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Almost half a century ago, Milton Friedman noted that “Corporate Social Responsibility,” CSR, was a subversive concept designed to facilitate open-ended political interference in business.
The Harper government’s recent announcement of an “enhanced” CSR strategy for mining — “Doing Business the Canadian Way: A Strategy to Advance CSR in Canada’s Extractive Sector Abroad” — would appear to confirm the great economist’s misgivings. In fact, the Harper strategy is designed to reduce irresponsible interference, not facilitate it.
The core belief of CSR advocates is that companies are greedy exploiters who don’t “do good” without arm twisting. That applies particularly to investment in poor countries. Business is indeed critical to solving problems of poverty and disease, but primarily by creating employment, sourcing locally, building communities and producing commodities and products that make peoples’ lives better.
What makes poor countries poor is incompetent governments and erratic policies, particularly when it comes to foreign investors. The Harper government has addressed that issue directly via the 24 Foreign Investment Promotion and Protection Agreements (FIPPAs) it has signed since 2006. The CSR weapon is another, if related, problem.
Businesses, to whom reputation is so critical, are ever eager to be seen as law-abiding and community-minded. Canadian mining companies operating overseas promote community projects in education, literacy, health care and training. None of this is contrary to Professor Friedman’s case – which has been comprehensively misrepresented. He didn’t recommend flinty-eyed commitment to the bottom line at the expense of workers, suppliers and communities.
What he said was that community activities or charitable contributions might well make sense to generate valuable goodwill, but that these actions are not then “social responsibility,” they are part of the normal profit-seeking function of the corporation.
Since Professor Friedman first wrote on CSR, the concept has been joined by Sustainable Development, the triple bottom line, social licence and any number of other meddlesome notions designed to bring corporations under extra-legal control.
For the rest of this article, click here: http://business.financialpost.com/2015/01/05/peter-foster-conservatives-de-fang-canadas-csr-policy/