Dean, Faculty of Social Sciences and International Relations (SSIR) and Director, Peace and Conflict Studies Institute

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1 CSR Project- Cambodia: Dr. Trond Gilberg Dean, Faculty of Social Sciences and International Relations (SSIR) and Director, Peace and Conflict Studies Institute Pannasastra University of Cambodia Dr. Fil B. Tabayoyong, Jr. Professor, SSIR Pannasastra University of Cambodia. Team leader: Trond Gilberg This report contains the following sections: 1. Developments up to the present 2. The Way Forward 3. Preliminary Assessments The project is designed to establish a comprehensive strategy for the development of CSR in Cambodia, in conjunction with major stakeholders. The main stakeholder was projected to be the Cambodia Chamber of Commerce (CCC), especially since CCC has signed an agreement on cooperation with academic institutions on research on topics of mutual interest. Pannasastra is one of the academic instituttions with which such an agreement has been established. As stated in the first preliminary report, submitted on September 29, 2016, the CCC proved to be completely unresponsive to our request for cooperation, despite the agreement signed with Pannasastra (PUC). There may be a number of reasons for this lack of response. Below I ll attempt to explain some of the possible reasons. Suffice it to say here that this lack of response from our main projected partner turned out to be very costly in terms of time. Months were wasted trying to rectify the situation and bring the CCC on board, to no avail. In terms of finance, the two investigators listed Above decided not to charge for the time and effort expended, since nothing positive was accomplished. Instead, it was decided that we must refocus and develop our own major partners in order to complete the project, which we consider the be very important for the development of Cambodia and the ability of Cambodian businesses to compete in a globalized world (or, alternatively, to examine the extent to which local businesses will be unable to be competitive, at least in part because of the lack of CSR. More on this later). 1

2 The refocused effort required the identification of major stakeholders now that CCC proved nonexistent as a partner. After careful consideration it was decided that the following organizations would constitute major stakeholders: The Government of Cambodia, especially ministries dealing with commerce and industry Organizations of large businesses Organizations of SMEs (small and medium-sized businesses) Relevant NGOs Other academics Major Chambers of Commerce from countries with developed CSR practices (iprimarily the US Chamber of Commerce and the EU Chamber of Commerce). Representatives from the organizations listed above thus became the key advisory board for the project Referring now to the original proposal, the first planned step was to establish contact with CCC and then sign an MOU with that organization. Furthermore, it was proposed that a survey would be developed to ascertain the level of knowledge of CCC-affiliated organizations, and then to present the findings of the survey and analysis of the results. With the absence of the CCC from the project, it became necessary for the investigators to develop and launch the surveys themselves. We have already sent out a survey to SMEs in conjunction with a representative from that organization. It has proven more difficult to get full cooperation from the organization of major manufacturers (on this, see below), but there is progress in the negotiations. I am hopeful that we can soon distribute a questionnaire to this stakeholder as well. Furthermore, we are discussing with other relevant stakeholders about their views of the process and expected outcomes. For example, a consultant to the Cambodian Government, who is himself a prominent academic, has been very helpful in sharing his views on the level of knowledge of CSR in Cambodia (both in government and the private sector). We are in conversation with the premier think tank on development in Cambodia on this issue as well. A meeting of the members of the advisory board (listed above) will take place soon. We have requested position papers from some of the stakeholders. These position papers will be distributed to the advisory board members in the forthcoming meeting for their feedback. Finances: The projected cost of the initial stage of the project, which would include CCC as our major partner, was S% 1,500. We proposed that these monies now be expended as follows; Breakfast meetings with advisory board members Development of a questionnaire and translation of the questionnaire into Khmer Small honoraria for two position papers (Cambodian Government representative and a representative form the Cambodian Development Resources Institute- CDRI); development of the questionnaire (Dr. Fil) and a comprehensive first report Dr. Gilberg). 2

3 The expenses for the activities listed above will remain within the limit of S$ 1,500 as projected in the original proposal. Members of the advisory board not specifically tasked as listed above have agreed to work pro bono at this stage. The venue of the events will be Anik Hotel, Phnom Penh (for breakfast meetings) and Pannasastra University for larger gatherings. PUC facilities are provided free of charge. The Way Forward. Once the initial step has been undertaken, as discussed above, we ll proceed as scheduled in the original proposal. The first step in this process will be the interpretation of the the survey results, as indicated in the origin al proposal. The next step is in many ways the key event of the project, because it involves a two-day workshop for relevant stakeholders and the interested public. Both of these activities have cost projections in the original proposal, and we plan to stick to those projections. The cost of the final event will include small honoraria for the final report (for Dr. Gilberg and Dr. Fil). Preliminary Assessment. An assessment requires hard facts, and the process of gathering these facts is still ongoing. But there is one fact that has already been established, thus lending itself to some analysis. This is the fact that CCC was completely unresponsive to our request for cooperation, despite the agreement already signed between Pannasastra and CCC. Below I ll discuss some hypotheses as to why this happened. I put hypothesis in quotation marks, because some of them are not verifiable, and others I prefer not to examine in further detail. Nevertheless, some of these hypotheses are troubling with regard to the future of CSR in Cambodia, and I ll spend a bit of time on them. Hypothesis 1: there were problems in communication between PUC and CCC. The principal investigators originally utilized a staff member in CCC as our liaison with that organization. This particular individual became an adjunct member of PUC, and was considered a good contact since he claimed to be personal assistant to one of the most important members of the CCC leadership. In the event this liaison proved ineffective, and this problem wasted months of implementation of the project, as stated above. I choose not to pursue the question of whether the individual mentioned in fact had the requisite contacts or stature for this relationship. That may or may not be the case. Enough said. We need to move forward. Hypothesis 2: Town-gown problems. There is virtually no tradition of collaboration between business and academia in Cambodia. In fact, stakeholders from business, whom we approached for this project, stated that no one from academia had been in touch with them on any issue before. It is therefore understandable that business leaders pay scant attention to requests from an academic institution. Another factor may be that Pannasastra is seen as an institution that has a large component of expats on its teaching staff, some of whom have been quite outspoken about the practices of Cambodian business leaders and their alleged tendency towards robber capitalism and kleptocracy. I hasten to add that academics here do have a tendency to see themselves as a class apart, with little concern for the rest of society. Pannasastra s vision and 3

4 mission statements do emphasize this connection, but I think our Faculty has been in the forefront of relating to the rest of society, both in terms of outlook and also programs. For much of the rest of academia, such concerns remain remote. In fact, the universities in Phnom Penh have little contact with each other except as competition. My experience has been that it is easier to organize a consortium with universities elsewhere in the Asia-Pacific than to establish cooperation with academic organizations here in Phnom Penh. Academia is internally fragmented, and there si little communication with business. The non-participation by CCC in this project may well reflect on this tradition. It will take time to change perceptions in this area. Hypothesis 3: Cambodian business culture is alien to the basic principles of CSR. Some of the members of our advisory board have argued that Cambodian SMEs are often family businesses or organizations based on close relationships in which social interaction as well as economic collaboration provide their own form of outreach and service to members. Therefore, the notion that a broader concept of social responsibility should be grafted onto their operations has little relevance. Other comments have focused on Cambodia as a country in rapid industrialization through the mechanism of low level equilibrium, meaning that Cambodian industry is labor intensive, particularly in large businesses, with low skill levels, providing exploitation of labor a s a main source of profit, with reduced bargaining power for workers organizations. In fact, a substantial percentage of Cambodian industry is in garments, staffed by a large female workforce whose members are heavily dependent on a weekly or monthly paycheck, much of which goes back to desperately needy families in the countryside. Incentives for CSR under these circumstances are few. In fact, some commentators have stated that CSR will be seen as irrelevant unless it helps produce greater profit. But unskilled labor is unlikely to produce these profits much beyond present production precisely because work means doing simple things at a high tempo. If this is indeed the case, CSR will be less relevant for quite some time to come. Hypothesis 4: The political and societal cultures of Cambodia are alien to the basic aspects of CSR. There is a substantial literature in Western languages about basic aspects of Cambodian political culture. Much of this literature focuses on the so-called culture of impunity, in which political, social, and economic elites do what they want to do, with little regard for accountability and noblesse oblige. While some of this literature may overstate the point, it also contains important aspects of reality. Furthermore, the community power literature can also point to a high degree of interrelations between these elites for example illustrated by the fact that the extent of intermarriage is high. Thus, if the business culture is inimical to CSR, there is no reason to expect that there will be a political corrective in the form of the political leadership forcing business elites to undertake reform that will include a greater amount of CSR. This is indeed a view held by some of the members of the advisory board.again, the point being made by these commentators is that modernization and globalization will force structural changes in the Cambodian economy. If and when that happens, CSR will become more relevant. It is assumed that this structural change will force business to come to grips with the real meaning of CSR. As it now stands, even large, foreign-owned enterprises assume that their charitable contributions constitute CSR. The presumed structural changes will remedy this, if the changes themselves com to 4

5 pass. But the key to change is that CSR means greater profitability. Merely doing the right thing will be rather unimportant. Conclusion. This preliminary assessment has taken us rather far from the attempt to explain why CCC proved to be completely unreachable in our project. This is in itself not a catastrophe, as evidenced by the fact that we have successfully moved ahead without CCC participation. The hypotheses produced above represent an escalating problem for the future of CSR in Cambodia. If the problem of CCC nonparticipation was caused by interpersonal relations and their failing, this can be remedied. If it was caused by lack of communication between academia and business, this problem can be overcome by greater efforts on both sides. But if the problem we had with CCC reflects a problem of culture, political power, and priorities by business elites and political leaders, the future of CSR in Cambodia will also represent a serious problem. Once the facts of our investigation are in, we can properly assess the problem level faced and the remedial efforts that need to be undertaken. Trond Gilberg PUC Team leader CSR in Cambodia project. 5