Business and Sustainable Development in Africa

Medicine or Placebo?

Uwafiokun Idemudia, Francis Xavier Dery Tuokuu, Tahiru Azaaviele Liedong, Uwafiokun Idemudia, Francis Xavier Dery Tuokuu, Tahiru Azaaviele Liedong

• Publisher: Routledge
• Year: 2022
• ISBN:
  9781000554564
• Edition: 1
• Topic: Business
• Subtopic: Business Ethics
• Index: Business

The book offers new critical insights into the relationship between corporate social responsibility (CSR) and sustainable development in Africa.

The extent to which CSR initiatives can contribute to sustainable development in Africa remains debatable. This book examines in a very clear structure how, when, and whether CSR initiatives are able to contribute to the realization of the sustainable development goals, peace, and environmental sustainability at the micro-levels of society. It also explores some macro-level issues such as the relationship between taxation and CSR, CSR and human rights, and CSR and public governance and, in so doing, challenges existing CSR dogmas.

With themes aligned with the UN Sustainable Development Goals (SDGs), this book provides useful practical guidance for policymakers and business leaders seeking to better understand the strength and limitations of CSR as a vehicle for advancing sustainable development in Africa. It will also appeal to scholars, researchers, and students of African studies, development studies, international business, strategic management, and business and society.

1 Corporate Social Responsibility (CSR) and Development in AfricaA Critical Overview

DOI: 10.4324/9781003038078-2

Uwafiokun Idemudia

Introduction

Berle and Means’s (1932) explication of the implications of the divorce of property ownership from control, which used to be inseparable in the dominant neo-classical understanding of the business enterprise, provided the impetus for questioning the idea that the corporation should be run by prioritizing the interest of the stockholder (Jones, 1996). For example, Stokes (1996) and Beasley and Evans (1978) argued that with the separation of property ownership from control, it no longer made sense for the corporation to be run solely in the interest of the stockholders. Rather it was argued that business should now be run in the interest of stakeholders (Freemen, 1984). Hence, the issue of corporate social responsibility (CSR) actually began as a concern for the role of the corporate managers and their ability to consider the interest of stakeholders in decision-making processes (Whitehouse, 2003; Jones, 1996). Nevertheless, the ‘social responsibility’ of business has been a recurring theme within the discourse of business–society relations for many years (Doane, 2005; Carroll, 1999). For example, Cicero in 44 BC wrote about unscrupulous business practices, while European social thinkers in the seventeenth and eighteenth centuries routinely engaged in a lively debate over the relationship between self-interest and the greatest good (Ciulla, 1991). Historical evidence, therefore, suggests that societal concerns for business social obligations are not new and that such concerns have continually ebbed and flowed at various times (Monsen, 1972; Cuilla, 1991; Jenkins, 2005). However, the latest manifestation of this concern within the concept of CSR (Smith, 2003; Blowfield and Frynas, 2005; Jenkins, 2005) appears to defy conventional pattern, as CSR seems to have taken on a life of its own and is unlikely to disappear any time soon (Doane, 2005; Eilbirt and Parket, 1973; Economist, 2005). Yet, the concept of CSR lacks a consensual definition and it is now seen as an essentially contested concept (Okoye, 2009; Gond & Moon, 2011). Nonetheless, the idea of CSR presupposes that business has obligations to society that go beyond profit-making to include helping to solve ‘hard’ social and ecological problems (Fredrick, 1960; Lodge, 1970, Idemudia, 2008). In other words, the CSR thesis suggests a shift from government to business enterprise as a source of social improvement and a means to promote specific items of social welfare (Beesley & Evans, 1978). However, Cash (2012) has argued that Transnational Corporations (TNCs) are not development agencies and therefore must not be viewed as such or called to lead a development agenda (see also Freidman, 1970; Levitt, 1958; Henderson, 2001).

Nevertheless, a key part of the contemporary debate has been the shift from whether business can or cannot contribute to development to how best to maximize business contribution to sustainable development (see Blowfield & Dolan, 2014). For example, Fox (2004) has argued that there is an urgent need to develop a better understanding of not only where the drivers for responsible business practices exist in the south, but also ways to build, broaden, and sustain them where they currently do not exist. This requires the identification of local CSR drivers and constraints in the south, the development of the human and institutional capacity to respond to these drivers, and the reorientation of CSR tools to address southern stakeholders’ developmental concerns (Fox et al., 2002; Fox, 2004). It is against this background that this chapter seeks to:

1. Critically examine the drivers, dynamics, and nature of CSR practices in Africa
2. Consider whether business is a tool or agent of development in Africa
3. Examine the emerging issues for CSR and development relationship in Africa

Corporate Social Responsibility in Africa: Issues and Drivers

The notion of CSR is not new to Africa. Indeed, Hönke (2012) showed that there are continuities between the paternalistic nature of corporate-community intervention pursued by mining companies during the colonial and the postcolonial period within the Democratic Republic of the Congo (DRC). Similarly, Noyoo (2010) points to how Anglo-American Corporation as early as 1929 was responsible for providing housing and hygiene for its employees in Zambia but with racial bias. Nonetheless, the literature on CSR in Africa is only just emerging and continues to be dominated by the works undertaken in South Africa and Nigeria (Visser, 2006; Muthuri, 2013). Although, in recent years, the scope (i.e. geographic focus within Africa) and scale (i.e. issues or themes covered) in the literature has steadily widened and deepened respectively. For example, while Ragodoo (2009) and Gokulsing (2011) have expanded the scope of CSR studies in Africa by exploring CSR practices in Mauritius, Kolk, and Lenfant (2010, 2013) have deepened the literature by examining CSR within a conflict context in Central African countries. This steady growth of the CSR literature in Africa is due to the interdisciplinary approach to the study of CSR that has allowed for contributions from other disciplines like geography, political sciences, anthropology, and sociology. For example, Hamilton (2011) provides a comprehensive analysis of the contributions of geographers to the CSR debate.

At any rate, given the role of TNCs in the process of colonial domination and exploitation in Africa, the notion of CSR for some scholars is just a euphemism that has recently re-emerged to ‘sugar coat’ the pillage of Africa by TNCs that has lasted for hundreds of years (see Orock, 2006; Noyoo, 2010; Bagire et al., 2013). Hence, CSR is seen by them as a new form of corporate colonialism (Malan, 2005; Banerjee, 2008; Fougere & Solintander, 2009; Vertigans, 2011). For example, Orock (2006) argues that TNCs have failed to adequately respond to social needs in Africa. He argued that while TNCs are generating significant profits on a daily basis from their investment in Africa, they are failing to make a plausible case for their social relevance in such a way as to be directly felt by most people at the grassroots. Indeed, rather than alleviating poverty, most TNCs are rendering Africans poorer and contributing to the widening of income inequalities. In contrast, Visser, McIntosh, and Middleton (2006) have noted that since the late 1990s, there is now a general consensus that the private sector via CSR is well placed to make significant positive contributions towards improving social, economic, and environmental conditions in Africa. For example, Garcia-Rodriguez et al. (2013) argued that their research findings in Angola suggest that despite the absence of an enabling environment in developing countries for CSR activities of oil TNCs, small actions such as the introduction of the environmental management system (EMS) using a bottom-up approach can generate important impacts in terms of strengthening the institutional context and helping to develop structures and institutions that contribute to social justice, environmental protection, and poverty eradication.

Hence, it is the practical and discursive implications of the reimagining of the role of business from being the cause to becoming a part of the solution to the problem of underdevelopment in the region (Idemudia, 2010, Rajak, 2011) that lies at the centre of the CSR debate in Africa. This is because the question of whether Africa lags behind all other regions on every established indicator of development is no longer necessarily contentious (Njoh, 2006), but what remains a subject of disagreement is what to do about it. Consequently, CSR is seen to be deeply enmeshed in the debate about the future of Africa’s development (Visser et al., 2006; Gokulsing, 2011). This is particularly the case given that the process of globalization for Africa has largely been contradictory and thus characterized by instances of collaborations and contestations as well as domination and resistance. For example, while the process of globalization ensured the opening of new markets and business opportunities especially for TNCs in Africa, revolution in information and communication technology has also meant corporate misdemeanours, incidents of human rights violations, and conflict between local communities and TNCs, which are now often broadcasted globally in real time with consequences for these TNCs (Kapelus, 2000; Smith, 2003). As a result, TNCs operating in Africa have not only had to respond to different forms of external pressures (i.e., from local communities, government, and non-governmental organizations, for them to address their social responsibility) but also TNCs have also sort to shape, define, and control the emerging CSR agenda in Africa. Thus, the ‘double movement’ approach suggested by Utting (2005) as opposed to Zadek’s (2001) conception of CSR as a business unilateral response to external pressure, best captures the nature and the dynamics of CSR evolution in Africa. This is because the corporation influences the institutional context within which it operates, just as the institutional context within which a company operates influences its social, economic, and environmental performance (Ameashi et al., 2006; Muthuri, 2013). For example, Egels (2005) demonstrated how Asea Brown Boveri (ABB) effort to define its CSR agenda in its rural electrification project in Tanzania was based not simply on the CSR definitions offered by local stakeholders or on ABB’s preferred CSR definition. Rather, it was a joint formulation of a local definition of CSR through a myriad of translation processes, but in which the TNCs played a key role by actively determining who would become a stakeholder.

Furthermore, the drivers of CSR practices in Africa can usefully be categorized into three dimensions: internal factors (e.g. local social movements, corporate–community conflict), external factors (e.g. spread of global norms such as the United Nations Global Compact; international reputational concerns; shareholder activism), and transnational factors (e.g. collaboration between African NGOs and Western NGOs) (see also Mzembe and Meaton, 2013). However, the relative effectiveness of each of these different CSR drivers is likely to vary across regions and between countries. This explains Cash’s (2012) observation that there are lower levels of CSR activities undertaken by oil TNCs in Chad compared to say Nigeria. Nonetheless, three principal arguments have often been put forward to explain why businesses operating in Africa should adopt CSR and contribute to development. The first is the governance deficit argument (see Fitzpatrick, Fonseca & McAllister, 2011). Proponents of the governance deficit argument assert that a combination of government failure and neoliberal policies foisted on African states has meant that African governments have been unable to both deliver positive political and economic goods for their people and effectively regulate the activities of TNCs operating within their border. Hence, TNCs have been both victims and benefactors of governmental failure. TNCs are victims in the sense that governmental failure has meant certain responsibilities previously assumed by governments are increasingly now being demanded of them (see Blowfield, 2010; Alstine & Afions, 2013; Campbell, 2012). On the other hand, governmental failure has also meant that TNCs are able to exploit their weak regulatory environment in a manner tha...

Table of contents

• Cover
• Half-Title
• Title
• Copyright
• Contents
• Contributors
• List of Figures
• List of Tables
• Introduction: The Nexus of Business, Corporate Social Responsibility, and Sustainable Development in Africa
• 1 Corporate Social Responsibility (CSR) and Development in Africa: A Critical Overview
• 2 Corporate Social Responsibility and Human Rights
• 3 Corporate Social Responsibility and Conflicts in Africa
• 4 Corporate Social Responsibility and Community Development in Africa: Issues and Prospects
• 5 Corporate Social Responsibility (CSR) and Taxation in Africa: The Battle for the Ethics of Tax and Responsible Governance
• 6 Tackling Climate Change in Africa through Corporate Social Responsibility
• 7 Corporate Social Responsibility and Institutional Strengthening: A RARE Model for Anti-corruption in Africa
• 8 CSR and Environmental Sustainability Implementation in Mining: Perspectives from Ghana
• 9 Achieving Sustainable Development Goals through Corporate Social Responsibility
• Index