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February 27, 2004
Critics Challenge Christian Aid Report as Biased, Cynical, and Inaccurate
    by William Baue

Part two of this two-part article considers defenses of corporate social responsibility against attack by a recent Christian Aid report.


Critics of corporate social responsibility (CSR) championed the report released last month by Christian Aid, a UK-based religious nongovernmental organization (NGO) that fights global poverty. The report characterizes CSR as a corporate attempt to replace regulation of social and environmental issues with voluntary initiatives, and illustrates its point with case studies of Shell (ticker: RD), British American Tobacco (BATS.L), and Coca-Cola (KO).

CSR supporters, on the other hand, have rebuked the report.

"The sad thing about the Christian Aid polemic is that it attacks the entire notion of corporate social responsibility, and does so on the basis of its cynicism of certain actions by three specific companies," said Mallen Baker, development director for UK-based CSR advocate Business in the Community (BITC). "It wears its cynicism on its sleeve, and is neither well informed nor academically robust."

"The Christian Aid argument is that there needs to be legislation to 'force' companies to be socially responsible," Mr. Baker told SocialFunds.com. "The position fundamentally misunderstands the role of legislation as a tool for ensuring minimum standards; CSR is about best practice and continual improvement, something that can't be achieved by law."

Shell spokesperson Simon Buerk granted the report some credit, but rejected the implications of the case study on its operations in Nigeria.

"We agree with the thrust of the report that multinational companies have a critical role to play in upholding and advancing environmental standards," Mr. Buerk told SocialFunds.com. "But we can't agree with its inference that Shell alone is responsible for the totality of the problems faced by Nigeria."

The report focuses on Shell's community development program in Nigeria. In 2002, Shell spent $67 million on the program, which numbers 900-plus projects. The report profiles six of these projects that Christian Aid visited in 2003 in the Umuechen region where the government executed anti-Shell activist Ken Saro-Wiwa in 1995.

"None of them function," the report states.

"We don't claim that our community development programs are 100 percent successful," said Mr. Buerk.

Shell's independent external verification identified a 75 percent success rate of the 121 projects visited in 2002, up significantly from the 52 percent success rate of the 87 projects visited in 2001.

"It's certainly possible to visit a handful of projects in Nigeria and find all of them are in the [unsuccessful category]," said Mr. Buerk, who also identified inaccuracies in Christian Aid's claim that all of the Umuechen projects were inactive.

Coca-Cola echoes this charge of inaccuracy.

"We have already responded to Christian Aid on January 20th strongly protesting against the biased and inaccurate report," said Lori George Billingsley, a spokesperson for Coca-Cola, whose bottling plant in Plachimada, India, is profiled in the report.

Report author Andrew Pendleton counters that the report was externally reviewed by "international human rights law specialists, business academics, and most importantly, people in poor countries who represent the communities affected."

"But we are not an impartial organization," Mr. Pendleton told SocialFunds.com. "It is our job to advocate on behalf of poor communities and although we have a duty to balance what we say and seek to listen to all sides, our raison d'etre is about challenging the structures and systems that keep people poor."

For its part, Coca-Cola appeals to the structures and systems that represent the communities it operates in: namely, their government.

"Government and independent tests have repeatedly confirmed that the bottling plant is not adversely affecting ground water supply," said Ms. Billingsley.

The report states that the Indian state of Kerala High Court ruled in December 2003 that Coca-Cola must stop drawing ground water from Plachimada for its bottling factory. However, Ms. Billingsley told SocialFunds.com that the Kerala High Court stated on February 3, 2004 that, because the case was brought up "without any evidence to back up the claims," that no ruling could be made until a scientific body established the facts.

Mr. Baker's criticism of the report hinges on this same issue of substantiation, as the report draws heavily on "interviews with very small numbers of individuals" in a way that gives short shrift to "more empirical data."

"Any academic would require a rather stronger link between the facts upon which a report is based and its conclusions--the suggestion that these three case studies prove that CSR is flawed per se would not be accepted as a good enough case by the humblest undergraduate thesis, let alone a report that can achieve such profile and coverage," said Mr. Baker. "That's not the same as saying there's no case to answer for any of their individual cases--but this write up doesn't do that case justice."


Part one of this two-part article considers support for the Christian Aid report.

 

 
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