IHEANYI NWACHUKWU & NGOZI UCHE
At a recent conference in Lagos, business leaders and other participants moved against a bill which aims to create a commission to oversee the implementation of CSR by businesses
These are trying times for businesses across the world. Many otherwise formidable corporate giants have crumbled like a pack of cards since the global economic meltdown set in. Not even the best of analysts know precisely how many headstones will be standing where some of the world’s most prominent corporate bodies currently sit by the time the crisis blows over.
Here in Nigeria the outlook is just as gloomy, if not more so. The meltdown met a prevailing difficult business terrain. Intractable power crisis, decaying basic infrastructure, rising cost of refined petroleum products, escalating crime, high interest rate, chaotic ports and multiple taxation are among numerous other factors constricting business growth in the country. And with the meltdown shockwaves, the business sector has been shaken to its foundation.
The crash of the Nigerian Stock Exchange and the Nigerian naira has altered the fortunes of many hitherto prosperous businesses, leaving many of them vulnerable. The Nigerian Stock Exchange All Share Index fell 40 percent this year, the world’s worst-performing equity index, according to Bloomberg data.
There is some genuine apprehension over the yet-to-be-seen effect of the crisis on all sectors of the economy, including banking, which has so far remained one of Nigeria’s best performing sectors. New York-based research, firm Eurasia Group says banks in Nigeria may have as much as $10 billion of toxic assets, equivalent to about half of their capital.
Recently, the Airline Operators of Nigeria (AON) raised alarm that many Nigerian airlines might not survive the next couple of years considering the gloomy situation of the domestic airline business. The majority of the airlines are indebted to banks and various aviation authorities including FAAN, NAMA, NCAA and Bi-Courtney Aviation Services. Passenger traffic is going south as people cut cost by opting for road transportation.
Read Also: The post-coronavirus global economy and international order (2)
Many businesses in other sectors face very grim prospects, which was why the Nigerian Guild of Editors at its 5th All Nigeria Editors Conference (ANEC) held in Kaduna recently called on the Federal Government to take proactive steps to ameliorate the impact of the global financial crisis on local businesses in the overall interest of the economy.
In the midst of all these, would it be a good time for the National Assembly to be thinking of forcing corporate bodies to implement social projects? Participants at a CSR roundtable in Lagos recently think the answer is a resounding No!
The roundtable with the theme, Understanding the Concept of CSR and the Implications of Legislating it held at Protea Hotel, Ikeja drew participants from all sectors of the economy. The breakfast roundtable featured key presentations from the promoter of the controversial CSR bill, Senator Uche Chukwumerije, the Dean of the Lagos Business School, Professor Juan Elegido, the sponsors of the meeting, Promasidor Nigeria and MTN Nigeria.
Chaired by former Nigerian Bar Association (NBA) President, Olisa Agbakoba (SAN), the discussions were kicked off by Senator Chukwumerije, who presented what he called a revised bill based on the feedback he got from the consultation he held with the business community in Lagos and the public hearing on the bill held in Abuja in January. The bill will create a commission to oversee the implementation of CSR by businesses. It will have power to punish defaulters.
He contended that the bill was meant to protect the interest of the society, because according to him, only 18 percent of the businesses operating in Nigeria implements any form of CSR. He argued that unless there was such a law as being proposed, the overwhelming businesses without any form of commitment to CSR would not change their ways.
Senator Chukwumerije further argued that the bill was not seeking to supplant government by compelling businesses to take over government’s traditional role, but that it was being presented in the interest of the section of the business community which had been faithfully discharging their responsibility to the communities.
Professor Elegido disagreed with Senator Chukwumerije that the bill would serve the interest of the society. If anything, the proposed law, he noted, was capable of hamstringing businesses from performing optimally, as it would saddle them with avoidable burden. Professor Elegido queried the clause in the bill that empowers the proposed CSR commission to suspend the operations of a company for 30 days for non-compliance with the CSR law. This, according to him, is a potentially dangerous clause that would not benefit the economy.
The Managing Director of Promasidor, Keith Richards, in his own presentation said the proposed bill would ultimately hurt the poor as many of the products and services priced within their reach might become unaffordable to them when companies begin to make adjustments to accommodate some of the social burden being imposed on them by the government.
We support CSR. We are committed to it. But this CSR bill is a wrong way to go, said Richards, who added that there are existing laws that can be refined and many government agencies doing what the proposed commission is expected to do. He stated that the proposed commission would be a waste of taxpayers’ funds.
The general manager, Corporate Communications, MTN, Funmi Omogbenigun who presented a formal submission earlier made to the Senate by MTN on the issue stressed that it is globally agreed that CSR is a voluntary initiative that emanates from companies which seek to positively impact their immediate sphere of influence beyond the demands of law.
She argued that legislating CSR eliminates the very essence of CSR being a voluntary socio-economic commitment to society, adding, the thrust of the bill implies that the Nigerian Constitution has failed.
She said the premise upon which the proposed CSR Commission is to operate leads to an assumption that Nigeria intends to manipulate the business community which has been responsible for wealth creation. She said this could send wrong signals to the international community, particularly would-be investors.
Corporate icon and former High Commissioner to the United Kingdom, Christopher Kolade, said even though the senator meant well, the bill would create more problems than it was meant to solve. He said government always made the mistake of creating a commission any time a problem arose, pointing out that creating a CSR commission as the bill seeks to do would merely create another avenue for some government officials to corruptly enrich themselves.
Speaker after speaker spoke against the bill, with many condemning the timing and asking the National Assembly to focus on devising creative solutions to the myriad of problems besetting the economy. Confronting the struggling entrepreneurs with one more impediment, many participants argue, would simply cause many of them to throw in the towel.
Business Day publisher, Frank Aigbogun, wrapped the discussion up with the story of an entrepreneur who recently decided to close his factory altogether, laying off his workforce, when he could no longer put up with all manner of frivolous taxes, levies and fines from federal, state and local governments. Government should work with, not against, business operators to pull through the hard times, Aigbogun advised, echoing the views of most of the participants.
