Corporates must stand up to be counted in Corona war

Thursday, April 16th, 2020 00:00 |
Private entities throw weight behind State’s anti-coronavirus kitty.

Opiyo Wandayi 

Various leaders, religious community, the media and other actors have come out to  offer support in varied ways as the country combats Covid-19 pandemic.

But corporate organisations, save for a few, have been conspicuously silent. The question is: why?

A large percentage of our national wealth is domesticated within multinational corporations (MNCs)—business entities with their headquarters in one country, otherwise called the home country, and subsidiaries in host countries, such as Kenya.

In Kenya, MNCs are established in almost all the 47 counties and are engaged in large scale enterprises ranging from agriculture, banking, finance, insurance, mining, tourism to the hospitality industry. 

The main goal of MNCs is to capture the local markets and establish a monopoly for the purposes of profiteering.

There are factors that influence the behaviour of MNCs in the pursuit of profit returns and capture of local markets. 

The labour factor ranks high, especially in developing countries. Here, labour is cheap and maximisation of profits is guaranteed. 

Secondly, MNCs seek to create a monopoly in production—a true manifestation of capitalism.

Thirdly, MNCs seek to establish mutual collaboration with political elite to capture the state to pave way for favourable policies for their enterprises to thrive. 

Equally, MNCs seek to diversify their production to enjoy the benefits of multiplier effects of investment which maximises their returns on investment.

Additionally, MNCs are engaged in value addition in enhancing their products and services because the higher the value of products, the better the returns on investment. 

And finally, MNCs especially in developing countries enjoy access to cheap raw material which increases the profits.

However, with all these benefits that MNCs accrue in the local markets, there is always a moral question: should they engage in corporate social responsibility (CSR) activities, especially during crises such as the coronavirus pandemic?

I am not talking about mere tokenism or publicity stunts that we are witnessing. Before I joined Parliament, I spent close to 15 years in the corporate world and I know what goes on.

CSR is premised on the logic that corporates have a responsibility to support communities where they accrue their massive benefits.

On the contrary, what we see in Kenya is an entrenchment of paternalism, with major players continuing to hoodwink Kenyans CSR is but a favour.

Globally, MNCs and business moguls are actively involved in mobilisation of resources towards combating Covid-19. Large corporations are stepping in to support SMEs during this difficult time. 

Some of the biggest tech firms in the US have stepped up in the effort to combat Covid-19.

Amazon, for instance, pledged to donate $5 million to local businesses based near its Seattle headquarters that are likely to lose out on sales now that the thousands of its staff are working from home.

Google, on the other hand, has pledged $1 million to businesses in Mountain View, California, impacted heavily by the pandemic. 

Facebook pledged to donate $20 million to support relief efforts, while Apple is committing $15 million.

Jack Ma, the billionaire founder of Chinese e-commerce giant Alibaba, donated 1.1 million testing kits, six million masks and 60,000 protective suits and face shields to Africa.

In Nigeria, billionaire Aliko Dangote, has donated the equivalent of more than Sh50 million.

South Africa’s Johan Rupert and Nicky Oppenheimer donated Sh11.4 billion to the solidarity fund to assist small scale business and their employees during this Covid-19 pandemic.

Here in Kenya, Narendra Raval Guru was the first Kenyan entrepreneur to support the emergency fund by donating Sh100 million worth of oxygen masks to all government hospitals. Few have followed suit.

The question, then, is why are multinational corporations operating in Kenya, from where they continue to accrue massive profits, slow in taking up their CSR in contributing to the efforts aimed at containing Covid-19 pandemic? 

When this crisis is finally over, it will have taught us a number of valuable lessons. 

Perhaps, it’s time to start considering the need for a legislation to govern CSR and to introduce a sense of accountability in the way businesses relate with the host populations. —The writer is the MP for Ugunja 

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