(Published in L'Express)
From the new Finance Bill, we can read that “companies shall in every year, set up a CSR Fund equivalent to 2% of its book profit derived from the preceding year to implement(a) an approved programme by the Company;(b) implement an approved programme under the National Empowerment Foundation; or(c) an approved NGO.” Elections beckoning, most of our representatives from the 20 constituencies of the country are toiling hard to come up with their list of priority social projects and they know very well how to “weave, it neatly and effectively with Government social policies for greater impact on the targeted areas and groups”that will be benefiting from the huge CSR fund.
We will have to call in the high-calibre advisers to get us out of this mess, the very those who believe that the potential of this mix-up, in mauritian parlance, they’ll say - a macatia of a CSR- to contribute to social development is enormous-18,000 CSR programmes within a year, reaching some 300,000 people in wide-ranging areas of social development; oh yes!! But how much more people could we have reached if we had not sold our precious prime IRS land for peanuts ( Pr Percy.S.Mistry has been persistently reminding us that the landowner-cum-developer is having a free ride to capture most of the eventual value gain from transformation of land ), if we had not allowed the corporate sector to capture all the gains of the early harvest though our generous taxation policies and doled out a stimulus package with a highly partisan flavor bailing out some of the chosen few of the private sector . And all this generosity had a cost; The tax revenue to GDP which stood at 18.2 % in FY 2005/06 has now dropped to only 17.0 % ; They had to do something to give a semblance of correcting their private sector bias, so the mix-up of 2% of the book profit levied on the corporate sector that goes to a fund instead of a more straightforward tax on the sector ; this policy, announced as a watershed in creating a CSR approach that is both voluntary and statutory with the prescribing requirements, is a mere ‘tick the box” approach which defeats the spirit and intent of the concept of CR, without necessarily leading to any better outcomes ; and it is turning out to be merely reinforcing a culture of entitlements .
They wanted to make Corporate Social Responsibility the buzz phrase of the budget but they ended up tinkering with the intricate nexus weaved by the corporate world with other stakeholders through the voluntary CSR ; it is better not to mess around with those subtle bonds between the private sector and the non-state agents, sometimes built along ethnic and even religious lines. Where they got it all wrong is that CSR practices, whether voluntary or compulsory, are not a panacea and cannot on their own be expected to deliver all kinds of outcomes. They are not a substitute for public policy, but they can contribute to a number of public policy objectives. (But do not mess it up- by compliance CSR, the Ministry knows best and forces the corporate sector to fit within a given template.)
