Achievements and Challenges of CSR in Colombia

Speakers:
• Francisco Díaz, President and CEO, Organización Corona
• David Bojanini Garcia, President, Suramericana
• Manuel José Carvajal, CEO, Carvajal
• Antonio Celia, CEO, Promigas

 

On January 29, 2008, the Council of the Americas hosted a breakfast with several representatives from organizations in Colombia to discuss the private sector’s role in promoting corporate social responsibility (CSR) in Colombia, a role which is often overlooked in the country’s human rights discourse. Each speaker provided an overview of his respective company’s social objectives and accomplishments and highlighted the long-standing commitment on the part of the Colombian private sector to social development. The discussion touched upon issues ranging from the past and future of CSR in Colombia to the importance of the pending U.S.-Colombia Free Trade Agreement (FTA).

In Colombia, the role of the private sector in social development has a long tradition, molded by both cultural and contextual circumstances. In the early twentieth century, the Colombian government adopted import-substitution policies to boost the country’s manufacturing capacity, leading to the creation of large industrial companies that now invest millions in social projects. According to Carvajal’sManuel José Carvajal, highly-respected organizations such as the Rockefeller and Ford Foundations attest that Colombia’s social non-profit foundations—many of which are affiliated with or sponsored by the private sector—are among the most active and efficient in the region.

While these foundations cannot replace government responsibility, they help shape government policy in a number of ways, according to Promigas’ Antonio Celia. Speakers highlighted three projects begun by the private sector and later institutionalized by the government.

In the 1950s, a group of companies created the country’s first caja de compensación familiar (family compensation fund), which provided social services to families of employees working for affiliated businesses. With the help of the government, the fund’s reach has expanded throughout the entire country. There are currently 53 compensation funds affiliated with some 183,676 companies and 3,547,610 workers, benefiting 9,846,031 people—roughly 22 percent of Colombia’s population.

The second program is the Instituto Colombiano de Bienestar Familiar (ICBF, Colombian Institute of Family Well-being), which traces its origins to factory-based day care centers for the children of employees. In the 1970s, the Colombian government adopted the program, moved the day-care centers to low-income neighborhoods, and made company contributions mandatory. This now-governmental entity has helped reduce malnutrition rates and allowed mothers to join the workforce.

The third initiative is the Servicio Nacional de Aprendizaje—SENA (National Learning Service). The SENA provides technical and vocational training to Colombians preparing to enter the work force. Originally established by companies providing training to future employees, the SENA now teaches a broad range of subjects.

Speakers pointed out that many large and medium-sized companies in Colombia continue to contribute financially to all three social programs in the form of para-fiscal taxes, which are not included in the national budget and instead are destined directly for these institutions. In 2003 companies contributed $526 million to the compensation funds, $395 million to the ICBF, and $263 million to the SENA, totaling more than $1.2 billion in contributions.

Importance of the FTA

Speakers highlighted the importance of the FTA for maintaining Colombia’s positive trajectory and pointed out that the pact would promote increased private investment in the country, ultimately leading to improved education and technical training.

While some in the U.S. Congress have argued that there is no urgency to pass the FTA because Colombia already receives preferential treatment as a result of the Andean Trade Preferences and Drug Eradication Act, Suramericana’s David Bojanini countered that waiting to take up the U.S.-Colombia FTA could harm long-term investor confidence. This, in turn, could lead companies to close their doors and shift businesses to other countries, destroying jobs and possibly leading to a heightened level of violence in Colombia.

Finally, Organización Corona’s Francisco Diaz spoke about the need to reinforce ties with Washington to counter Hugo Chavez’s influence in the region, pointing out that Venezuela is Colombia’s second largest trading partner behind the United States. He also said that, should the trade agreement fail to gain the support of the U.S. Congress, Chavez would use the opportunity to declare that Washington has turned its back on the region.

The new issue of Americas Quarterly, hitting newsstands on February 6, focuses on corporate social responsibility. Learn more about the journal here.