Comparing Corporate Social Responsibilities in Lao PDR and Thailand: International Business and Poverty Alleviation

As part of our AusAID Development Research Award Scheme (ADRAS) project, we have focused on the condition of economic poverty, and how corporate social responsibility from MNCs support such tragic conditions in Thailand and Lao PDR.  So far, we have conducted the literature review in international business and community studies. 

We have recently published a paper on CSR and poverty in Thailand and Lao PDR in the International Journal of Studies in Thai Business, Society & Culture, an open access Thai studies journal. We hope that the public will be able to read this paper and consider new ways of their poverty-related CSR activities. This is the abstract of the paper. 

Abstract:

Poverty has long been one of the major social problems in Thailand and Laos. By examining the geopolitics of poverty and international business, this paper argues that although corporate social responsibility (CSR) in developing countries has been increasingly gaining attention, issues of particular concern to stakeholders in the West are those which dominate the poverty-related CSR  agenda. This is partly because Multinational corporations (MNCs)’ primary stakeholders are located in the West and CSR initiatives in Thailand and Laos are targeted at  these audiences rather than oriented towards their beneficiaries in the host countries. Local Thai and Laotian factors promoting poverty alleviation activities among MNCs seem to be missing in the literature. Some practical CSR points from the literature confirm that poverty-related CSR activities must be integrated with social issues such as health, education and governance in Thailand and Lao PDR. 

Full paper can be accessed here.

MINING AND DEVELOPMENT IN THAILAND

The  key actors who promote social responsibility among mining MNCs in Thailand include the Thai Ministry of Industry, MNCs and local and international NGOs. The literature from Thai governance and international business sources show 7 aspects of contribution by mining MNCs in Thailand.

The data from existing literature raise a number of interesting issues in terms of the contributions from mining MNCs in Thailand. As a hub for foreign direct investment in the region, Thailand attracts a high number of MNCs and consequently, exhibits higher penetration of CSR activities. 

They include (1) environment (pollution and global warming prevention, sustainable consumption and land use, preservation and restoration of ecosystems and the natural environment, respect for future generation), (2) human rights (civil and political rights, economics, cultural and social rights, fundamental labor rights, community rights), (3) labour standards (occupational health and safety, working conditions, human resources development, worker as a human being), (4) organisational governance (inclusiveness, ethical conduct, disclosure of information, respect for rule of law, accountability), (5) fair business practices (promotion of ethical and transparent activities, promotion of free composition, application of fair and ethical supply and after-supply practice, intellectual and property rights, anti-corruption), (6) community involvement/ social development (development impacts, community involvement, philanthropy), and (7) consumer issues (providing consumer with accurate and adequate information, Provision and development of socially-beneficial services and products, provision and development of safe and reliable products and services, protection of consumers’ privacy). One interesting point from the literature is the focus on ‘transparency’ in actions of mining MNCs. It is confirmed that CSR activities can be easily achieved when transparency is witnessed and practiced by all key stakeholders.

The key issue from mining industry includes the fact that it involves a number of environmental issues. Three mining MNCs, that we examined their annual reports, focus on ‘sustainability’ concept in the CSR actions.  Strategies that lead to sustainability concept include health and safety of the workers, fair and rewarding work relationships and a healthy living environment. Although it is complex to achieve the sustainability concept, the literature in international business (i.e. Esteves and Barcly, 2011; Pimpa, 2013) argue that approaches in relationship management among stakeholders in mining industry in Thailand is very crucial. Multi-stakeholder participation can enhance the quality of relationship and contributions by mining MNCs in Thailand in various forms. When participations among different stakeholders take place, key community’s demands will be discussed and mining MNCs can eventually response to the community needs, which may go beyond MNCs’ centralization approach in development.

Academy of Management (II)

As the theme for the 73rd annual meeting of the Academy of Management is capital in question, most discussions and debates are about the cause-effect and impacts of capitalism in the contemporary economy. Many aspects of these debates are directyly relevant to the practice of management and therefore to our scholarship. Indeed, if, as researchers and teachers in international business (or community development), we assume the inevitability of the prevailing modern economic system which we are a part of as well as emerging issues posed by capitalism.

The theme is obviously appropriate with my research project since Mining MNCs, the theme of these project, focuses on behaviour, actions and contributions by the local community. I attended a number of CSR presentations since I need to make sense of what has been done in international business and business ethics areas. In particular, when we look at CSR from companies locating in different countries. It strikes my thought that CSR in developing countries can be regarded as distinct from CSR in developed countries for a number of reasons.

                 Capitalism in Question: Theme for the 73rd Annual Meeting in Orlando

First, developing countries represent growing economies and thus lucrative markets. At the conference, the power of emerging markets such as BRICS have been discussed widely and the practices and challenges of CSR were commonly discussed. Second, social and environmental crises are felt most strongly in the developing world. Third, developing countries are likely to experience the strongest environmental and social impacts. As a result, developing countries present companies with a unique set of CSR challenges that are different to those faced by MNCs in developed countries.

In the case of international mining industry, if we look at stakeholder theory (Freeman, 1984) that explains relationship among various institutions and suggests that the purpose of a business (in this case international mining) is to create as much value as possible for stakeholders. In order to succeed and be sustainable over time, executives must keep the interests of customers, suppliers, employees, communities and shareholders aligned and going in the same direction. We may argue that value-creation from mining to stakeholders can be different according to circumstances and needs or expectations from each stakeholder. Beside, I have made it clear in my paper that I presented at the academy that, in defining stakeholders, mining MNCs need to move beyond corporate-centric approach to community-centric system. If we take example of Lao PDR from this research, you will see the power of communitarian-base approach in doing corporate social activities.

                  Professor Ed Freeman, Father of Stakeholder Theory at 2013 AOM meeting

 I attended a few session by Professor R. Edward Freeman from the University of Virginia who argues that in the traditional view of the firm, the shareholder view, the shareholders or stockholders are the owners of the company, and the firm has a binding financial obligation to put their needs first, to increase value for them.

 However, stakeholder theory argues that there are other parties involved, including governmental bodies, political groups, trade associations, trade unions, communities, financiers, suppliers, employees, and customers. Sometimes even competitors are counted as stakeholders—their status being derived from their capacity to affect the firm and its other stakeholders. I also argue that, perhaps, in the mining context, stakeholders can and should be a part of value-creation in their own community, not only as consumers, or recipients of  the benefits of mining, but also the creators of value for themselves and the community.

References:

Freeman, R. Edward (1984). Strategic Management: A stakeholder approach. Boston: Pitman. ISBN 0-273-01913-9.

Academy of Management (I)

I am currently attending the annual Academy of Management (AOM) Conference in Orlando, Florida. One of the aims for this trip is to discuss the points from my research on sustainability and management by Mining MNCs in Thailand and Laos. As I did similar presentation for scholars from Mekong region last month at the International Conference on Sciences and Social Sciences, I plan to collaborate more with scholars from the Americas at AOM.

The Academy of Management's vision statement says that we aim "to inspire and enable a better world through our scholarship and teaching about management and organizations." The recent economic and financial crises, austerity, and unemployment, and the emergence of many economic, social, and environmental protest movements around the world have put back on the agenda some big questions about this vision: What kind of economic system would this better world be built on? Would it be a capitalist one? If so, what kind of capitalism? If not, what are the alternatives? Although most of our work does not usually ask such "big" questions, the assumptions we make about the corresponding answers deeply influence our research, teaching, and service.

Three features differentiate capitalism from previous economic systems in history: (a) market competition among profit-driven firms, (b) wage employment within these firms, and (c) limited government over them. Each of these features is associated with important benefits but also with important economic, social, and environmental costs.

Partly in response to these costs, some countries have evolved variants of capitalism that differ from the canonical "free market" form, and some people argue that these differences should be enlarged - broadening the objectives of the firm to encompass social and environmental goals, deepening the participation of employees in management decision-making, and strengthening government's regulatory role. More radical critics argue that these reforms are insufficient: they urge replacing competition with collaboration, wage employment with cooperative ownership, and limited government with economic planning. Proponents of free-market capitalism respond that such reforms, whether more modest or more radical, endanger both economic growth and individual liberty.

While some aspects of these debates may be beyond our professional expertise, much of our work on organization, strategy, human resources, and behavior is directly relevant. Conversely, many aspects of these debates are directly relevant to the practice of management and therefore to our scholarship. Indeed, if, as researchers and teachers, we assume the inevitability of the prevailing economic system, we blind ourselves to the important issues posed by that system and turn our backs on debates prompted by calls to change it.

An economy based on market competition also engenders some distinctive dynamics. Four stand out. First, competition often leads to concentration, as large firms achieve economies of scale and scope and accumulate market power. Second, competition paradoxically stimulates efforts among firms to cooperate in the race to develop new products and processes, in alliances, partnerships, industrial districts, and standard-setting bodies. Third, competition drives firms to expand regionally and internationally. This globalizes both the benefits and the costs of capitalism, and in the process, it pits nations against each other in economic rivalry, which is sometimes productive and sometimes not. Finally, recent decades have seen a dramatic shift towards a financialized form of capitalism. Scholars are still divided over whether this is a long-term, structural mutation of capitalism or a symptom of the decline of one world power awaiting the ascent of another. Nevertheless, financialization, like globalization, poses important questions in our field.

I hope that I will be able to share some points for discussion from this interesting conference.

ICSSS Conference

The 3rd International Conference on Sciences and Social Sciences was held at Rajabhat Mahasarakham University, Maha Sarakham in Thailand. One of our colleagues from Phetchaburi Rajabhat University strongly recommended me to participate in this lively inter-disciplinary conference. Certainly, I took her idea and  see this international conference as our first opportunity to discuss our project on mining and international development in Mekong with international academic community in Mekong region. Another reason to participate in this conference, the keynote speaker, Prof. Jira Hongladarom, is one of the most inspiring academics whom I have been following since my university time. 

When I arrived Rajabhat Mahasakham University, I felt like home since the organiser team members and a number of Professors from the University warmly welcomed me anywhere I went, from the airport to Rajabhat campus. The conference is truly an international conference.... not only in its form, but also the quality of presenters and participants from over 10 countries!

The President of the University, Assoc.Prof. Somchai Wongkasem, welcomed us at the opening ceremony of the conference on 18 July 2013. Nothing was better than his warm and sincere welcoming speech to all delegates. His interpretation of the conference theme, research and development for sustainable life quality, is extremely interesting. I can 'feel' his enthusiasm in the promotion of academic regional development by education from early to life-long education.

The keynote speaker, Prof. Jira Hongladarom, started the conference conversation by discussing his ideas on development by focusing upon roles of various social stakeholders in South East Asia. More importantly,  he firmly believes that universities must work with the real world concept, not a mere ivory-tower style, if  the reality of development is expected. Sustainability! Sustainability! Sustainability! This term clearly is the heart of this conference.I recorded an interesting part of his and love to share it with you here.

An interesting aspect of the conference is the opening ceremony. I have been to many places in my life and time as an academic. However, the opening of this conference is truly unique!! The lively dance of ASEAN and sustainability development, which was well performed by students from the dramatic arts department from Rajabhat Mahasarakham University. Entertaining and Educative!!

Through out this conference, I met and discussed various aspects of  development research with a number of delegates from Indiana State University, Arizona State University, Florida Atlantic University, the National University of Laos, Massey University, University of the Philippines, Mahasarakham University, and Vinh University from Vietnam. Again, we seem to focus on how to integrate our ideas and resources for the concept of research in sustainability and community development.

I presented 2 papers at the conference, focusing on mining and development and corporate social responsibility from mining companies in Mekong region. Our AusAID project was presented and well-received by the international participants. The focus on criticisms of mining in Asia was among management and social development academics from Vietnam and the USA. The concept of mining and development was not a brand new idea here. However, participants were very keen to share their experiences on this important issues. If you need to read a full paper on mining and development in Mekong from the conference, please click here.  I also presented the second paper on CSR in Vietnam and Cambodia and the full paper can be accessed here.

 Apart from the quality of international papers, I must admit that the integration of ideas from sciences and social sciences was the key features of this conference. Issues on management of resources, community and environmental development,and disaster management were discussed with sensation. Sustainability is an issue that interfaces with sciences, economics, culture as well as other social and environmental consequences of economic and technological activities. This conference clearly confirms that researchers need to integrate resources and ideas from different disciplines if we need to clearly understand complex issues of sustainability.

I would like to thank the organisers of the conference for this wonderful event and I look forward to participating in the next ICSSS conference.

Overview

Mining and Equitable Employment for Women in Lao PDR and Thailand

Overview

Mining is one of the key industries in many countries. The mining sector has considerable potential to improve quality of living, help reduce poverty, accelerate human development, promote economic growth, and support progress towards the United Nations' Millennium Development Goals (MDG). International mining can also generate economic and social opportunities, directly through employment of workers, through taxes, rents, community development, royalty payments and social responsibility programs, and indirectly by contributing to economic growth and private sector development.

Management of mining impacts in developing countries, however, can be complex and challenging for all stakeholders. Extraction of natural resources such as mining is limited within a particular geographical area. Often its activities are conducted in or near communities and have direct or indirect impacts on community resources, capabilities and well-being, thus leading to a state of poverty, violent behavior, and resentment by communities towards businesses, and other forms of human deprivation such as water and air pollution, land access, farming and toxicity.

Moreover, mining has long been a male-dominated industry, which women continue to be underrepresented in leadership positions. In order to achieve substantive gender equality, and the economic benefits of women in leadership, we need to understand how to increase the representation of women, and how to strengthen the pipeline of female talent in the mining industry, particularly in the developing countries.

Project Objectives

This project aims to investigate issues on socio-economic impacts of international mining industry on women in two developing countries in South East Asia, Laos and Thailand. With current rapid growth in mining development in Laos and Thailand, aid agencies want to understand more about how the activities of mining companies' affect women, particularly in regard to employment opportunities, gender equity, and health and safety issues.

Furthermore, this project will explore relationships among members of mining community, local government agencies, international organizations, and women association in Laos and Thailand, and factors contributing to success in empowering women and girls in the mining community. Key questions for this research project include:

1) In what ways are mining workplaces providing equitable employment for women?

2) What are the social and economic development impacts, particularly in rural areas, of women’s engagement in the mining industry?

3) What changes in policy and practice could be taken by the mining industry to support gender equity and safeguard women stakeholders?

Potential Outcomes

This project is a blend of academic and developmental research. The outcomes of the project will potentially lead to development in policies and practices for women in mining community in Laos and Thailand. Potential outcomes from this project include:

1) Reports for Policy Makers (including AusAID) in governance and International Mining;

2) Reports for Mining Community ;

3) Reports on Socio-Economic Impacts of the Project;

4) Public Seminars;

5) Conference Presentations and Publications;

6) Academic Publications in Community Development, International Management, and Asian Studies;

Country for Research

Lao PDR, Thailand

Research Partners

This project is supported by the Australian Agency for International Development (AusAID) through AusAID Development Research Award Scheme 2012 (ADRAS).

AusAID's Mining for Development

Mining for development is one of the key developmental themes from AusAID. This project is funded by AusAID (through AusAID Development Research Awards Scheme- ADRAS) and it aims to investigate soci-oeconomic impacts of the mining on women and girls in Lao PDR and Thailand.

This clip from AusAID will give you a clear overview on why mining for development becomes one of the priorities, and to what extent can 'good management' promote long-term development and sustainability in all communities.