University of Amsterdam
23rd of June 2017
Philanthropy in South Asia
And its relation to public investment needs
By Gijs de Haan
First reader: dr. Luc Fransen Second reader: dr. Philip Schleifer
MSc thesis Transnational Politics of Sustainability MSc Political Science: Political Economy
E-mail: gijs.dehaan@live.nl Student number: 10422501
Table of contents
Abbreviations p. 3
Introduction p. 4
Theoretical framework p. 7
Gap in the literature p. 7
Carroll’s pyramid of CSR p. 8
CSR pyramid for developing countries p. 9
The role of MNE foundations p. 10
Twelve pillars of competitiveness p. 11
Expectations p. 13
Method p. 14
Operationalization p. 14
Sample and case selection p. 17
Methods of data collection p. 18
Validity and reliability concerns p. 19
Theoretical and societal relevance p. 20
Background chapter – country profiles p. 21
A short history of South Asia p. 21
The recent economic development of South Asia p. 22
Bangladesh p. 23
Pakistan p. 25
Sri Lanka p. 27
India p. 28
Public investment in South Asia p. 30
Results – MNE CSR documentation p. 32
PGO membership p. 32
Disclosure of information p. 33
Health…. p. 33
… And primary education p. 35
Higher education…. p. 36
… And training p. 37
Frontrunners and black sheep p. 38
The extensiveness of CSR programs of MNEs p. 39
Results – MNE foundation activities p. 42
Focus areas p. 42
Strategy and funding procedures p. 43
The nature of CSR activities in South Asia p. 44
Country-specific funding p. 46
The focus of MNE foundation programs p. 47
Conclusion, discussion, and proposals for further research p. 49
Conclusion p. 49
Discussion p. 51
Proposals for further research p. 52
Scientific literature p. 53
Interviews p. 55
Websites and policy documents p. 56
Appendix I – data on MNEs, and MNE foundations p. 67
Appendix II – MNE profiles p. 77
Abbreviations
ADB – Asian Development Bank AL – Amawagi League A&F – Abercrombie and Fitch BNP – Bangladesh Nationalist Party BSR – Business for Social Responsibility BW – Better Work
CEO – Chief Executive Officer CSI – Corporate Social Investment CSR – Corporate Social Responsibility ETI – Ethical Trading Initiative EU – European Union FLA – Fair Labor Association FWF – Fair Wear Foundation GCI – Global Competitiveness Index GDP – Gross Domestic Product IFC – International Finance Corporation IMF – International Monetary Fund ILO – International Labor Organization LBGT – Lesbian Bisexual Gay Transgender LSF – Levi Strauss Foundation
MFA – Multi-Fiber Arrangement MNE – Multinational Enterprise MSF - Médicins Sans Frontières
P.A.C.E. – Personal Advancement and Career Enhancement
PGO – Private Governance Organization SAC – Sustainable Apparel Coalition SOMO - Centre for Research on Multinational Corporations
STD – Sexually Transmitted Disease UN – United Nations
UNCTAD – United Nations Conference on Trade and Development
US – United States
WEF – World Economic Forum WWB – Workers Well-Being
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Introduction
Research over the past decades has shown that the production of apparel in emerging economies can be seen as an important gateway industry to create stable and diversified exports for emerging economies and thus developing countries (Gereffi, 1999; Gereffi et al., 2005; Lopez-Acevedo and Robertson, 2016).
In recent years the center of this particular industrial activity, large-scale apparel production, in Asia has shifted from South East Asia to South Asia. At first, this was due to quota restrictions related to the Multi-Fiber Arrangement (MFA), that caused big apparel suppliers from Hong Kong, Korea, and China to move some of their production to low-wage developing countries in the region (Gereffi and Frederick, 2010: 158).
The leading importers of apparel products are, till this day, the European Union (EU), America and Japan (Gereffi and Frederick, 2010: 159). The economic slowdown in these developed countries due to the financial crisis of 2008 has impaired sales to these areas of the world and revealed weak spots in the export-oriented economies of developing countries. Eventually, Western buyers moved towards their core operations, creating widespread job losses in emerging economies dependent on the apparel industry (Gereffi and Frederick, 2010: 183).
Therefore, it is key that the nations of South Asia create a more diversified export economy and become less dependent on one particular line of export products. Governments should invest more public provisions that stimulate competitiveness and the upgrading of industrial capabilities (Gereffi and Frederick, 2010: 186-187). A useful framework that underlines the most prominent public provisions a government should invest in to decrease the vulnerability of their economies to external pressures is provided by the World Economic Forum (WEF, 2014). These ‘twelve pillars of competitiveness’ illustrate what is needed for economic progress divided into three different stages: factor-driven, efficiency-driven, and innovation-driven economies, of which factor-driven economies are the starting point (WEF, 2014: 8-12).
There are many reasons explaining that developing countries are not able to invest more in their socio-economic development. One noticeable origin of the problem is the interdependence of nations; shortcomings in public investment in
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developing countries can be related to the increasingly global nature of tax avoidance and aggressive tax planning. Research shows that developing countries, while they would have to invest more in public utilities, are severely affected by tax avoidance (Johannesen et al., 2016: 9).
Since the competitiveness of developing countries is affected by a lack of spending in public provisions by the government, as Oxfam International (2016: 2) states in their report on harmful tax practices, this research will focus on activities of private companies. More specifically, research will focus on corporate social responsibility (CSR) programs to see whether or not multinational enterprises (MNEs) are filling some of the gaps in public spending in developing countries. Therefore the following question will be answered:
To what extent do multinational enterprises have corporate social responsibility programs that are comprehensive enough to incorporate public investment needs in developing countries?
To able to examine this question thoroughly, three sub-questions will be presented and answered in the course of this research:
1) What are the differences in public investment needs between developing countries?
2) How extensive are CSR programs of MNEs in developing countries?
3) What are the priorities of MNE foundation programs in developing countries?
To answer the main research questions and the following sub-research questions, this study will start off by addressing the gap in the literature on this topic and also bringing forward the relevant theoretical framework to analyze this phenomenon. Second, the research will shed light on the operationalization of concepts, method used, the case selection and reliability and validity questions and concerns.f
The background chapter will contain four country profiles and thus the analysis that is needed for answering the first sub-research question, which uncovers what the specific gaps in public investments are in Bangladesh, Pakistan, Sri Lanka, and India.
The two empirical chapters of this research will focus on the units of analysis: the MNEs themselves. The first result-oriented chapter will analyze the CSR
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documentation and websites of eighteen different MNEs from the EU and the United States (US). This chapter will focus on answering the second sub-research question and determine how extensive CSR programs of MNEs are.
The second result-oriented chapter will cover four, more in-depth case studies on MNE foundations. These case studies will shed light on the last sub-research question about what the priorities of the different MNE foundations are in developing countries. The final chapter will be dedicated to drawing conclusions from the results presented in the research, but also to acknowledge its limits and present proposals for further research.
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Theoretical framework
As one can derive from the introduction, this research focuses on the CSR activities of MNEs in developing countries to determine whether or not these programs are comprehensive enough to fill gaps in public spending by governments.
Most of this research is based on deductive reasoning in line with the theoretical approaches presented in this chapter. However, after researching MNE CSR programs, and gaining an understanding of the possible importance of MNE foundations, literature was added to the theoretical framework.
First, this chapter will look at the gap in the literature, after that it will dive into the different theoretical concepts and the framework that is of importance when it comes to analyzing CSR activities in developing countries. Finally, it will elaborate on the expectations with respect to the results of this research.
Gap in the literature
The literature gap revolves around the relationship between public and private actors in developing countries and the way their activities in society interact. As Amenguel (2009: 405) states, there are two types of opinions in the scholarly literature: one of which suggests a positive relationship between public and private regulation, which in practice means that private regulation complements public regulation.
What Locke et al. (2013: 520) underline in their research, is that there is also another body of literature that states that the interaction between private and public regulation can stand in the way of effectiveness. In addition, the scholars state that state and private regulation cannot be effective when there is no interaction between the two (Locke et al., 2013: 520).
Bartley (2011: 525) states that there are three ways that the content of private and public regulation interact: through compliance with national law, exact similarity to national law and private regulation that goes beyond what national law requires.
Most of the studies concerned with the interaction between public and private regulation focus on private regulation, like codes of conduct, within the value chain of
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large multinationals (Bartley, 2005; Bartley, 2011; Locke et al., 2009; Locke et al., 2013). In some instances, as in the research conducted by Amengual (2009: 412-41), researchers conclude that private regulation can have positive effects when it comes to resources available to government agencies.
Looking at the body of literature that discusses this relationship between public and private regulation, it is clear what is overlooked, or what can be considered a new addition to existing literature: the influence of CSR programs and private regulation outside of the direct value chain.
Carroll’s pyramid of corporate social responsibility
The theoretical framework used in this research is built upon the pyramid of corporate social responsibility as developed by Carroll in 1991. This pyramid consists of four layers or corporate responsibilities: economic, legal, ethical and philanthropic responsibilities (Carroll, 1991: 40-43).
These four corporate responsibilities can be divided up into two pairs: economic and legal responsibilities, and ethical and philanthropic responsibilities (Carroll, 1991: 40-43). Economic and legal responsibilities of a firm or multinational revolve around doing what is best for the company and what is legal in host countries. Therefore, these responsibilities do not specifically care for something other than the direct interest of the firm (Carroll, 1991: 41). Crane and Matten (2005: 39) also deal with the responsibility of a firm to best protect shareholders’ investment. In addition to that, the scholars also note that protecting shareholders’ interest and compliance with national law cannot be considered to be the same as taking on a moral responsibility (Crane and Matten, 2005: 39).
The two responsibilities that are linked to the MNE as a moral entity are ethical and philanthropic responsibilities (Carroll, 1991; Crane and Matten; 2005). Ethical responsibilities are concerned with adhering to societal norms and values, more specifically, doing what is considered to be right (Carroll, 1991: 42). Looking at the developments within global value chains, one of the main arguments for taking on ethical responsibilities is the fact that MNEs rely on more than just their shareholders; consumers, suppliers and the local population in their host countries are also of major
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importance. Subsequently, it pays off to listen to those stakeholders (Crane and Matten, 2005: 42). One obvious example of this is the heightened attention regarding labor rights in South East Asia and South Asia as a result of the Rhana Plaza disaster in Dhaka, Bangladesh. In this context, MNEs like Primark and Wallmart had no legal obligation to deal with the situation, but pressure from consumers pushed these companies to do (Donaghey and Reinecke, 2015: 720-721). It is important to note that MNEs primarily focused on improving working conditions within their value chain and that it has been proven hard to form a unified response to problems at hand (Lund-Thomsen and Nadvi, 2010: 1-3).
Philanthropic responsibilities are responsibilities that are less frequently recognized by MNEs. According to Carroll (1991: 42), philanthropic responsibilities are about contributing resources to the community where a firm is active. One of the examples given is contributing to private and public education institutions (Carroll, 1991: 41). In the long run, positive contributions that elevate local communities might stabilize a company’s working environment (Crane and Matten, 2005: 42).
CSR pyramid for developing countries
Visser (2008: 489-492) is one of the first scholars to challenge the order of concepts as presented by Carroll. Visser (2008: 489) states that while economic responsibilities are still the most important component of the pyramid to executives of MNEs working in developing countries, philanthropic responsibilities have moved up the ladder and come in second. This change is visualized in Figure I1 below.
Figure 1 - Revised pyramid of CSR
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There are three causes for this shift in focus; the first is that, since the need for help is so big in most developing countries, philanthropic responsibilities have become a more important part of the standard procedure (Visser, 2008: 490). Also, there is the notion of managers that their companies cannot reach their full potential if the society in which they work can collapse at any time. Lastly, a culture of aid dependency in many developing countries has made local communities reliant on donors (Visser, 2008: 490).
The picture painted by Visser (2008) is underlined by findings of the World Investment Report of 2015: ‘the lower a country is on the development ladder, the greater is its dependence on non-tax revenue streams contributed by firms. In developing countries, foreign affiliates, on average, contribute more than twice as much to government revenues through royalties on natural resources, tariffs, payroll taxes and social contributions, and other types of taxes and levies, than through corporate income taxes’ (UNCTAD, 2015: xiii).
The role of MNE foundations
In the final two decades of the last century, corporate philanthropy became institutionalized. Larger MNEs increasingly started to set up corporate foundations through which they supported philanthropy (Himmelstein, 1997: 23).
In their research on the link between MNE foundations and MNEs, Westheus and Einwiller (2006: 147) find strong structural links between MNEs and MNE foundations. One example of this is the integration of the foundation in a network that that makes strategic decisions for all non-profit activities of the MNE (Westheus and Einwiller, 2006: 147).
In addition, Westheis and Einwiller (2006: 148) found that MNE foundations are conceived as making a contribution to corporate social responsibility programs of the founding MNE. This observation is underlined by the fact that in a research on chief executive officer’s influence on MNE foundation donations by Werbel and Carter (2002: 51), the scholars incorporate the assumption of the MNE foundation working in line with MNE interests. Therefore, the MNE foundation can be seen as an extension of MNE CSR activities, with a primary focus on philanthropy.
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Twelve pillars of competitiveness
The ultimate purpose of this research is to determine whether or not CSR commitments and programs made by MNEs can create a base for sustainable economic development. To develop a framework to better understand and predict the indicators of competitiveness of a country’s economy, and therefore for economic development, the World Economic Forum (2014) created the twelve pillars of competitiveness. Together, the pillars of competitiveness determine the ability of a country to sustain and stimulate growth (WEF, 2014: 4).
The twelve pillars are divided among three stages of economic development: the WEF (2014: 9) distinguishes factor-driven, efficiency-driven, and innovation-driven economies. The three types of economies refer to a different set of key drivers of economic development and change. Factor-driven economies are in need of basic requirements like primary education and health care, whereas efficiency-driven and innovation-driven economies need more sophisticated drivers to further develop their economies (WEF, 2014: 9).
Acs et al. (2008: 220) define factor-driven economies as economies that heavily rely on the production and export of standardized, low-cost products. Efficiency-driven economies have developed through the education of their workforce and more efficient production schemes (Acs et al., 2008: 220). The most advanced economies, the innovation-driven economies, benefit from increased innovation through entrepreneurship (Acs et al., 2008: 221).
The countries that make up the context for this research are the following South Asian nations: Pakistan, India, Sri Lanka and Bangladesh. Three of these countries, as the WEF report covering 2016-2017 shows, fall in the category of factor-driven economies; namely Pakistan, India, and Bangladesh. Sri Lanka is the only country that has an economy that is further developed and thus efficiency-driven (WEF, 2016: 38). Therefore, one pillar that is important for the conceptual start of this research will be explained. In addition, one pillar of each stage economic development will be chosen for evaluation to determine the extent to which CSR programs have an effect on economic development.
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Box I2, pictured below, shows the three pillars that are emphasized in this research.
Pillar one (basic requirement) Institutions
Pillar four (basic requirement) Health and primary education
Pillar five (efficiency enhancer) Higher education and training
The first pillar conceptualized by the WEF (2014: 4), focuses on the institutional framework present in a country. More specifically, looking at the gap in the literature described earlier, this research is aimed at trying to define how CSR shapes the institutional framework. Thus, research will look at the institutional framework in of the different countries in South Asia by looking at data from each country in the background chapter.
The first pillar that constitutes the analytical framework of the result-oriented chapters is ‘health and primary education’ (WEF, 2014: 6-7). Health is essential when wanting to maintain the efficiency of the country’s workforce. Also, the investment in health care provisions has a moral dimension, since health is critical for human life (WEF, 2014: 6). Without primary education, it is difficult for local firms to move up the value chain, or increase efficiency (WEF, 2014: 7).
The second pillar defined by the WEF (2014: 7) that is part of the analytical framework, is ‘higher education and training’. This pillar focuses on the training and education that is needed to move beyond the production of simple, highly standardized products (WEF, 2014: 7).
There are two reasons why these pillars were extracted from the framework presented by the World Economic Forum (2014) to analyze the cases of this research. The first is that education, training, and health care are essential to move up the value chain. Therefore, these pillars touch upon the developments Gerrefi et al. (2005) describe in their research on the apparel industry in Asia. Second, since the availability of health care and education has a moral component, it merges well with the pyramid of corporate social responsibility (Carroll, 1991; Visser, 2008).
2 The three pillars shown in Box I are further explained in the text and in the WEF report on global
competitiveness of 2014.
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Expectations
The gap in current literature caused this research to make an effort to find out whether or not philanthropic CSR programs can complement state expenditures. The revised pyramid of CSR as constructed by Visser (2005) suggests that philanthropic corporate responsibility becomes more prominent when doing business in developing countries. This research will try to determine whether or not the revised pyramid of CSR applies to developing countries in South Asia. Without a critical look at the data, and following the arguments made in theory, research will start out with two expectations.
The first result-oriented chapter will take a look at MNE CSR documentation. The expectation is, when applying the theory of Visser (2005), that there is a lot of extensive philanthropic activity in South Asia, especially given the importance of the apparel industry in this region of the world.
The second expectation is linked to the second result-oriented chapter is that MNE foundations, founded by MNEs, are an extension of CSR policies of MNEs and, given their philanthropic nature, MNE foundations are likely to engage in extensive philanthropic behavior, with a primary focus on health and education.
These expectations are inspired by the theories mentioned in this chapter, and therefore will serve to act as a theoretical counterweight in the empirical chapters of research. This counterweight will be affirmed by reflecting on these theoretical assumptions when answering the result-oriented sub-research questions, and the main research question.
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Method
In this section of the research, choices that were made with regard to operationalization, case selection, methods used for gathering data, validity, and reliability are explained. The chapter starts off with an operationalization of the concepts that are dominant in the empirical research, together with the case selection it is the empirical backbone of this research. After that, the collection of data will be discussed. Finally, validity and reliability concerns and theoretical and societal relevance will be discussed.
Operationalization
In order to describe CSR in developing countries, Visser et al.’s (2010: 106) definition of corporate social responsibility will be presented: ‘the formal and
informal ways in which business make a contribution to improving governance, social, ethical, labor and environmental conditions of the developing in which they operate, while remaining sensitive to prevailing religious, historical and cultural contexts’. According to Visser (2008: 475), most scientific work on CSR in
developing countries revolves around this social aspect of corporate behavior.
Since this research is predominantly looking at philanthropic behavior that affects communities outside of the direct value chain, it is important to define philanthropic behavior by MNEs. For the purpose of this research, the term philanthropic activity in the light of corporate social responsibility will be merged with the term corporate social investment (CSI) as presented by Baskin (2006: 35): ‘a company’s investment
in a range of community activities.'
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In addition to that, when it comes to philanthropic activities, there will also be levels of philanthropic activities, ranging from no philanthropic activity to partial involvement in philanthropic activity, to extensive forms of philanthropic activity conducted by MNEs. Box II bellow shows the operational definitions, as described by Baskin (2006: 35).
No activity (0) No mentioning of contributions to the community
Partial activity (1) ‘Some evidence of donations to charitable causes
or a community project.'
Extensive activity (2) ‘Evidence of involvement in a wide range of
projects, involving significant sums of money. In developing countries, this typically includes involvement in educational and health care projects.'
To be able to measure whether or not a CSR programs make a significant contribution to a community by investing in one of the pillars mentioned in the theoretical framework clear, workable definitions are needed for the result-oriented chapters. The methodology section of the website Global Competitiveness Index provides us with indicators that can be linked to the two pillars (WEF, 2017).
Health
_____________________________________ and primary education
- Business impact of malaria/tuberculosis/HIV/AIDS - Incidences of malaria/tuberculosis/HIV/AIDs - Infant mortality - Life expectancy
- Quality primary education
- Primary education enrollment rate Higher education
_____________________________________ and training
- Secondary/tertiary enrollment rate - Quality of educational system/ math and
science education/ management school - Internet access at schools
- Local availability of specialized research and training services
- Extent of staff training
Box II – forms of philanthropic activity
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Investment in the health and primary education pillar will be defined as investment in the provision of health services, as well as the quality and quantity of primary education (WEF, 2017). Investment in higher education and training will be defined as investment in the quality and quantity of secondary and tertiary education, as well as staff (on-the-job) training (WEF, 2017).
The indicators of Box III give a good sense of the content of each of the pillars. However, training of staff and availability of specialized training services can be contested concepts because of the emphasis on developments inside the supply chain. Therefore, training will only be measured if it has a direct impact on communities outside of MNE supply chains. Training on codes of conduct and human rights is not taken into account since these programs are mostly aimed at managers. Training that provides workers with practical knowledge applicable outside the MNE supply chain is.
It is important to mention that philanthropic activity is quantified in the analysis in order to be able to measure differences between CSR documentation. For the purpose of this research, partial activity will consist of 1 program in two different countries, two programs in the same country, or programs that are vaguely linked to the whole of South Asia. Any effort that consists of more than two programs, or a specific program conducted in more than two countries, will be defined as an extensive philanthropic activity. Lastly, when philanthropic activity is categorized as extensive, this does not imply that it fully complements gaps in public spending.
Table VII and Table VIII show the direct implementation of the theoretical framework presented in the theory section of this research. The data and justification for the classifications made in Table VII and Table VIII can be found in Appendix II. The tables combine the operational definitions of philanthropic CSR activity with the pillars health and primary education, and higher education and training. Both pillars are split up, as the indicators of both pillars also relate to half of the concept. In addition, the four pillar components will be assigned points to clarify distinctions between MNE CSR programs on the basis of their extensiveness (Box II).
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Sample and case selection
The units of analysis for this research are MNEs which are active in the apparel industry in developing countries. Since the apparel industry is currently so important for developing countries in South Asia (Lopez-Acevedo and Robertson, 2016), MNEs who are active in that region were chosen for further analysis. Since these countries mostly export their goods the United States and the European Union (Lopez-Acevedo and Robertson, 2016: 22), MNEs who are originally from these regions will be picked for evaluation. This relationship works both ways, and therefore studying MNEs from these areas of the world will provide detailed information on the status quo of philanthropic activities in South Asia.
For the first result-oriented chapter, the selection of eighteen MNEs was made from multiple private governance organizations (PGOs) since these organizations provide programs to improve CSR standards. As Fransen (2011: 359) puts forward in his piece on PGOs, different governance organizations compete for MNE participation in their programs. This competition causes fragmentation in the field of PGOs, with MNEs being part of multiple different PGOs (Fransen, 2011: 359-360). Therefore, MNEs were picked from seven PGOs: the Fair Labor Association (FLA), Made-By, the Ethical Trading Initiative (ETI), the Fair Wear Foundation (FWF), Business for Social Responsibility (BSR), the Sustainable Apparel Coalition (SAC) and Better Work (Table I). The number of MNEs per PGO varies from two to twelve (Table I).
In addition to the criteria of being a member of one of these governance organizations, the MNEs subject to examination source their products from at least one of the South Asian nations (Table II). Ralph Lauren is the only MNE that itself does not specify in what countries it is active, however, since there are several news articles about its presence in Bangladesh, this research assumes presence in South Asia (Passariello et al., 2013; Bashin, 2014). As Table IV shows, nine EU MNEs, and nine US MNEs were picked for further research.
For the second result-oriented chapter, four MNE, in other words corporate, foundations with extensive online presence, the H&M Foundation, the C&A Foundation, the Gap Foundation and the Levi Strauss Foundation (LSF) were thoroughly evaluated. This selection was, next to the availability of reporting on a wide variety of projects and grant lists, also based on the fact that the MNEs that are
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behind the corporate foundations are active in all of South Asia (Table II). Two of these MNE foundations are of American origin, and two originate in the European Union.
Methods of data collection
The background chapter, which was focused on answering the first sub-research question, used reports from multiple NGOs and intergovernmental organizations to specify public investment needs, and differences in these needs, in South Asia.
The primary data source for the two result-oriented chapters is policy documentation from MNE and MNE foundations. This data source was used because of the fact that is widely availed, and therefore enables comparison on a greater scale.
Furthermore, the CSR documentation of eighteen MNEs will be analyzed to see whether or not ambitions related to philanthropic activities are presemt, and how extensive they are. This CSR documentation consists of two elements: sustainability reports provided by the MNEs, and their website sections on CSR. However, to define the limits of internet research, the research will only take into account whatever projects are mentioned on the company’s website or reports, and will not expand its reach beyond projects that are conducted by the MNE and a maximum of two other partners.
By analyzing CSR documentation of MNEs, this research eventually determined the importance of MNE foundations in philanthropic CSR policy. Since the second result-oriented chapter will focus on MNE foundations specifically, foundation activity will only be taken into account if displayed on the corporate website directly.
Second, CSR documentation of four MNE foundations was analyzed. Data sources include policy documents and websites, but grant lists shed light on the precise focus areas of MNE foundations.
Data of both MNE and MNE foundations have been analyzed and categorized with respect to the pillars of competitiveness mentioned in the theoretical chapter, and in the operationalization section. This analysis in has resulted in MNE and MNE
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foundation profiles depicted in Appendix II and Appendix III. These profiles have made comparisons between CSR policies more clear and accessible.
Finally, by conducting semi-structured interviews with an expert at the Centre for Research on Multinational Corporations (SOMO), an MNE foundation manager, and an expert on CSR in Asia, triangulation was partially ensured. This method of data gathering will provide insight from the field that will be used to add context to policy document analysis.
Validity and reliability concerns
In terms of validity, measuring what you want to measure (Bryman, 2012: 47), policy document analysis has some prominent flaws: since MNEs, and their foundations, only write down policy measures, and for the most part evaluate these policy measures themselves. Therefore, the real impact of CSR activities is hard to measure by only looking at policy documents. However, since this is the only way to compare CSR activities on a wide scale, this method was chosen for this research.
To cover this weakness in terms of validity, interviews were conducted to add some context to the policies put forward in CSR documentation by MNEs and MNE foundations. However, given the minor importance of interview data for this research, this effect is limited.
Regarding reliability, the replicability of the procedures used to measure theoretical concepts (Bryman, 2012: 47), the policy document analysis in this research is considered strong. The operationalization of the concepts of philanthropic behavior, investment in health and primary education, and higher education is very clear and allowed categorization that can easily be repeated.
The semi-structured interviews do not score well on reliability. In particular because of the fact that two were in Dutch and one in English. Also, two were conducted via telephone calls, which made it more difficult to stick to the questions in a way that can be repeated. Again, it is important to mention that this did not heavily affected results.
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Theoretical and societal relevance
The gap in the literature explains that the influence of CSR programs outside of the direct supply chain has not been investigated. Therefore, this research will make a contribution to the literature that looks at the complementary value of CSR programs in developing countries. In doing so, this research will broaden the scope by looking at the complementary value of CSR programs when it comes to community development outside of the direct MNE supply chain. Furthermore, it will go even further and explore the possibility of CSR programs incorporating public investment needs. Also, research will evaluate the prominence of philanthropic CSR behavior among MNEs in South Asia, therefore contributing to research on the revised pyramid of CSR as described by Visser (2008).
The societal relevance revolves around the extra impulse CSR programs by MNEs can give to socioeconomic development in developing countries. Research will reveal the priorities of MNEs, and their foundations, with respect to the contributions they make to communities outside supply chains, and if these efforts are nearly comprehensive enough to deal with the needs of societies. Also, since governments often cannot invest enough to help diversify the economy, philanthropic investment of MNEs, can be a tool to pushing these countries up the development ladder.
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Background chapter – country profiles
This chapter will answer the first sub-research question, and determine the most prominent investment needs in Bangladesh, Pakistan, Sri Lanka and India. In order to do so, this chapter will establish country profiles of these nation by putting together data from reports of Freedom House, the Asian Development Bank (ADB), the World Economic Forum, and Lopez-Acevedo and Robertson.
The chapter will start out by shortly describing the historical and economic development of South Asia, to add context to the current situation in the region. Subsequently, the country profiles will describe the state of the political system and socioeconomic issues. Furthermore, the prominent investment needs will be described, with a focus on the three pillars of competitiveness: institutions, health and primary education, and higher education and training.
A short history of the subcontinent of South Asia
Bose and Jalal (1997: 3) state that the subcontinent of South Asia is one that has come into existence, in its current shape and form, after the second World War. Today, it encompasses seven states: India, Pakistan, Bangladesh, Sri Lanka, Nepal, Bhutan and the Maldives. In total, the subcontinent South Asia has had to endure the pressure of British colonial rule and has experienced very tumultuous development over in the last decades of the last century (Bose and Jalal, 1997: 4).
The region is very diverse in terms of the religious background of their people; the majority of people in India are Hindu, but the three biggest countries in the region, India, Bangladesh, and Pakistan each have over a hundred million Muslim inhabitants. In addition, there are Buddhist, Christian and Sikh minorities (Bose and Jalal, 1997: 4).
With the British partition of India in 1947 along religious lines, the region that was formerly known as the subcontinent of India, slowly disintegrated. India then was split up in a Muslim-majority Pakistan, and a Hindu majority India (Bose and Jalal, 1997: 165-166). Sri Lanka gained independence from the British in a peaceful manner in 1948 (World Vision Australia, 2010: 1). Lastly, Bangladesh gained independence
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from Pakistan, after a bloody Muslim on Muslim war in 1971 (Bose and Jalal, 1997: 190).
After 1971, Pakistan, as well as Bangladesh, experienced a period of unstable military rule, which was interrupted by brief episodes of parliamentary democracy (Bose and Jalal, 1997: 230). Cold War tensions created an imbalance between military forces and politicians in both countries, although there has been a parliamentary democracy in both countries since the 1990s. Also, democratic forces are not nearly as strong as in India, which means there is still a long road to go (Bose and Jalal, 1997: 237).
Sri Lanka has had its own set of internal disputes throughout the last thirty years, where central government forces fought the Tamil Tigers, a separatist rebel group (Bose and Jalal, 1997; World Vision Australia, 2010).
Despite internal differences, disputes and state structures, Bangladesh, India, and Pakistan face the same set of domestic problems that revolve around socioeconomic issues. Illiteracy rates are high, and life expectancy is significantly lower than in Sri Lanka (Bose and Jalal, 1997: 237). This relationship is also pointed out by an expert on CSR in Asia: ‘the Sri Lankan literacy levels are quite high, in the Asian context’ (Interview Murali, 2017). One of the reasons for these bad circumstances in all three countries is the discrimination along gender lines, region and class (Bose and Jalal, 1997: 237-238).
The recent economic development of South Asia
As Gereffi and Frederick describe (2010: 157-158), the size of the apparel market in South Asia today is caused by two economic developments in the EU and the US. The first is the establishment of the MFA in the early 1970s; this protectionist measure established quotas with respect to imports from apparel producing countries like China and Hong Kong. These restrictions caused the industry to partly move to countries that did not have such stringent quotas imposed on them, which were countries in South Asia (Gereffi and Frederick, 2010: 158-159). The second is the global economic crisis (Frederick and Staritz, 2012: 67-68).
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When the MFA was abolished, the expectation was that the South Asian apparel producers would not be able to withstand international competition. However this was not the case, cost-competitiveness consolidated their market positions, especially during the global economic crisis of 2008 (Frederick and Staritz, 2012; Lopez-Acevedo and Robertson, 2016).
According to Lopez-Acevedo and Robertson (2016: 43), the countries highlighted in this research are part of this regional development and can be divided into two categories: growth and stable suppliers. First, Bangladesh and Pakistan are considered to be growth suppliers. Growth supplier countries are countries that have experienced an increase in export value and global market share since the 1990s (Lopez-Acevedo and Robertson, 2016: 42). The second category of countries are stable suppliers: countries that have experienced a growth in export values, but the size of their global market share is stable or declining. Sri Lanka and India are considered to be stable suppliers (Lopez-Acevedo and Robertson, 2016: 42).
The WEF report on competitiveness of 2016-2017 also acknowledges that the South Asian region has experienced an upward trend in economic development. Although the area has improved primary education, health, and its infrastructure, further improvements will be necessary to lay the groundwork for upgrading industrial capabilities. Moreover, each country has its weaknesses and strengths (WEF, 2016: 17).
The core of the region is made up by the three biggest economies: Bangladesh, India, and Pakistan (WEF, 2016: 17). In South Asia, India improved its economy the most in 2016, Sri Lanka is considered to be the most advanced economy, and the Pakistani economy is the least developed (WEF, 2016: 17-20).
Bangladesh
According to Freedom House (2017a), Bangladesh has experienced a lot of political unrest during the year of 2016; the main opposition party Bangladesh Nationalist Party (BNP), and the main Islamist party were oppressed by the ruling Amawagi League (AL).
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The killing of religious minorities, academics, and people of the LBGT (lesbian, gay, bisexual, and transgender) by Islamist groups is also considered a big obstruction to further progress in the country (Freedom House, 2017a).
The Bangladeshi government has restricted foreign funding of NGOs and has made it possible to deregister NGOs when they are critical of the government. Bangladesh scores 47 out of a 100 and is considered to be partly free. Bangladesh has a population of 162,900,000 people, and a GDP (Gross Domestic Product) per capita of 1,212 dollars (Freedom House, 2017a). According to the ADB, 31,5 percent of Bangladeshi’s live below the national poverty line (ADB, 2017a).
However, the export of apparel products has created a significant growth of the Bangladeshi economy. Lopez-Acevedo and Robertson (2016: 24) show that the global market share of Bangladesh currently is 6,4 percent. Also, apparel exports make up 83 percent of total exports, which shows the extreme dependence of the economy on the fabrication of apparel goods (Lopez-Acevedo and Robertson, 2016: 24).
In Bangladesh, the industry focuses on the production of low-cost, highly standardized production of goods (Lopez-Acevedo and Robertson, 2016: 24). The Rana Plaza disaster of April 2013, which killed over a thousand factory workers, has caused international focus on labor conditions and building safety in the country (Lopez-Acevedo and Robertson, 2016: 21-23). Taking this effect into account, wages and working conditions of workers in Bangladesh are still an area of concern (Lopez-Acevedo).
When it comes to the pillars of competitiveness highlighted in this research, Bangladesh does not do well. A poor institutional framework and enforcement capabilities hamper business activities and economic development (WEF, 2016: 110). In fact, Bangladesh is the weakest performer of South Asia when it comes to building institutions, occupying the 125th place (WEF, 2016; Table III).
Bangladesh is a weak performer when it comes to economic development and competitiveness: it ranks 106th of a total of 138 countries on the list of the WEF (Table III). Although Bangladesh scores a 5.5 out of 73 on health and primary
3 This is a ranking used for the Global Competiveness Index by the World Economic Forum. Look at
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education, an insufficiently educated workforce is one of the top five reasons the economic environment in Bangladesh is not working properly (Table III). Looking at its score on higher education and training (3.0), and the multiple indicators relating to that pillar, it is obvious that for more economic development, better education and training facilities are needed (WEF, 2016: 110).
According to the survey conducted by the WEF and shown in Table III of Appendix I, poor public health is not seen as one of the indicators standing in the way of business activities and economic development. However, tuberculosis is a public health problem: it is one of the two worst indicators of the pillar and puts Bangladesh on the 118th place (Table III).
When it comes to higher education and training, Bangladesh lacks in terms of specialized training services (127th place), and staff training (124th place) (Table III). Hence the quality of education seems to be the most urgent problem for Bangladesh.
Pakistan
Domestic turmoil has defined Pakistan, although extremist violence has declined over the past year, with 1,803 terrorism related deaths counted, according to Freedom House (2017b). Although Pakistan has a multiparty system that is working properly, this domestic turmoil has given the high military officials a firm grip on security and a range of other policy issues (Freedom House, 2017b).
Corruption is still present at the highest levels of government, and Prime Minister Nawaz Sharif’s family is suspected of having undisclosed financial assets; the Supreme Court started a series of hearings to investigate the matter (Freedom House, 2017b).
The passing of a restrictive internet has reduced civil liberties in 2016. In addition, the government continues to clamp down on civil society organization with excessive reporting rules. Pakistan scores 43 out of 100 and is partly free. Pakistan has 203,400,000 inhabitants and has a GDP per capita of 1,435 dollars (Freedom House, 2017b). 29,5 percent of the population lives below the national poverty line (ADB, 2017b).
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Apparel exports have also stimulated economic growth in Pakistan. As well as Bangladesh, Pakistan can be considered a growth supplier (Lopez-Acevedo and Robertson, 2016: 42). In contrast to Bangladesh, Pakistan’s apparel exports only make up 19 percent of total exports, as is shown in Lopez-Acevedo. The global market share of apparel exports of Pakistan is 1,2 percent, which is a considerably smaller share than Bangladesh has established over the past two decades (Lopez-Acevedo, 2016: 24).
Pakistan, much like Bangladesh, focuses on the production of low-cost products, with a specialization in basic woven denim and low-priced knitwear (Lopez-Acevedo, 2016: 24). Although overall working conditions are better compared to Bangladesh, Pakistan is also marked by a disastrous factory fire in Karachi in 2012 (Lopez-Acevedo and Robertson, 2016: 183). Thus, working conditions are better, but not at all up to standard in the large cotton sector (Lopez-Acevedo, 2016: 14).
The 2016-2017 WEF (2016: 18) report on global competitiveness states that Pakistan is the worst South Asian performer on primary education and health. Also, Pakistan is the worst performer when it comes to higher education and training (WEF, 2016: 18). Its 122nd position reflects an upward trend regarding economic development, although Pakistan’s development level is still below that of 2007. This low development level reflects a period of internal instability (WEF, 2016: 20). The prevalence of corruption is still considered to be the most harmful institutional weakness with respect to the business environment of Pakistan (Table III).
As Table III shows, the health and primary education pillar of Pakistan is far below standards. The worst indicators of this pillar are infant mortality (131st place) and the primary education enrollment rate (133rd place). These rankings are exemplary for the position of Pakistan at the bottom of South Asia (Table III). It also shows that investment in primary education and health are needed before Pakistan can start working on efficiency-enhancing economic factors.
When it comes to the third pillar of higher education and training, Pakistan enjoys a higher place in the ranking. However, the worst rankings on the secondary enrollment rate and staff training are still in the bottom top-fifteen of the world (Table III).
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Sri Lanka
Since the 2015 elections, significant progress has been made on political rights and civil liberties of citizens. President Maithripala Sirisena’s administration is continuing constitutional reforms, seeking public support for its actions (Freedom House, 2017c).
Also, an Office of Missing Persons was set up to boost the reconciliation process between the North and the rest of the country. Anti-corruption efforts have experienced a minor setback since the President interfered with an independent corruption investigation (Freedom House, 2017c).
Religious minorities and advocates of religious tolerance continue to be harassed by extremist groups, although the number of cases has declined over the past few years. Sri Lanka scores 56 out of 100 points, and is partly free; it has 21,200,00 inhabitants and a GDP per capita of 3,926 (Freedom House, 2017c). In Sri Lanka, 6,7 percent of inhabitants live below the national poverty line (ADB, 2017c).
Sri Lanka is one of the two South Asian countries discussed in this chapter that falls under the category growth supplier, meaning that Sri Lanka is no longer expanding its global market share of 1,2 percent (Lopez-Acevedo, 2016: 24). The fact that Sri Lanka is not expanding its global share does not mean it does not rely heavily on the apparel trade. After Bangladesh, Sri Lanka is the most dependent on apparel exports, totaling 45 percent of total exports (Lopez-Acevedo and Robertson, 2016: 24).
Contrary to Pakistan and Bangladesh, Sri Lanka has already moved up the supply chain, producing more diversified products of higher standards (Lopez-Acevedo). Exports include more niche and luxury products (Lopez-Acevedo and Robertson, 2016: 182). The favorable position within the apparel market reflects on working conditions as well, since these are better than in other South Asian countries (Lopez-Acevedo and Robertson, 2016: 14).
Sri Lanka is second best of the South Asia ranking, with its 71st place (Table III). Nonetheless, Sri Lanka leads South Asia with respect to the pillars of competitiveness vital to this research; namely primary education and health, and higher education and training (WEF, 2016: 18). In terms of institutions, Sri Lanka is not the best performer, ranking 57th place, Sri Lanka falls short with respect to India when it comes to
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institutional quality (Table III). This track record might be positively influenced by the size of its economy compared to the rest: it is a lot smaller (WEF, 2016: 17).
Although its position with respect to the institutional quality of the county is also relatively good (57th place), it is notable that Sri Lanka is the only country in South Asia that does not, in proportion, perform well when it comes to the efficiency of its government’s bureaucracy (Table III).
As shown in Table III, and mentioned above, Sri Lanka does well regarding education. In terms of health, the picture is less positive: the number of people with tuberculosis is still a national health problem. Admittedly, this is not a real concern for economic development, since executives find poor public health the least problematic with respect to doing business in Sri Lanka (Table III).
A side note on the wellbeing of education in Sri Lanka is that tertiary enrollment rates (98th place) severely drag down Sri Lanka’s average score on this pillar (Table III). Therefore, this can be seen as an area of concern for Sri Lanka’s government.
India
India is the only strong parliamentary democracy of the four countries, with elections held at the federal and state level. However, corruption hinders politics and business (Freedom House, 2017d).
The social and economic position of India’s minorities has improved, but they still face discrimination on the basis of caste, tribe relations, and religious beliefs and are often victims of violence (Freedom House, 2017d).
In an effort to combat corruption, the government did pass two bills with respect to economic reform. India scores a 71 out of 100, and is considered completely free; it has a population of 1,328,900,000 and its GDP per capita is 1, 598 dollars (Freedom House, 2017d). 21,9 percent of the Indian population lives below the national poverty line (ADB, 2017d).
India is the second stable supplier of South Asia, its global market share of 3,5 percent is not likely to increase (Lopez-Acevedo and Robertson, 2016: 24). As
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mentioned before, India, together with Bangladesh and Pakistan, is the economic engine of South Asia (WEF, 2016: 17). The share of apparel in total exports is the lowest of the four countries that make up the context of this research, India’s apparel exports only make of 5 percent (Lopez-Acevedo and Robertson, 2016: 24).
Furthermore, its exports more diversified products than the other two big economies of the region (Bangladesh and Pakistan); its manufacturing base can produce textile, well-developed fibers and apparel (Lopez-Acevedo and Robertson, 2016: 180). Although India, therefore, has two important similarities with the Sri Lankan economy, working conditions are not as good. Poor working conditions are mainly caused by the fact that a lot of those employed by the apparel industry work informally (Lopez-Acevedo, 2016: 7).
According to the WEF (2016: 19), India has made significant improvements on infant mortality rates and the quality of primary education over the past decade. Despite that, basic indicators like infant mortality and life expectancy are still worse than in most other countries, dropping from 106th to the 115th place of the infant mortality ranking (WEF, 2016: 19).
In total, India leads the pack of South Asia, coming in at 39th place (Table III). The institutional structure of India is also better than the rest of the South Asian countries of this research, although corruption is still considered to be prominent and one of the top two most harmful indicators when it comes to doing business. Moreover, India is the only nation that finds poor public health in the top-five of harmful to business indicators, while the other three find this indicator to be the least harmful to business (Table III).
According to Table III, diseases are the main cause of this difference: tuberculosis (129th place) and HIV/AIDS (127th place) still have a big impact on business activities in India. The education of the workforce is less problematic; this indicator comes in at last place. Taking that into account, India does score worse than Sri Lanka on the two pillars relating to education and health (Table III).
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Public investment needs in South Asia
The aim of this chapter was to determine what the differences in public investments of developing countries are, while specifically looking at Bangladesh, Pakistan, Sri Lanka, and India. In an effort to answer the first sub-research question, a brief historical overview of socio-economic development of South Asia was given. Later on, the country specifics were described.
More recent economic developments have pushed the apparel industry towards the South Asian region, mainly due to trade restrictions from the EU and the US. Their competitiveness is enhanced due to the availability of low-cost labor. However, more investment in infrastructure, health, and education is needed to maintain this position. Sri Lanka is considered the most advanced economy while Pakistan has the least developed economy.
When it comes to the quality of institutions, India is the best-performing country in South Asia, closely followed by Sri Lanka. Pakistan is the worst performer, although its score does not differ much from that of Bangladesh.
When combining and comparing scores on health, primary education, higher education, and training, the pillars of competitiveness that are relevant to this research, Sri Lanka has the highest rank, followed by India, Bangladesh, and Pakistan. Pakistan is the worst performer on health and education indicators, although most scores are close to those of Bangladesh.
Bangladesh is the poorest country in the region, with 31,5 percent living below the national poverty line. However, looking at the pillars of competitiveness on health, education, and training, Pakistan is performance worse. The fact Pakistan performs so poortly on the health, education and training indicators coincides with the fact that Pakistan has the least developed economy.
Regarding dependence on apparel trade, Bangladesh relies the most on the industry, with 83 percent of its exports being related to apparel production. Poor public health in the country might not be seen as a problem to doing business, but public health still needs urgent attention. With respect to health, Pakistan’s situation is identical.
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Sri Lanka is described as having the most advanced economy, and this can also be seen in their health and education standards. Also, this reflects on its GDP per capita, which is the highest of the four countries. Sri Lanka has the best score on health and primary education, and higher education and training, although India ranks higher when combining scores on the twelve pillars of competitiveness.
In contrast to the other countries, in India, poor public health is seen as more harmful to the business environment than the poor education of the nation’s workforce. Also, India is the only country that has a completely functional parliamentary democracy and is marked free by Freedom House.
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Results – MNE CSR documentation
In this chapter, data analysis will be done to answer the second sub-research question. CSR documentation of eighteen MNEs active in South Asia will be analyzed in order to determine how extensive CSR programs by MNEs are.
The chapter will start out by looking at the PGO memberships of MNEs. Second, transparency and the type of information disclosed will be shortly reviewed. After that, MNE CSR documentation will be analyzed with respect to the health and primary education, and the higher education and training pillars.
PGO membership
As Table I of Appendix I shows, there are three PGOs who stood out in terms of MNE memberships: BSR, the SAC, and the BW program. BSR and the SAC both have ten MNE memberships; the BW program has twelve (Table I). The first two PGOs might be popular because of the absence of concrete obligations. Although BSR does focus on research and collaboration, membership seems to revolve around networking opportunities and support for MNEs themselves, as opposed to strong commitments for the betterment of supply chains or communities in developing countries (BSR, 2017b). The SAC can be considered to be the same kind of PGO; according to their website, the main purpose of the SAC is to be a provider of services: ‘Brands and retailers join the SAC for access to the essential resources and
support they need to credibly and effectively meet their sustainability goals’ (SAC,
2017b).
The broad support among MNEs for the Better Work program, might be influenced by the fact that the BW program is a PGO that collaborates with big international partners like the International Finance Corporation (IFC), which is a member of the World Bank group, and the International Labor Organization (ILO), an organization run by the United Nations (UN) (BW, 2017a).
The PGO that is at the bottom when it comes to the number of members among the eighteen MNEs examined is the FWF Foundation (FWF). Only two of the eighteen investigated MNEs are members of this PGO: Claudia Sträter and Acne Studios
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(Table I). The fact that there are only two members can be related back to the fact that the FWF does not only create guidelines but demands transparency and improved conditions within the supply chains. Also, the NGO verifies independently MNE compliance on commitments made earlier (FWF, 2017a). Martje Theuws, a researcher of the Centre for Research on Multinational Corporations (SOMO), also underlined the fact that FWF is a strict PGO: ‘At the Fair Wear Foundation they have a very
intricate system, where they work together with local NGOs and unions, that is a lot more thorough than normal compliance audits by MNEs themselves’ (Interview
Martje Theuws, 2017; translated by the author).
Disclosure of information
Table V shows that disclosure of information varies greatly from no information at all, to a detailed supplier factory list. The only MNE that did not provide any supplier information at all is Ralph Lauren, a majority of thirteen MNEs does provide public supplier lists, excluding Claudia Sträter and Acne Studios, who provide supplier information to FWF (Table V).
Looking at Table VI, sustainability reports, and dates of latest publicized work of Two MNEs stand out with respect to their lack of reporting: New Balance and Abercrombie and Fitch (A&F), with reports dating back more than five years. Seven MNEs have produced reports that cover 2016, including Claudia Sträter and Acne Studios (Table VI).
Health…
Health, a component of the fourth pillar, is first up for evaluation. Health support through company involvement comes in multiple different forms. After the Rhana Plaza disaster in the capital of Bangladesh, most MNEs decided to implement stricter health and safety standards in their supplier factories, resulting, for instance, in the Accord on Fire and Building Safety Bangladesh (Bangladesh Accord, 2017). This influence can be seen in the CSR programs all of the eighteen MNE under investigation.
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Of the eighteen, MNEs that make up the sample for this chapter, twelve do not engage in CSR activities that have any effect on communities outside the supply chain (Table VII). MNEs focus solely on audits and training staff members to be able to conduct those audits (Appendix II). In Table VII, those CSR activities have not been labeled partially philanthropic since these activities cannot be viewed as community projects, or as having an effect outside of the direct supply chain.
Furthermore, there are projects relating to health issues conducted by MNEs that are not taking place in developing countries or South Asia. Examples include the BOKS program and the training of youth basketball coaches in China by Adidas (2017a: 52), or programs battling obesity in the United States, supported by New Balance (2012: 88-89).
One of the MNEs has a program that includes some form of philanthropic investment, as Table VII shows, is Patagonia. The MNE has a very comprehensive sustainability report, which includes multiple (domestic) programs. However, the only proof of investment in health care in South Asia was an investment in a child day care center and the provision of medicines at a supplier factory of the MNE in Sri Lanka (Patagonia, 2016: 38).Another example of is the medical care for sexual abuse victims in Sri Lanka by PVH, in collaboration with the Ma Sevena project (PVH, 2015: 45). The other MNE that engage in partial philanthropic activities with respect to health is Primark, as can be seen in Table VII.
Three MNEs have CSR programs on health that can be categorized as extensive; those MNEs are Levi Strauss, Gap and Inditex (Table VII). Levi Strauss (2017a) has initiated the Workers Well-Being (WWB) program. The WWB program is active in India, Bangladesh and deals with awareness training on issues surrounding HIV/AIDS, sexually transmitted diseases (STDs) and family planning (Levi Strauss, 2016a; Levi Strauss, 2016b; Levi Strauss, 2016c).
Inditex (2015: 104) cooperates with Médicins Sans Frontières (MSF) in India to realize extensive health projects to fight a rare disease named Kala Azar. Moreover, it focuses on the combination of this disease with HIV/AIDS. Second, Inditex, again in collaboration with MSF, upholds a project tackling child malnutrition in India (Inditex, 2015: 104). Also, the MNE oversees the establishment of health and safety commissions in its Bangladeshi supply chain (Inditex, 2015: 47).
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Gap (2014: 104) has a very extensive program called P.A.C.E., a multi-layered program that also deals with other training programs. In the context of health, the program focuses of hygiene and sanitation issues (Gap, 2014: 104). The program is labeled extensive, since its operational in Bangladesh, Sri Lanka, Pakistan, and India (Gap, 2014: 89).
…. And primary education
The second component of the fourth pillar is primary education. Compared to health, this component is underrepresented in MNE sustainability reports and website section on CSR. Table VII shows only three MNEs of which some evidence of donations or community projects: Adidas, G-Star RAW, and PVH.
The rest of the MNEs do not support primary education programs (Table VII). At least, not in South Asia. Patagonia does provide its employees with the opportunity to enroll in internships at environmental and social organizations, like Fundación Agroecológica Iguazú, an organization that creates educational programs in Argentina (Patagonia, 2016: 59).
The three MNEs that do engage in community projects relating to primary education do so in different ways. Adidas (2014) also takes on more direct, and, in a way, more philanthropic approach: it contributed to the project Shelter to Shine, which is a school-building project in Pakistan. Also, Adidas supports the Basic Education Program, although the MNE does not specify it exact target areas (Adidas, 2014).
PVH also engages in community projects on primary education partially (Table VII). PVH (2015: 45) supports two projects: the Christel House and a project that is set up by Save the Children. The Christel House is an educational facility. The project with Save the Children focuses on the establishment of educational programs in Bangladesh, and India in the near future (PVH, 2015: 41).
G-Star RAW (2017b) has an undeniable affinity with education. The community involvement section on their website reveals that G-Star RAW has set up an independent MNE foundation, the GSRD Foundation, to deal with primary and
