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Social Auditing in Pakistan ± A Tale of
Three Sectors
Friday, October 22 2010
Khurram Aziz Fani (Kaif Associates, Pakistan)
Dr. Nadeem Bashir (King Saud University, KSA)
ISOSS, Superior University, Lahore.
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Sequence of the Presentation
Background
Main Area of ResearchFocus and its Importance
Methodology
Findings
Conclusion
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Social auditing - issue evoked under Code of Corporate
Governance. Last 2 decades, pressure f r om stakeholder
to comply social responsibilities makes it important.
Seminal wor k of Bowen (1971) who argued thatbusinessmen should focus on businesses discharging
their social responsibilities.
Steiner and Steiner (1991) highlighted importance of
social auditing.
Frederick et al. (1992), social evaluation needs to have
disclosure in some for m.
Background ± Social Auditing
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Main Area of Focus «.
Stewardship Theory
Vs
Agency Theory
Vs
Stakeholder Theory
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S A creates impact upon Governance.
Linked with Social, Economic and Envir onmental issues
of organization.
Measures organizations¶¶ shared values and objectives(Prakash, 2006).
Results in impr ovement in management practices and
accountability.
Important tool in building trust (Gao and Zhang, 2006)and impr oving accountability and transparency (Zadek
and Raynard, 1995, Ebrahim, 2003, O'Dwyer and Owen,
2005).
Social Auditing « Importance
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S A is gaining pr ominence. Gr owing awareness among
stakeholders.
Aim is «««.. to analyze the current state wor k
on Social Auditing and its application in Pakistani context.
Analyze application of social auditing in a telecom sector.
Analyze application of social auditing in a food sector.
Analyze application of social auditing in oil and gas sector.
Research Aims and Objectives «.
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Theoretical Framework of Research «
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Methodology - I
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Methodology - II
Stages of Resear ch ««
1. Identif ication of issue to be
studied.
2. Investigation of published
material on CSR and Social
Auditing so as to enable the
candidate to develop
understanding about the areaand shape the resear ch
design.
3. Development/identif ication of
Resear ch instrument.
4. Conduct of case study and
collection of relevant f acts.
5. Analysis of infor mation
collected in the preceding
stage.
6. Drawing up the conclusion
about the resear ch objectives
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Methodology - III
Stages of Resear ch ««
1. Identif ication of issue to be
studied.
2. Investigation of published
material on CSR and Social
Auditing so as to enable the
candidate to develop
understanding about the areaand shape the resear ch
design.
3. Development/identif ication of
Resear ch instrument.
4. Conduct of case study and
collection of relevant f acts.
5. Analysis of infor mation
collected in the preceding
stage.
6. Drawing up the conclusion
about the resear ch objectives
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Methodology - IV
Detailed Literature Reviewwas carried out in area s like:
Need for Organizational
Governance.
CS
R ± Histori
cal Perspe
ctive.
CSR ±Area in Focus.
CSR ± Def initions and
Features.
Advantages of CSR
Recent Resear ch in CSR
Dimensions of CSR.
Social Auditing, Envir onmental
Responsibility and
Sustainability Reporting.
Diversity Acr oss Countries
Ref erence Documents weref r om Emeraldinsight, JStor andEbscoHost ,Governmental andNon-Governmentaldocuments.
Data was collected thr oughstructured interview-guides.
Questionnaire developed byBalboni et al. (2007) was used.
Conducted resear ch for
³Ministry of Housing, Planningand the Envir onment´ of Trinidad and Tobago incollaboration with UN andSouth Trinindad Chamber of Industry and Commer ce.
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Methodology - V
Data was collected f r om threef ir ms.
SNGPL, Telenor and Nestle.
Qualitative Resear ch in thefo
r m
of
CaseS
tudy wascarried out.
Data Collected during June2010.
Survey Instrument used asInterview Guide, Key
Infor mants Interview + severalunstructured interviews.
Content Analysis applied onvarious reports and websites.
Most of the interviews wereconducted in Urdu.
Triangulation of Data
Resear ch ethics were not
vio
lated Infor med response,
Sharing only what was beingtold by the respondent,
Correct reporting of thef indings,
Authenticating collectedinfor mation.
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Methodology - VI
Yin (2008) suggested that thevalidity and reliability can beImpr oved thr ough
Co
nstruct Validity,
Internal Validity,
External Validity and
Reliability
Co
nstruct C
SR is widelyaccepted and Resear ched So
construct validity is assured
Balboni et al., 2007, samepurpose (yet diff erent settings)so questionnaire would oughtto measure the same thingswith same reliability level.
Internal validity, not relevant to as descriptive resear ch insteadof causal resear ch.
Conduct of case study inactual f ield setting enables thedissertation candidate ingeneralization of f indings.
Triangulation of data ensuresthat data is collected f r om reliable sour ces.
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Findings «. Telenor - I
(Pvt.) Ltd., f inancial statementsnot required , Not ListedCompany so no code of Cor.Governance.
CSR pr o jects done insidedepartment
2008, awarded ³Envir onmentalExcellence Award´ at 5th
Annual Envir onmental Awards´.
Maintains acom
prehensivehealth and saf ety policy to save envir onment f r om potential hazards of itspr oducts and services.
For employees,comprehensive healthassurance and a medicalscheme, pension, maternityleaves, employee assistance
pr ograms, etc. Encourages participation of
previously deprived socialsector in job participation.
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Findings «. Telenor - II
has high respect for ecologicalconcerns.
As compared to other telecom o
perato
rs, Teleno
r has lim
itedinf luence on the externalenvir onment but still it iswor king to reduce the impactto its minimum.
State of the art technology andhas limited inf luence on thehuman masses.
Using ³outdoor BaseTransaction Station´ towers.,energy eff icient and able to manage tough envir onmentalconditions.
Uses better quality of generators on its cellular tower sites. Reduce gas and noisepollutions.
Extensive site audits,confor mation to own andpolicies of PTA.
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Findings «. Telenor - III
Solar Energy Generators
Emergency ResponsePr ogram. Trained employeesto cope and contribute in caseof any disasters (f lood, earthquakes, air/rail/r oadaccidents).
Khuddar Pakistan (NayaQadam)
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Findings «. Telenor - IV
Engaged in extensive mobileradiation resear ch, unlikeothers. Also f inancing.
Maintained a helpline wherecustomers can launch their complainants. Fr om other networ ks, as well.
Customer serviceinf rastructure is nations¶ stateof the art customer servicecentres.
Only company adhering to therequirements of TL 9000.,QMS is a special purposesystem designed for telecom suppliers and servicepr oviders.
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Findings SNGPL - I
Mar ket leader in pr ovision of gas. Operates in North Centralarea of Pakistan, operations inPunjab and newlycommissioned Khyber
Pakhtoon Khwa. With anexperience of more than 45 years,
Incorporated under ³Companies Ordinance 1984´of Pakistan and is listed on
Lahore, Islamabad andKarachi stock exchanges of Pakistan.
Arranges diff erent socialgatherings, employees f r om allcadres participate.Independence daycelebrations, Eid f estivity, etc..
Very recently, company hascompleted an impr oved designpr o ject in collaboration withlocal engineering university.Impr oved ther mal/combustioneff icient, Organization¶s
envir onment sustainabilityendeavours. In 2009,upgraded its ³OSHA´ to 18001-200t f r om previously held 1999standards.
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Findings «. SNGPL - II
Listing requirements of stock
exchanges and in compliance
with code of corporate
governance, the company
issues quarterlyf inan
cialstatements. The reports are in
accordance with applicable
accounting and auditing
standards and applicable
GAAP.
Rating Agency (PACRA)
changed f r om s AA to A1+,
OSHA for employees and
contractors.
Compliance to legal
requirements.
The company is also strivingfor making itself a better and
saf e wor king place.
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Findings «. SNGPL - III
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Findings «. SNGPL - IV
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Findings «. Nestle -I
One of largest f ir ms of
Pakistan which is operating in
food sector. Listed at LSE and
KSE, 1988, Switzerland.
Milkpa
kLtd.
Milk, dairy and chilled dairy,
beverages, bottled water, food,
breakf ast cereals, chocolates
and conf ectionary.
CSR initiatives include
sponsorships, charity,
community welf are pr ograms,
ecological sustainability,
employment generation, etc.
Pr ograms designed at Head
off ice while regional off ices are
given autonomy.
Regional Off ices, In charge of
identif ying and reporting CSRpr o jects
Head off ice then evaluates and
develop f ull pr ograms.
Aim is to bridge gap which was
not lef t un-f illed by the Public sector.
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Findings «. Nestle - II
Major areas are education,
community welf are, impr oving
quality of lif e and investment in
health.
Major contribution inagriculture, helped sports and
cultural events f lourish in the
country.
Spent considerable amount of
money on school rehabilitation
and advancement of
education. APWA college
mobile laboratory.
Earthquakes support in
Pakistan.
Health and Saf ety policy for its
employees, Emergency
response for employees.
Employee training and
development, skills at par Nestle S A.
Wor kplace is continuously
monitored.
Wor k-lif e balance, ethics
training, etc. health insurance,pension, entertainment / gym,
maternity/paternity privileges,
employee assistance
pr ogrammes.
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Findings «. Nestle - III
Manuf acturing pr ocesses are
so well designed that they
minimize pr oduction wastes.
Sustainability of envir onment
as less and less of thematerials are required in the
pr ocesses.
Being in the food and
beverages business, the
compliance of health and
saf ety policies are very
important for the f ir m and it is
giving due regard to this.
Helpline for complaints.
Abides by all relevant pr oduct
quality and saf ety legislation
Adaptation of ³World Health
Organization¶s Codex Alimentarius´ on
manuf acturing food items.
Laboratories at Sheikhupura
and Kabirwala were given top
grading by Nestlé S A.
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Conclusion «.
CSR and S A are on the boom.
Industry wise compliance.
Organization are complying to their Envir onmental
and Social Accountability and are increasinglyreporting these pr o jects.
Envir onmental and Social Accountability initiatives
diff er f r om industry to industry with lot of similarities
and dissimilarities.
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Question Answer Session