DLA Piper Alerts Foreign Investors in China to New CSR Guidelines as Course of Competitive Advantage

China (LAWFUEL) – A PRC Government body has released draft guidelines with potentially far-reaching ramifications for foreign investors’ Corporate Social Responsibility (CSR) activities. The guidelines raise the possibility that foreign companies will be required by law to adopt CSR initiatives at a later date.

A subsidiary of the Ministry of Commerce, the Chinese Academy of International Trade & Economic Cooperation (CAITEC), issued the draft document in late August 2008, known as Guidelines on Corporate Social Responsibility Compliance for Foreign Invested Enterprises (CSRCFIE).

Dr. Liu Wei, Office Managing Partner, Beijing and Chairman of China Practice, DLA Piper said, “The PRC Government has recently been stressing the need for companies to be socially and environmentally-responsible. These guidelines are the strongest indication yet of the Government’s expectations of foreign investors.”

“CSRCFIE are voluntary guidelines and not law,” said Clare Pearson, CSR Manager, Asia at DLA Piper Beijing. “However, it is possible they will become legislation at a later date. At the very least they are an indication that the Government may be favourably disposed towards foreign companies which it considers to be CSR compliant.”

The guidelines were submitted to the European Chamber of Commerce in China for review and debated at the 11th Chinese International Investment and Trade Fair at Xiamen from 8 – 11 September. They deal with the economic, social and environmental impacts of foreign companies with recommendations about the responsibilities and obligations of CSR-compliant companies. A CSR compliant company, according to the guidelines, abides by laws, regulations and business ethics; actively balances interests of all stakeholders including employees, consumers, business partners and communities; and voluntarily undertakes social, economic and environmental development projects.

“The guidelines are wide in scope and encourage foreign invested companies to play an exemplary role in engaging with stakeholders to contribute to the economic, social and environmental development of the PRC,” added Alastair Da Costa, Asia Managing Director of DLA Piper. “DLA Piper is committed to the development of CSR awareness in the region and we have seen growing interests and concerns in this area, which will be risky for corporations to ignore in their business plans.”

“This has been a momentous year for China. The snowstorms in the South, the earthquake in Sichuan and the Olympic Games have collectively had a catalytic impact on corporate philanthropy. Now that the Games are over, CSRCFIE will aim to translate positive sentiment and philanthropy into corporate strategy. For foreign companies looking for a sustainable future in China, CSR will move from the wings to centre stage,” said Ms Pearson.

In a separate development, DLA Piper in Bangkok has received a special mention in the CSR category of the Australian-Thai Chamber of Commerce Business Awards 2008 for the firm’s commitment and contribution in CSR activities in the region.

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