Globalization: Numerous Federal Activities Complement U.S. Business's Global Corporate Social Responsibility Efforts
Published: 2005-08-08T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The trend toward globalization has intensified the debate about the proper role of business and government in global "corporate social responsibility" (CSR),which involves business efforts to address the social and environmental concerns associated with business operations. The growth in global trade and the dramatic increase in foreign direct investment in developing countries raise questions regarding CSR-related issues such as labor, environment, and human rights. U.S. firms with operations in many countries employ millions of foreign workers and conduct a range of CSR activities to address these issues. However, there is controversy as to the proper government role. GAO describes (1) federal agency policies and programs relating to global CSR and (2) different perspectives regarding the appropriate U.S. government role and views on the impact of current federal activities on corporate global CSR efforts.
section_title: What GAO Found
paragraphs: Although there is no broad federal CSR mandate, we identified 12 U.S. agencies with over 50 federal programs, policies, and activities that generally fall into four roles of endorsing, facilitating, partnering, or mandating CSR activities. Many of these programs have small budgets and staff and aim to accomplish broader agency mission goals, rather than being specifically designed to facilitate or promote companies' global CSR activities. The U.S. government endorses CSR by providing awards to companies, such as the Department of State's Award for Corporate Excellence. Federal programs facilitate CSR by such activities as providing information or providing funding to engage in CSR. For example, a Department of Commerce program facilitates CSR by providing training on corporate stewardship. Some agencies partner with corporations on specific projects related to their core mission. For example, the U.S. Agency for International Development (USAID) partnered with one U.S. corporation operating in post-war Angola to build up the country's business sector and workforce. Other agencies, such as the Overseas Private Investment Corporation, mandate CSR by requiring companies to meet CSR-related criteria to obtain their services. While perspectives on the government's role are tied to perspectives on CSR and its connection to profit, many we spoke with who are actively involved in global CSR desired a government role supporting business's voluntary CSR efforts. Those with a free-market economic perspective believe corporations should be primarily concerned with earning a profit and government should not promote CSR as it reduces profits. Those with a "business case" perspective often welcome government assistance with their voluntary efforts because they view their CSR efforts as increasing profits and business value. Finally, those with a social issues perspective believe that business should contribute to broader social goals but split on whether business action should be voluntary or mandatory. Most groups we spoke with at U.S. companies and others actively engaged in CSR were generally supportive of U.S. federal agency efforts to endorse and facilitate CSR and partner with companies voluntarily pursuing CSR actions. For example, several groups supported a government role in providing CSR-related information and convening stakeholders to address CSR-related issues.

section_title: Letter
paragraphs: The trend toward globalization—as evidenced by the growth in global trade  and the dramatic increase in foreign direct investment in developing  countries, from $22 billion in 1990 to $154 billion in 2002—has intensified  the debate about the role of business and the U.S. government in  addressing “corporate social responsibility” (CSR) related issues.  Presently, for example, some opponents of the U.S.-Central American Free  Trade Agreement (CAFTA) have complained that the agreement does not  do enough to ensure that workers in these countries have adequate labor  protections. The term CSR is often used to refer to business efforts to  address the impact of business operations on such concerns as labor,  environment, and human rights. U.S. multinational corporations, which  conduct operations in many countries and employ millions of foreign  workers, have sometimes responded to the varying pressures they face by  adopting CSR efforts to address social and environmental concerns. Some  advocates argue that the U.S. government should embrace CSR more  actively and use policies such as trade agreements to encourage or require  its adoption by U.S. multinational corporations. Others state that CSR  should be a voluntary corporate activity, and the federal government  should neither regulate nor promote CSR.
Given the role of U.S. corporations in the growth of trade and investment in  developing nations and your interest in issues related to globalization, this  report describes (1) global corporate social responsibility, (2) federal  agency policies and programs relating to global CSR, and (3) different  perspectives regarding the appropriate U.S. government role and views on  the impact of current federal activities on corporate global CSR efforts.
To describe global corporate social responsibility, we reviewed business  and ethics literature and interviewed selected corporations and other  groups interested in CSR. To determine what policies and programs federal  agencies have adopted that relate to global CSR, we surveyed federal  legislation and spoke with agency officials and experts in CSR. We obtained  information on specific agency programs and policies related to CSR using  a two-step process. First, we provided a general description of global CSR  to agency officials and asked them to identify relevant programs, policies,  and efforts within their agency. We then sent a questionnaire to officials  responsible for each identified program and interviewed officials to obtain  further information. To identify different perspectives regarding the role of the U.S. government related to corporate global CSR efforts, we  reviewed CSR-related trade and business literature and interviewed, on a  nonattribution basis, representatives from 14 selected U.S. multinational  corporations; 4 business interest groups; 4 investor groups; 6  nongovernmental organizations; and 4 academic institutions that are  leaders in the CSR field. We conducted our work from May 2004 through  May 2005 in accordance with generally accepted government auditing  standards. (Appendix I provides detailed information on our objectives,  scope, and methodology.)
subsections: section_title: Background
paragraphs: The expansion of world trade and investment has led to the increasing  integration of the world economy in recent decades—a process often  referred to as “globalization.” Total trade in developing countries, exports  and imports, rose from less than $1.5 trillion in 1990 to $3.8 trillion in 2002,  while foreign direct investment in developing counties grew even faster  during this period, from $22 billion to $154 billion. Some view globalization  as fostering economic growth, increasing employment, and improving  living standards in both developed and developing nations. At the same  time, others view globalization as resulting in negative social impacts and  raise concerns about the expanding activities of multinational  corporations, particularly in developing countries. U.S. multinational  corporations are now faced with difficult issues, such as the treatment and  conditions of foreign workers in corporate supply chains, environmental  and health issues associated with production in diverse local communities,  and human rights issues associated with authoritarian governments in  countries where multinationals operate. In addition, some negative  incidents involving U.S.-based companies have been widely publicized,  hurting their own and the United States’ image, such as the use of  sweatshops in the manufacture of clothing and other products. In another  example, a U.S.-based company recently came under allegations that its  overseas mining operations produced toxic waste that have caused  illnesses.
U.S. corporations are increasingly building operations or buying products  from sources in developing countries. However, the legal, regulatory and  ethical environments in which U.S. businesses and their suppliers operate  vary across countries. For example, some have asserted that developing  countries have inadequate or poorly enforced environmental and labor  laws. Given the limited capacity of some developing countries, CSR  advocates argue that corporations themselves must establish and maintain  codes of conduct regarding operating standards in these environments.  Companies face increasing pressure from nongovernmental organizations  (NGO), the media, “socially responsible” investor groups, and other  stakeholders to adhere to high standards globally in their own operations  and throughout their supply chains. In addition, some members of  Congress have shown support for CSR-related policies, similar to those  advocated by working groups convened by the Kenan Institute.
In response to these business challenges and outside pressures, companies  are increasingly adopting “corporate social responsibility” programs. For  example, recently U.S. electronics companies signed a joint code of  conduct to protect working conditions, workers’ rights, and the  environment in the electronics industry supply chain. A number of U.S.  companies have instituted programs to address HIV/AIDS and other  diseases in their operations in developing countries, for example, by raising  awareness or providing access to treatment. Most recently, U.S. companies  provided nearly $453 million to relief efforts in the wake of the tsunami that  hit South and Southeast Asia and East Africa in December 2004. Despite  these efforts, some CSR advocates call for more government action to  promote CSR, with some noting that several national governments in  Europe have put in place mechanisms to encourage or require the adoption  of CSR practices.
section_title: Global Corporate Social Responsibility Is an Umbrella Concept Covering Many Business Actions and Involving Many Players
paragraphs: Global CSR is an umbrella concept that can best be understood by  describing the different definitions used for the term, the actions  businesses take to practice CSR, and the roles of key players involved in  CSR. Although groups use different definitions and terms, CSR generally  involves business efforts to address a broad range of issues, including the  environment, labor, and human rights. Businesses perform many different  actions to address CSR concerns. The extent and type of these actions are  influenced by key players in CSR that include not only businesses, but also  the civil society, investor groups, multilateral organizations and  governments that seek to influence them.
The term “global CSR” is sometimes used to refer to business efforts to  address the social impacts of business in the global economy. Discussions  of global CSR in the context of developing countries focuses on the need  for business to address the gaps from inadequate or poorly enforced laws  to protect the environment, labor, human rights, and other social resources.
subsections: section_title: CSR Is Generally Defined as Business Efforts to Address the Interests of Its Many Stakeholders
paragraphs: The term “CSR” is an umbrella concept with many different definitions.  However, most definitions suggest that, in addition to addressing the  interests of its shareholders, business should address the interests of its  other stakeholders, including customers, employees, suppliers, and the  local community. CSR definitions cover a broad range of potential social  concerns, including business ethics, community development, labor,  environment, and human rights. Table 1 presents sample CSR definitions.
CSR definitions vary on whether CSR is considered exclusively voluntary  or whether it includes mandatory requirements for business regarding  social and environmental issues. Some definitions of CSR limit it to  voluntary business decisions and actions, above and beyond what is  required by law. Others organizations have reasoned that CSR should  include mandatory efforts, especially because in developing countries it  can be a tool to encourage compliance with laws and regulations. This  voluntary compliance with laws and regulations assumes a greater role in  developing countries, because even where developing countries have  adequate laws and regulations concerning social and environmental  concerns, they often have limited enforcement resources.
Some groups prefer other terms to address all or some of the ethical, social,  and environmental issues addressed by CSR. For example, one business  group preferred the term “corporate citizenship” because business social  and environmental efforts are indicative of business’s effort to be good  citizens, while they believe the term “CSR” implies that those efforts are a  responsibility rather than voluntary. Others prefer the terms “sustainable  development” or “triple bottom line,” reasoning that business decisions and  performance should be evaluated in terms of their economic, social, and  environmental impacts. Other terms such as “business ethics” deal with  one of the many concerns of CSR. Table 2 presents definitions of some  terms related to CSR.
section_title: Many U.S. Businesses’ Actions Address CSR Concerns
paragraphs: U.S. businesses conduct many different types of actions that address CSR  concerns that range from voluntary, such as philanthropic donations, to  government mandated, such as disclosure of significant environmental  conditions. These actions may or may not be part of a formal CSR effort.  Although groups categorize business actions addressing CSR concerns  differently, they can broadly be grouped as relating to (1) business ethics,  (2) community development, (3) environment, (4) governance, (5) human  rights, (6) marketplace, and (7) workplace. In our discussions with  representatives of U.S. corporations, which are noted as leaders in CSR, we  identified illustrative examples of U.S. companies’ actions that address  these categories of CSR concerns.
subsections: section_title: Business Ethics
paragraphs: Business actions addressing the CSR concern of business ethics involve  values such as fairness, honesty, trust and compliance, internal rules, and  legal requirements. Among the actions taken to address business ethics are  incorporating ethics into corporate value and mission statements,  developing ethics codes, conducting ethics training, and monitoring ethical  performance. In one example from the companies we interviewed, the  company had recently trained its workforce—including all levels of  management—on its standards of business conduct and now publishes  these standards in 20 languages.
section_title: Community Development
paragraphs: Business actions addressing the CSR concern of community development  involve business policies and practices intended to benefit the business and  the community economically, particularly for low-income and underserved  communities. Community development activities include employing and  training disadvantaged workers, partnering with minority- and women- owned businesses, and locating facilities in underserved communities. One  business we interviewed with a factory in South Africa works with its  employees to develop the physical structures of schools for youth and  adults in that community.
section_title: Environment
paragraphs: Business actions addressing the CSR concern of the environment involve  company policies and procedures to ensure the environmental soundness  of its operations, products, and facilities. Examples include pollution  prevention, energy efficiency, and supply-chain environmental  management. One company we interviewed stated that it strives to exceed  minimum U.S. government standards for toxic emissions, even in foreign  countries. The company stated that it had sent a team of specialists to  Mexico to bring a Mexican facility to the U.S. standard.
section_title: Corporate Governance
paragraphs: Business actions addressing the CSR concern of corporate governance  involve the broad range of policies and practices that boards of directors  use to manage themselves and fulfill their responsibilities to investors and  other stakeholders. Examples include developing processes for  communication with stakeholders, adopting formal board guidelines, and  implementing board and Chief Executive Officer (CEO) performance  evaluations.
section_title: Human Rights
paragraphs: Business actions addressing the CSR concern of human rights involve  assuring basic standards of treatment to all people, regardless of  nationality, gender, race, economic status, or religion. Among the concerns  in developing human rights policies are to avoid child labor in  manufacturing, government action depriving citizens of basic civil liberties,  and forced or prison labor. For example, a company we interviewed said it  had signed the United Nations Global Compact, which requires businesses  to comply with human rights requirements as one of its 10 principles.
section_title: Marketplace
paragraphs: Business actions addressing CSR marketplace concerns involve business  relationships with its customers and such issues as product manufacturing  and integrity; product disclosures and labeling; and marketing, advertising,  and distribution practices. Marketplace-related actions include establishing  ethical marketing and advertising policies, ensuring safety and efficacy of  products, and employing ethical sales tactics. One company we  interviewed that views water, health, and hygiene as their business stated it  had developed low-cost water purifying systems and products to save  water in hand washing and improve the lives of consumers in developing  countries.
section_title: Workplace
paragraphs: Business actions addressing CSR workplace concerns generally involve  human resource policies that directly impact employees, such as  compensation and benefits, career development, and health and wellness  issues. Examples of workplace CSR actions include adoption of global  workplace standards, involvement of employees in business decisions, and  establishment of employee grievance policies and procedures.
section_title: Business, Civil Society, Investor Groups, Multilateral Organizations and Government Play Important Roles in Shaping CSR
paragraphs: Businesses play the central role in determining their efforts to address CSR  concerns, but these efforts can also be influenced by the actions of civil  society, investor groups, multilateral organizations, and government.
subsections: section_title: Businesses’ Role in CSR
paragraphs: Businesses play a central role in CSR by determining which social and  environmental issues are addressed and how they are addressed. CSR  literature notes that there is a growing recognition by businesses that CSR  includes the way the company runs its core business, not just its  philanthropic activities. Businesses can further influence CSR in their  relationships with other firms through business networks, intermediaries,  and supply chains. For example, a business may require or promote CSR  among its business partners.
Available but not necessarily representative data on U.S. business efforts to  address CSR concerns suggests that many firms conduct some CSR efforts  and that a small number of firms hold themselves to more rigorous non  financial reporting standards on social, economic and environmental  information. A 2002 survey of U.S. firm involvement in sustainability (a  closely related term to CSR) included responses from 140 U.S.-based firms  that were likely among the most active U.S. companies in CSR. Three- quarters of responding firms reported practicing some form of  sustainability. Large firms, defined as those having revenues over $25  billion annually, were more likely than smaller firms to issue sustainability  reports, according to that same survey. Over half of the firms issuing a  sustainability report indicated that they were following Global Reporting  Initiative (GRI) guidelines. The GRI is an independent institution that  disseminates globally applicable sustainable reporting guidelines for  companies use in reporting on economic, environmental and social  dimensions of their activities, products, and services. As of March 2005, 69  U.S. firms had registered to use the GRI guidelines for reporting CSR  Issues. Similarly, 71 U.S. firms have signed onto the United Nations  Global Compact. Signatories to the Global Compact voluntarily agree to  support its 10 principles in areas of human rights, labor, environment, and  anticorruption policies.
Available information from some surveys suggest that business leaders  address social issues for business as well as for other reasons, including  consistency with their core operating values. Two recent surveys of  business executives reported that businesses practiced corporate  citizenship or sustainable business practices for a variety of reasons. The  voluntary nature of these surveys makes it impossible to project to the  universe of all firms. In the first survey, the majority of business  respondents concurred with the statement that “good corporate citizenship  helps the bottom line.” Similarly, the majority of the respondents to the  second survey indicated “cost savings” as a reason for adopting sustainable  business practices. The majority of firms responding to the first survey  also indicated that their founding traditions and core organizational values  of their companies dictate their commitment to corporate citizenship.  Similarly, the second survey reported that the majority of responding firms  indicated the CEO/Board commitment as a contributing reason for their  sustainable business practices. Further, this survey reported that a number  of respondents stated that one reason for adopting sustainable practices  was because it was “the right thing to do.”
Despite over 30 years of research, no consensus has been reached on the  relationship between business social and financial performance. Numerous  empirical research studies have attempted to determine whether those  firms that engage in socially responsible practices also do well in terms of  financial performance. A 1997 study that surveyed 25 years of research  observes that, many studies find a negative relationship between these  practices and financial performance, although the largest number of  studies find a positive relationship. More recent studies also reach a range  of conclusions with some finding a positive association, some finding at  least a neutral association, and others finding no significant or a mildly  negative relationship. A recent paper on the business justification for CSR  concludes, “It has not yet been possible to make a strong, causal,  quantitative link between CSR actions and financial indicators such as  share price, stock-market value, return on assets and economic value  added.”
The difficulty in accurately measuring CSR benefits to business  complicates any assessment of CSR. CSR literature, as well as discussions  with CSR experts, indicates that it can be very difficult to assess the  profitability of CSR actions because benefits may occur far into the future  and involve intangibles such as enhanced brand and company image or  other goodwill. Furthermore, the authors of a recent study suggest that the  provision of CSR will vary across industries, products, and firms. For  example, they argue that larger, more diversified firms, and those that  produce more highly differentiated products, may be more likely to engage  in CSR practices than smaller firms or those that produce in less  differentiated markets. The authors further suggest that if a firm is  successful in implementing a CSR action, competitors may adopt similar  measures, and this may have the effect of eroding any profit advantage. As  a result, they argue that there should be a neutral relationship between CSR  activity and firm performance.
section_title: Civil Society’s Role in CSR
paragraphs: CSR literature recognizes the impact of civil society on raising awareness  of social issues among businesses. The World Bank defines civil society as  the wide array of nongovernmental and not-for-profit organizations that  express the interests and values of their members or others based on  ethical, cultural, political, scientific, religious, or philanthropic  considerations. Civil society organizations include community groups,  nongovernmental organizations (NGO), labor unions, indigenous groups,  charitable organizations, faith-based organizations, professional  associations, and foundations. A recent report by the Kennedy School of  Government notes that the growth in civil society is one of the drivers  making CSR more mainstream.
Civil society groups can serve to strengthen the links between CSR  activities and business profits by increasing the transparency of corporate  operations. For example, civil society activities exposing sweatshops or  other questionable corporate activities can provide an incentive for firms to  act in ways that would not damage their reputation. Further, civil society  sometimes establish standards that business can use to signal compliance  or to enhance their reputation with their customers and other stakeholders,  potentially increasing profits and firm value. In 1997, the Council on  Economic Priorities Accreditation Agency released its Social  Accountability (SA) 8000, a voluntary standard to help companies monitor  a variety of workplace concerns. The SA 8000 provides verification of  corporate performance. The Coalition for Environmentally Responsible  Economies (CERES) partnered with the United Nations Environmental  Program (UNEP) to oversee the development of the GRI reporting  guidelines in the late 1990’s. The Interfaith Center for Corporate  Responsibility (ICCR), composed of over 275 religious institutions,  published a guide to be used as a reference tool by companies to monitor  policies in such areas as community development, environment, ethics,  human rights and workplace issues.
section_title: Investor Groups’ Role in CSR
paragraphs: Investor groups such as mutual funds and pension plans are responsible for  a growing proportion of U.S. investments and therefore, are a potentially  increasing influence over business’s CSR actions. According to a report by  the Social Investment Forum, a national membership organization of  social investment practitioners and institutions, firms using some type of  socially responsible investment strategy manage over 11 percent of all U.S.  investment assets under professional management. The report further  indicated that between 1995 and 2003 social-invested assets grew faster  than all other types of professionally managed investment assets in the  United States. CSR literature notes the increased activism of some  institutional investors and their calls for increased corporate accountability  and transparency.
section_title: The Role of Multilateral Organizations in CSR
paragraphs: Multilateral organizations have played an active role in developing  standards relating to CSR and in promoting the concept of CSR. The  Organization for Economic Cooperation and Development (OECD) first  published its guidelines for multinational enterprises in 1976. These  guidelines include recommendations by OECD-member governments to  multinational enterprises on appropriate business conduct in such areas as  business ethics, labor relations, environmental practices, and information  disclosure. The OECD revised the guidelines in 2000 to include a call for  companies to respect human rights, abolish forced and child labor, and  take a more active role in promoting environmental sustainability. The  United Nations launched its Global Compact in 1999, and it now consists  of 10 principles covering concerns with human rights, labor, environment,  and anticorruption. The World Bank also has a number of program goals  related to CSR, including supporting the development of environmental  and social practices in individual businesses in emerging markets, working  with national governments to help countries better understand and address  CSR, and cosponsoring (with the OECD) the Global Corporate Governance  Forum, which helps countries improve standards of governance for their  corporations.
The Role of Governments in CSR A 2002 World Bank study identified four major CSR roles for government:  endorsing, facilitating, partnering, and mandating. Government  endorsement of CSR can take a variety of forms, including direct  recognition of businesses with awards. In their facilitating role,  governments enable or provide incentives to companies to engage in CSR  to obtain social and environmental improvements. Government partners  with the private sector and civil society in tackling complex social and  environmental problems. In the mandating role, governments require  minimum CSR-related actions in laws and regulations.
Some industrialized countries have established programs to foster CSR.  For example, in 2001, the European Commission published a green paper  to launch debate on how the European Union could promote CSR.  Subsequently, the commission held a forum to foster dialogue among the  business community, trade unions, civil society organizations, and other  stakeholders on CSR. In May 2001, France became the first country to  require all publicly listed companies to report on the social and  environmental consequences of their activities. In 2000, the United  Kingdom appointed a Minister for Corporate Social Responsibility, who  maintains a central Web site that highlights government departments with  CSR responsibilities.
Although the social and economic priorities vary among developing  countries, the high incidence of poverty and weak civil society means there  are often fewer conventional drivers for CSR. Most developing country  governments seek foreign investment to help them grow and develop and  must attempt to balance development with other social and environmental  goals. A 2002 World Bank report notes that developing country  governments do not often participate in the development of CSR policies  and standards. Another report on public sector support for CSR among  global supply chains states that the lack of resources for developing  country governments, which do not view export sector workplaces as the  highest priority for social and environmental intervention, hinders progress  in addressing CSR-related issues in global supply chains.
The effectiveness of government programs supporting CSR in achieving  public policy goals has not been established, in part because of the  difficulties inherent in such assessments. CSR literature notes that it is  difficult to assess the impact of CSR-related partnerships on public policy  goals because it is difficult to measure or compare their intangible inputs  and outputs. Representatives from the four academic institutions we  interviewed agreed that it was difficult to assess the impact of CSR on  social goals. Several of these academicians also noted that they had not  seen good work measuring the benefit of CSR to society. One noted that  CSR is incremental and that it is hard to measure incremental  improvements.
section_title: Although No Broad Federal CSR Mandate Exists, Federal Agencies Conduct Many Activities Related to Global CSR
paragraphs: While the federal government does not have a formal role in global  corporate social responsibility, we identified over 50 programs, policies,  and activities at 12 agencies that are related to global CSR using a data  collection instrument completed by agency officials. We narrowed down  the programs to those that were ongoing in fiscal year 2003 or afterwards,  those that may affect U.S. corporations’ CSR efforts overseas, including  their supply chains, and those that touch on key components of CSR, such  as labor, environment, human rights, community development and  corporate governance. As illustrated in the text below, most of these  activities can be loosely categorized into the four key roles of governments  in global CSR identified by the World Bank: endorsing, facilitating,  partnering and mandating. Appendix II catalogs all the programs we  identified by agency.
subsections: section_title: There Is No Comprehensive Mandated Federal Role, Definition, or Agency Coordination in Global CSR
paragraphs: There is no comprehensive legislation mandating a federal role in global  corporate social responsibility, and few agencies actually define CSR. Many  agencies work with the private sector on issues that are generally covered  by the concept “corporate social responsibility,” such as labor,  environment, human rights and corporate governance, but few agencies  define corporate social responsibility or label their activities CSR. Some  agencies noted that they use other terms, such as corporate stewardship or  corporate citizenship, to refer to similar issues.
While there is no law designating a lead agency to coordinate federal  government activities related to global corporate social responsibility,  United States agencies are currently in the initial stages of creating a Web  site to catalogue federal CSR initiatives. This informal interagency  initiative, led by staff at the Inter-American Foundation (IAF), initially  involved the Department of State, USAID, the Department of Commerce,  the Environmental Protection Agency (EPA), and the Overseas Private  Investment Corporation (OPIC). The purpose of the initiative is to publicize  the U.S. government programs and resources that promote good corporate  practices or CSR to businesses and NGOs. The IAF expects to make the  Web site publicly available sometime in 2005.
Some agencies also reported that while they do not have a formal program  focused on global corporate social responsibility, they have a number of  initiatives that relate to global CSR. For example, officials at the  Department of State, which had the greatest number of initiatives related to  global CSR, told us that they house their CSR-related activities in several  bureaus linked through informal coordination. Likewise, at the EPA, which  also had a large number of related initiatives, an official told us that the  agency does not have a specific CSR program, but acknowledged there  were many links between EPA programs on the environment and the goals  of CSR. Further, EPA recently completed an internal inventory of its  voluntary initiatives that partner with corporations to improve  coordination and policy consistency.
section_title: While Agency Perspectives on CSR Vary, Many Federal Programs in Pursuit of Broader Mission Goals Are Related to Global CSR
paragraphs: Agency perspectives on global corporate social responsibility vary from  active endorsement to reluctance to labeling their programs CSR. For  example, several bureaus in the Department of State foster corporate CSR  practices as a means to enhance their own efforts aimed at public  diplomacy, protecting human rights, and other areas. Similarly, the  Department of Commerce has officially endorsed corporate social  responsibility, stating that American companies must follow the highest  standards of conduct anywhere they do business and that American  companies contribute to the communities in which they do business.  Through good corporate governance and global corporate social  responsibility, the Department of Commerce maintains that American  companies are helping to spread democratic values and prosperity around  the globe, which leads to greater economic freedom, higher standards of  living, and greater social and political freedoms. However, other agencies  do not want their programs to be labeled CSR because they do not see it as  part of their mission or believe they lack authority to engage in CSR  activities. For example, while officials from the Office of the U.S. Trade  Representative acknowledged that the agency undertakes some activities  that might complement CSR, they stated that the agency’s mission is to  negotiate trade agreements, not to engage in CSR efforts. Similarly, a senior  official at the Department of Labor said that, while the department has  many activities that could conceivably be seen as supporting global CSR,  the department is not doing them for that reason. He believes the  department lacks specific authority to do work on CSR.
Some agencies without a formal position on CSR actively take advantage of  mutual interests between their missions and company CSR practices to  achieve their broader mission goals. For example, USAID and the IAF  leverage resources from corporations for development missions, and EPA  intends to control pollution through voluntary programs with corporations.  Specifically, USAID’s Global Development Alliance aims to achieve the  agency’s development goals by leveraging resources from the private sector  and other partners. USAID’s alliances address a range of issues, such as  encouraging economic growth, developing businesses and workforces,  addressing health and environmental problems, and expanding access to  education and technology. To illustrate, USAID partnered with one U.S.  corporation operating in post-war Angola to build up the country’s business  sector and equip Angola’s workforce with necessary business skills. The  company and USAID each agreed in 2002 to provide $10 million over 5  years for a series of projects to strengthen small and medium-sized  businesses, including helping refugees and former soldiers to return to  agriculture, developing an enterprise development bank, and supporting  the creation of an agricultural training center. From fiscal years 2002 to  2004, USAID reported funding approximately 290 public-private alliances  with over $1.1 billion in federal money and over $3.7 billion in partner  contributions. Figure 1 illustrates how federal agency programs  sometimes complement company CSR practices.
Other agencies, such as OPIC, the Export-Import Bank of the United States  (Ex-Im Bank), and the U.S. Securities and Exchange Commission (SEC)  engage in activities that are related to CSR, generally in response to  statutory or congressional requirements rather than based on a formal  agency decision on CSR.
section_title: Many Federal CSR-Related Programs Are Recent, Focus on a Range of Countries and Sectors, and Have Small Budgets and Staffs
paragraphs: Many of the programs we identified started in the last 5 years. For example,  the Department of State’s Partnership to Eliminate Sweatshops Program  started in 2000 to provide grants to address unacceptable working  conditions in manufacturing facilities overseas that produce goods for the  U.S. market. In fiscal year 2003, the program funded the development of a  confidential database of factory monitoring reports that would be  accessible by companies seeking compliance information on factories in  their supply chains. The effort was in response to U.S. companies that have  cited lack of information about factory compliance as an obstacle to  improving their own compliance efforts and responsible behavior.
Since 2001, several presidential initiatives aimed at foreign assistance have  partnered with companies to achieve the initiative goals, which also  complement corporate CSR practices. For example, one interagency presidential initiative led by the Department of Commerce, the Digital  Freedom Initiative, was announced in 2003 to partner with U.S. businesses  to transfer the benefits of information and communication technology to  businesses in the developing world. The program has over 90 U.S.  corporate and nonprofit organization partners that provide volunteers and  other resources to support its activities. As part of the initiative, in Senegal,  a U.S. information technology company is developing 12 academies to train  Senegalese to install, manage, and maintain modern computer networks.
Federal agency activities related to CSR focus on a range of countries and  sectors. For example, the International Child Labor Program at the  Department of Labor funds projects in Bangladesh, Pakistan, Central  America, and West Africa that work with various industry associations to  address the use of child labor. The Department of State funds a number of  projects in China and other countries in various sectors, including the  apparel industry and the extractives sector. Federal programs and activities  assist U.S. companies with their philanthropic efforts, as well as with their  efforts to be socially responsible in their core business operations,  including their supply chains. None of the programs we identified were  specifically designed to monitor company CSR activities.
Most federal programs, policies, and activities related to CSR have small  budgets and staffs. Many programs do not specifically track budget and  staffing information for their CSR-related activities. Of the programs  reporting budget and staffing information, most are relatively small. The  Departments of Commerce and State and EPA, which identified the largest  numbers of discrete initiatives related to CSR, reported relatively modest  budgets and staffing for their initiatives. In total, only four programs  reported budgets at or over $2 million in fiscal year 2003 for CSR-related  activities. The two programs that reported the largest annual budgets of  around $20 million and $30 million are at the Department of Labor and  USAID, respectively. Similarly, many federal CSR efforts are staffed by  agency officials with multiple responsibilities, working part time on the  effort.
section_title: Federal Agencies Conduct a Range of Activities that Endorse, Facilitate, Partner and Mandate Company CSR Activities
paragraphs: Most U.S. government programs, policies, and activities related to global  CSR can be loosely categorized into the World Bank’s four public sector  roles: endorsing, facilitating, partnering, and mandating. These roles  range from the least government involvement—endorsing companies’  voluntary efforts above and beyond compliance with laws and  regulations—to the most government involvement through mandating  behavior consistent with CSR. Although some federal efforts related to  CSR can be classified as serving more than one role, roughly two-thirds of  the U.S. government programs, policies, and activities, that we identified  fell in the middle of the spectrum by either facilitating and/or partnering  with companies on their voluntary CSR efforts. The remainder either fell  into the mandating and endorsing roles, or outside the World Bank’s roles.  Figure 2 illustrates the range of U.S. government activities in the World  Bank framework. See appendix II for a complete listing and brief  description of the 54 CSR-related programs and activities that we identified  at 12 U.S. agencies.
The U.S. government has a number of awards programs that endorse CSR  by recognizing companies for socially responsible activities. U.S. officials  also endorse the concept to audiences through public speeches on an ad  hoc basis. Some examples of endorsing include:  The Department of State’s annual Award for Corporate Excellence,  which emphasizes the role U.S. businesses play to advance good  corporate governance, best practices, and democratic values overseas.  Since 1999, 12 businesses have received the Award for Corporate  Excellence, following nominations submitted by Chiefs of Missions at  U.S. Embassies and Consulates abroad. In fiscal year 2004, the  Department of State received 50 award nominations from Chiefs of  Missions.
The EPA’s Climate Protection and Stratospheric Ozone Protection  Awards, which encourage and recognize outstanding corporate  environmental efforts in climate protection. For example, a 2002  corporate recipient of EPA’s Climate Protection Award reduced its  energy use by over 30 percent internationally and offset all the  remaining greenhouse gas emissions both in the United States and  overseas.
subsections: section_title: Facilitating
paragraphs: The U.S. government facilitates CSR by providing information, funding or  incentives to companies and other players to engage in CSR-related issues.  Some examples include:   The Department of Commerce’s training on rule of law, human rights,  and corporate stewardship for commercial service employees. The  training helps these officers provide information on corporate  stewardship issues to companies involved in the export promotion  process. Additionally, commercial service officers can use this  information in their work with overseas chambers of commerce. As of  March 2005, 260 commercial service employees had received the  training since the program’s inception in 2003.
The Ex-Im Bank’s Environmental Exports Program, which began in  1993. The program enhances the Ex-Im Bank’s financing package for  such U.S. goods and services, thereby encouraging foreign buyers to  purchase U.S. exports that are beneficial to the environment.  Specifically, the program extends loan repayment terms, finances the  interest accrued during the disbursement period, and finances local  costs to an amount equal to 15 percent of the contract price. Exports  eligible for the program include renewable energy projects, water  treatment projects, air quality monitoring instruments, equipment for  waste collection and clean up, services for environmental assessments  and ecological studies, and other projects that meet specified emission  thresholds. During fiscal year 2003, Ex-Im Bank supported over $173  million of environmentally beneficial goods and services, including $13  million in products and technologies related to renewable energy.
section_title: Partnering
paragraphs: Several U.S. government programs partner with corporations or convene  partnerships with key stakeholders, which can help companies accomplish  their CSR initiatives. In addition to USAID’s Global Development Alliance  discussed earlier, representative examples include:   EPA’s Climate Leaders Program, which partners with companies to  achieve EPA’s goal of protecting the environment. The Climate Leaders  Program is a voluntary government partnership that enlists major U.S.  companies to set an aggressive greenhouse gas reduction target. EPA  established inventory protocols to assist the companies in tracking their  success toward their greenhouse gas target. Partners receive training  and technical assistance in completing the greenhouse gas inventories,  and EPA works with each partner to develop standard Inventory  Management Plans. EPA plans to provide recognition in later years after  partners have met or exceeded their targets, which are publicly  available on the EPA Web site.
The Voluntary Principles on Security and Human Rights, which provide  guidance to oil and mining companies on how to ensure respect for  human rights in their security procedures. In 1999, together with the  government of the United Kingdom, the Department of State convened  international NGOs with U.S. and United Kingdom oil and mining  companies concerning human rights abuses by hired security forces. A  set of voluntary principles was developed through collaboration with  the relevant stakeholders. According to a State Department official,  nearly every major oil and mining company is now a participant in the  Voluntary Principles process.
section_title: Mandating
paragraphs: While there is debate over whether complying with laws and regulations  constitute CSR, a number of federal requirements and regulatory  mechanisms that mandate social and environmental issues could fall under  the CSR umbrella. Examples of regulations and agencies that require  participating companies to comply with CSR-related requirements  include: An SEC rule, which provides anyone who owns more than $2,000 in a  company’s stock for more than 1 year with the opportunity to propose  issues for shareholders to vote on. SEC ensures that companies do not  exclude shareholder proposals for vote at annual company meetings,  unless they meet the legal criteria for exclusion outlined in the rule.  According to an investor group that tracks shareholder proposals, out of  1,052 shareholder proposals that were filed at U.S. companies for 2005  meetings, approximately 350 proposals focused on issues related to  corporate social responsibility, such as global warming and global labor  standards.
The Overseas Private Investment Corporation (OPIC), which provides  long-term financing and/or political risk insurance to U.S. companies  investing in over 150 emerging markets and developing countries,  requires that all beneficiary companies comply with certain CSR  criteria. These requirements cover issues that include host country  development impact, environmental protection, international labor  rights, and human rights. The requirements are written into contracts,  and OPIC specifies that they must be carried down to the subcontract  level.
section_title: Strengthening Enforcement and Compliance with CSR-Related Regulations in Other Countries
paragraphs: In addition to the four roles discussed above, a number of U.S. programs  foster a business environment conducive to CSR by working with other  national governments to strengthen compliance and enforcement of social  and environmental regulations in countries where U.S. companies operate.  These efforts serve to protect U.S. businesses from competing with  companies that are not complying with weakly enforced laws and  regulations. Some examples include:  The Department of Labor’s program on Protecting the Basic Rights of  Workers, which works with host country ministries of labor to improve  adherence to international core labor standards and acceptable  conditions of work in developing countries. In accordance with a  congressional appropriation, in fiscal year 2003 the office allocated $20  million for these efforts worldwide, including in a number of countries  in Africa, the Americas, Asia, and in Ukraine. However, according to an  agency official, the budget decreased significantly in subsequent years  to $2.5 million in fiscal year 2004 and no funding in fiscal year 2005.
EPA’s International Compliance Assurance Division, which works with  governments to ensure compliance of companies with environmental  standards. Since 2001, approximately 20 trainings have been held for  officials from a wide range of countries, including South Africa, Nigeria,  Indonesia, Vietnam, Brazil, Guatemala, and Egypt, among others.
section_title: Perspectives on the Appropriate Government Role in CSR Vary, but Many Support Federal Assistance for Voluntary Efforts
paragraphs: Our review of CSR literature revealed support for government involvement  in CSR varied with views of CSR’s connection to business profit. Opinions  of those we interviewed on the impact of existing federal agency efforts  and the appropriate government role related to CSR generally revealed a  desire for government involvement and the widest support for federal  agency activities that assist businesses in their voluntary efforts.
subsections: section_title: Perspectives on the Appropriate Government Role in CSR Vary with Views of CSR’s Connection to Business Profits
paragraphs: Based on our review of CSR literature, perspectives on the appropriate role  of government in CSR vary, but generally correlate with three major  perspectives on the connection of CSR to business profits: (1) free-market  economic, (2) “business case,” and (3) social issues.
subsections: section_title: Free-Market Economic Perspective
paragraphs: Those with a free-market economic perspective generally view businesses  engaging in CSR as a potential taking of profits from the business owners  that will ultimately diminish the effectiveness of the business and a free- market economy. The well known economist, Milton Friedman refers to the  doctrine of “social responsibility” as fundamentally subversive in a free  society, stating, “there is one and only one social responsibility of  business—to use it resources and engage in activities designed to  increase its profits so long as it stays within the rules of the game, which is  to say, engages in open and free competition without deception or fraud.”  According to this free-market economic perspective, business managers  have a primary duty to maximize value for shareholders and in doing this  businesses serve the general welfare by directing resources to produce  goods and services society wants. In this view, engaging in CSR actions that  are not based on profitability can affect not only business performance but  also potentially reduce the general welfare of society. David Henderson, an  economist who has written extensively questioning the value of CSR,  recently wrote “The general adoption of CSR, in response to social  pressures, would undermine the market economy and make businesses  less effective in performance of their primary role.” While this free-market  economic perspective recognizes that government has a role in structuring  the legal framework of a market economy, those with this view do not  support government involvement in the general adoption of the concept of  CSR.
section_title: Business-Case Perspective
paragraphs: Many CSR proponents cite a “business-case” perspective, in which  business CSR efforts are supported based on their contribution to business  profit and value. Those with the business-case perspective reason that  businesses can undertake CSR actions that will increase businesses’ value  or return on investment in terms of increased revenue, increased asset  value, or reduced cost. Business leaders often indicate that their CSR  practices help their bottom line. Supporters of the business-case  perspective assert that addressing important social issues in the business  environment can contribute to the long-term value of the firm. Supporters  of this perspective have developed many different lists of potential benefits  to a business in adopting CSR. For example, one discussion of the business  case identified the following six potential business benefits: Operational cost savings—Investment in environmental efficiency  measures such as waste reduction and energy efficiency can save  money as well.
Enhanced reputation—Good company performance in relation to  sustainability issues can build reputation, while poor performance,  when exposed, can damage brand value.
Increased ability to recruit, develop, and retain staff—These can  be direct results of introducing ‘family friendly’ policies. Also,  volunteering programs may improve employee morale and loyalty to the  company.
Better relations with government—More favorable government  relations and regulatory rulings are key for many companies looking to  extend their business in politically unstable conditions.
Anticipation and management of risk—Managing risk is increasingly  complex in a global market environment. Greater oversight and  stakeholder scrutiny of corporate activities makes managing risk key to  company success.
Learning and innovation—The interaction required with a wide range  of individuals and organizations outside the traditional business  relationships can encourage creativity, which can lead to increases in  profitability.
The benefits of CSR can also be viewed in a global context, with the  interaction between multinational businesses and foreign host-country  governments concerning issues of foreign direct investment and business  operations in host countries, generally. Engaging in CSR practices may help  the multinational business manage certain political and reputation risks in  their operations, particularly with regard to host countries in the  developing world.
Negative publicity can seriously undermine the reputation of multinational  business internationally, and it can create a political climate that may lead a  host government to take actions, such as regulation or other restrictions,  that can undermine the firm’s efficiency and profitability. In addition, some  developing countries may not have adequate laws to address concerns  about workers rights or the local environment, and even where they do,  these countries may not have the resources, technical expertise, or the  willingness to adequately enforce their laws and regulations. By  demonstrating a commitment to good business practices, such as through  CSR, multinational businesses may send a signal that they are committed to  helping mitigate problems or issues that may arise regarding their  operations, thus creating a more positive climate in which to pursue  business opportunities.
Those with a “business case” perspective view a major role of government  as supporting business’s voluntary CSR-related efforts. Surveys of business  leaders indicate that they believe that CSR should be completely voluntary.  This perspective stresses business involvement in the development of CSR  efforts because the business knows its resources and constraints and can  best identify potential benefit to the business. Supporters of this  perspective look for business to work with civil society and government to  develop CSR approaches that address relevant social issues. Subscribers to  this view see advantages of government working with business. For  example, in a recent book Walking the Talk the Business Case for  Sustainable Development, the authors state, “Governments too, have a  vested interest in collaborating with companies. Governments are spending  less time on command-and-control regulations and more on forms of  cooperation with industry to produce workable, incentive based solutions.  They are finding that historically intractable social and environmental  problems, such as poverty, disease, and threats to biodiversity, can only be  solved through partnership.”
section_title: Social Issues Perspective
paragraphs: Those with a social issues perspective focus on the extent to which  business addresses social issues, but opinions within this group are mixed  on whether to rely on voluntary or mandatory CSR approaches. A 1999  survey of 25,000 consumers worldwide found that two-thirds of the  population in countries surveyed indicated that “they want companies to go  beyond their historical role of making a profit, paying taxes, employing  people and obeying all laws; they want companies to contribute to broader  societal goals as well.” Some supporters of the social issues perspective  cite successes of some business voluntary CSR efforts in contributing to  social issues. Some also call on business to voluntarily adopt CSR practices  to address social issues beyond what might be justified by business profit.  Such organizations see a role for government in fostering voluntary  corporate CSR actions.
Others with a social issues perspective take a very different view. They  believe that business is primarily concerned with profit and thus should not  be trusted to develop solutions for important social issues on their own.  According to those with this view, business involvement in CSR efforts can  become merely a branch of public relations instead of effectively  addressing social problems. As a result, they feel that governments should  move to mandate CSR. Several groups have argued for increased  government engagement in CSR initiatives aimed at ensuring that business  adhere to international norms. For example, one consumer group’s position  paper on CSR calls on governments and international agencies to introduce  legislation to set standards that transnational corporations must observe  and also a framework for monitoring corporate behavior. Similarly,  another group noted that there is a need for increased government  engagement in CSR initiatives aimed at ensuring that businesses adhere to  international norms because governments are the only actors with  jurisdiction over the private sector. Another human rights NGO states that  voluntary initiatives will often be ineffective and insufficient. This  organization further states that more attention should be given to the role  international law can play in anchoring these responsibilities in a legal  framework that crosses national boundaries.
section_title: Views of Groups Actively Engaged in CSR Vary on the Appropriate Role of the U.S. Government and the Impact of Current Federal Activities Related to CSR
paragraphs: In addition to reviewing the available literature, we also interviewed 32  individuals representing groups actively engaged in CSR to obtain their  views on the appropriate role for the federal government and the impact of  current federal activities on their CSR efforts. Specifically, we interviewed  14 companies, 4 business groups, 6 NGOs focused on environmental,  human rights and labor issues, 4 investor groups, and 4 academic  institutions (See app. I for a complete list of the respondents). A majority  of respondents supported a government role in global CSR, yet views  varied regarding the appropriate federal role and the impact of current  activities. Most respondents generally supported government assistance  with voluntary CSR efforts such as endorsing, facilitating, and partnering,  while some also expressed an interest in government-mandated CSR,  especially to increase disclosure of CSR-related information. Most  respondents saw a need for the U.S. government to encourage foreign  governments to enforce CSR standards to help level the playing field for  U.S. companies adhering to high CSR standards. Some respondents based  their discussion of the government role on their knowledge of current U.S.  government activities related to global CSR, yet we found that several were  unaware of these efforts. Also, some said they were aware of U.S.  government efforts, but primarily cited domestic CSR efforts or initiatives  that are not led by the U.S. government. Several respondents called for a  greater U.S. government role in CSR, as in some other countries, and  greater coordination of existing U.S. efforts.
subsections: section_title: Mixed Reactions Regarding the Impact of U.S. Government Efforts to Endorse CSR through Awards
paragraphs: A number of respondents were aware of U.S. government award programs  that endorse CSR, but had mixed reactions regarding their effectiveness.  Whereas a majority of companies we interviewed who commented on  awards said they have a positive impact, for example, by motivating  employees and validating the company’s efforts, some were not motivated  by awards. One company in favor of government endorsing CSR through  awards said that, although there are a lot of awards given to companies for  corporate social responsibility, an award from the U.S. government or  another government is credible and valuable. However, another company  said it receives so many awards that receiving one more is not very useful,  unless it is accompanied by significant media attention. Most of the  business groups reacted positively to federal government awards, stating  that awards call attention to success stories and provide a signal of the type  of behavior the government likes, help to motivate companies, and provide  a positive counterbalance to regulations and compliance by rewarding  voluntary efforts. Most of the NGOs that were aware of federal government  awards for global CSR activities were skeptical of the impact of the awards,  questioning the nominations and selection processes and whether the  awards are a good indicator for companies’ CSR performance. The two  investor groups that were aware of federal government awards programs  thought they were a positive influence. In addition to awards, a few  respondents also suggested the government should more actively endorse  CSR in its own procurement processes and in government pension  investments.
section_title: Respondents Viewed Government Efforts to Facilitate CSR Favorably
paragraphs: Many respondents from the various groups expressed support for federal  government efforts to facilitate CSR, especially through providing  information. Representatives from companies and other groups suggested  that the government could play a more active role in providing information  on setting benchmarks in areas such as the environment and human rights,  providing information on best practices and how to start CSR activities in  other countries, or establishing a clearinghouse with CSR-related  information. A few respondents suggested that providing information or  assistance would be particularly helpful for small and medium-sized  companies and companies just getting started with CSR.
section_title: Respondents Generally Viewed Partnerships with Government on CSR Favorably
paragraphs: Many respondents viewed government partnerships with companies and  efforts to convene stakeholders to accomplish CSR goals favorably and  thought it was an appropriate role for the U.S. government. One company  that has worked with USAID and the Centers for Disease Control on a  health-related issue in Haiti said that the government is well placed to help  companies focus on the needs of those living in poverty and that companies  have a lot to contribute by helping to provide safe drinking water, fight  HIV/AIDS, and improve education and economic welfare. Two NGOs that  are aware of partnership programs had mixed reactions. For example,  while one NGO said partnerships are helpful in bringing parties together  and leveraging private sector resources, another NGO was concerned  about potential conflicts of interest. Respondents from business groups,  investor groups, and academic institutions who commented on federal  efforts to partner with companies on CSR issues were generally positive  about these partnerships. Many organizations supported a federal role in  partnering by convening stakeholders to address specific CSR issues or to  share information. For example, the Department of State’s involvement in  developing the Voluntary Principles on Security and Human Rights was  cited as an example of a positive effort by the U.S. government to convene  stakeholders to address a CSR-related issue.
section_title: Mixed Views on Government Mandating CSR through Laws and Regulations
paragraphs: Companies and business groups generally held mixed views regarding the  impact of laws and regulations on company global CSR efforts, whereas  NGOs and investor groups largely believed that laws have a positive impact  on CSR. In general, these latter groups desired a government role in  mandating CSR, especially to increase disclosure and transparency of  company CSR activities. A few respondents cited the lack of U.S.  legislation or involvement in CSR as an impediment to companies’ CSR  efforts.
While some companies were concerned about burdensome mandates,  several said that certain existing regulations and government efforts create  minimum standards and level the playing field internationally, which is  helpful to companies with active CSR programs. According to one  director of CSR, the company’s initial reaction to CSR requirements, such  as import controls, is negative because they are costly and burdensome.  However, the company recognizes that new rules can help level the playing  field, as not all companies voluntarily adopt high standards. Another  company said the Foreign Corrupt Practices Act has had a positive impact  on the company’s CSR activities by enhancing the visibility of CSR and  helping to raise standards of transparency and governance. Similarly,  customs legislation that set minimum criteria allows the company to  discuss CSR standards with its suppliers and ensures that it is not the only  company focusing on these issues, which could create a competitive  disadvantage. A business group expressed concern that codes can also lead  to two moral principles conflicting with each other, such as policies to  prevent harm to animals or the environment may inhibit the ability of  companies from discovering life-saving treatments or technologies. One  multinational company said it upholds homogenous standards globally, so  in that sense, U.S. programs could affect its global standards in reporting,  building design standards, and worker health and safety. However, the  company also noted that its own standards often exceed legal standards.
Many respondents agreed that government should play a role in promoting  transparency and disclosure of companies’ CSR efforts. Some companies  strongly supported a federal role in promoting transparency, yet others  warned against regulation and adverse consequences, for example, if U.S.  companies face regulatory burdens and are forced to disclose more than  their foreign competitors. For example, the Sarbanes-Oxley Act of 2002  was cited by companies as a costly and burdensome mandate. However,  some NGOs and investor groups supported government mandating that  companies should disclose information on CSR-related issues. Three  academic institutions cited recent European regulations on disclosure of  CSR issues as a model for the U.S. government. “The single most useful activity of the U.S. government to promote corporate responsibility  would be to promote the implementation and enforcement of existing national laws in other  countries and to assist national governments in this regard. The majority of countries  around the world have adequate laws, but such laws are not implemented or enforced.  Commercial activity and private enterprise depend on national governments to set a level  playing field so that competitive markets can flourish for the benefit of consumer and  society. This requires . . . appropriate legal frameworks in areas such as corporate  governance, financial disclosure, bribery and corruption, environmental protection and  labor rights.”
section_title: Some Respondents Want More Coordination among U.S. CSR Activities and Greater Role in Global Leadership on CSR
paragraphs: Some respondents expressed a desire for more coordination among U.S.  activities related to global CSR and pointed out that other countries are  more involved in CSR than the U.S. government. Some noted that federal  efforts are not well coordinated, which can make it difficult for companies  to participate in U.S. government activities, and called for increased  coordination among U.S. government agencies for CSR activities. Several  respondents also expressed a desire for a greater U.S. government role in  CSR, stating that the United States is absent from world leadership,  especially the European Union, on this issue. According to one company,  many European countries are involved in CSR activities; and if the U.S.  government does not play a role regarding U.S. companies’ international  CSR activities, leadership will go elsewhere. Similarly, another company  wanted the U.S. government to participate in the global debate on CSR and  to continue its efforts to represent U.S. interests in the face of the  European Union’s more regulatory approach to CSR.
section_title: Concluding Observations
paragraphs: The globalization of recent decades has increased the breadth and extent of  U.S. corporations’ operations in foreign markets, through both increased  investment and trade. These globalization trends have led to increased  pressure on U.S. multinational corporations to adopt more CSR-related  activities in their global operations, particularly for developing countries.  Nevertheless, the extent that U.S. multinationals adopt CSR practices  continues to vary by industry, location, and by individual firm priorities. At  the same time, if the recent CAFTA debate in Congress is any guide, the  U.S. government also faces calls to strengthen labor, environmental, and  social conditions abroad. Thus, the debate over the right balance between  private sector and government roles in achieving these CSR-related goals  will likely continue.
Important public policy questions have been raised by the trends in  globalization and global corporate social responsibility such as whether the  U.S. government should adopt an official position regarding global CSR.  However, the dichotomy of views regarding the benefits of CSR to business  and society complicates any consensus on the appropriate government  role. Our research shows that U.S. federal agencies already conduct a  number of programs and activities that overlap and/or interact with  corporate global CSR efforts. In addition, our interviews with agency  officials indicate many view CSR as a useful complementary tool for  attaining their broader policy missions. Key private sector players in CSR,  meanwhile, indicate that they generally found current U.S. government  activities helpful in their voluntary CSR efforts. More generally, it appears  that CSR—even if not a substitute for regulation—has resulted in the  commitment of U.S. multinational resources, and focus on issues of  importance to the U.S. and to host countries. The challenge for the U.S.  government is to determine how global CSR fits within the broader range of  policy tools directed at achieving sustainable improvements in the quality  of life for both U.S. and foreign citizens.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided a draft of this report to the Administrator, Agency for  International Development; the Administrator, Environmental Protection  Agency; the President, Export-Import Bank; the President, Inter-American  Foundation; the President, Overseas Private Investment Corporation; the  Executive Director, Securities and Exchange Commission; the U.S. Trade  Representative; and the Secretaries of the Departments of Commerce,  Energy, Labor, State, and the Treasury. We received technical comments  from the Agency for International Development; the Environmental  Protection Agency; the Export-Import Bank; the Inter-American  Foundation; the U.S. Trade Representative; and the Departments of  Commerce, Labor, and State. We revised the text based on these comments,  where appropriate.
As agreed with your office, unless you publicly announce the contents of  this report earlier, we plan no further distribution until 30 days from the  date of this letter. At that time, we will send copies of this report to  interested Congressional Committees and to the Agency for International  Development; Environmental Protection Agency; the Export-Import Bank;  the Inter-American Foundation; the Overseas Private Investment  Corporation; the Securities and Exchange Commission; the U.S. Trade  Representative; and the Departments of Commerce, Energy, Labor, State,  and Treasury. We will also make copies available to others upon request. In  addition, this report will be available at no charge on the GAO Web site at  http://www.gao.gov.
If you or your staff have any questions concerning this report, please  contact me at (202) 512-4347 or at yagerl@gao.gov. Contact points for our  Offices of Congressional Relations and Public Affairs may be found on the  last page of this report. GAO staff who made major contributions to this  report are listed in appendix III.
section_title: Objectives, Scope, and Methodology
paragraphs: Members of the House of Representatives asked us to provide information  on the federal involvement in global corporate social responsibility. This  report describes (1) global corporate social responsibility (CSR), (2)  federal agency policies and programs relating to global CSR, and (3)  different perspectives regarding the appropriate U.S. government role and  views on the impact of current federal activities on corporate global CSR  efforts.
To describe global corporate social responsibility, we reviewed business  and ethics literature and interviewed corporations and other groups  interested in CSR. Specifically, we reviewed documentation from academic  institutions, business associations, and multilateral organizations,  including the European Commission and the World Bank CSR Practice.  However, the information on foreign law in this report does not reflect our  independent legal analysis, but is based on interviews and secondary  sources. We collected major definitions and descriptions of CSR and global  CSR and related terms and obtained information on different perspectives  that have led to different definitions for CSR and CSR-related terms.
To determine what policies and programs U.S. federal agencies have  adopted that relate to global CSR, we surveyed federal legislation, reviewed  literature, and spoke with agency officials and experts in CSR. To select the  federal agencies to involve in our review, we first considered which  agencies’ missions suggest possible involvement with promoting,  facilitating, or monitoring global corporate social responsibility efforts,  which yielded seven agencies. We then added two additional agencies to  include all of the agencies that participate in the interagency working group  developing a Web portal to publicize the U.S. government programs and  resources that promote good corporate practices or CSR. We added the  remaining three agencies, following referrals by agency officials or CSR  experts, and had discussions with some agency officials to determine if  their agencies had relevant programs for this review. The agencies we  identified with CSR-related programs were:   Department of Energy (DOE),  U.S. Environmental Protection Agency (EPA),  Export-Import Bank of the U.S. (Ex-Im Bank),  Inter-American Foundation (IAF),  Overseas Private Investment Corporation (OPIC),  U.S. Securities and Exchange Commission (SEC),  Department of the Treasury,  U.S. Agency for International Development (USAID), and  Office of the U.S. Trade Representative (USTR).
We identified specific agency programs and policies related to CSR using a  two-step process. First, we provided a standard Data Collection Instrument  (DCI) with a general description of global CSR to agency officials and  asked them to identify current programs, policies, and efforts within their  agencies that directly or indirectly promote, facilitate, or monitor global  CSR efforts. The description discussed the general elements that a global  CSR program can involve, including labor, human rights, environmental  and corporate governance efforts. In addition, we also asked agencies  about programs that we identified through interviews or literature review.  We then sent a more detailed DCI to officials responsible for each identified  program to obtain further information, such as the program’s objective,  start year, legal basis, targeted groups, and activities. Most of the programs  have other goals and objectives, and some only relate to CSR in particular  aspects of their activities. We collected budget information and staffing  levels, where available, to estimate the level of effort dedicated to the CSR  activities by the agency.
After we received the responses from the agencies, we followed up with  many of the identified federal programs to obtain additional information,  which helped us determine whether we should include the program in our  review. We also obtained additional documentation from a subset of the  programs to verify the information and conducted a thorough review of all  of the responses identifying the legal basis for the program/activity. We  narrowed down the programs to those that met the following criteria: (1)  were ongoing in fiscal year 2003 or afterwards; (2) may affect U.S.  corporations’ CSR efforts overseas, including their supply chains (e.g.,  government to government efforts); and (3) touch on key components of  CSR, such as labor, environment, human rights, community development  and corporate governance. We also obtained agency concurrence that the  program is related to CSR.
We excluded programs or activities that are primarily aimed at U.S.  corporations’ CSR efforts within the United States, although they may  influence a company’s CSR efforts overseas, and efforts that are primarily  targeted at the federal government, such as government procurement  policies. Due to the lack of federal legislation on, and a generally accepted  definition of, corporate social responsibility, there are likely additional  programs, policies, and efforts related to global CSR within the federal  government that we did not identify.
To obtain different perspectives regarding the role of the U.S. government  in corporate global CSR efforts, we reviewed CSR literature. In addition,  we conducted and synthesized information from a structured interview  with 32 individuals representing a diverse variety of groups actively  engaged in CSR. We initially identified 25 U.S. companies that were (1)  leaders in CSR, based on companies that appeared on the Business Ethics  Magazines’s Top 100 to Corporate Citizens list each year from 1999 to 2004  and (2) had international operations. Fourteen of these companies agreed  to participate in interviews with us. However, their views may not  represent those of all 25 leaders we identified, or those of all U.S.  companies. We identified representatives from other groups actively  engaged in CSR through a review of CSR literature and referrals from  experts and agency officials. We selected these groups and organizations to  help us obtain a broad range of knowledgeable and informed views on  global CSR and the federal government's role in global CSR; our selection  was not intended to be representative in any statistical sense. Groups that  are not active in global CSR may have different views and opinions,  especially in terms of the federal government's role. Specifically, we  interviewed:  Fourteen U.S. multinational corporations that appeared on the Business  Ethics Magazine’s Top 100 Corporate Citizens list for each year from  1999 to 2004—Brady Corporation; Coors Brewing Company; Cummins,  Inc.; Deere & Company; Herman Miller, Inc.; Hewlett-Packard  Development Company, L.P.; International Business Machines  Corporation; Intel Corporation; Merck & Co., Inc.; Modine  Manufacturing Company; Motorola, Inc.; Procter & Gamble; The  Timberland Company; and Whirlpool Corporation;   Four business interest groups that have been active in CSR—Business  for Social Responsibility; the Conference Board; the U.S. Chamber of  Commerce Center for Corporate Citizenship; and the U.S. Council for  International Business;  Four investor groups—Calvert Group, Ltd.; Domini Social Investments,  LLC ; Dow Jones Sustainability Index; and the Interfaith Center on  Corporate Responsibility;   Six nongovernmental organizations—Coalition for Environmentally  Responsible Economies; Fair Labor Association; Human Rights Watch;  Social Accountability International; World Resources Institute; and  Worldwide Responsible Apparel Production; and  Four academic institutions—Center for Corporate Citizenship, Boston  College; Center for Responsible Business, the Haas School of Business,  University of California at Berkeley; the Corporate Social Responsibility  Initiative, John F. Kennedy School of Government, Harvard University;  the Frank Hawkins Kenan Institute of Private Enterprise, University of  North Carolina’s Kenan-Flagler Business School.
The structured interview instrument included questions designed to obtain  information from these organizations on their definition of CSR and similar  terms; efforts related to evaluating the effectiveness of CSR activities; the  impact of current U.S. government programs, policies and practices; and  opinions regarding the appropriate U.S. government actions or role  regarding U.S. companies’ global CSR activities. However, in this report, we  do not evaluate the concept of CSR nor the justification or efficacy of any  government role with regard to CSR activities.
We conducted our work from May 2004 through May 2005 in accordance  with generally accepted government auditing standards.
section_title: Federal Agency CSR-Related Programs and Activities
paragraphs: This appendix provides a listing and brief description of the 54 programs  and activities we identified at 12 U.S. agencies that relate to global CSR.  Currently, an inventory of U.S. government efforts related to global  corporate social responsibility is unavailable. To develop this list, we  provided a standard DCI to 12 agencies with a general description of global  CSR to obtain information on current programs, policies, and efforts within  their agency that directly or indirectly promote, facilitate, or monitor global  CSR efforts. For programs or activities that are interagency in nature, we  list the program or activity with the lead agency and indicate other agencies  involved with a footnote. Due to the lack of federal legislation on, and a  generally accepted definition of, corporate social responsibility, we do not  consider this list exhaustive. See appendix I for a more detailed description  of our data-collection process.
Export-Import  Bank Act of  1945, as  amended,  codified at  12 U.S.C.  635.
Foreign buyers  and U.S.  exporters  participating in  foreign projects.
During FY 2003,  Ex-Im Bank  screened  approximately 70  applications for  their potential  environmental  effects. The  Bank’s  Engineering and  Environment  Division  undertook formal  environmental  evaluations of the  projects related  to 21 separate  applications for  financing. $531,000  .
Three FTEs  .
Export-Import  Bank Act of  1945, as  amended,  codified at 12  U.S.C. 635.
U.S. suppliers of  environmentally  beneficial  products, and  participants  undertaking  projects that are  beneficial to the  environment.
The  Environmental  Exports Program  was instrumental  in enabling Ex-Im Bank to  support over  $173 million of  environmentally  beneficial goods  and services in  FY 2003,  including $13  million in  products and  technologies  related to  renewable  energy. $148,000  .
0.80 of an  FTE  .
Authorizing  legislation,  See 22  U.S.C. 290f.
U.S.  companies  and other  organizations  operating in  the U.S. and  abroad.
A web portal will be  launched in 2005  housing each agency’s  activities related to CSR  or corporate  stewardship. $37,000 was  obligated in  FY 2003, but  activities were  carried out in  FY 2004.
20-25  percent of  one staff  person’s time  .
Authorizing  legislation,  See 22  U.S.C. 290f.
U.S., Latin  American and  Caribbean  corporations  and business  associations,  local  governments  and NGOs.
Supports innovative  projects in Latin America  and the Caribbean in  partnership with  companies that want to  invest in grassroots  development; Facilitates  tax-deductible  contributions by U.S.  corporations to support  grassroots development  programs in Latin  America and the  Caribbean; Provides  technical assistance to  corporate partners to  create more sustainable,  participatory CSR  programs. $1,039,500.
0.75 of an  FTE divided  among  several staff  persons .
Two full time  staff starting  in FY 2004.
Authorizing  legislation,  See 22  U.S.C. 290f.
U.S. and  foreign  companies  and corporate  foundations.
Learning exchanges  among members,  strategy formulation,  development of trainings  in all countries,  mobilizing corporate and  other resources; At the  end of FY 2004, 52  companies were in the  network, several of  which represented  multiple companies.
Authorizing  legislation,  See 22  U.S.C. 290f.
Private, public  and  nongovernme ntal sectors.
Provides funding,  participated on steering  and operating  committee. $35,800 for  FY 2004.
10-15  percent of  one staff  person’s time  .
The Inter-American Foundation is leading this interagency effort. Additional participating agencies  include the Departments of Commerce and State, USAID, and EPA.
The full name of the RedEAmérica Initiative is the Inter-American Network of Corporate Foundations  and Companies for Grassroots Development.
The Inter-American Development Bank is the lead organizer for the conference. The U.S. Department  of State has also played a role coordinating U.S. government involvement in the conference.
Annual  appropriations  legislation.  Current  authority is P. L.  108-447, Div. F,  Title 1  (Department of  Labor  Appropriations  Act, 2005).
Foreign  Governments,  workers and  employers.
Training,  equipment  provision,drafting of  training  materials and  promotional  activities. The  program works  in a range of  sectors and  countries in  Africa, the  Americas, Asia,  and in Ukraine.  One project in  Cambodia is  establishing an  independent  monitoring  system to  generate  reliable  information on  the  implementation  of core labor  standards in the  garment sector.
Nine staff  work part  time on  this  program.
The program  has funded  several projects  for various  lengths of time  in Bangladesh,  Pakistan,  Central  America, and  West Africa that  involve industry  associations to  combat child  labor. For  example, the  program  provided a $6  million grant to  the International  Labor  Organization to  prevent child  labor in the  coffee industry  in Central  America and the  Dominican  Republic, which  included the  creation of a  child labor  monitoring  system, among  other activities.
About $35 million  between fiscal  years 1999-2004  for all projects  working with  industry  associations.
Not  available.
Annual  appropriations  legislation.  Current  authority is P. L.  108-447, Div. F,  Title 1  (Department of  Labor  Appropriations  Act, 2005).
Children,  parents,  community  leaders,  government  officials, and  industry  associations.
The International Child Labor Program generally provides technical assistance and funds  international projects designed to eliminate the most hazardous and exploitive forms of child labor;  researches and reports information to inform U.S. foreign policy, trade policy, and development  projects; and raises awareness of the U.S. public to increase their understanding of the issues relating  to international child labor and recent efforts to combat the problem. For example, the program works  with foreign governments to improve their capacity to handle the issue of child labor and has provided  funds to the International Labor Organization to address trafficking of children for labor exploitation.  However, the program informed us that they consider their work with industry associations to be most  relevant to global corporate social responsibility.
Not available.
Not  available. receiving OPIC  support in the  form of direct  loans, loan  guaranties,  political risk  insurance and  “subprojects”  obtaining funds  from OPIC- supported  financial  intermediaries.
Evaluates  each project’s  expected  impact on  development,  the  environment,  and requires  projects to  meet all  applicable host  country labor  laws or  international  conventions on  labor rights.
Not available.
Not  available.
Overseas  Private  Investment  Corporation  Amendments  Act of 1977,  See P. L. 95- 268, Sec.  237(1).
U.S. investors  that receive  OPIC support  and the  companies in  which they  invest.
All major  sponsors of an  OPIC financed  project must  answer  questions  relating to the  Foreign  Corrupt  Practices Act  and OPIC  ensures that  support does  not go to  persons and  practices  restricted by  Treasury’s  Office of  Foreign Assets  Control. OPIC  monitors loan  projects on an  ongoing basis.
Rule 14a-8  of the  Securities  Exchange  Act of 1934,  See 17  C.F.R.  240.14a-8.
SEC reporting  companies.
The  Shareholder  Proposal  Taskforce  corresponds  with companies  regarding  requests to  exclude  shareholder  proposals that  do not meet the  criteria  according to  Rule 14a-8.
Not available.
Not  available.
Three full  time staff in  FY 2004.
Foreign  companies and  U.S.  companies  with foreign  subsidiaries  that have  contacts with  countries of  concern.
Review  company  documents to  ensure that  companies are  aware of the  disclosure  standard  applicable to  their operations  or contacts.
Not available.
SEC reporting  companies.
Securities  Act of 1933  and the  Securities  Exchange  Act of 1934.
Review  company  disclosure and  provide  comments to  companies.
Not available.
Not  available.
Rule 14a-8 provides shareholders owning more than $2,000 of company stock for more than 1 year  with the opportunity to place a proposal in the company’s proxy materials for presentation to a vote at  an annual or special meeting of shareholders. The rule generally requires the company to include the  proposal unless the shareholder has not complied with the rule’s procedural requirements or the  proposal falls within 1 of the 13 substantive bases for exclusion contained in the rule. For some or most  of the proposals, the company accepts the proposal or negotiates with the shareholder and the issue  never reaches the SEC. However, if a company intends to exclude a proposal from its proxy materials,  the company must submit its basis for excluding the proposal to the SEC. The Shareholder Proposal  Taskforce reviews these requests for exclusion. Accordingly, the task force considers proposals that  address a range of issues, including global CSR issues.
State  Department  Basic Authorities  Act of 1956, as  amended, See  22 U.S.C.  2651a(c)(2) and  22 U.S.C.  2151n(d)(3).
NGOs,  governments,  U.S. and  foreign  companies.
The Partnership has  provided several  million dollars to  support public and  private sector  initiatives to establish  codes of conduct,  encourage effective  workplace monitoring  and auditing systems,  and conduct  research, training and  education initiatives.  The program has  funded projects in a  number of countries,  including China and  other Asian countries,  Central America, the  Middle East and  Africa. person  works 60  percent of  his time  and one  staff  person  works 25  percent of  her time  on this  effort  .
State  Department  Basic Authorities  Act of 1956, as  amended, See  22 U.S.C.  2651a(c)(2).
NGOs, U.S.  and U.K. oil  and mining  companies,  and corporate  responsibility  organizations.
The bureau convenes  companies, NGOs,  and local  governments to  implement the  principles, and is  working to include  additional  governments. Nearly  every major oil and  mining company is a  participant in the  Voluntary Principles  process.
One staff  person  works15- 20 percent  of his time  on this  effort  .
State  Department  Basic Authorities  Act of 1956, as  amended, See  22 U.S.C.  2651a(c)(2).
U.S.  companies,  NGOs,  foreign  governments.
Ongoing or planned  projects in Equatorial  Guinea, Oman and  China.
Equatorial  Guinea -  $225,000;  Oman - N/A;  China -  $400,000 in  FY 2004.
One staff  person  works 20  percent of  his time on  this effort  .
Not  available.
State  Department  Basic Authorities  Act of 1956, as  amended, See  22 U.S.C.  2651a(c)(2).
Multilateral  organizations  and their  member  states.
Prepares guidance  for U.S. delegations  and responds to  requests for  information from  United Nations  organizations when  issues arise related to  corporate  responsibility. DRL  also represents the  State Department  and the U.S.  Government at a  variety of  conferences and  meetings related to  corporate  responsibility, where  human rights issues  are directly relevant.
No specific  budget.
One staff  person  works 5  percent of  his time on  this effort  .
Mission of the  Bureau of  Economics and  Business Affairs.
U.S. small  and medium-  sized  companies  and  multinational  corporations.
Award nominations,  public ceremony. In  FY 2004, the  Department received  a record number of  50 nominations from  U.S. Chiefs of  Mission worldwide.
One staff  person  works 30- 40 percent  of her time  on this  effortEstimate].
Presidential  initiative.
U.S. and  Mexican  businesses,  associations  and academic  institutions.
Award nominations,  public ceremony.  Seventy nominations  were received in FY  2003. More than 900  people attended the  Award Ceremony and  Gala, which received  extensive media  coverage, especially  in Mexico.
Not  available.
One staff  person  works 100  percent on  the award  program  from April  – June and  30 percent  for the  remainder  of the year .
Companies,  labor unions  and NGOs.
No discrete  budget.
Requirement as  signatory to the  OECD  Declaration and  Decisions on  International  Investment and  Multilateral  Enterprises.
Promotes  understanding of the  OECD Guidelines  and helps companies,  labor unions and  NGOs in their efforts  to resolve issues that  may arise with  respect to the  Guidelines; From  2000-2004, 16  specific instances  were brought to the  attention of the  National Contact  Point.
One staff  person  spends 33  percent of  his time on  this effort  and one  office  director  spends 10- 15 percent  of his time  on this  effort  .
Foreign  governments,  companies.
No separate  funding.
See Pub. L. 100- 318, The  Omnibus Trade  and  Competitiveness  Act of 1988,  asking the  Executive  Branch, led by  State, to  negotiate a  convention on  bribery at the  OECD. See also  Senate  Resolution of  Advice and  Consent to the  OECD  Antibribery  Convention, of  July 31, 1998.
Leads U.S.  delegation to the  OECD Working  Group on Bribery to  monitor  implementation and  enforcement of the  OECD Antibribery  Convention, and to  assess areas where  the Convention could  be amended to  decrease bribery and  other corrupt activity.  Meet with the private  sector and civil  society groups  regarding  implementation of the  OECD Antibribery  Convention.
One  deputy  office  director  spends 50  percent of  his time on  this effort  .
22 U.S.C. 2656. Georgia,  $150,000  (cost of  contractor  who serves  as project  coordinator).
1.25 FTEs.
Nicaragua,  Nigeria, Peru,  other G-8  governments.
Provide assistance  through the Bureau of  International  Narcotics and Law  Enforcement Affairs  to develop a series of  projects with four  countries that signed  compacts with G-8  countries in 2004  committing to reduce  corruption and  enhance  transparency in their  budgets, government  procurements and  concession-letting  procedures.
Presidential  initiative.
Liaise with USAID,  Treasury, the private  sector and civil  society, coordinate  U.S. policy toward the  EITI, a United  Kingdom-led  initiative.
No separate  funding.
0.25 of an  FTE.
Governments,  companies,  industry  associations,  international  organizations,  civil society,  investors.
Foreign  Assistance Act  of 1961, as  amended.
U.S.  companies  and business  groups, civil  society,  foreign  governments,  and  international  organizations.
Meets with  representatives from  the private sector and  civil society on a  regular but ad hoc  basis, includes  representatives from  the private sector and  civil society on official  U.S. delegations  relating to sustainable  development,  provides information  about and  encourages  sustainable  development  partnership efforts. In  addition, OES leads  negotiations for  environmental side  agreements to trade  agreements.
No specific  budget.
Not  available.
Coordinating  function  operating  through the  bureau.
U.S.  commercial,  academic or  cultural  contacts and  civic groups.
Manages a Web site  for donations,  coordinates referrals  from Congress, and  with other agencies,  presents to  gatherings of  individuals or  organizations with an  interest in supporting  reconstruction and  humanitarian needs  in Iraq.
No specific  budget.
One full-  time  person.
Emergency  Wartime  Supplemental  Appropriations  Act, 2003 (See  P. L. 108-11) and  chapter 4 of Part  II of the Foreign  Assistance Act  of 1961, as  amended.
U.S.  companies.
U.S. companies host  interns for three  months at their own  expense. In fiscal  year 2003, more than  35 companies hosted  interns. $2,000,000 One part  time plus  contractor  support.
U.S. and  foreign  companies.
Emergency  Wartime  Supplemental  Appropriations  Act, 2003 (See  Pub. L. 108-11)  and chapter 4 of  Part II of the  Foreign  Assistance Act  of 1961, as  amended.
Through a  cooperative  agreement to the  Junior Achievement  program, MEPI is  setting up chapters  throughout the region  to promote  entrepreneurship,  such as job training,  among high school- aged youth. U.S. and  foreign companies  serve as long-term  sponsors and  mentors for this  program. $2,400,000One part  time plus  contractor  support.
United Nations  Participation Act  of 1945.
Not  available.
United  Nations  programs,  funds,  agencies and  other  organizations.
Negotiations over  resolutions, work  programs and  budgets in United  Nations  organizations, and  reviews of programs  and activities.
No specific  budget.
Several  staff in this  bureau  devote  time to  CSR on an  ad hoc  basis.
The U.S.  Leadership  Against  HIV/AIDS,  Tuberculosis,  and Malaria Act  of 2003, See  Section 101 of  P.L. 108-25.
Private  sector.
Not  applicable.
The private sector is  a critical partner at  the country level.  These partnerships  facilitate company  workplace programs  to create awareness  about the spread of  HIV/AIDS, decrease  stigma among those  who know their HIV  status, and provide  antiretroviral therapy  to employees and  their families. The  office began keeping  track of the number of  partnerships in FY  2005.
No specific  budget.
The Partnership for Prosperity is a bilateral initiative between Mexico and the United States designed  to leverage private sector resources and expertise to boost the social and economic well-being of  Mexican citizens, particularly in regions where economic growth has lagged.
In addition to the Department of State, USTR, EPA and the Departments of Treasury, Commerce, and  Labor help resolve complaints against companies.
The guidelines are a set of nonbinding recommendations that have been agreed upon by OECD  member countries. Their aim is to provide guidance for companies on a range of business activities,  including industrial relations, human rights, environment, information disclosure, competition, taxation,  and science and technology.
The Department of State also coordinates with the Departments of Commerce and Justice to address,  as appropriate, alleged incidents of bribery of foreign public officials (by foreign-based corporations)  that adversely affect the opportunity for U.S. companies to compete on a transparent and level playing  field for international tenders and contracts.
OGAC is not an implementing office. Actual implementation of partnerships with the private sector  and other workplace activities are put forth from its implementing agency partners, primarily USAID  and The Department of Health and Human Services (HHS).
Clean  Diamond  Trade Act (P.L.  108-19),  Executive  Order 13312,  and Rough  Diamonds  Control  Regulations,  31 C.F.R. part  592 (Regulations).
Companies or  individuals  involved in the  export from  and/or import  into the United  States of  rough  diamonds.
The Regulations  provide that trade  in rough diamonds  is prohibited unless  the rough diamond  is controlled  through the  Kimberley Process  Certification  Scheme as set  forth in the  Regulations. The  U.S. also  participates in  Kimberley Process  multilateral working  groups on  Monitoring and  Statistics.
No specific  budget.
Three FTEs.
To encourage public- private partnerships  for development  projects.
Foreign  Assistance  Act of 1961  (P. L. 87- 195), as  amended.
Foundations,  for-profit firms,  civil society  organizations,  foreign  governments.
Trains USAID  staff on public- private  alliances and  conducts  outreach to  private sector  and civil society  partners. For  fiscal years  2002-2004,  USAID  leveraged over  $3.7 billion in  partner assets  through $1.1  billion in agency  funding. staff plus  contractors  and field  support.
Executive  Order  13317.
To deploy skilled  volunteers in U.S.  foreign assistance  programs.
U.S.-based  organizations,  including  corporations.
By the end of  FY 2004,  Volunteers for  Prosperity  recruited nearly  200 for-profit  and nonprofit  organizations,  representing a  pool of at least  34,000 skilled  American  professionals  available to  serve as  volunteers.  Participating  organizations  reported having  deployed nearly  7,000  volunteers.
No specific  budget.
Three full  time staff.
USAID serves as the interagency coordinator for this initiative. Per the executive order, USAID, the  Departments of State, Commerce and Health and Human Services were required to set up Volunteers  for Prosperity offices or operating units.
2002.
Trade Act of  2002.
Foreign  governments.
No discrete  budget.
Negotiating terms of  trade agreements with  U.S. trading partners.  USTR will consider  including CSR issues  and projects in trade  agreements if the issue  is raised by trading  partners. For example,  CSR language is  included in the US- Chile and US- Singapore free trade  agreements.
FTA  negotiators  address CSR  as warranted  during  negotiations.
Not  available.
Not  available.
Business  groups.
One percent  of one staff  person’s  time.
USTR meets with  business groups on an  ad hoc basis to discuss  a range of issues. On  occasion, this includes  encouraging  businesses to  implement corporate  codes of conduct.
No discrete  budget.
section_title: GAO Contact and Staff Acknowledgements
subsections: section_title: GAO Contact
section_title: Acknowledgements
paragraphs: In addition, Kate Blumenreich, Kenneth Bombara, Martin De Alteriis, Mark  Dowling, Tim Fairbanks, and Kim Frankena made key contributions to this  report. Shirley Brothwell, Emilie Cassou, Jeanette Espinola and Richard  Lindsey also provided assistance.