Corporate Social Responsibility British Airports Plc - Essay Example

CORPORATE SOCIAL RESPONSIBILITY - BRITISH AIRPORTS PLC (BAPLC) Introduction. Development of infra structure is an essential pre requisite for growth. Cardiff Bay is ideally located in the United Kingdom to serve as a hub for services to Europe as well as rest of the World. This is likely to attract large investments in the region and should thus be welcomed. However any green field project undertaken amidst a community and especially so a large airport venture is likely to invite adverse reactions from the society as a whole. Corporate social responsibility guidelines provide an effective means to align the aims of the company with that of the community. Seeing the potential of the project BAPLC share holders seek long term benefits and have also accepted that the approach for development should meet the need for corporate social responsibility. (CSR). Over the years the concept of CSR has graduated from that of philanthropy to greater involvement of corporate in communities and now is considered as a corporate-community partnership for sustained growth and development. This has also been institutionalised internationally through the Global Compact and in the European Union through the White Paper on CSR. CSR has thus emerged as a universally accepted norm of social responsibility for corporate. It has a number of components which are discussed in succeeding paragraphs. Corporate Governance, Universalisation of the principles of CSR and corporate governance crystallized during the World Economic Forum on 31 January 1999, when the United Nation's Secretary-General Kofi Annan asked business leaders to join the international initiative led by the UN known as the Global Compact. This was slated to bring together the companies, UN agencies, labor and civil society to support universal principles with reference to environmental and social issues. Formal launching of the Global Compact took place in New York on 26 July 2000. This is now accepted as a standard international norm for corporate governance and all major companies are part of this UN initiative. (Unglobal: 2006). It is appropriate that the BAPLC aligns its CSR policies in line with the ten principles of the Global Compact which include human rights, labor and employment non discrimination, environment protection and abolition of corruption. These principles are as given below:- (a) Businesses should support and respect the protection of internationally proclaimed human rights within their sphere of influence; (b) Business should make sure they are not complicit in human rights abuses. (c) Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining (d) Businesses should uphold the elimination of all forms of forced and compulsory labour (e) Businesses should uphold the effective abolition of child labour. (f) Businesses should uphold the elimination of discrimination in respect of employment and occupation. (g) Businesses should support a precautionary approach to environmental challenges. (h) Businesses should undertake initiatives to promote greater environmental responsibility (i) Businesses should encourage the development and diffusion of environmentally friendly technologies (j) Businesses should work against corruption in all its forms, including extortion and bribery. (Unglobal : 2006) The underlying principle of corporate governance related CSR is that the companies should undertake additional social responsibilities voluntarily which go beyond the regulatory frame work for good conduct of business and relate to the issues of social development, environmental protection, respect for fundamental rights of employees as well as the local population and adopt a policy of open governance. Thus society is an important stake holder in the company. This approach provides a unique opportunity for dialogue and management of change particularly in the present setting where BAPLC is establishing a new project in an area where local resistance is anticipated. The concept has support in the European Union's Lisbon Declaration which envisages the EU to be the most competitive and dynamic knowledge based economy in the World which is capable of sustained progress. (European Commission. 2006). Thus this vision visualizes business contributing to CSR which in turn leads to sustainable community development.The European Union guidelines provide an excellent insight on the issue of BAPLC wherein it has identified CSR as a function of integration with the local communities by contributing to it in various forms such as jobs, providing health and prosperity and also generate additional and supplemental business in the area. (European Commission : 2006). BAPLC may be able to fulfill these criteria to the fullest measure in Cardiff and should ensure that the confidence of the local communities in its commitment to the CSR is raised to the highest level. The United Kingdom Government's view on CSR also needs to be taken into account. This envisages businesses to align their economic, social and environmental impacts on society for its overall benefit and address the key challenges to sustainable development. (Corp : 2006). The BAPLC though located in United Kingdom, being an air port management company will have linkages with multi nationals across the globe and particularly in Europe. Thus it would have to adopt a CSR policy which is in line with the UN Global Compact and the policies of the EU. The BAPLC will also have to ensure that it supports its internal environment by being people oriented, trains its staff to adopt the CSR model and a culture of community involvement is induced in all categories of its employees as they would have to interact with the environment more than the senior management. Information sharing with the internal and external environment is another important facet of CSR as this will raise the confidence and commitment of the company with the community. (Tong: 2006). Health and safety compliance is another facet particularly given its role as an airport construction and management company, identification of hazards and maintenance and functionability of airports will form a significant aspect of CSR. (Tong: 2006). Ultimately CSR is a concept which is aligned with the objectives of sound management and should contribute to the five drivers of productivity identified by Michael Porter investment; innovation; skills; enterprise and competition. (CSR Govt: 2004). The Government in the UK has a very effective policy on CSR which is based on periodic assessments by companies in which 132 of the UK top 250 companies reported on their environmental performance and 139 companies participated in the second Corporate Responsibility Index. A number of conventions and regulations which govern the CSR have been adopted by the United Kingdom. These include the OECD Convention on the Bribery of Public Officials and the Anti-terrorism, Crime and Security Act 2001 (Part 12) new legislation which came into force on 14 February 2002. The effective implementation of these has avoided any major incidents of terrorism and crime in the United Kingdom. The BAPLC will be strategically placed in relation to adoption of these regulations as it will be located at the point of entry and exit to UK. Thus it will be vulnerable to crime as well as terrorism. The BAPLC should thus adopt these norms very stringently to ensure that vulnerabilities are not created. This is also a new project and it would have to adopt, the minimum environmental standards applicable in UK from 1 November 2003, to central government departments including those related to contracts and tendering. (CSR Govt: 2004) Human Rights The Global Compact's first two principles relate to human rights. These require that states and businesses should support and respect protection of internationally proclaimed human rights within their sphere of influence. The second principle is that of complicity. It underlines the importance of states and businesses to ensure that they are not complicit in human rights abuses. Thus CSR has a large dimension of human rights in relation to international operations as well as global supply chains, with which BAPLC will be invariably connected including the global air lines industry. There are a number of regulations and mandates which need to be adopted by the BAPLC. These include the ILO Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy and the OECD Guidelines for Multinational Enterprises. These are also enforceable in the context of the European Union which has an obligation for companies and businesses operating in the EU to ensure respect of standards of labour, protection of environment and human rights in its cooperation policy. BPLC will have to adopt these in its policies of governance. There are also a large number of UK legislations in this regard which need to be adopted by the BAPLC. These are the Human Rights Act 1998, which incorporates the rights under the European Convention of Human Rights to the domestic law in UK, National Minimum Wage Act 1998, National Minimum Wage Regulations 1999, Part-time Workers Regulations 2000, Protection from Harassment Act 1997, The Sex Discrimination Act 1975, The Provision and Use of Work Equipment Regulations 1998, The Manual Handling Operations Regulations 1992, The Health and Safety (First Aid) Regulations 1981, The Reporting of Injuries, Diseases and Dangerous Occurrences Regulations 1995, The Noise at Work Regulations 1989, The Electricity at Work Regulations 1989, The Health and Safety (Young Persons) Regulations 1997, The Confined Spaces Regulations 1997, The Health and Safety (Safety Signs and Signals) Regulations 1996 and so on. These are applicable to the employees of the company and are as much a part of the internal CSR. (Lantra: 2006). Their fair adoption is essential in terms of responsibility of BAPLC towards its internal stake holders, the employees to ensure that they are given a fair treatment and their rights are fully acknowledged by the company and adhered to. This is also significant in relation to avoidance of violations as there are a large number of employee associations as well as civil rights bodies which have raised awareness of labour towards their rights in a more positive way rather than the acrimonious attitude of labour unions. All these aspects need consideration. Supply chain management, Another issue relating to CSR and human rights is that of supply chains including adherence to labour standards by those which are not based in the close vicinity of Cardiff. The Government of UK supports the Ethical Trading Initiative. BAPLC thus has to adopt these guidelines. The ILO's Declaration of Principles concerning Multinational Enterprises and Social Policy covers the labour and social issues in the context of multinational enterprises and is known to promote the core standards of the ILO. The BAPLC should immediately adopt these guide lines and support them. The BAPLC may not be a multi national company in the context of global basing of operations as its activities are restricted to the UK. However due to the nature of its operations it will have a number of components which will need a European and global perspective. Thus the BAPLC will have to adopt the ILO standards on labour in letter and spirit as its commitment to CSR. (CSR Govt: 2004). Implementation may be a difficult proposition for the BAPLC where sourcing is from outside the immediate sphere of influence. It would have to ensure proper contracting arrangements based on international standards from its sourcing agencies to ensure adherence to established norms. Suppliers need to be monitored from a variety of points of view to ensure that a suitable risk analysis is carried out. This is particularly so as the company has decided to use construction material which is extractive and involves felling of trees and cutting of forests such as Green Oak. This needs to be sourced from forest management agencies which follow efficient and environmentally friendly policies; the source is legal and sustainable. The wood as well as other material should not be from areas that are threatened or considered valuable in terms of the nature of habitat and are also contributing to bio diversity. Proper certification for the same should be obtained. The traditional rights of people staying in the area also need to be considered. The BAPLC will either have to obtain a certification or deploy supervising teams to ensure that established norms are followed. (Tong: 2006). Support of civil society organizations which can act as independent observers can be obtained. The Commitment to the Community BAPLC has already held community workshops to discuss the project generally and address concerns of the local people. These would be particularly critical with reference to air as well as noise pollution and long term effects on the environment. An information and awareness campaign will enable spread of knowledge by the BAPLC in the community. It can obtain their support willingly. A number of lateral initiatives in the field of environment, health and education for the community can be undertaken. There are various other ways in which BAPLC can be involved in the community effort by improving the environment, preventing pollution particularly noise and air pollution which is the normal impact of an airport in the vicinity of a township. There are many initiatives which can be adopted for community development. By providing alternatives the BAPLC can demostrate its commitment to the local environment. (European Commission : 2006). Environment The project envisages large scale use of Green Oak which is a hard wood. There is concern over use of this item especially so as it would have to be procured in large numbers. There may be some environmental concerns on use of timber as other non biological construction material is available. However timber is also known to have a number of advantages such as high energy efficiency, less pollution and disposal problems, conversion into construction material does not involve consumption of energy and replacement of trees enables more efficient photosynthesis when old trees are replaced by young plants. (CSR finnforest: 2006). However it should be ensured that the trees are felled as per international standards and specifications on cutting of forests. The supplier's employees should have been granted full protection under human rights which are applicable internationally. This is particularly relevant as the laws governing environment are not followed effectively in third world countries from where the wood is likely to be procured. The wood also needs to be sourced from ecologically sustainable woodland management areas, which have a more varied harvest of timber, forest products and crafts, create concomitant employment opportunities, are monitored and wildlife and biodiversity is maintained. (Beckett: 1999). There is also a need to ensure that wood procured is sourced from companies which have an effective training programme for their employees. The final test will be ensuring Forest certification and Chain of Custody norms. BAPLC must ensure that these are obtained. (CSR finnforest : 2006). If the sourcing is done from England or Wales, it should be ensured that where timber felled exceeds cubic metres in volume (about two tons) per quarter, a valid license from the Forestry Commission is obtained. (Green Oak: 2006). Recommendations and Conclusion The issues related to CSR as relevant to the BAPLC project at Cardiff have been covered in detail in the preceding pares. BAPLC should follow these norms voluntarily and create an atmosphere of conviviality in the internal and external environment. Since airport management is a project which has varied dimensions which affects the community, people's confidence has to be gained. This will come about with the commitment of the management but there is also a need to monitor the same. The British Government decrees that companies publish annual reports on CSR however it is seen that only 23 percent of the companies published these reports in 2001. In 2005, this number had increased to only 50 percent. (What is Core: 2006) This denotes a large percentage of companies which are not ensuring publication of an important document. Non Government organisation networks as Core, believe that just as it is mandatory for businesses to submit yearly financial reports, CSR reports should also be compiled regularly to denote commitment of companies to their task of corporate responsibility. (What is Core: 2006) BAPLC as a responsible corporation which is committed not only to business but also social objectives must ensure that it publishes its CSR report. This should be a comprehensive document which will cover social, environmental and economic indicators. An advance CSR report stating its essential aims, objectives and commitment towards the community published even before the project commences will generate the desired degree of confidence in its core constituency both internal and external and ensure a smooth path of induction. References 1. Beckett, Jack. (1999). 'Planning for Sustainable Woodlands'. Oxford Brookes University, Oxfordhttp://www.tlio.org.uk/chapter7/woodland.html. (02 May 2006) 2. Corporate social responsibility. http://www.finnforest.co.uk/default.asppath=200;411;412(02 May 2006) 3. Green European Oak (Quercus Robur). http://www.streetmaster.co.uk/content/products/materials/finishes_timber.htm. (02 May 2006) 4. What is Core. (2006). http://www.corporate-responsibility.org/.(02 May 2006) 5. Corporate Social Responsibility: A Government update. (2004). Department of Trade and Industry. www.dti.gov.uk/ DTI/Pub 7201/1k/05/04/NP. (02 May 2006) 6. Tong, John. (2006). Corporate Responsibility. Finnforest UK Ltd. www.finnforest.co.uk. (02 May 2006). 7. Lantra. Employment Responsibilities and Rights Workbook. (2006). Lantra: www.lantra.co.uk. (02 May 2006) 8. Corp. Corporate Responsibility. 2006.http://www.baa.co.uk/portal/controller/dispatcher.jsp. Corporate+Responsibility. (02 May 2006) 9. UN Global (2006). The Global Compact. http://www.unglobalcompact.org/AboutTheGC/index.html. (02 May 2006) 10. European Commission. (2006). Promoting a European framework for corporate social responsibility Green Paper. European Commission Directorate-General for Employment and Social Affairs. Read More