Social Accountability and Social Responsibility

By

Shikhar JainSenior Counsellor

CII

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Standards for Social Accountability and Responsibility

• Standards have been developed to assist organizations in being socially accountable and responsible, arising from the expectations of its stakeholders and society.

• The following standards will be introduced in this presentation: Guidance on Social Responsibility (ISO 26000:2010) International Standard for Social Accountability (SA

8000:2008) Indian Standard for Organizational Accountability at

the Workplace (IS 16001:2010)

Globalization

ISO 26000 – A new standard for a new world

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ISO 26000connects

the Great Global Agreementsto the daily activities of

organizations

Rising Influence & Power of the Private Sector

  Country/Corporation GDP/Sales ($ million)

1 United States 11,667,510.00

2 Japan 4,623,398.00

3 Germany 2,714,418.00

4 United Kingdom 2,140,898.00

5 France 2,002,582.00

7 China 1,649,329.00

9 Canada 979,764.20

10 India 691,876.30

20 Turkey 301,949.80

21 Austria 290,109.50

22 Wal-Mart Stores 258,681.00

23 Indonesia 257,641.50

24 Saudi Arabia 250,557.30

27 Poland 241,832.50

28 Exxon Mobil 213,199.00

29 South Africa 212,777.30

30 Greece 203,401.00

31 General Motors 195,645.20

32 Finland 186,597.00

35 Ford Motor 164,496.00

  Country/Corporation GDP/Sales ($ million)

37 Hong Kong, China 163,004.70

40 General Electric 134,187.00

41 Malaysia 117,775.80

42 Israel 117,548.40

43 ChevronTexaco 112,937.00

49 ConocoPhillips 99,468.00

50 Colombia 97,383.93

51 Pakistan 96,114.84

52 Citigroup 94,713.00

53 Chile 94,104.94

54 Intl. Business Machines 89,131.00

57 Egypt 85,000.00

60 Hewlett-Packard 73,061.00

62 Peru 68,394.96

63 Verizon Communications 67,752.00

64 Ukraine 65,149.34

65 Home Depot 64,816.00

66 Berkshire Hathaway 63,859.00

67 Altria Group 60,704.00

69 Bangladesh 56,844.49

The SR concept building

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Poverty

Friedmanand the conceptof shareholder

Adam Smith

The concept ofstakeholder

SustainableDevelopment

Triple Bottom Line

Social Responsibility

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MEO-CCP021-20080221-RGSS

Adopting integrated Social Policies

$113 bn $7 bn $106 bn 75%

StockMarket Value

NetBook ValueGoodwill %

$380 bn $41 bn $339 bn 89%

$199 bn $21 bn $178 bn 90%

$499 bn $23 bn $476 bn 95%

$104 bn $8 bn $96 bn 92%

$202 bn $31 bn $171 bn 85%

$60 bn $8 bn $52 bn 87%

$46 bn $19 bn $27 bn 59%

$35 bn $8 bn $28 bn 78%

$149 bn $72 bn $77 bn 52%

Source: Interbrand/Citibank league table, 2001

Evidence of the Importance of Goodwill

Some of the Social Pressures Facing Managers today

Definition ‘Social responsibility’

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Responsibility of an organization for the impacts of its decisions and activities on society and the environment, through transparent and ethical behaviour that contributes to sustainable development, including health and the welfare of society; takes into account the expectations of stakeholders; is in compliance with applicable law and consistent with international norms of behaviour; and is integrated throughout the organization and practiced in its relationships.

NOTE 1 Activities include products, services and processesNOTE 2 Relationships refer to an organization’s activities within its sphere of influence

The 7 Principles of Social Responsibility – Accountability: an organization should be

accountable for its impacts on society and the environment

– Transparency: an organization should be transparent in its decisions and activities that impact on others

– Ethical behaviour: an organization should behave ethically at all times

The 7 Principles of Social Responsibility

– Stakeholder: an organization should respect and consider the interests of its stakeholders

– Rule of law: an organization should respect the rule of law

– International norms: an organization should respect relevant international norms where these norms are more favourable to sustainable development and the welfare of society

– Human rights: an organization should recognize both the importance and the universality of human rights

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Stakeholder map

MediaGovernment

Citizens NGO’s

Consumers

IndustryOrganization

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Value & supply chain

Customers

MediaGovernmentCitizens NGO’s

Consumers

Workers

IndustryOrganization

Value chain

Sub-Suppliers

Raw material providers Waste

services

Supply chain

Social Responsibility Core Subjects

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Labourpractices

Fair operating practices

Consumer issues

Theenvironment

Communityinvolvement and

developmentHuman rights

Or g

an i z a t i ona

l

ORGANIZATION

SR Framework

50,000 feet: VISION

- Define corporate values - Build a vision - Understand macro trends - Educate and manage stakeholders - Assure transparency and accountability

30,000 feet: STRATEGY

- Create a clear value proposition - Develop a strategic plan - Integrate and align - Build a communications and engagement strategy - Create a measurement system

Ground: EXECUTION

- Implement - Communicate - Report - Evaluate

How is your company

articulating its mission and vision?

How is your company creating a

strategy?

How is your company executing

on its strategy?

Social Responsibility – from Top to Bottom

SOCIAL ACCOUNTABILITY

SA8000 covers the following areas of

accountability: Child LaborForced LaborWorkplace Safety & HealthFreedom of Association & Right to Collective

BargainingDiscriminationDisciplineWorking HoursRemuneration

ILO Conventions

# Forced labor (29, 105) # Wages (100, 131, 95, 63)

# Child labor (138, 182) # Working Hours (1, 116

30, 63, 47)

# Freedom Of Association # Health and Safety (155

(87, 98) 162)

# Discrimination (111, 100, # Home workers (177)

35, 154) # Maternity Protection (183)

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Introduction• SA8000 is a global social accountability standard

for decent working conditions, developed and overseen by Social Accountability International (SAI).

• SA8000 is based on the UN Universal Declaration of the Human Rights, Convention on the Rights of the Child and various International Labour Organisations (ILO) conventions.

Social Accountability Requirements

1. Child Labor

Criteria 1.1

The company shall not engage in or support the use of child labour as defined above.

Criteria 1.4

The company shall not expose children or young workers to situations-in or outside of the workplace- that are hazardous or unsafe to their physical and mental health and development.

2. Forced Labour

Criteria 2.1The company shall not engage in or support the use of forced or compulsory labor as defined in ILO Convention 29, nor shall personnel be required to pay ‘deposits’ or lodge identification papers with the company upon commencing employment

3. Health & SafetyCriteria 3.1The company, shall provide a safe and healthy working environment and shall take effective steps to prevent potential accidents and injury to workers’ health arising out of, associated with, or occurring in the course of work, by minimizing, so far as is reasonably practicable, the causes of hazards inherent in the working environment and bearing in mind the prevailing knowledge of the industry and of any specific hazards,

4. Freedom of Association & Right to Collective Bargaining

Criteria 4.1All personnel shall have the right to form, join, and organize trade unions of their choice and to bargain collectively on their behalf with the company. The company shall respect this right, and shall effectively inform personnel that they are free to join an organization of their choosing and that their doing so will not result in any negative consequences to them, or retaliation, from the company. The company shall not in any way interfere with the establishment, functioning or administration of such workers’ organizations or collective bargaining.

5. DiscriminationCriteria 5.1The company shall not engage in or support discrimination in hiring, remuneration, access to training, promotion, termination or retirement based on race, caste, national or social origin, religion, disability, gender, sexual orientation, union membership, political opinions, age or any other condition that could give rise to discrimination.

6. Disciplinary Practices

Criteria 6.1The company shall treat all personnel with dignity and respect. The company shall not engage in or support the use of corporal punishment, mental or physical coercion, and verbal abuse of personnel. No harsh or inhumane treatment is allowed.

7. Working HoursCriteria 7.1The company shall comply with applicable laws and industry standards on working hours and public holidays. The normal workweek, not including overtime, shall be defined by law but shall not exceed 48 hours.

8. RemunerationCriteria 8.1The company shall respect the right of personnel to a living wage and ensure that wages paid for a standard working week shall always meet at least legal or industry minimum standards and shall be sufficient to meet basic needs of personnel and to provide some discretionary income.

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Social Responsibility and Social Accountability in India

• India has the largest number of workers employed by facilities certified to SA 8000 in the world:

364,231 workers in 576 SA8000 certified facilities

• The Ministry of Textiles, GoI, encourages textile manufacturers to be more accountable and responsible to society by encouraging them to adopt the following standards: ISO 14001, OHSAS 18001 and SA 8000.

• The Textile Committee of the Ministry of Textiles provides technical assistance to manufacturers for certification to these standards.

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Indian Standard for Organizational Accountability at the Workplace (IS 16001)

• The standard details out principles and requirements of each core element that have to be adhered to by the organization to be in compliance with the standard

• The core elements of the standard are: Freedom of Association Health & Safety at the

Workplace Harassment, Abuse and

Inhumane Treatment Wages and Benefits

Child Labour Community Engagement Discrimination Employment Freely Chosen Employment Relationship Employees’ Welfare

Measures

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Social Responsibility and Social Accountability in India

• The Indian Standard for Organizational Accountability at the Workplace (IS 16001), described earlier is an initiative taken by the Bureau of Indian Standards to promote Social Accountability of Indian Business.

• It provides for a mechanism to be in place taken into account the local context to ensure the promotion of such practices are taken up by Indian companies.

• Need to popularize IS 16001 vis-à-vis SA 8000

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Questions and Discussions

THANKS