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Nipping it in the bud

By Franklin Alli

Members of the organized private sectors already catching cold as a result of the CSR Commission Bill currently before the National Assembly have commenced efforts to stop it before it is passed, Franklin Alli reports

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Mna bos

Members of the organized private sector are deeply worried about the CSR Commission Bill currently before the National Assembly. The members believe the bill is not in the interest of business community, the citizenry and the economy, and it contradicts Federal Government drive at promoting Real Sector development as encapsulated in the seven-point agenda and the vision 2020 of this administration and have decided to make this known to the Presidency and National Assembly.

In a letter to the Presidency and the leadership of the National Assembly, the five Organized Private Sector (OPS) body comprising the Nigeria Association of Chambers and Commerce, Industry, Mines and Agriculture (NACCIMA), Manufacturers Association of Nigeria (MAN), Nigeria Employers Consultative(NECA) National Association of Small Scale Industrialists (NASSI), and Nigerian Association of Small and Medium Enterprises (NASME), said the OPS is concerned of effects the CSR bill would have on operators in the real sector of the economy (Manufacturing, Agriculture and Solid Minerals), as well as on the standard of living of the citizenry if passed into law.

The document which was signed by the Director Generals of NACCIMA, Lawrence Adekunle, Jide Mike, MAN, NECA, Olusegun Osinowo, including the National General Secretary of NASSI, Taofik Azeez and the Executive Secretary NASME, Eke Ubiji, further noted that: “The OPS having reviewed the bill, is totally opposed to it. This is because the bill is not in the interest of business community, the citizenry and the economy, and it contradicts Federal Government drive at promoting Real Sector development as encapsulated in the seven-point agenda and the vision 2020 of this administration.”

The position of the business community has also been communicated to the law makers through a recent public hearing on the bill in Abuja and also through stakeholders meetings in Lagos.

Attempt to introduce CSR tax on businesses, the body believes, will constitute additional burden to multiplicity of taxes that the federal government is presently addressing. This could also discourage genuine local and foreign investors currently operating in the country and prospective ones, thereby eroding the gains being achieved by the federal government on the attraction of the Foreign Direct Investment (FDI).

According to the document, the OPS unanimously oppose the obnoxious bill based on the following reasons:
·No country in the world has legislated on Corporate Social Responsibility (CSR) as it is voluntary and not mandatory.
·CSR is a voluntary initiative undertaken by companies to positively impact on their immediate operational environment and does not require any law.

·The already high cost of doing business in Nigeria, which has continued to pose grave challenge for enterprise.
·Business are already over-burdened with over 150 multiple taxes and levies from the Federal, states and local governments.

·The function which the CRS Bill seeks to assign to the commission, are already within the purview of existing government departments and agencies such as the Ministry of Environment for environmental issues, Ministry of Labour, the Corporate Affairs Commission and the Ministry of Internal affairs.

·International best practice has never been to mandate CSR and corporate governance through legislation, but rather encourage companies to voluntarily carry out CSR and good governance.

·A number of companies in Nigeria are already committing trillions of Naira on CSR activities.
·The Bill will further encourage corruption in the country as enforcement officers would, as usual, take undue advantage of the situation to extort money from companies.

The OPS, therefore, wishes to make the following recommendations to the Federal Government and the leadership of the National Assembly:

·The idea of legislating CSR should be stopped and the CSR Bill jettisoned. This is in view of the fact the establishment of a Commission on CSR will create a new avenue for corruption in Nigeria. It would also not be in the best interest of Nigerians or assist in realizing the 7-points Agenda and Vision 2020 of this Administration.

·Government should offer tax incentives to companies that are socially responsible and are already involved in CSR activities as a form of encouragement to those companies and others who would want to emulate their action. Highlights of the CSR Commission Bill showed that the bill entails the following:

·conducting of research and investigation of the needs of host communities ·identifying socially response behaviour of organisations in compliance with legislation

·Classification of corporate organisations, ranking them according to organisational size and magnitude of investment, which shall determine the nature of corporate social responsibility expected of them.

·Serving notices of social responsibility request to organisations.
·Developing the environmental guidelines to be met by organisations doing business in Nigeria.

·Pegging and monitoring the implementation of local content in terms of employment and sourcing of raw materials.
·imposing sections through fines or offering incentives to companies who defaults or comply with CSR rules and principals
·temporarily shut down and suspend operations of an organisation, corporation or company for minimum of 30 working days as penalty of non compliance

·The bill also makes it an offence to willfully obstruct the commission or its staff, which is liable to imprisonment upon conviction of not less than six months.

Comparatively, Denmark made a law on CSR 16 December 2008. The Danish parliament adopted a bill making it mandatory for the largest Danish companies, investors and state owned companies to include information on corporate social responsibility (CSR) in their annual financial reports. The reporting requirements became effective on 1 January 2009. The information shall include:
·information on the companies’ policies for CSR or socially responsible investments (SRI)

·information on how such policies are implemented in practice and
·information on what results have been obtained so far and managements expectations for the future with regard to CSR/SRI.
Some critics believe that CSR programmes are undertaken by companies to distract the public from ethical questions posed by their core operations.

They argue that some corporations embark on CSR projects for the commercial benefit they enjoy through raising their reputation with the public or with government. They suggest that corporations which exist solely to maximize profits are unable to advance the interests of society as a whole.

Another concern is when companies claim to promote CSR and be committed to sustainable development whilst simultaneously engaging in harmful business practices.

Furthermore, critics concerned with corporate social responsibility or community relation generally suggest that governmental and international regulation and enforcement are better than voluntary measures. This they argued is necessary to ensure that companies behave in a socially responsible manner.

CSR is a form of corporate self-regulation integrated into a business model. Ideally, CSR policy would function as a built-in, self-regulating mechanism whereby business would monitor and ensure their adherence to law, ethical standards, and international norms.

Business would embrace responsibility for the impact of their activities on the environment, consumers, employees, communities, stakeholders and all other members of the public sphere. Furthermore, business would proactively promote the public interest by encouraging community growth and development, and voluntarily eliminating practices that harm the public sphere, regardless of legality. Essentially, CSR is the deliberate inclusion of public interest into corporate decision-making, and the honouring of a triple bottom line: People, Planet, Profit.


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Comments expressed here do not reflect the opinions of vanguard newspapers or any employee thereof.