Environmentally weak China must make CSR a legal requirement

A leading member of the Communist Party has told state media in China that legislation is required to force companies to take corporate social responsibility seriously.

Cheng Siwei, vice-chairman of the powerful Standing Committee of the National People’s Congress, attacked companies which were allowing the pursuit of profit to blind them to their environmental and social duties and made vague threats about legislation to enforce ethical business standards.

“The practice is serious and widespread among Chinese firms. Like other countries, China can no longer tolerate it,” Cheng Siwei, vice-chairman of the Standing Committee of the National People’s Congress, said in a party-published magazine, China Economy Weekly.

The congress itself only convenes for two weeks of the year and for the remaining 50 weeks when it is not in session, the standing committee wields its power. While there is no direct equivalent in a Western democracy, the closest comparison would be an upper house.

While it used to be seen as having symbolic rather than actual power the committee has moved away from solely rubber stamping duties in recent years to make a real contribution to Chinese politics, such as ruling on right to Hong Kong residency and questioning the legality of re-education through forced labour.

In the interview Mr Cheng cited examples of reckless practices including factories discharging torrents of pollution, food companies using cheap, unsafe industrial ingredients and the extraction industries putting pressure on employees to work in unsafe mines.

He said these “irresponsible practices” have prevented Chinese companies expanding their business overseas. Foreign companies operating in China would also need to meet higher standards, he added.

“Society expects companies not only to produce economic profits but also to promote equality and social justice, and balance the interests of different groups,” Cheng said, adding that business affects politics, culture, social values, and especially the environment.

The politician argued that it is to legislate to ensure that there are tough legal sanctions available for companies that shirk their social responsibilities when they do business, but did not go as far as to say how this legislation might work.

“Prompted by both ethics and the law, I believe more and more companies and entrepreneurs will shoulder their share of responsibility to society,” Cheng said.

His demand that more weight be given to environmental and social concerns reflects a growing shift in official attitudes in China, which criticise the idea of growth at all costs and call for a more sustainable path to prosperity.

Just two weeks ago, the newly appointed vice-minister of the State Environmental Protection Administration (SEPA) spoke of the need for a cultural change, as well as more powers for regulators (see related story).

Several Chinese cities have also announced this week that they will be lowering their economic targets to allow them to increase their environmental performance.

But despite the rhetoric, the country is yet to show much tangible progress according to the annual China Modernisation Report which ranked the country as 100th out of 107 when it came to ecological modernisation, the same position it held in the 2004 report.

The report measured factors such as carbon emissions, treatment of sewage and availability of drinking water and acknowledged that while China has made great steps in economic modernisation, it is still lagging behind the vast majority of other countries when it comes to the environment.

Sam Bond

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