Transcript Corporate Social Responsibility, Sustainability & Water

India- different security issues
labour in carrying water
Water as a commons
They hang the man and flog the woman
That steal the goose from off the
common,
But let the greater villain loose
That steals the common from the
goose.
English folk poem, circa 1764
Unsustainable practices noted
The poet C.J Dennis also saw this in the poem[i]
Ye are the Great White People, masters and lords of the earth,
Spreading your stern dominion over the world's wide girth.
Here, where my fathers hunted since Time's primordial morn,
To our land's sweet, fecund places, you came with your kine and
corn.
Mouthing your creed of Culture to cover a baser creed,
Your talk was of White Man's magic,- but your secret god was
Greed.
And now that your generations to the second, the third have run,
White Man, what of my country? Answer, what have you done?
[i] C JDennis ‘The Spoilers’ The Herald 1935 p.6 This poem was about the Western
District of NSW and written through the eyes of an Australian Aborigine.
Framework
Federation unfair socially
Water security
Many Stakeholders many interlocking scales
• domestic local supplier level
• Rural growers often other suppliers
• Other businesses
• Province and State level which can involve
upstream downstream issues
• National level
• International level and globally the relationship
to development
Water Security-Australia
• We have Ministers with that portfolio at
State level and water supply businesses
who have a major corporate objective
water security.
• How to achieve it and the appropriate
enduring law and policy decision making
framework?
Water security
“…the commitment of
business to contribute
to sustainable
economic development,
working with
employees, their
families, the local
community and society
at large to improve their
quality of life.”
World Business Council
on Sustainable
Development
Social Primacy Approach
Identification
of &
prioritisation
between
stakeholders
unclear
another expression
water supply businesses
Water plans as a way to increase
security
• Purpose of a WAP is to:
•
share of consumptive pool approach
• Balance environmental, economic and social needs
for water
• Flexibility and equity in access to the resource
• Promote active and expeditious use
• Promote efficient use
• Sustain the resource, and protect reliant ecosystems
and community
the balance is the challenge
• Environmental: reliant ecosystems.
• Economic: irrigated agriculture, industry
and aquaculture.
• Social: town water supply, stock and
domestic, and recreation (sporting clubs &
local government
THANK YOU
The water ‘crisis’
•A perceived water crisis has emerged
•Both government and the corporate sector are
required to respond to the challenge
•How does/should the law facilitate the corporate
sector’s response to the demand for sustainable
water use?
A number of approaches..
Implement objective and
specifically formulated duties
related to water use
management
Implement objective but general duties
toward ecologically sustainable
development eg s 9 (1) Natural
Resources Management Act 2004
(SA); s 93 Water Act 1989 (Vic); s 292
(3) Water Management Act 2000 (NSW)
Embed corporate social responsibility (incorporating duty
to act sustainably) within the law
To achieve sustainability…
• Relying on corporate social
responsibility or general
duties to act in an
ecologically sustainable
manner alone insufficient;
similarly trying to implement
water management planning
without corporate
commitment to sustainability
may suffer from traditional
difficulties associated with
command and control
regulation
Corporate Social Responsibility
• Normative commitment much broader in scope than
matters coercible through legal regulation
• Applies to relationship between corporation and
those it impacts upon (past, present & future) –
essentially individually determined by the
corporation – not collectively by legislature;
government.
• In the past has been difficult to apply because of a
lack of methodologies/systems/understanding/lack
of integration with public policy development
Example – OK Tedi
• BHP – Biliton =
leader in CSR
• From 1970s – 2001
engaged in
development of
open-cut copper
mine at Ok-Tedi in
PNG Highlands
• Mine = 10% of
PNG’s GDP
Ok-Tedi
• Originally mine was meant to have tailings
dam – but not built; so mine waste
dumped into Tedi River at the rate of
80,000 tonnes per day
• Leading to 90% fish death, water
contamination & forest die back
• Litigation initiated by local communities
against BHP
Ok-Tedi
• BHP settled disputes; eventually forced to
transfer its interest in mine to PNG
Sustainable Development Program Ltd &
write off investment
CSR
• Various approaches have been identified in
the literature, today will focus upon 2:
- Business approach- mainstream – applicable
to most large corporations in Australia
- Social Primacy approach – Requires social
welfare to be prioritised over corporate
welfare – most Australian water supply
corporations appear to follow this approach
How does the law support either
approach?
1.
2.
3.
4.
5.
Social Primacy Approach
General duties toward ESD – eg s 292 (3)
Water Management Act 2000 (NSW); s 93
Water Act 1989 (Vic)
Control of pricing
Imposition of customer service standards
Imposition of water quality and efficiency
planning
Imposition of community service
obligations
Social Primacy Approach
• Law also requires water corporations to
act competitively
• Trade off between CSR obligations &
commercial obligations not clear
Social Primacy Approach
• Under resourced
• Methodologies for assessing
sustainability still developing
• Environment only salient via
government & regulators
How does the law support business
approach?
• General duties on
corporation not to
harm environment
or to abuse natural
resources eg s 9
Natural Resources
Management Act
2004 (SA); s 25
Environment
Protection Act 1993
(SA)
Law & business approach
• Imposition of directors’ duties for
corporate breach
• Directors’ duties to the corporation to
ensure corporation’s interests are
protected
No proactive duty re: ESD
• No legal duty on
corporation or upon
directors of corporation
to actively promote ESD
• Legal duty to
stakeholders rejected
by CAMAC & PJCCS –
too difficult to review
and enforce
How does law support the business
approach?
• Sustainability reporting
largely voluntary
• No universally accepted
standards
• Limited & weak
statutory requirements
– s 299 (1)(f)
Corporations Act 2001
(Cth)
Law & Business approach
• Where investment promoted
as socially responsible –
Product disclosure
statement must disclose
how environmental, social,
ethical considerations are
taken into account,
measured and applied: s
1013D (1) Corporations Act
2001 (Cth); Reg 7.9.14C
Corporations Regulations
Other reporting requirements
• National Greenhouse and Energy
Reporting Act 2007 (Cth)
• National Environment Protection
(National Pollutant Inventory) Measure
1998 (Cth)
Other corporate governance legal
mechanisms
• Shareholders have very limited powers over
managerial discretion regarding day to day
business, planning, policies; so they cannot
override directors
• Although shareholders have power to
convene meetings/replace directors –
generally attempts to convene
meetings/replace directors to sanction poor
environmental performance have failed
Other mechanisms
• Shareholder litigation equally limited
unless breach of duty to company also
personally harms shareholder or
shareholder can show that directors’
decision re: ESD matter harms corporate
interests.
Stakeholders generally
• Have no standing to sue for breach by
corporation or management unless they
can show direct damage or ‘special
interest’
• Overseas cases indicate this will be
difficult eg Connecticut v American Electric
Power (2005) 406 F Supp 2d 265
Prognosis?
• CSR can be supported by law but difficult
to make it a legally coercible - since there
is no universal definition or universally
accepted means of measuring it.
• Therefore should not wholly rely on CSR
to secure corporate engagement with
sustainability
Rather…
• Objective and specifically formulated
obligations required to secure corporate
engagement with sustainable water use
and management.
• Qld, Vic & to a limited extent NSW have
initiated new regulatory approach
engaging corporations in process of water
efficiency management planning.
WEMPs
• Corporations must account for water use
• Corporations must identify water saving
measures
• Corporations must prepare plans for
implementing water saving measures
• Each plan must be independently certified
• Reporting against plan mandatory
• WEMPs supported by significant funding
WEMPs
• Case studies demonstrate success –
therefore a step in the right direction for
securing sustainable water use
Conclusion
• Noblesse oblige alone insufficient
• Engaging corporations in water planning
and management and leveraging off the
mainstreaming of CSR leads to higher
levels of compliance and greater
regulatory efficacy.