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

Chapter 4: Colombia1 Executive SummaryIn Colombia the need for private sector participation indevelopment issues is evident by the high levels ofpoverty and violence. Lack of employment is one of themain factors causing these problems; therefore as SMEsrepresent 90 percent of the country’s economy they cancontribute to the solution. SMEs that act as suppliers forlarge domestic and international firms have alreadyrecognized CSR as providing a competitive edge in themarket. However, the majority of Colombian SMEs stillthink of CSR as a way to enhance the economic growthof the country, not as a business managementtechnique that can affect their profits.Multilateral Development Institutions (MDIs) have thestrongest role in fostering CSR, as MDIs already raiseCSR awareness, finance pilot activities and providetechnical assistance to SMEs. MDIs also support thepublic authorities’ roles by encouraging public-privatepartnerships and providing basic and technicaleducation. MDIs could lead the development of aconducive policy environment, which may facilitateprivate sector initiatives and support voluntary efforts.MDIs may consider financing pilot projects on qualitymanagement systems and publishing the results ofhealth and safety programs and of environmentalmanagement systems. MDIs should also encouragepartnerships between large and small enterprises.The Colombian government and local authorities havea fundamental role in most of the recommendedactions, since they were perceived as the most reliableinstitutions by the stakeholders interviewed. Publicauthorities should define standards, establish targets,enforce compliance and monitor activities for businessperformance embedded within the legal framework.Public institutions should promote informationcampaigns, conduct training programs and support pilotprojects in order to help SMEs reach compliance. Publicauthorities can also facilitate, monitor and legitimizecorporate accounting, governance and transparencystandards. Finally, ensuring transparency throughvoluntary programs may strengthen firms’ responsiblebehavior in regards to issues such as compliance, fairtrade, employment relations, taxation, bribery andcontractual conditions.Colombian business associations can also play animportant role through capacity building, raisingawareness and creating incentives. In particular,business associations should finance actions thatimprove compliance, develop responsible brands andlabels and finance training programs on CSRmanagement and planning for SMEs.The role of civil society in enabling an environmentfor CSR is frequently emphasized. For the purpose ofthis report, civil society includes academia, media,NGOs and the local communities. In Colombia,academia and NGOs are the most effective and activeactors within civil society. These two groups willlikely implement most of the proposed actions. NGOsand academia can act as the link between companiesand government, translate the terminology of socialdevelopment into a language comprehensible tobusiness and provide information on SME activitiesto the public (Petkoski and Nigel, 2003).Colombian civil society has supporting roles inpromoting environmental assessments, supporting anNGO engagement awareness campaign, promotingpilot projects and participating in innovative activitiessuch as, ethical behavior evaluation procedures andeducational programs. Civil society may take aprominent role in stakeholder engagement programsand networking with market players to develop amore conscious application of CSR in SMEs. A leadingrole can also be taken in rewarding corporateresponsibility in the marketplace and workplace.2 Economic and SocialFrameworkColombia is a country with 43 million inhabitants 50and a territory of 1.1 million km. 2 it has a GrossDomestic Product (GDP) of USD 82.4 billion and a percapita GDP of USD 1,890. 51 After several decades of anaverage growth rate of 5 percent, the Colombianeconomy lost some of its dynamism towards the end ofthe 1990s, and growth has remained moderate in thefirst few years of the twenty-first century (FTAA 2003).Agriculture accounts for 13 percent of GDP, while50 2002 projections based on the census of 1993.51 World Bank figures, 2001.Colombia65