CSR360

Posted: Monday 1 February 10, 9.50am GMT

THIS ARTICLE AS A BRIEF POLITICAL AND CONTEMPORARY EXPLANATION

For decades underdevelopment proved businesses and State to be inefficient major players of an institutional battlefield where modes and trends always finished in the same result: not so high growth, not so slow inequality, not so ethical dealings and businesses, and not so peaceful political environment.

Since the 1970s, when Ecuador discovered and started exporting petroleum, corruption and so called “oil course” appeared on the map as an additional hazard to modernization and sustainability of business communities. It is true that oil brought infrastructure and bases for further business development, but it is also true that oil brought (with it) bad practices in stakeholders management, in special in social issues (e.g. relations of transnational companies with indigenous peoples) and environmental challenges (such oil spills in the Amazon region the fallout of which still rages in the courts).

Traditional values and ethical practices in the State and society of Quito and Ecuador have been replaced by political lobbying, interest groups and easy money invading social programs, local economies and private spaces. Under those circumstances, the last four decades have proven to be a black hole in terms of advances in concepts such as public governance, cultural strengthening, and private evolution through CSR.

Fortunately, after years of unsuccessful initiatives to make changes and convert responsible businesses in a reality more than a chimera, the year 2000 found a country that felt in its roots the ethical crisis and left not only the corrupted national currency (Sucre) behind, but also wanted to forget and overtake the deepest economic crisis of its history (the GDP fell in -7% in real terms).

THE NEW CENTURY AND THE ADVANCE TOWARDS CORPORATE CITIZENSHIP

Provided the fact that the US Dollar became the new currency of Ecuador in 2000, the country gave face (for the very first time in 30 years) to its lack of productivity and the absence of microeconomic and social fundamentals for the development of its economy and industry.

A new generation of Entrepreneurs started to look back in time, search among their relatives and root communities, and found solutions to management that involved the creation of new relations, the articulation of polycentric systems, where competitiveness had to be based in good relations with stakeholders and the will to abandon bad practices related to environment, society and the economy.

During last two years, in Quito, with the presence of David Halley, from Business in the Community, London, the author has organized (with the support of the Pichincha Provincial Government) a ceremony of recognition of those Entrepreneurs that have lead the way for others to come or already coming. See here for more information.

This process was helped by a vibrant civil society that marched in multitude in the streets and forced the change of several Presidents of the Republic (from the mid 90’s to the mid 2000’s, three Presidents have been forced to leave office).

Political changes have created space for the development of the CSR agenda through the adoption of a more contemporary concept known globally as “Corporate Citizenship” (CC), or locally as “MINGA”.

The current Government of Ecuador is the first to have been re-elected in 40 years. The base of the governance solution found by the political structure created in Ecuador (not so democratically, in orthodox terms) is the new Constitution of the Republic: one that gives rights to citizens, nature, and re-concentrates the power in the hands of the State.

Conservative parties in Ecuador have opposed to this, but achieved no more than 20% of the vote (against the Constitution). Hence, with the support of a majority, the population has voted for change.

The challenge for the next generation of Entrepreneurs is there. The only way forward for developing responsible businesses, with such a Constitution as the one described above, is CSR. However, CSR, understood as philanthropy, has no more space to exist. It has to evolve through stakeholders management (polycentric systems, or MINGA), towards Corporative Citizenship.

THE CHALLENGE AHEAD

As Ethical Corporation has written about Ecuador, “Ecuador is still no El Dorado of corporate responsibility. But, for investors and other stakeholders willing to delve around, there are traces of treasure to be found.” The time has come, in Ecuador, when Businesses have to be IN the community, and not the other way around.

CC and MINGA are now in the mainstream for any entrepreneur interested in doing business in Ecuador. It is not that corruption has disappeared, neither fast growth is occuring, nor inequality is being reduced miraculously. No: the thing is that now it is something politically incorrect to show and promote any enterprise as an insensible structure, or as a machine of making money or generating profits.

We have witnessed from Hexagon Co. and S2M (Sustainability, Measurement and Mediation) Foundation how many modern and model business leaders in Ecuador have started talks with government (most of them facilitated directly by the author) where agreements have shown up every single time that the actors on the table talked close enough to triple–bottom line aspects, and entered in fields where rights, balance, ethics, values, community, supply chain, engagement, sustainability, and transparency were the key themes.

The challenge ahead is to go out from committees and introduce these developments in public debates, media and dialogue events.