Las Noticias

The first week of November 2005 saw riots and protests at the Argentine coastal town of Mar del Plata, host to the fourth Summit of Americas. Negotiations for the creation of a Free Trade Area of the Americas (FTAA), which would establish a free trade bloc covering 34 countries stretching from Alaska to Tierra del Fuego in southern Argentina, collapsed as a trend of increasing political assertiveness in the region meant that key players such as Argentina and Brazil refused to agree to the conditions.

The economic and political landscapes of the region are already shaped by important sub-regional groupings such as NAFTA (North American Free Trade Area), the recently negotiated CAFTA (Central American Free Trade Area), MercoSur, a grouping of Argentina, Brazil, Chile, Uruguay and Paraguay and a number of bilateral agreements with the US. Those who protested against the proposed FTAA argue that the majority of these existing free trade mechanisms have largely worsened socio-economic conditions in many countries in the region, often to the benefit of the US economy. This indicates the views of a significant proportion of the population, according to a survey by the regional polling organisation Latinobarometro that was reported by Business Week in November, showing that 61% of Latin Americans have little or no trust in the U.S. government's intentions toward the region.187

Latin American countries account for nine of the top 20 of the latest United Nations (UN) Human Income and Poverty Index188, suggesting the region is becoming increasingly affluent. However, such statistics conceal the huge inequalities existing between the countries, and within them, as decades of colonial legacies, civil war, financial instability and positioning as the US’ ‘back yard’ during the Cold War, have left scars on the resource-rich nations. According to the UN189, 43% of the population of Latin America are poor, with approximately half of that number living in slums, and a quarter living on less than a dollar a day. The region’s forests provide nearly one quarter of the world forest cover and protect systems rich in biodiversity, but the rate of deforestation, often at the hands of business, is one of the highest in the world at an annual 0.48%.

Well publicised cases such as Coca-Cola in Colombia, Parmalat in Brazil and sweatshop labour in Mexican export processing zones have highlighted problems of worsening job security, lower wages and poor health and safety conditions for workers. As in many low-income regions, key aspects of voluntary corporate responsibility, such as regular reporting on non-financial activities, stakeholder engagement and codes of conduct, are not widely-recognised or engaged with. However, according to Antonio Vives, head of the Inter-American Development Bank’s (IADB) Corporate Responsibility programme, in corporate responsibility in Latin America is ‘on the verge of take-off.’190

Over 400 business representatives, academics, government representatives and members of civil society from 22 different countries attended the IADB’s third annual conference, held in Santiago, Chile. Discussions based around the main theme of ‘Who is responsible for responsibility?’ explored the roles of the private sector and other actors in developing a more formal, integrated model of CSR for Latin America. A recent rating of the eight largest countries in the region found Chile to be the most ‘ethical’ place for business, while poorer countries like Peru and Colombia scored much lower.191 An OECD report released in November, detailing case studies of good corporate governance practices in Latin America hailed Peruvian mining company Buenaventura and Brazilian electricity company CPFL Energia amongst those who have been found to be complying with CSR standards issued by the OECD and other international organisations.192

Participants at the IADB conference argued that these examples of best practice were not indicative of the real status of CSR across a region in which small and medium-sized enterprises (SMEs) account for 95% of firms, employing 40 - 60% of the population of each country.193  Religion and altruism were argued to be the main drivers of a more mainstream tradition of ad hoc corporate philanthropy and ethics in these smaller indigenous businesses. Now demand for more embedded, strategic CSR practices, based on the Anglo-American ‘business-case’ model is being voiced.

Some civil society organisations are sceptical of the applicability of a CSR model created in the West. The region is home to the World Social Forum (WSF) movement, founded to help forge more horizontal links between social movements across the world. The annual meetings of the WSF are held as an alternative to the World Economic Forum (WEF) meetings in Davos, Switzerland. The instrumental rationale of CSR as strategic management practice, limits the the scope for addressing concerns and critiques of many social movements and is unlikely to be welcomed by vocal NGOs that are wary of big business, but supportive of the principles of participatory democracy and social justice.

The Red Puentes network, comprising 31 voluntary organisations working to catalyse an improvement in corporate governance in Latin America, argues that any CSR model for the region must be based on the ‘perspectives, visions, rights and needs of the civil societies in which the corporations operate.’194 They argue that SMEs largely have good local knowledge and links with the communities in which they operate. The call upon large, and often foreign-owned, corporations to maintain international standards of social and environmental protection and also to involve civil society in their decision-making to help develop a model of CSR that is genuinely suited to the needs of this vast, diverse regon.

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