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Corporate Social Responsibility

Corporate Social Responsibility

1. How did the concept of Corporate Social Responsibility come about?

The recognition of corporate social responsibility (CSR) is an outcome of social civilization and economic development. In the initial stage of capital accumulation, multinational companies strived for development by sacrificing the environment resources and labor welfare of developing countries. However, as the ideas of "human-oriented" and "sustainable development" are widely recognized, the civil society, with consumers as the mainstay, has paid increasing attention to the production process of the commodities they have purchased, and began to boycott the products from "sweatshops". As a result, related issues are gradually brought into the scope of government supervision and legislation control. To redeem reputation and enhance investor confidence, multinational companies took the lead in establishing their own codes of conduct.

2. What does corporate social responsibility mean?

The corporate social responsibility means that an enterprise should bear certain responsibilities to its stakeholders in its various business activities, so that it is capable of maintaining sustainable development in economic, social and environment aspects. In other words, apart from earning profit for its owner(s), a business enterprise shall also integrate concerns of all stakeholders in the business decisions.

3. Who are the shareholders?

The so-called shareholders refer to any local or overseas individuals or groups that either affect or who are affected by the enterprise’s decisions and activities. This could include employees, customers, suppliers, business partners, mass organizations and social groups, local neighboring communities, environments, etc., with employees being
the main shareholders.

4. What does corporate social responsibility prohibits an enterprise from doing?

The definition of CSR widely covers prohibition of using child labor and forced or compulsory labor, prohibition on discrimination, harassment and abuse, honoring related regulation on working hour, guarantees on occupational health and safety, environment protection, observing business ethics as well as assisting the healthy development of the
community or country where the enterprise operates.

5. Which existing laws in China deal with corporate social responsibility in some form?

Today, the Chinese government places greater emphasis on safeguarding the legal rights and interests of citizens and has established a well-founded and complete legal system, in which, many laws and regulations, such as “Labor Law of the People’s Republic of China”, “Trade Union Law of the People’s Republic of China”, “Law of the People’s Republic of China on the Protection of Rights and Interests of Women”, “Provisions on Special Protection for Juvenile Workers”, “Production Safety Law of the People’s Republic of China”, “Code of Occupational Disease Prevention of the People’s Republic of China”, “Cleaner Production Promotion Law of the People’s Republic of China” and “Regulations on Enterprise Minimum Wage”, all contain CSR elements and requirements. However, China is still in the initial stage of developing a standardized, systematic and widely participated CSR social movement.

6. How has corporate social responsibility in China developed?

Over the past decade, the development of CSR in China has gone through three stages:

The first stage was from the mid 1990s to the early 21st century, during which the CSR requirements were mainly applied to the international supply chain. In this stage, driven by the consumer market, international retailers and brand owners began to pay attention to the CSR issue, establish and implement CSR codes of conduct, standards or systems. Some Chinese enterprises, which had joined the global supply chain, began to accept factory auditing by multinational corporations. The management of these export-oriented enterprises was the first social group contacting CSR concept.

The second stage was from the early 21st century to 2003, during which the CSR concept was introduced to the society, drawing wide attention and debate. At that time, Chinese academic institutions, non-government organizations and international organization in China began to systematically introduce this concept and carry out extensive study and discussions. Under the background of global economic integration and fast growing foreign trade, trade authorities called on all interest parties to pay attention to CSR, so as to avoid the negative impact it may bring to trade. At the same time, government departments began to show concerns to the development of CSR among enterprises. The Ministry of Labor, the Ministry of Commerce and the Chinese Enterprise Confederation (CEC) all created CSR investigation committees to study the development of CSR in China.

The third stage began from 2004. It is a stage of active actions. Chinese government departments, industries and enterprises all have realized that developing CSR is an effective means to build a harmonious society, carry out the scientific approach to development and realize sustainable development. Accordingly, they have taken a series of positive measures to promote the maturity of CSR movement.

7. How has the textile industry responded?

As the representative of manufacturing industries, the textile and apparel industry takes the lead in promoting CSR in China. China National Textile and Apparel Council has developed the CSC9000T system and started to promote it among enterprises. Chinese government departments have taken more positive attitude towards CSR and developed related encouraging policies. For example, the “Development Guidelines on the Textile Industry in the 11th 'Five-year Plan' Period (2006-2010)” and the joint circular of “Some Suggestions on Accelerating the Restructuring and Promoting the Upgrading of the Textile Industry”, both clearly call on “positively promoting the development of
CSC9000T system and materializing the implementation”.

8. Did Chinese enterprises react in a positive way?

Some enterprises have taken measures to voluntarily improve CSR management. For example, in March 2006, the State Grid Corporation released its CSR Annual Report, which is the first State-owned enterprise to demonstrate its CSR performance to the public. On June 23, 2006, Shanghai Pudong Development Bank issued its CSR Report on both public and internal websites, which became the first Chinese commercial bank that published a CSR report.



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