Chapter 2: Corporate Social Responsibility: A literature review
2.10. CSR at multinational corporations
2.11.6. Lack of CSR framework
In addition to the above, CSR activity in Zimbabwe has been adversely affected by the lack of a framework or policy that directs and monitors the activities of organisations or institutions in the private and public sector. Machadu (2012: par. 1) highlights that there is no explicit law compelling businesses in Zimbabwe to engage in CSR. Whether it be self-regulation or full regulation (also known as government regulation), Zimbabwe lacks a framework to drive CSR activity.
Nyawuyanga (2015:29) states that although the Zimbabwe’s Companies Act (Chapter 24.03 of 1952) encourages companies to participate in CSR activities, it does not express how organisations should go about addressing societal concerns. That is not to say that good businesses necessarily need to be told by law how best to conduct their CSR, but a guideline or framework would go a long way in increasing attention towards CSR, highlighting societal expectation and monitoring compliance.
Nyawuyanga (2015:29) further suggests that this lack of regulatory and enforcement legislation has led to organisations abdicating their social and ecological responsibilities.
Although IEEP in Zimbabwe plays a pivotal role in regulating the activities of foreign owned organisations and may thus be considered as a CSR regulatory framework as shall be discussed, it falls short of providing an all-encompassing solution to direct all businesses in the country. The policy is designed to dictate the activities of foreign owned organisations. There is no policy that drives locally owned entities. The introduction of IEEP may be seen amongst other things, as a way to influence organisations to plough back to community. The IEEP will be discussed further in the following chapters. Whether it be self-regulation or full regulation (also known as government regulation), Zimbabwe lacks a framework to drive CSR activity.
92 2.11.7. CSR positives in Zimbabwe
Despite the economic challenges, some organisations in Zimbabwe actively participate in CSR albeit at minimal levels. The country is highly dependent on the primary and tertiary sectors and more specifically, the extractive and service industries. Companies within the mining industry have been very active on issues of CSR. This sector is dominated by MNCs and as such Anglo, Rio Tinto and Impala Platinum. Many of these take their CSR guidance from their home countries. Nyawuyanga (2015:30) notes that some mining corporations have established beneficial social and infrastructure programmes in their communities such as building dams to improve the reliability of water supply in the area and financial contributions to local schools and clinics.
In the service industry, companies such as Econet and Old Mutual stand out. For its CSR activities, the organisation runs the Joshua Mqabuko Nkomo Trust and the Capenaum Trust and has partnered with the Zimbabwe National Healthcare Trust and the Christian Community Partnership Trust. In its 2020 report, Econet reported its commitment to the SDGs. By using its financial capabilities and core competences, the organisation reported that it had assisted 13 333 primary and secondary school children (SDG 4), installed 12 solar installations (SDG 7), donated 7 300 trees (SDG 8) and recorded 22% decline in absenteeism due to improved employee wellness programmes (SDG3) (Econet Annual Report 2020:48). The other SDGs that the organisation has adapted are SDGs 17, 5, 12, 11, 8, 9, 1 and 16. The company was awarded the SDG and community impact award in 2019 by Corporate Social Responsibility Network Zimbabwe and also received runners up recognition in the Excellence in Corporate Governance by the Institute of Charted Secretaries and Administration in Zimbabwe (Econet Annual Report 2020:99).
Old Mutual is involved in a number of initiatives to uplift the livelihood of Zimbabweans in the areas of education, health, arts and culture, environment and sports development. Old Mutual recognises that beneficiaries of CSR programmes can also become an organisation’s greatest advocates (Old Mutual CSR report 2014:6) and as such, embraces its responsibility by actively engaging with the community. In 2018, the organisation reported on its various initiatives in a 24-page Responsible Business report (2018), Old Mutual highlighted its initiatives that included its commitment to toastmasters international, Zimbabwe’s sevens rugby team, the Heath Streak Cricket Academy, as well as the Mathematics Olympiad. The organisation also donated blankets to Bumhudzo Old peoples home as well as US$400 000 to the government of Zimbabwe’s fight against cholera.
Notably, Old Mutual used its core financial competences in a housing project in Bulawayo. The organisation invested US$6 million in servicing 1082 housing stands to be mortgaged to citizens upon completion (Old Mutual Annual Report 2018:22). This illustrates that if an organisation is involved in initiatives which resonate with its mission and competences, it is most likely to solve particular problems as highlighted by Husted and Allen (2000:26). It is also worth noting that Old Mutual is an MNC and as such is better place to understand CSR than other local financial institutions in the country.
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There have also been significant strides in CSR practices in Zimbabwe’s hotel industry.
Organisations such as African Sun, Zimbabwe’s largest hotel chain, have developed better appreciation of CSR as a business concept. A comparison of their 2016 and 2019 annual reports shows a significant shift in CSR practices. In 2016, African Sun reported that they had donated US$
35 000 to the Better Schools Programme in Marondera and Tsholotsho Rural District Council as well as handing over linen to various institutions in Harare and Bulawayo. No other information on CSR was provided. This is consistent with research conducted by Nyahunzvi (2012:604). The author found that philanthropy in the form of donations in cash and kind were the main CSR activities undertaken by hotel chains in Zimbabwe. Review of African Sun’s 2019 annual report however showed a significant shift in how the organisation approached CSR. The organisation dedicated 14 pages to sustainability reporting in 2019 compared to 2 pages in 2016. African Sun detailed the various initiatives that it had undertaken in the year under review with projects ranging from cheap planting to partnerships with Hwange national parks and Victoria Falls anti-poaching unit. The organisation also provided information on its sustainability committee which it describes as being responsible for policy on sustainability and CSR. African Sun also highlighted employee engagement initiatives which included the promotion of employee equity programmes, women empowerment as well as training and development. This represents a new approach for other organisations to emulate.
Consistent with the activities in other developing countries, corporate philanthropy is noticeably the most significant approach to CSR in Zimbabwe. Visser (2009:490) states that corporate philanthropy is seen as the most direct way to improve the prospects of the communities and as such is seen as an excepted norm and is considered the right thing to do by business. Philanthropy alone is inadequate as a CSR approach. It fails to solve some of the socio-economic challenges such as upskilling unemployed youth or enterprise development. Corporate philanthropy may be seen as the simplest approach as there is little direct involvement by the donor. Furthermore, philanthropy creates a culture of dependency on the part of the recipient thereby discouraging self-reliance. Visser (2009:490) argues that the reason why developing countries prioritise philanthropy is that they are generally still at the early stage of maturity in CSR, sometimes even equating CSR and philanthropy, rather than embracing more embedded approaches now common in developed world. A shift towards supporting practices that promote self-sufficiency within the Zimbabwean society would therefore go a long way in alleviating the socio-economic challenges faced by citizens. Panwar and Hansen (2008:45) assert that over time, societal expectations of business responsibilities broaden as a society passes through the phases of economic development and as its population increasingly seeks to meet not only physical but also social and personal-growth needs.
Although some companies have active CSI, the dissemination or reporting on such activities is inadequate. For example, Nyahunzvi (2013:607) found that a common theme identified was the inadequacy and poor quality of the information reported surrounding CSR activities in the annual
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reports and corporate websites of hotel chains in Zimbabwe. CSR reporting is important as it not only communicates an organisation’s effort but also forms an important part of stakeholder engagement and establishes a basis for meaningful dialogue between all parties involved.
As observed, CSR in Zimbabwe may be described as being in transition mainly because of the country’s unstable social economic situation. Most of the measures that may be necessary for CSR to thrive are either in their infancy or do not currently exist. Economically, the country ranks amongst the worst performing in the world and is therefore in dire need of assistance from the corporate world especially if it is to achieve the SDGs. With adequate developmental support from MNCs, the resource rich country would be in a better position to provide for its citizens.
Zimbabwe’s social, economic and political situation has had an impact on the way CSR is practised in the country. A critical examination of CSR in Zimbabwe offers an understanding of the practice and gives MNCs a view of the type of initiatives that are applied in the country. Though the CSR priorities of Zimbabwe are similar to those of other developing countries, the extent of its challenges are unique and require a differentiated approach by both the government and non-state actors.
Zimbabwe’s indigenisation policy presents a different dimension to the needs and expectations of society, and this evaluation presents insight into the capacity and ability of organisations to meet these expectations in light of all the challenges that they face. As societal expectations of business responsibilities broaden in Zimbabwe, so too should the organisations CSR activities. The importance of CSR therefore cannot be understated and by evaluating practices in Zimbabwe, the research is able to explore any additional expectations from communities and the government. As such, this examination is set to add value by illustrating the situation in the country and providing a background upon which to base any evaluation of the manner in which MNCs develop their own strategies in the country.