China’s Corporate Social Responsibility with National Characteristics: Coherence and Dissonance with the

Global Business and Human Rights Project中国特色的企业社会责任：与全球商业-人权发展事业的同与异

Larry Catá BackerProfessor of Law and International Affairs,

The Pennsylvania State University

LCB911@GMAIL.COM

Prepared by :

Shan Gao, S.J.D. Candidate, The Pennsylvania State University Dickinson School of Law

企业社会责任China CSR

Roadmap

I. CSR in a global context

II. CSR in the Chinese context

III. Operation of CSR in China

IV. Conclusion

I. Though all states may share common objectives, generally understood, that path to those objectives may not be entirely compatible with the operational premises underlying CSR and business and human rights projects emerging from developed states. That difference has produced tension between the global business and human rights projects and developing states, especially China.

I. CSR in a global context A changing world of CSR movement • Globalization has produced a triple track set of CSR governance sources in national, international

and societal norms.

• Emergence of consensus on normative content of CSR grounded in stakeholder maximizing human rights centered objectives crystalized in the UN Guiding Principles for Business and Human Rights.

• Although western operation of CSR, individual oriented approach of governance, might incompatible with a state oriented governance approach, like China, both may share common objectives.

International Norms, Foreign Laws

Different approaches, consequences

West CSR

Stakeholder not just shareholder—individual rights oriented

China CSR

Stakeholder and state interest embodied within party—state duty oriented principleHuman

Rights *

Ethic

Legal

Economic

Civil

Political

Ind

ivid

ual

Economic

Harmonious

Party

/ state

Communism *

Socialist Modernization

Scientific Development/ Legal Normative System

Economic

II. CSR under Chinese context

• Party is the key to the fundamental ideology of Chinese founding system, which provides guiding principles to frame the operation of CSR theory in China.

• Precisely, this has been done by the theory of Harmonious Society through the Five Coordination; Corporations shall:

1. focus on the production of wealthy to promote people’s material conditions Socialist modernization as the CCP line).

2. comply with all regulatory legal mechanisms (consumer, environmental, labor protection laws) and their contractual obligations, etc.

3. comply with all social obligations by improving the conditions of their employee and communities in which they operate.

4. participate in substantial social programs to coordinate national policies. For example, go west policy; acquisition choices

Corporations CSR

social

culture

economic

III. Operation of CSR in China • The Chinese characteristics of CSR is premised on a different approach toward

the protection of individual rights. Human rights sourced in and through the state and not within individuals. Fighting against injustice is legitimatized through state not individual.

• CSR is the proxy of executing state objectives rather than expression of obligations that potentially burden these objectives.– It further helps China to project global influence on the discourse of corporate regulatory

scheme. Such as State-Owned Assets Supervision and Administration Commission of the State Council (SASAC) Guidelines

Individual State Individual

Chinese CSR formula One Main Thread:

– scientific outlook on development for socialist modernization objective;

Three Alignments:– State shall dominate the discourse of constructing CSR system;– International standard cannot be adopt in China without adjustment for China’s political and

socio-economic objectives. – CSR is a secondary objective that subordinate to the framework of socialist modernization.

Four Harmonies: – Employee, employer – Among enterprises – Business and society – Humanity and nature

SASAC CSR Guidelines关于中央企业履行社会责任的指导意见

• The premise:

– An application of CCP scientific development line to improve positive image of Chinese SOE and its oversea operations.

• Possible way of application:

– Company culture,

– Business planning,

– Internal management/ control system.

Social welfare project

Employee rights

Safety

Tech innovation

Environment preservation

Quality control

Sustainable profits

Legal/ Honest operation

The Substance

Enforcement• Western model

– grounded on state based judicial and non-judicial remedies

– Little room for corporate mitigation or dispute resolution mechanisms

• Chinese model

– Judicial remedies may not work best;

– administrative remedies may be better suited to local conditions

– Issue of coherence in policies between home country and outbound operations

Example of Japan customer-oriented CSR

• Interpretation of CSR notion sharing similar elements with China;

– Philanthropy, Customer satisfaction and Environment;

• Similar difficulties of CSR operation in developing countries;

– Biased measurement of labor rights among different operating locations;

• Determination and willingness of improving the integration of CSR concept within corporate behavior.

Consequences

• CSR is grounded in administrative role of the state

• Can’t ignore the structures and authority of the CCP and its political line

• CSR must be read consistently with the vanguard objectives of the CCP

• Most successfully transposed if treated as an administrative obligation of the state aligned with the CCP’s political line

• Functionally CSR objectives are in line with those of Chinese socialist modernization with respect to economic, social and cultural rights

– But not with political and civil rights.

Conclusion

• Without study of Chinese characteristics of CSR, we cannot complete understand the internalization of CSR in China. To that end, we cannot develop a constructive discussion on global human rights.

• Shaped by the social, institutional and political culture of China, CSR is understood as Institutional obligation to public in general, rather than individual rights.

• Thus, Substance of CSR in China is premised on the notion of socialist modernization; Operation of CSR is premised on the State obligation.