Corporate responsibility -- government duty

In terms of corporate responsibility and regulatory debates there is no recent African analogy to last month's shocking Dhaka building collapse that killed over 600 mainly garment workers and injured thousands.

Like much reform generally, momentum on governance reform (by both the private and public sectors) on social impact issues often requires (sadly) a landmark, shock-inducing event.

(Empirically, such events do not necessarily lead to change, although they may add a pulse, perhaps no more nor less, to the general thrust of pressure for change; see this BBC online debate post-Dhaka: here).

There are few African analogies. The 1995 execution of activist Ken Saro-Wiwa (by a Nigerian military dictatorship) is one such event which prompted reassessment of business-government relations and the parameters of corporate influence on host country policy. By contrast, today many of Africa's better-known corporate impact issues are slow-burning ones without particular spike events -- from gas-flaring to toxic waste-dumping to conflict minerals.

That selective list itself illustrates how random or arbitrary it will often be whether a particular sector or issue or firm comes into the corporate responsibility spotlight -- a point made in a recent post on reputational risk, here. (This is not to say firms cannot plan for foreseeable contingencies). Other issues of profound significance, such as climate change, are in some ways too diffuse and unwieldy to fit easily into targeted campaigns by either firms or governments or activists. An expert's briefing published by our firm this last week noted how academic debate takes some issues as squarely within the field of 'corporate responsibility' while others which involve significant social impact by business, and which conceivably could become framed in that way, do not.

One question prevalent in the media and industry since the Dhaka event has been whether this is indeed a 'corporate responsibility in global supply chains' issue, or rather a question of weak government supervision of local statutory standards; enforcing local laws is not a corporate responsibility.

The answer may lie somewhere in between, since through their purchasing conduct foreign corporations and financiers have some capacity to 'regulate' local regulators (especially in weaker governance zones) to ensure these officials enforce their own rules; they also have some potential influence over the local commercial actors who mediate activity in their global supply chains. There are wider forces and considerations at issue relating to local control, global competitiveness and the allocation of responsibility and conscience-calling.

The Dhaka misery and debates on global supply chain integrity are too big for one post, in an Africa-focused blog. (Since I cover South Africa a lot, it is natural to think of the decimation of jobs in that country's garment sector as the ANC tries to promote its 'decent work' agenda in the context of Chinese and other manufacturing competition -- an unenviable task, at which they are at best drifting.)

I have been thinking this week of analogies with the 'aid to Africa' debate, where it is right for aid effectiveness / transformation activists to spare a lot of their energies typically directed at donors, to the behaviour of recipient governments. In the same way, while global brands can wield some regulatory influence over government complying with their own local standards, the responsibility in so many respects lies at home with governments. There is another analogy with aid, one familiar to corporate social investment debates: the more one asks of firms, the more some governments become removed from responsibility and unresponsive to local constituencies.

The challenge as ever -- across regions -- is to move from blame-game to game-changing steps in regulating, within what is realistic in a globalised market, the conditions under which people work.  That includes moving from an either/or approach to responsibility to appropriate apportionment and cooperative approaches to creating shared value and distributing shared risk.

Dhaka's victims fell at the intersection of small, particular regulatory norms (capable of altering local circumstances) with the more universal, amorphous norm which the ANC's emphasis on 'decency' captures. Big firms in Africa can do their brands and workforce a favour by thinking (individually or in sector coalitions) of how, beyond tax-paying, to improve the regulatory competence and integrity of government agencies -- even if the latter should always bear by far the primary responsibility for creating conditions for a more decent life.

Jo