In a session to discuss draft report on The Private Sector Practice of Corporate Social Responsibility in Palestine in Light of International Standards,
Civil Society Team for Enhancing Public Budget Transparency: Government or institutional approach to corporate social responsibility is still poor and requires a strategic plan for local institutionalisation
Ramallah – The Civil Society Team for Enhancing Public Budget Transparency (“Team) held a session to discuss a draft report on The Private Sector Practice of Corporate Social Responsibility in Palestine in Light of International Standards. The report aims at making practical recommendations to decision makers for promoting corporate social responsibility (CSR) management and governance in general, and for triggering private sector contribution to the national anti-corruption effort in particular.
In her opening statement, Ms. Hama Zeidan, Operations Manager at the Coalition for Accountability and Integrity (AMAN), explained that AMAN was concerned with the best investment of Palestinian private sector CSR contributions in line with a clearly defined and institutionalised community vision. To ensure a long-lasting impact, the report examines the current context of CSR of Palestinian private sector firms, including in social, financial and human rights dimensions, in light of relevant international concepts and standards. The report also explores the governance indicators of CSR management, provision of support to vulnerable groups, and private sector’s role in strengthening integrity and combating all forms of corruption.
CSR definition varies in the absence of a CSR strategic plan
Making a presentation on the report, Researcher Eman Sa’adeh provided a review of the definition of CSR in the Palestinian context. Private sector corporations have not arrived at a consensus on a definition of CSR. The concept of CSR continues to be misapplied or unclear to many private sector companies, often overlapping with other activities, such as public relations, company promotion, or corporate image advertising. A major portion of support provided by private sector firms is mostly premised on individual requests by persons or institutions. Selection of sectors can be a matter of discretion of the executive management of companies based on their own appreciation of priorities. There is no government map or proposal by human rights centres or civil society organisations for national development priorities. It is not apparent whether there are focused programmes under strategic plans of the majority of companies, which are approached by individuals or institutions for funding to implement relevant initiatives or receive requested assistance.
Inadequate CSR application in corporate employment policies
The report presents indicators adopted on grounds of some statistical data provided by a 2009 survey of the Palestinian Central Bureau of Statistics (PCBS). The survey frames CSR as the “culture of compliance with responsibility within strategic planning priorities of institutions and provision of support to all three (economic, social and environmental) dimensions of sustainable development. CSR is a strategic approach to doing business in our society in a sustainable and responsible manner.”
The PCBS survey showed that only 57.7 percent of companies across the Palestinian territory are sufficiently aware of the concept of CSR, including 61.4 percent in the West Bank and 47.8 percent in the Gaza Strip. In relation to CSR application in corporate employment policies, while 78 percent of companies did not employ men with disabilities, 85 percent of private sector firms did not offer jobs to women with disabilities (No updates or other surveys have since been released on these aspects).
Corporate support is “relief-oriented” and not linked to the 2030 Agenda for Sustainable Development
Most often, corporate support is relief in nature and not associated with sustainable development and achievement of the 2030 Agenda for Sustainable Development. The larger portion of private sector corporations contribute to social activities, mostly relief-based social assistance (56 percent), arts and culture (28 percent), and education (40 percent). According to a 2011 PCBS survey, while just 13.4 percent of private sector companies supported environmental issues, corporate support was in the form of scholarships or aid to needy students, certain educational initiatives and competitions, and sports programmes (30 percent).
Contrary to CSR, the Waqfet Izz Fund model was contentious and unsuccessful
The report presents the examples of the Waqfet Izz Solidarity Fund as a model of CSR. The Palestinian government called for establishing the fund in pursuit of social solidarity in response to economic, social, and health impacts of the COVID-19 pandemic on Palestinian society. The Waqfet Izz Fund can be seen as a practical assessment of CSR policies. It mainly relied on donations from the local private sector. Palestinian corporations donated some ILS 50 million, accounting for 81 percent of the total funds raised. Although it set a target of ILS 100 million, until 4 July 2020, the fund only managed to raise ILS 62.1 million from all donors, including companies. A comparison of funds given by some private sector firms to the Waqfet Izz Fund and tax exemptions these firms have under the Investment Promotion Law shows that only 95 corporations contributed to the fund. A far greater proportion of contributions were offered by companies not subject to the Investment Promotion Law. This reflects a paradox and distorted social role of private sector companies, particularly during states of emergency. Private sector corporations do access business facilities in Palestinian society, generating significant profits.
Failure to develop and adopt national indicators for CSR assessment
The report states that a law or regulation is not in place so as to oblige private sector firms to make CSR contributions. Companies are only bound to varying degrees of disclosure of those CSR policies and activities which they implement. To date, no national indicators have been developed and adopted for CSR assessment. Including such indicators, a CSR survey has not been conducted, showing relevant developments on an annual basis. The report also indicates that government or institutional approach to CSR continues to be poor. It is unclear if a government document is in place, setting a terms of reference for handling CSR, highlighting the importance of CSR, or major sectors which the private sector should channel initiatives to on grounds of the 2030 Agenda for Sustainable Development and National Policy Agenda goals and priorities.
Government agencies should contribute to mapping priorities in Palestine, placing a focus on vulnerable groups
The report recommends that private sector firms be informed of the concept of CSR, creating a sense of accountability and ensuring that these firms uphold their obligations towards society. The report also recommends that government bodies play a role in mapping sectors that need support, objectives to be achieved, and areas of intervention by the private sector CSR contributions, while at the same time placing an emphasis on marginalised and vulnerable groups, including persons with disabilities, women, and the poor. Additionally, corporations will be directed to comply with human rights principles, conserve the environment, maintain the rights of different stakeholders, and achieve sustainable development goals.
Corporations are required to adopt a clear CSR policy
Private sector corporations need to adopt a clear policy for CSR and CSR areas. This should gear companies’ approach towards announcing sectors, projects, and initiatives to which CSR contributions are made. The CSR policy will, therefore, facilitate contacts with companies according to their interests and the sectors to which they address CSR initiatives. CSR policies of private sector firms will be directed towards strengthening and supporting initiatives and projects designed to empower women.
AMAN: CSR is provided by private sector code of ethics and governance
In his comment, Dr. Azmi Shuaibi, Advisor to AMAN’s Board of Directors for Anti-Corruption Affairs, recalled that CSR was not prescribed by the outdated Company Law of 1964. The government established a committee chaired by the Palestinian Capital Market Authority as an oversight body of companies, particularly those listed on the Palestine Exchange. Membership on the committee included the Palestine Monetary Authority, Association of Banks in Palestine, and some representatives of mega corporations or consortiums at the Private Sector Coordinating Council. At the time, AMAN introduced the inclusion of CSR within the private sector code of ethics and governance. When they are fully developed and conditions are conducive, certain provisions can be transferred from the code to the law.
Shuaibi asserted that the report presented a clear concept of CSR. The idea of CSR has so far been contentious between the government, private sector corporations, and civil society organisations. CSR is not a matter of donations, one-off support, or assistance. CSR should reflect a national perspective, which emanates from the private sector’s responsibility towards society and social needs. The government is required to put in place a national plan for needs assessment. Along this vein, AMAN will contribute to developing the CSR concept and incorporate this contribution into the anti-corruption effort as a priority. The CSR process will be Palestinianised in tandem with the capital market needs, priorities, and mechanisms. Agreed indicators will then be crystallised to assess corporate contributions and agree to a clearly defined operational framework.
