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A seminar on corporate social responsibility (CSR) held in Portugal in June 2003 aimed to promote debate on the issue with a view to improving understanding of the principles and practices involved. The occasion presented the social partners with an opportunity to give their views on CSR, and they all stressed that one of the prerequisites in Portugal is respect for existing laws on economic activity, employment and the environment.
On 16 June 2003, the Institute for the Development and Inspection of Working Conditions (Instituto para o Desenvolvimento e Inspecção das Condições de Trabalho, IDICT) of the Portuguese Ministry of Social Security and Labour organised a seminar on corporate social responsibility (responsabilidade social da empresa). The aim was to engage public and private bodies in a debate on corporate social responsibility (CSR) with a view to improving their understanding of the principles and practices involved. Participants included representatives of national social partner organisations, the European Commission, the European Foundation for the Improvement of Living and Working Conditions and the European Agency for Safety and Health at Work. .
The July 2002 European Commission Communication (COM (2003) 347) on Corporate Social Responsibility: A business contribution to sustainable development (EU0207205F) was presented at the seminar and reference was made to the United Nations (UN) Global Compact initiative (whereby companies are asked to sign up to nine principles in the areas of human rights, labour and the environment). The following issues were discussed in detail:
- CSR as a way of creating value;
- the traditional division of CSR issues into social, environmental and economic concerns;
- a debate on the role of the state in this field;
- the different definitions of CSR from different institutions;
- CSR in small and medium-sized enterprises;
- the role of vocational training; and
- the future of CSR.
A number of examples of company 'good practice' in CSR in Portugal were cited: Valsan, a metalworking company; the Portuguese operations of DHL, the international express delivery company; Companhia Industrial de Resinas Sintéticas (CIRES), a chemicals company; the Portuguese operations of Danone, the French-based food multinational; and Delta Cafés. The latter company has won a UN CSR award for good practices in local sustainability, 'eco-efficiency' and fair trade in East Timor.
The social partners and CSR
The IDICT seminar gave Portuguese social partner organisations an opportunity to give their views on CSR.
Employers's views
The Confederation of Portuguese Industry (Confederação da Indústria Portuguesa, CIP) and the Confederation of Portuguese Services and Commerce (Confederação do Comércio e Serviços de Portugal, CCP) stressed the following viewpoints:
- a company’s main purpose is to do business competitively by means of fair competition and the creation of wealth and employment;
- the first stage is economic responsibility and compliance with existing laws. In addition to these there are other social and environmental functions that are voluntary, over and above compliance with the law;
- the function of the state is to create laws and the right conditions for CSR to be able to work properly; and
- the fact that companies have been moving their operations away from Portugal makes the debate on CSR especially important.
Trade unions
Trade unions examined the implementation of CSR both in Portugal and from the point of view of globalisation.
According to the General Workers' Union (União Geral de Trabalhadores, UGT), CSR is normally associated with voluntary practices rather than legal requirements. However, in Portugal company practices are often far from observing the law in terms of respect for tax obligations, fair competition or social rights in general. Institutions like the Inspectorate General for Labour (Inspecção Geral do Trabalho, IGT) should play a more supervisory and 'pedagogical' role. Although the basic goal of a company is to make a profit, a company is not only its capital. It is also its workers, suppliers, the community in which it is located and institutions such as schools, with which it must maintain a close relationship. The company has to be answerable to these groups. It has been proved, according to UGT, that CSR has contributed towards benefits in the cost-benefit equation. CSR should involve both small and large companies - ie the whole business fabric.
For the General Confederation of Portuguese Workers (Confederação Geral de Trabalhadores Portugueses, CGTP) CSR is a trend and a business contribution accepted by the UN, EU and International Labour Organisation (ILO) with regard to the issues raised by globalisation. Globalisation has enlarged the geographical area of business for companies but has not touched the social barriers. There must be global policies for multinationals, respecting workers' rights and guarantees. There should be an evaluation of compliance with these rights, based on the ILO’s Conventions, and with other social standards linked to education, the environment, safety and health.
Management model or just good marketing?
The CIP industrial employers' organisation suggested that CSR should be voluntary and come over and above compliance with legal standards on economic, social and environmental matters. It contributes to the growth of 'corporate citizenship', which should be assessed in terms of good practices in health and safety at work, vocational training, good working conditions and good relations with local communities. CIP considers that the 'social recognition' of companies is an important point but that it should not be carried in a standardised way and based on uniform measures. Instead, it should take into account the size of the companies involved and their economic contexts, with freedom of choice as to the method used - eg whether a company wants internal or external certification of its CSR practices. Companies are subject to and conditioned by permanent assessment and pressure from consumers. Both models are legitimate and it is the market that should decide.
According to CCP, for service sector employers, it is obvious that companies exist to sell and so the 'marketing' function of CSR is important. However, CSR practices that are not based on a culture and on principles are not sustainable. CSR should be voluntary, which means that it is not the result of direct state intervention but is achieved by the introduction of improvements. Although CCP is against CSR being compulsory, underlining its voluntary nature, certification should be carried out by companies, auditors etc. The state should be given the role of disseminating good practices, though it should be noted that there are already groups of companies disseminating CSR practice in Portugal
For UGT, CSR must be part of companies' strategic management and be assessed by social audits with independent evaluation and global certification (in areas such as accidents at work). Companies have to take into account that customers are increasingly influenced by 'values' and that trade unions are waging strong campaigns on CSR issues. An example was quoted of a company that met strong resistance for a while in Portugal because it did not employ women. 'Social labelling' is important, accompanied by the definition of criteria, monitoring and penalties.
If only certain companies can currently comply with CSR in Portugal, in UGT's view, the approach should be to promote respect of the basic ILO Conventions (on child labour, freedom of association and forced labour) and then build on them. Companies should first respect the rules and tax laws, show a positive 'social balance' and ensure the training of their workers if they want to be evaluated as being socially responsible - a process in which the state should participate. Portuguese institutions cannot copy 'Scandinavian' models, where compliance with the law is unquestioned, in a country where economic and social standards and competition rules are not always respected.
CGTP stated that some companies very obviously adopt CSR initiatives for marketing purposes. Voluntary CSR and evaluation are not enough. In the case of multinational companies, their CSR should be examined as a whole, globally, because they act differently in the differing political and social contexts of the countries in which they operate. Global respect for working conditions as defined by the ILO and the UN is essential. All the requirements and criteria leading to certification in matters of the environment and workers' rights should be clear.
The future of CSR
In the debate on the future of CSR at the seminar, the Portuguese Association for CSR (RSE Portugal) - a grouping of companies aimed at increasing the number of companies involved in CSR activities in Portugal and providing them with support, and a member of CSR Europe- drew particular attention to CSR as a management philosophy and an opportunity. It undertook to create a working platform on CSR based on European values, such as: cultural diversity; the participation of workers, employers’ organisations and other public and private entities; helping to improve performance; social dialogue; sustainability; and active employability and education for all.
OIKOS, a Portuguese organisation working for development in poor countries, stressed the importance of new forms of governance and a fair relationship with all in the 'chain of value'. This should occur with the involvement of all suppliers and subcontractors in a situation of fair world trade and investment with transparency and accountability, dialogue and partnerships for sustained development which is not of a casual nature or based on charity. The need for strategic alliances with consumers and education for responsible consumption and citizenship - above all environmental citizenship - are essential.
Commentary
It appears from the seminar that, in Portugal, future discussion of linking CSR to companies’ strategy will involve a debate on the role of the state and the public authorities and on the model to be followed - with the choice between a unilateral company model with self-assessment, and a model based on verifiable and comparable evaluation by auditors, based on credibility and transparency.
Behind the CSR debate, there remains the goal of achieving the aims of the EU's modernisation and employment strategy agreed by the Lisbon European Council in March 2000 (EU0004241F) and the need to reinforce European economic policies, which must be reformulated if they are to promote sustainable development.
In the debates on CSR in the public and private sectors in Portugal it has been suggested that it is first necessary for existing laws to be obeyed if the situation is to be improved, and that deregulation practices must be avoided. This has led to a debate on the important role of institutions such as Inspectorate General for Labour, as well as on social audits. (Maria Luisa Cristovam, UAL)