Prof. Balmukunda Regmi

Are all the corporates caring for the needy, helping the society and acting responsibly? Not much Corporate Social Responsibility (CSR) seems to have been carried out in Nepal.
However, as in other countries, Nepali corporates have contributed in social development. Nepal Bank Limited provided Rs. 5 million in assistance to Rastriya Primary School based in Bara district.

Nepal Investment Bank Limited has given Rs. 5 million for the renovation of Bhimsen Temple in Lalitpur. Similarly, Nepal Bangladesh Bank Limited has provided Rs. 932,000 in aid for the maintenance of Laxmi Pokhari in Banepa, and given 31 pieces of blankets to Navakiran Orphanage Home in Lalitpur. Himalayan Bank provided material support to Kawasoti-based Shree Maulakalika Disability Service Organisation, Navakiran Orphanage Home, and donated Rs. 500,000 to Teach for Nepal. Nabil Bank Limited has provided Rs. 700,000 to mountaineer Nirmal Purja while Everest Bank Limited has provided a school van to Self Help Group for Cerebral Palsy Nepal, and Rs. 500,000 to Manipal Hospital.

Helping launch telemedicine and health information connectivity infrastructure in Dhulikhel Hospital, Ncell is supporting health services in rural areas. In the first phase, it will link Manekharka in Sindhupalchowk, Dorpu in Solukhumbu, Thangsin in Nuwakot and Bolde in Kavrepalanchok, providing services to more than 15,000 households. After the implementation of the programme, the locals will get treatment services for chronic, non-communicable and communicable diseases.

Legal provision
The list goes on. As per the Industrial Enterprises Act, 2020, a medium or large-scale industry or cottage or small-scale industry with annual turnover of more than Rs. 150 million shall set aside at least one per cent of its annual net profit in each fiscal year for performing CSR. Penalties apply if the firms that fail to perform CSR. There is a regional disparity in the distribution of such support. A study by Nepal Rastra Bank shows that two-thirds of the amount spent by banks and financial institutions on corporate social responsibility is spent in the Kathmandu Valley. However, more important issues are missed.

Where from comes the money for charity? From business, as a surplus income. What leads to surplus? Extra production, extra pricing of the goods and services, or underpayment to the workers?
Let us not debate whether special recognition should be given to the profits made through intellectual property rights that propel the overall economic developments. Issue here is why the government allow the business firms to accumulate so much profit that ultimately comes through either unfair treatment of the resources, overpricing the goods and services or underpaying the workers.

No enmity to the growth of corporates. Salutes to their kindness! We understand how difficult it is for the corporates to succeed in this dog-eat-dog world. Objection is to the fact that these corporates succeed due to their success in garnering certain aspects of business handling in their favour: formation of corporate-regulatory nexus, creation of monopoly through exploitation of state mechanisms, natural resources, misuse of non-financial barriers, process and trademark patents, disinforming and capturing of judging capacity of the ordinary people.

Why small and medium enterprises (SMEs) fail but big houses succeed? All enterprises, big or small, need to undergo time-consuming, cumbersome regulatory process, which adds disproportionately higher financial and human resource burdens to the SMEs. Small or big, all firms need to fulfil obligations related to registrations, renewals, audits, tax clearances, customer information, anti-laundering provisions; they have also to remunerations pay legal advisors, security workers, lawyers, import-export or business agents. Many a time these SMEs have to make “voluntary” donations to political forces and their sister organisations to avoid possible agitations and sabotages in disguise of labour agitations or public oppositions. The loudest advertisement of an SME is almost inaudible in presence of a slightest whisper of a big house!

To make corporate responsibility true to society, we need to begin from the basics. Consider emergence of supermarkets. It has cost livelihood of thousands of street vendors. In the Kathmandu Valley alone, thousands of Newars have lost their generation-old family professions of cottage industry and shop keeping. Some Newars have become employees of the supermarkets that sell imported substandard goods, of large-scaled restaurants that serve “traditional Newari foods” prepared using imported soya oils, processed, canned and preserved raw ingredients! Others have left Kathmandu and sought their livelihood as migrant workers in foreign lands. Scenario is not different in the hills and plains.

In Nepal, the National Land Use Policy 2012 and Land Use Act, 2019 limit the tillers’ ownership land for land, but it let the big houses own unlimited lands in the name of industry, agricultural or otherwise. Thanks to the capitalist competition, in Kathmandu and other valleys and basins, the farmers are already pushed out to the surrounding slopes. When the homes of these displaced farmers slide down along with the slopes, these big houses come to help them, which gets media coverage.

In the hilly region, cement industries are digging the rocks, spreading hazardous dust particles in the atmosphere which then moves to nearby villages, ultimately damaging the public health. Others dig the riverbeds, causing floods. Big hotels try to occupy Phewa Lake in Pokhara, open lands and shrines premises in Kathmandu and other parts of the country.
Governments register and recognise brewery and distillery as important industries but declare traditional homemade wines harmful and illegal. Through such provisions, the commoners are forced to pay higher prices for wines they could prepare at home without much cost and effort. Then, the governments and the corporates harp on social responsibility, show pity in locations and to the people thus impoverished, both selected as they like.

State’s responsibility
Rather than enforcing advertorials-like corporate social responsibilities, should not the governments emphasise the conservation safe natural habitats to all people, protection of their traditional livelihoods, promotion of eco-friendly and socio-culturally compatible economic activities? Providing livelihood, basic health services, elementary education and security to all should be and is the responsibility of governments, and this task is not transferred to big business houses. For the sake of a healthy society, the state can and should, if necessary, order the corporates to act in a manner that helps avoid their negative impacts on the society in general.

(Regmi is a professor at Tribhuvan University and a researcher at Charhar Institute, China)