New Europe, new drivers
A UN Development Programme (UNDP) study on corporate social responsibility (CSR) in Central and Eastern Europe revealed that civil society is a missing element in holding corporations accountable for their impacts on society and environment in the region. In contrast to Western Europe, where CSR is influenced by the active pressure from various civil society organisations (CSOs), the CSR agenda in Central and Eastern Europe is driven mainly by companies themselves, especially large corporations and international organisations present in the region.13 The impact of civil and consumer groups is still limited owing to underdevelopment of the non-governmental sector. Indre Kleinaite of the Lithuanian sustainable enterprise network Gyva.net told JCC that 'the Soviet system formed a passive society who then developed an obsession with the market economy as a panacea for all their inherited problems, and paying most attention aspiring to Western ideals of consumerism'.
The UNDP report was the first comprehensive regional study on the level of CSR implementation in eight Eastern and Central European countries. The conference to launch the report was opened by Ms Kori Udovicki, UN Assistant Secretary-General, who stressed that 'Eastern Europe has learned that markets are indispensable for fast growth, but we also need institutions that can remedy the less positive consequences of the drive for profits. CSR is one such tool to help ensure that everyone benefits from growth'. Mr Richard Howitt, MEP, Rapporteur on CSR, called for more support from the European Parliament (EP) and European Commission (EC) for involving CSOs and small and medium-sized enterprises (SMEs) in the region. Ms Lyra Jakuleviciene, Head of UNDP Lithuania and leader of the regional CSR project, concluded, 'while there are some success stories to be proud of, there is also plenty of work to be done'.
In recent years there have been signs of growing civil society activism in Lithuania, albeit leading to a backlash from some in business and government. Since 1991, when Lithuania regained its independence from the Soviet Union, privatisation was undertaken to move towards a market economy. One case has now inflamed civil society protests. The private owners of a popular cinema named 'Lietuva' (Lithuania) in Vilnius decided to demolish it and build apartments instead. Over the period 2005-2007 a number of protests merged into a civil society movement for public spaces and public interest, which has delayed the property development process.
In July 2007, a lawsuit was launched by the developers against four activists for inquiring into the real-estate project. Gediminas Urbonas, artist and one of those activists, says that this constitutes an unprecedented attack on public expression. He adds, 'it is a very concrete illustration of how capital squashes public discourse by paralyzing active individuals'. The activists called for financial support from people to be able to hire lawyers to defend the case in the court.14 The case sparked an active media debate from free-market advocates labelling the case a 'falsification of public interest',15 arguing that a few independent film lovers are pretending to represent the public by calling the movement a symbolic fight for Lithuania. However, as a free and active civil society is a necessary driver of corporate responsibility, a corporate backlash against social activism will not be helpful.
Meanwhile, identifying other drivers for CSR in the region is important. One such driver could be the need to address the widespread emigration of skilled people from Central and Eastern Europe. Unemployment is no longer an issue in countries such as Lithuania where thousands of people have left to pursue better-paid jobs elsewhere in Europe, especially the UK and Ireland. This means local businesses are now lacking workers and experiencing skills shortages. Could businesses have been more attentive to this social trend and taken measures to improve the pay and conditions of workers so more might have chosen to stay in countries such as Lithuania? Might CSR in the workplace be one way to tempt them back?
In the absence of a tradition of NGO advocacy funded by donations from individual citizens, it is likely that new social enterprises will be a key way for social and environmental concerns to be articulated in post-Soviet states. The success of Latvian high-end cosmetics company Mádara is illustrative of how young Eastern Europeans motivated by social consciousness can express themselves. The company makes completely natural flower and herb cosmetics for body and facial care. These products are made only from plant extracts, natural oils, butters and waxes, without petroleum ingredients, chemical preservatives, parabens, artificial colourants and other potentially harmful substances. For all print and packaging, Mádara uses paper from forests certified under the Forest Stewardship Council (FSC), a system of sustainable wood supply that WWF helped to create in the early 1990s. The paper is manufactured in accordance with a strict environmental policy that calls for minimal carbon emissions and the recycling of water. According to co-founder Zane Rugina, the brand 'tells a story about a healthy and natural lifestyle, about dignity and respect towards secrets of natural beauty'.16
The debate about CSR in Eastern Europe is part of a broader debate about the type of economic system countries in the region want to shape. Canadian activist Naomi Klein once wrote that 'the alternative to capitalism isn't communism, it's decentralized power'.17 Indre Kleinaite explains that 'in the post-Soviet Union some are now arguing the alternative to communism is not just capitalism, but a balanced system that allows both private and public interests to go hand in hand like two forces in a union where none of them is dominating the other'.