sends a message, which is you are only a temporary custodian of the monies in your possession and bestows some responsibility on the holder of such monies to be more communal and charitable in his or her actions.

In contrast, what is found in underdeveloped nations, is a set of people (Elite and the Rich), who believe that society owes them indefinitely. They possess a megalomaniac disposition, imbued with an over-bloated ego of self-importance, almost feudalistic in nature, to the detriment of the society around them. A set of people, who are on a one-way track of constantly stripping the society and the environment of its resources, without giving anything back. If this is not wicked, I do not know what the word means.

In a business or capitalist environment, there is nothing wrong in healthy competition amongst entrepreneurs, but when that need for capitalist competition begins to hurt society, then it is wrong and we should know when to draw the line. It is this sort of unbridled money-making, without any care for the society from which the money is derived, that leads to the collapse of societies and civilisation i.e. Syria, Iraq, and Libya.

It is the opinion of the writer beyond all reasonable doubt, that the cause of high corruption in the land, is based on this circumstance of injustice and inequity. The blame lies not only on Government officials, but also on the people of the nation, who have been so impoverished over the years, that they now suffer from a poverty mentality, even in the midst of riches, making the people desperate and less humane.

How do you explain the situation where banks ask their workers to meet crazy monetary generation targets (in the Billions) or they would lose their jobs? The multiplier effect on the psyche of Nigerians in this era of little or no job security, is best left unimagined. Most people will become criminals and will be encouraged to steal to meet up. Even Juju/ Obeah (Traditional Spiritual assistance) is not out of the question in this effort, of unbridled primitive acquisition of material resources.

One solution to this situation is the implementation of a Corporate Social Responsibility (CSR) Law in Nigeria, as in India. This would make it compulsory for every company that makes over a particular amount, to spend a part of its revenue on CSR. The implementation of such a law would act as a driver towards sustainable development in the society.

Why is this not prevalent in most under-developed nations?

In the words of Bob Dylan, the answer my friend is blowing in the wind.

A word is enough for the wise.

Videos on Inequality in today’s world:

 

 

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Branding, CSR, Law, Public Relations, Sustainable Development

CSR is about looking at problems as opportunities – William D. Eggers, Deloitte

Corporate social responsibility (CSR) has become a buzzword with the government (in India) making it mandatory for companies to spend 2% of their net profit on the social upliftment of people .

Meet Mr William D. Eggers, Research Director, Public Sector Industry, Deloitte
Bill, as he is called, is the author of eight books, including his newest, co-authored with Paul Macmillan, The Solution Revolution: How Business, Government, and Social Enterprises are Teaming up to Solve Society’s Biggest Problems (Harvard Business Press, September 2013). He coined the term Government 2.0 in a book of the same name.

He is an appointee to the U.S. Office of Management and Budget’s Performance Assessment Rating Tool (PART) Advisory Board. Bill has advised governments around the world. He gives close to 100 speeches a year and his commentary has appeared in dozens of major media outlets including the New York Times, Wall Street Journal, The Washington Post, The Guardian and the Chicago Tribune.

In an interview granted to Live Mint & Wall Street Journal, Bill said if a company uses CSR activities to also promote its business, it should be applauded and not frowned upon. He feels it is not unethical to leverage on CSR activities to strengthen your brand, if the company is doing a lot to improve the environment, the company should be able to state that it is part of their core values.
Socio-Capitalist agrees with this statement, because if there is no psychological impetus/ booster or Public Relations value for companies to continue to carry out CSR activities, the pot of CSR and the benefits accruable would eventually dry up, especially if companies would be restricted from having bragging rights over positive CSR activities they have carried out.
What is your opinion?

Find below the feature of the interview:

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Branding, CSR, Law, Public Relations, Sustainable Development

Cruise Industry underperforming in CSR – Leeds Met Research Study

A new research by Leeds Metropolitan University reveals that the cruise industry isn’t going far enough in their corporate social responsibility towards the environment, society and the destinations they visit.
The study, published in April, 2014 in the journal, Tourism Management, analyses the industry’s lack of corporate social disclosure and ranks companies through analysis of their corporate social responsibility reports and websites to provide the first cruise sector sustainability reporting index.
Sixty five per cent of the 80 cruise companies worldwide which were analysed do not mention corporate social responsibility on their websites, and only 12 brands publish corporate social reports – belonging to only four companies: Carnival Corporation, Royal Caribbean International, TUI and Disney Cruises.
Dr Xavier Font, the lead author of the study from Leeds Metropolitan University explains: “Most companies report soft data, such as statements from their CEOs, that are easy to copy and do not show real change”.
The report highlights that more must be done by the cruise industry in terms of the environmental impact of cruise ship’s discharges, as cruises usually operate in highly valued coastal water and marine ecosystems. It is noted that some anti-fouling coating used to mitigate the impact contain hazardous chemicals which can be harmful to marine organism. The harm from ballast water is well recognised since 1970 when the International Maritime Organization noted the negative impact of non-indigenous organisms transported in the ballast water. Since 2004 there is a Convention for the Control and Management on Ship’s Ballast Water and Sediments, but that has not entered into force due to the limited signing from states (only 33) until 2012.
Cruise ships that comply with legislation and are under international regulations may still discharge comminuted and disinfected sewage using systems approved by its flag administration at a distance of more than three nautical miles from shore. To be able to claim environmental responsibility, cruise companies should use an advanced system and use it consistently, not just depending on the jurisdiction.
The study also examined the socio-economic impact of the cruise industry and highlighted previous research which reported evidence of frequent violation rights for disadvantaged groups including charges for medical examinations, visas, transport and administration putting cruise industry workers into a level of debt that cannot be repaid and is comparable to forced labour.
It also noted that there is limited public data to sustain the claim that cruise industry contributes to the economy by creating jobs and contributing to the local economy of the destinations visited. In fact, low spend cruisers are considered unproductive given the costs incurred by their impact. Additionally earnings by the supply chain are limited, as the requirements for the cruise are complex, requiring larger number of forecasted supply. Economic factors, such as fuel consumption, are the only ones considered to select destinations, but not the impact on communities. This is especially acute in small destinations where the ratio to cruise passenger per resident is high.
(www.travelandtourworld.com)

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Branding, CSR, Public Relations, Sustainable Development

CSR Initiative: Enterprise Bank Partners Okpekpe International Road Race 2014.

Nigeria – The Okpekpe International Road Race has come and gone, but we at Socio-capitalist could not let escape the CSR Initiative involved in the project.
Enterprise Bank Limited of Nigeria has extended its corporate social responsibility (CSR) vote for wellness and physical fitness of Nigerians to the 10-kilometre Okpekpe Road Race as the Official Banker.
The annual international event, which has been endorsed by the Edo State Governor, Comrade Adams Oshiomhole, and the International Association of Athletic Federation (IAAF) is on its second edition and took place on May 3, 2014 in Okpekpe in Etsako Council of Edo State.
The bank’s sponsorship of the 2014 version of the race stems from its desire to promote a healthy lifestyle amongst Nigerians through a programme of eating right and engaging in physical fitness, a position which complements the CSR initiative of the race organizers, Pamodzi Marketing Company Limited, to promote good health in the Okpekpe environs through its malaria eradication programme.
The Okpekpe Road Race 2014 featured participants from over 10 countries and had a total prize money of about $117, 000 or N20 million. The winner of the men’s race was Ethiopian, Teshome Asafan, who went home with $25,000 (or N4.13million) on offer, $10.000 of which, was made available by the State Governor.
The event was given adequate coverage by the media, with local TV stations delivering live coverage of the race.
Okpekpe is a town in Etsako East Local Government Area of Edo State, Nigeria. It is located about 25 kilometres (16 miles) northeast of Auchi. It has a population of 3155 inhabitants. Its people belong to a large homogeneous group of people, called the Afemai. (Wikipedia)

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CSR, Law, Public Relations, Sustainable Development

Greenwashing – the extent to which companies meet their CSR promises depends on national attitudes to competition and individualism, according to Oxford Academic.

A new research into firms’ symbolic and substantive CSR practices has shed light on differing expectations of the role of business in society.

The assumption that corporations say one thing and do another when it comes to Corporate Social Responsibility (CSR) is not far from the truth, but just how much they follow through on their promises depends on cultural interpretations of the principles of liberal economics and the perceived role and strength of the government, says Thomas Roulet, Research Fellow at Saïd Business School, University of Oxford.

In a paper for the Journal of Business Ethics, Thomas Roulet and his co-author, Samuel Touboul, IPAG Business School, explored the ambiguities surrounding firms’ commitments to social and environmental initiatives. They discovered that in countries where people believed strongly in the virtues of competition, firms were more likely to practise “greenwashing” – that is, to make a lot of noise about their CSR, but to do very little. In countries where liberalism was interpreted as predominantly about individual responsibility, firms were more likely to focus on concrete actions.
Using qualitative and quantitative methods, the researchers calculated average country-level beliefs when it came to two central tenets of economic liberalism: a belief in the virtues of competition and a belief in the importance of individual responsibility. They found that developed market economies such as Switzerland, the United States, New Zealand and Canada tended to have higher cultural beliefs in favour of individual responsibility. While those countries also score highly in terms of cultural beliefs in favour of competition, it appears that countries with higher scores on this variable are fast developing countries such as India, China, and Morocco.

Mapping these country-level beliefs against the CSR actions of firms in those countries confirmed that firms are more likely to greenwash when populations’ beliefs in the virtue of competition are predominant, and when their beliefs in individual responsibility are less prominent. Therefore, in a country like Morocco, where beliefs in the virtue of individual responsibility are low, but in the virtue of competition are high, firms are more likely to greenwash. Conversely, in a country like France, where the population believes in the virtue of individual responsibility but prefers an absence of competition, firms are less likely to greenwash as they tend to implement socially and environmentally responsible actions without specifically signalling those actions.

The question is where do countries like Nigeria fall into?

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CSR, Law, Sustainable Development, Uncategorized

CSR News: India sets up New Law on Social Responsibility

India has seized the initiative to promulgate a law, making corporate social responsibility mandatory for corporate organisations. This is a major step by the country, in light of the prevailing situation operative in other countries of the world, whereby companies are left to exercise CSR at their discretion. Though CSR is gaining popularity all over the world, countries have not seen the need to codify CSR into law.
Now, companies in India have to match the efforts of the State and Non-Governmental Organizations (NGOs) in initiating activities for the economic growth of the underprivileged and similarly marginalized groups as well as social causes such as animal welfare and environment.
From April 1, 2014, it has become legally binding for companies in India to be “socially responsible.”
Section 135 of the new Companies Act 2013, reads that the CSR Rules makes it mandatory for companies, meeting certain criteria, to set aside two per cent of their net profits for undertaking and promoting socially beneficial activities and projects in India. To implement this, the Ministry of Corporate Affairs (MCA) recently issued the CSR Rules, 2014, to implement this legislative mandate, which came into effect on April 1, 2014.
Every company with a net worth of at least Rs 500 crore, or a minimum turnover of Rs 1,000 crore, or a minimum net profit of Rs 5 crore (approx. $1 million), has to constitute a CSR committee dedicated to undertake initiatives such as promoting women’s empowerment, improving maternal health, education, gender equality or ensuring environmental sustainability.
Commentary:
This is a great step in the right direction and a catalyst for development. Developing Countries should look in this direction.

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