Increasing

the Impact of CSR through PPP

Fernando Gerard O. Espero III, EnP.

Last January 24, I received an email from ASEAN CSR Network informing me that I have
been accepted in the ASEAN CSR Programme 2018. I, along with 24 other fellows from
ASEAN member countries shall be trained on the essentials of corporate social
responsibility through interactive and blended learning, i.e. combination of theories and
concepts, and their practical applications. Seven months after the commencement this
year’s Fellowship Programme, I have learned much about CSR through interaction from
practitioners from the private sector, as well as representatives from the government
and international development agencies who were gracious enough to share their
knowledge on the subject matter, and other related topics such as responsible business,
sustainable development, anti – corruption, and human rights.

Corporate Social Responsibility is defined as a way in which enterprises give
consideration to the impact of their operations on society and affirm their principles and
values both in their own internal methods and processes and in their interaction with
other actors. It is a voluntary, enterprise-driven initiative and refers to activities that are
considered to exceed compliance with the law (ASEAN Guidelines for CSR on Labor,
2017). During the course of the Fellowship Programme, I have learned that more than
the programs, projects, and activities intended for specific communities and individuals,
CSR is mantra and a process through which companies earn their social license. It is
undertaken not because companies want to look good, but rather because they have to
in order to continue their operations. As one CEO of a company that we visited puts it,
“we are not doing CSR because it is a noble deed but rather because the sustainability of
our business rely on it”. This statement should not be construed as the CEO not being
sincere with his company’s CSR. Rather, it is an acceptance of the contribution of CSR to
business development and sustainability.

In the Philippines, the more common CSR programs include building of classrooms and
daycare centers, provision of medical and educational supplies and equipment, and
conduct of medical missions and other outreach activities. While the beneficiary
communities are often those where the businesses operate, the scope of initiatives also
extends to other areas, usually those that have been hit by disasters such as typhoons
and earthquakes.

To say that CSR has helped communities, especially those that have been hit by
calamities, is an understatement. Having been part of the UN – Habitat team that
provided technical support to Tacloban City and two other local government units that
have been badly hit by Super Typhoon Haiyan in 2013, I am a living witness to the
valuable contribution of the CSR initiatives during the humanitarian response all the way
to recovery and rehabilitation. Notwithstanding the gaps in coordination between the
government and the business sector, as well as reports about companies who
capitalized on the opportunity to expand their business through the calamity,
the impact of CSR in these areas is largely positive. The shelter, livelihood, education,
and health programs and projects that were implemented through CSR has enabled tens
of thousands of individuals and households to get back on their feet and rebuild their
lives. I cannot imagine how the affected local governments and communities could have
managed to recover from Haiyan without CSR.

While CSR has made significant contributions to community and local development,
and perhaps national development to some degree, much can still be done to widen and
sustain its impact. One way is through Public – Private Partnership (PPP). There is no
common definition of PPP. The World Bank defines it as “a long – term contract
between a private party and a government entity, for providing a public asset or service,
in which the private party bears significant risk and management responsibility,
and remuneration is linked to performance”. The said definition applies to the
engagement between the government and private sector for infrastructure projects and
services such as solid waste management and utilities, where the private sector gets a
substantial return (monetary) on its investment. However, other collaborations between
the government and the private sector can also be considered as PPP. The participation
of corporations in local development planning and management is one example.

The Republic Act 7160 or the Local Government Code of 1991 bestowed powers to
provinces, cities, municipalities, and barangays as both a political subdivision of the
national government and as a corporate entity representing the inhabitants of its
territory (Section 15). As such, they can enter into contracts with other local
governments, national agencies, and the private sector. The Code also mandated these
local governments to prepare their respective local development plans. Provinces, cities,
and municipalities are required to prepare their comprehensive land use plans (CLUPs)
and comprehensive development plans (CDPs). The terms used for the provincial plans
are different but they are practically similar (land use and development plans).
For barangays, they are mandated to prepare their baranggay development plan (BDP).

The quality of the local development plans, and the level of implementation vary from
one province/city/municipality/barangay to another. Usually, wealthy local
governments can implement a good number of programs, projects, and activities
identified in their development plans. The ones with low income end up having a wish
list of development programs and projects. This is where CSR can play a huge role in
local development. By linking their CSR initiatives with the local development plans of
partner provinces, cities, municipalities, and barangays, corporations can help design
and implement much – needed programs and projects on health, education,
environment, infrastructure, and even governance. This is not to say that corporations
will simply download CSR funds to partner local governments and communities. This will
not work. Rather, CSR in the context of local PPP means corporations shall work with
local governments in the formulation and implementation of local development plans.
It can also include monitoring and evaluation of big – ticket programs and projects.
This can be a great equalizer, especially since it is unlikely that the proposal to allocate
the internal revenue allotment (IRA) of the wealthy LGUs to the poor ones will happen
anytime soon. Corporations can opt to work with deserving local governments under
this arrangement. It would be ideal if partner local governments will be selected on the
bases of extent of need (e.g. poverty level) and quality of governance, instead of
outright business opportunities and return of investments.

Undertaking CSR through PPP benefits both the local government and the private
sector. On the part of the local governments, resources (human and financial) from
private sector would help realize much – needed programs and projects. It will also
provide them with a better understanding on how corporations think and behave. This
is a key lesson on securing private sector investments. On the part of the private sector,
linking CSR with local development plans will limit the possibility of duplication of
initiatives, fill out gaps, and increase overall effectiveness and efficiency of the use of
resources. It goes without saying that partnering with the local governments, especially
if done through clustering, will enable corporations to see business opportunities
(e.g. bulk water supply, toll roads, commercial banks, and new markets for products and
services).

While this suggestion is made based on my experience working with the government
and private sector in the Philippines, I believe that this can also be applied in other
ASEAN countries. As an example, the Smart City initiative of Ho Chi Mihn in Vietnam can
be fast – tracked through this mechanism. There is no barrier great enough to prevent
collaboration between the local government and corporations across South East Asia.
The ASEAN CSR Network can facilitate knowledge sharing on CSR and PPP among these
parties. All it takes is one corporation and one local government to give it a shot.