CSR [corporate social responsibility] and anti-corruption initiatives are often approached differently both conceptually and within companies, yet they are linked. CSR considers the economic, social and environmental impacts of a company’s operations, and all of these spheres may be negatively affected by a company’s corrupt activities.
Socially, corruption undermines the rule of law and the legitimacy of public office, and creates an obstacle to democracy. Economically, corruption depletes national wealth, leads to the misallocation of scarce resources, can hinder the development of fair market value structures, distort competition and deter investment. Environmentally, corruption can contribute to environmental degradation, the exploitation of natural resources and insufficient regulation or enforcement to protect the environment.
Presenting or preventing corruption risk?
Corruption risk varies depending on the CSR approach a company takes. Corruption risk ought to decrease when a company is using the newer concept of CSR embodied in the Guiding Principles. Best practices in anticorruption compliance require policies, codes of conduct and due diligence to prevent and detect corruption, all of which are required by the Guiding Principles in respect of human rights. The steps required by the Guiding Principles can be integrated into a company’s overall compliance processes, and can dovetail with existing anti-corruption policies, procedures and due diligence. This new "due diligence" approach to CSR, when followed, can provide additional feedback to help companies prevent, identify and remediate corruption.
In a project-based approach to CSR, companies need to remain vigilant about corruption. CSR projects are often designed to mitigate challenges in getting businesses up and running, particularly in developing countries. Not only must a number of approvals must be obtained from foreign officials in the regulatory area, but it is also often necessary to obtain more community approval – or "social licence" – from affected local peoples for proposed projects. As a result, companies, particularly in the extractive sector, engage in activities such as investing in local infrastructure (improving roads, building hospitals and schools, and improving water systems), and providing training and support for local projects, charities and initiatives.
Read the complete article at NorthernMiner.com/news/fulfilling-csr-goals-without-violating-anti-corruption-laws
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