Ladies and gentlemen,
- It is a great honor for me to welcome you to the Oslo Conference on Corporate Social Responsibility (CSR) 2012.
- I would like to jump right into the Myanmar case. I just returned from a visit to the country last week. My third visit in 18 months.
- The Norwegian Government has lifted its sanctions against Myanmar, with the exception of those dealing with arms trade. And we have reintroduced preferential customs treatment. This shows that we believe that Myanmar is heading in the right direction.
- While in Myanmar, I also had the pleasure of inaugurating Jotun’s Multi Color Centre in Yangon. This is the first establishment of a Norwegian company since the reforms and opening up of the country started. This brings into Myanmar a strong tradition on CSR.
- I would strongly encourage Norwegian firms to engage in Myanmar. It is not a question whether to go to new markets like Myanmar – but how to do it.
- However, CSR is particularly important for companies operating in countries in a post-conflict phase or suffering from weak governance. Foreign companies can actually have a positive impact on these countries, for example by setting high standards for corporate conduct, which can subsequently be followed by local companies.
- In Myanmar – as in all other overseas operations – we expect Norwegian companies to live up to the same standards as they do at home.
- I come straight from a round table discussion with Norwegian business leaders. A very engaging dialogue. We established consensus on several issues:
1) That presence is better than the alternative
2) That CSR should always be observed
3) That you might lose (a contract) in the short run, but that CSR will give long term gains
I Stock taking
- It is five years since the last international CSR conference in Oslo. The trend is more public awareness of CSR.
- The last conference gave rise to the ambition to produce a Norwegian white paper on CSR. The white paper was launched in January 2009. It has provided us with a coherent CSR policy.
- There is no such thing as one size fits all. Each country must design its own policy adapted to its own reality.
- Yet I believe it is important to take into account certain fundamental values, rights and guiding documents. Human rights, the ILO’s core conventions and the UN Convention against Corruption are all crucial in this context.
- Norway’s white paper on CSR defines three key areas for government action.
- The first is exercising social responsibility in the Government’s own activities.
- The second is conveying the Government’s expectations to Norwegian companies.
- The third is developing an international CSR framework.
- This framework is now in place:
- Since its launch in 2000, the UN Global Compact has grown to become the world’s largest corporate sustainability initiative.
- In 2011, the UN Guiding Principles on Business and Human Rights were adopted. They are a milestone in terms of making companies more accountable for adverse human rights impacts.
- The OECD Guidelines for Multinational Enterprises were updated the same year, while ISO 26 000 on social responsibility was established in 2010. Both are aligned with the UN Guiding Principles, supporting unprecedented convergence in international standards.
- The Global Reporting Initiative has established a comprehensive CSR reporting template that is widely used around the world.
- Implementation of this framework is the main challenge we face today when promoting CSR.
- While government matters, we need responsible companies. One aim of this conference is therefore to identify best practices that support implementation of the international CSR framework.
II Human Rights
- Another key priority is the growing impact of human rights on our understanding of CSR.
- The UN ‘protect, respect and remedy’ framework places the duties of states and the responsibilities of business in the same governance document. It reminds both governments and businesses that they need to ensure there are adequate remedies should things go wrong.
- We do see that companies have come a long way in acknowledging their responsibility for respecting human rights. This was evident during the efforts to establish the UN Guiding Principles aimed at implementing this framework.
- Human rights are no longer a concern that the business community can leave to governments alone.
- We see that shareholders, employees, customers and the general public have growing expectations with regard to CSR. For many companies, there is growing awareness that human rights violations can have negative repercussions, in the form of a damaged reputation or reduced earnings. CSR is influencing the market value of a company.
- We see that globalisation and the growth of the information society are providing companies with a many new opportunities. However, they also mean that companies are increasingly required to demonstrate corporate social responsibility and engage in sound business practices.
- Transparency is vital in the promotion of CSR. Both desired and undesired corporate behavior must be made visible. Ethical dilemmas must be exposed. In this way unethical decisions can be prevented or rectified.
- There are several drivers of transparency:
- 1) First of all, the general public now expects greater transparency. Civil society and the media function as watchdogs and help to highlight corporate misconduct.
- 2) Laws and regulations can also serve to promote transparency. Several countries, including Norway, already have or are about to pass laws that make it mandatory for companies to report on CSR.
- Such reporting can improve a company’s work on CSR, as it helps increasing awareness of the challenges that exist and the potential for improvement. What can be measured can be controlled, and what can be controlled can be changed.
- 3) International cooperation can also promote transparency. At the Rio +20 conference this summer, sustainability reporting was endorsed. The business community was encouraged to integrate sustainability information into its reporting cycle.
- 4) Transparency is crucial for governments that have natural resources to manage. This is a field where CSR is being put to the test all the time.
- On the one hand, if managed well, natural resources can lift a country out of poverty. On the other hand, if mismanaged, they can lead a country into a vicious circle of corruption, environmental degradation, human rights violations and poverty.
- That´s why we support the Extractive Industries Transparency Initiative (EITI).
- This is a unique partnership between governments, the private mining sector and civil society. Countries publish what they pay and governments what they receive. These numbers are then independently verified and compared in an EITI report. The EITI has its secretariat here in Oslo.
- 5) We also actively support country-by-country reporting.
- Country-by-country reporting requires companies to carefully examine their accounts for each country in which they operate. This will help to curb tax evasion, as it prevents companies from gathering all their country figures into one lump sum for a broader geographical area, for example, a single profit figure for “Africa”.
- The EU Commission has advocated country-by-country reporting. We would like to go one step further by opting for a system that compares a company’s extraction of natural resources with its tax payments, in order to fight tax evasion.
- The Norwegian Government aims to have such a tax system in place by 1 January 2014.
- 6) In my previous position as Minister of Defence I worked hard to promote the NATO Building Integrity Initiative. The aim of the initiative is to promote good practice and reduce the risk of corruption in the defence sector. In fact, the Norwegian Ministry of Defence has in place ethical guidelines for suppliers and for contact with business and industry.
IV The future of CSR
- During the last session of the conference there will be a discussion relating to the future. I would like to share some thoughts with you on this.
- I believe that CSR increasingly will not be viewed as an entirely voluntary matter. Some areas – such as support for development – remain in that category, while others, such as respect for human rights, are non-negotiable baseline expectations of all companies. Moreover, corruption and child or enforced labor are covered by UN conventions and integrated in the penal code of many countries.
- Today’s world is changing. Its political and economic centres of gravity are shifting.
- I hope and believe that we by now have an international CSR framework that is strong enough to prevail as a global norm, even in countries with rapidly growing economies that do not share all our values.
- We are seeing increasing pressure worldwide for more decent working conditions. As a result of many Chinese workers demanding higher wages, we are seeing production being moved to other low cost countries, for example Vietnam.
- I hope that this pressure will grow, in China, in Vietnam and elsewhere. I hope that all hardworking and low-paid workers everywhere will gain decent working conditions and fair pay. This is a priority for me and the Norwegian Government.
- I believe good governance will remain a critical factor in promoting CSR. We need to assess our role on a continuous basis and sort out where hands on or hands off is the right approach.
- We see that responsible business increasingly complement government action promoting sustainable development. In line with this
- I hope to see the business community advancing sustainable development on a broad scale in line with the Rio+20 agenda.
- I hope to see more business innovation lifting people out of poverty and having an impact on energy and climate, water, biodiversity, agriculture and food, corruption and gender equality.
- In short, I hope to see more businesses as keen and efficient drivers of development.
- We should remind ourselves that in fact CSR is in the companies’ own self- interest.
- To be in front on CSR can increase your competitiveness in an increasingly social responsible world market. Aiming for ever higher environmental standards for both the products itself and the way they are produced, will give your company a competitive advantage in the future. I am encouraged to see many companies using CSR as a technological incentive for innovation.
- On the human rights, decent work and anti-corruption aspects of CSR it is exactly the same. The company with the highest standards will not only be given a competitive advantage when it comes to entering a new market. It has a branding value. But the company figuring as the most social responsible enterprise will also likely be the working place attracting the best people. That in turn gives the social responsible company a competitive edge.
- To reiterate my key points:
1) We have a CSR framework in place. Now it is time for the tireless and continuous implementation.
2) In doing this we need to take into account the growing impact of human rights on CSR. (UN Guiding principles).
3) We need to pay attention to companies operating in countries in a post-conflict phase or suffering from weak governance.
4) Focus on transparency. (EITI. New Norwegian initiative on tax evasion)
5) Reached the “point of no return” a long time ago. The question is not whether or not to exercise CSR, but how to do so. Future of CSR (Decent work, good governance, competitiveness).
- I would like to wish you every success with this conference.