Mr Speaker,
according to the corporate governance
principles issued by Organisation for
Economic Co-operation and Development
(OECD), good Corporate Social
Responsibility (CSR) is highly associated
with good corporate governance; which
indicates that organisations are measured by
their concern towards society among other
outputs. Since public and private
organisations form a significant part of the
economic structure of every nation, their
activities, both good and bad, have bearing
on the sustainability of the economy.
Mr Speaker, while Ghana has seen some
CSR activities emanating from the spread of
industries, it appears that the impact is not
felt as significantly as we would want. For
a long time, pointing out the disparity in this
expectation has not been clear in literature
as it is now. It is true that CSR was espoused
in the early days as being voluntary. It has
therefore carried with it, a sense of ‘going the extra mile' in the business-society relationship. While this still holds
relevance, I find that much emphasis has not
been placed on the ‘responsibility' in Corporate Social Responsibility. As the
renowned College Basketball head coach
Patricia Summit, expressed, “Responsibility equals accountability, equals ownership…”, CSR will be incomplete if we turn down the
invitation to invoke accountability of the
corporate bodies for their CSR.
Mr Speaker, when we talk about CSR in
Ghana, as is evident in Mavis Amo-
Mensah's literature review on CSR in Contemporary Ghana, (published in the
International Journal of Business and
Management Review), there is a dominance
of foreign Multi-National Companies
(MNCs) on matters of CSR in Ghana. She
also adds that the motivation of these MNCs
to actively engage in CSR can perhaps be
attributed to their need to gain legitimacy in
the Ghanaian business industry. For what
better way is there to establish legitimacy of
a brand in Ghana than to show concern for
the needs of a given society? Unfortunately,
the aspect of CSR that looks at what the
company does or provides for the
communities has been overly focused on,
while paying little attention to how the
company carries out its activities in a
socially responsible manner.
Mr Speaker, for the past few years, I have
been vested in the need for the State to play
a more central role in driving the CSR of
corporate bodies here in Ghana for a few
reasons:
Mr Speaker, firstly, while CSR has been
defined according to the European Com-
mission of 2001, in terms of a voluntary
action by corporate bodies to integrate
social and environmental concerns in their
business operations, the context of
environmental issues in our world today
demands a more committed approach from
all actors to ensure the sustainability of our
economies, business operations, and our
planet.
Mr Speaker, secondly, since the general
understanding of CSR leans towards
philanthropic or charitable activities, it is
difficult to see the need in regulating
corporate activities in relation to their
societies. In other parts of the world like the
European Union, the adoption of OECD
Guidelines for Multinational Enterprises
seeks to change this narrative.
Mr Speaker, thirdly, since the
communication of CSR activities is lacking
in our Ghanaian communities, the State can
sufficiently make up for this shortfall
through CSR awards, CSR movements,
CSR foundations, CSR stakeholder
conferences and other schemes by think-
tanks.
Mr Speaker, Corporate Social Respon-
sibility (CSR) legislation is generally
relevant for several reasons:
1. Standardisation and Accountability: CSR legislation provides a
standardised framework that defines
what is expected from companies in
terms of social responsibility. This
ensures that all companies,
irrespective of their size or sector,
are held accountable for their
relative impact on society and the
environment.
2. Protection of Stakeholders: With CSR legislation, the rights and
interests of stakeholders such as
employees, consumers, local
communities, and the environment
are protected. This is particularly
relevant in sectors where
operations can have significant
social or environmental impacts.
3. Promotion of Sustainable Business Practices: CSR laws promote
sustainable business practices.
They encourage companies to
consider the long-term implica-
tions of their actions and to balance
profit-making with societal and
environmental considerations.
4. Transparency and Trust: CSR regulations based on how they are
crafted require companies to share
useful information about their
social and environmental practices.
This transparency can help build
trust with consumers, investors,
and the broader public.
5. Competitive Advantage: By requiring all businesses to adhere
to certain CSR standards, the
legislation can help to level the
playing field on assessing
organisations' CSR contributions. This can prevent companies from
gaining a competitive advantage
by neglecting their social
responsibilities.
6. Supports National and Global Goals: CSR legislation can align
corporate activities with national
development goals or global
initiatives such as the United
Nations' Sustainable Development
Goals (SDGs). This can facilitate
collective action towards
addressing major societal and
environmental challenges.
Mr Speaker, undoubtedly, legislation
on CSR will have significant
implications for a country like Ghana,
where the major industries such as
mining, oil and gas have substantial
impacts on local communities and the
environment.
7. Protects Communities and the Environment: Legislation can
ensure that companies conduct
their operations responsibly, mini-
mising harm to local communities
and the environment. In Ghana,
where sectors such as mining and
petroleum can have significant
environmental impacts, legislation
can help prevent degradation and
protect biodiversity.
8. Sets Clear Expectations: A legal framework establishes clear guide-
lines and expectations for
corporate behaviour. Companies
not only know what, but also how
they are expected to contribute to
society beyond their primary
business activities.
9. Promotes Sustainable Develop- ment: CSR legislation can
encourage companies to invest in
sustainable practices, contributing
to national goals in areas like
education, health, and environ-
mental conservation. This aligns
with Ghana's commitment to the
United Nations' Sustainable
Development Goals.
10. Encourages Economic Equality: CSR can help address regional
disparities in economic develop-
ment. Companies, particularly
those extracting natural resources,
can be required to invest in local
communities, improving infra-
structure, education, and health-
care facilities. This direction can
only come from legislation.
Mr Speaker, in conclusion, legislating
CSR can have several effects, and these
include:
1. Compliance Costs: Companies might incur additional costs to
comply with CSR legislation.
While these costs can lead to long-
term benefits, they might be
viewed as burdensome by some
companies, particularly small and
medium-sized enterprises, which
form a great proportion of
corporate entities in the country.
2. Enforcement Challenges: The government would need to
adequately monitor and enforce
compliance, which could require
significant resources.
3. Potential for Unintended Con- sequences: If not well designed,
CSR legislation could lead to
unintended consequences. For
example, companies might focus
only on compliance rather than
genuinely engaging with the spirit
of CSR.
Mr Speaker, overall, while CSR
legislation holds significant potential
benefits for Ghana, careful thought and
consultation would be needed to design
an effective framework that maximises
the benefits while mitigating potential
drawbacks.
Mr Speaker, with the legislation of
CSR, we stand in a better position to help
corporations in protecting the environ-
ment, with initiatives aimed at reducing
their environmental footprint, product
safety and quality. This way, we
safeguard against the exploitation of our
natural resources. Whether it is the
sourcing of raw materials or siting of
manufacturing facilities and office
buildings, factors can be fused into the
CSR law which will ensure that business
corporations fund projects to restore or
protect our biodiversity.
Mr Speaker, a commendable instance
is the recycling project that Voltic
Natural Mineral Water has put in place to
mitigate the effects of rubber and plastics
pollution on the ocean and land.
Mr Speaker, the point in its entirety is
that Ghana stands a better chance at a
better future in a more secure economy
when we legislate Corporate Social
Responsibility now.
Mr Speaker, thank you for the space
granted.
