Page |1

What is corporate social responsibility?

CSR is the acknowledgement by companies that they should be accountable not only for their
financial performance, but for the impact of their activities on society and/or the
environment. Discussions surrounding the concept are still at an evolutionary stage, although
the principles of CSR have long been part of business strategy.

Business is already accountable for its activities over the diverse strands that now come under
the 'CSR' umbrella – such as human resources and environmental issues, sustainable
development, waste management, health and safety practices, through a wide range of
existing guidelines at national, EU and global levels. But it is important to distinguish
between these base-line standards and CSR activity which is voluntary, business-driven and
often goes well beyond what is required by legislation.

Corporate initiative to assess and take responsibility for the company's effects on the
environment and impact on social welfare. The term generally applies to company efforts that
go beyond what may be required by regulators or environmental protection groups.

Corporate social responsibility may also be referred to as "corporate citizenship" and can
involve incurring short-term costs that do not provide an immediate financial benefit to the
company, but instead promote positive social and environmental change.

Companies have a lot of power in the community and in the national economy. They control
a lot of assets, and may have billions in cash at their disposal for socially conscious
investments and programs. Some companies may engage in "greenwashing", or feigning
interest in corporate responsibility, but many large corporations are devoting real time and
money to environmental sustainability programs, alternative energy/cleantech, and various
social welfare initiatives to benefit employees, customers, and the community at large.

We define corporate social responsibility strategically. Corporate social responsibility

encompasses not only what companies do with their profits, but also how they make them. It
goes beyond philanthropy and compliance and addresses how companies manage their
economic, social, and environmental impacts, as well as their relationships in all key spheres
of influence: the workplace, the marketplace, the supply chain, the community, and the public
policy realm.

The term "corporate social responsibility" is often used interchangeably with corporate
responsibility, corporate citizenship, social enterprise, sustainability, sustainable
development, triple-bottom line, corporate ethics, and in some cases corporate governance.
Though these terms are different, they all point in the same direction: throughout the
industrialized world and in many developing countries there has been a sharp escalation in
the social roles corporations are expected to play. Companies are facing new demands to
engage in public-private partnerships and are under growing pressure to be accountable not
only to shareholders, but also to stakeholders such as employees, consumers, suppliers, local
communities, policymakers, and society-at-large.

Mr. Ashvin Ramgoolam

 Page |2

Laggard firms and governments can sometimes use the existence of corporate social
responsibility programs to shirk their roles. Government ultimately bears the responsibility
for leveling the playing field and ensuring public welfare. In order for corporate social
responsibility programs to work, government and the private sector must construct a new
understanding of the balance of public and private responsibility and develop new
governance and business models for creating social value.

Extract from Budget Speech

253. Third, NGOs have a key role to play in our efforts to protect the population and improve
our society. I, therefore, welcome the offers from the private sector to spend some of their
profits on Corporate Social Responsibility (CSR) schemes. However, the response and
implementation have been uneven. I am, therefore, requiring all profitable firms to either
spend 2 percent of their profits on CSR activities approved by Government or to transfer
these funds to Government to be used in thefight against poverty. The CSR programme or the
direct payment to Government could provide some of the resources to underpin the efforts of
the Ministry of Social Security to build up a strong NGO community through the
development of the four pillars I talked about earlier.

254. Some of the projects that the CSR programmes could undertake by supporting NGOs
include

• Literacy
• Social housing
• Life skills training
• Micro enterprises
• Support to improve academic performance and reduce dropouts
• Aids prevention and support
• Assistance to women and children in need or abused
• Assisting the handicapped
• Alcohol and substance abuse prevention and rehabilitation
• Promoting Arts and Crafts

Mr. Ashvin Ramgoolam

 Page |3

Guidelines On Corporate Social Responsibility

1.0 Objectives
2.0 Definition of Corporate Social Responsibility
3.0 Legal Obligation
3.1 Approved Programme
3.2 Areas of Intervention
3.3 Non-Qualifiable Activities
4.0 Approved Corporate Programme
5.0 Vehicles eligible for use in the implementation of a CSR Programme
5.1 Non-Government Organisation (NGO)
5.2 Special Purpose Vehicle (SPV)
5.3 Corporate Partners
6.0 Non-Qualifiable Activities

Guidelines on Corporate Social Responsibility by Private Companies and NGOs

1.0 Objectives

The Government of Mauritius has established a policy with the overall objective of
mandating registered companies to pay 2% of their book profit towards programmes that
contribute to the social and environmental development of the country. Specific objectives of
this fund are to:

• Encourage companies to manage their own programmes, impacting the intersection of

economic with social and environmental development
• Facilitate the contribution of companies to support existing Approved National
Programmes implemented by Companies, national agencies or NGOs
• Promote a functional community on NGOs with complementary workplans that are
relevant to the national development programme

2.0 Definition of Corporate Social Responsibility

Corporate Social Responsibility (CSR) is the concept whereby companies act to balance their
own economic growth with the sustainable social and environmental development of their
areas of operation. A company performing highly in CSR is one that goes beyond compliance
with the legal framework to actively pursue positive impacts on local communities and its
environmental footprint.

3.0 Legal Obligation

Any company making profit is required as per Section 50K and 50L of Income Tax Act to
contribute 2% of their book profit after income tax, in compliance with prevailing legislation,
to set up a CSR Fund to finance CSR activities.

Companies which are excluded from the payment of CSR are as follows:

Mr. Ashvin Ramgoolam

 Page |4

i. Company holding a Global Business Licence Category 1 under the Financial Services
Act.
ii. Incomes of banks derived from transactions with non-residents and corporation
holding a Global Business Licence.
iii. An IRS Company
iv. A non-resident societe, a trust or a trustee of a unit trust scheme.

3.1 Approved Programme

Any profitable company may use its CSR Fund to finance programmes under any of the
following options:

i. Approved Corporate Programme as described at paragraph 4.

ii. Approved NGOs as described at paragraph 5.
iii. Approved National Programme as described in paragraph 6.

3.2 Areas of Intervention

CSR activities must focus on the following Areas of Intervention:

• Socio Economic Development (including gender and human rights)

• Health
• Education & Training
• Leisure and Sports
• Environment
• Catastrophic Interventions & support.

A list of sub areas is submitted at Annex I for guidance of companies and NGOs. All other
new areas will be subject to approval by the CSR Committee.

3.3 Non-Qualifiable Activities

The following activities do not fall under the definition of CSR:

i. Contribution for religious activities

ii. Contribution to activities discriminating on the basis of race, place of origin, political
opinion, colour or creed.
iii. Contribution to Trade Unions
iv. Sponsorship for marketing purposes
v. Contribution for political parties
vi. Shareholders and Senior Staff benefits (schemes benefiting staff and/ or their family
members and shareholders holding more than 5% of shareholding)
vii. Staff welfare cost (including e.g. current and future staff training costs),
viii. Activities which are against public safety and national interest.

Mr. Ashvin Ramgoolam

 Page |5

4.0 Approved Corporate Programme

Companies with CSR Fund will be divided into two categories, namely:

i. CSR Programme for Companies with CSR Fund contributions of Rs. 2 million and
above (i.e. 2% of Profit equals or is greater than Rs 2 million).; and
ii. CSR Programme for Companies with CSR value less than Rs. 2 million (i.e. 2% of
Profit is less than Rs. 2 million).

Companies with CSR Value of Rs 2 m and, not using SPVs, may seek approval of their
Corporate Programme from the CSR Committee using Corporate Programme Proposal Form.

The CSR Committee will approve the application subject to receipt of all necessary
documentation.

The Committee is presently finalising monitoring and reporting mechanism. This will shortly
be communicated to the different stakeholders.

5.0 Vehicles eligible for use in the implementation of a CSR Programme

A company can implement a CSR Programme through its own organization or use any of the
following vehicles:

i. Approved NGOs - Eligibility criteria are detailed at Paragraph 5.1

ii. Special Purpose Vehicle - Eligibility criteria are detailed at Paragraph 5.2.
iii. Corporate Partners - Eligibility criteria are detailed at Paragraph 5.3.

5.1 Non Government Organisation (NGO)

An Approved NGO must meet the criteria below:

i. NGOs should have a legal locus standi.

ii. NGOs should run on non-profit making basis.
iii. NGOs should have a proven track record of activities in one or more of the Areas of
Intervention for a minimum of TWO years.
iv. NGOs should operate on either a national, regional or local basis and should be on a
NON-SECTARIAN basis/ should not discriminate on the basis of race, place of origin
political opinion, colour or creed.
v. The administrative costs of NGOs should not exceed 15% of the total expenditure of
the budget of a project.
vi. NGOs should keep proper books and records and should submit certified/ audited
financial statements.
vii. NGO should not be involved in any Non- Qualifiable activities, detailed at para 3.3.

An NGO seeking approval for ‘Approved NGO Status’ must submit an application to the
CSR Committee using Application Form for Accreditation of NGO.

Mr. Ashvin Ramgoolam

 Page |6

The CSR Committee will approve the application subject to receipt of all necessary
documentation.

Organisations that achieve this status will be required to report to the CSR Committee six
monthly using NGO, SPV and National Programme Reporting on Actual CSR
Programme Implementation (This form is presently being finalised and will be
communicated shortly).

5.2 Special Purpose Vehicle (SPV)

A Company with a CSR Programme of above Rs 2 million annually can also use a Special
Vehicle for the implementation of its programme.

A Special Purpose Vehicle should satisfy the following criteria:

i. should have a legal status;

ii. Should be run on non-profit making basis;
iii. The administrative costs of Special Vehicle should not exceed 15% of the total
expenditure of the budget of a project.
iv. Should keep proper books and records; and
v. should implement an approved programme and not involved in any Non- Qualifiable
activities, detailed at Paragraph 3.3.

SPVs must seek approval, using Application Form for Accreditation of Special Purpose
Vehicle from the CSR Committee and must report in the same way as NGOs (using NGO,
SPV and National Programme Reporting on Actual CSR Programme Implementation
(This form is presently being finalised and will be communicated shortly).

The CSR Committee will approve the application subject to receipt of all necessary
documentation.

A company using a Special Vehicle for CSR Programme will be allowed to carry forward a
maximum of 20% the total CSR programme value for up to one year.

5.3 Corporate Partners

These are organizations which have been delivering CSR activities on behalf of a company
for the last 2 years. These Corporate Partners will need to satisfy the following criteria:

i. Should operate on non-profit making basis;

ii. Should keep proper books and records;
iii. The administrative costs of the Corporate Partner should not exceed 15% of the total
expenditure of the budget of a project.
iv. Should implement an approved corporate programme; and
v. A company with a CSR Budget of less than Rs. 2 million, using a Corporate Partner
to implement its CSR Programme will be allowed to spend only an amount not
exceeding 25% of the 2% value of the CSR budget.

Mr. Ashvin Ramgoolam

 Page |7

6.0 Approved National Programme

Private, Non-Profit and Public organizations should apply to the CSR Committee for
approval of an ‘Approved National Programme’ status, using Application to Accredit a CSR
Programme as an Approved National Programme.

Reporting on implementation must be submitted six monthly to the CSR Committee using
NGO, SPV and National Programme Reporting on Actual CSR Programme
Implementation (This form is presently being finalised and will be communicated
shortly).

Mr. Ashvin Ramgoolam

 Page |8

CSR strategically and ethically requires a very local connection if, for instance, the company
commits to a high standard of environmental responsibility that requires budgeting and
management policy from the executive level—from headquarters. But such commitment and
policy, however management or community-centered, always rolls out at the local levels.
This is true for petrochemical and refinery operations, for instance. In that industry public
health and safety are real challenges and continual engagement is crucial. Local connections
are vital to bring the organization, similar organization, community residents, local
government, and NGOs into meaningful dialogue.

Events, often central to reputation management, occur at the local level. Community
standards, public norms, local customs, and community dynamics are essential to successful
CSR programs, which invariably link to savvy community relations programs. Lerbinger
(2006) sees corporate social responsibility as an essential rather than peripheral aspect of
community engagement. He offered The Pyramid of CSR as a set of guidelines for public
affairs engagement:

1. Perform basic economic function of producing goods and services for society, and,
thereby, also provide jobs.
2. Minimize the social costs imposed on society [by the organization’s operations].
3. Help solve social problems.
4. Make social investments to strengthen society’s infrastructure.
5. Support public policies that are in the public interest. (p. 408)

In this discussion he cautioned that Friedman’s (1970) and others’ admonition against CSR is
narrow, dysfunctional and counterproductive to profit optimization.

Even the most brief review of CSR literature suggests that it goes in many directions and
makes different assumptions. Some discussants feature CSR as having marketing value;
companies profit from CSR reputations (see for instance, Gildea, 1994-1995; Kotler & Lee,
2005). At minimum, this approach to CSR and CR would feature the company as being a nice
neighbor.

Other discussants feature more of an ethical than pragmatic, profit orientated approach. They
argue, for instance, that the organization needs to apply revenue to build a better community
and even to help solve local problems. Here we have that range of strategic philanthropy from
supporting cultural events to solving collective problems, which might extend to financial
support (beyond taxes) for public schools and even for scholarships (see for instance, Ihlen,
2005; Sen, Bhattacharya, & Korschun, 2006).

Finally, we have the CSR challenge of the responsive/reflective neighbor (Mahon &
McGowan, 1991; Rochlin, Witter, Monaghan, & Murray, 2005). Battles over the past 40
years in corporate America have revealed that activism, and even government policy
(regulation, legislation, and litigation) result when the operating standards of companies fall
short of community expectations. The standards of HSE, as noted above, result from concerns
that business operations harm health, safety, and environmental quality. Organizations can
attempt to disprove such concerns or prove that the organization meets the expected
standards. So goes CR, but it may require changing policy (budgeting and management
policy) to operate at a higher level so that the community standards are not offended and their
expectations are met.

Mr. Ashvin Ramgoolam

 Page |9

The purpose of this paper is to ground and expand the examination and appreciation of
community relations, and to foster additional theorizing, research, and best practices. At
minimum, it is useful to organizations seeking to know local opinions and expectations of
what the company or other organization needs to think and do to be a nice neighbor. But it
also presumes that more can be expected to build, maintain, and repair relationships between
the organization and community where it operates. It needs to consider what is expected for it
to be good, as well as responsive and reflective.

Community relations is not merely a communication activity but it begins with management
policy and decision-making with the desire to be a constructive member of each community
where it operates: local, regional, national, and global. For these reasons, public relations,
through community relations and CSR efforts, has an excellent opportunity, but a daunting
challenge, to make society more fully functioning (Heath, 2006; this article includes the
following premise:

To help society to become more fully functioning, managements of organizations (for profit,
nonprofit, and governmental) must demonstrate the characteristics that foster legitimacy, such
as being reflective; being willing to consider and instrumentally advance others’ interests;
being collaborative in decision making; being proactive and responsive to others’
communication and opinion needs; and working to meet or exceed the requirements of
relationship management, including being a good corporate citizen. (p. 100)

Mr. Ashvin Ramgoolam

 P a g e | 10

A multi dimensional view of corporate responsibility

In market economies, the primary purpose of companies is to maximise shareholder value
(e.g. economic profit, share price and dividends) bound by legal/regulatory obligations which
address specific social and environmental issues. For this, companies pursue competitive
strategies which rely upon and develop relationships between the corporation and its
stakeholders.

Since the early 1990’s, corporate responsibility issues including the social obligations of
corporations have attained prominence in political and business debate. This is mainly in
response to corporate scandals but also due to the realisation that development centred only
on economic growth paradigms is unsustainable and therefore there is a need for a more pro-
active role by states, companies and communities in a development process aimed at
balancing economic growth with environmental sustainability and social cohesion.
This debate has motivated the following three interlinked movements in the corporate world:
· CSR (Corporate Social Responsibility);
· Corporate sustainability;
· World wide reforms on corporate governance.

CSR and corporate sustainability represent the way companies achieve enhanced ethical
standards and a balance of economic, environmental and social imperatives addressing the
concerns and expectations of their stakeholders. Corporate governance reflects the way
companies address legal responsibilities and therefore provides the foundations upon which
CSR and corporate sustainability practices can be built to enhance responsible business
operations.
We distinguish between two interrelated dimensions for CSR and corporate sustainability:
· corporate responsibility and sustainability as part of a new vision for the world
based on a global partnership for sustainable development;
· corporate responsibility and sustainability as a business management approach
that should provide in the long run better value for shareholders as well as for
other stakeholders.
Early roots of corporate social responsibility can be found in the actual business practices of
successful companies and early theoretical views in the 1950s and 60s linked corporate social
obligation to the power that business holds in society. Theoretical developments are currently
broadly subdivided into the ethical and accountability issues and the stakeholder approaches
to strategic management.
The corporate responsibility movement is backed by UN initiatives such as the Global
Compact and the Millennium Goals which have defined the goal and principles for

Mr. Ashvin Ramgoolam

 P a g e | 11

responsible corporate behaviour in the following areas:

· Human Rights
· Labour Standards
· Environment
· Health
· Anti-Corruption
· Economic responsibility

Key driving forces include investor and consumer demands and governmental and public
pressure. Particularly important is the support from Socially Responsible Investing (SRI).
The corporate responsibility movement is now entering a mainstreaming phase aided by
standardisation activities such as the GRI, the AA1000 series and the ISO2600 guide.
Key driving forces include investor and consumer demands and governmental and public
pressure. Particularly important is the support from The corporate responsibility movement is
now entering a mainstreaming phase aided by standardisation activities such as the GRI, the
AA1000 series and the ISO2600 guide.

CSR, corporate sustainability and corporate governance collectively are shaping the identity
of organisations and are therefore increasingly integrated into the business strategy of
successful corporations. Consequently, the field of responsible business strategy and practice
is becoming one of the most dynamic and challenging subjects corporate leaders are facing
today and possibly one of the most important ones for shaping the future of our world.

The 4CR taxonomy described in the following table highlights four corporate responsibility
areas:
· Corporate Competitiveness (CC)
· Corporate Governance (CG)
· CSR
· Corporate Sustainability (CS)

Mr. Ashvin Ramgoolam

 P a g e | 12

· Corporate Competitiveness addressed by strategic management is a subject rarely

discussed in the context of corporate responsibility. However, unless all strands of corporate
responsibility are brought together under a common management framework, CSR and
sustainability will remain peripheral activities and their impact is likely to remain well
below required levels to achieve the Millennium and related goals.

· Corporate Governance sets the legal framework to protect a company’s shareholders and
stakeholders; the relative emphasis being dependent on national approaches.
· CSR is aimed at extending the legal requirements promoting ethics, philanthropy and
social reporting to satisfy stakeholder concerns.
· Corporate sustainability focuses on long term economic and social stakeholder
expectations both by optimising their sustainability performance and by participating in
networks with governments, NGOs and other stakeholders that can provide the capacity
for the world’s sustainable development.

Mr. Ashvin Ramgoolam

 P a g e | 13

CSR Approved National Programme

No. National Programme Areas of Interventions

1. Empowerment Programme To provide placement for training for

unemployment & retrenched workers

To support unemployed women in micro

business projects
2. Eradication of Absolute Poverty To provide outreach facilities in the 229
Programme pockets of poverty in terms of : support to
pre-primary school children not attending
school, social and life skills, integrated
health support, remedial education, adult
literacy, upgrading of living environment,
etc.

3. Integrated Social Development To assist in integrated community

Programme development of vulnerable families with a
view to empowering them by providing
support in terms of civic education and
social housing

4. ZEP Project To mobilize all available resources within

each school zone so as to contribute, in
partnership with relevant stakeholders, in
the standard of achievement of the school
population.

5. National Aids Programme To sensitize, provide support & treatment

to AIDS/HIV patients
6. National Needle Exchange To mitigate the Medico-Socio Economic
Programme impact of substance abuse and HIV
infection;

To reduce the transmission of HIV, viral

infection and blood borne infection caused
by the use of contaminated needles /
syringes.

7. Methadone Substitution Therapy To use methadone to diminish the incidence

of HIV in the Mauritian population

Mr. Ashvin Ramgoolam