Recommended actions to foster the adoption of Corporate Social ...

Chapter 1: Argentina1 Executive SummaryIn Argentina, CSR development should be led byNGOs and academic institutions, which are alreadyengaged in the promotion of CSR, in partnership withenterprises, business associations and governmentalorganizations. Local actors, such as the communityand civil society, which had prominent roles duringthe 2001 economic crisis, should promote CSR inArgentina at the sub-national level.There are several variables that may be holdingback the advancement of CSR in Argentinean SMEs.The most evident obstacles are the effects of the2001 economic crisis, including: lack ofemployment, corruption, absence of an effectiveregulation framework and ineffective compliancecontrol systems. Many stakeholders think that theattention given to CSR in the last few years was anapproach to help overcome aspects of the economiccrisis. Since the crisis is now arguably over, CSRneeds to find a different way to draw attention to itspotential not only as a recovery remedy, but also asa way to increase competitiveness, access new andglobal markets, enhance supply chains, and supportlocal economic development.NGOs, as a part of Argentinean civil society, have avaluable role in fostering CSR among SMEs. 5 Civilsociety should educate SMEs, engage stakeholders,and conduct awareness campaigns and feasibilitystudies. Civil society could also contribute to thecreation of codes of conduct and ethical behavior,the improvement of monitoring systems andenvironmental assessment, the launch of a centerfor environmental technology transfer and thecreation of CSR awards and labels.Given the shortcomings of existing regulations andthe lag in the adoption of internationally acceptednorms in Argentina, MDIs have a strong role inraising awareness of CSR, engaging the parties innegotiation and cooperation, financing pilotactivities and providing technical assistance. MDIsmay provide financial support through MultilateralFinancial Institutions, which are part of MDIs. MDIsshould also encourage the involvement of publicauthorities, promote public-private partnershipsand support transparency campaigns.The Argentinean national and local governmentscan have an important role in facilitating CSR. Thisanalysis, however, discourages Argentina’s publicauthorities from imposing CSR regulations, due tothe low level of public trust in politicians andadministrators.Business associations can also play an importantrole in promoting CSR, as they have successfullytaken a leading role on several pilot projects aimedat enhancing compliance in the marketplace,applying environmental management systems, andimplementing gender policies among SMEs. Theyalso have leading roles in facilitating an approach tocompliance, improving monitoring systems,promoting environmental assessments and trainingSME managers.2 Economic and SocialFrameworkMost of the documents reviewed for this analysishighlight the exceptionality of Argentina, due to theunique macroeconomic figures resulting from the2001 economic crisis. After the economic crisis,approximately 40 percent of SMEs could not continueoperations. This was mainly because they were facedwith having to pay similar levels of taxes and penaltiesas they had before the crisis, but now withconsiderably less income. According to the WorldEconomic Forum (WEF) in 2005, Argentina’sunemployment rate was 13.6 percent of the total laborforce. SMEs in Argentina employ 78 percent of thelabor force and contribute with 61 percent of thedomestic product.5 The civil society role, as known, was mainly in raising attention to ethical conduct and responsible behaviors as a way to overtakethe crisis and the impasse.Argentina13