Canada's corruption problem

Barely a day goes by at the moment here in Canada without a new twist or turn in a corruption story hitting the headlines. Last week we got news of SNC Lavalin offering an amnesty for any employees providing information about their huge ongoing bribery scandal. The police also announced last week their intent to extradite Dr Arthur Porter for his part in allegedly receiving $22m in return for granting a contract to SNC to build the McGill University Health Centre in Montreal.

Meanwhile, Stephen Harper's government is embroiled in a major, and very persistent, scandal involving an attempted cover-up of some dodgy expenses claims by a conservative senator. This involved Harper's (now resigned) Chief of Staff giving a "gift" of $90,000 to Senator Mike Duffy to reimburse his questionable claim and stave off any further the investigation. Oh, and who can ignore the now internationally ridiculed mayor of Toronto, who in the wake of allegations about him being caught on video smoking crack, has now had 5 members of his administration resign or get fired for, so far, unspecified reasons. Add to that the other revelations trickling out of the ongoing Charbonneau Inquiry into corruption in Quebec, and a second Laval city mayor in a matter of months accused of taking bribes and clearly all is not well in the country formerly known for peace, order and good governance.

On the face of it, Canada has a serious corruption problem. So it was refreshing to hear last week at the aptly timed Spotlight on Anti-Corruption organized by Transparency International Canada that actually, with respect to upholding its obligations for combating international bribery, Canada is actually in the midst of a major upswing. Following years of apathy and a failure to prosecute any violations of the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, in the last few years we have seen the setting up of a dedicated and fully resourced police department responsible for anti-corruption, and since 2011 the first handful of persecutions. Remarkably, the Canadian police are now investigating no less than 35 cases of alleged bribery by Canadian companies overseas.

The general consensus among the anti-corruption community here is that, if not a leader, Canada is no longer a laggard. So one way of explaining away what might seem like a major corruption problem is to put it largely down to increased enforcement and in general a greater attention to corruption in the country. As delegates at TI's Spotlight event last week put it, the 'moral compass' on corruption has shifted for the better.

This view has some truth to it. But in our view, there is more to it than that. After all, the corruption that is hitting the headlines is of a very specific variety. It's not just petty corruption but is in fact involving some of our most senior business and political leaders - CEOs, hospital directors, city mayors, even the PM's office. And many of these leaders are not seemingly ready to take a public stand condemning the practice and doing all they can to root it out. SNC Lavalin is still aiming for a 'rogue employee' defense, whilst the approach of Harper's government seems to be one of secrecy and a refusal to admit any kind of wrongdoing.

This is the kind of corruption that in terms of 'tone at the top' is sending a very dangerous message to the rest of us that no amount of increased enforcement is going to compensate. Corruption, these leaders are implicitly saying, is something we are immune to.

So what is to be done? Well, rather than necessarily seeing this as an intractable problem, all the attention around corruption at the moment also offers a couple of important opportunities.

First, now is the time for our leaders to take a genuine leadership position on corruption. The public is ready to support it, there is a renewed vigor in the anti-corruption community, and Canada has a genuine opportunity to start staking a place closer to the head of the table rather than just aiming for not being quite so bad.

Second, now is also the time for a rethink about the regulatory environment around corruption. The Corruption of Foreign Public Officials Act was a good start and the amendments proposed in the 2013 Bill S-14: Fighting Foreign Corruption Act will make some incremental improvements. But as several delegates at the TI Spotlight pointed out, one reason why the US and other countries are so much more effective at prosecuting corruption is that they can also prosecute through civil law through the SEC. This makes the burden of proof lower and the likelihood of a successful prosecution higher. Institutions like the Ontario Securities Commission should be playing a much greater role in enforcement. Consider that 70% of all of the equity raised for the world's public mining companies happened on the Toronto Stock Exchange last year. This is a real concentration of financing for a major corruption risk industry which means that greater devolution of powers to prosecute corruption here could help enhance the reputation of an industry integral to Canada's economic prosperity.

As the old saying goes, never let a good crisis go to waste.

Photo by IntangibleArts. Reproduced under Creative Commons Licence

Looking for positive outcomes from plagiarism in the Margaret Wente affair

Following on from the earlier guest post from our York colleague Dawn Bazely regarding the Globe and Mail plagiarism case, we asked Dawn to tie up the loose ends by identifying some of the positives that have emerged from the whole affair. This is what she has to say....

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There was a lot of learning to be had from following the Margaret Wente story last week. All in all, last week was important if you have ever written an assignment (e.g. essay or laboratory report), or have taught any form of writing or have read a newspapers or magazine. This covers pretty much most of the Canadian population!

Questions were raised by mainstream journalists, bloggers and hundreds of the readers of online stories, about whether Wente was guilty of plagiarism, and the behaviour of a number of Globe and Mail staff in responding to this allegation. These stories came out in publications that included Macleans, the Toronto Star, the National Post, and Toronto Life, and even the Guardian. Those asking questions included John Miller, a former dean of journalism at Ryerson, Elizabeth James with Vancouver’s North Shore News and the blogger at the Sixth Estate who wrote about How media should handle a plagiarism scandal

Why were the Globe and Mail’s ethics and standards being called into question? In a nutshell, several columns by Globe and Mail columnist Margaret Wente had been scrutinized by an Ottawa artist and professor, Carol Wainio in her Media Culpa blog. Over several years, Media Culpa posted comparisons of older text by other authors to the text in some of Wente’s columns. Wainio made several of these comparisons. Wente’s columns made no attributions or reference to this other work, and strings of words were identical.

What made it possible for everyone to weigh in with an opinion, was that the Media Culpa’s blogs provided similar comparisons if text to those produced by plagiarism software, such as Turnitin.com. With Turnitin output reports, side-by-side text comparisons are made. Every course director and teaching assistant must make a judgment about these Turnitin text reports, and decide what to tolerate in terms of the cutting and pasting of text. There will be a process for taking this up with students whose work is identified in this way.

The response that unfolded to Media Culpa’s posts, which Wainio had conveyed on several occasions to the Globe and Mail, was that various editors and columnists (including Wente herself) defended a position on plagiarism in which a certain amount cutting and pasting of text written by someone else is to be expected and accepted. Reasons for downplaying Wainio’s text comparisons included the pressures of meeting deadlines. A number of well known writers in “old media”, aka the mainstream press defended Wente. Some of them expressed the opinion that upholding the standards and principles of “academic” plagiarism, or the standards taught in university and high school, was just too difficult. The Wente apologists included Terence Corcoran and Dan Delmar at the National Post. Back at the Globe and Mail, the editor, John Stackhouse and the public editor, Sylvia Stead provided very muted and restrained responses, only after torrents of internet chatter ensured that the story did not die down.

Is cutting and pasting so unavoidable, so that we are we all guilty of using other peoples’ phrases and sentences?

Some members of the reading public seem to think so. Jack, commented at the crux of the matter blog: “So she quoted without naming sources. I rarely do. Does that make me a plagiarist? “Sloppy journalism”? Disagree. If that were true we would all be guilty but we aren’t are we?”

The title of Dan Delmar’s column at the National Post was: Are we all “self-righteous” sinners cast(ing) the first stone at Margaret Wente? My answer to this is a definite “no”. Biology laboratory reports provide a good case study for evaluating just how prevalent cutting and pasting actually is. Hundreds of student do the same experiments every year, and write up their results. Up to to now, thousands of these reports have been run through plagiarism software such as Turnitin. This software checks for patterns in words, and compares one person’s text against that from other sources: the internet, other student papers, journals, and whatever other text is available and accessible.

The Turnitin reports shows that it IS possible for thousands of students to write up the same experiment with relatively little overlap in sentence structure. The one exception is the methods section, in which students often quote directly from the laboratory manual, and it has been easy to put guidelines into place for quoting them.

Nevertheless, IS the academic integrity project in jeopardy?

There may be a very real case for arguing that different kinds of writers should be held to different standards, but there is no doubt in my mind that if Margaret Wente had submitted the columns in which Wainio detected unattributed text as undergraduate assignments, that she would have been called in for a chat with the teaching assistant and course director. Not surprisingly, a US Gallup poll found that journalists aren’t high on the public’s honesty list.

While the entire affair raised serious questions about the ethical behavior of powerful members of “old media”, in general, I tend to agree with the Back of the Book blog, that there has been an upside to the Wente case.

Good pedagogy includes raising awareness about the rules of academic integrity and plagiarism. Academic integrity is not primarily about punishment but about learning how not to plagiarize, and give credit appropriately. Many of the frontline workers, such as grad student blogger, gradstudentdrone, in the war on cut and paste have stepped forward during l’affaire Wente, to acknowledge the challenges, and the grey areas of confronting plagiarism.

The reader responses have shown that these principles and ethical codes relating to academic integrity are taken very seriously by many outside of academia and the media. Being able to view the text comparisons directly, was no doubt a contributing factor to the outrage at the behavior of senior editors, and the picture that their actions paint of the corporate culture. Carol Wainio wrote several responses on her blog and in the mainstream media that were calm, measured and logical. This all served to reinforce the impression that a section of the media establishment has been making judgment calls that put them out of line with teachers, readers and members of the mainstream media who are more apt to look at the evidence without blinking. Kathy English, the Toronto Star’s public editor described the Wente case as a test of accountability.

Perhaps the most positive outcome is the broad discussion that the Wente story generated. A very cool example is the discussion thread about this on the Vancouver Canucks Hockey team forum. Thank goodness the fans have something to distract them. This incident also gave many people cause for reflection and rememberance, such as David Climenhaga’s raising the tragic case of Toronto Star journalist Ken Adachi, who committed suicide after being found plagiarizing. 

Dawn Bazeley

Image by Jobadge. Reproduced under Creative Commons Licence

Are Americans working too much?

With many people currently enjoying or looking forward to their summer holidays it is sobering to consider some of the differences in expectation that workers in different countries will have about how much paid time off they can enjoy. Statutory minimum leave varies enormously by country, from zero days in the US, through to 5 working days in China, 10 working days in Canada, and all the way up to 25 working days plus public holidays in countries like Denmark and Norway. Of course, variations in legislated minimums give plenty of scope for more explicit CSR type policies in low-regulation countries such as the US, but even looking at the average leave taken across countries, Scandinavia and most of Europe far outpace North America. Sure, a lot of the talk now is about Americans not having enough jobs, but another way of looking at it is maybe some Americans are simply working too much.

We have been interested in debates about working hours, flexible work arrangements, forced overtime and the like for some time. In the first two editions of our Business Ethics textbook we included cases on young professionals and excessive working hours.  In the most recent 3rd edition, this changed to a case about forced labor, which is a related but quite different issue. These are complicated problems, especially when much of the excessive hours worked by professionals is, in principle, voluntary. Even in sweatshops, some argue that workers choose to work long hours for low pay, because it is better than the alternative - which is no job and no pay.

Anyway, arriving in the inbox today was a nice infographic from onlinemba.com, the fruits of whose labors we've featured before in our survey of the best and worst corporate responsibility infographics. It tells an interesting, and well documented, story of the problems of excessive working hours in the US. We're not sure the call for a return of a 40 hour week will be heeded in the current climate, but it certainly helps start an important conversation. And with many in the CSR world apparently uninterested in working hours in the developed world as a relevant topic, it provides a decent business case for changing that perspective.




Infographic source: OnlineMBA.com
Photo by LaPrimaDonna. Reproduced under Creative Commons Licence

Cleaning up the "ethical oil" mess

With Stephen Harper's government getting plenty of heat at the Durban climate conference over its decision to relegate Kyoto to the history books,  there is a lot of discussion back home about the merits or otherwise of presenting the Canadian oil sands as "ethical oil". It's something we discussed in the blog earlier in the year, but the XL pipeline decision process has kept the issue very much on the front burner. Factor in a controversial TV spot by Ethicaloil.org comparing so-called "ethical" Canadian oil to "conflict" oil sourced from Saudi Arabia that funds oppression of women, and its no surprise to wind up in a heated debate

Yesterday, CBC, Canada's national broadcaster, featured a segment on ethical oil in its popular morning radio show The Current, and we were happy to be invited to participate, along with Kathryn Marshall, the spokesperson for Ethicaloil.org and Jody Williams, a Nobel Peace Prize winner, who has publicly come out against the tar sands.  You can hear the lively discussion, led by the impressive host Anna Maria Tremonti on the CBC website.

A colleague of ours in the law school here at York University, Stepan Wood, has blogged about the show and takes the time to expand upon some critical points that there was hardly even enough time to raise in the conversation itself. As he says:

"For one thing,[ethical oil's] narrow focus on human rights and the rule of law distracts attention from the massive environmental damage and energy consumption involved in extraction and processing of tar sands oil. For another, the claim that tar sands operations fully respect human rights is debatable, with numerous First Nations claiming that these operations impair their rights to clean water and a healthful environment. It is also hard to miss the xenophobic undertones of the Ethical Oil message–it is no coincidence that most of the countries targeted by the campaign are ethnically, culturally or religiously distinct from the white Canadian majority"

The bottom line, in which we and Stepan agree, is that Canada is very much not a leader when it comes to handling its responsibilities around oil extraction:

"To be a real leader Canada would have to show that it is genuinely committed to progress toward a post-carbon economy and improvement of the human rights records of Canadian companies overseas. This would include holding Canadian oil companies to the same high standards wherever they do business in the world. It is disingenuous to say that oil companies in Canada are ethical leaders if those very same companies are busily pumping oil and propping up those same repressive foreign regimes that the Ethical Oil campaign vilifies."

We don't expect that to happen any time soon, and in fact Canada has been content to be relegated very much to the margins of the Durban conference. When even China is criticizing you for setting a bad example, any claims that the country is a leader in providing "ethical oil" are only likely to fall on deaf ears.

Graphic by jfeathersmith. Reproduced under Creative Commons Licence

Why Occupy Wall Street should occupy corporate leaders' minds

This weekend, the Occupy Wall Street protest will go global. Protests, marches and occupations are planned across the world, with almost a thousand events across every continent scheduled to go ahead on October 15th. Here in Toronto, the financial district around Bay Street is preparing for an occupation that has so far garnered more than 9000 followers on Facebook. In London, social media sites have registered more than 15000 followers for the planned occupation of the London Stock Exchange. Similar smaller scale events are in the offing from everywhere from Alaska to Auckland. Whatever the success of these protests, it is remarkable the speed at which a local event in New York which was hardly reported on two weeks ago, has now been turned into a global movement.

Although the range of issues and demands of the Occupy Wall Street campaign and its various international incarnations are many and diverse, they share a strong single point of focus. The financial sector is very much the villain here. This is in some contrast to the movement that the current events most parallel, the anti-globalization protests that took to the streets in late 1990s and early 2000s, exemplified best by the Battle in Seattle in 1999. At that time, although many of the issues were the same as those receiving attention now, the main point of focus was international finance and trade organizations such as the WTO and the IMF, and meetings of political leaders such as the G8 were major targets. Now, by occupying the financial centers of major cities, the focus is much tighter. The financial sector is public enemy no.1.

In many respects, this is not too surprising. Economies across much of the developed world have been in a constant state of crisis for the past three years. Austerity measures are biting hard. Unemployment is up. And a significant proportion of society feels excluded, exploited, and ready for an alternative. The financial sector is an obvious target because it is here that the systemic risks have been created, and it is here that so much of taxpayers money has ended up, shoring up institutions that are too big to fail. When these same organizations continue to post substantial profits, pay out huge bonuses and generally carry on as before, it is fairly predictable that they will become the focus of so much public ire.

Much of the initial response to Occupy Wall Street has been dismissive. The financial sector, which must be getting quite used to being the bad guy these days, has hardly raised a murmur in response. As of yet, we haven't seen a single press release on the events from major financial services organizations such as Bank of America, Barclays, Citigroup, Goldman Sachs, HSBC, or anyone else. Don't business leaders have anything to say about what's going on?  Don't they want to be part of the conversation? Or are they just so concerned that anything they say will just be ridiculed by the protesters, or simply set them up as even more of a fall guy, that they are fearful of trying to put their position across in public?

But big business, and big finance in particular, needs to take this seriously. Here's why.

First, because governments are looking to be responsive and populist, especially with elections around the corner in the US. That could mean tighter controls, less freedom and more regulation. As even Dominic Barton of McKinsey made clear in the Harvard Business Review earlier this year, "Business leaders face a choice: They can reform the system, or watch as the government exerts control ... there is growing concern that if the fundamental issues revealed in the crisis remain unaddressed and the system fails again, the social contract between the capitalist system and the citizenry may truly rupture, with unpredictable but severely damaging results." Better regulation might fix some of these problems, but knee-jerk regulation, borne of anti-corporate prejudice is not going to be the best fix for the capitalist system, and not necessarily the one that we need.

Second, because the protests create a great opportunity for collective action on the part of business. Problems of financial risk, executive pay and corporate lobbying aren't going to be fixed by individual company initiatives, or even by national government regulation. If one firm or one country reduces its attractiveness by, for example, controlling pay, then talent will likely migrate to more rewarding shores. If one company puts a limit on government influence, then the attention of policy makers will simply be taken up by its competitors. That's the savage logic of the global marketplace. The best recipe for meaningful change is collective action across an entire industry. Like a financial sector executive pay protocol. Or a banking industry code of practice on political influence. But to be effective these would need to include government and civil society participation and include effective monitoring and sanctions across borders. No one is pretending this wouldn't require a huge effort. But crises of trust, like the current protests, could be the context that is needed for collective action such as this to arise and prosper.

Third, because these protests clearly signal that for some proportion of the population, all the money, time and effort expended on CSR simply isn't working. And spending more isn't going to make a difference. These people are looking for a change in the system, in the rules that govern business and it's relationship with government.They're looking for more accountability, less political influence, and if their demands are for better corporate citizenship, they mean the kind of citizenship where you pay your fair share of taxes and don't just simply offshore when it suits you. This requires a very different approach to CSR than the one now predominant in the corporate sector. It means fixing attention on how to devise better rules, not how to behave better within the existing rules.

The challenge here, clearly, is a big one. Perhaps then it is no surprise that corporate leaders have been content so far to just cover their ears and hope it all blows over. But there are fundamental issues that need addressing at the heart of our model of global capitalism. Occupying Wall Street, Bay Street, or the City of London may not be any kind of solution, but that does not mean it should just be dismissed either. Business leaders would be foolish not to see this as an opportunity to create an improved system of capitalism that serves us all better.

Photo by david_shankbone. Reproduced under Creative Commons licence 

Can the Canadian oil sands really be an 'ethical' source of energy?

The new year has got off to a bang in Canada with the new Environment Minister Peter Kent coming out of his corner fighting. According to Kent, the Albertan oil sands are not the environmental catastrophe we all thought they were. In fact, as he says, the oil sands are "an ethical source of energy". Yes, that's right. Alberta is the new home of ethical oil.  Oh boy, that's going to need some explaining.

Now, before you slam your head into the computer screen in disbelief, let's take a closer look at this claim and put it in a little bit of context. Kent's basic point is that because the oil sands are in Canada, they are properly and democratically regulated, they do not fall foul of corruption and abuses common in oil rich countries - and the proceeds don't go into funding terrorism. Compare that to the other states in the top 10 countries by proven oil reserves and you can see that he might have a point. Saudi Arabia, Iran, Iraq, Kuwait, Venezuela, UAE, Russia, Libya, and Nigeria - hardly a list of ethical hotspots it has to be said. As Kent puts it, "[Oil sands oil] is a regulated product in an energy superpower democracy... The profits from this oil are not used in undemocratic or unethical ways. The proceeds are used to better society in the great Canadian democracy."

OK, so let's not get into a debate about just how "great" the Canadian democracy is. After all this is a country that, under the current Government, has regularly taken to shutting down Parliament when things get a bit dicey. But against the rest of the countries with big oil reserves, it still comes up looking pretty good by comparison. This is important for potential buyers of oil sands oil, especially the US which is concerned with global energy security, and is looking to wean itself off its dependence on oil imports from countries that it would rather not have to go to war with again. In fact, Kent's ethical makeover of the oil sands is all part of the major charm offensive that the Canadian government is pursuing to bolster its reputation in the US and elsewhere where climate concerns have started making Canadian oil distinctly unpopular in recent years.

In this context Kent is right to promote some of the virtues of the oil sands. All energy sources have their positives and negatives - yet the oil sands has become chiefly known only for its social and environmental downside. So a bit of rebalancing of the ethical equation is not inappropriate. But claiming any source of non-renewable energy is "ethical" and especially one that is fraught with such problems as oil sands oil, is not too helpful in advancing the debate in a meaningful way. Such claims may get media attention but they also infuriate critics and simply serve to entrench existing antagonisms. Climate activists are likely to target the oil sands even harder now that the Canadian government is drawing out the battle lines in this way. Greenpeace Canada for example had already started campaigning on a 'Separate oil from state' platform including an anonymous leak site for inside tip-offs about government efforts to promote the oil sands. This is all part of a concerted NGO response to what  the Climate Action Network regards as, "federal officials ... systematically trying to kill clean energy and climate change policies in other countries in order to promote the interests of oil companies."

Far better it would have been then for Kent to acknowledge the shortcomings of the oil sands along with proclaiming their virtues. Any freshman ethics student knows that a utilitarian cost-benefit analysis of the ethics of different energy sources has to take into account more than just one factor. Country of origin is just one of a whole range of relevant issues. There is no way that the tar sands can be regarded as an ethical source of oil based on one factor alone. But country of origin "benefits" can be traded off with climate change "costs" if you subscribe to a utilitarian mode of thinking. However, a myopic, one-sided piece of government propaganda doesn't help anyone ... especially when it is proclaiming the virtues of "the great Canadian democracy".

Photo copyright Greenpeace. 

What’s wrong with Canada?

For a long time Canada – certainly in the rest of the world – had this image of a very progressive, liberal and forward looking country in terms of social and environmental responsibilities of business. This not only applies to business leaders which from an early time on championed these ideas. To mind comes Maurice Strong and his engagement for various UN led environmental initiatives in the 1970s. Or Chuck Hantho who, while CEO of what is now ICI Canada, initiated the ‘Responsible Care’ program in Canada which subsequently was adopted by the global association of the chemical industry and is now a standard for the industry in 53 countries globally. Not to forget David McTaggart, the Canadian businessman who became one of the founders and early leaders of Greenpeace. Also notable are wider initiatives such as the Montreal Protocol or, more generally, the courageous stance for human rights and integrity in the world, symbolized by ‘the last man standing in Ruanda’, Canadian General Romeo Dallaire on the UN mission when the Genocide began to unfold in the Central African country.

This all sounds like long ago now. The month of November was not a good month for Canadians with an interest in social responsibility of business. First, we saw Bill C-300 voted down by the Canadian parliament – a bill which attempted at raising the standards of environmental and social responsibilities of Canadian mining companies abroad. We might quibble about details of the bill. But it is pretty undisputable that the Canadian mining industry as a whole has a pretty dismal reputation around the world. What is conspicuous is that Canadian politicians do not even see some attempts at ‘symbolic politics’ – which the bill would have been by and large – as necessary. It makes you wonder.

Then, later in November, it was a – by all standards rather modest – attempt at addressing Canada’s more than wanting approach to climate change, which was voted down in the Senate (Canada’s second chamber of parliament). Bill C-311 was a modest attempt to close the gap between the Kyoto targets and the current performance of the country, ahead of a next round of negotiations in Cancun this month.

Of course it does not help to be governed by a party whose power base and current Prime Minster is from the province of Alberta which thrives on one of the most questionable mining operations in the world: the oil sands. But it cannot be all just old-style business interest driven political manoeuvring. This blog is triggered by reports about the work of Vancouver based consultant Patrick Moore for Asian Pulp and Paper (APP) basically legitimating the environmental record of a company that is allegedly responsible for the most rampant deforestation in Indonesia. The delicate detail – which seems to look symbolic for the country: Moore once was a director and spokesperson for Greenpeace.

All this is even more interesting as Canadians generally pride themselves on being so much more sophisticated, civilized and socially literate than their relatives ‘South of the border’. Looking, however, at the track record on the ground, the mood of the country has largely assimilated to that of their Southern neighbours. And were it not for the last bastion of Canadian’s pride in their social edge – the public health system - the Country’s practices make it look in many ways like the 51st state...

Photo by 416style reproduced under the Creative Commons Licence.

Ratan Tata: corporations in the developing world have to be more paternalistic

In the last decade, the business case for CSR (i.e. that attention to social issues needs to make sound business sense) has become something of a mantra for corporate responsibility advocates. Deviation from this script is rare. So it was refreshing to hear Ratan N. Tata, the leader of India's largest conglomerate, Tata Sons Ltd, mark his first public engagement in Canada by speaking eloquently last night of his commitment to a different approach to responsible business.

Speaking as the guest of honour at the inaugural event of the Thomas J. Bata Lecture Series in Responsible Capitalism , hosted by our own Schulich School of Business here in downtown Toronto, Tata make it clear that in his view, the developing world presented a different type of challenge for corporate responsibility. "Building schools and hospitals," he argued, "is something you have to do" in countries like India that lack basic government provisions. For corporations, he suggested, this meant that they have had to adopt a "more paternalistic" approach than that required in the developed world.

His own company, the Tata group, has become something of an icon in the responsible business world. Sure, they've had their run-ins with environmentalists, unions, and community groups over the years, most recently with the launch of the Tata Nano. But few could deny the contribution the company has made to social and economic development in India. And despite a rapid global expansion over the past two decades that Ratan Tata has been at the helm, the company has managed to combine its business success with an impressive commitment to business integrity and community service. Last night, as he reeled off a string of successful community engagement projects pioneered by the company, Tata claimed that, "with all of this, there's been no business gain for us. Yes, it creates goodwill that no advertising campaign will ever achieve, but it's not why we do it".

Tata's emphasis on the moral case for CSR perhaps makes sense when considered in the context of his particular company, which is 66% owned by philanthropic trusts. However, his comments were also echoed by his fellow business leaders on the responsible capitalism panel, Ed Clark the CEO of TD Bank and Jacques Lamarre, the former CEO of the global engineering firm SNC Lavalin. Clark, for instance, was keen to emphasise the importance of a values-based approach to responsibility. Citing his company's sponsorship of Toronto Pride, the annual gay and lesbian festival, Clark suggested the bank had lost business from customers upset about the advocacy of LGBT issues. But, he insisted, the bank was committed to diversity and "had to stick to its values".

Of course, all this talk of corporate responsibility beyond the business case could just be only so much hot air from corporate leaders keen to spin the image of capitalism away from its "greed is good" reputation. But in a world where, as Doug Miller, the chair of Globescan commented from the audience, the public had increasingly lost faith in capitalism, it was good to see that a new way of talking about "responsible capitalism" might at least be possible.

Oil

While in New York recently, we took in Edward Burtynsky’s latest exhibition, ‘Oil’, at the Hasted Hunt Kreutler Gallery in Chelsea. It’s an impressive collection, put together over more than a decade, and tracing the value chain of oil from extraction to use, and disposal.

Some of the shots are simply stunning, more akin to abstract art than photojournalism. From Australian mines to Azerbaijani wells, and Shanghai car factories to LA freeways the overwhelming scale and embeddedness of oil as a feature of the contemporary global landscape is thrown right in our faces. Burtynsky’s large format pictures are simultaneously shocking and beautiful, prompting for us a strong, but somewhat ambiguous response. Yes, this addiction to oil has got out of hand; yes, our thirst for oil has ravaged the environment; but, wow, isn’t this pinnacle of modernity also in some ways just downright amazing?

Now for those of us interested in issues of corporate responsibility such ambiguity is nothing new. Balancing the good with the bad, the value creation for some with the value destruction for others, is what much of what our field is all about. But Burtynsky takes this a little further. By seeking to absorb us in the global experience of oil, by joining up the dots in ways that make us want to learn more about what we’re looking at, what we are … yes, enjoying, he draws into the debate not just business ethics nerds like Crane and Matten, but also people that might like a good picture but who might never otherwise give much of a second thought to the ‘oil problem’.

Burtynsky’s exhibition, which is showing simultaneously in New York, Toronto and Washington, is also accompanied by a book, also called simply ‘Oil’. As he says in the introduction:

“In 1997 I had what I refer to as my oil epiphany. It occurred to me that the vast, human-altered landscapes that I pursued and photographed for over twenty years were only made possible by the discovery of oil and the mechanical advantage of the internal combustion engine. It was then that I began the oil project. Over the next ten years I researched and photographed the largest oil fields I could find. I went on to make images of refineries, freeway interchanges, automobile plants and the scrap industry that results from the recycling of cars. Then I began to look at the culture of oil, the motor culture, where masses of people congregate around vehicles, with vehicle events as the main attraction. These images can be seen as notations by one artist contemplating the world as it is made possible through this vital energy resource and the cumulative effects of industrial evolution.”

Growing up in Ontario as the son of a former GM worker, Burtynsky had his initiation into these cumulative effects at first hand. He has described for instance how his father’s death from cancer (and that of many of his co-workers) might be linked to PCBs in oil used in the workplace. The moral ambivalence of flying in a helicopter to take beautiful shots of the substance that likely killed his father injects an urgency into his work that makes it all the more compelling. Of course, as fellow Ontarians now, this has particular resonance for us. It’s perhaps no surprise that a Burtynsky piece hangs in the boardroom on our school … and next week the film based on his work, Manufactured Landscapes, is going to be shown in our Responsible Business Movie Night series. But Burtynsky speaks not just to his neighbours; his captivating depictions of the global culture built around oil have something for everyone. And you don’t even need to grow your carbon footprint flying to New York to see it. Click here for some large format shots at Photo District News and here for some previews from The Guardian newspaper.

The state of CSR in Canada

In our last post we commented on the No.1 position claimed by the Schulich School of Business in Toronto in the Beyond Grey Pinstripes ranking of business schools – a global survey which assesses the performance of schools in integrating responsible business into MBA curricula and research. Overall, Canadian business schools did well in the ranking with several schools making the top 50 – McGill (31st), Concordia (34th), and the University of British Columbia (49th).

But though Canadian business schools are starting to punch above their weight in the world of responsible business education, the performance of the country’s corporate sector in responsible business practice remains in question. For example, you’d be hard pressed to find any Canadian companies in the top 50 of Corporate Responsibility Officer’s Best Corporate Citizens of 2009. Still, rankings like this don’t tell you everything. So we thought we’d take the pulse of responsible business in Canada by checking out a couple of practitioner conferences taking place in downtown Toronto this last week. Clearly it is full-on conference season in Canada’s responsible business community with 3 major gatherings happening in 2 weeks – the first two of which we dipped into to test the waters.

First up was the ‘In Good Company’ CSR Conference organized by the Orenda consulting firm that took place on Tuesday 27th October 2009. This was a first-time outing for Orenda on the CSR conference circuit, and it was interesting to see the differences with some of the more mainstream conferences. We didn’t stay for the whole event but it was notable just how much the CSR agenda here was dominated by corporate community investment (CI) issues. This no doubt reflected to some extent the particular orientation of the consultancy running the show, but still, it was something of a surprise for a gig billed as a ‘CSR conference’. As Peggie Pelosi, the CEO of Orenda told us, the event was mainly aimed at engaging SMEs – and issues like CI are where most of them are with respects to CSR.

That said, the level of expertise demonstrated by the speakers on CI was pretty impressive. Clearly the leaders in Canada have been quick on the uptake in terms of developing well-managed CI programs with plenty of measurable impacts and meaningful metrics, good attention to employee involvement, and a genuine desire to both make a positive social contribution and generate greater meaning for employees. All good stuff, even with what looks like relatively limited resources compared to some of their overseas counterparts.

Strikingly missing from much of the debate however was a genuinely strategic approach to CI where firms focus their attention not just on doing good, but on leveraging their own competencies, and focusing on social problems within their own value chain or ‘sphere of influence’. Given we are in the middle of a financial crisis, and an energy situation that is rapidly heating the planet, it was somewhat disconcerting to hear a finance company talking about investments in homework clubs, tree planting and affordable home-building, whilst an energy firm regaled us with stories of their success in supporting food banks. All very laudable, and all very successful, but haven’t they got more pressing business-critical social issues they should be concentrating on? Aren’t food banks just a bit of a distraction when we’ve got climate change to solve? To be honest it was quite a relief when the Director of Corporate Citizenship at Microsoft got up and starting talking about investments in technology projects. Here was clearly a company that demonstrated that it got CSR in a deeper way.

And so it was onto the Conference Board of Canada event ‘Creating Business Value with Integrated Sustainability’ two days later. Unsurprisingly a somewhat more suited-up corporate event, but again one where, with one or two notable exceptions, the real leaders seemed to be, like Microsoft Canada over at the Orenda event, the Canadian subsidiaries of US corporations who had picked up their best tricks from over the border …. or even back in Europe. Companies like the American carpet manufacturer Interface, or even IBM, appear to be leading the pack here. And it's regulation from Europe that appears to be driving attention to environmental issues - though whether catching up with Europe's regulatory requirements is really a 'proactive' strategy, as one presenter claimed, is a moot point.

Funny how Canada manages to maintain a reputation for being all socially responsible and environmentally friendly, when corporate Canada actually seems to be dragging its feet somewhat in developing a progressive approach to responsible business. Obviously we didn’t hear everything said at either event. But from what we could gather from our admittedly brief forays into both of them, the debate here seems little more than a warmed up version of what we were hearing in the UK and other places years ago.

This is not to say there are not some impressive movers and shakers in the corporate CSR world here – but whole sectors of the economy don’t appear to have quite got it yet. The Conference Board organizers had put together a good program, but in oil and minerals rich Canada where were the energy and mining companies with something to say about ‘creating business value with integrated sustainability’? Holed up in the tar sands no doubt. Still, it was good to see consumer products companies at least starting to think seriously about green innovation issues.

So what can we conclude from our conference crawl this week? Well, let’s just say that Canada still has plenty of untapped potential when it comes to responsible business. As Peggie Pelosi acknowledged, Canadian companies are doing a pretty good job on community investment initiatives but are still well behind their overseas counterparts in sustainability and other key areas of CSR practice. As glass-half-full kind of guys, we’d like to think this means that Canada has a real opportunity to leapfrog the US, the UK and others. But we won’t be holding our breath….

Green Canada flag copyright Realc. Reproduced under Creative Commons license

So, what then is ‘Socialism’?

Among the things one can’t avoid noticing after living in North America for more than two years is the bizarre use of the ‘S-word’. It recently keeps popping up in the context of health care reform in the US but it also rears its allegedly ugly head in many other contexts.

Since the 1960s, most notably promoted by Ronald Reagan, the term ‘socialized medicine’ has been used as a scarecrow to denunciate any other approaches to healthcare than the private system the US has had in most places. Other systems, such as the Canadian or the British or the French, by being branded ‘socialist’ gave people the impression – as comedian Bill Maher put it recently – that ‘Stalin himself would stop by to use his iron fist for your prostrate exam’… And the campaign proved to be successful.

It is interesting to see how people in North America find it difficult to imagine that any other system of capitalism than theirs is necessarily ‘socialist’ or even ‘communist’. Some in the US even fear that Obama’s approach to saving the banking system or rescuing the car industry is a direct way to socialism.

We won’t get into the details of the differentiations – it’s after all the 101 of political philosophy. It is however a good time to bring this to our attention. After 30 years of what often has been derogatorily been dubbed ‘neo-liberalism’ or the ‘Washington Consensus’ we see now a shift in economic policies. In many countries of the globe governments – some more reluctant than others – have assumed a role which assigns business a wider role and responsibility in society than the one to shareholders only. And more broader yet, the US seems to be leading reforms of social and economic life which point to a more inclusive and socially balanced form of capitalism.

Countries such as Sweden or France – often called ‘socialist’ on this side of the Atlantic – are capitalist countries with all the trimmings: private property of the means of production, markets, and the rule of law. However, they have built in some mechanisms that cater for the whole of society (such as a healthcare system for all) and ways of redistributing some of the income of the top earners in society for the benefit of the more disadvantaged.

These differences are not rocket science. It has been studied by a whole school of academic thought, among them the ‘Varieties of Capitalism’ approach, or the ‘National Business Systems’ school of thought. The more surprising it is that even respected scholars in North America fall in the trap of using this simplistic view on the S-word – as a recent debate about the Canadian health care system on the email listserver of the ‘International Association of Business and Society’ (IABS) shows.

It’s time to get rid of old stereotypes. Let the debate begin!

BP and alternative energy

There was a nice feature article in the Financial Times earlier this week on BP's retreat from its alternative energy business. Headlined 'Back to Petroleum' it argued that since the departure of former chief executive Lord Browne, the new BP leadership had brought about a greater attention to core business in oil and gas .... and that this had meant the "BP Alternative Energy" business unit was being scaled back. Noting the early retirement of the quasi-independent unit's chief exec, the closing of its off-site office, and cut backs on funding, the paper remarked that having led the charge towards alternatives, "BP is now leading the retreat".

To be honest, even under Browne, BP had hardly been gung-ho in its commitment to alternatives. Even with year on year increases over the past few years, by 2008 the company was diverting just 1.3 per cent of its 2008 capital expenditure on solar energy, 2.6 per cent on wind, and a full 93 per cent towards oil and gas extraction (see the handy BP presentation on the Greenpeace website). Hardly a signal of a change of direction. It's no surprise that many of questioned whether the iconic 'Beyond Petroleum' rebranding was simply that - a change in advertising and logo that did little to alter the fundamental substance of the company.

Certainly under Browne, though, the momentum towards renewables, however small in relation to the core business of BP, was unmistakable. It wasn't all just empty rhetoric. The company quickly turned itself into a recognized leader among the big oil companies for its attention to sustainability issues - not that it faced much competition. The strategy, a common one in the CSR toolkit, was to stay just enough in front of the competition to be a leader, but not so much as to risk changing the game and threatening the underlying cost and revenue structure.

Under current CEO Tony Haywood, BP is clearly employing a back to basics approach. There's a lot of sense in some of this - not least in the greater attention being focused now on core health and safety issues aroung exploration and refining. The last thing the company needed was another Texas-style 'preventable accident'. But in stalling investment in the renewables business (not to mention new investments in the Albertan oil sands), Haywood is clearly serious about sticking to the core oil and gas business for the time being and waiting and seeing on alternatives until a clearer message (and more subsidies) come from governments.

We're not sure anyone should be too surprised by BP's reversal given some of the clear messaging that Haywood has given since taking over - such as describing the company as having “too many people that were working to save the world”, and a determined commitment to cut costs in the face of falling oil prices. Perhaps also, we're simply looking in the wrong place if we expect oil companies to be the engines of a low carbon economy of the future. As the FT hints, succeeding in the renewables business requires a very different set of organizational capabilities than in the oil and gas business. Old economy thinking is not likely to equate to a new economy mindset. The future of the energy business is more likely to be found in innovative new business start-ups than among the collossal energy giants of today. Although once the young tigers have proved their worth, it'll be the companies rich from oil revenues that'll be looking to buy them up.

Photo by Mancio7B9. Reproduced under Creative Commons license.