Hon Frank Annoh-Dompreh
Nsawam/Adoagyiri
Mr Speaker, I am grateful.
Mr Speaker, Corporate Social Responsibility (CSR) encapsulates a corporation’s ethical obligation to conduct its business in a manner that is economically viable, socially responsible and environmentally sustainable, while simultaneously safeguarding the interests of a diverse range of stakeholders including employees, consumers, local communities and the broader ecosystem.
The global corporate landscape has evolved to recognise CSR not merely as a philanthropic gesture but as a strategic imperative that fosters sustainable economic growth, social equity and environmental stewardship. Ghana, however, is yet to fully harness the transformative potential of CSR, a reality that has resulted in untapped economic opportunities that other nations have strategically capitalised upon. Mr Speaker, empirical evidence underscores the profound economic and social development impact of structured CSR framework.
For instance, the enactments of the Companies Act of 2013 in India mandates CSR expenditure for corporations with a net worth exceeding ₹500 core, approximately USD 67 million. Research findings indicate a marked increase in CSR investment post-legislation, yielding tangible benefits such as enhanced corporate reputation, increased employees’ engagement and amplified social impact, as cooperated by the Klynveld Peat Marwick Goerdeler (KPMG) 2020 report.
Mr Speaker, similarly, within the African continent, South Africa’s BroadBased Black Economic Empowerment (B-BBEE) Act, 2023 has been instrumental in compelling corporations to invest in socio-economic development initiatives. The outcomes have been remarkable, leading to sustained economic growth, employment generation and social integration as documented in 2018 and 2019 B-BBEE annual report.
It is imperative to note that in South Africa, the B-BBEE Act has led to an increase in black ownership of companies from 1.9 per cent in 2001 to 23.3 per cent in 2019.
Additionally, the act has contributed to the creation of over 500,000 jobs. It is also important to know that Nigeria has the Nigerian Content Development Monitoring Board (NCDMB) Act, which requires companies operating in the oil and gas sector to invest in local content development. Kenya has the Companies Act 2015, which requires companies to disclose their CSR activities.
Furthermore, Mr Speaker, Brazil’s Corporate Social Responsibility Law (Law No. 12,101/2009) has incentivised corporate investment in social and environmental initiatives, yielding measurable improvement in access to education and healthcare services. Additionally, Denmark’s Financial Statement Act mandates CSR reporting, enhancing transparency, corporate accountability and stakeholder engagement as evidenced by the Danish Business Authority’s Report, 2020.
Mr Speaker, these jurisdictions exemplify the tangible benefits of legislated CSR frameworks, underscoring the necessity for Ghana to adopt a structured and binding CSR policy.
Mr Speaker, while Ghana has some incremental progress in advancing CSR, particularly in the extractive industries, the absence of a standardised regulatory framework has led to inconsistencies in corporate accountability and impact measurement. The Ghana Chamber of Mine reports that the mining sector allocated some GH₵1.4 million, approximately US$230 million to the CSR initiatives in 2020, a notable increase from GH₵1.1 billion in 2019.
Mr Speaker, despite these investments, CSR engagement in Ghana remains largely voluntary, with no mandatory reporting requirements to ensure transparency and accountability.
Mr Speaker, the lack of comprehensive national CSR policy has led to a fragmented approach with corporations implementing sporadic initiatives rather than integrating CSR into their core operational strategies. A prevalent misconception in Ghana equates CSR with discretionary philanthropy rather than recognising it as an integral component of corporate governance that fosters sustainable national development.
Mr Speaker, this narrow perspective has resulted in superficial and short-term engagement rather than strategic and sustained investment in community empowerment, environmental conservation, and workforce development. Mr Speaker, Ghana’s regulatory environment further compounds the challenges surrounding CSR.
According to the International Organization for Standardization’s 2020 report, Ghana is among the few African nations lacking a national CSR policy or binding legislation. Moreover, weak enforcement mechanisms exacerbate the issue, with the Ghana Chamber of Mines reporting that some 60 per cent of mining companies have not been subjected to regulatory inspection in the past year.
Mr Speaker, the inadequacies of Ghana’s labour laws in safeguarding workers’ rights as highlighted by the International Labour Organisation (ILO), further exposed the limitations of the existing CSR framework.
Additionally, the Ghana Environmental Protection Agency 2020 report reveals that the maximum penalty for corporate environmental infractions stands at a mere GH₵10,000, an amount insufficient to deter non-compliance.
The absence of a robust legislative framework perpetuates inconsistencies in CSR implementation across industries, thereby undermining the country’s ability to hold corporations accountable for their social environmental footprint. Furthermore, Ghana ranks 114th out of 129 countries in stakeholder engagement according to the World Business Council for Sustainable Development. This underscores the need for structured regulatory interventions to enhance corporate community relations.
Mr Speaker, given the preponderance of empirical evidence and institutional reports, it is imperative that Ghana enacts a national CSR policy and legislation that mandates corporate entities to operate within an ethical and socially responsible framework. Such legislation will provide a structured mechanism for corporations to align their CSR initiatives with national development priorities, ensuring that corporate contributions transcend mere public relations exercises to become impactful and measurable contributions to socioeconomic progress.
Mr Speaker, in drawing the curtain to a close, in this regard, I propose the following legislative considerations. Mandatory CSR reporting. Companies should be legally obliged to disclose their CSR initiatives and financial commitment to enhance transparency and accountability. Conformity to CSR standards. The policy framework should establish clear CSR benchmarks that corporations must adhere to, ensuring uniformity in corporate engagement across industries. Enforcement mechanism. Regulatory bodies must be empowered to monitor, evaluate and enforce compliance with CSR obligations, including the imposition of deterrent penalties for noncompliance. Stakeholder engagement requirements.
Corporations must be mandated to engage in meaningful consultations with local communities and other relevant stakeholders to ensure that CSR initiatives address pertinent social needs and contribute to sustainable development. In conclusion, the formulation and enactment of a national CSR policy and legislative framework is a critical step towards fostering sustainable development and enhancing corporate accountability in Ghana. A well-defined CSR policy will not only provide the necessary legal structure for responsible corporate behaviour but also serve as a catalyst for inclusive economic growth, environmental sustainability and social equity.
I urge this august House to take a decisive action on CSR legislation to ensure that corporate entities contribute meaningfully to the socio-economic advancement of our dear country. Mr Speaker, I thank you
Hon Eric Edem Agbana
Ketu North
Mr Speaker, I commend the maker of this very important Statement.
I would want to plead that beyond just a Statement being discussed on the floor of Parliament, we take the recommendations concerning the Statement very seriously and see how we can help as a country for us to adopt or enact a CSR policy for this country.
Mr Speaker, across the world, companies and businesses are being urged to operate within some ethical standards. Here in Ghana, because it is not mandatory, companies are allowed to do or embark on CSR activities at their own will.
There are a number of things we can do to promote CSR activities, especially in education. Recently, we had a national education forum and the issue of education financing came up. We discovered that there are many companies or businesses operating which are even making profits within certain limits that can support education financing, but because there is no national policy on CSR, they are not able to enter the space or the ecosystem to contribute. There are a number of things we can do. One is for us to have a national dialogue on CSR. We currently do not have a standard practice and so depending on the sector, there are various policies.
The mining sector has a different policy regarding CSR and the other sectors have their own policies. But we need to have a national policy on CSR, and that will be the beginning of getting businesses or companies to operate in more ethical ways and also to contribute positively. In terms of environment, we are talking about green transition and all of that. Without legislation, it will be difficult to be a check on companies that are operating or polluting our environment because we will have these conversations in a very general manner, but because of the lack of legislation, we will not be able to hold any company accountable for how they are operating. We need to enact a law.
I will plead that as the maker of the Statement himself is a Leader in this House, I will encourage him to follow this issue up and then let us see how we can have an interministerial committee set up and begin a national dialogue on CSR. Again, one thing we can do to promote CSR is to grant tax incentives to companies that are operating ethically. The tax incentives will become a way of getting many more people into their ecosystem who will agree that beyond just making profits out of operating in Ghana, they can also contribute to building schools or embarking on corporate social responsibilities that will positively impact this country.
Mr Speaker, we earlier discussed the issue of flooding. In conclusion, these issues of flooding cannot only be a governmental issue. All these private companies that we talk about, as part of their CSR, can be brought in to help so that together, we can confront some of these social challenges that confront us. I believe this Statement should be treated as a very, very important Statement. Let us follow up, take some urgent steps on it, and ensure that we enact a national CSR policy to guide how businesses operate in this country. Once again, I commend the maker of this Statement for bringing this important issue to the House.
Mr Speaker, thank you for the opportunity.
Hon Francis Kwabena Berepong Owusu-Akyaw
Juaben
Mr Speaker, thank you. I will first thank my respected Leader for this Statement.
Mr Speaker, when we study natural resource law, as far as in 1958, when the then-President formed Wharton’s Commission, this CSR was also proposed for the country to take. Mr Speaker, as of now, we are still talking about it. I think it is high time this august House adopted it, as we have done for the local content as well.
Mr Speaker, because there is no binding law to cover this CSR, some companies also go to some communities, establish a modus operandi with them, and then later, they choose to do different things. And because the communities cannot also complain as much, these companies do that and then get away with it.
Mr Speaker, I think when we are able to do so, especially in the mining areas, some things we complain about now will be a thing of the past, in terms of community development, well-being and the safety of the environment will not be an issue which we will talk about. And I think that we can also do well by encouraging the companies who will be doing well within this side to help them, in terms of giving them some concessions which will be good for them to promote their Corporate Social Responsibility (CSR). I think by this, we can promote the social welfare of the communities and its citizens.
Mr Speaker, with these few words, I thank you and the maker of the Statement.
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