Benin report - Institut Africain de la Gouvernance

CHAPTER FIVE: CORPORATE GOVERNANCE__________________________________________________________________________the state, which lacks standards as well as technical and statutory means toassess the relevance of management costs.666. Several entrepreneurs and members of the CCIB informed the CRM of casesof companies that contributed to the financing of CSR projects – like thebuilding of schools or financing of charity activities – only to be penalised bythe tax authorities for „poor fund management‟ or attempted tax evasion.667. According to the core self-assessment documents, the state has not establishedan attractive framework to encourage enterprises to better honour their socialcommitments to grass-roots communities. There is no equitable treatment ofCSR projects in Benin‟s laws, and companies avoid exposure to high taxes forthis type of project. In fact, the tax services tolerate only one-thousandth ofturnover to be channelled as gifts and social works. Any amount above thisthreshold is considered as sales support and therefore taxable. This dampensthe social enthusiasm of major beneficiary enterprises capable of participatingin public life in other ways than through sales support and implementation.668. At Lokossa, some stakeholders informed the CRM of cases of enterprises thatcontributed to improving the daily life of citizens by building a school and acollege. Though discouraged by tax considerations, this resolve of certainenterprises to assume their social responsibilities also risks being construed aspolitical election-oriented actions and could, therefore, trigger reprisals fromelected officials at local and national levels.669. The circle of mistrust also includes corporate citizen commitment by whichsome managers engage in politics, not for the public good, but solely to wincontracts and be paid by the state.670. Respect of the environment and sustainable developmentBenin has a number of laws and mechanisms for the protection of the naturalenvironment. Stakeholders confirmed that developers wishing to invest inactivities that could affect the environment are required to carry outenvironmental impact assessments. Investors are required to obtain an„environmental conformity certificate‟ before starting their projects, and mayhave to undertake more in-depth environmental impact assessments before theproject is approved.671. Some enterprises in Benin are ISO 9000 compliant, but none has the ISO14000 environmental certification. One of the major difficulties is the lack ofrelevant expertise at the national level. Stakeholders stressed that urban waste,pollution and gold mining activities need to be better managed, stating thatcouncil quality control and hygiene services only come in to collect taxes andnot really to assist enterprises or address the problem of industrial oragricultural waste, not even with technical advice.672. The CRM feels that the inspection service in MEHU needs better training,qualified workers and financial resources to enable it to tackle thesechallenges. The inspectors should be better trained in the diagnosis of227