CSR in Lao PDR Earth systems smithies
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The document provides an overview of corporate social responsibility (CSR) in Lao PDR. It finds that while CSR is still a relatively new concept, certain sectors like coffee, tea, and hydropower are beginning to adopt CSR initiatives in response to consumer and investor demands. It also identifies opportunities to further promote CSR activities and compliance with social and environmental standards and regulations in the country. These include developing sector-specific CSR guidelines, establishing a CSR stakeholder committee, and integrating CSR into existing development programs.
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CSR in Lao PDR Earth systems smithies
- 1. Corporate Social Responsibility in Lao PDR A baseline assessment of social and environmental regulations and standards
- 2. Message from GIZ & BGR The study was commissioned by GIZ and BGR in order to: • build on recent interest in CSR and provide a baseline from which to further develop CSR in Lao PDR • explore tangible measures for developing CSR among different stakeholders by providing existing and potential examples of; o the application of CSR type activities or o measures that enable and encourage adoption of CSR BGR and GIZ strongly encourage everyone concerned to use the report as a tool for the introduction of social and environment standards and comply to respective regulations.
- 3. What is CSR? ‘the continuing commitment by business to contribute to economic development while improving the quality of life of the workforce and their families as well as of the community and society at large’ (WBCSD) • Various definitions (strict compliance through to strict philanthropy) • Debate about the roles of business and government in promoting CSR • 3 common approaches identified by GIZ (2011): o Ethical CSR – Doing what’s right o Altruistic CSR – Corporate philanthropy o Strategic CSR – ‘Shared value’ and ‘social licence to operate’ • CSR towards compliance vs CSR beyond compliance • ISO 26000 - Guidance on Social Responsibility
- 4. ISO 26000 Core Issues • Organisational Governance • Human Rights • Labour Practices • The Environment • Fair Operating Practices • Consumer Issues • Community Involvement and Development
- 5. The Study • Rapid baseline Assessment of Social and Environmental Regulations and Standards in Lao PDR • Six target sectors • Desktop review • 35 meetings with government and key sectoral informants • Analysis of the potential to support opportunities for efficiently fostering the growth of CSR (and sustainable development) in Lao PDR
- 6. Status of CSR in Lao PDR • CSR still a relatively new concept • CSR as a voluntary and business led initiative • CSR approaches: o Ethical – Organic and fair trade in the coffee and tea sectors o Altruistic – ‘Buddhist CSR’ amongst local and regional companies o Strategic – Concept of ‘shared value’ adopted by leading hydropower and mining companies • ‘Regulatory CSR’ emerging in GOL policy and legislation
- 7. CSR Drivers in Lao PDR • Tourism, Coffee and Tea Sectors o Consumer demand (ecotourism packages, organic/fair trade products); and o Environmental and social credentials of company operators and service providers • Hydropower and mining o Investor demand (internationally financed projects) o Development and maintenance of ‘social licence to operate o Maintain competitive advantage in sectors where ‘best practice’ is becoming more commonplace • Transport and Logistics Sector o Limited incentive due to protectionist policies that limit involvement of international companies
- 8. CSR Drivers in Lao PDR • ASEAN o Significant policy and legislative reform across all Lao government sectors o CSR is an important focus of the ASEAN socio-cultural pillar o ASEAN CSR Network • Lao Business Community Interest o CSR measures as a way to drive sustainable development in developing countries o Increased interest among sections of the Lao business community in recent years
- 9. CSR in Lao PDR Coffee Sector • Sector Overview: Niche vs quantity producers / traders. • Key CSR drivers: Consumer demand (international coffee markets). • CSR Initiatives: Local and International Certification (Organic, Fair Trade, Rainforest, UTZ, 4C). • Opportunities: Promote importation of CSR; Support Lao Organic Initiative; Promote regional cooperation (ACF etc…) Photo: Sinouk Coffee producers
- 10. CSR in Lao PDR Tea Sector • Sector Overview: Smallholders vs contract farming. • Key CSR drivers: Consumer demand (organic/FT tea markets). • CSR Initiatives: Local and International Certification (Organic, Fair Trade, Rainforest, UTZ). • Opportunities: Establishment of Lao Tea Association; Support Lao Organic Initiative; Develop linkages between tea and tourism Photo: Tea plantation in Phongsaly
- 11. CSR in Lao PDR Tourism Sector • Sector Overview: Domestic vs International/regional • Key CSR drivers: Consumer/stakeholder demand for green products and services. ASEAN Tourism Standards • CSR Initiatives: Local and International Certification (The Mark, Green Globe, ISO, UN Code of Ethics for Responsible Tourism). • Opportunities: Vocational training, Lao Standards, ASEAN co-operation Photo: Vang Vieng
- 12. CSR in Lao PDR Transport & Logistics Sector • Sector Overview: Logistical islands, international/domestic transport companies. • Key CSR drivers: Stakeholder demand (for international companies). • CSR Initiatives: Limited. Road safety programs (Beerlao), Driver safety systems (PBM). • Opportunities: Support for integrated logistics infrastructure, Support GOL with EST, establishment of transport training centre Photo: Isuzu truck near Luang Prabang
- 13. CSR in Lao PDR Hydropower Sector • Sector Overview: Internationally financed vs domestic/regionally financed projects. • Key CSR drivers: Stakeholder demand, lender requirements, corporate strategy. • CSR Initiatives: Community programs, infrastructure development, education. • Opportunities: Support HWG on sector specific CSR initiatives, Assist MEM with hydropower policy to encourage CSR (ie CDF) Photo: Nam Theun 2 Dam
- 14. CSR in Lao PDR Mining Sector • Sector Overview: International/regional/domestic/ artisanal • Key CSR drivers: Stakeholder demand, lender requirements, Industry standards, corporate strategy. • CSR Initiatives: Community programs, infrastructure development, education. • Opportunities: Re-establishment of Lao Mining Association, emerging CSR mining program, EITI Photo: Phu Bia Mining Phu Kham Mine site 2012
- 15. Potential next steps Development Co-operation • Coordinate CSR training programs and activities with business community • Co-ordinate establishment of a CSR stakeholder committee • Integrate sector-specific CSR components into existing / up-coming development programmes Business Community • Work with GOL to develop a country-specific understanding of CSR - develop a joint statement on CSR in Lao PDR • Develop a MOU with regional COC’s and business associations of CSR across Southeast Asian region • Membership of ASEAN CSR Network
- 16. Potential next steps Lao Government • Continue to strengthen implementation and enforcement of current legislative framework • On-going engagement with business community on the development of policy and regulations which are intended to mandate CSR • Work with business community and development sector to further adopt Lao specific standards for business and industry (i.e. Lao Organic, ‘The Mark’) • CSR incentives for the business community (i.e. tax deductions) for additional investment into CSR activities and the adoption of ‘international best practice’ CSR
- 17. Acknowledgements • Government of Lao PDR • Key informants for each sector Please contribute ideas for further discussion at: http://bit.ly/csr-ideas
- 18. Thank You Please send any feedback about the CSR report to: Earth Systems GIZ Level 5, Alounmai Tower, 23 Singha Road 247/19 Watnak Yai Road Ban Nongbone, Vientiane, Lao PDR Ban Thaphalanxay, Vientiane, Lao PDR Tel: +856-21 454 434 Tel: +856-21 353 605 Fax: +856-21 454 434 Fax: +856-21 312 408 Email: enviro@earthsytems.com.au Email: giz-laos@giz.de Website: www.earthsystems.com.au Website: http://www.giz.de/en/