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MONTHLY NEWS ITEM

Oct 2000

Singapore: Corporate, prostate Social and Responsible but no Corporate Social Responsibility

Singapore presents an apparent paradox to analysts. It is hard to imagine a country where companies have more importance in the public mind. Share trading is a national hobby, if not obsession, and in a country where politics takes a back seat the fortunes of leading Singapore companies are the most important elements of the national news. Government considers its premier duty to promote Singapore Inc. Similarly, group endeavour and citizenship are everywhere promoted and the sense of national unity is palpable. Individuals are urged to volunteer for social responsibility and the importance of the family is seen as a second pillar of the same sense of personal commitment to the maintenance and development of Singapore society. Yet, in the midst of this, there is a complete absence of discussion about corporate social responsibility as a subject. Search the net under the two together and you will find not a single article or subject reference bringing the two together. Why?

What is the resolution of this apparent paradox? Is it simply that in common with value based accounting, or EVA, CSR is a concept which began in the West, in the USA in particular, and is only gradually spreading worldwide? If this were true then it is to be expected that eventually, and perhaps relatively rapidly, CSR analysis, company reporting such as AA1000 and triple bottom line accounting will spread to Singaporean companies. But perhaps there are more fundamental reasons why CSR has been slow to take off in Singapore.

First, at the corporate level, the trouble is that Singapore Inc is mainly about profits and corporate success. While several academic studies exist of Western companies demonstrating that CSR and increased profits go very well together, this is not yet recognised - let alone quantified - in Singapore. Indeed, it remains unproven and there might even be concerns about the proper responsibilities of companies in this area. So, for example, when in August 2000 the Singapore government announced a $S1bn (about $580m) investment into life sciences, via an R&D fund managed by the Economic Development Board, there was no mention of the potential public good that this investment might bring. The Industry Minister said only: "Our universities and research institutes have made good progress in some aspects of the life sciences. We also have excellent healthcare facilities and doctors. Upon this strong foundation, we hope to build a world-class hub for the life sciences". Many similar examples could be quoted.

Second, of course, Singapore, as a city-state, is a special case in Asia. There is no agricultural sector, manufacturing is mainly hi-tech, laws - such as racial discrimination law in multi-cultural society - are strongly enforced and there is precious little unemployment. Many of the CSR issues facing Western companies such as environmental contamination and employment issues simply do not apply. A recent study (Tsang, 1998) of Singapore's banking, food and beverage industries from 1986-93 showed that of 33 companies, 16 of them had no references to social responsibility whatever in their accounts. Of the other 17, disclosure was mainly on human resources and some on community involvement. Since 1993 the level of disclosure, as measured by the amount of information presented in annual reports, has remained constant. Value-neutrality may be hard to define, but it is easy to recognise an attempt to apply it, and Singapore's corporate sector shows it to fine advantage. The new economy of Singapore, in common with the new economy everywhere to be fair, is equally unfamiliar with the language of CSR. At the Asian Internet Fair of September 2000 there was not a single mention of any CSR benefit for any of the B2C, let alone B2B, products and services on offer.

Third, while in the USA and Western Europe government has pulled back from a number of social responsibilities, this has not yet happened in Singapore. Companies do not need to take up the slack. Even the Asian recession failed to hit Singapore with devastating effect, and in the first half of 2000 the economy grew by a massive 8.5%. From that point of view the parallel ought to be with Hong Kong or the UAE rather than with the USA or Western Europe. Moreover, with such substantial wealth in government hands, invested on behalf of Singapore citizens, it need not. Government, for example, takes the lead in respect of education. Singapore schools are widely recognised by their own citizens to have improved dramatically in the last decade; but not satisfied with that, the government has recently allocated no less than $S5bn (about $2.9bn, or $725 for each citizen - a very considerable amount) to a Lifelong Learning Fund 'to enable Singaporeans to acquire knowledge and skills from pre-school to retirement'.

At the individual level the apparent paradox continues. On the one hand, individuals within companies in Singapore pride themselves on their civic duties and their contribution to society. On the other, companies do not insist that individuals working for them should participate in company CSR schemes such as community work. In what remains very much an Asian society, the reason for this should perhaps be sought in the principle that there is nothing particular in being an employee of a specific company that should make one responsible: that is a civic duty applicable to everyone, whether or not you work and whoever you work for. So, for example, the Economic Development Board recently conferred some foreign investors with the Business Friends of Singapore Award. The criteria for this Award was purely economic and no mention was made of any social contributions that the individuals made. Slightly more encouragingly, when the 'Entrepreneur of the Year' award was made by the Rotary/Association of SMEs there were six criteria, all approximately weighted evenly: innovation, growth and development, regionalisation, contribution to community and/or environment, and profitability. But family did not go without a mention even on this occasion. "I wouldn't have been here without $S5000 from my grandmother, and I'm sure she would be proud that her money has been put to good use", the winner, Leslie Loh of System Access, told his audience. He was helped by his family and the implication is that he owes the next generation similar support.

If CSR is to come to Singapore, therefore, it looks like it must come at a higher level. If Singapore companies are limited in what they can do for the population of Singapore itself, that does not apply to international responsibilities. If Singaporeans start to view themselves as global citizens, or at least see their companies as global players, then measurement of their contributions on the global stage will become relevant. At that point and perhaps only then CSR will have a larger role to play in Singapore.

Sources:

Straits Times, various, September 2000; Singapore Investment News, August 2000; Singapore Investment News, September 2000; Eric W K Tsang: "A longitudinal study of corporate social responsibility in Singapore: the case of the banking, food and beverages and hotel industries", Accounting, Auditing and Accountability Journal, 11:5 1998, pp624-635

[contributed by Julian Roche, MHCInternational Ltd.]

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