Business

In Burma, a Fine Line Between CSR and Karmic Cash

By Kyaw Hsu Mon 16 March 2016

RANGOON — It was perhaps inevitable that Burma’s business sector would struggle with the idea of corporate social responsibility (CSR), operating in a country of high charitable giving and stark contrasts between its wealthiest and poorest citizens.

At least in part, this stems from the reality that CSR, as a concept, has only caught on in the former pariah state within the past few years. Observers say this has led to overly broad use of the term and to confusion about its actual meaning by many companies, often most visibly by Burma’s biggest conglomerates, including Zaw Zaw’s Max Myanmar Group, Tay Za’s Htoo Group and Aung Ko Win’s Kanbawza (KBZ) Group.

Of the trio above, Zaw Zaw and Tay Za remain on a US blacklist, preventing American firms from doing business with them, for perceptions that they are members of Burma’s “crony class,” whose willingness to work with the former military regime ran counter to Washington’s pro-democracy agenda. Rightly or unfairly, in recent years CSR initiatives from blacklisted companies have been viewed with cynicism as the US Treasury Department has removed some names from the list and talks have turned to rehabilitating the reputations of those that remain sanctioned.

Burma’s larger companies have their own philanthropic foundations to take the lead on CSR efforts. Zaw Zaw, Tay Za and Aung Ko Win have all founded their conglomerates’ foundations within the last decade.

While such businesses have made significant financial contributions to education, health care and various social awareness activities in Burma, this does not mean that their contributions necessarily align with international standards on what qualifies as CSR.

“From what I understand about CSR, it’s about the long-term effectiveness of activities for the community. It’s not about donations, which many businesses label as CSR,” Aung Myo Shein, CSR manager of the Parami Energy Group of Companies, told The Irrawaddy.

In recent years so-called CSR initiatives have produced some awkward optics, from the repatriation of modern-day Burmese slaves who were decked out in KBZ Bank merchandise to the National League for Democracy (NLD) taking money for training parliamentarians-elect from a bank owned by US-sanctioned Tay Za.

While there is a degree of ambiguity about what constitutes CSR, some say more nefarious motivations can also be behind these initiatives.

“[Using the term ‘CSR’] is a good way to launder money. For real CSR, businesses must know how they’ll affect the community, but many just do it for show,” Aung Myo Shein said.

Adding to the confusion is the fact that different people define CSR in different ways. Thomas Thomas, CEO of the Asean CSR Network, said CSR is not so much about how people spend money as it is about how they make that money.

“It’s not about doing a lot of the sins and then trying to build a church, temple or mosque and contribute, and say God forgave you,” he recently told Reporting Asean.

In this, he appears to be of the same mind as Washington as it relates to the US blacklist: Following a meeting in 2014 with businesspeople on the American sanctions roster about how they could successfully be delisted, US Assistant Secretary of State for Democracy, Human Rights and Labor Tom Malinowski told The Irrawaddy that it would take more than generosity.

“We also made clear that donations to charity, while welcome, would not be taken into consideration—for this purpose, what’s important is not how they spend their money but how they make their money,” he said.

According to Vicky Bowman, director of the Myanmar Centre for Responsible Business (MCRB) and a former British ambassador to Burma, many businesses actually prefer not to use the vague term “CSR” because Burmese people understand it in different ways.

Bowman said MCRB recently organized a workshop for companies in Hpa-an, Karen State, polling them on whether they understood CSR to be “social/community investment or contribution, philanthropy, sponsorship and disaster relief” or “the responsibility of enterprises for their impacts on society,” the latter of which is the EU definition.

Companies’ representatives split 50-50, while some even thought that CSR could be both, she said.

Bowman added that instead of “CSR,” MCRB uses two distinct terms: “responsible business” to refer to business behavior, and “community investment” or “creating shared value” to get at where businesses go beyond fundamental legal and moral obligations.

“The rest is philanthropy, not related to the business,” she said. “There’s nothing wrong with philanthropy. Indeed, it is wonderful and a source of great national pride, that Myanmar is top in the world in terms of charitable giving,” she said, referring to the fact that in 2015, Burma was again ranked the most charitable country in the world by the London-based Charitable Aid Foundation.

“But you aren’t demonstrating corporate responsibility by building schools and clinics, particularly if you made your money through environmental destruction, corruption or worker exploitation,” she continued.

Key to CSR, Bowman contends, is that a company must earn and retain its “social license.”

“That’s what allows it to operate without strikes and demonstrations and get its official permits more easily, particularly in a world in which the government is increasingly sensitive to public opinion—as Myitsone and Dagon City demonstrated,” she said, referring to controversial hydropower and high-rise projects, respectively, that have run up against intense public opposition.

“Technically, you can’t be a responsible business if you break the law. But the laws affecting businesses here are often unclear or new or unknown or contradictory or not applied consistently,” Bowman added, pointing out that the main challenge for most companies in Burma is non-compliance with the law, an issue particularly obvious when one looks at the dearth of environmental regulation and resulting pollution and waste.

Chit Khine, chairman of the Eden Group of Companies, echoed these sentiments.

“We need the government to advocate proper learning of CSR,” he said. “It’s time to change from this family business-style to an international standard.”

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