1. Russian CSR and participatory rights
Britcyna Ekaterina, PhD candidate, 2017
Russian CSR and participatory rights

2. Introduction
“Our biggest challenge this century is to take an idea that seems abstract—sustainable development—and turn it into a reality for all the world’s peoples.”
Kofi Annan, former UN Secretary General

3. Cases
Ronald Macdonald House (USA)
Lukoil “ Red tippy” (Russia)
Ikea “Soft toys”
There are various economic systems in the
world. Russia operates within a mixed free-market economy characterized by competition and a limited role
of government in economic affairs. Economic-policy makers face considerable challenges within a capitalist system,
including unemployment, inflation, poverty, and environmental impact. Globalization increases the complexity of these
challenges significantly and has exerted strong and transformative effects on workers and entrepreneurs in the economy.

4. Discussion part
Should the corporations have a conscience?
What is CSR? (Create a definition of corporate social responsibility)
What are the benefits of corporate social responsibility? (summarize
the benefits of CSR and evidence to support each benefit)
What are concerns about corporate social responsibility? (summarize
the concerns about CSR and evidence to support each
Criticism).
Is social responsibility in the best interest of society?
Corporations effort to be socially responsible

5. CSR definition by Carroll
Carroll (1991) organized different corporate social responsibilities as a four-layered pyramid model and called it the pyramid of responsibilities. The four different responsibilities - economical, legal, ethical and philanthropic are the layers of the pyramid.
According to Carroll and Buchholtz (2003), the pyramid of responsibilities should be seen as a whole and the different parts should not be separated. To be profitable as a company, minimize cost and maximize sales or make sensible strategic decisions are at the base of economic responsibilities. Economic performance is required by the society. The second layer is the legal responsibilities and it is also required by society. In these responsibilities companies are expected to obey the law, because the law mirrors show the society regards as accepted or unaccepted. The difference of the ethical responsibilities from the first two responsibilities is that the ethical responsibilities are not required but expected by society. To assert ethical leadership, avoid questionable practices or operate above the minimum standard of the law could be examples for the ethical responsibilities. The philanthropic responsibilities stand at the top of the pyramid and to be a good corporate citizen and improve the quality of life for the society is the aim of these responsibilities. Corporate contributions, to support the community by providing programs or engagement in volunteerism can be example for the philanthropic responsibilities. To some extent the philanthropic responsibilities are desired and expected by the society.
A stakeholder model is represented by the Pyramid of CSR where the different stakeholders are affected by the different responsibilities. If the business is not profitable Economic responsibilities will directly affect employees and owners. Legal responsibilities are vital to the owners, but it is also necessary in the relation with employees and consumer stakeholders. Ethical responsibilities impact on all stakeholders, but most frequently they engage consumers and employees. The major effect of the Philanthropic responsibilities are on the community, but there is also impact on the employees since the company’s philanthropic performance influences the employees’ morale.
Pinkston and Carroll (1994) carried out a survey among top managers in 591 U.S. subsidiaries of multinational chemical companies with headquarters in England, Germany, Sweden, Japan, U.S., Switzerland and France. CSR Quest (2006) emphasized that the findings from the survey confirmed Carroll’s pyramid model, but Sweden and Germany are shown as exceptions, where legal responsibilities were ranked the highest priority followed by economic, ethical and philanthropic aspects.

6. Other definitions of CSR
The European Commission defines it as a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis (2006).
The United Kingdom defines CSR as how business takes account of its economic, social and environmental impacts in the way it operates — maximizing the benefits and minimizing the downsides.
The United Nations (2007) defines CSR as the overall contribution of business to sustainable development.”

7. Other definitions of CSR
The World Business Council for Sustainable Development (WBCSD) provides that CSR is the commitment of business to contribute to sustainable economic development, working with employees, their families, the local community and society at large to improve their quality of life (WBCSD, 2002).
Amnesty International advocates for mandatory “global standards on business and human rights that will apply across borders to all companies (which) will provide governments with clear, common guidelines on how to address corporate behavior on human rights” (Khan, 2007).
CSR may be viewed as an effort to integrate economic considerations with environmental and social needs, as well as corporate efforts to balance the interests of diverse stakeholders.

8. Benefits of CSR practices
Triple bottom line ("People, planet and profit“) - People" refers to fair labour practices, the community and region where the business operates. "Planet" refers to sustainable environmental practices. Profit is the economic value created by the organization after deducting the cost of all inputs, including the cost of the capital  (by John Elkington1994)
Brand differentiation build customer loyalty based on distinctive ethical values.
Reduced scrutiny and/or risk management Corporations are keen to avoid interference in their business through taxation and/or regulations and risks.

9. Benefits of CSR practices
The ability to have positive impact in the community hence support public value outcomes Keeping social responsibility front of mind encourages businesses to act ethically and to consider the social and environmental impacts of their business. In doing so, organizations can avoid or mitigate detrimental impacts of their business on the community. 
Access to funding opportunities
Enhancing your influence in the industry
Enhanced relationship with stakeholders

10. Concerns about CSR
The Social Responsibility of Business is to Increase its Profits
by Milton FriedmanThe New York Times Magazine, September 13, by The New York Times Company.
CSR allows businesses to project positive image by doing very little (Mullerat (2009) and Aras and Crowther (2010)
CSR is only an effective public relations tool (Catka et al (2004)
Corporations need to have a conscience. Consumers are starting to care about corporate social
responsibility in making purchasing decisions, and this influences the bottom line.
• Corporations don't necessarily need to have a conscience because they should care first and foremost about
profits and stockholders.
• Corporations have a conscience because they generally practice good citizenship in the United States and
abroad by creating better working conditions, protecting the environment, and positively influencing local
and global communities.
• Corporations don't necessarily need to have a conscience; corporate social responsibility (CSR) is often
seen as code for more government regulation and oversight of the corporate marketplace, which, in the
long run, benefits no one.
Greenwashing?

11. Main concepts of CSR CSR (Carroll, 1979)
Firms have responsibilities to societies including economic, legal, ethical and discretionary (or philanthropic).
See also DeGeorge (1999) on the “Myth of the Amoral Firm”
Social Contract (Donaldson, 1982; Donaldson and Dunfee, 1999) – There is a tacit social contract between the firm and society; the contract bestows certain rights in exchange for certain responsibilities.
Stakeholder Theory (Freeman, 1984) – A stakeholder is “any group or individual who can affect or is affected by the achievement of an organisation’s purpose.” Argues that it is in the company’s strategic interest to respect the interests of all its stakeholders.

12. Who are the stakeholder groups?
Stakeholder is anyone who can affect or be affected by the success of the firm.
Group № 2
A Dutch multinational seafood producer, involved in fishing in the North Sea and producing and packaging fish in Morocco and selling it in the central European market.
Group № 1 A Swedish forestry firm, logging trees in Swedish Lapland, has the pulp- paper factory in the south of Sweden and sells its products to several European markets.

13. Who are the stakeholder
groups? .

14. What is the difference between legal responsibility and corporate social responsibility?

15. Key drivers of CSR . Around the world Developing Countries
NGO Activism
Responsible investment
Litigation
Gov & IGO initiatives
Developing Countries
Foreign customers
Domestic consumers
FDI
Government & IGO

16. Procedures for Cooperation with Stakeholders
1.Prepare a list of stakeholders 2.Understand their needs and expectations 3.Schedule a process of establishing a dialogue and cooperation4.Initiate dialogue 5.Maintain dialogue, cooperate and use a tool of feedback
Methods of Stakeholder Engagement
Online discussion forum
Working Group
Individual meetings
Informal meetings
Organization of joint projects

17. From theory to practice.

18. Komi case .

19. Indigenous communities (e. g
Indigenous communities (e.g. Sámi, Nenets) for whom the North is a homeland rather than a resource frontier, are engaged, or are attempting to engage, in dialogue with one another and with government and industry and seek to express their views about what oil exploration and extraction could mean for both present and future generations in terms of socio-economic impacts, community sustainability, wildlife, and environmental health (Nuttall 2010).

20. Komi Case: WHO?
Interested parties: Lukoil- Komi, oil company Komi-Izhemtsi, local community Save the Pechora committee and Izhvatas, NGOs Mass Media Banks Researchers

21. Komi Case: Where?

22. Komi Case: Background
The main oil-production enterprises in the Republic are OOO LUKOIL-Komi (hereinafter Lukoil-Komi), OAO NK Rosneft, ZAO Kolvaneft, OOO Enisei, ZAO Pechoraneftegaz, ZAO Nam Oil and ZAO Neftus

23. Komi Case: Background
Majority of the people living in the Republic of Komi are ethnic Russians and only about 24 % of the inhabitants are indigenous Komis.

24. Komi people – not officially indigenous peoples
Komi Case: Background
Komi people – not officially indigenous peoples
In 1926
Komi (92,2 %)
Russians
In 2010
Komi (23,7 %)
Russians
Komi-izhemsti is a distinct group of Komi people
Izma-river-region
Still practicing reindeer herding (Komi  Nenets Region)

25. Conflicting definitions: Indigenous peoples under international law and Russian law
A group, aspiring to recognition as an indigenous small-numbered peoples must meet all of the four criteria:
It must reside within a specific place (the tradi­tional settlement territories of its ancestors),
2. It must live in a specific way (“traditional way of life”),
3. It must fall within a specific size range (Less than 50,000),
4. It must self-identify as an ethnic group
UN working definition of indigenous peoples established by the Martínez- Cobo study on discrimination against indigenous peoples:
• Self-identification;
• Historic continuity with regard to settlement with­in a specific place;
• Cultural distinctiveness.

26. Oil esp. in the Northern parts Lukoil biggest in Komi
Komi Case: Background
Oil esp. in the Northern parts
Lukoil biggest in Komi
Headquarters of oil companies in Moscow: tax money goes to Moscow
Old pipelines
E.g. Lukoil inherited old pipelines where had been the world’s biggest oil leak in the 1990s

27. Usinsk 1994 Kolva River Oil Spill
When: September 8th, Where: Usinsk, Komi Republic, Russian Federation Casualties: n/a Amount spilled: 2 million barrels (84 million gallons)
A badly corroded pipeline around the northern Russian town of Usinsk had been leaking for eight months, contained by a dike erected around the leak site. Severe weather conditions caused this dam to collapse, resulting in the millions of gallons of accumulated oil spilling across the fragile Siberian tundra and into the Kolva River, a tributary of the Pechora River that flows into the Barents Sea. 23 species of flora and fauna were affected by the disaster which polluted 186 km² of grass and marshlands.

28. Conflicts now https://www.yout ube.com/watch?v =a6rTM1a5ST4
Greenpeace about Komi
ube.com/watch?v =a6rTM1a5ST4
he oil spill near the town of Usinsk in Northern Russia (Komi republic) is one of the most serious environmental disasters of the decade. The pipeline just south of the Arctic Circle had been leaking since February 1994 but the oil was contained within a dike built for this purpose. On October 1st, the dike collapsed because of cold and snow. Following the collapse, around 102,000 tones of oil began to pour onto the Siberian tundra. The spill reached the Kolva River, a tributary of the Pechora River, which falls into the Barents Sea. Life within the rivers as well as the fragile environment of the Artic have been endangered by this oil spill. Experts estimate the spill to be eight times greater than the Exxon Valdez oil spill.

29. Main Recent Conflict
The conflict between komi-izhemci and the Company started in February, Local people of the village Krasnobor near Izhma uncovered several oil rigs which had been placed at the edge of the village.
•Inadequate conduct of a “clean up” operation of an oil spill from a gathering oil pipeline covering 0.6 ha in March 2014 by means of igniting the oil

30. People in Komi are not in general against oil drilling

31. Izhma

32. Usinsk

33. CSR in Russia Stages Forms of realization Until 1917 Charity
Soviet times
The government implements social programs
Post soviet times
Emerging role of the business in social expenditures
Modern times
Establishment and development of social partnership
Этап 1. Дореволюционный период (XIII в. – начало ХХ в.). Формы проявления социальной ответственности – благотворительность, меценатство. Мысль об ответственности богатства, в основе которой лежала идея общественного служения, была издавна распространена в отечественной предпринимательской среде. Принадлежность к российской предпринимательской элите того времени определялась не только экономическим весом и размерами состояний той или иной династии, но и ее общественным престижем и авторитетом, чего невозможно было достичь без активной благотворительной и меценатской деятельности.
Этап 2. Советский период (начало ХХ в. – 70-е гг. ХХ в.). Формы проявления социальной ответственности – реализация государством социальных программ, направленных на обеспечение рабочих и служащих набором социальных льгот и выплат. Все советские хозяйствующие субъекты были «гиперсоциально ответственными». Они отвечали за ЖКХ и больницы, за школы и тепло-энергоснабжение, за культуру и художественную самодеятельность, за детские сады и футбольные команды, шефствовали над армией и селом. Они разрабатывали перспективные планы социально-экономического развития предприятия и региона. Существовали системы показателей социально-экономического развития коллективов, методики их расчета и оценки.
Этап 3. Переходный период (конец 80-х – 90-е гг. ХХ в.). Государство оказалось неспособным оградить население от снижения уровня жизни. Усиливается значение альтернативных государственных источников финансирования социальной сферы, в основном, средств предприятий. Период стабилизации характеризуется ростом среднего класса в России. Формируются социальные программы российских корпораций. Системный кризис 1998 года изменяет внешнюю среду деятельности корпораций. Наблюдается устойчивая тенденция к сокращению деятельности корпораций по проблемам социальной ответственности.
Этап 4. Современный период (начало ХХI в. – по настоящее время). В начале XXI века причинами дальнейшего развития социальной ответственности бизнеса стал расчет экономического эффекта социальных программ. Социальная ответственность бизнеса выходит на государственный уровень. Этот этап характеризуется возрастающей конкуренцией и экспансией предприятий с иностранным капиталом с более эффективными, в сравнении с отечественными предприятиями, социальными программами.

34. Modern Russian CSR Russian CSR is at its initial phase
Still orientated on the closest stakeholders (government, shareholders and employees of the company), because the main driving forces of implementation of CSR practices are the companies, created during privatization or the government
Insufficient development of civil society, which can influence on the company’s decisions

35. Specific Russian trends of CSR perception
1. Historical and geographical trends (large territory; isolated localities from the center; capital concentration in some regions);
2. Mentality of the public (high social expectations within low activity of the citizens, labor law traditions)
3. Economical and political trends(high level of income inequality, different and large scale of problems in regions: poverty, environment pollutions, diseases)

36. Lukoil http://www. lukoil

37. Voluntary initiatives
Company joined the Social Charter of Russian Business, which relies on UN Global Compact guidelines
- the Company joined UN Global Compact
the Company joined to the campaign “Green office”, organized by Greenpeace

38. Lukoil today
Lukoil operates in
39 countries
63 regions in Russia

39. Lukoil’s inititatives of support
Sport support
Development of monotowns
Charity
Nature conservation activities
Support of vulnerable groups
Preservation of ethnical cultural identity
Industrial safety and labour protection
Realization of soical programms for the employees and their families
Social responsible participation of the Company
Социальный кодекс зафиксировал основные направления социально ответственного участия Компании в жизни Общества.
technological development 39

40. - To increase capitalization of the company
CSR
Two goals:
- To increase capitalization of the company
To pay taxes to RF

41. CSR
“For us it is important not just to give money, cover some gaps or buy-off. For us also it’s important not to substitute the state in the issues of charity.
With a wish we could install plastic windows to all schools. For us is important to solve social problem, that it will be good for definite social group.”

42. Social policy of a company
Lukoil´s policy
Social policy of a company
Social projects
Agreements
Programs
Regional level
Municipal level
Social Code of Lukoil stipulates the social investments management system.
Social investments are financing of programs and projects that create a lasting effect and have positive impact on the life quality in the Russian regions.
Social investments are implemented within the social partnership agreements, federal corporate programs and social and cultural projects contest, corporate voluntary work, socially important campaigns.
Charity

43. Participation

44. Other forms of participation
Public expertise
Citizens, NGOs and municipal bodies could organize public expertise.
The object of public expertise could be all objects of state expertise, except objects, information about which constitutes a state, commercial or another protected by law secret.

45. Other forms of participation
Judicial protection method
Individuals, legal entities, prosecutor are entitled to claim compensation to the court for damage to health and property.
For example, if a anyone discovers an oil spill he/she can apply to the court, because a damage was caused to environment. The process of application could be quite difficult and long, a person should have special knowledge to deal with legal issues or to apply to authorized bodies

46. Judicial protection method
LUKoil-Komi was fined for nine oil spills from in Russia’s northern republic of Komi, according to documents available on the republic’s arbitration court website.
The spills covered an area estimated between and 21 hectares of land in the province.
The fine was the biggest of its kind in Greenpeace’s experience, and apparently the biggest in the post-Soviet history of Russia’s oil industry, a spokeswoman for Greenpeace Russia said.
© RIA NOVOSTI.
How oil spills endanger sea life
The previous record was made in 2012, when several companies were slapped by a Russian court with a combined fine of 503 million rubles ($15.1 million) over a tanker that spilled 1,200 tons of fuel oil in the Black Sea during a storm in 2007.

47. Administrative protection method
Citizens have the right to address personally or to send individual and collective to state and local government bodies or officials.
An inspection can be initiated
According to the Federal Law NO 59-FZ OF MAY 5, 2006, On procedures for examining appeals and addresses from citizens of the Russian Federation

48. Direct participation
Local referendum
Local meetings

49. Agreement with NGO
In April, 2015 JSC Lukoil-Komi concluded the agreement for a period of a year with movement of the Izhma Komi «Izvatas". Environmental problems were defined as one of the document’s top priorities. "Before "LUKOIL-Komi" will decide to begin operations, plans and projects, the principles of operation will be discussed with us- the chairman of the Izvatas mentioned.

50. References
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Banarjee., S.B. (2007) Corporate Social Responsibility: the good, the bad and the ugly Edward Elgar Publishing, Cheltenham, UK
Cartka, P., Balzarova, M.A., Bamber, C.J. & Sharp, J.M. (2004). How can SME’s effectively implement the CSR agenda? A UK case study perspective. Corporate Social Responsibility and Environmental management. 11:
Cilliberti, F., Pontradolof, P., & Scozzi, B (2008). Investigating Corporate Social Responsibility in supply chains: and SME perspective. Journal of Cleaner production. 16:
Fernando, A.C. (2011) Business Environment, Pearson, USA
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Heath., R.L. (2010) The SAGE Handbook of Public Relations, John Wiley & Sons, New Jersey, USA
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Mullerat, R. (2009) International Corporate Social Responsibility, Kluwer Law International, Netherlands
Perrini., F., Pogutz., S. & Tencani., A. (2006). Developing Corporate Social Responsibility: a European Perspective, Edward Elgar Publishing, Cheltenham, UK
Johnson., G., Scholes., K. & Whittington., R. (2008) Exploring Corporate Strategy, 8th Edition, FT Prentice Hall, Essex
Schwartz, MS, 2011, Corporate Social Responsibility: An Ethical Approach, Broadview Press, USA
Tolhurst, N, Pohl, M, Matten, D & Visser, W, 2010, “The A to Z of Corporate Social Responsibility”, Wiley Publications, New Jersey, USA

51. Kiitos!