Posts Tagged 'CSR'

Qatalum and Labor Rights.

By: Magnus Gravem

April 12th 2010 Qatalum aluminum plant opened in Qatar. This is the world’s biggest aluminum plant and a 50/50 joint venture between the Qatari company Qatar Petroleum and the Norwegian company Hydro. 5.7 billion USD has been invested in this project, and over 56.000 laborers from 86 different countries have been directly involved in the construction of this plant.

The grand opening of this plant was a major happening, and the guest list included royals, ministers and other VIP guests from Norway, Qatar and around the world including Qatar’s Amir Hamad bin Khalifa al-Thani and Norwegian Crown Prince Haakon.[1] Both the official Qatar and the official Norway were present to celebrate this event.

There are certainly many possible benefits for both Qataris and Norwegians with the creation of this joint venture. However, it also should raise some questions of how a Norwegian company should act in a country with a poor history in the field of labor rights.

The situation of the expatriates working in Qatar is not what is considered appropriate in Norway or most other Western countries. Hydro’s CEO and President, Svein Richard Brandsvæg indicated that Hydro was not fully satisfied with the situation of the labor force that built this plant. Thus the situation of the laborers building Qatalum cannot have been within Hydro’s standards of labor rights. According to Norwegian media, Norwegian minister of industry and trade, Trond Giske, had discussions with Qatari political leaders with the aim of improving the situation of the expatriates in the country.

Hence, the situation of expatriates in Qatar, including the expatriates at Qatalum, is not considered acceptable by Norwegian standards. Despite this, the Norwegian company chooses to do business in this country with what seems to be fully supported by Norwegian authorities. Since labor rights is one of the cornerstones of the ethical considerations of the Norwegian government for Norwegian companies,[2] this would indicate that instead of supporting this collaboration, Norwegian authorities could, or should, have been a lot more critical. It has also been surprisingly quiet from the press in this matter, even though the coverage of the opening was extensive.

On the other side, however, it could also be discussed how the best way to actually change the situation of the labor force in Qatar really is. It could certainly be argued that doing business in a country with a labor force without any political powers or rights could be unethical. However, the approach it would seem that Norwegian authorities, and Hydro, have taken in this particular case is a more diplomatic approach: Change through dialogue and collaboration. It could easily be argued that this is a more efficient way to change this situation, and to create a better situation for the expatriates in Qatar. Hydro has an extensive description of how they try to ensure acceptable working conditions in Qatalum on their homepage.[3] These efforts include competitive salary, free housing, health and social services for the employees and their families.

Since this project is high profile and a major investment for Hydro, it will be extremely interesting to see how the Norwegian company will work for continuously improving the situation of the expatriates working for them in the future. It will also be interesting to see if Norwegian authorities will increase the pressure on Qatari authorities to ensure the very same thing.


[1] www.hydro.com

[2] in Report to the Storting No. 10 2008-2009

[3] www.hydro.com

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Corporate Social Responsibility: Saudi Arabia and International Standards

By: Magnus Gravem

The Global Competitiveness Forum to be held in Riyadh January 24th – 26th 2010, can be argued to be one of many signs indicating that corporate social responsibility (CSR) is gaining increased importance in Saudi Arabia. This annual forum hosts many international guest speakers, and also the King Khalid Responsible Competitiveness Award (KKRCA). This award is a co-operation between a governmental organization, Saudi Arabian General Investment Agency (SAGIA), and two non- governmental organizations, national King Khalid Foundation and the global AccountAbility.

Together, these three different organizations have taken initiative for the Saudi Arabian Responsible Competitiveness Index (SARCI), in which the best companies in different categories are awarded the King Khalid Award mentioned above. SARCI is a program meant to support and assist companies in the Kingdom access new areas of value creation and in this way contribute to the national goal of making the economy of Saudi Arabia one of the top- ten in the world. To reach this goal, one of the key tasks for Saudi Arabian companies is to contribute to the development of human and social capital in the country, and in this way enhance the competitiveness of the Kingdom.

SARCI was first started in mid- 2008, and the first KKRCA was awarded in January 2009. 40 companies participated in the SARCI the first year, and the winners of the KKRCA were National Commercial Bank, Zamil Industrial and Al-Fanar. This year 65 companies are participating, and this years winner will probably have to be even more social responsible than the winners of last year. The initiative it self, and the growing numbers of participating companies, could both indicate that CSR is growing in importance in the Kingdom.

The cooperation between these organizations, two Saudi Arabian and one international, raises some interesting questions about how international standards of CSR (UN Global Compact, OECD Guidelines for Multinational Enterprises and soon- to- be- issued the ISO 26000 to mention a few) will affect the view of CSR in Saudi Arabia.

It could seem as many Saudi Arabian companies see their social responsibility limited firstly to the local community they are operating, and secondly to the national level. I would argue that this affect most of the CSR efforts in the Kingdom. This make the cooperation between these three organizations interesting, especially with the international AccountAbility in mind: Will this contribute to a understanding of social responsibility in Saudi Arabia that also becomes more focused on the regional and global levels? Will AccountAbility, as an global organization, try to affect Saudi Arabian companies to take more global social responsibility?

It could also be argued that another major difference between international and Saudi Arabian standards of CSR, are the core values. The international standards tends to emphasize human rights, labor rights, the environment and anti- corruption as their most important areas of focus, while this do not seem to be as important for Saudi Arabian companies. As of my understanding, these values are not seen as important as other social issues in the Kingdom, and as the SARCI indicates, the development of human and social capital seem more important than it is in the international standards.

What will then happen when international organizations with a focus on CSR are involving them selves in the Kingdom? How will this affect the view of CSR in Saudi Arabia?

Will these international organizations try to affect Saudi Arabian organizations and companies to become more in compliance with international standards? I would argue that this is the most likely outcome of this cooperation, but this raises another question: How will Saudi Arabian actors react to this influence? Will they embrace these new values, and immediately set aside the more “Saudi Arabian” values of CSR? Will they feel that these are ethnocentric values, and that these values might be functional in Western countries, but not work as well in the Kingdom? Or will this be gradually incorporated into the Saudi Arabian understanding of CSR? I would believe that international standards of CSR will become more important in Saudi Arabia with time.

Finally, the last question this cooperation also raises is the total opposite of the others. Instead of asking what the international community of CSR has to offer Saudi Arabia, we could ask what Saudi Arabia can contribute to the international community in the field of CSR. Could the system of CSR in the Kingdom work as a model of social responsibility for other countries? I would definitely argue that there are values in the Saudi Arabian understanding of CSR that, if incorporated by other countries, could make a major positive impact to societies all over the world.  Among these values are the importance of the society as a major value in it self, and a tradition of giving not for getting good publicity or any other benefits, but for making a difference for someone who needs it. Willingness to spread knowledge and expertise is also among important values of Saudi Arabian CSR that I will argue could be exported from the Kingdom with positive outcomes.

To conclude this blog, CSR is increasing in importance in the Kingdom, and have especially done so the last couple of years. The King Khalid Responsible Competitiveness Award handed out next week is one out of many signs of this. Still, the understanding of CSR in the Kingdom and the different international standards of CSR differ in many ways, and especially it seems as the core values are different. I argue that this should be a two- way- street, and that CSR- practices in Saudi Arabia have both a lot to learn from international standards, but also have a lot to contribute with to these standards. I believe that there is a graduate change in the field of CSR going on in the Kingdom these days, and that this will contribute to make the Saudi Arabian society better. Then again, I believe Saudi Arabian companies have important values and experience in the field of CSR that could contribute to make societies outside the Kingdom better as well. The Global Competitiveness Forum in Riyadh next week might be an arena to start off this two- way communication, and 2010 can become the year where this communication begun.


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