Are we sinking?
It is the worst disaster in living memory; resulting in mass migration that even exceeds that which took place during partition. While the loss of human lives has not been colossal, the sheer number of families uprooted, livelihoods lost and crops ruined, and not just houses but the washing away of entire villages has disrupted life in a manner that is yet to sink in completely.
Misery has become as widespread as flood-waters with over 20 million people and around one-fifth of Pakistan affected. The ubiquitous image of large swathes of land submerged in water, with roofs of houses barely visible, has become the staple diet of news channels. Dominating the news in equal measure is criticism of the government’s response in relief, rehabilitation and reconstruction work.
President Asif Zardari says development has been pushed back by a decade. The financial loss from the calamity is estimated to be $43 billion while the finance ministry says that there will be zero growth for the next fiscal year and probably many more to come. Inflation has hit the roof and prices of essential items have nearly quadrupled. For instance, the price of one kg of sugar has now crossed the Rs. 100 mark from the contentious and much debated Rs. 50 just a few months ago.
Add to that the country’s perennially bad economic and developmental indicators and it can be safely said that the situation is a ticking time bomb; and unless remedial measures are taken, the situation would continue to deteriorate.
Clutching onto straws:
The country’s top leadership has once again taken out the proverbial begging bowl, with Prime Minister Yousuf Raza Gilani conceding that failure of the international community to help would leave the people from flood affected areas vulnerable to the overtures of extremist elements.
But the response of the international community has been lukewarm. When compared to the international community’s response to this decade’s other major disasters, like the tsunami in South-East Asia, Hurraicane Katrina or even the earthquake in Haiti, the contribution to Pakistan’s flood relief pales in comparison.
According to a BBC report, $6.82 has been pledged as donation per survivor of the flooding in Pakistan. The corresponding figure for the Haitian earthquake earlier this year was a whooping $669.60.
Similarly, ten days after the Kashmir quake in 2005, donors gave or pledged $292 million, according to the aid group Oxfam. The disaster in Haiti led to pledges nearing $1 billion within the first 10 days. For Pakistan, the international community gave or pledged $150 million after the flooding began in earnest in late July, according to the U.N. Office for the Coordination of Humanitarian Affairs, known as OCHA.
Why the Private Sector needs to step forward:
This clearly illustrates that there is a void in terms of relief efforts – which is there for all to see. A visit to any of the numerous relief camps whether on the extremities of Karachi or in small cities across the country will show the pathetic conditions in which flood affectees are currently living.
Lack of expertise in disaster management and the non-existence of planning in relief work have exacerbated the problem. The development sector – mainly NGOs – and individuals have done a commendable job but the sporadic nature of their efforts and a lack of management expertise has diluted the impact of relief work while the limited supply of funds means only a small proportion of the affectees from over 72 districts have received any kind of substantial aid.
The private sector, on the other hand, has the requisite management expertise to ensure that any relief effort is executed in a seamless manner with minimum wastage. But the corporate sector cannot be expected to send their employees to work at reliefs camps at the expense of their usually profitable ventures.
However, companies can partner with NGOs and transfer their expertise to development sector workers through focused and targeted training sessions. Their emphasis on systems, standard operating procedures and efficacious use of resources to ensure profitability can serve as a guiding light for the development sector workers, who often tend to overlook these core values driven as they are by the desire to bring positive change to society.
This problem in the development sector is illustrated by the lack of co-ordination between NGOs working on a similar mandate. Replication and duplication of effort is the most widespread problem in this sector with NGOs often wasting essential resources as they try to outdo the other.
In the current scenario, such ‘reinvention of the wheel’ would be an anomaly. A centralized entity that co-ordinates flood relief activities could eliminate this problem. However, there is no unified platform of NGOs where such decisions could be taken.
It is in areas like these that the private sector can show the way; as there are bodies that represent the interest of multi-nationals and even serve as a lobby group in government policy making.
Embedding CSR – Where do we stand?
Most important of all, the private sector – particularly corporations – have the budgets and resources that could make a phenomenal impact on developmental activities in general and flood relief in particular.
Most organizations have budgets allocated for developmental activities, particularly Multi-nationals as it is usually embedded in the mandate of the parent company due to regulatory requirements. Globally, companies are required to invest a part of their profits back into society to tackle the economic, social, environmental and cultural aspects that are affected by their activities.
For instance, upstream oil companies’ CSR activities focus on areas where the drilling and exploration take place; the marine environment if its off-shore drilling; and the environment in general because of the degradation caused. Similarly, pharmaceutical companies can with focus on the health sector.
CSR activities are not necessarily limited to related fields but can be all encompassing and serve as a company’s contribution to society; often focussing on education and health sectors.
However, companies are yet to internally integrate CSR as one of the core business values in Pakistan, as its beginning point is organizational stakeholders, like shareholders, employees, internal environment, and only then can investments be made in society.
Globally, though, companies are coming up with socially responsible products, such as Toyota’s hybrid cars, General Motor’s hugely profitable Ecomagination initiative or IBM’s Big Green intiative.
In Pakistan, SECP’s recent ‘Companies (Corporate Social Responsibility) General Order, 2009’ sought descriptive and monetary disclosures from companies for their CSR activities. There is no regulatory requirement for private companies to allocate a certain proportion of their revenue or profit for CSR activities.
Need for more comprehensive regulations:
This means that the role of corporations remain sporadic and inconsistent, with companies often taking the easy way out by donating a certified amount (made mandatory due to regulation in the parent company’s country) to an international aid organization or a local NGO – which also tends to dilute the impact of relief work.
This is the practice that is being witnessed in flood-related relief work. Unilever’s (Global) donation of Rs. 138 million (€1 million+) was distributed among World Food Programme, Oxfam International, Save the Children & Population Services International.
Such international entities have a high percentage of administrative cost; which substantially reduces the aid amount that reaches the final recipient.
For instances, if Rs.100 is donated to the United Nations; then Rs. 52 will be used for administrative costs while Rs. 48 will go to relief efforts. On the other hand, a Rs. 100 donation to Edhi Foundation would mean Rs. 20 for administrative costs and Rs. 80 for the deserving.
While not all organizations tend to take the easy route, it remains a prevalent practice; and not just in times of such disasters but otherwise as well.
Mobilink is one stand-out example in this bleak scenario. It did a commendable job for the relief & rehabilitation of the affectees of the Kashmir Earthquake. The company invested $1 million in the setting up and running of a relief camp that was completely administered by their own team. And now, the company has donated Rs. 236 million, easily one of the largest donations by a private sector company in Pakistan, which is being used for emergency relief distribution, hygiene kits, shelter, portable health units and dispensaries, and other relief and rehabilitation activities.
Most importantly, the company has confirmed that no cheques were handed over. They are doing everything through their own employees and local NGOs that are involved on the ground and do not have exorbitant administrative costs.
Volunteering personal time is the best donation I can think of. Moreover, the company is using the expertise of relevant teams to drive efficiencies. A corporate procurement executive is far well versed in negotiating with vendors trying to make a quick buck from the crisis and a local contact is of course better suited to identify exact needs on ground.
Such activities appear to be more effective and exhibit genuine concern rather than the Rs. 100 million contribution of Pakistan Petroleum Limited that has gone to the Prime Minister’s Relief Fund.
It also seems that private sector companies are cognizant of this fact; and hence, there has been minimal disclosure in terms of exact contributions made for flood relief. The information that has been made available clubs together the total contributions made and the names of contributing companies. For instance, members of the Overseas Investors Chamber of Commerce & Industry (OICCI) have provided information that requires decryption, such as:
“..Companies like Unilever Pakistan, Mobilink, Aventis Pakistan, Johnson & Johnson, Nestle Pakistan, Coke and Pepsi contributed cash, besides donating their products for the affected families. Donations comprising food items were around Rs141 billion, while Rs202 million worth of products were also sent by some companies...”
Time to change tracks!
Amongst all, the corporate sector remains the best-equipped to provide some sort of long-term solution through sustainable projects that can make a significant contribution towards the development of certain spheres of society – geographically, socially, economically, environmentally and also culturally.
Because, like charity, CSR also begins at home!
