Speech on 2Nd Meeting of the EU-CHINA Round Table

Speech on 2nd Meeting of the EU-CHINA Round Table

Corporate Social Responsibility in China

By Mr. Liu Peng,

Member of China Economic and Social Committee

Director of Employers Department of ChinaEnterpriseConfederation

Mr. Chair, Distinguished participates, ladies and gentlemen:

I am honored to have this great opportunity to introduce the development of Corporate Social Responsibility in China and positive performance of promoting CSR implementation of Chinese enterprises.

Today, the challenges such as deterioration of the ecological environment, damage of natural resources, increasing unequal distribution of wealth, unemployment, are facing to all humanity. In order to promoting CSR, Mr. Kofi Annan, former secretary general of United Nations, proposed “Global Compact” program. Mr. Ban Ki-moon, who is newly appointed secretary general of United Nations, fully affirms the great significance of “Global Compact” in the UN systems. “Global Compact” appeals the enterprise circles to comply with ten principles in human rights, labor standards, environment protection and anti corruption areas as an initial action. A number of the international organizations advocate ethical thought and values of social responsibility as well, promote Corporate Social Responsibility positively.

Chinahas achieved rapid economic growth in recent 30 years due to implementing reform and opening-up policy. China’scentral government advances theviewpoint of scientific development and puts forward the objectives of building a socialist harmonious society, andpush forward economic and social sustainable development. The newly amended Company Law of the People's Republic of China, which went into effect as of January 2006, provides clearly, “When undertaking business operations, a company shall comply with the laws and administrative regulations, social morality and business morality. It shall act in good faith, accept the supervision of the government and the general public, and bear social responsibilities.” Therefore, enterprises should take CSR as the requirements of reform and opening and economic development. On one hand, enterprises should grow bigger and stronger, create more social wealth, build a solid foundation for China economic development; on the other hand, enterprises should take their own responsibilities from those aspects such as respecting human rights and labor standards, protecting labor rights and interest, protecting environment, advocating honesty and goodwill, increasing employment, exhibiting devotion to the public welfare and facilitating community stability, enterprises should make efforts to be innovative enterprises, frugal enterprises, harmonious enterprises, and qualified corporate citizen as well.

At present, China is going through the development phase of fully implementing 11th five year plan, which is also an important period of fully implementing scientific viewpoint of development and building harmonious society. Hence we must comprehend that enterprises bear social responsibility upon the strategic headway of building harmonious society, realize that corporate social responsibility is not only related the corporate long term development, but also related crucial context of achieving harmonious and sustainable development of society and economy in all round way in China, and building harmonious society. Enterprises not only bear the responsibility to create wealth, but also play an important role to distribute the wealth. Establishing harmonious relationship between enterprises and their stakeholders such as employees, clients, suppliers, consumers, located communities,natural environment, is an important foundation for building harmonious social relationships. The existence and development of enterprise should contribute to the increase of whole social welfares.

Now, more and more Chinese enterprises realize that enterprises should take their own responsibilities including respecting human rights and labor standards, protecting labor rights and interest, protecting environment, advocating honesty and goodwill, exhibiting devotion to the public welfare in order to fulfill corporate sustainable development. In-depth exploration of integrating the thought of CSR into corporate strategy, organizing and regular running has begun in Chinese enterprises. State owned enterprises, especially those under the central government, shoulder more important task on promoting CSR. Central SWE is an important pillar of the national economy, it is also basic force leaded, promoted, coordinated and controlled economic and social development by country, as well as it is main force to build well-off society in all-round way, and it is important guarantee to fulfill the rights and interests of broad masses of the people and common prosperity. Enhancing central SOWs social responsibility is utmost important to the level of Chinese CSR as whole, and then promote corporate healthy development. The state owned enterprises can play an important role in building socialist harmonious society only implementing the responsibility to society and natural environment consciously, complying with social laws and business ethics consciously, raising awareness of building resource saved and environment friendly enterprises, accelerating the optimization and upgrading of industrial structure, speeding up the transformation of the mode of economic growth. Recent years, the State-owned Assets Supervision and Administration Commission of the State Council (SASAC) has attached great emphasis and concern to CSR issues, and made a series of programs to lead and promote central enterprises implementing social responsibility. As promoted by SASAC, a number of central enterprises have begun to compose CSR report, and integrate the CSR into corporate strategy and corporate production management. These enterprises are developing topic research positively on CSR, exploring the main content and efficient avenues for implementing social responsibility, and then building the evaluation system of CSR in accordance with specific situation of China.

Chinese enterprises have undertaken the following actions on social responsibilities in recent years: The first is joining actively in the Global Compact initiated by the United Nations. More than 130 enterprises have joined in network of the Global Compact, and most of which are medium and large scale state-owned enterprises. The second is releasing of CSR reports, which in turn puts the implementation of social responsibility and accepting the public supervision. The CSR report released by the China State Grid Corporation in 2006 was the first CSR report among Central SOEs. The COSCO Sustainable Development Report 2005, which was published by the China Ocean Shipping Corporation (Group), has been listed as the model report by the UN Global Compact. Lots of enterprises have released their CSR report by far. The state-owned enterprises have been the dominant power in implementing the CSR in China. The third is introducing the in-house code of conduct on production. Some enterprises requiretheir suppliers to follow the uniformed code of conduct on production, the core contents of which include social security, treatment of labor, rights of labor and labor standards in international conventions. The fourth is the building of responsible supply chain. Initiated by the China Business Council on Sustainable Development (CBCSD), some multinational enterprises took part in the “1+3” program, in which a company heads one supplier, one logistic service provider and one customer to improve the responsible capacity of the supply chain so as to improve competitiveness of the whole supply chain. The program has gained some good effects. It is estimated that about 100,000 export-oriented Chinese enterprises have passed various CSR auditing and certification. The fifth is being actively involved in the charity activities. As a development-oriented and poverty elimination program jointly initiated mainly by private entrepreneurs, the China Guang Cai Program has attracted 120 billion RMB since 1994, and nearly 20,000 private entrepreneurs has invested directly in some western poor areas with more than 16,000 investment items.

As employers’ organization of China and as an important business association, China Enterprise Confederation/China Enterprise Directors Association (CEC/CEDA) is devoted to promote CSR among Chinese enterprises. CEC became the first national employers’ organization in the world to support“Global Compact”, and plays an key role in promoting “Global Compact”in China and launched a lot of campaigns. In January of 2005, Global Compact Promotion Office was established in CEC，which is the network focal point of China authorized by Global Compact Office of UN. Global Compact Promotion Office focus on providing comprehensive compliance guidance and service on meeting requirements of Global Compact, joining Global Compact and implementing social responsibility to all Chinese enterprises.

CEC has jointlyorganized a number of forums and seminars with some of international agencies and organizations such as UNDP, ILO and so on. As well as CEC has explored major theoretical issues related CSR based on the research topics. Since 2005, CEC held a number of trainings related CSR in Zhejiang, Guangdong, Sichuan, Anhui, Heilongjiang provinces and Shanghai. At the same time, CEC has organized CSR trainings for large-sized companies such as China Ocean Shipping (Group) Company, China Development Bank, China Huaneng Group, China Datang Corporation, China Huadian Corporation, and help them to compose and release Social Responsibility Reports.

Chinese enterprises have also set up good examples on undertaking CSR. Take the SINOPEC Corporation for an example: it always puts CSR and public interests in priority position.SINOPEC has taken a series of measures such as promoting its sales network ofpetroleum products, improving products quality to ensure domestic petroleum products supplies; it has achieved safety and cleaning development through adopting strict control of hidden risks, implementing of policies on “ three same time” investigation of safety and environment protection, and accelerate its clean production process;it also keeps a sustainable development through optimizing structure to decrease energy consumption and save resources; SINOPEC fulfills its duty required by the labor contract, protects its employees’ related rights, improves their career growth capability to promote harmonious development of corporation. At the same time, SINOPEC pays a high attention on public welfare to promote building of harmonious society, it has provided financial aidto “Chun Lei” Program to help girl children who are unable to go to school to go back schools; has donated “Healthy and Sunny Express” Activity to support cataracts to recover. SINOPEC has also participated the programs such as poverty elimination, support Tibet and building HopeSchools, donation on disaster area.

State Grid Corporation of China(SGCC) holds its value direction with the core business to build and operate power grids and thebasic mission to provide secure and reliable power supply for economic and social development. Adhering to a scientific outlook on development and the ten principles of the United Nations Global Compact, SGCC vigorously assume our social responsibilities. SGCC insists on its CSR value of “Develop the Company, Serve the Society, Human-oriented, Common Growth”, it has established an all-round CSR working system, to promote integrity of CSR and its management system in order to set up guide principles, management system and business process of CSR. SGCC has incorporated CSR concept into its routine works, and undertake CSR in an all-round and a better way.With its responsibility culture, SGCC takes CSR as an opportunity to build a world class utility through securing a safe, quality, convenient and clean power supply, and make greater contribution to building a harmonious socialist society.

As the biggest shipping enterprise in China and an international plural corporation running businesses worldwide, China Ocean Shipping (Group) Company(COSCO) commits itself to adopting the growth way based on environmental protection and resource saving, eliminating waste to a greatest extent, and actively supporting and participating in ecological protection to realize harmonious development between human beings and the nature. COSCO has introduced ISO14000 Environment Management Standards, set up department responsible for environment protection;establish its environment management system. All of Its shipping companies has introduced ISMC and established related management systems. Environmental protectionis an important working standard and has been taken as one of appraisaland evaluation factor. COSCO headquarter will conduct compulsory trainings for the managers of environment management system annually.

China Railway Engineering Corporation (CREC) pays a high attention on its employees, and takes care of their work and life. CREC shoulders its CSR such as help its employees, especially those who are from the rural areas; takes resources saving and protecting environment as its CSR goal, takes attending programs on poverty elimination as its main measures on shouldering CSR. It also shoulders a wide series of CSR including support the disadvantaged people, protect rights and interests of its employees, pay close attention to environment and ecology, promote the development of backward regions, participate public welfare and contribute to economic and social development.

Chinagainsa good momentum on promoting CSR and has achieved some fruitful progress despite the fact that its reform and opening-up experiences for a relatively short time. From now on, under the guide of Scientific Development View, Chinese enterprises will undertake their CSR in a better manner, and achieve harmonious development of enterprise.

Thank you for your attend.