Corporate social responsibility
in developing countries
Comparative analysis of breweries
in Sierra Leone and Ghana
Name: Gerjan Agterhof, BA Student number: 1722522 Study: MA History Today Date: 8 August 2014
Supervisor: Dr. Clemens Six
Table of contents
List of abbreviations 2
List of figures 4
1. Introduction 5
2. Theory of Corporate Social Responsibility 10
2.1 General CSR theory 10
2.2 CSR in developing countries 13
2.3 Theoretical framework 15
3. Heineken International and CSR in Sierra Leone 18
3.1 Socio-economic situation of Sierra Leone 18
3.2 Sierra Leone Brewery Limited and Heineken International 19 3.3 Sierra Leone Brewery Limited‟s and Heineken International‟s 20
CSR practices
3.3.1 Environment 22
3.3.2 Employees 23
3.3.3 Communities 25
3.3.4 Agriculture 28
3.4 The socio-economic outcomes of CSR conducted by Sierra Leone Brewery Limited and Heineken International
4. SABMiller and CSR in Ghana 34
4.1 Socio-economic situation of Ghana 34
4.2 Accra Brewery Limited and SABMiller 36
4.3 Accra Brewery Limited‟s and SABMiller‟s CSR practices 36
4.3.1 Environment 38
4.3.2 Employees 38
4.3.3 Communities 41
4.3.4 Agriculture 44
4.4 Socio-economic outcomes of CSR conducted by Accra 45 Brewery Limited and SABMiller
5. CSR practices of the breweries compared 50
6. Conclusion 53
List of primary sources 56
List of abbreviations
ABL - Accra Brewery Limited
BCAASL - Business Coalition Against Aids in Sierra Leone
BoP - Base of the Pyramid
CED - Committee for Economic Development
CSI - Corporate Social Investment
CSR - Corporate Social Responsibility
CSP - Corporate Social Performance
DJSI - Dow Jones Sustainability Index
FDI - Foreign Direct Investment
GDP - Gross Domestic Product
GII - Gender Inequality Index
GIZ - Deutsche Gesellschaft für Internationale Zusammenarbeit
GMCL - General Mills Company Limited
GNI - Gross National Income
GRI - Global Reporting Initiative
GTZ - Deutsche Gesellschaft für Technische Zusammenarbeit
HAF - Heineken Africa Foundation
HDI - Human Development Index
ILO - International Labour Organization
MDGs - Millenium Development Goals
MNC - Multinational Corporation
MPI - Multidimensional Poverty Index
NCDO - National Committee for International Co-operation and Sustainable Development
LIC - Low Income Country
LMIC - Lower Middle Income Country
OECD - Organization for Economic Cooperation and Development
SAB - South African Breweries
SLBL - Sierra Leone Brewery Limited
SLRTA - Sierra Leone Road Transport Authority
UN - United Nations
WBCSD - World Business Council for Sustainable Development
List of figures
Fig. 2.1: Carrol‟s pyramid of CSR 15
Fig. 2.2: Visser‟s pyramid of CSR in developing countries 16
Fig. 3.1: GDP per capita Sierra Leone and Sub-Saharan 19 Africa (1960-2012)
Fig. 3.2: Heineken‟s CSR policy: „Brewing a better future‟ 22
Fig. 3.3: Heineken‟s contribution to MDGs 31
Fig. 3.4: Diseases in Heineken‟s Sub-Saharan Africa 32
Fig. 4.1: GDP per capita Ghana and Sub-Saharan 34 Africa (1960-2012)
Fig. 4.2: SABMiller‟s sustainable development strategy: 37 „Ten principles. One future.‟
1. Introduction
On the cover of this thesis is a picture of our planet with three hands in a protecting position around it. When searching for the term „corporate social responsibility‟ (CSR) on Google Images pictures like this appear quite often. It seems as if this picture wants to say that the earth needs to be protected, that danger is awaiting and that earth is fragile. Tha fact that this picture is linked to CSR seems to imply that CSR is a way of protecting and carefully handling planet earth. This last thought is a popular view among corporations. Of course they would like to come across as responsible businesses. But is the view that CSR is a solution for multiple problems not a bit one-sided? Is or was CSR really the solution for protecting planet earth against some kind of danger as the picture apparently suggests? Anyway, more and more companies are conducting CSR because they feel they should do business in a responsible sustainable manner and take the well-being of their stakeholders into consideration.
An important question is whether CSR is actually a solution for fighting global problems, like poverty or global warming. Africa is a continent with many poor countries, and a lot of companies are already conducting CSR in this continent. Often these companies state that they contribute to the Millenium Development Goals (MDG‟s) and that they improve the socio-economic development of the region they are working in. There is nevertheless not enough research done yet to confirm this view. Different scholars acknowledge that there hasn‟t been done much research yet about CSR in sub-Saharan and in developing countries more generally. Among those who did, though, is Wayne Visser who states that “the volume of published papers [regarding CSR in Africa] is extremely low”. 1 Dobers and Halme agree with Visser and add that the need for research on CSR in developing countries is more pronounced than the need for research on CSR in developed countries. This is because CSR activities might provide social goods for the local population and those goods are more needed in developing countries than in developed countries.2
To increase the amount of research done on CSR in developing countries and to find out whether CSR could be a solution to socio-economic challenges in developing countries, this master thesis will discuss this topic by looking at two case studies, the CSR policies of two
1
Wayne Visser. “Research on Corporate Citizenship in Africa. A Ten Year Review (1995-2005).” In Corporate Citizenship in Africa: Lessons from the Past; Paths to the Future, eds. Wayne Visser, Malcolm McIntosh and Charlotte Middleton. Austin: Greenleaf, 2006, 14.
2
breweries in sub-Saharan Africa. The central questions of this research are how CSR is conducted in developing countries and what the socio-economic outcomes are of the CSR practices of the two case studies, more specifically from the year 2000 onwards.
To further the understanding of CSR in developing a theoretic framework will be used. The case studies will be mirrored to this framework. A lot of scientists have investigated (different aspects of) CSR. A number of important theories have emerged from this debate, of which Archie Carroll‟s „Pyramid of CSR‟ is one. Wayne Visser, a researcher specialized in CSR in developing countries developed the „Pyramid of CSR in developing countries‟, based on Carroll‟s pyramid. These theories explain what CSR actually entails, in developing countries as well as in rich countries. Both theories are considered influential.
Concerning socio-outcomes it is important to be aware of the following. A lot of claims have been made about positive and negative impacts of CSR but there is little information about the outcomes. Micheal Blowfield presents in his 2007 article convincing evidence that scholars know much about the outcomes for the businesses itself but little about the outcomes for the societal problems it was about to tackle.3 He states that much more is known about the environmental impact of CSR then about the social or economic impact, especially in developing countries.4 The fact that I am conducting research in the socio-economic area in a developing region makes this thesis informative, because this hasn‟t been done much before, but raises the level of difficulty as well since I have to explore rather unknown ground.
Some research in the form of case-studies has already been done by some scholars, but those researches focused mainly on the oil- and mining industry or have a narrow geographical focus (i.e. in Africa Nigeria and South-Africa receive a lot of attention). It is therefore hard to claim that a clear overview of CSR in developing countries is exists. I have decided to concentrate on a more under researched sector to broaden the knowledge on CSR in developing regions. Two breweries situated in West-Africa will be my case-studies. I have chosen for a brewery in Sierra Leone which belongs to the Dutch company Heineken International and a brewery in Ghana which is mainly owned by the company SABMiller, a brewery with its origins in South Africa. These two case-studies will strengthen this research because it gives an insight in the practice of CSR because these two companies are not directly harming the communities the work in in an environmental or socio-economic way.
3 Michael Blowfield, “Reasons to be cheerful? What we know about CSR‟s impact.” In Third World Quarterly
28, no. 4 (2007): 694.
This is different from for instance mining companies or oil-companies which can hardly avoid any e.g. environmental damage to the region they work in. Those two breweries have extensive CSR policies in place for years now, and it is interesting to look for socio-economic outcomes to find out what the real benefit for the stakeholders has been. Between Ghana and Sierra Leone are multiple socio-economic and political differences, although there both developing countries, which makes it interesting to explore whether one CSR practice flourishes more than the other in relation to the situation in the respective country. A recent news article showed the importance of breweries in Africa as more Africans are starting to drink beer. Breweries thus reach many people nowadays (making their impact significant) and this phenomenon makes breweries a significant subject of research.5
Regarding socio-economic outcomes, it is important to realize that outcomes are not the same as impacts. Outcomes tell us what kind of changes, e.g. socio-economic or environmental changes, did occur while impacts tell us how the lives of beneficiaries are impacted on a deeper, broader level, e.g. health improvement. I have chosen to investigate outcomes since impacts would broaden the scope of my thesis to an unfeasible level. I intend to find out whether CSR can improve the livelihoods of the people living close to the breweries and the country as a whole.
It is important to clearly define what CSR is and how the term is going to be used in this thesis. From the amount of different definitions of CSR can be concluded that this is a difficult concept to narrow down in a few sentences. Aspects which appear in most of those definitions are “beyond the interests of the firm and what is required by law”, “environmental, economic, social development of society/community” and “integrated in business operations”. So a few things become clear: CSR is voluntary, it should benefit the society or community, and is an integrated part of the business strategy. CSR clearly claims to develop society in multiple ways. Therefore socio-economic improvements should be visible when investigating the results of CSR policies. The definition used by the World Business Council for Sustainable Development (WBCSD) is the one that will be used in this thesis. According to the WBCSD, "Corporate Social Responsibility is the continuing commitment by business to contribute to economic development while improving the quality of life (level of different
variables, like health, family life, community life, political stability, climate et cetera) of the workforce and their families as well as of the community and society at large."6
While writing this thesis some challenges arose which the reader should be aware of. Since the possibility to visit the sites in Ghana or Sierra Leone and speak directly to the people involved was not there, other independent sources needed to be found. Many organisations and people (Dutch, European and African) where contacted, but they could not or would not provide any information. So apart from a few independent sources (e.g. small interview with Ghanaian journalist or report of ActionAid), most of the information came from reports from Heineken and SABMiller themselves. This information is coloured. They have an interest to present their results in a positive way, which might decrease the level of transparency and honesty. As a result it was hard to draw hard conclusions. In the conclusion the reader will find out that there is a clear overview of the CSR activities of the breweries, but that is often hard to draw strong conclusion about socio-economic outcomes. In short, Heineken‟s CSR policy is less extensive than SABMiller‟s, but SABMiller tried to dodge taxes (according to ActionAid) in Ghana which makes them unreliable and their CSR activities implausible. Therefore Heineken‟s practices were valued better in this research. But once again, that conclusion is based on few independent sources. Further research on this topic should therefore only be done when the researcher has the possibility to speak directly to the people involved.
The first chapter will discuss theories about CSR in general and CSR in developing countries. It will show that there are some differences between the two and it will end with the presentation of the theoretical framework. This chapter will be based mainly on the research of multiple scientists. About CSR in general some scholar‟s ideas turned out to be quite influential and therefore they will receive attention in my chapters to improve the understanding of CSR. After the first chapter both case studies will be investigated to see how two big MNCs shape their CSR strategy and whether theory and practice correspond. In these two chapters primary sources are most important. Evaluations of third parties like the Dutch consulting firm Steward Redqueen and the German Ministry for Economic Cooperation and Development, sustainability reports of Heineken International, SABMiller and Accra Brewery Limited, websites of the breweries, reports of NGO‟s like ActionAid and NCDO and news
reports will prove useful for investigating those MNCs and the CSR climate in Sierra Leone and Ghana.
Although many scientists and international organizations including the United Nations (UN) keep using words such as „developed‟ and „underdeveloped‟ to describe the socio-economic situation of a particular country I have decided to not use those terms. Those terms became more and more euphemistic because of the many different aspects of terms like „developed‟. Development can mean a lot of different things and is highly influenced by culture, ethnicity, and interests. Therefore I have decided to use the terms „developing countries‟ which was chosen by the countries concerned.7 I will also use terms like Low Income Country (LIC) and Lower Middle Income Country (LMIC), to describe countries that fit in these categories, according to the World Bank.8 Those categories are absolute (because they are based on the Gross National Income (GNI) per capita) instead of the relative, euphemistic categories like underdeveloped countries‟, „less-developed countries‟ et cetera.
7
--, “Developing Countries.” In Dictionary of development: Third World economy, environment, society, eds. Brian W.W. Welsh and Pavel Butorin. New York: Garland, 1990.
2. Theory of Corporate Social Responsibility
This chapter presents the theories of CSR in a „general‟ situation and in developing countries. It is important to understand what CSR entails and what the most important visions on this business strategy are. This chapter ends with the presentation of theoretical framework which will be used to analyse my case studies.
2.1 General CSR theory
In 1953 Howard Bowen published his book „The social responsibilities of the businessman‟. This book is considered the first book on CSR. The decades before 1953 CSR existed mostly as strategic philanthropy.9 Bowen stated that, since the biggest firms in the world have a large influence on the lives of millions of people, these firms should conduct business in a responsible manner. In the following decades this line of thought became more important because the prominence of companies worldwide was growing.10 Legislation was adopted in Europe and the United States regarding protection of employees and consumers, so companies were obliged to take into account the interest of other parties.11 The view that CSR could be beneficial for a company in economic terms was presented in the „60s.12
One of the most cited views on CSR is the one of Milton Friedman, and important 20th -centure economist and advocate of free-market capitalism.13 14 In 1970 he published his article The Social Responsibility of Business is to Increase its Profits.’ He stated that a corporate executive is an employee of the shareholders en should therefore do what these shareholders wishes; which is mostly making maximum profits.
Nine years later Archie B. Carrol challenged Friedman‟s so-called agency-theory of CSR in his article „A Three-Dimensional Conceptual Model of Corporate Performance‟. This is was one of the new directions in CSR thinking, which appeared in a context of rising protest against capitalism and growing social concerns. These protests led to more regulatory
9
Archie B. Carroll, “A Three-Dimensional Conceptual Model of Corporate Performance.” In Academy of Management Review 4, no 4 (1979): 497.
10 Ibidem.
11 Rosemaria C. Moura-Leite and Robert C.Padgett, “Historical background of corporate social responsibility.”
In Social Responsibility Journal 7, no. 4 (2011) 532.
12
Carroll, History of CSR, 27.
13 --, “The legacy of Milton Friedman, a giant among economists.” In The Economist Online, 23 November
2006.
14
procedures from the government and more legal requirements.15
Carol‟s model, called the „pyramid of CSR‟ is still important because it comprehends all the different aspects of CSR and could therefore explain the actions of businesses. He defines four different social responsibilities; economic, legal, ethical, and discretionary responsibilities. This theory will be one part of my theoretic framework because it is comprehensive, clear and is considered influential.
In the 80‟s stakeholders were getting more attention in the CSR debate. Important is the book written in 1984 by R. Edward Freeman, titled „Strategic Management: A Stakeholder Approach.‟ This book laid the foundations for the stakeholder theory and was published in these years partly because of the widespread ethical scandals. The attention of the public was focused on wrong-doings of corporations and managers like the Union Carbide Bhopal explosion in India in 1985 which killed thousands of people and controversies on companies active in apartheid South-Africa.16
He calls for more awareness for this group because firms cannot thrive without the support of stakeholders, among them consumers, employees, suppliers, and communities.17
Therefore he believed that CSR is important for the overall economic well-being of the firm.
The discussion about CSR is still going on. One of the latest contributions to this discussion is a sceptical view on CSR, published by Peter Fleming and Marc T. Jones. Their book „The end of Corporate Social Responsibility‟, published in 2013 argues that companies do not focus on the real problems facing the world today, but their main goal is to show he world that corporate goals and social good can be reconciled. Furthermore they criticized stakeholder theory. According to them stakeholders do not have equal power and the less powerful stakeholder groups are easily ignored when their demands are incompatible with the wishes of the company. Thus CSR practices are incapable of benefiting the whole society.18 They stated that most of the CSR-related activities of companies are nothing more than a way to gain legitimacy from consumers and employers to further their exploitative and colonizing agenda.19
15 Domenic Melé. “Corporate Social Responsibility Theories: Historical background.” In The Oxford Handbook
of Corporate Social Responsibility, eds. Andrew Crane et al. Oxford: Oxford University Press, 2008.
16
Carrol History of CSR. 36.
17 R. Edward Freeman, Strategic Management: A Stakeholder Approach. Boston: Pitman, 1984, 52.
18 Ross Brennan, Review of “The End of Corporate Social Responsibility: Crisis & Critique” by Peter Fleming
and Marco T. Jones. University of Hertfordshire: 2013, 4.
CSR theory and practice is not only shaped through scientific debates, but also through international organization. Organizations are for instance the Organisation for Co-operation and Development (OECD) with their Guidelines for Multinational Enterprises. In 1976 the first edition of these guidelines was presented and adopted by the 34 member-states of the OECD. The goal of the Guidelines is to „aim to encourage and maximise the positive impact Multinational Enterprises (MNEs) can make to sustainable development and enduring social progress.‟20
The Guidelines pay therefore attention to multiple CSR topics among which are compliance with legal obligations, abstaining from bribing, disclosure of information et cetera. These Guidelines are often revised, the most recent version being presented in 2011. In this revision a chapter on human rights was added. Stephen Tully claimed in 2001 that the Guidelines were „the most prominent intergovernmental code of conduct‟.21
Nevertheless there is also critique; Amnesty International stated after the 2011 revision that the Guidelines „fail to include adequate standards on disclosure and consultation with affected or potentially affected communities, including specific requirements for consultation with indigenous communities and free, prior and informed consent.‟22
In 2000 the UN started Global Compact. This initiative entails the following: „The UN Global Compact is a strategic policy initiative for businesses that are committed to aligning their operations and strategies with ten universally accepted principles in the areas of human rights, labour, environment and anti-corruption. By doing so, business, as a primary driver of globalization, can help ensure that markets, commerce, technology and finance advance in ways that benefit economies and societies everywhere.‟ 23
Today more than 10,000 corporations and stakeholders from 130 countries are member of Global Compact and have promised to adhere to the Ten Principles of Global Compact. Any company who nowadays claims to place high value in CSR should be a member of Global Compact.
The third and last important CSR initiative is the Global Reporting Initiative (GRI), which started in 1997. GRI works closely together with UN Global Compact and aims „to make sustainability reporting standard practice for all companies and organizations.‟ 24
Sustainability reports of corporations should, according to GRI, include information about the
20 OECD Website, Guidelines for Multinational Enterprise.
21 Stephen Tully, “The 2000 Review of the OECD Guidelines for Multionational Enterprises.” In The
International and Comparative Law Quarterly 50, no. 2 (2001): 395.
22 Amnesty International, Public Statement: The 2010-11 Update of the OECD Guidelines for Multinational
Enterprises has come to an end: the OECD must now turn into effective implementation, 2011.
23
UN Global Compact Website, Overview of the UN Global Compact, 2013.
economic, environmental and social impact of a company. Nowadays almost 6,500 organizations use the GRI guidelines for writing their sustainability reports, making GRI the standard.25
1.2 CSR in developing countries
The first paragraph showed the „general‟ CSR theories, which are often Western-centred. It is thus the question whether these theories (and especially Carroll‟s „Pyramid of CSR‟) could explain CSR practices in developing countries. There are multiple theories and views on CSR in developing countries. The information below shows that CSR in developing countries is not the same as CSR in rich countries. Other problems arise in developing countries, compared to Western countries and therefore another agenda is needed to address the needs of these countries properly. Wayne Visser saw those differences and altered an existing theory (Carroll‟s Pyramid of CSR) to explain CSR in developing countries, this theory will be a part of my theoretical framework but this paragraph starts with a brief overview of some other theories about CSR in developing countries.
Scholars mostly agree that CSR in developing countries is different from CSR in richer countries. Dobers and Halme, for instance, state that the need for research on CSR in developing countries is high because those national governments often cannot provide the necessary social services for their people. In circumstances like those companies might come under more pressure to fill that gap, because of expectations of the public or companies feel a moral obligation to provide those missing social services.26
One of the important thoughts is that CSR might get a different twist when it is practised in a developing country with weak institutional environments underlined by arbitrary enforcement of law, bureaucratic inconsistency, insecurity of property of rights and corruption.27
In 2009 the Deutsche Gesellschaft für Technische Zusammenarbeit (GTZ) conducted research on behalf of the German Ministry for Economic Cooperation and Development about hindering and promoting factors for CSR in sub-Saharan Africa.28 They concluded that a lot of factors are responsible for succeeding of failing a CSR practice. The most important factors are stakeholder engagement, the „enabling environment‟ created by the local government, the
25
Global Reporting Initiative Website. Database.
26 Dobers and Halme, 237. 27 Dobers and Halme, 242. 28
extent to which beneficiaries‟ needs are properly identifies and the commitment of the staff. In 2011 GTZ did another research concerning CSR in Africa and concluded that apart from the well-known dark side of Africa (widespread poverty, major health issues, low education level et cetera) there is also a bright side. The investigators saw a reshaping of institutional environments through constitutional and legislative reforms to improve the conditions for economic development.29
Wayne Visser names multiple reasons for CSR to be conducted in developing countries.30 Socio-economic priorities are an important driver. In Nigeria for example, CSR is especially aimed at e.g. fighting poverty, healthcare provision and education. Western CSR is much more focused on e.g. consumer protection and green marketing.31 Filling governance gaps is another important driver for CSR. Often governments in developing countries are too weak to adequately ensure health care, education, roads etc. The CSR approach of MNEs is often seen as a way to fill those gaps. The risk, when it comes to using CSR as a way to fill gaps left behind by governments, is that MNEs turn into some kind of governing body on which people rely when MNEs are in fact just companies trying to make profit.32
Because of a lack of strong governmental control on the performance of firms stakeholder groups are another driver. The last notable drivers are the requirements that are being imposed by MNEs on the supply chains. „Fair trade‟ and other labelling schemes for agricultural products are more widespread, partly as a consequence of revelations of labour and child abuse in the supply chains of companies like Nike and Apple.
It is clear that CSR is different from CSR in Western countries. Nevertheless are many CSR agendas based on Western situations, while a Southern-centred CSR agenda is necessary according to Ralf Barkemeyer33 and Uwafiokun Idemudia34 and even the United Nations (UN)?35 They all argue that CSR is often driven by the interests of companies, campaign
29 GIZ, Shaping Corporate Social Responsibility in sub-Saharan Africa. Guidance Notes from a Mapping
Survey. Berlin: Federal Ministry for Economic Cooperaton and Development, 2012, 10.
30
Wayne Visser, “Corporate Social Responsibility in Developing Countries.” In The Oxford Handbook of Corporate Social Responsibility, eds. Andrew Crane et al. Oxford: Oxford University Press, 2008, 480.
31 Ibidem, 482. 32 Ibidem, 484.
33 Ralf Barkemeyer,”Beyond compliance – below expectations? CSR in the context of international
development.” In Business Ethics: A European Review 18, no. 3 (2009): 285.
34 Uwafiokun, Idemudia, “Corporate social responsibility and developing countries: moving the critical CSR
research agenda in Africa forward.” In Progress in Development Studies 11, no. 1 (2011): 3.
35
groups and investors in rich counties and therefore do not address the actual needs of the people.
Wayne Visser, changed Carroll‟s pyramid of CSR as presented in the foregoing paragraph, making it applicable for developing countries. Visser argues that this pyramid, with a few adjustments, is also useful for understanding CSR in developing countries (see fig. 2.1). Visser switched the order of the different layers and gave the philanthropic responsibilities a more important position. Nevertheless are all the layers the same, so CSR still exists in four ways: economic, philanthropic, legal and ethical responsibilities. Visser‟s model will form the other part of my theoretical framework and I will elaborate more on that in the next paragraph.
2.3 Theoretical framework
To explain the activities of the two breweries in Ghana and Sierra Leone a framework is needed. The most important theories about CSR (in developing countries) are outlined in the two paragraphs above but a combination of two of those theories is deemed the most useful. These theories are Carroll‟s “Pyramid of CSR” and Visser‟s “Pyramid of CSR in developing countries”. These theories are comprehensive and influential. Since both the case studies are located in developing countries one could argue that only Visser‟s theory is applicable, but when it turns out that Visser‟s theory cannot explain the CSR activities of the breweries it is an easy step to apply Carroll‟s theory to see whether that one can explain those activities. Therefore both theories will be used.
Fig. 2.1 Carroll’s pyramid of CSR36
Carroll‟s “Pyramid of CSR” becomes visible in the figure on the page before and comprehends four different responsibilities. In its economic responsibilities a business ought to produce goods and services and sell them at a profit. This is the fundamental assumption. Legal responsibilities mean that businesses have to adhere to the laws and regulations sanctioned by society. Ethical responsibilities are the expectations that society has of companies over and above their legal requirements, essentially „doing what is right‟. Discretionary responsibilities signify the voluntary, philanthropic aspect of CSR. profit.
Fig. 2.2: Visser’s pyramid of CSR in developing countries37
Visser states that Carroll‟s model is a popular one, but almost entirely focused on a American context. This makes Carroll‟s model less useful in a developing countries‟ context.38
Visser switched the order of the different layers and gave the philanthropic responsibilities a more important position.39 Economic responsibilities are as important developing in countries as in Western countries. Foreign Direct Investment (FDI) is, although growing, not abundant in Southern countries and therefore the economic contribution of MNEs is most welcome and the economic responsibility as important as ever. According to Visser, philanthropic responsibilities are more often present in developing countries compared to Europe or North America. This is partly a result of African traditions of philanthropy. Next to that, three other aspects are important as well. The socio-economic need is so large, that philanthropy is an expected standard by the general public. Secondly, companies cannot be successful in a failed society and plain philanthropy is the one of the most direct ways to improve a society. Thirdly, many developing countries have become dependent on foreign aid. Legal responsibilities have, according to Visser, a lower priority in developing countries compared
37 Visser. Corporate Social Responsibility, 488. 38
Ibidem, 489.
to high income countries. 40
This is not because companies do not want to comply to legal regulations, but because of the fact that there aren‟t that many legal regulations. Tax avoidance by companies is therefore a major problem in developing countries. Finally, ethical responsibilities are the least important in the developing countries. Corruption negatively influences business and not every African government wants to change that. Visser calls for an improvement of ethical responsibilities which incorporates good governance. The other responsibilities will thrive when the ethical one flourishes.41
40
Dobers and Halme, 243.
3. Heineken International and CSR in Sierra Leone
The first of the two case studies investigated will be about the Sierra Leone Brewery Limited (SLBL) in Freetown, Sierra Leone. This brewery was built by Heineken and the United Africa Company in 1961 and started producing the famous Heineken beer in 1965. In this chapter attention will be paid to the socio-economic history and situation of Sierra Leone, followed by the history of SLBL and Heineken International and its CSR practices and outcomes. Activities of the Heineken Africa Foundation, as a part of Heineken‟s CSR strategy, will also be investigated. Throughout this chapter attention will be paid to Carroll‟s and Visser‟s theories.
3.1 Socio-economic situation of Sierra Leone
The Human Development Index (HDI) gives a clear overview of the socio-economic situation of Sierra Leone. This index combines indices of health, education and income. Currently the HDI of Sierra Leone is 0.359, ranked 177th of 185 countries and is slowly climbing since 2000 (HDI: 0.244).42 Life expectancy at birth is currently 48.1 years, 3.3 years of education is average and Sierra Leone scores high on the Multidimensional Poverty Index (MPI) and the Gender Inequality Index (GII). 72.8% of the population lives below the poverty line of 1.25 US$ per day.43 It comes as no surprise that this country is classified as a Low Income Countries with a GDP per capita of US$ 634.90 in 2012. In the graph on the next page the development of the Gross Domestic Product (GDP) per capita of Sierra Leone is visible. GDP per capita doubled since 2004 (mainly because of a recovery of agriculture and mining), but is still one of the lowest of the world and of Sub-Saharan Africa.
When compared to the GDP per capita of sub-Saharan Africa it becomes even clearer that Sierra Leone is a very poor country. About the quality of governance, there are other indicators who visualize that. The World Bank keeps track of the so-called Worldwide Governance Indicators (WGI) about corruption, rule of law, political stability and absence of violence, voice and accountability, government effectiveness and regulatory quality. Almost every indicator shows a small or bigger growth from 2000/2001 onwards, but on the other hand all the indicators are on a very low level.44
42 UNDP Website, Human Development Report Sierra Leone, 2013. 43
African Economic Outlook Website, Country-Notes: West Africa: Sierra Leone, 2013.
It is not strange that from 2000/2001 on a development heading to a higher HDI and higher WGI is visible. A civil war from 1991 until 2002 ripped the country apart with 50,000 casualties and a country in ruins as result. During those years there was not much space and time for socio-economic development, which changed after the war ended in 2002. Since 2005 for instance, the country ranked as one of the top reformers in improving business regulations and rose on the Ease of Doing Business Index of the World Bank.45
Fig 3.1: GDP per capita Sierra Leone and sub-Saharan Africa46
The GIZ emphasized the importance of the government in a successful executing CSR practises. Rule of law and accountability were among other factors, important for an enabling environment. The WGI shows that the government is a long way from delivering those factors on a respectable level. On that basis the conclusion can be drawn that an enabling environment for CSR is absent. On the other hand, a document from the United States government shows that CSR awareness is rising although most of it is of a philanthropic nature.47 Altogether, this is the country in which the SLBL has to do their work and conduct their CSR practices; Sierra Leone: a very poor country, trying to get back up on its feet after a devastating civil war.
3.2 Sierra Leone Brewery Limited and Heineken International
As told at the beginning of this chapter, SLBL and Heineken are connected with each other since 1961, when the brewery was build. This was the first brewery in Sierra Leone, dedicated to brewing the local „Star‟ beer. In 1965 SLBL started producing Heineken under license. Guinness followed two years later.48 The amount of expatriates in the management of the
45
African Economic Outlook Website, Country-Notes: West Africa: Sierra Leone.
46 World Bank Databank Website, World Development Indicators Sierra Leone, 2013.
47 Bureau of Economic, Energy and Business Affiars, 2011 Investment Climate Statement –Sierra Leone. U.S.
Department of State, 2011.
48 SLBL Website, History of SLBL, 2012.http://www.slbrewery.com/history-of-slbl/
0 500 1000 1500 2000 19 61 19 63 19 65 19 67 19 69 19 71 19 73 19 75 19 77 19 79 19 81 19 83 19 85 19 87 19 89 19 91 19 93 19 95 19 97 19 99 20 01 20 03 20 05 20 07 20 09 20 11
brewery declined from in the „70s, making it a truly Sierra Leonean brewery. Heineken proved itself a social responsible employer by looking after its employees. On-the-job training and literacy classes for employees were being held. Production increased up to the point that 96% of the beer consumed in Sierra Leone was produced by SLBL.49 But in the „80s and „90s SLBL was experiencing difficult times. The leone, the Sierra Leonean currency, devaluated. Lack of foreign exchange led to the termination of Heineken production and the production of Star decreased because of a shortage of raw materials. Due to war activities because of the civil war production further declined. In 1997 the brewery was ransacked and closed for half a year. In 1999 rebel forces reached Freetown and destroyed much of the brewery. Heineken was worried of their employee‟s safety and kept paying them one-quarter salary even when they could not work. Despite this arrangement several employees voluntarily continued to work in dangerous conditions. Heineken also increased its shareholders interest so that more capital was available for the rebuilding of the brewery.50 After the millennium the tides were changing. The civil war was over and production increased although Heineken‟s subsidiary did not became profitable before 2010.51
3.3 Sierra Leone Brewery Limited’s and Heineken International’s CSR practices
Heineken invested in their employees from a very early time. That is one part of CSR activities, but CSR contains much more aspects. According to the corporate relations officer of SLBL, Aminata Carew, the brewery „has shown a commitment to local investment through Corporate Social Responsibility by providing industrial skills, employment opportunities, generating tax revenues for the development of the country and also investing in and enriching communities in the country.‟52
This is because it is the vision of SLBL „to be an exemplary company contributing to the sustainable development of Sierra Leone by creating more value to all stakeholders.‟53
It is nevertheless hard to find information about those early years, since reporting about CSR activities was not as such a high level as it is today thanks to initiatives like the Global Reporting Initiative (GRI) which encourages corporations to publish sustainability reports. Therefore the research will start with the first online available annual report of Heineken from 2000. The 1994 annual report was also accessible online and this report showed how little attention was being paid at CSR activities in that report. There was
49 Ibidem. 50 Ibidem. 51 Ibidem. 52
SLBL, Corporate Social Responsibility, 1.
little attention for sustainable environment improvements, and even less attention for employee policies and responsible alcohol usage.54
Regarding the CSR activities of Heineken International it is worth mentioning that Heineken has been part of the Dow Jones Sustainability Index (DJSI) and the FTSE4Good for several times since 2000. Heineken was ranked leading brewer globally from 2007 to 2009 in the DJSI.55 These indices are only accessible for companies which perform well in terms of social responsibility.56 Heineken is also a member of UN Global Compact.57 Annual sustainability reports were written from 2006 on and were influenced by the GRI. The fact that Heineken is part of these indices and initiatives gives a first indication that Heineken is a company who places high value in CSR.
Concerning human rights, an indispensable part of CSR, an independent investigation took place in 2012 about how Dutch businesses pay attention to human rights. Heineken was also investigated. The only thing this report says over Heineken‟s human rights policies is that that policy is a good example of the implementation of human rights principles in a corporation. Heineken launched their human rights policy in 2011 and according to this investigation this is a comprehensive policy. The only critical note was about the fact that human rights impact on local communities was not covered in this policy.58
In 2010 Heineken launched a comprehensive CSR policy called „Brewing a better future‟ in which environment, employees and communities, and responsible alcohol consumption are combined. In the graph below this becomes visible.59 The long-term ambition attached to „Brewing a better future‟ is to be the „the worlds greenest brewer‟. In the words of Heineken: „to us, being green is an overarching, all inclusive concept, not simply another word for environmental credentials. It means sustainability across all aspects of our business – not just the environment. Being green is about making a commitment to people, communities and society. And it means working with others throughout the value chain to make a difference.‟60 These big words are on the one hand entrepreneurial rhetoric, but show on the other hand that Heineken has a comprehensive CSR policy in place for which it can be held accountable.
54 Heineken International, Jaarverslag 1994, 21-22.
55 Heineken International Website, Sustainability: Benchmarks, 2014. 56 Heineken International, Annual Report 2002, 15.
57
UN Global Compact Website, Participants: Heineken N.V., 2013.
58 BECO, VBDO and Human Rights @ Work. Take a closer look. Current practies of Dutch business on human
rights, june 2012, 40.
59
Heineken International, Sustainability Report 2009, 36.
Fig 3.2: Heineken’s CSR policy: ‘Brewing a better future’
3.3.1 Environment
The environment is an important part of mainstream CSR practices. Logically, in every annual report or sustainability report from 2000 on attention is being paid to the environment. The annual report in 2000 shows a greater commitment to environment compared to the 1994 report and this commitment is even more visible in the sustainability reports written from 2006 on. Water usage is an important part of Heineken‟s CSR policy, since producing beer requires large amounts of water. Wastewater treatment plants were built at all Heineken breweries in Africa (including SLBL) to reduce the misuse of water.61 Energy-saving measures are also taken and further developed.62 According to Heineken these environmental policies addresses all links in their supply chain, making it a comprehensive approach.63 A recent example of energy efficiency by SLBL is the installation of so-called Green Fridges. This should result in an average energy saving of 38 per cent.64 The new water treatment plant, first used in 2013, should further reduce the use of water. Since SLBL is the largest consumer of water in Freetown, this is important for SLBL as well as for the communities surrounding the brewery.65 In the last three years energy consumption, water consumption and
61 Heineken International, Annual Report 2000, 20. 62
Heineken International, Annual Report 2002, 16.
63 Heineken International, Annual Report 2003, 20. 64 SLBL, 2.
65
CO2 emission decreased with respectively 16, 50 and 14 per cent.66 All this shows that Heineken is increasing its commitment to the environment since 2000. Nevertheless must be acknowledged that there are no independent sources available to confirm these claims.
4.3.2 Employees
Concerning employee policies Heineken stresses in almost every report that it is important to care for their employees. Because of its international activities there are a lot of cultural differences between countries and therefore employee policies are largely decentralized, thus being the responsibilities of the local breweries themselves.67
In Africa, training of local personnel is import and therefore a part of Heineken‟s CSR policy, mainly because employees have to work in difficult conditions.68 This could be due to weather conditions, political tensions or safety issues. Regarding personnel healthcare in Africa guidelines have been written to take good care of employees infected with HIV/aids. In countries where employees cannot be helped by their normal healthcare providers, Heineken provides aids management drugs to them and their families.69 Heineken does this since the 1990s.70 Two incentives were leading in starting employee health care. Dutch expatriates working in sub-Saharan Africa saw the health situation of the local staff, and when they compared that to their own access to healthcare they asked Heineken to do something about the bad healthcare situation of the local employees. The second incentive is that a healthy workforce can benefit a company greatly.71 SLBL has extended this healthcare package and gives employees and their families treatment of malaria and tuberculosis as well.72 In 2006 Heineken operated from their own clinics in 15 different locations in Sub-Saharan Africa. Worldwide 100 doctors were employed and 30,000 employees and their families profited from these facilities.73 Bed nets impregnated with an insecticide to prevent malaria are distributed to all employees and their families for the first time in 2006.74 Furthermore extra care for pregnant women and babies is present free of charge. Heineken sees providing good
66 SLBL, 2. 67
Ibidem, 21.
68 Ibidem, 35
69 Heineken International, Annual Report 2001, 21.
70Katinka C. van Cranenburgh and Daniel Arenas, “Strategic and Moral Dilemmas of Corporate Philanthropy in
Developing Countries: Heineken in Sub-Saharan Africa.” In Journal of Business Ethics, Published online on 17 June 2013, 6.
71 Ibidem. 72 SLBL, 1. 73
Heineken International, Sustainability report 2006, 32.
healthcare to their employees as their responsibility when government or private parties do not.75 In 2010 a special program was started to investigate healthcare situations around the world to provide better healthcare for employees and families.76
In the same year SLBL started Heineken‟s alcohol policy, to promote the responsible consumption of alcohol and prevent abuse and misuse. A special part of this policy was meant for SLBL‟s own employees. To avoid alcohol abuse within or outside the workplace a program of trainings named ‟Cool@Work‟ were given to the staff.77
A Business Code of Conduct was launched by SLBL in 2007, adapted from Heineken International. This code gives guidelines on corruption, bribery, acceptable behaviour, doing legal and ethical business et cetera, to make sure that the brewery is more socially responsible.78 This Code is also linked to efforts of the Sierra Leonean government to fight corruption. It was presented in the staff canteen in Freetown were the Chief Executive Officer (CEO) said that as the only brewery in Sierra Leone and one of the leaders in corporate Sierra Leone it is their duty to show leadership in CSR.79
In the 2004 annual report Heineken reports that a program has been launched in Africa to make sure that employees use the right protective clothing and machines to avoid accidents.80 Accidents in breweries happen more often in Africa, compared to other parts of the world, therefore Heineken wanted to avoid further accidents.81 Avoiding accidents stays, logically, important for Heineken. Therefore goals were made when Heineken started with „Brewing a better future‟ to decrease the number of fatalities and casualties in breweries and their supply chain. International Labour Organisation (ILO) standards are important when Heineken is developing safety policies.82
All these CSR practices are aimed at improving the lives of their employees and families. As becomes clear in this subparagraph, through the years Heineken expanded its programs to what they are today. They seem quite comprehensive, but once again: more independent sources about SLBL were unavailable so a thorough evaluation of their activities is not
75 Heineken International, Sustainability Report 2007, 31. 76 Heineken International, Sustainability Report 2007, 32. 77 SLBL, 1.
78 SLBL, 1. 79
Vidal Boltman, “Sierra Leone Brewery launches its Code of Business Conduct.” In Awareness Times Newspaper (Freetown), 28 February 2007.
80 Heineken International, Jaarverslag 2004, 35. 81
Heineken International, Annual Report 2003, 21.
possible, although there are some reports available about employee circumstances in Heineken‟s breweries in Cambodia and Mexico and some other countries. These reports were written by SOMO (Dutch NGO specialized in investigating multinationals) and VBDO (Dutch organization for sustainable investments). In Cambodia Heineken employed women as beer promoters in clubs and bars since 1998. These women received a wage far below living wage and these women often encountered sexual harassments during their work.83 In Mexico Heineken did not ensure the right for their employees to unite themselves in labour unions and was criticised for that by SOMO and VBDO.84 In 2014 VBDO was still not satisfied with the level of human rights of Heineken‟s employees, because of the fact that the two cases named before where not yet properly resolved.85 These cases show that Heineken is not such a good employer as their sustainability reports would like the reader to believe but these reports are not about SLBL in Sierra Leone. Independent sources about that brewery are not available, therefore it cannot be concluded if Heineken is as good of an employee as they themselves state in Sierra Leone or as bad of an employee as the SOMO/VBDO-reports indicate in Mexico and Cambodia.
Concerning the theoretical framework used, it becomes clear that a large part of the CSR activities are of an ethical and philanthropic nature. Taking care of your own personnel is what society expects but taking care of their families as well is philanthropic. Some practices are both ethical and economic, because making sure that your personnel receives proper healthcare also improves the productivity of the company. This is a good example of a sword that cuts both ways. So far it seems that Visser‟s theory is correct, and that Carroll‟s theory is not applicable to developing countries.
3.3.3 Communities
Heineken is very well aware of the drawbacks of the consumption of alcohol. Therefore responsible alcohol consumption is one of the main priorities for Heineken. A co-operation with governments, the alcohol industry and other organizations is, according to Heineken, necessary to make people aware of the dangers of alcohol abuse. The „Enjoy Heineken Responsibly’-campaign started in 2005 to raise awareness for the dangers of alcohol abuse.86
In Sierra Leone multiple awareness raising programs take and took place (e.g. Cool@Work).
83 SOMO. Heineken. Overview of controversial business practices in 2009, June 2010, 9. 84 SOMO. Heineken. Overview of controversial business practices in 2010, April 2011, 9. 85
VBDO. Mensenrechtenbeleid Heineken stelt teleur, 24 April 2014.
A recent example is a partnership between the SLBL and the Sierra Leone Road Transport Authority (SLRTA) started in 2013 to raise awareness among drivers to reduce the high rates of accidents in Sierra Leone associated with drunk driving.87 This is the first partnership between SLBL and a government agency concerning alcohol awareness since the foundation of the brewery in 1961 and can therefore be seen as a significant move.88
The 2003 annual report is the first one to mention that Heineken does not only care for the well-being of its employees and families but also for the people living close to its factories.89 This is, nevertheless, not further explained in the report. The 2006 sustainability report is clearer regarding CSR for local communities. Heineken states that they „give back‟ largely through local taxes and employment.90 In 2007 one of the first big philanthropic gestures was made when Heineken opened an ICT training centre in Ghana in corporation with the Dutch government. This training centre is meant for the local population, so they could enhance their chances on the labour market.91
„Caring for the local community‟ began taking clear shape when in 2008 the Heineken Africa Foundation (HAF) was established. HAF‟s mission is to „improve the health of those living in Sub-Saharan African communities where Heineken is active.‟92 The establishment of HAF is a clear example of CSR conducted at the expense of the company. This costs Heineken money since Heineken invested 10 million dollar in a trust fund in 200893 and healthcare projects will not be funded if „that may lead to a direct commercial benefit for the local Heineken operation.94 In 2009 another 10 million euros were added.95 An important reason for the establishment of HAF was the fact that criticism arose from stakeholders, NGO‟s and international institution, because health policies for Heineken‟s employees created a health gap between the employees and their families and the local communities.96 HAF works together with the local brewery and local NGO‟s to profit from the local know-how and experience.
87 SLBL, 3. 88
Matthew Jabby, “Siera Leone: RTA, SLBL Sign Partnership Agreement.” In Concord Times (Freetown), 16 December 2013.
89 Heineken International, Sustainability Report 2003, 20. 90 Heineken International, Sustainability Report 2006, 35. 91 Heineken International, Sustainability Report 2007, 34. 92
Van Cranenburgh, 7.
93 Ibidem.
94 Heineken Africa Foundation Website, Funding Criteria, 2013. 95
Heineken International, Sustainability Report 2008, 33.
In Sierra Leone the foundation supported five health-related projects.97 They formed a partnership with the Lion Heart Foundation which opened the Lion Heart Medical Centre in 2010. The focus of the Lion Heart Medical Centre lies with work-related injuries among farmers and improving the healthcare for their families (fighting mother and child mortality). HAF provided funding and made it possible to increase the capacity of this hospital. Another project supported by SLBL and HAF was providing the MEPS Trust Well Women Clinic with (mobile) ultrasounds to fight maternal and neonatal mortality, especially for underprivileged woman. HAF also took the responsibility for training 10 to 15 health professionals to man the clinic. In 2011 HAF and SLBL provided the Wellington Peripheral Health Unit with an ambulance, especially for the transport of pregnant women in critical conditions. Along with this ambulance additional medical equipment was given. Other projects of HAF in Sierra Leone are also aimed at pregnant women.
CSR activities to improve the local community are also conducted by SLBL without HAF. SLBL is, for instance, a key member of the Business Coalition Against Aids in Sierra Leone (BCAASL). This is a private sector initiative to fight HIV/aids which started in 2008.98 Another example is the giving of scholarships to students in colleges, primary and secondary schools or supplying Maltina, a malt vitamin-rich drink also produced at SLBL, at those schools.99 A special CSR practice was the sponsoring of a 10k Fun Run in 2001. This run was organised by the Sierra Leonean Army when the civil war was not yet over to raise money for the NGO Children Aid Direct.100
Most of the activities concerning local communities, named above have a philanthropic nature. The activities of HAF are the largest example of that. Sponsoring a local orphanage with soft drinks might also have an economic nature, since those orphans are the customers of the future. Investing in alcohol awareness campaigns is mainly an ethical thing, since the public expects that Heineken is aware of the dangers of alcohol and that Heineken tries to raise that awareness.
97 Heineken Africa Foundation Website, Projects Sierra Leone, 2013. 98
SLBL, 3.
99 Sahr Morris Jr., “Sierra Leone: SLBL is Committed to National Development – Kobi Walker.” In Concord
Times (Freetown), 4 May 2007.
100
3.3.4. Agriculture
Sustainable agriculture and local sourcing of raw materials are ways for Heineken to deal in a social responsible way with nature and the local economy.101 2005 was an important year for SLBL when it comes to sustainable agriculture. That year they started experimenting with sorghum in its products. Barley does not grow in tropical conditions and was therefore imported from Europe. This was, among other reasons, too expensive and polluted the environment too much, e.g. because of the emission of CO2 during transport from Europe to Sierra Leone. Heineken and SBSL worked together with different partners and started to teach the farmers how to grow, harvest, package, and transport sorghum in a profitable way. The farmers were also given seeds, fertilizers and micro-credits. SBSL promised the farmers to buy a set amount of sorghum and pay a fixed price, to gain the farmer‟s trust.102 Before the use of sorghum in beer it was just a hunger season staple produced by small farmers as a rice substitute. The goal of this approach is to help farmers raise an income from their sorghum production to alleviate poverty and for SLBL to get high quality crop for a lower price with lower emissions. At least 2,000 farmers and 12,000 families should (not clear yet?) profit from this initiative.103
This initiative is a good example of an economic responsibility while also improving the socio-economic conditions of many people. It is cheaper for Heineken to source the raw products locally, while the local communities benefit from a growing agricultural sector. The fact that SLBL seemed to be quite generous with giving out micro-credits, guaranteeing a fixed price and amount, and supporting the farmers in the production of sorghum gives the impression that there was also some philanthropy involved.
3.4 Socio-economic outcomes of CSR conducted by Sierra Leone Brewery Limited and Heineken International
In this paragraph the outcomes of the activities named above will be investigated as far as possible. As stated in the introduction of this thesis investigating outcomes of CSR practices is not an easy task. The foundation for my research will be different sources, from Heineken and SLBL as well from third parties like consultancy organizations Triple Value and InReturn
101 Heineken International, Sustainability Report 2012, 18. 102
Heineken International, Sustainability Report 2010, 48.
and the Dutch National Committee for International Co-operation and Sustainable Development (NCDO).
About the socio-economic outcomes of Heineken‟s and SLBL‟s general (CSR) practices two reports were written, both in 2006. One report was written by the consultancy organizations Triple Value and InReturn commissioned by Heineken and NCDO. They conducted a so-called economic impact assessment to investigate the economic impact of Heineken in Sierra Leone. Heineken wanted this investigation because the economic impact „over and above the profit and loss account had not been studied before.‟104 Heineken thought this was important because their contribution towards realisation of the (poverty-related) MDGs needed more investigation. According to Heineken this assessment was important because „economic development and poverty reduction are not only important from a humanitarian perspective – in many emerging markets lack of economic prosperity is also one of the most important obstacles to further growth of our businesses. Understanding precisely what determines the level of our impact gives us an opportunity to optimise the positive influence we have.‟105
A couple of things were concluded. An important conclusion is that SLBL pays all its required taxes.106 SLBL adds 0.5 per cent value to the Gross Domestic Product (GDP) of Sierra Leone, SLBL‟s workforce is 0.3 per cent of estimated people with formal jobs and SLBL contributes 3.7 per cent of the total tax payments of Sierra Leone‟s tax revenues.107 Next to that SLBL spends money in the Sierra Leonean economy which is subsequently re-spend, therefore causing indirect economic effects.108 Since beer production and distribution is a labour-intensive process a lot of indirect jobs are supported by SLBL. In 2006 175 people were direct employees of SLBL while a total of 6.900 people had a job because of SLBL‟s presence. This presence is also beneficial for the poor (income below 0.75$ per day) and the very poor (income below 0.35$ per day) because indirect and direct cash flows reach those groups. In 2006 this was between 2.5 and 3 million US$ per group.109 The substitution of barley with sorghum benefits the economy and the poor even more.110 These results were for the Financieele Dagblad (a Dutch financial newspaper) reason to write an article with the title „Heineken helps Sierra Leone.‟111
All these numbers seem quite impressive, and they are, but
104 Heineken International, Sustainability Report 2006, 36. 105 Ibidem.
106 Triple Value and InReturn, Economic impact of Heineken in Sierra Leone, 2006, 14. 107 Ibidem, 15. 108 Ibidem, 17. 109 Ibidem, 26. 110 Ibidem, 31.
on a national scale their positive influence is quite small. Nevertheless does SLBL have a significant economic influence, especially in the neighbourhood of the brewery.
The NCDO wrote a report on the impact of MNCs of the MDGs. A special model was developed to investigate the impact of this MNCs called, this framework contained 77 different indicators. NCDO concluded that the main contribution to MDGs was the core business of a MNC. Each different MDG was awarded with a different score (0-100) to see what the impact of the MNC was. This is in fact a very vague way of presenting the results, because it is unclear what each score means. Despite this deficiency one conclusion can be drawn. Heineken has the most impact on the fourth and sixth MDG, respectively reducing child mortality and combating HIV/aids and other diseases. This becomes visible in the graph on the next page. In Heineken‟s 2010 sustainability report Heineken‟s impact on the MDGs is mentioned as well. They argue that they contribute to multiple MDGs, mainly the goals about fighting poverty, fighting diseases and reducing child mortality and improving maternal
health. 112
The projects to substitute barley with local grown sorghum which started in 2005 turned out to be very successful. This initiative created many jobs, especially for poor farmers which helped alleviate poverty. Currently 600 farmer households and 3,600 people already profited from their increase in cash income and finally 2,000 farmers and 12,000 farmer families should benefit from this project.113 20 tons sorghum was bought by SLBL in 2005 and by 2011 this was more than 500 tons. This also decreased harmful CO2 emissions and resulted in a lower price for SLBL.114 In 2010 Heineken and SLBL received the World Business and Development Award from the United Nations during the MDG Summit in New York. The UN called their sustainable local supply chain initiative „ground-breaking‟.115
Heineken received the award because of the „clear link between vital business practices and the contribution of the project towards the MDGs.‟ In 2011 this project won the Outstanding Achievement Award for Agriculture from the Sierra Leone Chamber of Commerce.116 This clearly signifies the impact that this project had and still has. It is meaningful that the international community and the country itself both acknowledge the positive contribution to the Sierra Leonean economy and to alleviating poverty.
112 Heineken International, Sustainability Report 2010, 47-48. 113
SLBL, 2.
114 Heineken International, Sustainability Report 2010, 48.
115 --, “Heineken International: Heineken honoured for its contribution to alleviating poverty.” In Reuters US
Website, 22 September 2010.
Fig. 3.3: Heineken’s contribution to MDGs117
The healthcare programs Heineken has set up for its employees are, according to Heineken, successful. That claim is not so surprising, since that is the purpose of their PR, but this claim is based on some convincing arguments. In the report about the performances of Heineken in 2003 is mentioned that because of programs in Africa intended to reduce accident and illness less time was lost compared to before.118 In the 2005 annual report was mentioned that no Heineken employees died of HIV/aids, which, according to Heineken, is mainly because their health programs for employees and their families.119 The graph on the next page shows that from 2004 to 2008 people who benefited from Heineken‟s healthcare (mainly employees and their families), had small change of getting infected with HIV/aids. The graph also shows a remarkable decline in the malaria infections by beneficiaries. Figures of more recent years were not available so it is hard to make emphatic statements, but looking at the widespread health programs Heineken deployed in Sierra Leone there can be no other conclusion than that at least 1,000 people in Sierra Leone have access to good health care and that therefore the chance that their living conditions improved is present. But once again, that claim cannot be backed by independent sources.
SLBL is active in BCAASL to prevent HIV/aids in Sierra Leone. This business coalition is a success, according to different news sources. The establishing of BCAASL is called „one of the greatest achievements in the fight against the HIV/Aids pandemic under the leadership of
117 NCDO, Measuring the contribution of the private sector to achieving the Millennium Development Goals. Six
multinationals compared. Amsterdam: NCDO, 2006.
118
Heineken International, Annual Report 2003, 20.
