1 OVERVIEW OF ISO SOCIAL RESPONSIBILITY AND THE BENEFITS TO INDUSTRIES SEMINAR STANDARD 2011: STANDARDS TOWARDS INCREASING MARKET COMPETITIVENESS-13 DECEMBER 2011 ORGANISED BY MINISTRY OF INTERNATIONAL TRADE AND INDUSTRY MALAYSIA SPEAKER: AB RAZAK SALIM SIRIM

 Brief process of ISO  ISO FRAMEWORK  Highlight on clauses  Benefits of social responsibility OUTLINE PRESENTATION

 BRIEF PROCESS OF ISO 26000

4 How did the ISO effort get started? Advisory Group COPOLCO COPOLCO Report AG Report Stockholm Conference NWIP : Three month vote, ending May 2001 Jun 2002 Sept April 2004 June 2004 Swedish Industry Association Env. Mgt Consultants of CV Industry Stds Committee for Petroleum and Gas MoUs established Work begins

5 Who has been participating in the process?  99 countries represented through their NSBs  42 liaison organisations (including MoUs with ILO,UNGC and OECD)  450 experts and 210 observers from 6 stakeholder categories (Industry, Government, Consumers, Labour, NGO,SSRO) (2010)

6 Stage 3-5: Building national consensus/vote, D-liaison backing Stage 2: Building consensus among individual experts STAGE 1 New Work Item Proposal (NWIP) STAGE 2 Working Draft (s) (WD) STAGE 3 Committee Draft (s) (CD) ISO writing process STAGE 4 Draft Intern. Standard (DIS) STAGE 5 Final Draft Intern. Stand. (FDIS) STAGE 6 International Standard (IS) STAGE 2 Working Draft (s) (WD) STAGE 2 Working Draft (s) (WD 4.3) PUBLICATION -1 NOV 2010

ISO FRAMEWORK

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HIGHLIGHT ON CLAUSES 1-SCOPE  SCOPE- PROVIDE GUIDANCE TO ALL TYPES OF ORGANISATION, REGARDLESS OF SIZE OR LOCATION ENCOURAGE ORGANISATION TO GO BEYOND LEGAL COMPLIANCE NOT A MANAGEMENT SYSTEM NOT INTENDED FOR CERTIFICATION OR REGULATORY OR CONTRACTUAL USE

CLAUSE 2  Terms and definitions ~ 27

Organisation (2.12) -Entity or group of people and facilities with an arrangement of responsibilities, authorities and relationships and identifiable objectives

International norms of behaviour (2.11) expectations of socially responsible organizational behaviour derived from customary international law, generally accepted principles of international law, or intergovernmental agreements that are universally or nearly universally recognized

Supply chain (2.22)  Sequence of activities or parties that provides products or services to the organisation

Value chain (2.25)  Entire sequence of activities or parties that provide or receive value in the form of products or services

IN/ID - YYYY-MM-DDTitle / Titre – Value & supply chain Customers Partners MediaGovernment Citizens NGO’s Consumers Suppliers Workers Employees Sector Association Banks / Insurance Shareholders Industry Organization Value chain Sub- Suppliers Raw material providers Waste services Supply chain

Sphere of Influence 2.19 Definition: range/extent of political, contractual, economic or other relationships through which an organization has the ability to affect the decisions or activities of individuals or organizations

18 Distributors Value chain Supply chain Sector association MediaGovernment Citizens NGO’s Social, Economic and Environment ConsumersSuppliers A Sub- Suppliers A Raw material providers Waste services Workers Employees Industry Organization Partners Banks / Insurance Shareholders Suppliers B Customers A Sub- Suppliers B Customers B Sphere of influence

Assessment on an organization's SOI: ownership and governance economic relationship legal/political authority public opinion

CLAUSE 3-Understanding social responsibility  Essential characteristics of SR Willingness of an organisation to incorporate social and environmental considerations in its decision making and be accountable for the impacts of its decision and activities on society and environment.

 Relationship between social responsibility and sustainable development -Sustainable development-meeting the future needs of society without jeopardizing the ability of future generations to meet their needs -Social responsibility- focus on organisation and its responsibilities to society and environment -objective of organization's SR should be to contribute to sustainable development

CLAUSE 4 Principles of Social Responsibility  Accountability  Transparency  Ethical behaviour  Respect for stakeholder  Respect for the rule of law  Respect for international norms of behaviour  Respect for human right

CLAUSE 3-Understanding social responsibility Fundamental of SR Identifying and engaging with stakeholders is central to SR.

Stakeholder ( 2.20) - individual or group that has an interest in any decision or activity of an organisation

25 IN/ID - YYYY-MM-DDTitle / Titre – Stakeholder map Customers Partners Media Government Citizens NGO’s Consumers SuppliersWorkersEmployees Sector Association Banks / Insurance Shareholders Industry Organization Volunteers

 Stakeholder engagement Dialogue between organisation and stakeholders Various forms~ meeting, conferences, workshops, public hearings, advisory committees, round table discussions CLAUSE 5: RECOGNIZING SR AND ENGAGING STAKEHOLDERS

CLAUSE 6 SR core subjects and issues

28 7 CORE SUBJECTS

Std Pres Kit 29 GUIDANCE ON SR CORE SUBJECTS Organizational Governance Issue 1.Decision-making processes and structures

Std Pres Kit 30 SR core subjects Human Rights Issues 1.Due diligence 2.Human rights risk situations 3.Avoidance of complicity 4.Resolving grievances 5.Discrimination and vulnerable groups 6.Civil and politics rights 7.Economic, social and cultural rights 8.Fundamental principles and rights at work

Std Pres Kit 31 SR Core Subjects Labour Practices Issues 1.Employment and employment relationships 2.Conditions of work and social protection 3.Social dialogue 4.Health and safety at work 5.Human development and training in the workplace

Std Pres Kit 32 SR Core Subjects Environmental Issues 1.Prevention of pollution 2.Sustainable resource use 3.Climate change mitigation and adaptation 4.Protection of the environment and restoration of natural habitats

Std Pres Kit 33 SR Core subjects Fair Operating Practices Issues 1.Anti-corruption 2.Responsible political involvement 3. Fair competition 4. Promoting social responsibility in the sphere of influence 5. Respect for property rights

Std Pres Kit 34 SR Core Subjects Consumer Issues 1.Fair marketing, factual and unbiased information and fair contractual practices 2.Protecting consumers’ health and safety 3.Sustainable consumption 4.Consumer service, support and dispute resolution 5.Consumer data protection and privacy 6.Access to essential services 7.Education and awareness

Std Pres Kit 35 SR Core subjects Community involvement and development 1.Community involvement 2.Education and culture 3.Employment creation and skills development 4.Technology development and access 5.Wealth and income creation 6.Health 7.Social investment

36 Organizational governance Human rights Labour practices The environment Fair operating practices Consumer issues Community involvement and development 1. Due diligence 2.Human rights risk situations 3.Avoidance of complicity 4.Resolving grievances 5.Discrimination and vulnerable groups 6.Civil and politics rights 7.Economic, social and cultural rights 8.Fundamental principles and rights at work 1.Employment and employment relationships 2.Conditions of work and social protection 3.Social dialogue 4.Health and safety at work 5.Human development and training in the workplace 1.Prevention of pollution 2.Sustainable resource use 3.Climate change mitigation and adaptation 4.Protection of the environment and restoration of natural habitats 1.Anti-corruption 2.Responsible political involvement 3. Fair competition 4. Promoting social responsibility in the sphere of influence 5. Respect for property rights 1.Fair marketing, factual and unbiased information and fair contractual practices 2.Protecting consumers’ health and safety 3.Sustainable consumption 4.Consumer service, support and dispute resolution 5.Consumer data protection and privacy 6.Access to essential services 7.Education and awareness 1. C ommunity involvement 2.Education and culture 3.Employment creation and skills development 4.Technology development and access 5.Wealth and income creation 6.Health 7.Social investment NOT ALL ISSUES WILL BE RELEVANT FOR EVERY ORGANIZATION Decision-making processes and structures

37 ~Practices for integrating social responsibility throughout an organization ~Communication on social responsibility ~ Enhancing credibility regarding social responsibility ~Reviewing and improving the organization’s actions and practices related to social responsibility 7 Guidance on integrating social responsibility throughout an organization

 Role of communication - Raising awareness - Legal and disclosure requirement - Engage and create dialogue - Facilitate comparison, stimulate improvement - Enhance reputation

7.5 Communication should be: -Complete -Understandable -Responsive -Accurate -Balanced -Timely -Accessible

 Types of communication ~ examples - Meetings or conversation - Dialogues - Articles in media - Advertisement or public statement - Periodic public reporting

Reporting on social responsibility - Report on SR at appropriate intervals/ periodic basis - Report on core subject and relevant issues - Fair and complete picture, achievement and shortfall - Ways shortfall will be addressed

Enhancing credibility.. (7.6)  Stakeholder engagement ~ help build trust ~ the verification of organization's claim concerning its performance  Through participation in specific certification scheme eg environment, labour practices, processes

Social Responsibility (2.18). Responsibility of an organization for the impacts of its decisions and activities on society and the environment through transparent and ethical behaviour that:  contributes to sustainable development, including health and the welfare of society  takes into account the expectations of stakeholders  is in compliance with applicable law and consistent with international norms of behaviour  is integrated throughout the organization and practiced in its relationships

Implementation Challenges  SR often not seen as commercially important, benefits are seen as “intangible” or “soft” and seek greater proof of hard financial benefits and how to measure them  Need financial and human resources  Need know-how and information  Large business faces external pressures e.g. reporting on CSR. SME are more interested in day to day survival.

Box 5 — Benefits of social responsibility for an organization These include:  enhancing the reputation of the organization and fostering greater public trust  enhancing employee loyalty, involvement, participation and morale;  improving the safety and health of workers;  preventing or reducing potential conflicts with consumers about products or services.

 organization's ability to recruit, motivate and retain its employees;  achieving savings associated with increased productivity and resource efficiency, lower energy and water consumption, decreased waste  improving the reliability and fairness of transactions fair competition, and the absence of corruption

Conclusion A Pathway For the Future  Social Responsibility helps in achieving sustainable development.  The need for social responsibility behaviour is needed more than ever before from the huge environmental and social problems that the world face.  Industry activities have impacts on social responsibility

Thank you …