This report investigates Sri Lankan perceptions of the role of business in society, and businesses’ own perception of this role, including its potential in supporting social, economic and political development. It also explores whether Corporate Social Responsibility (CSR), as presently understood by businesses and the wider community, can be a useful entry point for Sri Lanka’s private sector to contribute to peace.
The current war between the government and the Liberation Tigers of Tamil Eelam (LTTE) is two decades old. According to official figures, around 65,000 people have been killed, but the true total may be much higher. Despite fluctuations in the military balance of power, the situation appears to have entered a long-term stalemate with neither side capable of defeating the other. Norway’s involvement as facilitator in November 2001 and the signing of a ceasefire agreement in February 2002, followed by peace talks, raised hopes of a negotiated political agreement. However, formal peace talks broke down in May 2003.
Since economic liberalisation in the late 1970s, the private sector has had an increasing impact on society in Sri Lanka. In the light of this, it is of strategic importance to explore ways in which business can be involved in addressing issues of social concern. The bombing of Colombo International Airport in July 2001 drove home the economic consequences of war and the vulnerability of Sri Lankan businesses to the conflict. This motivated them to launch initiatives that work towards building peace in the country.
One of today’s most pressing social issues is the need for an inclusive, peacebuilding process that addresses not only the manifest conflict with the Tamil community and LTTE, but also latent conflict issues involving other groups in the rural south, Muslims, and the ‘upcountry Tamils’. This is especially needed now, when the peace process is challenged and needs new ideas to move forward.
Perspectives on CSR and peacebuilding
With the aim of better understanding the existing practice of CSR initiatives in Sri Lanka, an initial research to map existing approaches, activities and implementers was undertaken. The exercise looked at how interviewees defined CSR, the reasons for engagement in it, areas of engagement and the history behind them. This research focused on big businesses and other groups in Colombo. Two surveys followed. The first was an island-wide survey to ascertain public perceptions of CSR and the role of business in society. The second was a survey of businesses in 11 districts focusing on how the business community perceives its own role in society and in building peace.
Perception of the role of business in society
The study indicates that most Sri Lankans do not have a clear understanding of the role they wish businesses to play in society. The public is unclear whether businesses should only focus on profits or also engage in social issues. While a slight majority feel that business should do more for the social good, they are mistrustful of companies’ ability to handle this task and express fears that the private sector exploits consumers and destroys cultural values.
From the business point of view, most organisations feel they have a strong role to play in addressing social needs but, while there is a long history of charitable giving, most do not have a strategy or policy for doing so. Nor do they have a clear direction on how or what to contribute towards society, or the benefits of doing so.
The study reveals that businesses view their CSR practices as genuine gestures of giving, though the public views them as self-interested and only designed to win publicity for commercial motives.
Practice of CSR
Many businesses and business organisations in Sri Lanka practise some form of social activity, usually through charitable giving to religious or educational institutions. This is a positive base for future work and demonstrates the willingness of business to support social needs. Most businesses in Colombo have a broad understanding of CSR and are involved in initiatives, but without having an overall policy.
Regional businesses, most of which are small and medium enterprises (SMEs), struggle to offer the same benefits as Colombo-based firms to employees. Exposure to, and understanding of CSR is not as progressed in the regions. This is because Colombo businesses have greater capacity for human resource development, are in stronger competition for skilled employees, and under greater scrutiny by labour regulators.
Business and peacebuilding
Though businesses do not have a clear understanding of CSR, especially its more substantial longterm benefits, the business community has clearly stated its desire to be involved in peacebuilding. There is a strong recognition that the state of the country directly affects their business and that peace is a pre-requisite for growth and sustainability. There have been a few efforts in Sri Lanka to address this issue, but many businesses feel they do not have the capacity, understanding or mandate to become involved in peacebuilding.
The concept and practice of CSR provides a useful entry point for business to become involved in peacebuilding. CSR is a framework for understanding how business success is tied to the prosperity and health of the community within which it operates. Indeed, most of a company’s assets, from employees, suppliers and distributors to resources, infrastructure, customers and government, all lie beyond its doors. Business has connections to the community that gives it a unique opportunity to contribute to the needs of society. Sri Lanka’s biggest need today is a stable social, economic and political environment, but that can only be realised if there is lasting peace.
The approaches adopted by Sri Lanka First and the Business for Peace Alliance are examples of the role of business in peacebuilding. Although most of the business organisations involved do not have formal CSR policies, social responsibility and the realisation that their own long-term survival depends on peace have spurred them on.
Corruption between the private sector and the government is a serious problem because it limits the ability of the government to meet the needs of the nation, putting private sector interests above those of citizens. It must be assumed that this realignment of needs is negatively affecting the peace process. Further, the relationship negates, practically and morally, any other social initiatives in which the private sector may engage. Business must become convinced that it is in its own longterm interest to build responsible government through the active transformation of the culture of corruption that currently exists.
DIALOGUE is essential to taking these discussions further. This is best done by:
a) Multi-stakeholder dialogue Dialogue is needed between all stakeholders including donor agencies, government, the business sector and civil society on:
- How to address the different economic visions that are present in the country, and how they relate to the role of business in society;
- How to identify priority areas for CSR initiatives for businesses, and how business can support and complement existing structures and initiatives;
- How to better enforce existing government legislation on employment practice, reporting and the environment;
- Identifying the particular roles that business can play in supporting peace.
b) Business/Civil society dialogue
- The business community should engage civil society in dialogue to determine the role of business in society;
- Business must work in partnership with civil society groups, especially religious leaders and NGOs, on more contentious issues such as peacebuilding;
- NGOs can assist the business community in analysing, developing and implementing social and environmental efforts, while business can enhance the efficiency, capacity and professionalism of NGOs.
c) Business/business dialogue
- Businesses should engage in dialogue with each other and adopt best practices through shared learning;
- Businesses need to explore the benefits of collaborative action;
- Dialogue with businesses outside of Sri Lanka can help develop best practice;
- Businesses in Colombo and the regions need to discuss how they can better complement each other.
TRAINING is essential to create awareness and to plan, formulate and implement CSR strategies and initiatives. The main areas to be covered are:
a) CSR training: socially responsible business practices;
b) CSR as an entry point for peacebuilding;
c) Developing broader approaches in the curriculum of business schools, including business ethics, and social and environmental issues.
FURTHER RESEARCH/STUDY is recommended in the following areas:
a) Role of the government in CSR;
b) Applicability of CSR in the SME sector;
d) Increased capacity of NGOs on consumer and environmental issues.