Abstract
The notion of legislating Corporate Social Responsibility (CSR) has for the most part not been well received. This is evident from the fact that legislation directly regulating CSR (either in the public or private spheres) is almost non-existent, with only a handful of jurisdictions referring to CSR in national legislation, and where references to CSR are made it is generally in the context of taxation. In line with the international trend, South Africa also does not have legislation expressly addressing CSR, although it does have a regulatory framework with CSR content (such as socio-economic development initiatives in terms of the Broad-Based Black Economic Empowerment Act 53 of 2003, (the BEE Act) and the social and ethics committee in terms of the Companies Act 71 of 2008). However no explicit CSR legislation exist in the South African context. This contribution focuses on the following question: What could be included in a proposed CSR framework Act aimed at institutionalising CSR in the South African context? This contribution proposes a CSR framework Act for South Africa without creating an explicit right to CSR. The framework legislation proposed in this contribution should be regarded as being complementary to existing legislation addressing the rights addressed. With no comprehensive policy framework and no overarching legislation that addresses CSR in existence in South Africa, the country is in need of a framework law that addresses CSR and provides the necessary legal impetus for the establishment of a corporate conscience based on its social responsibility. It is evident, then, from noting the lack of an effective CSR enabling framework that the need exists to regulate aspects of CSR by means of a framework law. As a result, the aim of this contribution is to combine relevant national legislation and national and international guidelines into a framework Act that would institutionalise CSR.
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Notes
- 1.
61 of 2003. This Act provides the framework for a structured uniform health system within the Republic based inter alia on the constitutional duty included in s 27(1)(a) of the Constitution.
- 2.
107 of 1998. This Act establishes a framework for integrating good environmental management into all development activities and is regarded as a legislative measure taken in terms of s 24(b) of the Constitution.
- 3.
36 of 1998. This legislative measure was taken in accordance with the Constitutional duty in s 27(1)(b) of the Constitution.
- 4.
Similar to Bill 1239 introduced in the Philippines aimed at institutionalising CSR.
- 5.
S 5(o) of the Nigerian Bill for an act to provide for the establishment of the Corporate Social Responsibility Commission (available at https://senatorchukwumerije.net/id64.html) provides that Nigerian companies should annually contribute at least 3.5% of their gross annual profit to CSR initiatives (which could include educational, cultural, environmental or economic programmes). Failure to make these contributions would result in financial penalties of at least 3.5% of gross annual profit for repeated violations (s 7(3) of the Bill). Another and potentially more severe penalty is envisaged by s 7(2) of the Bill, which empowers the Commission to “temporarily shut down and suspend operations of an organization, corporation or company for a minimum of 30 working days as a penalty for non-compliance with statutory requirement of the corporate social responsibility as stipulated in this Act”.
- 6.
This resembles the provision in s 134(3)(o) of the Indian Companies Bill, 2011 that requires the board of directors of Indian companies to report on the details of the company’s CSR policy along with their annual financial statements, and to say how the policy has been implemented during the year. In terms of s 134(3)(o) of the Bill, companies should also report on their CSR initiatives undertaken during the year. Failure to report is a contravention of the section and punishable. Both the company and the officer who is in default will be held liable (see s 134(8)).
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Kloppers, H. (2020). Legislating South African CSR Through Framework Legislation. In: Crowther, D., Seifi, S. (eds) Governance and Sustainability. Approaches to Global Sustainability, Markets, and Governance. Springer, Singapore. https://doi.org/10.1007/978-981-15-6370-6_6
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