Corporate Social Responsibility and Palestinian Civil Society: Potential Cooperation
By NGO Development Center/NDC
Worldwide, it is becoming very clear that direct impact of new technology, current demographic trends, climatic change, and general global health issues are all creating a new environment with new forms of risks that directly affect the work of governments, civil society, and the private sector.i Therefore, multi-stakeholder collaborations and the engagement of the private sector have become very important for finding proper holistic and sustainable solutions to communities’ problems. This implies that community empowerment means that all people should work together, including within the private sector, in order to make life better. It involves more people being able to influence decisions about their communities, and more people taking responsibility for tackling local problems, rather than expecting others to do so. Other factors that have motivated increased interest in private-sector partnerships include a growing concern with the effectiveness of traditional development approaches, recognition of the impact of globalisation and the increase of private capital flows into the developing world, and appreciation of the unique potential contribution of the private sector. This means that the business case for investing in development, with mutual benefits accruing when communities become development partners rather than passive recipients of philanthropy, has become ever more persuasive.ii On the other hand, and on the global level, Millennium Development Goal (MDG) number eight also calls for a global partnership for development with specific references to the engagement of the private sector. In 2002, the World Economic Forum (WEF) launched a Global Corporate Citizenship Initiative that organised and mobilised its 1,000 corporate members around various development challenges. All of this has contributed to increasing the momentum toward corporate social responsibility (CSR).
CSR - also known as corporate responsibility, corporate citizenship, responsible business, sustainable responsible business, or corporate social performance - is not easy to define. As a concept, CSR is about a holistic and sustainable approach to business that considers all its potential impacts on and responsibilities to society, the environment, and shareholders rather than focussing solely on financial responsibilities to shareholders, as has traditionally been the case.iii It is about how companies manage the business processes to produce an overall positive impact on society; this includes but is not limited to commitments to sustainable poverty alleviation, job creation, and education. It implies that CSR programmes should be thought of as strategically planned efforts that are in uniform agreement with the companies’ strengths and complementary to the government’s programme, and should never be thought of as one-time philanthropic projects, since this is more than just philanthropy and more than charity. Therefore companies should focus on addressing development concerns that could make a difference and a clear impact on their communities. In other words, good corporate citizenship means looking beyond short-term profits; it can be thought of as a good investment strategy, an investment in sustainability.
CSR and the Palestinian Private Sector
For the reasons mentioned above, all citizens of a community must consider not only their own welfare but that of the community of which they are a member; and since corporations do not operate in a vacuum, they operate in environments upon which they depend and which they must therefore protect and help develop. CSR encourages looking beyond short-term profits; it is again an investment in sustainability. But in Palestine, as is the case in most of the Arab region, CSR is still more about philanthropy and is still not considered to be an internal process within corporate operations and strategy. It is still largely philanthropically oriented and external to business. In general, there is a need to harmonise the definition and initiatives of CSR in all the Arab countries, including Palestine.
On the other hand, Palestine continues to be totally dependent on financial support from external sources, mainly the international donor community, inclusive of Arab donors. In general, donors control decision making about how resources are used on their behalf. At the same time, dependence on international aid has undermined Palestinian civil society’s ability to respond effectively to the continually deteriorating political, social, economic, and environmental crises. It has become very clear that the economic, social, and environmental situations and problems are too complex to be solved by any one sector alone. The current situation in Palestine is creating a new environment that must seek solutions through multi-stakeholder collaborations including the direct engagement of the private sector; it is clear now that the Palestinian Authority (PA) cannot solve everything by itself, nor can the community. It is preferable for all to work together. Within the current difficult situation, there is a need to build broader social capacities that join the efforts of civil society to the public and private sectors. This will certainly help in encouraging a more holistic and sustainable approach and solutions to current challenges. In addition, genuine collaborative efforts would help to improve governance in all sectors.
Taking the prevailing situation into consideration, it is not necessary that the Palestinian private sector address development concerns directly. What is expected is that the private sector, in cooperation with public and civil society organisations, would be able to target areas where they could make an impact. On the other hand, the private sector should do a better job in communicating its commitment and contribution to the development and improvement of the current situation. It is believed that engaging a responsible private sector in current challenges and solutions can have a fundamental long-term impact on poverty alleviation and social development in Palestine. The private sector could help in improving the economic, social, and environmental activities in Palestine through its investment and direct cooperation and coordination with the public and more specifically with the civil-society-organisations sector, in addition to its direct support in poverty alleviation through the creation of jobs and income generation.
The NGO Development Center
As one of the pioneering, specialised, and exemplary institutions that offers support in developing and empowering the Palestinian civil society institutions, NGO Development Center (NDC) believes that cooperation with the private sector will ensure stronger and more financially sustainable NGOs and community-based organisations (CBOs), and hopes that this will lead to a more effective community. The private sector is part of the local community, and therefore there is a need to initiate a direct link and cooperation between the private sector and the NGO/CBO sector. Moreover, there is a need to engage people in expanding traditions of philanthropy and volunteerism and working together to strengthen the Palestinian social and economic structure.
To this end, NDC initiated a research project that aims to take the lead in furthering discussions with related stakeholders in the hope that a collective, comprehensive, and strategic framework for corporate social responsibility (sustainability) in Palestine be developed, adopted, and hopefully applied. The main objective of this research is to promote cooperation between NGOs and the Palestinian private sector with the possibility of direct support from NDC, as a local, innovative Palestinian non-profit organisation that empowers Palestinian NGOs to better provide vital services to Palestinians living in the West Bank and Gaza, especially the poor and marginalised. It is hoped that this study will be supported by and followed up with actual initiatives that examine this possibility. It is expected that the research results will be ready by the end of 2009 and will be disseminated to all relevant stakeholders.
A major subject to be explored by the study is how NGOs and the private sector can collaborate, as both actors are important players in community development and sustainability. It will examine the legal and institutional constraints of this collaboration and provide policy recommendations for addressing these issues, including advocacy for tax exemptions to private sector contributions to NGOs and other community actors.
The research project is based on data collection, discussions, and meetings with active persons and bodies in the Palestinian private sector, in addition to other relevant sources of information. It is hoped that the information gathered through the project will shed light on the availability of CSR programmes in the Palestinian private sector and will help in exploring the ability and willingness of private-sector entities to cooperate with and support Palestinian civil society. The research will include a review of experience in the field of cooperation between NGOs and the private sector in general. Focus will be on Palestinian and regional examples and will include present and past private sector activities/experiences in corporate social responsibility. Further development of these initiatives will be used as a base for this research. Results of the research will make use of the needs assessment study conducted by NDC where information regarding the needs of local NGOs (CBOs as a major target of the study) is available. Possible cooperation and support provided by the private sector should be linked to the needs of these NGOs. The results and information gathered from the above steps and meetings could lead to the development of a major pilot proposal (or proposals). This should take into consideration the scope of work of both the private-sector entities and NGOs.
Preliminary results of the research
The first phase of the research incorporated meetings with 26 senior-management-level persons from selected private-sector companies in the West Bank, a representation of large-sized companies working in various sectors. Three of the largest companies selected in the West Bank declined to participate in an interview due mainly to internal concerns within these companies. Companies from the Gaza Strip will be included in the second phase of the research, and results presented in the final report will reflect the situation both in the West Bank and the Gaza Strip.
In general, participating companies demonstrated high interest in the research being conducted by NDC. This was reflected in the direct involvement of the senior-management-level persons in the meetings and survey. Public shareholding companies were the main target of the survey and represented about 44 percent of the companies, whereas limited-liability companies made up 36 percent and partnership companies 20 percent. Geographic distribution of the companies surveyed was also taken into consideration. During the first phase, which covered the West Bank, approximately 58 percent of the participating companies were located in the central part of the West Bank, 23 percent in the northern West Bank, and 19 percent in the southern West Bank. The largest segment, about 54 percent of the surveyed companies, serve local and export markets, whereas 46 percent target the local market only.
The survey revealed confusion amongst participating companies between the concept of social responsibility and marketing activities. Companies indicated that activities related to their perception of social responsibility during the years 2008 and 2009 included voluntary donations and actions during emergencies and religious events; approximately 50 percent of the companies surveyed have adopted social responsibility programmes. Ninety percent of the surveyed companies concentrate on activities that target both the education and health sectors. These activities address the interest of youth especially in the geographical location of the company’s headquarters. Thirty percent of surveyed companies have sponsored an exhibition, a conference, or a festival; whereas about 86 percent of the companies have made donations to legally registered charities.
According to results of the survey, only 27 percent of participating companies conduct their CSR-related activities based on an approved plan, and 10 percent have a specified budget set for the purpose of CSR. The remaining majority of companies are motivated by other factors, including political and financial circumstances, society needs, and potential company benefits from the proposed initiative. Seventy percent of the companies have the objective of helping Palestinian society sustain itself and helping communities to develop based on religious beliefs. They believe that the poor have the right to share their profits. Improving the company image and that of their products was the primary aim for 57 percent of researched companies; this included competition with Israeli and other imported products. Twenty-three percent of the companies were not able to identify specific objectives (internal or external) that their CSR-related activities attempt to achieve, and 10 percent of the companies believed that CSR is a useful tool in attracting highly qualified personnel to work with them. Nineteen percent of the companies thought that it would help to preserve employee loyalty. One company aimed to obtain an international certificate for adopting social responsibility.
In relation to the cooperation between the private sector and the NGO sector, 62 percent of the surveyed companies confirmed conducting their activities through cooperation with local partners; the remaining 38 percent conducted the activities without cooperation with NGOs or local partners. The majority of researched companies (77 percent) indicated a positive attitude towards possible cooperation with NGOs and CBOs in conducting CSR initiatives. On the other hand, 73 percent of the surveyed companies identified education as the main area of interest for possible cooperation, 42 percent identified the health sector, and 19 percent, the economic sector. Youth and children were identified as the main beneficiary groups of interest for 38 percent and 35 percent of companies, respectively.
As is clear from the preliminary results of this research, there is a need to redefine CSR in order to reach an agreement on its framework and definition in Palestine. NDC hopes that this preliminary research project, expected to be completed by the end of 2009, will be the first step in this direction.
Compiled by the NGO Development Center (NDC), an innovative Palestinian non-profit organisation that empowers Palestinian NGOs to better provide vital services to Palestinians living in the West Bank and Gaza.
For more information, contact [email protected] or visit www.ndc.ps.
i World Bank Institute, the Center for International Private Enterprise (CIPE), the Egyptian Institute of Directors, and the Arab Labor Organization, “Corporate Social Responsibility and Corporate Citizenship in the Arab World.” Draft Background Paper, November 2008.
ii World Bank Institute, Economic and Sector Work Summary, “Beyond Corporate Social Responsibility: The Scope for Corporate Investment in Community Driven Development,” Report No. 37379-GLB, March 2007.
iii Morton, V., “Corporate Fundraising,” CAF/ICFM, 2002.
This article was originally published in "This Week in Palestine "