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Corporate social responsibility isn't just a public relations ploy

Publication Date : 15-12-2013

 

The latest pollution scandal involving Advanced Semiconductor Engineering (ASE) has come as a shock to Taiwan not because pollution by factories is anything new in Taiwan, but because ASE is such a big company.

ASE is the biggest semiconductor packaging and testing firm in the world, with annual revenues of over NT$200 billion (US$6.75 billion). Like many other major companies, ASE claims that it attaches paramount importance to fulfilling what the world of business calls corporate social responsibility (CSR).

In this era of heightened environmental awareness, protecting the environment is an important part of CSR, particularly for the manufacturing sector of the electronics industry, whose manufacturing processes usually produce toxic waste.

We would usually believe that companies the size of ASE would be happy and willing to devote a tiny portion of their revenues to fulfill CSR obligations. But the latest revelations at ASE's Kaohsiung plants, accused of intentionally discharging untreated toxic wastewater, have shown that such a belief might only be wishful thinking.

It seems to have instead brought us back to the hard reality of the world of business, in which growth, revenues, profits and responsibility to investors take priority.

Anything else — protecting the environment, contributing to charity, community relations and other social responsibilities — takes the backseat. Efforts in those directions may simply be public relations work to make the company look better or even greenwashed lies to conceal their dirty linen.

Is that right? We are not asking companies to give CSR priority over business, but at least they have to strike a balance between them.

We know that operating a business in Taiwan's electronics industry is tough. Competition among domestic peers and from rivals in China and other countries is intense; clients are always looking for lower costs; consumers in the end market are always looking for better yet cheaper products. But that doesn't mean that they have to sacrifice the environment.

We need changes which must be forced onto the world of business externally and internally.

Governments must come down hard on rogue businesses. There must be stringent laws curbing pollution and punishing polluters.

But we must also ask how much punishment is enough to scare rogue companies.

In the ASE case, Kaohsiung authorities have slapped a NT$600,000 fine on the company. Even if it were to be fined the same sum daily for an entire year, that would only amount to NT$219 million — just a drop in the ocean for ASE.

The government is now looking to fine ASE a sum equivalent to the profits it has made from operations that have allegedly polluted the environment. But such a sum is difficult to determine in the first place.

And then, such big companies could leave Taiwan to avoid stringent environmental laws and continue their polluting operations in other countries that place economic growth concerns much higher than environmental ones.

In fact, Taiwan's economics minister has already urged the nation not to “condemn ASE to hell” because of the incident. We can understand his worries about the possibility of ASE leaving Taiwan, which would dampen Taiwan's economic growth. But we cannot accept a mentality that caused the minister to leap to the firm's defense.

We cannot let such big companies hijack the government; nor should we allow them to continue their rogue operations anywhere else in the world.

We need internal pressure to go with government actions in order to bring along changes. The concept of CSR is not something that governments impose on companies. There is a growing consensus in the world of business that companies are responsible to both their investors and society.

Such a consensus should not be just an empty gesture. Every company — particularly those big players — must put it into practice to achieve real results.

Look at Apple's reaction to accusations that its Taiwan-based contract manufacturer, Hon Hai Precision Industries, was running sweatshops in China.

Apple, coming under pressure from society, forced Hon Hai to answer these accusations and promise improvements.

Are ASE's clients ready to take actions?

US$1 = NT$29.62

 

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