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MINISTRY OF INDUSTRY, INVESTMENT AND COMMERCE OF MALI

THE IMPACT OF THE PRIVATE SECTOR ON CHILDREN’S RIGHTS IN

MALI

Mapping and analysis of the private sector to further a child rights’ focused Corporate Social Responsibility (CSR) agenda

- SUMMARY-

Authors of the study:

Fernando Casado Cañeque

Philippe Jochaud

Paula García Serna

March 2011

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1. General context and aim of the study

One of the most remarkable phenomena in the field of development over the last twenty years is the increasing role assigned to the private sector in achieving development goals. Thus, we can see how, since the Rio Conference in 1992, or the World Forum on Sustainable Development in Johannesburg in 2002, international organizations, public institutions and non-governmental organizations have gone from looking at businesses with scepticism to considering them today as strategic partners in the pursuit of their objectives. Following this trend, in June 2009 the Executive Board of UNICEF developed the « Strategic Framework for Partnerships and Collaborative Relationships». This document seeks to promote the increasing role of business by integrating the latter as a fully-fledged partner who can contribute to improve the effectiveness and impact of policies promoting children’s rights. The government of Mali, inspired by the Strategic Framework for Growth and Poverty Reduction (CSCRP), also now places the private sector at the very heart of its strategy to fight poverty, as illustrated by the adoption of the Economic and Social Development Project (PDES). Corporate Social Responsibility can be defined as "a concept in which businesses incorporate social, environmental and economic concerns in their activities and in their interactions with other stakeholders on a voluntary basis1". It tends to focus on a firms’ responsibility vis-à-vis stakeholders, following the philosophy of « act locally, think globally », promoting the integration of the local and global context within the strategic analysis of the company. The United Nations Children’s Fund (UNICEF) increasingly perceives the development of Corporate Social Responsibility (CSR) as a real opportunity to mobilize the private sector in the promotion of the organization’s goals, and it is within this context that, under the leadership of the Ministry of Industry, Investment, and Commerce (MIIC), the Mali-UNICEF Cooperation Program is developing initiatives to promote CSR as a tool enabling the improvement of children’s living conditions in Mali, specifically in terms of health and child survival, education, and protection against violence and abuse. This study has been developed within the framework of this partnership.

2. Approach and Methodology

The study’s approach was conceived by UNICEF and the MIIC, with the support of a steering committee and a technical committee, both composed of various institutions and organizations representative of Malian society.

The completion of the study was supported by a Technical Committee composed of the MIIC, the Statistical Planning Divisions (CPS) of the Ministries of Health, Social Development and the Advancement of Women, Children and the Family; the National Institute of Statistics (INSTAT); the Permanent Assembly of the Chambers of Commerce of Mali (APCMM), and the United Nations Children’s Fund (UNICEF).

The supervision of the study was carried out by a Steering Committee composed of representatives of the public sector, the private sector, civil society and financial and technical partners, including: the Finance Commission of the National Assembly, the

1 European Commission 2001

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Ministry of Industry, Investment and Commerce (MIIC), the Ministry of Crafts and Tourism, the Ministry of Health, the Ministry of Agriculture, the Ministry of Mines, the Ministries of Social Development and the Advancement of Women, Children and the Family, the Economic, Social and Cultural Council, the Statistical Planning Divisions (CPS) of the Health and Social Development sectors, the Mali National Business Council, the Professional Association of Banks and Financial Institutions of Mali (APBEFA), the Chamber of Commerce and Industry of Mali (CCIM), the Permanent Assembly of the Chamber of Agriculture of Mali (APCAM), the APCMM, the French Development Agency (AFD), as well as UNICEF.

In terms of the research methodology, various tools were used both in collecting and in analyzing the data. The following are some of these tools:

� Analysis of secondary sources from major publications on CSR and childhood, both within Mali and at an international level;

� Analysis of a questionnaire taken by Malian businesses;

� Analysis of a questionnaire taken by private sector stakeholders in Mali;

� Personalized interviews with businesses and businesses’ stakeholders in Mali;

� Personalized interviews and phone interviews to the managers of UNICEF’s strategic partnerships;

� Intersectoral workshops to submit and discuss the collected information with leading Malian interest groups.

As the study focused on the most visible and representative firms of the major sectors of the Malian economy, a majority of the responses to the survey came from large and medium businesses (80%)2. Just above a third of these were part of international corporations. Small businesses developing their activities in the informal sector were not addressed directly for obvious practical reasons; instead, they were approached through umbrella organizations, and especially through Chambers of Commerce (Chambers of Agriculture, of Trade, of Commerce and Industry) and federations (Mali National Federation of Artisans).

In terms of capital and area of activity, almost 65% of businesses in the study are private capital businesses, and 24% mixed capital. The majority develop their activities at a national level (53%), over 26% at a regional or international level, and 20% at a local level.

We can confirm that the study is indeed representative of the economy, as it deals with the country’s main economic sectors in terms of contribution to GDP (agriculture, mining, telecommunications), as is illustrated below (see Figure 2).

2 In this study, the classification of the UE has been used: large business > 250 staff, medium business < 250 staff and small business < 50 staff

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Figure 1. Sectoral representativeness of the study

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3. Socioeconomic situation of children in Mali

Whereas the private sector had long played a secondary role in economic life, in the last decade Mali, has adopted major reforms to improve the business climate. The progress achieved has allowed the country to move from the 162nd place in the Doing Business3 ranking of the World Bank in 2009, to the 153rd place in 2011. The economy of Mali has thus experienced constant growth in the past 10 years, with an average GDP growth rate of just above 5%. However, we can see that this growth is not enough to lead to true development. Almost half of the population, and up to 73% in rural areas, live below the poverty line of under a dollar a day. Thus, Mali continues to be one of the poorest countries in the world, as is illustrated by its 160th position out of a total of 169 countries in the UNDP Human Development Index (HDI). Children are generally the first victims of poverty; their situation in Mali remains critical. Indeed, eight out of ten children suffer from deprivation, nine out of ten of these are living in rural areas. Lack of housing and education are the most common problems.

3 Doing Business 2011 Mali – World Bank IFC

Energy and water,

Mining industry

EDM, Avion, Anglogold

Ashanti, Randgold,

Tamico

Information and

Telecommunication

Orange

Agro-industrial and textile

CMDT, Groupe Ami,

Bramali SA, Sukala SA,

Comatex, Abattoirs du

Mali, Boulangerie Kansaye

Chemical and

Pharmaceutical Industry

Embalmali, Jikke, MPC Laboratoire Cellal

Banking and Insurance

Allianz, Sabu N'yuman, BICIM, BNDA, Caece

Jigiseme, PMU

Construction and Public

Works

Somafrec, Manutention Africaine Mali, Office du

Niger

Crafts and Tourism

Groupe AZALAI, Bakatra,

Coopérative Jama Jigui,

Coopérative des Pêcheurs

de Mopti

Transportation

Transrail SA, Air Mali,

Air France, MAERSK

Hydrocarbons, Services

and Commerce

CFAO CADAU

Crafts and Tourism

Groupe AZALAI, Bakatra,

Coopérative Jama Jigui,

Coopérative des Pêcheurs

de Mopti

Transportation

Transrail SA, Air Mali,

Air France, MAERSK

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Notwithstanding considerable improvements, the Millennium Development Goals will probably not be achieved by 2015 in terms of eradicating extreme poverty and hunger (MDG 1), promoting gender equality (MDG 3), reducing infant mortality (MDG 4), improving maternal health (MDG 5), or in terms of combating HIV/AIDS, malaria and other diseases (MDG 6). Significant progress has been made in terms of primary education, with a gross enrolment rate of above 80% in 2009, but there continue to be great disparities in access to education depending on gender, region, or parents’ revenues. In addition, Malian children are still widely victims of traditional practices which harm their proper physical, mental and emotional development such as female genital mutilation/cutting, early marriage and child labour or forced begging. All of these factors affect their ability to reach their full potential as adults, thus representing lost important opportunity for the country. Mali’s economic growth and future well-being depends on its capacity to invest in this segment of the population today.

4. UNICEF and strategic partners Partnerships involve finding common ground between the public and private sectors and combining the skills and expertise of the private sector with the knowledge of poverty and development issues, as well as the legitimacy, of the public sector. There are several domains in which private actors and public institutions can engage to improve the conditions of children in Mali, such as health, education, community development and the fight against poverty (see Figure 3).

Figure 2. Overlapping interests in multisectoral partnerships

Source: The Partnering Initiative and GTZ. An Introduction to Partnerships for Sustainable Development in South Africa, 2008.

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With this in mind, intersectoral partnerships can help overcome the challenges of development, which are by nature too great and complex to be tackled by a single organization or sector. Partnerships can also maximize the impact of development and the fight against child poverty by sharing human and financial resources, as well as the knowledge and expertise of each stakeholder, in a strategic manner. Sharing risk and resources as a form of teamwork can help businesses and public institutions to achieve their own objectives whilst working towards a common goal. In the last decade, the private sector in Mali has contributed to the development of the health system by expanding health coverage; however, the latter still hasn’t achieved the level it should have within the national health system.

Within this context, and guided by the Strategic Framework for Partnerships and Collaborative Relationships, UNICEF has launched a process seeking to expand its traditional relationship with the private sector beyond financing and philanthropic activities towards a new type of partnership (see Figure 4). Figure 3. Types of collaborations and partnerships with UNICEF

Source: UNICEF Strategic framework for partnerships and collaborative relationships. 2009.

UNICEF has been working for a long time in close collaboration with multinational corporations, national companies and medium and small businesses in order to propose, conceive and implement partnerships that use the assets of the private sector to better serve the interest of children worldwide. Traditionally, the initiatives stemming from partnerships with the private sector primarily have involved strategic corporate patronage, humanitarian marketing, employee donation programs, special events, charity greeting cards, and support in humanitarian emergencies. However, lately UNICEF has redefined its relationship with businesses by recognizing the private sector as a key actor able to contribute to children’s well-being in a more strategic manner.

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Indeed, UNICEF understands that the potential of businesses’ contribution to children goes way beyond traditional philanthropic activities. By incorporating the discourse of children’s rights at the heart of firms’ corporate social responsibility policies, the latter commit to respecting and promoting children’s well-being in the everyday management of their activities.

5. Impact of business on children All businesses have a more or less direct impact on children that can be either positive or negative. The impact of businesses on children can be summarized in the following manner4: � Physical impact � Moral impact � Intellectual, cultural and social impact � Impact on economic well-being, parents’ employment and family life.

Knowing that businesses can affect various aspects of children’s lives in a positive or negative manner, it is important that they measure and understand the impact of their actions on children’s well-being in order to minimize the negative effects and maximize their potential in contributing to their happiness and fulfilment. Understanding the dimensions of this impact is the first step towards understanding the problems that children face. Integrating children’s issues within the company’s framework implies a behavioural change which goes beyond a strategic change.

Nevertheless, children’s issues are rarely approached in a holistic manner by businesses. Most CSR initiatives related to children focus on the fight against child labour and on philanthropic activities that do not translate into an active engagement on behalf of the company in the programs it finances. This is largely due to a lack of knowledge of businesses’ impact on children, inadequate understanding of the latter’s specific needs, and to a general lack of awareness surrounding children’s rights. However, more and more firms have begun to understand that it is more effective and profitable to create partnerships with the public sector and civil society, and that there are several ways of contributing to children’s development that go beyond traditional philanthropy based on donations, sponsorship or charitable business initiatives.

6. CSR: Moving beyond philanthropy

Businesses have traditionally contributed to development goals through essentially philanthropic activities. Their initiatives generally stem from management, and are not developed in a systematic or coordinated manner, thus minimizing their potential impact. However, businesses have begun to understand that their contribution does not have to limit itself to these donations. The rising interest in CSR at an international level represents an important change in firms’ operating mode in support of development. Indeed, CSR implies integrating initiatives for development at the very heart of the company’s operating range, thus considerably increasing its potential impact.

4Analysis drawn from the study Business and Children: Mapping Impacts, Managing Responsibilities

Business Ethics (2010), published by Andrew Crane and Bahar Ali Kazmi in the « Journal of Business

Ethics ».

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The study of international good practice in the field of CSR related to children reveals great diversity in the initiatives that have been developed. In particular, we notice a growing interest in innovation and the development of new products that lead to solutions for children. In addition, businesses tend to depend more and more on partnerships with NGOs, public institutions or international organizations to develop their initiatives. However, it appears that the private sector’s ability to impact on children has not yet achieved its full potential. It is a relatively new concept and there are few tools and methodologies supporting the development of this type of initiative.

7. The five dimensions of CSR

A company’s main sphere of action in terms of CSR can be broken down into five key dimensions that affect its potential impact on development and on children: its strategic approach, its products and services, its operations, communication with its stakeholders and its social investment in the local community. Figure4: the five dimensions of CSR

The values and principles dimension involves elaborating a vision and mission statement, as well as codes of conduct and ethics that allow the company to integrate the values of social responsibility and the protection of children in a transversal manner. Through its internal and external operations, the company can develop activities that have an impact on its triple bottom line, that is, its economic, social and environmental result. This dimension involves promoting internal human resources and developing a constructive relationship with suppliers. By developing innovative products and services, the company can meet the needs of children and society through their supply, whilst creating new markets that will in turn generate profit.

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The communication and dissemination capability of a company can also have a very important impact on social awareness. It can play an educational and formative role with great added value for the region in which it operates whilst at the same time contributing to consolidate the company’s reputation. Finally, the company is an integral part of the local community in which it has settled. This involves rights as well as obligations. If the company manages to develop a real partnership with the community, supported by other partners such as local collectives, NGOs or international organizations, it can have a profound impact on this community, which in turn will contribute to maximize the potential of the company.

8. The Role of the private sector in promoting children’s rights in Mali

In order to analyse the role of the private sector in promoting children’s rights, the interviews and questionnaires focused on the following aspects:

i. Knowledge of the CSR concept ii. Level of integration of CSR in the company’s policy iii. Malian businesses’ perception of problems affecting children and priorities for

action iv. Businesses’ economic contribution to children’s causes v. Businesses’ modes of intervention in favour of children in Mali

Figure 5: Dimensions of the private sector

We describe below the most important conclusions derived from the study.

Knowledge of the CSR concept

� 66% of firms have never heard of the term. � The bigger the company, the more likely it is to be familiar with the term. � Multinationals are the ones that know the term best.

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Level of integration of CSR in the company’s policy

� 63% of businesses interviewed claim to have developed a vision and mission statement. � However, very few firms actually incorporate CSR principles in their vision and mission

statements. � Half of the businesses interviewed claim to have a declaration of values and/or a code of

ethics. � 38% of businesses interviewed are developing a CSR policy. � 13% of businesses interviewed evaluate their social impact. � 25% of businesses interviewed claim to publish or to have published a social report.

Malian firms’ perception of problems affecting children and priorities for action

� Health, education, and protecting children against exploitation and mistreatment are perceived as the most important issues faced by children in Mali.

� While two out of three children in Mali work, only 25% of firms perceive this as a very important problem.

� Over 50% of businesses interviewed claim to finance activities related to children. � Amongst the businesses that do not currently contribute, there are just as many that claim

to want to contribute in the future, as that claim not to be interested at all. � Whilst the fight against HIV/AIDS is by far the area in which firms have been more active,

education appears as the area in which they would like to contribute more. � There is definitely the will on the part of firms to contribute more to fighting problems

affecting children, but they need further counselling in order to achieve it. It therefore appears that businesses are beginning to understand that investing in children is pivotal to the economic development of the country in the long run.

Businesses’ modes of intervention in favour of children in Mali following the five dimensions model

Values and principles

� While 38% of firms claim to take into consideration aspects affecting children in the definition of their values and principles, in practice the fight against child labour remains the only issue included in the codes of conduct.

� Whereas a large number of businesses claimed that the promotion and protection of children’s rights are amongst their values and principles, in practice the definition of these ethical values does not appear in any charter.

Operations

� If we analyse the operations dimension, we notice that CSR activities are more frequent at an internal level than in the supply chain. Indeed, whereas numerous initiatives geared towards improving the social environment of employees’ families have been put in place, the study could not identify any specifications for suppliers addressing issues related to children.

� In terms of health, the most common measure is extending medical coverage to family members.

� In terms of education, covering the partial or full cost of school fees and setting up a loans program are the most frequent initiatives.

Products and services

� The supply of products and services that meet the needs of children is essential to guarantee the well-being and development of children and youth in Mali. Whether through

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the creation of intersectoral partnerships, or by developing new ranges of products and services, businesses play an essential role in this challenge.

� Businesses can create new markets by offering innovative products and services, while at the same time becoming more competitive vis-à-vis companies that develop traditional products.

� The private sector has access to human, technical and financial resources to invest in the research and development of solutions favouring children.

Awareness-raising and communication

� There are a few Malian businesses developing communication activities related to the protection of children’s rights.

� Businesses have great potential in terms of communication and awareness-raising on children’s issues, both at an internal and external level; they have the necessary resources and wish to get more involved, but do not consider these issues as priorities for the company and often do not have the necessary knowledge to engage in awareness-raising campaigns. Commitment to the community

� 42% of businesses claimed to be developing initiatives in favour of the community. The commitment to the community (which by and large translates into philanthropic activities) is generally the firms’ favourite CSR mode of intervention.

� Businesses tend to provide in-kind contributions or to make infrastructure and logistical services available to the community, but they rarely get involved in the development of health and educational programs directed to children. Activities do not follow a properly-defined corporate social responsibility strategy. With a few exceptions, businesses do not count on an annual budget intended for social activities, and CSR departments or foundations in charge of managing the company’s activities in favour of the community are practically non-existent.

9. Strategic recommendations

The recommendations stemming from this study have been broken down into three main groups.

In terms of the private sector, we suggest putting in place a series of measures that would allow for the integration of CSR in favour of children within the strategies of Malian businesses (R1). These include a methodology tailored to the size of the business (large firms, SMEs, and informal sector businesses) to integrate CSR in the company, setting up a training program, and developing awareness-raising activities on CSR and children. We also recommend creating a coalition to promote children’s development within the private sector (R2) as a way to mobilize the financial, technical and human resources of the sector in favour of the great cause of protecting children’s rights. Next, we approach public institutions and TFPs (Technical and Financial Partners) as entities able to contribute to the creation of a favourable environment for good practices in CSR and initiatives favouring children (R3). That is why we suggest: creating funding for companies that wish to adopt CSR strategies; putting in place a strategy for training in CSR directed to businesses; creating a favourable legal framework, be it juridical or fiscal; and finally, promoting institutional coherence, at the level of the Malian government, as well as at the level of TFPs or of the United Nations System (reform: “ Delivering as One”).

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The third group of recommendations is oriented towards the creation of a framework auspicious to the development of strategic partnerships seeking to find solutions to the issues faced by children in Mali. Setting up a platform for intersectoral dialogue on childhood (R4) would allow the elaboration of a national strategy for children, the organization of periodic workshops between the different actors, and the launching of a process around innovation in products and services for children. Finally, it is recommended that pilot projects be put in place to seek to improve children’s conditions in mining and agriculture (R5).