4.4 The role of CSR in this context
In the developed world, legal regulation has long been deemed to be necessary to ensure safe working practices. This form of corporate accountability predates the development of the concept of CSR. It is an area that is widely regarded as too important to be left to the voluntary initiative of business organisations alone. Nevertheless, a commitment to safe working practices is invariably included in CSR strategies and is commonly interlinked with a pledge to ensure that the business operations are carried out in a sustainable manner.
ArcelorMittal is an Indian-based MNE. It is one of the world’s largest steel companies manufacturing for the automotive, construction and household appliance market. In 2010 its website reported a revenue of $78 billion and crude steel production of 90.6 millon tonnes – 8% of the world steel output. An excerpt from the Corporate Responsibility strategy of ArcelorMittal in 2010 reveals how safe working practices are commonly integrated into the CSR strategies of a company.
Investing in our people
This means making each and every person working on our behalf feel valued.
Our people are leaders, helping us transform tomorrow. We need their ideas and rely on their hard work and commitment. We treat them with dignity and respect, investing in their development, and providing them with a safe and healthy working environment.
We hold ourselves accountable for:
- Ensuring healthy and safe working conditions at all our operations.
- Actively promoting a strong culture of leadership and accountability, and rewarding our employees fairly based on their performance.
- Creating a collaborative, productive, and innovative workplace.
- Effective dialogue with our employees and their representatives.
- Being transparent and honest in our commitments to our people, to ensure we maintain a trusted working environment.
The important issue here is what advantage can be gained by the integration of the commitment to good working practices into CSR strategies that is not already provided by the imposition of legal regulation?
Christine Parker (2007) offers a clue. She asserts that CSR has a different purpose and objective to regulation by way of law, as law is centrally concerned with regulation rather than responsibility more generally:
The law is traditionally concerned with accountability — ‘holding people to threshold criteria of good conduct and performance’. Responsibility goes beyond accountability to ask how much people ‘care about their duties, ideals as well as obligations, values as well as rules’ … Traditional legal regulation of business is primarily concerned with accountability.
Parker also identified that the concept of CSR is increasingly being developed by individuals or groups who invoke the law:
Recently, law and regulatory enforcement action are being used (by consumers, employees and NGOs as well as governments) to encourage and enforce corporate economic, social and environmental responsibility. The law is (directly or indirectly) requiring companies to implement governance measures such as compliance systems, whistle-blower protections, CSR reporting initiatives, stakeholder complaints and consultation processes etc., in order to build up their corporate conscience (to build values that transcend narrow self-interest into the practice and structure of the enterprise …). This has been referred to as ‘meta-regulation’ – the regulation of self-regulation of responsibility.
The adoption of voluntary CSR codes would appear to have several advantages in this context. They are self-imposed and are designed to pre-empt harm, so avoiding the physical and financial cost involved in workplace incidents. In contrast, legal regulation tends to focus on punishment, reparation and deterrence once the harm has occurred. Also, CSR policies have the ability to transcend jurisdictional boundaries. Those MNEs which are genuinely committed to the concept of CSR take responsibility for the impact of their operations worldwide. Their influence may help to effect a more universal and widespread change in corporate culture, which cannot be achieved by legal regulation alone.