1. Social Accountability and Social Responsibility By Shikhar Jain Senior Counsellor CII

2. 2 Standards for Social Accountability and Responsibility Standards have been developed to assist organizations in being socially accountable and responsible, arising from the expectations of its stakeholders and society. The following standards will be introduced in this presentation:  Guidance on Social Responsibility (ISO 26000:2010)  International Standard for Social Accountability (SA 8000:2008)  Indian Standard for Organizational Accountability at the Workplace (IS 16001:2010)

3. Globalization

4. ISO 26000 – A new standard for a new world 4

5. 5 ISO 26000 connects the Great Global Agreements to the daily activities of organizations

6. Rising Influence & Power of the Private Sector Country/CorporationGDP/Sales ($ million) 1United States11,667,510.00 2Japan4,623,398.00 3Germany2,714,418.00 4United Kingdom2,140,898.00 5France2,002,582.00 7China1,649,329.00 9Canada979,764.20 10India691,876.30 20Turkey301,949.80 21Austria290,109.50 22Wal-Mart Stores258,681.00 23Indonesia257,641.50 24Saudi Arabia250,557.30 27Poland241,832.50 28Exxon Mobil213,199.00 29South Africa212,777.30 30Greece203,401.00 31General Motors195,645.20 32Finland186,597.00 35Ford Motor164,496.00 Country/CorporationGDP/Sales ($ million) 37Hong Kong, China163,004.70 40General Electric134,187.00 41Malaysia117,775.80 42Israel117,548.40 43ChevronTexaco112,937.00 49ConocoPhillips99,468.00 50Colombia97,383.93 51Pakistan96,114.84 52Citigroup94,713.00 53Chile94,104.94 54Intl. Business Machines89,131.00 57Egypt85,000.00 60Hewlett-Packard73,061.00 62Peru68,394.96 63Verizon Communications67,752.00 64Ukraine65,149.34 65Home Depot64,816.00 66Berkshire Hathaway63,859.00 67Altria Group60,704.00 69Bangladesh56,844.49

7. The SR concept building 7 Poverty Friedman and the concept of shareholder Adam Smith The concept of stakeholder Elkington (Triple Bottom Line) Sustainable Development Triple Bottom Line Social Responsibility

8. 8 MEO-CCP021-20080221-RGSS Adopting integrated Social Policies

9. $113 bn$7 bn$106 bn75% Stock Market Value Net Book Value Goodwill% $380 bn$41 bn$339 bn89% $199 bn$21 bn$178 bn90% $499 bn$23 bn$476 bn95% $104 bn $8 bn$96 bn92% $202 bn$31 bn$171 bn85% $60 bn$8 bn$52 bn87% $46 bn$19 bn$27 bn59% $35 bn$8 bn$28 bn78% $149 bn $72 bn $77 bn52% Source: Interbrand/Citibank league table, 2001 Evidence of the Importance of Goodwill

10. Some of the Social Pressures Facing Managers today

11. Definition ‘Social responsibility’ 11 Responsibility of an organization for the impacts of its decisions and activities on society and the environment, through transparent and ethical behaviour that contributes to sustainable development, including health and the welfare of society; takes into account the expectations of stakeholders; is in compliance with applicable law and consistent with international norms of behaviour; and is integrated throughout the organization and practiced in its relationships. NOTE 1Activities include products, services and processes NOTE 2Relationships refer to an organization’s activities within its sphere of influence

13. The 7 Principles of Social Responsibility –Accountability: an organization should be accountable for its impacts on society and the environment –Transparency: an organization should be transparent in its decisions and activities that impact on others –Ethical behaviour: an organization should behave ethically at all times

14. The 7 Principles of Social Responsibility –Stakeholder: an organization should respect and consider the interests of its stakeholders –Rule of law: an organization should respect the rule of law –International norms: an organization should respect relevant international norms where these norms are more favourable to sustainable development and the welfare of society –Human rights: an organization should recognize both the importance and the universality of human rights

15. 15 Stakeholder map Customers Partners Media Government Citizens NGO’s Consumers SuppliersWorkersEmployees Sector Association Banks / Insurance Shareholders Industry Organization Volunteers

16. 16 Value & supply chain Customers Partner s MediaGovernment Citizens NGO’s Consumers Supplier s Workers Employee s Sector Associatio n Banks / Insurance Shareholde rs Industry Organization Value chain Sub- Suppliers Raw material providers Waste services Supply chain

17. Social Responsibility Core Subjects 50 Labour practices Fair operating practices Consumer issues The environment Community involvement and development Human rights O r g a n i z a t i o n a l ORGANIZATION

18. SR Framework

19. Social Responsibility – from Top to Bottom

20. SOCIAL ACCOUNTABILITY

21. SA8000 covers the following areas of accountability:  Child Labor  Forced Labor  Workplace Safety & Health  Freedom of Association & Right to Collective Bargaining  Discrimination  Discipline  Working Hours  Remuneration

22. ILO Conventions # Forced labor (29, 105) # Wages (100, 131, 95, 63) # Child labor (138, 182) # Working Hours (1, 116 30, 63, 47) # Freedom Of Association # Health and Safety (155 (87, 98) 162) # Discrimination (111, 100, # Home workers (177) 35, 154) # Maternity Protection (183)

23. 23 Introduction SA8000 is a global social accountability standard for decent working conditions, developed and overseen by Social Accountability International (SAI). SA8000 is based on the UN Universal Declaration of the Human Rights, Convention on the Rights of the Child and various International Labour Organisations (ILO) conventions.

24. Social Accountability Requirements 1. Child Labor Criteria 1.1 The company shall not engage in or support the use of child labour as defined above.

25. Criteria 1.4 The company shall not expose children or young workers to situations-in or outside of the workplace- that are hazardous or unsafe to their physical and mental health and development.

26. 2. Forced Labour Criteria 2.1 The company shall not engage in or support the use of forced or compulsory labor as defined in ILO Convention 29, nor shall personnel be required to pay ‘deposits’ or lodge identification papers with the company upon commencing employment

27. 3. Health & Safety Criteria 3.1 The company, shall provide a safe and healthy working environment and shall take effective steps to prevent potential accidents and injury to workers’ health arising out of, associated with, or occurring in the course of work, by minimizing, so far as is reasonably practicable, the causes of hazards inherent in the working environment and bearing in mind the prevailing knowledge of the industry and of any specific hazards,

28. 4. Freedom of Association & Right to Collective Bargaining Criteria 4.1 All personnel shall have the right to form, join, and organize trade unions of their choice and to bargain collectively on their behalf with the company. The company shall respect this right, and shall effectively inform personnel that they are free to join an organization of their choosing and that their doing so will not result in any negative consequences to them, or retaliation, from the company. The company shall not in any way interfere with the establishment, functioning or administration of such workers’ organizations or collective bargaining.

29. 5. Discrimination Criteria 5.1 The company shall not engage in or support discrimination in hiring, remuneration, access to training, promotion, termination or retirement based on race, caste, national or social origin, religion, disability, gender, sexual orientation, union membership, political opinions, age or any other condition that could give rise to discrimination.

30. 6. Disciplinary Practices Criteria 6.1 The company shall treat all personnel with dignity and respect. The company shall not engage in or support the use of corporal punishment, mental or physical coercion, and verbal abuse of personnel. No harsh or inhumane treatment is allowed.

31. 7. Working Hours Criteria 7.1 The company shall comply with applicable laws and industry standards on working hours and public holidays. The normal workweek, not including overtime, shall be defined by law but shall not exceed 48 hours.

32. 8. Remuneration Criteria 8.1 The company shall respect the right of personnel to a living wage and ensure that wages paid for a standard working week shall always meet at least legal or industry minimum standards and shall be sufficient to meet basic needs of personnel and to provide some discretionary income.

33. 33 Social Responsibility and Social Accountability in India India has the largest number of workers employed by facilities certified to SA 8000 in the world: 364,231 workers in 576 SA8000 certified facilities The Ministry of Textiles, GoI, encourages textile manufacturers to be more accountable and responsible to society by encouraging them to adopt the following standards: ISO 14001, OHSAS 18001 and SA 8000. The Textile Committee of the Ministry of Textiles provides technical assistance to manufacturers for certification to these standards.

34. 34 Indian Standard for Organizational Accountability at the Workplace (IS 16001) The standard details out principles and requirements of each core element that have to be adhered to by the organization to be in compliance with the standard The core elements of the standard are:  Freedom of Association  Health & Safety at the Workplace  Harassment, Abuse and Inhumane Treatment  Wages and Benefits  Child Labour  Community Engagement  Discrimination  Employment Freely Chosen  Employment Relationship  Employees’ Welfare Measures

35. 35 Social Responsibility and Social Accountability in India The Indian Standard for Organizational Accountability at the Workplace (IS 16001), described earlier is an initiative taken by the Bureau of Indian Standards to promote Social Accountability of Indian Business. It provides for a mechanism to be in place taken into account the local context to ensure the promotion of such practices are taken up by Indian companies. Need to popularize IS 16001 vis-à-vis SA 8000

36. 36 Questions and Discussions THANKS