We make reference to an article that appeared in the Botswana Guardian, March, 8, 2022, by Nicholas Mokwena, “Legislated CSR Too Risky for Botswana-Minister Moagi.”
The Minister of Mineral Resources, in response to opposition MP, Hon Kesitegile Gobotswang, who had asked ‘Parliament to request Government to enact the law,’ legislating CSR, argued that ‘introduction of mandatory Corporate Social Responsibility (CSR) Law would impact negatively on Botswana’s attractiveness as a mining destination…that it would seem as another form of tax…and additional cost…in the initial investment of the company…it would result in Botswana’s ranking dropping…’ and that ‘social upliftment programmes’ in Botswana are being incentivised and promoted under provisions of the Economic Inclusion Act of 2021 Section 29 (4)…that it is best international practice for CSR to be voluntary.”
Minster Moagi is wrong, on all counts. If he is aiming for fundamentalist free market ideological persuasion, long discredited and abandoned, by the entire civilized world, he should say so. If he is speaking to research-based facts and economic empirical evidence, based on the major trends in the economic history of the last fifty years, especially with regard to rapidly changing global corporate culture and multinational investment practices, then he is dead wrong.
To begin with, our contemporary global development models and narratives are informed by UN sustainable development goals (SDGs) and Vision 2036 as we write precisely because global society is retreating from the path of development that this minister is advocating; selfish, greedy, unrestrained, and socially unconscious industrialization at any cost in perpetual and irresponsible maximization of profits to the exclusion of all other interests and global concerns; including indifference to climate crisis, and the poor and vulnerable countries and people in parts like Africa who have been left behind by runaway globalist expansion and industrialization, but are paying the highest price from the negative externalities of uncaring industrialization.
What happened to the 2019 BDP Manifesto and its claim to advance sustainable development goals in Botswana? What happened to its commitments to Vision 2036? Isn’t its Reset Agenda supposed to move Botswana in the direction of progressive, innovative, and compassionate development?
So the minister would be happy to get multinational investment, any investment, without regard to the results of unregulated foreign investment? What then prevents mining houses disregarding their duty to consider the interests of all stakeholders and get away with negative environmental and social impacts such as damaged eco-systems like it happened with the BCL Mines in Selibe Phikwe and dispossessed and disempowered communities like poor communities around Botswana’s diamond mining towns for example?
Isn’t legislation the best way to deal with these issues? And is it true, empirically, that such legislation would drive away foreign investment? What does the data say? Is the ascendancy of unrestrained economics, competition and technology, good for sustainable development in the 21st century with problems of climate change getting worse and poverty and inequality widening and threatening democratic order? Does business law improve social outcomes for targeted adjacent poor communities? Can even constitutional amendment improve economic outcomes for such communities? Can the extension of legal liabilities improve social and environmental performance on the part of targeted industries and companies?
These questions have been around for more than fifty years, and serious research and public policy continues to address them through determined and committed political work.CSR is about maximising positive impact, or maximizing the contributions of corporations to society.
If the business of law can help in this direction, why not? If the business of law can motivate and promote sustainable development and social justice in poor settings like Botswana, why not? Isn’t the essence of this policy shift to compassion (Vision 2016, 2036) still relevant to Botswana Government? How are we going to address the predicament of poor citizens, those left behind? Isn’t regulated CSR a measure of concern for the public good, for example to reduce poverty and equalities, and prevent social unrest and political alienation in the process?
Is it possible the Minister is only concerned here not with the economic view of law but the litigation this might generate? What’s wrong with legislating CSR to serve the interests of social justice? Is the concern really multiple taxes, as he claims, or protection of harmful foreign investment contracts? Isn’t the concern here to shield harmful investment contracts from progressive business core principles guided by enforceable legal compliance programs and operating cultures?
Why is the Minister happy with the uncomfortably narrow consideration of CSR as just a good idea, and not legal requirement, that companies integrate social and environmental concerns in their business operations, and in their interactions with their stakeholders, on a ‘voluntary’ basis; a dogma with potential to undermine Vision 2036 and SDGs, and even contradict BDP manifesto and Reset Agenda?
International best practice? The position advocated by the Minister is dangerously regressive, outdated and the direct opposite of sustainable democratic development.CSR is rapidly moving towards an international legal framework-and national laws are not far behind-an understanding of how law functions to dispense social justice and promote democratic governance through the application of legal methodology to the work and operations of companies and their ethical responsibilities.
Come to think about it, why should company law, a basic tool to capture wealth, in a country like Botswana with the highest levels of poverty and inequality, not receive attention from a corporate responsibility perspective? And look at the Economic Inclusion Act that he mentions; does it require company directors to take account of the interests of non-shareholding stakeholders such as locally based citizens, workers, suppliers, or even the environment? No, it doesn’t. It’s just one of the many laws and BDP policies that purport, at least on paper, to advance indigenous capitalist growth.
International best practice in foreign investment culture is not narrow, selfish and indifferent to the externalities of economic growth, and requirements for the operations of multinationals to accept the social expectation that uncaring industrial growth, and associated capitalist behaviour, is morally unacceptable.
Bad business deals, bad politics; the very things the minister is advocating, are rapidly becoming things of the past. Why is BDP Government so backward in their exploration of relationships between foreign investment contracts, human rights and sustainable development? Why is BDP not willing to shape the major infrastructure projects of investors, to help shape these transactions to benefit Botswana local community economies, some of the poorest among the poor in the world?
As it is right now most big companies in Botswana do not bother at all to consider the relationship between their tax arrangements and their approach to Corporate Social Responsibility, and that’s fine with people like this Minister, behaviour that is economically inefficient, socially destructive, and profoundly unethical.
We suspect that attitudes like this arise from unfounded fears of tensions between Corporate Social Responsibility and legal risk management in the investment business environment, that foreigners investing here deserve patronage from Government at the expense of Batswana?
But do foreign investors like such political coddling and patronage? Let’s hear what they say from widespread calls and business philosophies that reflect how mandated CSR in business pays attention to the well-being of its workers, the environmental impact of company operations, and the sustainability of micro and macro-communities: “Successful people have a social responsibility to make the world a better place and not just take from it” This is from Carrie Underworld; one of the people who understand the business world, moral ethics and responsible economic and political behaviour in a model world.
Klaus Schwab; Executive Director, World Economic Forum, argues that “CSR is measured in terms of businesses improving conditions for their employees, shareholders, communities, and the environment. But moral responsibility goes further, reflecting the need for corporations to address the fundamental ethical issues such as inclusion, dignity and equality.”
Noreena Hertz; Economist, named by Vogue, “one of the world’s most inspiring women: “All companies want a policy on CSR. The positive effect is hard to quantify, but the negative consequences of a disaster are enormous. “Barry Commoner, one of the first persons to raise alarms on the dangers of technology, nuclear weapons and a former American presidential candidate, “…the environmental crisis arises from a fundamental fault: our systems of production-in industry, agriculture, energy and transportation-essential as they are, make people sick and die.”
Paul Polman; Dutch business executive in the world’s biggest firms, including CEO, Unilever, CFO, Nestle and Proctor & Gamble, President, Western Europe, and founder of sustainability-related ventures, Imagine and Consumer Foods Forum; 2019, “It is not possible to have strong, functioning business in a world of increasing inequality, poverty, and climate change.”
We know that CSR is not a legal concept; and companies do have responsibilities to their shareholders and debtors, first and foremost. But to take a position like the one the Minister advocates does not help Botswana local communities, and progressive and serious policymakers are trying to do something to change this situation. The statements above show that international investors agree with them. We vote politicians to promote local communities and national interests, not to benefit uncaring foreign investors.
The Minister should be looking into issues like what significance does CSR have in tax law? Does CSR set limits on the tax planning and activities of companies? How do companies view obligations to pay more taxes than what has to be paid according to the law? Is mandatory CSR a form of aggressive taxation? How effective is mandatory CSR in the protection of companies from charges of irresponsibility and associated reputational damage?
He should be discussing these issues with potential investors and accommodating only solutions that equally benefit both such investors and Batswana, instead of running away from serious debates and political work. As for the Economic Inclusion Act, 2021; infective like all previous BDP empowerment policies and laws.
Not the even the best constitution in Africa and much of the world; the South African, has succeeded in promoting economic inclusion and equality; Ref; International IDEA, Assessing the Performance of the South African Constitution, 2016, 122 pages, see also Human Sciences Research Council; through the Democracy, Governance and Service Delivery Research Programme, Final Evaluation Report; Access to Justice and Promotion of Constitutional Rights Programme, 2016, 232 pages.)
What Africa, and Botswana in particular, really need is deliberate legal, constitutional, and political work, to solve problems.
The World Bank recently published; The State of Economic Inclusion Report, 2021, 348 pages, a rigorously researched and evidence-based report focusing on four global case studies; enlightening, focused and candid, and it demonstrates how such Government laws, born of great expectations turn into sceptical mirages and public disappointment, often leading to public violence, and they recommend more political work must be invested in turning capitalist triumphalism into public goods, a direction that Botswana, too, must start taking going into the future.
