Corporate Social responsibility usually thought of in terms of 'unethical/socially irresponsible/environmentally irresponsible companies' includes an important quotient. The government. In developing economies particularly, Governments play an enormous role in all forms of decision making from business to agriculture. It is also a given that developing nations leave a lot wanting in the area of the ethics of civil servants. Simply put bribery and corruption run rampant in the Government. In 2005 India was ranked in the low 80's (of 158) in the Transparency Index!

To relate this to a real world scenario, I'll narrate the story of Coke in India. The facts were these. Around 2003-06 Coke and Pepsi came under enormous scrutiny after a Delhi-based NGO Centre for Science and Environment (CSE), put out reports showing that the level of pesticides in the cola drinks were 24 times the permissible limit. They were also widely criticised for the use of water resources in India. The problem escalated to such an extent that almost a quarter of the 28 Indian states were considering a ban on the cola drinks and 7 states issued on the production and distribution of the product. This was in reaction to the widely led protests from several organization and the public. Coke and Pepsi were threatened immensely by this ban given their huge reliance on the Indian market and their investments.

Between Coke and Pepsi they held 98% of the cola market. In the past decade Coke had invested $1 Billion in India and proposed to invest another $250 million in the coming half of the decade. India with its struggling agricultural sector, high levels of unemployment etc thrives on Foreign Investment after years of economic isolation.

Coke tried playing the blame shifting card by arguing that their pesticide limits were far lesser compared to the pesticides found in common foods such as milk, eggs, meat etc. But the activists shunned this argument saying that they were shunting responsibility.

The upheaval slowly faded after Coke garnered the support of several celebrities and the government and manged to mitigate the claims. The bans were lifted leaving one to wonder the power exercised by the cola heavy-weights on the government. Indian political class has been accused of short sightedness in its economic policies endangering its long term sustainability as a global business entity. one example of this is the weak regulations that are in place and the corruption of its civil servants amidst mass globalization efforts rising CSR!



Ref:
http://www.transparency.org/
www.WSJ.com