CSR

Where are multinational corporations in war on Covid-19?

There is need for legislation to govern corporate social responsibility

In Summary

• CSR is premised on the logic that corporates have a social responsibility to support communities where they accrue their massive benefits.

• On the contrary, what we see in Kenya is an entrenchment of paternalism, with the major players continuing to hoodwink Kenyans that this responsibility is a favour.

Members of the Hindu community at the Uasin Gishu county offices in Eldoret where they donated water tanks and sanitiser to support war against spread of the coronavirus.
HINDU Members of the Hindu community at the Uasin Gishu county offices in Eldoret where they donated water tanks and sanitiser to support war against spread of the coronavirus.
Image: MATHEWS NDANYI

Whereas elected leaders, the religious community, the media and other institutions continue to offer support in the war on Covid-19,  corporates, save for few, have not been as active.

A large percentage of our national wealth is domesticated within the multinational corporations. 

In Kenya, MNCs are established in almost all the 47 counties and are engaged in large scale enterprises ranging from agriculture, commerce, banking, finance, insurance, mining, tourism to the hotel industry, among others. 

The main goal of MNCs is to capture the local markets and establish a monopoly for the purposes of profiteering and extraction of profits. These enterprises are driven by a number of factors in as far as mobility of capital is concerned. There are factors that influence the behaviour of MNCs in the pursuit of profit returns and capturing of local markets.

The labour factor ranks high, especially in developing countries where labour is relatively cheap and the maximisation of profits is almost guaranteed. Secondly, MNCs seek to create a monopoly in the means of production – a true manifestation of capitalism.

Thirdly, MNCs seek to establish a mutual collaboration with the political elite to pave way for favourable policies for their enterprises to thrive. Equally, MNCs seek to diversify their production to enjoy the benefits of multiplier effects of investment, which maximises their returns on investment.

Additionally, they are engaged in value addition in enhancing their products and services because the higher the value of products, the better the returns on investment.

Finally, MNCs, especially in developing countries, enjoy access to cheap raw materials which increases their profits

However, with all these benefits, there is always the moral question, should MNCs engage in corporate social responsibility, especially during crises such as the one we face?

I am here not talking about mere tokenism or publicity stunts of the kind that we are witnessing. I spent close to 15 years in the corporate world before I joined Parliament and, therefore, I know what goes on.

CSR is premised on the logic that corporates have a social responsibility to support communities where they accrue their massive benefits. On the contrary, what we see in Kenya is an entrenchment of paternalism, with the major players continuing to hoodwink Kenyans that this responsibility is a favour.

Globally, MNCs and business moguls are actively involved in mobilisation of resources towards combating Covid-19.

According to the Wall Street Journal, small businesses’ confidence has plummeted as a result of Covid-19. Large corporations are stepping in to support SMEs during this difficult time.

Some of the biggest US technology firms have also stepped up. Amazon, for instance, pledged to donate $5 million to local businesses based near its Seattle headquarters that will likely lose out on sales now that its staff are working from home.

Google, on the other hand, is pledging $1 million to organisations in Mountain View, California, impacted heavily by the pandemic.

Facebook pledged to donate $20 million to support coronavirus relief efforts, while Apple is committing $15 million.

Billionaire Mark Cuban has been reimbursing employees who purchase lunch and coffee from local restaurants. Additionally, Jack Ma, the billionaire founder of Chinese e-commerce giant Alibaba, through his foundation, donated 1.1 million testing kits, six million masks and 60,000 protective suits and face shields to Africa.

In Nigeria, Aliko Dangote, one of Africa’s wealthiest men, has donated the equivalent of more than Sh50 million through the Aliko Dangote Foundation. South African Johan Rupert and Nicky Oppenheimer donated Sh11.4 billion to the solidarity fund to assist small scale businesses and their employees during this Covid-19 pandemic.

Here in Kenya, Narendra Raval Guru was the first Kenyan entrepreneur to support the emergency fund by donating Sh100 million worth of oxygen. Few others have followed suit.

The question, then, is, why are multinational corporations operating in Kenya slow in taking up their CSR in contributing to the fight against Covid-19?

When this crisis is over, we will have learnt a number of valuable lessons. Perhaps, it’s time to start considering the need for legislation to govern corporate social responsibility and to introduce a sense of accountability in the way businesses relate with the host populations.

The writer is the MP for Ugunja and chairs the Public Accounts Committee in the National Assembly. He is also the ODM Secretary for Political Affairs. The views expressed here are personal.