What drives indigenous corporations in the developing world to engage
in CSR as a management strategy?
Case study of the sugarcane and ethanol industry in the Cauca Valley,
Colombia
Isabella Mariño Rivera
August, 2010
CONTENTS
I.
Introduction
II.
Conceptualising CSR
III.
Case study of the sugarcane and ethanol industry in the Cauca
Valley, Colombia
1. Social, economic and political context of the industry
a.
Characterization of the industry and its socioeconomic
impact on the region
b.
Labour conditions of the workers in the industry
c.
2005 and 2008 strikes and the political context of the
sector
2. History of CSR in the sector
IV.
a.
From corporate
responsibility
social
awareness
to
corporate
b.
Moving forwards: regional and enterprise-based efforts to
achieve corporate citizenship
i.
The Regional System of CSR and the Global
Compact
ii.
Riopaila-Castilla S.A. and Manuelita S.A.
iii.
Asocaña and the certification process with Better
Sugarcane Initiative
Discussion
1. The “CSR System” in the sugarcane industry
2. Key drivers of CSR management strategies
V.
Conclusions
2
“There can not exist a “healthy” corporation in a “sick” society”
Manuel Carvajal
I.
Introduction
Within the context of globalization, factors such as privatization, capital
mobilization, private foreign investment flow and trade liberalization have
propelled non-state actors like corporations towards great prominence
(Koenig-Archibugi, 2005). In the world today, 51 of the 1000 largest
economies are business enterprises, while only 49 are countries (Anderson &
Cavanagh, 2000). Hence, there has been a paradigm shift: today firms are
essential to the development and protection of Human Rights (HR), and are
expected to act as necessary partners to governments and international
organizations in their promotion and respect (IBLF, 2005).
Nevertheless, corporations are not legally compelled to act under
guidelines of the United Nations (UN) HR framework. This in turn, alongside
globalization, has created a governance gap in enabling a permissive
environment for wrongful acts by companies without proper sanctioning or
reparation. To this day, International HR Law has not been able to cope with
the challenge of overcoming its state-centric approach and the private-public
divide built under the Westphalia system (Alston, 2005).
Hence, the main objectives of the Business and HR predicament lie in
tackling theses deficiencies in the global order. The corporate HR movement
has debated between advocating for voluntary or regulatory regimes,
differentiating
between
corporate
“responsibility”
and
“accountability”
(Clapham, 2006)1. Amidst this discussion, Corporate Social Responsibility
(CSR) has evolved as a tool of the voluntary regime, based on the
1
There is a current debate between voluntary and regulatory initiatives to control corporate
activity. For further reading see: International Council on HR Policy (2002); Chandler (2003);
Van der Putten (2003); Koenig-Archibugi (2005), Villiers, (2005) Weissbrodt & Kruger (2005);
McLeay (2006) and Corkin (2008).
3
assumption that HR is part of the taxonomy2 of business responsibilities
(Blowfield & Murray, 2008).
Although CSR policies are supposedly adopted in a voluntary manner,
the reality is private businesses are in the centre of a “System of CSR
Promotion and Advocacy”, determined by a number of drivers, pressures and
incentives, shaped by diverse sources and actors (Haslam, 2004). Hence, the
business case3 for CSR differs between developed countries and emerging
economies; the current corporate responsibility priorities of Latin American
companies are different to their United States or European counterparts
(Ethical Corporation, 2005). Drivers of CSR engagement are one of the key
elements that differentiate emerging economies from the developing world.
Thus, identifying these differences contributes to the HR movement in two
ways: by determining the pressure points where the CSR agenda can be
better moved forward in developing countries aiming to close the
implementation gap between standard setting and compliance, and by
shaping the characteristics of the CSR agenda to local needs. Given that
literature on business and HR has focused mostly on finding ways to
strengthen regulatory schemes, this research intents to contribute to the other
side of the debate, seeking to strengthen the voluntary regime in regards to a
particular group of corporations: enterprises originated and based on
developing countries, particularly Latin America.
Moreover, operations by indigenous firms4 in developing countries5
Blowfield and Murray (2008) define the “taxonomy” of business responsibilities as “the
multitude of ways in which business impacts upon, and is affected by, the rest of society (…)
this differs according to the type of company, the moment in history, the nature of the
industry, and the geopolitical context”.
3
What is meant by “the business case” is the demonstration that there is a positive
correlation between CSR and business performance, increasing the likelihood that CSR
practices will be adopted (Blowfield & Murray, 2008).
4
“Indigenous corporations” in this paper will refer to large, medium and small enterprises with
a local origin, in contrast to TNC that are home-based in developed countries, but operate in
emerging economic contexts.
5
Acknowledging the contested nature of the classification of countries as “developed” or
“developing”, the term will be used here in reference to nations that according to the World
Bank´s country classification correspond to low-income and middle-income countries. Terms
such as “global south” and “emerging economies” will also be used in this sense. For the
2
4
unfold in particular contexts such as rapidly expanding economies, regardless
of constituting the scenery where social and environmental crises are more
intensely felt due to globalization. Hence, these settings denote distinctive
challenges when compared to those faced in the developed world, particularly
due to the task enterprises are expected to have in triggering development
within contexts of scarcity (Jeppesen, 2006). The later is particularly relevant
in Latin America, where 128 million people live on less than two dollars a day
and
governments
face
impediments
to
fulfil
socio-economic
and
environmental needs (Peinado-Vara, 2006).
Therefore, this research aims to shed light on why indigenous third
world country corporations uptake CSR policies. CSR in developing countries
is a new research field emerging as enterprises in the global south are
increasingly concerned with the social and environmental impact of their
operations (Lund-Thomsen et al, 2006). Until today, studies on the matter
have focused for the most part on the relationship between indigenous
business and transnational corporations (TNCs) or the role of CSR in
international development, mostly from a normative perspective (Jeppesen,
2006)6. Moreover, Latin America has been widely excluded of this incipient
progress in English speaking publications and no country-based study has
been carried-out on Colombia.
However, the few papers published on the subject can be said to
conclude: i) external drivers such as international standardization, investment
incentives, market access and supply chain imposition by TNCs are
significant in fostering CSR practices in the region; ii) cultural tradition and
corporate philanthropy are the most important internal driver, based on ethical
and religious components; and iii) the role of civil society and governments in
complete classification, go to: http://data.worldbank.org/about/country-classifications
(Accessed 26 July 2010).
6
In this regard, see: Blowfield & Frynas (2005) and the special issues on CSR and
development that have been published by the Journal of Corporate Citizenship (issue 24,
2006), International Affairs (issue 81 (3), 2005), and Development (issue 47 (3), 2004).
5
shaping CSR is scarce7.
Hence,
this
research
was
specifically
undertaken
to
test
the
aforementioned claims. It follows the case-study methodology analysing the
case of the sugarcane and ethanol industry in the Cauca Valley. Empirical
data was gathered from 22 semi-structured in depth interviews conducted in
Cali, Colombia with executives from Manuelita S.A., Caicedo Gonzales
Foundation (CGF), National Association of Sugarcane Growers (Asocaña),
workers from the plantations, and academics that have written on the sector
and the social problems that surround it. The interview data was
complemented by a review of relevant literature and documentary evidence;
documents such as internal organizational policies, academic publications
and newspaper articles were also gathered. Research for academic
publications was done in three local universities: two that are businessfocused institutions (Universidad Javeriana de Cali, Universidad ICESI), and a
third one that takes highly critical positions against the sector (Universidad del
Valle).
The paper will first introduce a theoretical framework on CSR (II); after
which the case study of the sugarcane and ethanol industry in the Cauca
Valley is presented (III). Furthermore the paper discusses the case study
concluding that internal social and political circumstances are more
determinant than external drivers for corporations to engage in CSR
strategies (IV), and ends suggesting the need for contextual analysis and
implementation of CSR strategies, proposing new avenues of research on the
topic (IV).
7
In this regard, see: Baskin (2006), Muro (2006) Peinado-Vara (2006), Vives (2006), Wyzig
(2006), Vives (2005), Correa (2004), Gutiérrez & Jones (2004), Haslam (2004), and Barret
(2002).
6
II.
Conceptualising CSR
A brief explanation will be made on the concepts of CSR. On one hand, for
the purpose of this paper CSR should be understood to mean:
“The practices that are part of the corporate strategy which complement
and support the main business activities, explicitly seek to avoid damage
and promote the well-being of stakeholders by complying with the law and
voluntarily going beyond it”. Stakeholders in this case include clients,
suppliers, employees, community, government and the environment”
(Peinado-Vara, 2006).
A second point that needs to be clarified is that “contemporary” CSR
management is a function of strategic planning including fours elements: 1)
building effective relationships with its stakeholders under the understanding
that the firm is an organisation embedded in a complex web of relationships
and an integral part of society; 2) it has a clear purpose; 3) a strategy must be
put in place; and 4) adequate systems and processes are created (Blowfield &
Murray, 2008).
Additionally, the levels of engagement a company has to CSR policies
can be expressed as a continuum, described in the following stages; 1)
“corporate social awareness”, when a corporation is gradually understanding
the extent of its stakeholders and invests in episodic philanthropic initiatives
through foundations; 2) “corporate social responsibility”, when initiatives link
corporate decisions to ethical values and acknowledge stakeholders; 3)
“corporate social involvement”, meaning the corporation moves away from its
advocacy role, and starts making strategic alliances with NGOs and
governmental agencies to make changes. Nevertheless, these activities have
not yet been included in the management process; and 4) “corporate
citizenship”, when CSR is part of the business norms and strategies. Hence,
the company as a whole assumes a leadership role promoting cross-sectorial
cooperation and discloses what it is doing on the area (Barnett, 2002).
Although it is difficult to determine when a company is “socially responsible”,
7
the corporations vision, mission, strategic drive, structure management of
concerns, and stakeholder relationships and reporting will be the criteria
observed to establish the level of engagement a company has in modern CSR
practices (Blowfield & Murray, 2008).
Finally, this paper will base its analysis and discussion chapters on two
analytical frameworks: Haslam´s “CSR System” for Latin America, and
Visser´s classification of drivers for CSR in developing countries.
Haslam´s “System of CSR Promotion and Advocacy” theorizes the key
actors, relationships and influences on the development of CSR in the region.
As every other publication on the topic, it argues that considerable impetus
behind the promotion of CSR comes from foreign demands, particularly from
private foundations, multilateral agencies, and TNCs. It describes a set of
interactions that occur between three levels: the national (where the
company is located), the home country (which applies only if the firm has
links to TNCs), and the international system. Figure 1 represents these
relationships, with larger arrows indicating greater pressure and influence
(Haslam, 2004).
Figure 1: CSR System in Latin America
Source: Haslam, 2004
8
On the other hand, Visser´s framework describes a set of drivers, making
a distinction between internal and external, the former defined as pressures
within the country, while the later having a global origin. Amongst internal
drivers, Visser includes: a) cultural tradition, understood as philanthropic
business ethics and community rooted practices, b) political reforms, offering
the example of how political transformation in Latin America since the 1980s
have shifted the role of business towards greater responsibility for social and
environmental issues; c) economic priorities in the environment in which firms
operate; d) governance gaps as a consequence of weak governments that
fail to provide adequate social services; e) crisis response, represented in
catastrophic events, for example; and f) market access, conceiving CSR as
an enabler for companies in emerging economies to access markets in the
developed world.
Moreover, Visser characterises external drivers as: a) international
standardization, some of which are imposed by multinationals striving to
achieve global consistency among its subsidiaries and operations in
developing countries (Baskin, 2006); b) investment incentives, given that CSR
is serving as a signalling device for developing countries aiming to assess
foreign investment proposals; c) stakeholder activism by groups such as
development agencies, trade unions, international NGOs and business
associations, local NGOs supported by global networks, and the media; and
d) supply chain, conceived as the pressure set upon small and medium-sized
companies as part of the supply chains of multinationals. A good example of
this is the ethical trading initiative. Visser´s proposal is observed in Figure 2.
9
INTERNAL DRIVERS
Political reform
Crisis response
Cultural tradition
CulturaS Governance gaps
Socio-economic priorities
Market access
meT grrt
Tr
International standardization
Supply Chain
Investment incentives
Stakeholder activism
EXTERNAL DRIVERS
Figure 2: Drivers of CSR in developing countries
EXTERNAL DRIVERS
Source: Visser, 2008
Hence, the following case study aims to assess the aforementioned
frameworks, analysing the detailed socio-economic and political context and
the development of CSR practices in the Cauca Valley in Colombia.
III.
Case study of the sugarcane and ethanol industry in the Cauca
Valley, Colombia
1.
Social, economic and political context of the industry
a.
Characterization
of
the
industry
and
its
socioeconomic impact on the region
The Cauca Valley is one of the most prosperous regions in Colombia
particularly since the midst of the XX century. Its economy contributes to 11%
of national gross domestic product (GDP), and according to the Report of the
UN Development Program (UNDP) published on the region in 2008, the
10
Human Development Index is of 0.80, national second highest. Nevertheless,
as in the rest of the country the social inequalities remain high, with a Gini
coefficient of 0,51 (PNUD, 2008).
There are five strategic economic activities: fruit pulps, maquila, health
services, logistic services, and sugar production. The later accounts for 6%
GDP in the region (Departamento Nacional de Planeación, 2004).
The
production of sugar began with Manuelita in 1864, expanding between 19201940 when other twelve sugar mills began operating; particularly RiopailaCastilla (Riopaila) which was founded in 1925.
In 1959 the Sugarcane
Growers' Association (Asocaña) was created under the purpose of promoting,
maintaining and improving the conditions of private enterprises in the sugar
sector. That same year the production expanded internationally, when United
States closed its markets with Cuba, and Colombia entered the International
Sugar Organization (Ramos, 2005). A second boom of sugar export
developed in the 1990s as a consequence of economic liberalism policies that
aimed to export agricultural products considered internationally competitive. A
further step in the industry was taken in 2002 when Colombia’s ethanol
program was put in place, grounded on law 693/01 that mandates a mix of
10% bio fuel with regular gasoline. Hence, when the law went into effect in
2005, sugarcane based ethanol production began in 5 mills, aiming to supply
the demand on cities with more than 500, 000 inhabitants. In summary, the
sugar business today is a cluster composed of 13 mills, food and beverage
companies, alcohol and liquor producers, energy plants, sucrochemical
corporations and soda companies, amongst others (Dueñas et al, 2007).
The socioeconomic impact of the industry is fundamental in the lives of
inhabitants of the Cauca Valley: 21 towns in the region live out of growing and
harvesting sugarcane, it employees 5, 809 direct workers, and 87, 978
workers along its supply chain
(Arbeláez, 2010). The industry has the
greatest impact on the families of the 12, 000 workers involved in the manual
harvesting of sugarcane (“sugarcane workers”, “workers” or “corteros”). For
the most part, Afro-Colombians and indigenous population constitute these
communities, much of whom have migrated due to the levels of violence in
11
the Pacific Region, are not educated, live under extreme conditions of
poverty, and know of sugarcane harvesting as their only economic source. As
an example, only 38% of a group of 817 randomly surveyed corteros know
how to read (Asocaña, 2009).
The sugarcane industry transformed throughout international and
domestic economic crisis, particularly by mid-1990s when the economy
slowed and by 1999 the country fell into its first recession since 1929. This
was a drawback for the industry at that time, producing sugar five times more
expensive than the average international price (Lemus, 2010). After some
years Colombia overcame the crisis, positioning as the 10 th exporter of sugar
amongst 80 countries, Brazil being the first producer and exporter in the world
(Arbeláez, 2010). However, the industry is in need of moving onwards to
become sustainable and more competitive. Mechanizing the harvesting
process is a necessary step for two reasons: reducing the costs of production
and being environmentally responsible. Currently, Colombia pays the highest
price in the world for manual harvesting, having mechanized only 10% of its
production,
loosing
competitiveness
against
Brazil
(Asocaña,
2008).
Additionally, in the process of hand harvesting the field needs to be set on
fire, producing ash which has devastating effects on neighbouring populations
and the environment (Dávalos, 2007). Nevertheless, the course of action of
mechanizing has been slowed down by the industry due to the social impact it
would have on the economy of the region (Jaramillo, 2010).
b.
Labour conditions of workers in the industry
Out of the total number of workers of the industry, 31% are employed
directly by the companies, 23% are hired by sugarcane growers to work at the
plantation fields, 11% are hired by independent contractors for various tasks,
and 33% are corteros subcontracted through associated labour cooperatives
(cooperatives).
Sugarcane workers were not always hired through cooperatives. They
were traditionally employed under a paternalistic scheme, and the industry
12
embraced them almost as family members. The process of “flexibilizing”
labour standards began in the mid 1990s as a response to the challenges of
globalization and the economic crisis at that time in Latin America, caused by
economic liberalization At that point in time, the industry had two choices in
order to subsist: either become more productive or reduce its costs of
production, choosing the later (Ortiz, 2007).
Consequently, in the mid 1990 sugarcane workers were hired through
contractors, compelled to constitute associative working enterprises (in
Spanish, empresas asociativas de trabajo), and in 2002 the legal figure of
cooperatives was introduced by the national government to incentive labour
flexibilization in the aftermath of the economic crisis, hoping to bring down the
unemployment figure (Castaño, 2008). The expansion of this phenomenon
was observed particularly as the next century moved in, when cooperatives
associating sugarcane workers increased from 17 in 2002 to 82 in the next
three years. Until 2005, cooperatives were not even administered directly by
the workers, but by the same contractors that used to outsource their services
in the past (Urrea, 2007).
The consequences of outsourcing the services of sugarcane workers
meant a 9% reduction in the cost of sugar production since the company was
no longer compelled to pay for its workers pension, healthcare and other
benefits (Salazar, 2010). Nevertheless, for the workforce this lead to a great
loss on many fronts: on the one hand they had to assume their new role as
entrepreneurs, finding themselves administering the cooperatives with neither
education nor knowledge on the subject (Gómez, 2010). Additionally, their
income was reduces, although the industry has contested this claim
(Arbeláez, 2010). Finally, this process affected the trade union movement and
the workers´ capacity to bargain in favour of their conditions, since they are no
longer employees of the companies and thus lost their legal right to take part
in trade union activities (Urrea, 2007).
13
c.
2005 and 2008 strikes and the political context of the
sector
The sector’s political background has evolved in past years, mainly due
to the production of ethanol as part of the core business of 5 of the 13
plantations in the region, allowing novel stakeholders to arrive on the scene.
A historic actor within the political context of the industry are trade
unions; most companies in the sector have dealt with the presence of two
types: Sintracañaizucol, affiliated to the politically driven left-winged federation
Central Union of Workers (CUT), and Sintracañabal, affiliated to the
Confederation of Workers of Colombia (CTC), characterized as a businessunion. Both federations are affiliated to the International Trade Union
Organization (ITUC), and have a protracted history in Colombian trade union
movement. The number of members of Sintracañaizucol has been heavily
diminished due to the process of contracting out sugarcane workers. Hence,
the leading union in the industry today is Sintracañabal (Aricapa, 2006).
Although some scholars argue the industry has greatly manipulated
unions in its favour (Caicedo, 1982), heavy strikes have determined the labour
relations. Two strikes to remember were the ones in 1974 and 1976 in
Riopaila plantation, both of which are kept in the collective memory of workers
(Lemus, 2010). Nevertheless, the most significant events that shape the
current political context of the industry were lived in 2005 and 2008.
In 2005 the grievances workers had accumulated for years erupted in
the shape of isolated strikes in five of the plantations. Lasting only a few days
and with little coverage from the media (El Tiempo, 2005), workers demanded
better pay, shorter working hours, better housing and educational facilities for
them and their families, and a formal work contract with labour and union
rights, a claim that could not be fulfilled by enterprises due to financial
circumstances of the business. The settlement achieved between companies
and workers abolished the contractors and the corteros were allowed to run
14
cooperatives by themselves (Aricapa, 2006). A second consequence of the
strike was the foundation of Sinalcorteros, an industry union affiliated to the
CUT, which started gaining political power due to its alliance with political
leaders in the region (Mancilla, 2010). Unlike this, the reaction of the industry
to the strike was anything but strategic: every form of dialogue between
companies and their workers was destroyed, no grievance solvingmechanism was left standing (Gómez, 2010) and the mechanization process
was accelerated (Muñoz, 2010).
Evidently grievances amongst workers grew to the point of causing a
general 54 day-strike in 2008 of over 19, 000 corteros, causing economic
losses of about US 1700, 000 for the industry as well as a social crisis in 12
cities of the region. The whole economic cluster was boycotted and even the
price of gasoline increased in 4.1%. The demands of workers were the same
as in 2005: labour contracts, correct weighing and the right price for cane that
had been cut, the increase in wages, measures for workers suffering disability
due to the working conditions and rights to health, education and housing.
This time around however, the drivers behind the strike, the actors engaged,
and the consequences for corporations were without precedent (Semana,
2008).
The origins of this strike are grounded on contacts made by Jose Oney
Valencia in October 2007 with Alexander López, a congressman of the leftwinged party in Colombia, Alternative Democratic Pole. He explains; “we were
enthusiastic about meeting a parliamentary who was genuinely interested in
our case (…) we are still in touch with him today, he is the only public figure
that has created awareness of our working conditions” (Valencia, 2010). On
the contrary, for the industry it was clear that politicians and unions were only
interested in votes and gaining affiliates, promising a mass of uneducated and
vulnerable workers unachievable aims like a formal work contract (Salazar,
2010).
The 14 of June 2008, a HR NGO called “Corporación Humanidad
Maestra Vida” organized a public hearing in the town of Pradera, where both
15
HR and environmentalist activitists gathered, the former to demand
improvement in the working conditions of corteros, the later campaigning
against the production of ethanol in the context of the global food crisis. At
that time, Senator López was the President of the HR Commission in
Congress and a few of his party-colleagues were present that same day
(Ecoportal.net, 2008). One month later, Sinaltrainal, Sinalcorteros and the
CUT presented a list of bidding terms and conditions to Asocaña, that refused
to sit and negotiate the list of claims arguing that sugar refineries had not
entrusted them with the function of engaging in collective bargaining on their
behalf. Further on, September the 5th workers marched to Cali, capital city of
the Cauca Valley, claiming they were “replaced by machines” (El Tiempo,
2008), after which the movement blocked the entrance to some of the
plantations, causing violent confrontations with the police on the 25 of
September (El Tiempo, 2008). On October 1st, wives and children of the
workers also marched to Cali and various left-winged political leaders
contributed to the cause by providing food and basic supplies to the workers
and their families. The press informed the Venezuelan Government of Hugo
Chávez was funding some of the aid (El Tiempo 2008), and Government
officials publicly claimed that “dark” forces were manipulating the workers,
clearly making reference to left-winged guerrilla groups (ILO, 2009).
Settlements between workers and the industry were achieved in
November that same year. Compared to 2005, the power and support for the
worker’s cause had changed: while in 2005 the strike was hardly covered by
the press, in 2008 the strike was centre-stage in the media, new stakeholders
were
engaged,
resulting
in
unexpected
domestic
and
international
consequences for the workers movement and the industry. Hence, the
struggle of the corteros can be described as a meeting point for many key
concerns of diverse social movements in Colombia: anti-capitalist fighting
against the sugarcane oligopoly, class struggle, fighting a business owned
and run by few traditional families in the region, inequalities due to the unfair
distribution of land, racial tensions given that sugarcane workers are mostly
indigenous and afro, and the struggle for vindicating labour, human and
environmental rights.
16
As a conclusion on this chapter, it is important to emphasize three main
consequences the 2008 strike brought for workers, the Colombian
government and the industry. Foremost, the workers were empowered as a
social movement allowing the strengthening of their union. The leaders of the
strike founded the “14 June Movement”, in commemoration of the 14 June
2008 when the public hearing to inform of their claims was held (Valencia,
2010). Furthermore, Sinalcorteros expanded from 870 members to 3
thousand affiliates in the aftermath of the strike. Finally, the National Union of
Food Industry Workers (Sinaltrainal) engaged in the struggle. Known for filing
a lawsuit in 2001 in a Miami district court against Coca-Cola for the murder of
several union members (Business and HR, 2010), Sinaltrainal sent a
complaint to the International Labour Organization (ILO) in September 2008,
alleging the violation of the right of personal freedom due to the violent
repression of the strike by the public authorities of the work stoppage, and the
refusal of Asocaña and the companies to negotiate the list of claims
presented by the trade unions. Thus, in Case no. 2668 the Committee on
Freedom of Association of the ILO analyzed the use of excess of power by
public authorities, and requested the Colombian government to “ensure that
Sinaltrainal is able to engage in collective bargaining at least on behalf of its
members and asks the Government to keep it informed in this respect” (ILO,
2009).
Finally, the strike raised the attention of key international actors and
stakeholders. The “Global Labour Movement” including the ITUC, the
American Federation of Labour and Congress of Industrial Organizations
(AFL-CIO), the Canadian Labour Congress, and the European Parliament
sent letters to the Colombian Government supporting the worker’s demands
(The Canada-Colombia Project, 2008). All of the above are crucial actors for
national interests, due to their advocacy against the negotiations of free-trade
agreements with Colombia.
17
2.
History of CSR in the sector
In resemblance to the global trend, corporations in Colombia engage in
CSR policies on a voluntary basis. According to surveys made by the National
Association of Industries (ANDI) between 2003 and 2008, corporations in
Colombia invested an average of 2.8 of their profits on what they characterize
as CSR. Although 61% of this amount was destined to financial donations, by
the year 2008 64.5% of the 210 medium and big enterprises assessed had a
CSR strategy, 27.6% had signed-up to the Global Compact, and 59% aimed
their activities towards achieving Millennium Development Goals (MDG)
(ANDI, 2009). Despite these accomplishments, there is still a long way to go
to build corporate citizenship. The aim of this section is to describe the
process the industry in the Cauca Valle has gone through to engage in CSR
as a management strategy, focusing on the sugarcane sector, and analysing
the CSR programs of the most committed enterprises: Manuelita S.A.
(Manuelita) and Riopaila & Castilla S.A. (Riopaila).
a.
From corporate social awareness to corporate
responsibility
Philanthropy and community investment have been a tradition in the
agricultural business in the region since mid XIX century (Laverde, 2005). A
diagnose of regional CSR patterns carried out by ANDI on 135 corporations,
proved that by 2005 these firms used philanthropy and CSR as
interchangeable terms, their key stakeholders were both the community and
their employees, and an average of 62.2% of the funds directed to financial
donations were destined to education projects. The main flaws in their policies
were the lack of strategic direction in their programs: only 46% of the
enterprises had concrete goals and reports on progress, there was a critical
distance between business and government agencies at local and national
level, hence few alliances had been achieved. Moreover, in most cases
corporations had not mapped the impact of community investments (Paz &
Benítez, 2007).
18
The development of CSR in the sugarcane sector is a good
representation of this trend. At the time when sugar refineries were growing in
the region, there was insufficient presence of government agencies, hence
corporations in alliance with the Catholic Church had to provide their
communities and employees with health services and education (Lemus,
2010). Riopaila trained their workers in technical skills to supply the mills with
human resources, and Manuelita S.A. contributed by funding housing projects
and building recreational centres. Nevertheless, this scheme was paternalistic
and made workers dependent of the industry, rather than promoting selfsufficiency and free will amongst the corteros (Jaramillo, 2010).
However, social foundations have played a very important role in the
progress of CSR in the sector. In 1957, Riopaila founded Caicedo Gonzalez
Foundation (CGF) grounded on the Christian spirit of charity. Its chief
executive officer characterizes the period between 1957 and 1989 as
“Philanthropic”, what Barret would classify in the continuum as “corporate
social awareness” (Fundación Caicedo González, 2010). A second phase
developed between 1989 and 2000, triggered by external pressures of the
community and the workers due to the crisis of the sector in the 1990s and
the process of labour flexibilization. Thus, the Foundation worked closely with
the corteros to find them other sources of income, creating the so-called
“Program of Applied CSR”. Nevertheless, this step was not taken by
Manuelita neither by other companies in the sector, which mistakenly
conducted their flexibilization processes without diagnosing the impact it
would have on the workers or the community (Montoya, 2010).
b.
Moving forwards: regional and enterprise-based
efforts to achieve corporate citizenship
The first decade of XXI century was significant for the development of
CSR as a management strategy in the region. First, the innovative “Regional
System of CSR” was designed and set to work, and Manuelita and Riopaila
both structured proper CSR management systems defined by a targeted
19
strategy, proper stakeholder engagement, construction of tactical alliances,
standard implementation, certification and reporting.
i)
The Regional System of CSR and the Global
Compact
The Social Committee of the ANDI conformed by social foundations
(amongst them CGF) began working in March 2002, aiming to gather efforts
in order to address the most urgent social needs in the region. Their initial
task was to engage industries of the economic cluster in the process of
constituting a Regional System of CSR. By 2003 they had designed a plan
with the purpose of enhancing the social commitment of the private sector
with the society at large. The first three goals achieved were the design of
“The Colombian Guidelines to CSR”, the identification of public and private
scenarios were they could contribute and the diagnose of CSR practices in
the region in 2003 and 2005 (ANDI, 2009b). After a process of 6 years of
consultancies, training and creating awareness on the subject the next step
was taken, and the pilot project began with 23 mid-large companies of every
sector engaged in structuring CSR programs as management strategies
(Riopaila and Manuelita were the only sugar refineries initially involved). This
second phase is currently being financed and coordinated by COMFANDI, the
main Family Compensation Fund in the region, expecting to engage 100
corporations in this initiative and looking forward to create alliances with
strategic stakeholders.
By the end of year 2008 the Committee of CEOs of Enterprises
Working for a Socially Responsible Region was put into place. This new
institution aims to “Align, strengthen and support public and business
strategies aiming to achieve the MDG and UNDP policy recommendations for
the region”. In 2009 the corporations represented in the Committee made
official their commitment to the process by joining the UN Global Compact
20
(GC)8 (Sistema Regional de Responsabilidad Social, 2009). Until today, 5 out
of the 13 sugar refineries in the region have adhered to the GC (Manuelita,
Riopaila, Maria Luisa, Pichihí and Mayagüez).
The terms of the adherence to the GC were contested amongst the
aforementioned corporations due to Principle 3, which states that;
“Businesses should uphold the freedom of association and the effective
recognition of the right to collective bargaining”. Given the recent strike in the
sugarcane sector, the signatory corporations adhered to the GC interpreting
the aforesaid wording (Garrido, 2010). Consequently, there were opposed
reactions to the adherence: while executives expressed this was the first time
they came close to HR normative and thought of this process as an
opportunity to comply with such standards (Vélez, 2010), interviewees from
social foundations communicated their concern for the “instrumental” use of
the GC logo as a “green washing” strategy (Lemus, 2010), an opinion the
academy agreed on (Álvarez, 2010). The fact that the GC was joined by sugar
refineries a few months after 2008 strike is a matter of analysis that will be
discussed further on.
An additional positive consequence of this process is the leadership
the ANDI gained as a promoter of the GC in Colombia. Based in Bogotá, they
manage the Colombian focal point in the Latin American network 9, and are
advocating constituting a second focal point in Cali (Parra, 2010).
Despite of the regional effort to engage in CSR strategies, each
corporation has lead a particular process to achieve this, given specific drivers
and interests. The process followed by Riopaila and Manuelita will be
described next.
The UN Global Compact is defined as “a strategic policy initiative for businesses that are
committed to aligning their operations and strategies with ten universally accepted principles
in the areas of HR, labour, environment and anti-corruption” (UN Global Compact, 2010).
9
GC Local Networks are cluster of participants that get together to advance the GC and its
principles within a particular region, aiming to: root the GC within local and cultural-specific
contexts, facilitate the progress of implementation of the 10 principles, and create
opportunities for multi-stakeholder engagement (UN Global Compact, 2010).
8
21
ii)
Riopaila-Castilla S.A and Manuelita S.A.
Riopaila and Manuelita were chosen to represent the evolution of CSR
in the sugarcane sector given their commitment to the region and their
communities, but also due to the differences amongst each.
Previous to properly structuring its CSR program, Riopaila had already
engaged in elaborating sustainability reports in 2007 and 2008. Nevertheless,
it was not until 2008 the corporation followed a detailed consultation process
with a Chilean CSR firm, AxisRSE, in the context of the consolidation of the
Regional System of CSR. In 2009 they published their third sustainability
report following Global Reporting Initiatives (GRI) standards and introduced
their newly designed strategy of CSR. The mission of the corporation was
defined as “Being perceived by our stakeholders as the most socially
responsible agro industrial enterprise in Colombia”. The business charter of
values can be summarized in its commitment to ethics, and the respect and
promotion of HR, and as of stakeholder identification, the consultancy carriedout identified both the internal (employees, cooperative-affiliates and
shareholders) and external (customers, suppliers, the community and the
government) stakeholders. The adherence to the GC was significant for
Riopaila, committing to inform their 2010 sustainability report on their level of
compliance to the 10 principles (Fundación Caicedo González, 2010).
Due to the nature of their business, Riopaila acknowledges the
importance of their relationship with the community and the corteros,
prioritizing these stakeholders in the social component of their CSR program.
Hence, it was only until 2009 that the contribution of the CFG was articulated
in the CSR management structure. The CFG has two main schemes
responding to this group: strategic social investment focusing on education,
housing and income-improvement for the corteros; and financial donations,
focused on short-term benefits and responding to immediate demands, in the
area of education, heath, leisure and well-being of their employees
(Fundación Caicedo González, 2010).
22
The Chief Executive Officer of CGF explains the process to consolidate
their CSR strategy:
“Although the foundation had informed the company of the relevance of
structuring
proper
policies
that
targeted
the
needs
of
specific
stakeholders, it was not until the strike in 2005 that executives became
aware of the importance of engaging with both workers and community in
a planned manner. The recognition of workers and employees in this
industry has always been a consequence of social demands. This sector
has always acted reactively to external drivers” (Lemus, 2010).
In regards to the adherence to the GC she explains the industry had
discussed the subject since 2007 when the GC was introduced in Colombia.
Nevertheless, “it was only after the 2008 strike and the unexpected negative
consequences it brought for the industry that we joined the Global Compact.
The claim sent to the ILO arguing the industry violated union rights also
triggered the adherence” (Lemus, 2010).
The story of Manuelita is slightly different. On one hand, there was no
actor playing the role the CGF had in Riopaila and during the labour
flexibilization process. Hence, workers, their families and the community were
no longer targeted in their policies due to the fear of lawsuits claiming the
existence of a labour relationship between former employees and the
company (Montoya, 2010). Therefore, while the CGF built a program to
accompany the corteros in the outsourcing process, Manuelita deliberately
“abandoned” this key stakeholder at that time.
Additionally, given the diversification of the business to other products
such as shrimps, mussels and palm oil, as well as the expansion of sugar
production to ventures in Peru and Brazil, in 2005 the enterprise was
structured into a holding company named Manuelita Investments S.A. (IMSA).
Since then, business decisions are determined by the internationalized
holding and not directly by the sugar refinery. According to the former Human
23
Resource Director, the business started to acknowledge the importance of
dealing strategically with its surroundings in 2006 after the 2005 strike,
“particularly given that our raw material is growing in 25, 000 hectares
inhabited by a lively community” (Salazar, 2010). Nevertheless, until 2008
Manuelita´s CSR strategy was based on a program of random financial
investments lacking strategic direction, largely focused on philanthropy
(Ocampo, 2010).
In April 2008 a new Chair took over IMSA, bringing renovation to the
management strategy, willing to revise the policies on financial donations and
CSR. In June that same year Manuelita started a consultancy with
“Compartamos”, a Colombian firm specialized in CSR and community
engagement. The strategy designed and set to work in 2009 involves only two
strategic stakeholders: workers (including cooperative-affiliates) and the
community. They are aware that a proper CSR policy should be inclusive of
other external stakeholders, but have prioritized the aforementioned mainly
due to the negative consequences of 2008 strike on the sector (Montoya,
2010). The structure of their sustainable development program is dived in
three main areas: i) The identification and address of unfulfilled basis needs;
ii) The generation of alternative income; iii) Environmental leadership. These
tasks are in progress due to alliances with Carvajal Foundation and
COMFANDI (Salazar, 2010).
Furthermore, Manuelita is preparing its first sustainability report in 2012
following GRI standards. They are aware of the compromise they must fulfil
with the GC, and have started working on their first report due at the end of
2010. From the interviews held, it is possible to conclude their executives are
less familiarized with the 10 principles of the GC than executives in Riopaila. It
is important to mention they are currently auditing their supply chain on labour
standards and child labour (Montoya, 2010).
Finally, executives are aware of their mistakes in the past in regards to
strategic stakeholders and acknowledge the influence the social mobilization
had on the turnout of the CSR policy. The Director of Human Resources from
24
IMSA explains the initiative of designing a proper CSR strategy was prior to
the strike, but recognises the events in 2008 triggered the input the top
management of the company has put on the projects for both the community
and the corteros (Ocampo, 2010). The academy shares this view,
acknowledging the contribution the renewed direction of the holding had on
this process (Muñoz, 2010).
Hence, it is possible to conclude Riopaila has in place and running a
much more structured and comprehensive CSR strategy, while Manuelita is
still on its way towards achieving the programs designed, and has not yet
developed a sufficiently comprehensive scheme. Nevertheless, in both cases
what is relevant is the timing of the process, which by no coincidence overlaps
with both 2005 and 2008 strikes.
iii)
Asocaña and the certification process with
Better Sugarcane Initiative
Asocaña is an additional actor in the system of CSR of the sugarcane
sector. Although it does not deal directly with every internal and external
stakeholder of the industry, it is responsible for articulating alliances between
corporations, and international and governmental agencies in order to
advance a challenging social agenda in the region. In 2009 they structured an
ambitious CSR policy envisioning results for 2015, expecting to contribute
towards: i) Upgrading the quality of life of the community in accordance to the
MDG; ii) Making an effective use of resources in the region; iii) Positioning the
sugarcane sector as the main driver of development in the Cauca Valley. To
achieve this, they aim to focus on 5 strategic actions: i) Adhere to the GC; ii)
Tighten-up alliances and generate trust; iii) Education; iv) Strengthen social
networks; and v) Respect for the environment (Asocaña, 2008).
The first step accomplished was joining the GC as an association in
2009. Furthermore, the component of their CSR policy regarding social
intervention is focused on two MDG: education and poverty reduction, which
they are advancing in alliance with various strategic stakeholders. On one
25
hand, their CSR policy is based on a study developed by Universidad
Javeriana describing the socioeconomic condition of corteros and their
families. Moreover, they are working with the ILO campaigning against child
labour in sugarcane plantations and have recently started a project with the
UN Office of the High Commissioner of HR (OHCHR) and the governmental
agency Acción Social for the return of displaced communities to the Pacific
Coast. Additionally, the National Training Service (SENA) is supporting the
education component.
Beside the aforementioned initiatives that overlap with efforts lead by
individual corporations and COMFANDI, Asocaña is coordinating the
certification of 5 sugarcane refineries by Better Sugarcane Initiative (BSI),
amongst them Riopaila and Manuelita (Calero, 2010). The driver of that
process was the need to access global markets like European countries,
given the negotiations and future signature of the Free Trade Agreement
between the European Union and Colombia.
Nevertheless, certification processes are not new for the industry: as
suppliers of TNCs such as Cadbury Adams, Coca-Cola and Kraft Foods, both
Manuelita and Riopaila have been subject to social auditing (Montoya, 2010).
However, achieving a certification by BSI requires demonstrating the
production of sugar under the compliance of a global metric standard aimed to
reduce social and environmental impacts whilst maintaining or enhancing the
economic status of farmers (BSI, 2010), a challenge the industry had not
undertaken before.
Hence, this chapter has described the process followed by regional
and corporate actors to engage in modern CSR policies. The discussion next
intends to connect such evolution with the socio-economic and political
context in the Cauca Valley, in order to determine whether; i) external drivers
such as international standardization, investment incentives, market access
and supply chain imposition by TNCs are significant in fostering CSR
practices in the region; ii) cultural tradition and corporate philanthropy are the
26
most important internal drivers, based on ethical and religious components;
and iii) the role of civil society and governments in shaping CSR is scarce.
IV.
Discussion
1.
The “CSR System” in the sugarcane industry
In order to determine the drivers of CSR, it is important to introduce the
version of Haslam´s CSR System applied to Colombia, particularly based on
the present case study. As it will become evident further on, there are wide
differences in terms of actors, pressure points and the arrow flow, an
indication of the flaws Haslam´s proposal has once it is applied to a particular
context. It relevant to recall arrows represent both the direction of influence as
much as the relevance of the relation.
Multilateral
Organizations (ILO,
UN)
The National
system
The International
Political System
Asocaña
National
Government
HR and
environmental NGOs
ANDI
Local firm
Trade Unions
COMFANDI
Social movements
and political
parties
Social
foundations
Academic
The Global
Market
System
TNCs
Government
Trade Unions
International
NGOs
Global
Trade
Unions
Figure 3: CSR System in the sugarcane industry
27
The relevance of actors and connections within the system is defined
primarily on the national level where there is a four-way relationship between
the sugarcane growers association, COMFANDI, ANDI and the corporations,
explained by the fact that programs lead by Asocaña, COMFANDI and the
firms complement each other. As well, COMFANDI is the head of the
Regional System of CSR in the Cauca Valley, being a significant actor for the
promotion of CSR in close relationship with ANDI. Hence, the program of
CSR in each sugarcane refinery must be understood and analyzed in relation
to the initiatives lead by these other organizations.
Furthermore, there are three other sets of actors which pressure the local
firm to be socially responsible and have been strategic drivers of the sector’s
CSR policy: social foundations (particularly CGF), the academy and the
“cluster” of civil society actors represented by HR and environmental NGOs,
trade unions and social movements. Although pressure from the academy has
been relevant until now due to publications by the Universidad del Valle, it
could be strengthened. The Javeriana and ICESI Universities as businessfocused institutions have supportive corporations, mediating between the
community and the enterprise, contributing to the analysis of the social
context. Moreover, trade unions and local NGOs are influenced from outside
the national sphere by the support and funding from international NGOs,
foreign trade unions like the AFL-CIO and the ITUC.
A first source of external pressure originates in multilateral organizations
that advocate in favour of their interests upon Asocaña, which serves as a
mediator between national/international public/private expectations. Some of
the initiatives funded by multilateral organizations are the ILO program for
child labour eradication and the OHCHR program that strives to return
corteros to their communities in the Pacific Coast.
Moreover, two additional sources of external pressures determine the
engagement of the corporations in CSR policies: indirect demands imposed
on the firm due to the pressures from international organisms and
governments on the local government, as well as requirements directly
28
enforced by TNCs. On one hand, the Colombian State is pressured by
multilateral organizations due to the commitment it has to international
agreements, particularly labour treaties enforced by the ILO. Additionally,
advocates of labour and HR like the AFL-CIO and the European Parliament
pressure both the United States and the European Union to impose standards
on the Colombian government in order to sign bilateral agreements. Hence,
the government takes measures to comply with such demands by enacting
laws and shaping public policies, but also by requiring a socially responsible
behaviour from corporations. Nevertheless, the relationship between the
national government and the firm is represented in the system by a skeletal
arrow due to the fact that the sugarcane and ethanol sector is a priority for the
national economy and to this day has received more benefits than impositions
from the central government.
The third form of external pressure is imposed directly on the firm by
TNCs. In this case, although sugarcane refineries have an arm’s length
relationship with TNCs solely as their supplier, the CSR Codes of TNCs are
extended to their supply chain, expecting local partners to meet their CSR
requirements. Examples of this are the social audits Coca-Cola and Kraft
have imposed on Manuelita and Riopaila which are explained by the pressure
imposed on them by trade unions such as Sinaltrainal.
Consequently, there are significant differences in the interactions and
actors present in the Figure representing the sugarcane sector and Haslam´s
original “CSR System”. On one hand, modifications were done in regards to
the relations and their flow and even the local/global/international systems
were named differently due to the actors present in the local scene.
Furthermore, both actors and relations were excluded since they are not
present on this particular case study, such as business NGOs and private
foundations. In this case, social foundations can be said to have the functions
of business NGOs, promoting CSR programs amongst the sector and the
region.
29
Nevertheless, there are some characteristics described in Haslam´s
System that are equally identified in this case study. As the diagram shows,
there is an important influence of international actors on the national system.
The next section will determine if the so-called “external drivers” are the main
factors that have triggered the CSR agenda in the sugarcane sector.
2. Key drivers of CSR management strategies
The System of CSR designed for this case study is an important tool to
visualize the complex web of social, political, economic relationships and
interests corporations are embedded in. It also helps determine the drivers
present in the industry that have lead corporations to engage in CSR as
strategic management policies. Hence, this section aims to present the drivers
identified in the case study following Vissers´s classification, in order to
conclude whether the three general assumptions presented on the literature
apply to this specific context.
On one hand, cultural tradition represented in philanthropy and
Catholic faith has been a significant driver for the industry to engage with its
workers and communities in an unsystematic and indiscriminate manner. A
second driver at the stage of “corporate social awareness” is governance
gaps, due to the underdevelopment of the region at the time when sugar
refineries were expanding and the paternalistic view corporations had of their
role in society. Both of these “internal” drivers are diagnosed in literature on
the subject, particularly in papers by Peinado-Vara (2006) and Gutiérrez and
Jones (2004).
It was precisely this altruistic spirit that lead corporations to create
social foundations, some of which have lead the process started in 2002
towards the creation of the Regional System of CSR for the Cauca Valley,
engaging not only Manuelita and Riopaila, but many other sugar and ethanol
producers in the process of designing and putting in place modern CSR
strategies.
30
Nonetheless, a different set of drivers has determined the engagement of
the industry in modern CSR policies, aiming for “corporate citizenship”
(Barnett, 2002). As observed in the abovementioned “System of CSR”, there
are various external and internal pressures that have influenced this process.
Primarily, there are external drivers represented in investment incentives,
for although executives from the business were aware of the need to be
perceived as “socially responsible” by the global community, it was only in the
aftermath of the 2008 strike when this factor became a driver, due to negative
publicity against the sector. To mention an example, Manuelita envisioned
change also in an effort to be perceived as socially responsible by its partners
in business in Peru and Brazil where they had recently expanded their
operations (Montoya, 2010). A second outside driver described by Visser is
the supply chain, represented in the social audits applied on Manuelita and
Riopaila by TNCs. Nevertheless, in this case CSR codes and standards
cannot be characterized as “drivers” for CSR, rather than as mechanisms of
instrumental use by the industry to “green wash” its image after the strike; it is
not a coincidence the desire of the industry to join the Global Compact as was
argued before and to start reporting only until 2008 with GRI Sustainability
Reporting Guidelines.
In regards to market access, although Visser characterizes it as an
“internal” driver, in this case it must be defined as an external driver
determined by pressures from governments in the developed world and global
trade unions. For the sugarcane industry and various other sectors in the
national economy, the negotiations and signature of free-trade agreements
with both the United States and the European Union are significant for
accessing new markets, particularly after Venezuela blocked trade with
Colombia. As aforementioned, the requirements made to the Colombian
government for the negotiation of these agreements include the respect for
HR and union rights, demands that have been imposed on the companies.
Hence, market access has been a way to create awareness on the industry of
global standards on sustainability.
31
In regards to internal drivers, socio-economic priorities acknowledged by
the UNDP in its regional Human Development Report in 2008 made
corporations aware of the role they have to play in the region, leading them to
shape the Regional System of CSR.
Finally, stakeholder activism must be described as the most significant
driver of CSR as management strategies in the sugarcane sector. Visser
classifies it exclusively as an “external” driver, mainly due to the global origin
of the stakeholder groups he claims to be the most powerful activists of CSR.
Nevertheless, the former framework excludes actors present in the local
scene: national HR and environmental NGOs, trade unions and social
movements are of local origin and constitute the main players leading the
strike between 2005 and 2008. However, given that global forces were
determinant for the internationalization of the strike, this driver will be
classified as two-fold (internal and external).
But why was stakeholder activism such a significant driver? Mainly
because the strike allowed the sector to acknowledge its errors, based on a
lack of a stakeholder engagement strategy and an adequate CSR policy. The
industry made three prominent mistakes, it: i) took for granted its role in the
development of the region and did not think of its “paternalistic” relationship
with locals as an asset; ii) abandoned the community at a time of transition
when the labour flexibilization started, allowing social forces to empower
workers as political actors for the left-winged party; iii) did not diagnose the
new stakeholders that would arise when the business expanded towards
ethanol production. Hence, both strikes were significant for the process
towards corporate citizenship: in 2005 it made companies aware of the social
problem they had created due to the labour flexibilization process, but it was
not until 2008 when the many local and international pressures described fell
upon the industry, making corporations react enabling proper CSR programs.
It is a fact that both Manuelita and Riopaila had started consultancies to
design such strategies, but the strikes speeded-up these processes and reoriented their main targets. Today, the components of Manuelita and
Riopaila´s modern CSR programmes have the corteros and their communities
32
in centre stage, a relevant signal of the importance both strikes had on the
industry.
To conclude, the three arguments that shaped the premises of this
research must be revised. On one hand, during the first decade of this century
a diverse number of drivers demanded the action of the industry to engage in
modern CSR strategies: socio-economic priorities (internal), market access
(external), international standardization (external), supply chain (external),
investment incentives (external), and stakeholder activism (internal/external).
Although external drivers outnumber internal ones, the relationships observed
in Figure 3 intent to prove that despite the fact that the sugarcane industry is
certainly under pressure due to globalization and international demands, the
stress set upon the sector after 2005 and 2008 strikes is at the core of the
seriousness with which CSR policies have been adopted today.
Moreover, cultural tradition and corporate philanthropy were important
drivers for what is classified under Barret´s continuum as “corporate social
awareness”, although these do not correspond to drivers of contemporary
CSR policies that could lead to corporate citizenship. Religion and tradition
left their legacy in the shape of social foundations, which act as key actors of
the CSR System today. Finally, it is true that the role of governments in
shaping CSR is scarce in Colombia and there are still actors amongst civil
society that have not engaged in the process, such as consumers and
business NGOs. However, social movements, local and international NGOs
and trade unions were strategic players in the game of pushing the sugarcane
industry forward.
V.
Conclusions
Corporations are intertwined in a complex web of relationships and thus,
trying to distinguish between the economic and social ends of business
activity is useless. As the case study demonstrated, economic decisions have
social consequences, a reality that supports the claim that enterprises,
regardless of their size and income, have responsibilities towards their
33
stakeholders and the social, political and environmental context they operate
in.
Furthermore, enterprises in the developing world are embedded in a “CSR
System” specific to the actors, relations, pressures and incentives present in
their contexts. Consequently, literature on CSR in Latin America has made
generalized claims based on secondary source research, trying to look at the
“big picture”, ignoring how social, economic and political circumstances are
sawn together. To illustrate the argument, both Haslam and Visser´s
frameworks were proven wrong under the case study, demonstrating there is
no universal understanding or model of CSR that can serve every context.
Moreover, the findings of this case study open an opportunity for
corporate HR practitioners. In comparison with Haslam and Visser´s
frameworks of analysis, the CSR System for the sugarcane sector was
missing in both cases the presence of business NGOs. Another opportunity
blossoms for consumer groups that could be more active in demanding goods
produced under sustainable conditions and for scholars that could support the
demands of stakeholder groups with scientific evidence, or work side by side
with the industry towards achieving corporate citizenship.
Finally, there are some topics of interest that could serve as avenues
for further research on the subject. On one hand, a few years from now it
would be relevant to study if the perception by business leaders on the
relationship between business and HR has changed. Up until today, the
awareness around the topic is scarce and mostly informed due to the GC and
BSI standards, but there was still a negative response from corporate
executives whenever the topic was brought up during the interviews. A
possible explanation for this relies on how the protracted civil conflict in
Colombia has shaped HR as a discourse from left-wing guerrilla groups
exclusively.
34
A second topic would be the GC “effect” in the industry. Will it be used
instrumentally for “green washing” purposes, or will the industry engage fully
in complying with its standards?
Thus, the business case for CSR in the sugarcane sector today is the
need for a “healthy” community in order to have a successful corporate
environment; hence the touchstone of good CSR management has been
reached. The avenue to move onto corporate citizenship might burst with
obstacles, but the enterprises have learned how to listen, and the workers
have made themselves be heard, consequently a more peaceful evolution
towards corporate citizenship for the business can be foreseen.
35
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