Business Matters

Retrospective on CSR after the floods

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The floods having come and gone, it is worth noting that such natural disasters bring out the best in people and in organizations. It is therefore unsurprising to find many corporations and their employees at the forefront of socially responsible initiatives. Let us reflect on what and how corporations can do (better) given their resources and organizational structure.

For example, during Hurricane Katrina’s rampage through New Orleans and beyond in the United States in 2005, Wal-Mart arguably performed faster and better than the much maligned Federal Emergency Management Agency (Fema). Its stores distributed water, batteries and other essentials before Katrina hit, and its supply chain delivered relief goods with dispatch. Closer to our region, during the 2004 tsunami that hit Thailand and other countries, several Bangkok-based multinational companies received word from their global headquarters of the tsunami in real time and ahead of news reports. Since expatriate families were vacationing in Phuket, corporate “command & control” undertook search and rescue operations. More recently, since “Ondoy” if not earlier, the Philippines has been undertaking local-level quasi-public-private partnerships between communities and companies on “rapid response” during emergencies. For example, Laguna towns and local business chambers redesigned and redeveloped their evacuation and relief procedures.

These examples illustrate three “corporate competencies” in the wake of floods and other natural disasters:

1. A company with a nationwide scope has a built-in supply chain and network that through sheer number and coverage will ensure that enough elements—warehouses, vehicles, supplies, and the like—will survive to provide assistance to individual engulfed communities.

2. Well-run firms believe in the competitive power of relevant, accurate, and real-time information. Data-mining—or collecting and analyzing information that leads to action—is part of a company’s DNA. Information can help to more quickly match resources with needs.

3. Companies that serve mass markets such as the fast-moving consumer goods industries keep in close contact with their end-consumers and can use their resources to influence their behavior with respect to flood preparation and response.

There are many other examples that demonstrate the direct application of company competencies to specific needs. Telecommunications operators offer cash assistance via mobile phones; housing companies help to salvage, to recycle and to rebuild parts of homes; agribusiness firms replant inundated forests; earth-moving enterprises assist in reopening roads; pharmaceuticals provide both medical assistance and supplies, etc.

All these indicate that CSR can be applied over and above simply providing the “basics”—such as seeking donations and calling on employee volunteers. However, organizations and networks are not exclusive to corporations. Schools received donations in kind (for example, sacks of rice) and mobilized families of students to cook the staple for immediate consumption. Moreover, disaster relief is not the responsibility of concerned corporations and the citizens. The government is the prime mover. But the evidence based on the poor performance of the government agencies of even a rich nation like America during and after Katrina does not augur well for the capabilities of the governments of less developed economies.

Public-private partnerships (PPP) are a global phenomenon encouraged in the Philippines. The same approach can be applied to disaster relief, given the scarce resources of the public sector. The small-scale, on-the-ground, grassroots cooperation between local governments and on-site businesses is certainly replicable.

On a larger, more systematic scale, consider the problem of garbage that becomes quite apparent in the aftermath of floods. Garbage is unsightly; one government official has commented that the Philippines’ development as a tourist destination was not helped by the use of the waterways for garbage disposal. And garbage is most certainly unhealthy.

The problem demands a systematic approach: Education and enforcement can alter household behavior. However, garbage uncollected in front of houses and improperly disposed of at unauthorized landfills will not reinforce good behavior. Scale is also required: The cleanliness of a few households will be overwhelmed by a generally unclean neighborhood. A PPP to address the garbage problem will involve private corporations, schools, and households, and the public sector both local and national.

Corporations are also able to undertake longer-term measures considering that the tenure of CEOs often outlasts the term of the Philippine president and other elected officials, dynasties notwithstanding. For example, a multinational oil firm is working with a Bicol province on the immediate issue of preparedness for disaster relief and with a geodesic observatory on the longer-term issue of analyzing critical disaster-related variables.

Finally, after considering replication and scale, sustainability is the next key success factor. The ningas kugon attitude prevails in disaster relief; the urgency wanes after the floods even as the issue is still regarded as important. Corporations can incorporate long-term implementation efforts in their CSR strategic plans and instruct their foundations to assist in sustaining the effort—primarily but not only financially. Perhaps the next retrospective will yield positive outcomes.

Francisco L. Roman is a professor at the Asian Institute of Management and executive director of RVR Center for Corporate Social Responsibility.

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