By CSR Asia Centre
Professional Masters programme in CSR offered at AIT, please contact the CSR Asia Centre at AIT at firstname.lastname@example.org.
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Map Ta Phut is an interesting case because it is one of the clearest examples of companies losing their license to operate as a result of a prolonged disregard for the environmental and health impacts of their industries. But they seem to be learning their lesson.
Five of the most affected companies (PTT Chem, Dow Chemical Thailand, BLCP Power, the Glow Group and Siam Cement Group) joined efforts to form the Community Partnership Initiative (CPI). The partnership was intended to improve relations with the community where doing so was going to take more than just donations.
Since the Map Ta Phut crisis put CSR on the map in Thailand, it is interesting that the resulting model for community outreach is also setting an example for improving upon the common model of community investment.
To provide a bit of background on the situation, Map Ta Phut is an industrial estate along the gulf of Thailand that houses a number of petrochemical companies, oil refineries and other industrial giants. Dangerous levels of volatile organic compounds (VOCs) in the air caused a high incidence of cancer in workers and surrounding communities. In response, local organizations filed a lawsuit that brought 76 planned projects to a halt. In 2009, the Central Administrative Court ordered the suspension of working permits of the projects until proper health and environmental impact assessments could be completed and reviewed. Although all but two of the projects have since been given the go ahead, the financial impact of the year long stop was huge. The blocked projects accounted for well over US $7 billion and tens of thousands of jobs.
So what is interesting about the CPI? Its top goal is to address the cause of the problem – its own pollution. The member companies are employing cleaner technology in their plants and transferring knowledge about technology to other operators in the industrial park to further reduce pollution. Secondly, it aims to improve the health of community members suffering from the pollution by providing things like mobile medical services.
While the main focus is to address the environmental problem and health impacts of the communities, the partnership has advanced a broader range of activities that include providing 300 university scholarships to community students and to create large areas of green space, and plant trees that would eventual help transform Map Ta Phut into an “eco-industrial” town. It’s not clear whether these latter two initiatives dodge the bullet on greater environmental cleanup needed, but pressure on the companies will certainly be high. Finally, SCI also includes an effort to build trust with community members by inviting them into the factories during two “open house” events to see the manufacturing and petrochemical processes.
The collaboration was initially driven by SCG’s president and chief executive, Kan Trakulhoon, who first managed to get the 5 leading firms to collaborate, but has grown from the initial companies to include 58 of the 140 industrial plants in the area. The goal is to eventually include them all. This summer, it evolved from an initiative into a registered association it became the Community Partnership Association (CPA).
As reported by The Nation on July 27th:
“The chairman of an Islamic Community near the Map Ta Phut Industrial Estate, Suchart Kosem, said that industries, at one time, were the communities’ foes. However, the image of industries has changed following establishment of the CPI…We can [now] feel their sincerity. The companies give the communities a lot. From now on, we will not fight each other.”
The CPI approach has a number of strategic components. The companies are a) working together, b) attempting to clean up their own operations, c) addressing the health problem in the community that they have created and d) engaging in dialogue and opening their doors to build trust. What is this getting them? It is building the needed trust that other strategies would probably not achieve.
In Thailand, there is a strong corporate culture of making donations to community projects, but these are often chosen with no strategic focus and often don’t achieve the recognition from the community that companies seek. This should serve as an example in Thailand and elsewhere for a more strategic way for companies to manage community investment
It also provides an example of companies working together to tackle problems on the global commons. More and more, it makes sense for companies to collaborate to address sustainable development issues – be they pollution, limited natural resources that are fundamental business inputs, or services they can jointly provide to communities. In all cases, companies can achieve a lot by being more strategic with their community relations and investment. Farsighted, strategic involvement now can save high costs down the road.