Speeches & Articles

Remarks by Consul General Beth A. Payne
At the American Chamber of Commerce
Seminar on Corporate Social Responsibility
December 15, 2008

December 15, 2008

Gulshan Sachdev, chairman of the American Chamber of Commerce
Friends and colleagues

Thank you for inviting me to join you in this valuable discussion about Corporate Social Responsibility.  I am very pleased that the American Chamber of Commerce for the Eastern region of India is focusing on this subject, which I believe is a very important requirement for industrialization and continued economic growth in this region.
 
While "CSR" has become a catch phrase these days, the concept of corporations being socially responsible is not new.   Over 100 years ago, American industrialists such as Andrew Carnegie - the father of America's steel industry - understood that helping to create a healthy and educated society is an important component of building successful businesses.  But what is corporate social responsibility?  Is it simply complying with statutory obligations and regulations?  Or, is it something more. 
 
I would argue that following the law is the civic duty of all individuals and corporations.  Respect for the rule of law is essential for societies to progress and prosper.  Without the rule of law, corruption, lack of predictability and mistrust of agreements will discourage long-term investments which are critical for industrialization.  Corporations who do not respect the law may benefit in the short-term, but they will inevitable lose in the long run as their societies and economies stagnate due to the lack of economic growth, or their business collapse because they can no longer compete effectively with others who have earned the trust and respect of their communities.
 
But I see social responsibility as something more than simply following one's civic duty.  I was raised in a Mennonite family and one of the tenants of Mennonite values is the belief that all individuals have a responsibility to ensure the well-being of the society in which we live.  Growing up in Pennsylvania, I saw first hand that when everyone in a community shares responsibility for the well-being of society, the society becomes stronger, healthier and more prosperous.  That meant that we cared for elderly, the infirm and others who could not care for themselves.  It meant that we volunteered our time to ensure that everyone in our community was educated, that no one went hungry and that even the poorest in our community had a roof over his head.
 
While we paid taxes to the government so it could also provide assistance to our communities, we never relinquished our responsibility to hold the government accountable in its exercise of its duties and we worked to fill in the gaps that the government could not fill.
 
Corporate social responsibility suggests a stakeholder approach that instructs business to consider everyone’s needs, management, labor, suppliers and community members, in pursuit of the bottom line.  Yes, firms exist to maximize profits; however, profit maximization does not occur within a vacuum.  Rather, businesses operate in a social, political and regulatory environment.  A co-operative stakeholder approach will avoid the company the costs of long-term litigation or political and labor unrest.
 
Companies in Eastern India are already successfully practicing the type of corporate social responsibility I am advocating today.  I was very impressed when I visited a self-help program supported by Pepsico's FritoLay to learn that every manager at FritoLay is expected to spend time in the farming communities that supply potatoes to their plant here in West Bengal.  FritoLay employees have forged strong relationships with the local communities and they work with their neighbors to improve healthcare, empower women and increase educational opportunities.  The result has been a more prosperous farming community and a more profitable factory for Pepisco - everyone in this society has come out a winner!
 
Corporate social responsibility is not the purview of altruistic saints.  Rather, it is the maxim of companies around the world who have realized that the pursuit of profits requires a more comprehensive stakeholder approach.

As I close, I would once again like to thank the American Chamber of Commerce for focusing attention on this important and to commend the companies here today who are taking seriously and fulfilling their responsibility to their societies. Thank you.