16048758 Csr Malaysia Nazrul Nifkuzyaire
Transcript of 16048758 Csr Malaysia Nazrul Nifkuzyaire
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1. Introduction to Case study
Malaysian government had already turned to tolls as means of financing highway
development. One of Malaysias first BOT privatizations was the North-South Highway, the
operating company known as PLUS, Projek Lebuhraya Utara Selatan. PLUS is a subsidiary of
United Engineers (M) Ltd., or UEM, a company controlled by the countrys dominant political
party UMNO Handley (1997). Due to the concession contract agreements made in the past with
UEM and now shifted to PLUS BHD, government regardless of public concern and guilt feelings
must make toll collections along the PLUS highways mandatory until the concession period over.
Somehow, The North South Expressways (NSE) was a high profile project with involvement of
many stakeholders. The stake-holders are those involved and affected by the activities of the
company Freeman (1984). They can be latent, dominant, discretionary or definitive stockholders.
The bread and butter of PLUS BHD regardless of stakeholder salience stressed that it owes
obligations only to its stakeholders - the government, its lenders, shareholders, employees as well
as highway users. PLUS BHD is becoming rich enough to acquire other private highways
operators which helping boosting Malaysia economy development and other related facilities. As
a public listed company, PLUS owes a corporate social responsibility to convince the sceptical
lens of millions of Malaysian expressway users that they are giving back to the community. PLUS
BHD under banner of corporate citizenship has been promoting CSR by providing ample
maintenance, operator, clerical as well as other jobs for Malaysian and directly through donations,
fund raisings, sponsorships etc. For many years, PLUS BHD remains overshadowed by security
commission and Bursa requirement for corporate governance disclosure requirements, just
recently PLUS BHD followed its parent company UEM BHD which is also a GLC to quick fix
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for Bursa CSR framework. This case study consists in a longitudinal study of PLUS Expressway
BHDs CSR practices from year 2005 to 2007.
1.1 Case Study Objectives
The primary objectives of the case study are:
1) To briefly go through the mainstream literatures of CSR and highlight the CSR
movement in Malaysia as well as CSR practices in PLUS BHD.
2) To justify at what kind of CSR, PLUS BHD is pursuing, either self-interest as coined by
Milton Friedman (1970), selfless (Post-Frideman) or for sustainability. I posit that with
great government holding power over company the philanthropic tendency might greatly
influenced by the government.
3) To critique PLUS BHDs strategic CSR based on CSR strategy matrix table. See table 1.
4) To provide critical thinking views for any loop holes in current CSR practices by PLUS
BHD and provide them with suggestion.
1.2 Company Profile
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The company was founded on 27 June 1986 known as Highway Concessionnaires
Berhad, a member of the United Engineers Malaysia Berhad (UEM). On 13 May 1988 , it
changed its name to Projek Lebuhraya Utara-Selatan Berhad (PLUS). The company was
incorporated in Malaysia on 29 January 2002 known as PLUS Expressway Berhad (PEB). On 17
June 2002 , the company was listed on the Main Board of the Kuala Lumpur Stock Exchange
(KLSE, now Bursa Malaysia ).
Plus was incorporated 1986 and under the termed of concessions awarded by the
government of Malaysia has been involved in construction of and improvements to theexpressway network, maintenance works and toll road operations. Concentrated ownership in
Malaysia is mainly attributable to government holding and family control of the public-listed
companies (Azlan et al.).Based on previous argument, PLUS BHD fall under concentrated
ownership category, as evidence to date the Malaysian government owns approximately 63.97%
via Khazanah Nasional (23.76% direct and 40.21% indirectly via the GLC, UEM Group Bhd.
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http://www.answers.com/topic/june-27http://www.answers.com/topic/1986http://www.answers.com/topic/uem-grouphttp://www.answers.com/topic/may-13http://www.answers.com/topic/1988http://www.answers.com/topic/june-17http://www.answers.com/topic/june-17http://www.answers.com/topic/2002http://www.answers.com/topic/bursa-malaysiahttp://www.answers.com/topic/bursa-malaysiahttp://www.answers.com/topic/june-27http://www.answers.com/topic/1986http://www.answers.com/topic/uem-grouphttp://www.answers.com/topic/may-13http://www.answers.com/topic/1988http://www.answers.com/topic/june-17http://www.answers.com/topic/june-17http://www.answers.com/topic/2002http://www.answers.com/topic/bursa-malaysiahttp://www.answers.com/topic/bursa-malaysia -
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Figure 1 PLUS EXPRESSWAYS group structure.
Table 1 List of Top 3 holders allowed for 5% and above
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Table 2 List of Top 30 Holders as at 30 April 2008
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2 Literature Reviews
Corporate governance is not only about conformance with laws, rules, standards and
codes but also about enhancing performance and shareholder value. Once corporate adopting
single or numbers of pragmatic and normative elements inside their managerial objectives and
roles, going beyond corporate compliances moving beyond traditional philanthropy (arabic word
sadaqah), walking the talk of corporate social initiatives (giving up fishing rode instead of
fishes) and shifting from shareholder maximization towards sustainability interest (the earth) then
they are said to adopt CSR practice. With regard to command and control regulation, CSR
activities can help to enhance compliance with mandatory policies. As for societal governance,
CSR becomes a beyond compliance strategy when it fulfils goals or measures not required by
legislation, as long as CSR is defined as a beyond compliance strategy, voluntary company
activities need to be distinguished from mandatory ones.
As far back as the 1940s, some scholars suggested that a business firm should be viewed
as a citizen in society (Drucker, 1946, p. 137). Bowen (1953) argues that businessmen have the
obligation to pursue desirable policies in terms of societal objectives and values. Carroll (1979, p.
500) specifies that obligations of businesses encompass the economic, legal, ethical and
discretionary expectations that society has of organizations at a given point in time. Businesses
have the ( economic ) responsibility of being profitable (by producing goods and services that
society wants. Some business leaders and researchers equate philanthropy with corporate
citizenship (Drucker (1946), Bowen (1953) and Caroll (1979) cited in Jeremy Garlbreath, 2006 ).
Those companies engage in philanthropic initiatives or community investment only when
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resources are available (Rostami, 1998) and believe they are acting as good corporate citizens.
(Drucker, 1946, Bowen, 1953,Carol, 1998l and Rostami 1998 cited in Valrie Swaen and Isabelle
Maignan,2006) Both of them,argue that corporate citizenship is unlikely to be widely embraced
by organization unless it yields concrete business benefits.
The notion that corporations ought to be socially responsible began during the 1960s, a
time when businesses were expanding internationally and growing rapidly in size and power
(cited in Lantos, 2001). In 1979, Carroll proposed a four-part definition of CSR that was
embedded in a conceptual model. In 1991, Carroll revisited his four-part definition of CSR
and organized the notion of multiple corporate social responsibilities in a pyramid
construct. About the same year Well (1990) came out with Corporate Social
Performance model . These two schools of taught if reconciled can provide extension to CSR
impact assessment. Carroll (1998) and view corporate citizenship solely as a discretionary
activity. More recently, demands for greater corporate accountability, responsibility, and
transparency, the terms corporate citizenship and corporate responsibility had emerged, both in
practice and in academic writing. Another major emphasis is currently on sustainability, a term
originally popularized by the Brundtland Commissions 1987 report, which first defined
sustainable development. The term sustainability originally emphasized ecological sustainability.
Long recognized Doing well by doing well is the essence of Corporate Social Responsibility
(CSR). Although this term is in widespread use, it tends to be associated with corporate
philanthropy and other do good efforts even if it comes at the expense of the bottom line and
CSR activities are often thought of as corporate window dressing, i.e., an effort to make the
company look good while it continues to pursue problematic business practices.
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Identifying CSR effects: Effects resulting from the adoption of CSR are identified, taking
into account changes in commitment and strategy (CSR output), concrete practices (CSR
outcome) and the consequences for society and the environment (CSR impact). Lantos (200l)
introduced the strategic nature of CSR, providing the following classification firstly, ethical CSR
(including economic, legal and ethical as one group); second, altruistic CSR (philanthropic, going
beyond ethical, regardless of whether or not this will benefit the business itself); third strategic
CSR (fulfilling those philanthropic responsibilities which will benefit the firm through positive
publicity and goodwill). The recent development of Corporate Social Responsibility (CSR) is
now changing the pendulum back to a broader approach of value-creation for the broad group of
stakeholders and emphasizing triple bottom line approach.Andrews (1998) described CSR as
intelligent and objective concern for the welfare of society that restrains individual and corporate
behaviour from ultimately destructive activities, even though those activities ensure immediate
profits (cited in Perera & Hewege, 2007 ).
Any corporations business goal is to provide value and incentive to its shareholders.
Therefore, profit-oriented corporations or organizations are not a charitable organization although
sometimes it is in their direct interest to support charitable activities. Furthermore, sometimes
corporations or organizations carry out certain activities that governments should undertake,
although they are not government agencies (Mudzamir, 2007). Ideally, what good for
government would be good for Government Linked Companies (GLCs) or state owned
companies (SOCs).By nature, altruistic CSR promote by many governments in the world today
are for society betterment. In a simple description, altruistic CSR are any government actions that
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substitute for charitable endeavors which help solve the free-riding problem because the
mandatory nature of beneficiaries salience for charitable giving to the government (taxes that we
pay) or in simple laymen terms, pure selfless commitment explain why government imposing
taxes and using the proceeds to produce public goods. In fact looking at our local context the
Government as the producer of altruism also encourage public and private sector to altruistic
CSR. Although government spending largely targets pure-altruism activities such as collecting
taxes that are prone to free riding problem the government still competes to some extent with self
interest corporate activities which basis in shareholder strategy . The shareholder strategy
represents an approach to CSR as a component of an overall profit motive, one that is focused
exclusively on maximizing shareholder returns. This strategic option is best aligned with the
economist Milton Friedman Jeremy Galbreath, 2006). Although perhaps seen as short-sighted in
todays business climate, a shareholder strategy, one based on the classic Friedmanite
argument, is nonetheless a strategic option with respect to CSR he added. Furthermore, any
expenditure that is not related to profit maximization is seen as tax levied on shareholders
(Greenwood, 2002). In academic world, Lockett et al., (2006) find that 89%of theoretical CSR
papers are non-normative (self-interest or profit-driven), but CSR in developing countries
literature; the balance is far more evenly split. This is largely due to the relatively large number of
papers on the role of business in development, which tend to adopt a normative (altruistic),
critical perspective (Blowfield and Frynas, 2005).
CSR for sustainability cannot be maintained unless private firms have some
benefits from CSR activities. Once CSR actions are linked with company business strategy and
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are incorporated in to day-to-day operations of the business, some firms have shown positive
results and also the sustainability of CSR (Key and Popkin, 1998). Thus, the citizenship strategy
not only recognizes its responsibilities to potential external constituents beyond its shareholders,
but to its internal constituents as well (Dawkins and Lewis, 2003 cited in Jeremy Galbreath,
2006).
2.1 CSR disclosure in general
The term CSR disclosure reflecting the disclosure of social and environmental
information attracts attention as the information itself involves the living quality despite the fact
that its reporting is voluntary in nature (Mohamad and Ahmad, 2001).Research on factors
influencing CSR disclosure has mainly focused on the significance of a number of corporate
characteristics such as company size (e.g. Belkaoui and Karpik, 1989; Patten, 1991) and industry
type (e.g. Roberts, 1992; Hackston and Milne, 1996; Adams et al., 1998, Mudzamir and
Norfaieszah. However, only recently a few researches have been done on the association between
ownership structure and board practices on CSR disclosure such as (Afzalur and Sudhir, 2008
Many explanations for CSR disclosure some provided by substantive management, and symbolic
management (legitimacy orientation), power capacity of and power relationship of stakeholders
which influence manager prioritization and rise to political costs which influence mangers on the
selection of accounting method. One CSR practice that paramount important is CS Disclosure
(CSD). CSD may have the potential to strengthen stakeholder engagement as reporting promotes
corporate transparency and instills greater confidence and trust amongst stakeholders. CSD is a
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means used by firms to inform its stakeholders and also to manage public impressions as
demonstrated by Neu, Warsame & Pedwell (1998).
2.2 CSR in Malaysia
Malaysia strategies for CSR are built to inculcate the level of CSR consciousness amongst
corporate Malaysia, increase the capacity and capability to combat environmental and social
concerns in short to promote responsible businesses to be part of solution towards sustainable
development. More to say, CSR has some impact on earning management and financial
performance for companies listed in Bursa Malaysia. Currently, Malaysian PLCs are in various
stages on the CSR continuum.The CSR continuum for Malaysia was far sighted road from
philanthropy to PR whitewash to ad-hoc CSR to strategic CSR to strategic CR departure;
Malaysia has been traveling the journey of corporate governance and corporate responsibility for
the past twenty years. Indeed CSR requires clarity of corporate purpose, principles and values,
backed up by rigorous internal accountability systems. Milestones in this journey include,
Firstly the establishment of key institutions promoting the corporate governance and CSR agenda
in the form of the Malaysian Institute of Corporate Governance, the Minority Shareholders
Watchdog Group and the Institute of Corporate Responsibility Malaysia and the Green Book on
Corporate Governance ICR Malaysia was established on Nov 16, 2006, to promote socially
responsible business practices, thereby raising business standards of Malaysian companies for the
benefit of all stakeholders and ensuring sustainable development. Second, the implementation of
policies promoting good governance and social responsibility referring to the introduction of the
Malaysian Code of Corporate Governance and Bursa Malaysias Revised Listing Requirements in
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2001, focusing on good governance on the one hand, and to the requirements to declare what
companies have done for CSR by the government in the 2007 and 2008 budgets if they want to
tender for government business and Bursa Malaysias updated listing requirements in 2007 for
annual reports on the other. Bursa Malaysia had stated that these reports ranged from a one-line
statement to a standalone report, allowing flexibility to adopt this practice. There is list
requirement for GLCs to adopt the Silver Book process in devising their CSR policies. Third
several high profile conferences have been hosted by the SC on CSR; and Fourth Malaysia
already has a Corporate Governance Index. (Zarinah,2008).Looking at Malaysia scenario, the
adoption of CSR disclosure (cross set diagram of corporate disclosure) has slipped of many PLC
radar screens with exception of a few companies. Fortunately, two CSR subwoofers breaking the
silence recently namely Khazanah Silver Book CSR guideline book for PLCs and Bursa CSR
framework. The Bursa CSR framework will guide these companies in formulating their CSR
statements and agendas (Omar, 2006).Whereas for the more advanced pro-active CSR
companies that perceive CSR as strategic business opportunities and integrated CSR companies
that institutionalise CSR policies and use CSR practices as a strategic differentiator, Bursa will
profile them on a Bursa SRI Index and moot them as investments for national pension funds and
institutional investors. Finally, Bursa will assist mission driven CSR companies, whose purpose is
to improve social or environmental conditions, to gain entry into international indices like the
Dow Jones Sustainability Index, thereby increasing visibility ( Nazatul , 2006 ). The
complementary, Silver Book, was launched from the government- linked company (GLC)
transformation program earlier that the Bursa CSR launch day, this Silver Book provides firms
with scorecards and guidelines to measure these ideas and to gauge how effective their CSR
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policies are. CSR reporting was made compulsory in Budget 2006, requiring all public listed
companies to report on their environmental and social responsibility performance. Prior to that
Bursa Securities had released corporate disclosure listing requirement. This listing requirement
also state that any announcement made by listed company, must among others, factual, clear,
unambiguous, accurate , succinct, contain sufficient information and not false. Back up by Bursa
and SC, ICR Malaysia (ICRM) which also has informal network names CSR Malaysia, ACCA
as well as National Integrity Institute are the pillars of CSR hallmark in Malaysia. Apart from
philanthropic and ad hoc CSR, this nation also hunts for sustainable
development(SD).Apparently, national aspiration for SD has give birth to Business Council for
(BSCDM).Sustainable Development. BSCDM is non-profit organization which is embarking on
short and long term environmental education programme to drive the message of sustainable
development, mainly through employees, customers and society. GLCs in Malaysia have started
to rationalize their CSR calls for sustainability. As the result G20 network was established since
end 2007 championed the PINTAR project initiated by the Ministry of Finance and spearheaded
by the Performance Management Office, Khazanah Nasional together with Government-Linked
Companies (GLCs), aimed at improving the socio-economic standard of rural students through
educational achievement.
At the global stage, several Malaysia GLCs signed and took part in the oath ceremony on
the name of the Malaysia Compact and the Caux Round Table, with the support of Khazanah
Nasional Berhad and Talisman Energy, the companies pledged to align and observe the
Compact's te universal principles regarding human rights, labour rights, environmental
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sustainability and anti-corruption in their operations and strategies as well as produce a
comprehensive annual report on their implementation (UNGlobal compact news,2008)
2.3 Automatic Tax relief for Philanthropic in Malaysia
Malaysian government through its Lembaga Hasil Dalam Negeri (LHDN) or Inland
Revenue Department (taxation board) lists organizations, clubs, funds and foundations, trusts,
and associations etc every year to ensure the donations made to the organizations listed were tax
exempted. However, beside the list that enabled an automatic tax relief, special requests from
PLCs was made during the mini budget 2009 meeting that the scope of charitable and community
projects eligible for tax deduction be extended to include projects relating to increasing the
income of the poor as well as for the conservation or preservation of the environment.
3.0 PLUS Corporate Citizenship promoting CSR
Sizable amount of PLUS BHD voluntaries, fund raising as well as sponsorship activities
shows that they are pure altruistic company by taking holistic approach integrating philanthropic
into their core business environment. PLUS BHD alternates their CSR tagline caring to
customer and the community with caring corporate citizenship can be found in the annual
reports. The Bread and Butter (Top managers) of PLUS BHD were quick to realize volunteerism
as their corporate shield (virtue) as highlighted in the following PLUSs corporate statement as
quoted volunteerism is also high on the list of virtues that we like to encourage in our
employees. It is with this in mind that we support initiatives by our operations personnel in a
wide range of charitable projects involving low income families, orphanages and other deserving
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sections of the local communities that we serve. In year 2005, PLUS BHD got a very seldom
chance to lend helping hand to the Tsunami victims. The fact is that this Tsunami is natural
disaster happen only once every 1000years! Sometimes PLUS BHD chooses activity based
community services to portray their CSR hallmark. During heavy rain season, PLUS BHD will
send the voluntary teams played their part in organizing relief efforts to flood the victims by
providing equipment and supplying manpower to assist with cleaning up activities PLUS
stakeholder participations in activities based CSR can also be found programme such as the
"Kembara Bersama PLUS" Edu-Fun programme which brought together underprivileged school
children from rural areas for an educational and recreational field trip to Kuala Lumpur. PLUS
BHD make their status known amongst the community by sponsoring free daily newspapers for
30 schools along the PLUS expressways as dynamic and maximize the positive ramifications of
their capital donation. The Company also give back to the community in term of donations for
example in 2006 the company brought cheer to University Malaya Medical Centre's Oncology
Pediatric Unit when it presented RM20,000 and gifts to the unit at the annual get-together for
ward staff, patients and their families.
Again social contribution activities were reported in year 2006 with some additional
educational programme launched during the year was the Kembara Bersama PLUS@EduSafe as
well as PLUS@EduClean Campaign which hopes to instill road safety awareness and labour
importance of hygiene respectively among children through educational games and interactive
workshops.
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Since a growing trend in philanthropy is to engage several company resources in
supporting a cause and to work closely with academic centers in using those resources wisely .
Tripartite CSR partnerships between PLUS BHD, academic centers, and NGOs are often the
most effective way for fund raising and public relations .Evidences, jointly organized by PLUS
BHD and UMMC (an academic center), the social gathering of patients, families, friends and
hospital staff has become an annual event in which children with cancer are given a special treat
to lift their spirits.
Reconciling a painful past (due to dust and noise during highway construction) with a hopeful
future PLUS BHD company provides business opportunities for communities living near our
expressway facilities. They provide affordable rental rates and continuous training on food
preparation, hygiene and customer service to local entrepreneurs.
3.1 Sustainable development banner of PLUS BHD
It would be meaningful to GLCs when CSR is integral to the heart of their strategy. There
are four broad areas in GLCs where CSR can make a difference. These are taking the lead in
tackling social issues, providing stewardship to environment, being employer of choice and
fighting corruption (Tan, 2005). Narrowing down out scope to PLUS BHD, it is not a surprise to
notice that the group subscribes to the principles of sustainable development which underline all
our activities and decision-making (PLUS corporate statement, 2007).Plus BHD promotes
sustainability CSR through environment stewardship programme for example PLUS BHD
involvement in United Nation Environment Programme in this region, PLUS marketing and
corporate communication general manager Khalilah Mohd Talhah as quoted We will ensure that
the greenery along the North-South Expressway is maintained. So far, we have planted a lot of
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trees as a way to maintain the greenery and preserve the environment In addition, the company
realizes the importance of caring for the environment. We have adopted a comprehensive
environmental strategy that includes establishing an environmental management system. This
will allow thorough and efficient monitoring and control of all expressway activities that interact
with the environment, including the treatment of waste water produced at our RSAs.
3.2 Human capital Development
The company has always reveled in its role as a provider of the infrastructure necessary
for economic development, but it also values the opportunity to contribute to society in more
direct and personal ways. Towards this end, job opportunities have been extended to people with
disabilities and we have embarked on an executive development programme, taking a number of
fresh graduates on board to equip them with skills that will enhance their employability. Pipeline
development has become of PLUS BHD de facto for sustainable growth.
4.0 Critical views of PLUSs CSR practices
Table 3
CSR Strategy Matrix
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Source: Jeremy Galbreath, 2006 article on corporate social responsibility strategy: strategic
options, global considerations
At maximum, PLUS BHD is successful in sounding CSR statements in their annual
report. The intention is clearly stated in the one of the annual report as quoted to raise the
awareness of CSR to integrate the practice of CSR as part of the way they work and think (care
for environment in which they operate). PLUS BHD has shifted from 100% profit driven to
altruistic to strategic philanthropy. Strategic philanthropy describes practices through which
companies align charitable activities such as donations and volunteerism with a social issue or
cause that supports their business objectives. Thinking about giving strategically (financially,
through in-kind donations, and with volunteers) means considering the value added to your
business through philanthropic initiatives as defined by the Boston College Center for Corporate
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Citizenship. Due to so much financial support from government through compensations and tax
deduction, PLUS BHD group do not just give donations to cater the need charity groups they
might also engaging in reciprocal type of CSR practices(see table 1) as seen through their public
relations, partnerships and sponsorships. Likewise, as an exchange and a listed company, PLUS
BHD is in a unique position to face the challenge that CSR poses both from a commercial and
national standpoint. I can see that their CSR activities aligned with national aspiration and
policies. For example, government support for road safety campaign has become catalyst to
PLUS BHD to perform road safety education campaigns etc.
From SD lens, PLUS BHD really is contributing toward economy development to the
nation by connecting north and south regions. They provide many jobs to Malaysian. They pay
huge amount of tax. PLUS BHD also put their effort to contribute to social development of the
new generation through many joint partnerships with NGOs and Academic entities. PLUS BHD
also catalyzing CSR for sustainability through lands acquisitions has speed up the government
aspiration to modernize rural and remote areas triggered up for new township and many industrial
estates. The highway developments have those socio-economic impacts which both been visible
and tangible for example their land acquisition boosting new mega project development such as
Iskandariah region located in south Malaysia. Do you think government will open up Iskandariah
region if no expressways nearby?
CSR might not appear to be related to PLUS BHD profitability in the same period but
some evidences suggests that it might be related to lag profit. Evidence one, PLUS BHD received
government compensation for not increasing the toll, is RM1.1billion to RM1.4billion yearly
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from 2004 to 2007.Indirecty this would increase the discretionary resources for charitable
purpose. Evidence two, PLUS BHD also planted Tectona Grandis trees or in Malaysian word
they call Pokok Jati alongside the north south highway .Just imagine the profits they can gain
out of this lag profit in case PLUS cut down the trees in future time. Maybe they plan to harvest
them before the concession end because scientifically the longer the trees live the better the
quality.
Many firms have provided examples of CSR actions, yet there are questions relating to
ulterior motive and the scope of CSR activities these companies indulge in. Close scrutiny of
these CSR actions and the related propaganda by the firms provide evidence for profit
maximization. The verbatim point of PLUS mad rush for profits at the expense of corporate
social responsibility as seen by the latest imposition for fines for motorists who drive too slowly
or spend too much time in the highway should be punished severely, PLUS has shown no
corporate social responsibility. Hence, in order to refute bad image for primacy of profit over
social welfare, PLUS BHD must make sure accountability and legitimacy proving they really
engage in CSR with pure altruism, genuine commitment to society devoid of profit motives.
PLUS BHD owes an accountability report to the public convince that such toll hike and road fine
is absolutely necessary and justifiable. Many doubt the reliability and efficiency of Plus
emergency units in handling accidents in broad daylight let alone past midnight it should give
the 10% discount irrespective of the time of travel. This, then, will not endanger the lives of
Malaysians and so on.
To me PLUS BHD is slightly profit driven, but it is not going to maintain that way for a
long time period as the cash cow concession for PLUS BHD will only valid only for 50 years
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before government can have full ownership. Having full ownership meaning government can
reduce toll tax, if thats true fact, and then we may say PLUS BHD is practicing shareholder
strategy (see Table 1) because the short time frame seems valid here. However, some readers
might say that 50 years is a long time frame period thus PLUS BHD might practicing altruistic
strategy by giving back to community in term of check-book philanthropy(see table 1). To
some readers PLUS BHD perform both previous strategies plus reciprocal strategy (see table 1)
which is measured through public relations, sponsorships, community activities and volunteering
etc. I argue that PLUS BHD is matured enough that they engage in citizenship strategy. They
should consider gear up from strategic CSR to Strategic CR.
5.0 Suggestions to improve PLUS CSR engagements and CS reporting.
PLUS BHD could include in their annual report the CSR indicators that they are currently
using to measure their CSR performance. PLUS BHD should embrace in both their strategic and
operation CSR. Companies should develop clear performance metrics to measure the impact of
their CSR strategies. These metrics should be both internal metrics like reputation improvements,
gains in market share, brand perception, increased sales, decreased operational expenditures, and
employee satisfaction, as well as external metrics focused on society and the environment.
Because of the diversity of stakeholder groups to whom accountability is required it is important
to suggest how that accountability can be delivered namely fiscal accountability making sure the
money has been spent as agreed, according to the appropriate rules; Programme accountability
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(providing assurance that the charity is effective in achieving results intended); as well as
Accountability for priorities (fulfilling user needs appropriately) and Process accountability
(ensuring proper procedures have been followed to provide value for money) as suggested by
Hayes (1996).
PLUS BHD should provide standalone CSR and publish in detail their CS reporting
through corporate website. They also must introduce key Performance Indicator (KPI) to
standardize performance of the work might it be during construction, operation or maintenance
done. Regulatory bodies such Bursa and SC should act as watchdog to government BOT projects
and other type of governmental privatization projects and ICR Malaysia can become government
arm to give advices to the Malaysia government about best CSR practices.
6.0 Conclusion
Malaysia ex-Prime Minister Tun Dr. Mahathir Mohammeds vision 2020 and
modernization concept shaped a new rhetoric around local corporations in middle 80s. An
advantage local corporations have over the government seeking modernization is that different
corporations can offer different types of market altruism to different people. The forces of
modernization have further emphasized of several BOT projects such as National car project
SAGA and PLUS expressways. The Government of Malaysia has long recognized the need for
an efficient and safe expressway to link the major towns and ports to accelerate economic growth
in the light of the overall development plans. Fortunately, Malaysian government managed to get
private company management and capital to source Malaysias first super highway known as
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NSE. The North-South Expressway (NSE) is the mother of all unfair privatizations in Malaysia
claimed Lim Kit Siang, the ex-opposition leader. Without intention to elaborate more on his
statement hardly any trade unionist in our country knew anything about the concept of
privatisation until Dr Mahathir Mohamad started talking about it after he became the Prime
Minister in July 1981. A three-day seminar was held in 1983 in which Mahathir delivered the
keynote address. He said that privatisation would improve efficiency and transparency. As the
PM, he also gave an assurance of open tenders, which, of course, he never ever practiced. The
demerits of privatization (2007).
The first open tender in Malaysia was on BOT highway project, The PLUS. The project was
granted to UEM. Many know that this BOT is one way of privatization which gives some control
to the Malaysia government.
Similar to privatization sudden trigger, was establishment of the GLCs. GLC concept was Tuns
creative way reacting to proponent of CSR like fighting corruption and improving human right of
civil service workers (see global compact principles). He used the power of government through
these GLCs to open up the market and break down the de facto monopolies then in existence. The
role played by his GLCs is a far cry from corruption-ridden variety in existence today.
Since then, Malaysia has become a leader in Corporate Governance (GC) and later Corporate
Social Responsibility (CSR) not just in ASIA but also around the world. The foundations of this
success have been laid by a number of key initiatives including the Putrajaya Committee for GLC
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Transformation, the CSR reporting requirements for PLCs and a range of tax incentives aimed at
promoting sustainable investment in environmental, social and governance activities.
In motivation to understand and report real CSR practices by local company, the case
study was looking at the CSR practices by PLUS BHD aiming for clear picture of how private
company is responsible to their business operation. Wholly owned by Khazanah and UEM, PLUS
BHD is expected to fulfill Khazanah silver book and the latest CSD requirement by security
commission of Malaysia Bursa. From the content analysis of the annual reports from year 2005 to
2007, we can found many evidences CSR strategies manipulated by them.
Prior to that, in literature review reader can find about classic views and framework on
CSR.CSR philosophy and CSR development in Malaysia also touched. Previous researches on
Corporate Social Disclosure were also highlighted.I also did critique the current CSR practices
Towards the end I gave some suggestions for PLUS BHD to look into strategize and
operationalize their CSR activities so that they can better results.
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