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A Repeort On Corporate Social Responsibility of Pharmaceutical Comapnies in Bangladesh
A Repeort On Corporate Social Responsibility of Pharmaceutical Comapnies in Bangladesh
A Repeort On Corporate Social Responsibility of Pharmaceutical Comapnies in Bangladesh
Objectives 26
Scope 27
Methodology 28
Part Four: Findings of the Study
Sample Enterprises 30
Reporting Practices 36
Evaluation 37
Future Directions 40
References 42
Part one:
Introduction
A Brief Description of CSRi
The term "CSR" came in to common use in the early 1970s, after many multinational
corporations formed, although it was seldom abbreviated. The term stakeholder, meaning
those on whom an organization's activities have an impact, was used to describe
corporate owners beyond shareholders as a result of an influential book by R Freeman in
1984.
A Brief Description of CSR Practices by
Bangladeshi Companiesii
In Bangladesh many organization has started CSR practices. Given the broad definition
of CSR there are many areas of business operations that are affected by it. The most often
mentioned elements of CSR are:
In the banking sector, 3 SCBs (75%), one DFI (20%) and 29 PCBs (97%) have reported
their CSR initiatives as supplements to usual annual financial reports in accordance to the
directive of Bangladesh Bank. In case of FCBs, only audited financial statements are
prepared for the host country, and their annual reports are published from their parent
country. As a result, disseminating their CSR activities as supplements to usual annual
financial report do not apply. It was also observed that:
1 SCB, 1 DFI and 13 PCBs have reported the CSR activities separately as a
chapter in the annual report to make it available in the public domain for
perusal by stakeholders.
1 SCB and 11 PCBs have provided details in those supplements. They have
reported the action programs along with amount of investment made in
each program.
2 SCBs, one DFI and 4 PCBs have included a future plan in the annual
financial reports.
None of the banks have issued separate reports of their CSR programs and activities in
comprehensive standard formats such as the GRI. Additional information had to be asked
for in compiling this review, over and above the information provided in annual reports
of banks. For convenience of all involved, banks and financial institutions will be well
advised to take steps for more elaborate reporting in comprehensive standard formats iv.
In the Pharmaceutical sector, out of the 26 companies only a few have reported their
social responsibility activities in public. There is no standard set for reporting social
responsibility activities in annual report of Pharmaceutical companies.
It concludes that the pattern of such reporting is far away from expectation; still, there is
a positive indication that the volume and quality of reporting is increasing.
Part Two:
Statement of the
Problem
Emphasis on Business involvement in
CSR Activitiesv
Despite the gap that exists between the voluntary participation in CSR activities and the
weakness in enforcement of legal requirements, it has been observed in the FGDs that
many Bangladeshi enterprises are involved in CSR activities. Some of them are forced
into it due to consumer pressure (from foreign countries) but a large majority of them
have adopted CSR as an integral part of their social entity either to promote their name in
the domestic market or as a pure philanthropic gesture.
Some have argued that given the weakness in our enforcement ability, payment of taxes,
repayment of loans, payment of public utility bills, etc., can be considered an integral part
of CSR activities because they are voluntary in nature. Companies could have avoided
paying them because of either the weak enforcement characteristics or the existence of
high level of corruption in the society.
In addition, CSR activities include voluntary donations at the community levels during
floods, draughts, cyclones, etc., or helping weaker section of the society by patronizing
social activities or institutions. Activities like supporting cholera research centre,
hospitals, schools, etc. falls in the category of social responsibilities of the companies.
In terms of CSR activities related to human rights and labor rights, FGDs noted that
companies are engaged in activities like providing education for the children of their
workers, scholarships, medical facilities, and other workers’ welfare scheme are primarily
voluntary in nature in Bangladesh. Similarly, healthy environment within the factory
premises is also part of CSR in Bangladesh. These are legally required but are never
enforced in Bangladesh. Precautionary activities to safeguard health of the workers and
also customers are sometimes CSR activities in Bangladesh.
In the environmental front, companies following the 3Rs (reduce, recycle and reuse)
during waste disposals are engaged in CSR activities and it is still voluntary for a
majority of companies in Bangladesh. Similarly, companies who have established
treatment plants within their premises are doing so voluntarily and hence could be
considered as a CSR activity.
1. Financial Institution
2. Pharmaceuticals
Social Responsibilities
• Production of innovative new medicines.
• Publication of health care journals to update the professional knowledge of the
doctors.
• Supporting medical research centers.
• Awareness campaign on health and health care.
• Supporting hospitals.
• Helping the families of the workers in education and health care.
Environmental responsibilities
• Regular maintenance of machines by the qualified personnel.
• Strict consideration for health and hygiene factors.
• Precautionary arrangements for the factory premises.
• ISO certification.
• Product standards.
Economic responsibilities
• Paying taxes regularly.
• Repaying loans.
• Regularity in payment of dividends.
• Ensuring affordable prices for essential drugs.
• Attractive compensation package for workers (beyond minimum wage
requirements).
• Investing in improving the quality of workers.
• Transport facilities for workers especially for women.
Social responsibilities
• Ensuring educational facilities for the workers.
• Enhancing the quality of the life of the people by helping families in need.
• Helping the children of the workers:
• Establishing educational and training institutes.
Environmental responsibilities
• Establishing effluent treatment plants.
• ISO certificates.
• Product quality or standards.
Economic responsibilities
• Paying taxes, repaying loans, paying dividends, etc, regularly.
• Helping workers by providing attractive compensation packages.
4. Home Accessories
Social responsibilities
• Responsibility towards the workers.
• Ensuring educational facilities for the workers.
• Ensuring accesses by all employees to the medical facilities.
• Providing educational, healthcare, and other facilities for the children of the
workers.
• Scholarship programs.
• Compliance to Factories Act, Labor Law, etc.
Environmental responsibility:
• Proactive measures for maintaining pollution free environment.
• Introduction of the paper bags to replace polythene bags.
• Encouragement in the use of natural dyes.
• Campaigns for use of chemical free fertilizers.
• Avoidance of the use the harmful artificial color.
• Establishment of effluent treatment plants.
Economic responsibility:
• Paying taxes, repaying loans, paying dividends, etc, regularly.
• Providing interest free loans to workers.
Theoretical Discussion on CSR Practicesvi
CSR concepts and practices in Bangladesh have a long history of philanthropic activities
from the time immemorial. These philanthropic activities included donations to different
charitable organizations, poor people and religious institutions. Till now, most of the
businesses in Bangladesh are family owned and first generation businesses. They are
involved in the community development work in the form of charity without having any
definite policy regarding the expenses or any concrete motive regarding financial gains in
many instances. Moreover, most of the SMEs fall under the informal sector having low
management structure and resources to address the social and environmental issues.
These limitations drive the top management of local companies to think only about the
profit maximization rather than doing business considering the triple bottom line: profit,
planet and people (CSR definition of Lotus Holdings). The discussions on CSR practices
in Bangladesh in its modern global terms, are relatively new, but not so for the concept
itself. Because, being a part of the global market, it is difficult to ignore CSR standard
specifically in the export sector. In general, it is true that in Bangladesh, the status of
labor rights practices, environmental management and transparency in corporate
governance are not satisfactory, largely due to poor enforcement of existing laws and
inadequate pressure from civil society and interest groups like Consumer Forums.
Globally, as CSR practices are gradually being integrated into international business
practices and hence is becoming one of the determining factors for market accesses, it is
becoming equally instrumental for local acceptability. A focus on CSR in Bangladesh
would be useful, not only for improving corporate governance, labor rights, work place
safety, fair treatment of workers, community development and environment management,
but also for industrialization and ensuring global market access. Since, CSR entails
working with stakeholders it is important to work from within and diagnose the
stakeholders; concerns so that CSR is truly embedded in the companies. By now, many
CSR dimensions are practiced in Bangladesh. The SMEs largely depend upon export.
The US and EU buyers set guidelines to RMG industry to ensure the standards. Some of
the exporters found difficulty in convincing the US/EU buyers to have positive attitude
towards Bangladesh due to inadequate CSR practices,
Overseas workers are mostly exploited by recruiting agencies whereas these rural and
mostly illiterate people have to sell all their belongings becoming paupers of lend money
at very high interest. Owing to cheating by the recruiters and unlawful behavior by the
overseas employers, many of them get compelled to come back as beggars, some after
long confinement in overseas jails. Hardly any remedy is available from the law
enforcing agencies.
Many industrial units run with half-century old machinery producing fatal air, soil and
water pollutions. More modern factories also don’t care to install Effluent Treatment
Plants.
Starting from FMCGs, vegetables, fruits and all other conveyable goods, adulteration,
abnormal ripening at times with poisonous elements, keeping fish fresh with applying
deadly Formalin and all other malpractice is rampant and carefree. Good Governance and
efficient law enforcing agencies can only solve these plights.
Why is Reporting Necessary in Relation to
CSR Practices
It may also be defined as “an approach to reporting a firm’s activities which stresses the
need for the identification of socially relevant behavior, the determination of those to
whom the company is accountable for its social performance and the development of
appropriate measures and reporting techniquesviii.
The standards which are guidelines for the listed companies in Bangladesh with regard to
social audit are given below:
The study attempted to capture the current status of the corporate responsibility practices
in Bangladesh. The exercise of quantification of corporate responsibility status is first of
its kind in Bangladesh which provides the study the status of a benchmark study. We
have only studied the current status of Pharmaceutical industry of Bangladesh and for
that we have selected five Pharmaceutical companies operating in Bangladesh.
Methodology
To prepare this paper, main emphasize has been given on the secondary data. As there
was no primary data available for the study, so we have to rely on the secondary data
available for the study. The following are the sources of data collection:
Secondary data:
Eskayef Bangladesh Limited, the world-class healthcare solution provider, is one of the
leading and fastest growing pharmaceutical company of Bangladesh, which is engaged in
the manufacture and marketing of a wide range of therapeutic drugs, bulk pellets and
animal health and nutrition products with annual sales surpassing 60 million US dollars.
Eskayef is growing more global since 2005 and exporting bulk pellets and finished
products in Asia, Africa, and Central America and also in the process of exporting in the
European countries. The company is also tied up with the world leader in eye care
solution Allergan Inc. Ireland.
We are one of the few pharmaceutical companies researching both medicines and
vaccines for the World Health Organization’s three priority diseases – HIV/AIDS,
tuberculosis and malaria, and are very proud to have developed some of the leading
global medicines in these fields.
PPL has an aim to lead the market of Branded Generics in Bangladesh with a portfolio of
vital molecules while at the same time, progressing for the next wave of novel products.
From the inception in 1958, it has today burgeoned into one of the top line conglomerates
in Bangladesh. Square Pharmaceuticals Ltd is holding the strong leadership position in
the pharmaceutical industry of Bangladesh since 1985 and is now on its way to becoming
a high performance global player.
Club Excel: Club Excel provides information services for patients to learn about
asthma and increase disease awareness and exchange information on healthcare
rights to improve advocacy agenda's by raising the experience and voice of
patients to support more effective asthma management and dialogue in policy
forums and physicians' chambers. They support better asthma management
through advocacy, meetings, patient counselling and newsletter services.
During 2009: We gave BDT 184,500 through an unrestricted grant to support
disease awareness and advocacy support for patients living with asthma.
During 2008: We provided 300000 BDT to support patient advocacy activities, a
news letter, regular patient meetings and patient counseling services. An additional
200000 BDT was given to strengthen patient advocacy and patient summit activities.
During 2007: We provided a project grant of US$ 14,000 to support disease
awareness of asthma.
Popular Pharmaceutical Ltdxxvii:
Sports:
Social Events:
Medical Community:
Reporting Practices
Conclusion
Summary of the Findings
The concept of Corporate Social Responsibility has been passing through a transitional
phase. While in the past it was basically thought to be corporate philanthropy, now, as the
economies of the world are becoming integrated, the business case of corporate practice
is gaining momentum. Corporate responsibility status has been becoming the prerequisite
for sourcing goods and services from the developing and the least developed countries.
The policy makers and businessmen of the least developed countries such as Bangladesh
have been put into a very disadvantageous position since they are never in a condition to
ensure a corporate standard set by the global business leaders on the basis of their
business status and objectives.
The interventions expected from the Government may be making, monitoring and
enforcing of laws related to major corporate responsibility issues such as environment
protection, health and safety, labour rights while majority of such issues, could be solved
at company level.
Some organizations in Bangladesh have started practicing corporate social responsibility
and some have not. The banks in Bangladesh are ahead in this regard. Other industry
such as Pharmaceutical Company needs to follow the benchmark created by the banks of
Bangladesh and the government of Bangladesh needs to make standard regarding
corporate social responsibility.
Future Directions
As both the civil society group and workers hold negative opinions about the
corporate responsibility, companies have to seriously consider how to restore their
image.
The variability of perceptions indicates specific areas where to intervene and set
priorities. All the controversial issues including the overtime issue should be taken
note of and settled through a multi-stakeholder initiative.
Environmental concerns should receive greater attention by the companies.
Gender aspects should be more carefully addressed and monitored for their
implementation.
Corporate-community relations are found to be strained. The corporate owners and
executives should consult and communicate with the local communities on a
regular basis.
Health and safety issues deserve greater attention given that failure in these areas
impact negatively on the productivity and endanger human life.
More consultation should take place between the employers and the employees so
that a team spirit is restored in the corporates.
References
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ii. http://www.junoconsulting.com.au/articles/Making_Sense_of_Corporate_Social_Responsibility_Part_II.pdf
iii. http://www.ewubd.edu/ewu/downloadfile/crt/abstract2009/12.pdf
iv. http://www.bangladesh-bank.org/pub/annual/csr/csr0809.pdf?q=icc-t20-world-cup
v. http://www.bei-bd.org/downloadreports/publicationdownload/60/download
vi. http://www.thefinancialexpress-bd.com/more.php?news_id=88734
vii. R.H. Gray, D.L.Owen & K.T.Maunders, Corporate Social Reporting: Accounting and accountability (He
Hempsteameld: Prentice Hall, 1987) p. IX.
viii. D. Crowther, Social and Environmental Accounting (London: Financial Times Prentice Hall, 2000), p. 20.
ix. http://www.haccpalliance.org/sub/index.html
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xiii. http://www.iso14000-iso14001-environmental-management.com/iso14011.htm
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xv. http://www.iso14000-iso14001-environmental-management.com/iso-19011.htm
xvi. http://www.ohsas-18001-occupational-health-and-safety.com/
xvii. http://csrbangladesh.org/SA%208000.php
xviii. http://www.iso.org/iso/iso_catalogue/management_standards/social_responsibility.htm
xix. http://www.beximco-pharma.com/about-us.html
xx. http://www.skfbd.com/
xxi. http://www.gsk.com/worldwide/bd.htm
xxii. http://www.popular-pharma.com/
xxiii. http://www.squarepharma.com.bd/AboutUs.html
xxiv. http://www.beximco-pharma.com/about-us/corporate-social-responsibility.html
xxv. http://www.skfbd.com/index.php?page=46&pid=21
xxvi.http://www.gsk.com/responsibility/patient-groups/international-bangladesh.htm
xxvii. http://www.popular-pharma.com/ar_support.htm
xxviii. http://www.squarepharma.com.bd/SocialContribution.html