Status of IPD initiative on CSR

Investment Promotion DepartmentMme Thavichanh ThiengthepvongsaDeputy Director General

1. Overview

• Introduction of the economic reform process in 1986 under the New Economic Mechanism “NEM”

• CSR is one of the important topics discussed in Laos.

• Laos pursues its economic development based on its national potential and comparative advantage with regard to the country’s obligations and commitments under treaties and general international law.

• The Government realizes that the State has the primary responsibility to promote and to protect the environment.

• Other players such as the private sector also has an important role to play to promote CSR

Lao PDR’s macroeconomic framework is encapsulated within the five-year National Socio-economic Development Plans (NSEDP). The NSEDP lays out the broad goals and economic targets for five year timeframes. The 8th NSEDP for 2016-2020 sets forth the aim to achieve sustainable economic growth and reduce poverty (and inequality):

– The National Socio-Economic Development Plan (NSEDP) 2016-2020: targets at least 7,5% annual GDP growth, 55 - 57% will be from private investments.

– Investment sectors cover 30% of GDP (223 Billion kip)

– Average 3,217 $ Per Capita Income in 2020

2. CSR Policies and Legislation

• the National Constitution and several laws adopted by the National Assembly; sub-laws, decrees and policies adopted by the Government.

• the Law on Environment Protection, the Law on Investment Promotion, the Law on Mining, the Law on Electricity, the Law on Forestry, the Law on Agriculture, the Law on Water and Water Resources, Law on Labour, the Law on Enterprises and the Prime Minister’s Decree N.192 on Compensation for the Affected People by Development Projects.

• Laos is a party to several treaties in the field of environmental protection, biodiversity and labour standards.

• Laos has signed Agreements on the Promotion and Mutually Protection of Investments, which have due regard to the protection of environment.

• Development projects and concession agreements signed by the Government and investors include terms and conditions related to mitigation of environmental and social impacts.

3. Key Drivers and Priorities for CSR

• The main driving force for CSR in Laos is public and investment policies, laws, social and environmental norms.

• Currently CSR is still at an early development in Laos and it is yet to meet the expectations and needs of the society.

4.Degree of Public Awareness on CSR

• Awareness of CSR is being widespread.• CSR-related activities are of common public

knowledge but they are understood as concepts in and of themselves and not within the CSR context.

• There are occasional printing media that publish articles mentioning about CSR.

International Law Forum on CSR12 March 2012, Vientiane, Lao PDR

5. Status of CSR Core Subjects1. Governance

• The Government has taken steps to make its public administration simple, rational and efficient.

• The reform in the governance sector is to ensure a transparent, accountable and participatory system in providing better public services to the people.

• Improvements in the rule of law include further work on the Legal Sector Master Plan (LSMP), with the introduction of new regulations, implementation mechanisms and capacities by the Ministry of Justice.

2. Business Practices• Applications of CSR have been sparse and

limited in scope.• The most common programs are to address

health and safety issues of the company staff, education and training for staff and communities and environment protection.

• Some companies apply CSR mostly in the social dimension such as giving scholarships, supporting communities or school activities such as sports and arts.

• Some companies sponsor traditional events such as festivals, Lao New Year, Children’s Day, Lao National Day, etc.

• Lao National Chamber of Commerce and Industry (LNCCI) represents the business community in the country. It is the nexus between state and private enterprises and represents employers, groups and joint ventures across all organizations that have been established under the laws of Lao PDR.

• Dialogues among the LNCCI, other business associations and the Government are facilitated through the Lao Business Forum, which was established in 2005.

3. Environment• The Government has developed a Natural Resources

and Environment Sector Plan 2011-2015 and an associated Action Plan, National Strategy on Environment to the Years 2020, a National Climate Change Strategy, a National Adaptation Plan of Action and a National Water Resources Strategy 2011-2020, Environment Protection Law.

• Lao PDR is a State party to a number of important multilateral environmental agreements and implements them in good faith.

• The national socio-economic development needs to take due regard to the protection of the environment to ensure sustainable development for the present and future Lao generations.

• The Ministry of Natural Resources and Environment has set up a Department on Assessment of Social and Environmental Impacts of Development Projects. This Department plays a crucial role to streamline developmental issues with the need to protect the environment.

5. Labour Policies• The Lao PDR has ratified a number of ILO Conventions

related to international labour standards and norms which are most directly related to CSR.

• Labour Law, Law on Trade Union, Law on Investment Promotion to guarantee fulfilment of the rights at work in accordance with international human rights instruments.

• the country is discussing on drafting law on labour disputes

management/settlement which will have much impact on the promotion of CSR in the future.

7. Education on CSR

• CSR is a familiar topic in educational institutions such as universities and colleges.

• Law schools have started to develop their needs to duly include the subject of CSR.

8. Main Challenges on CSR

• lack of specific policy on CSR• limited of understanding and awareness of

CSR is not widely known• limited companies’ budget to implement CSR

9. Best Practices

Example of companies practicing CSR

• Lao Brewery Company Limited• Sinouk Coffee Company• Nam Theun 2 Power Company• Minerals and Metals Group (MMG)

Conclusion

• CSR is still at an early development in Laos• CSR is considered as philanthropy, charity or

policy• Need more awareness and education on CSR• Need more regulatory framework and

enforcement

3-8th November 2014

13 participants from IPD/MPI, DPI and GIZ staff from Sayaboury, Luang namtha and Attapeu provinces.

Organizer: TLCA- Thai Listed Companies Association.

Learning CSR from Neighboring Country -Thailand

Learned CSR from: TLCA- Thai Listed Companies Association, Thaipat institute, Banpu company, Mitr Phol Sugar Group, Community development project in Rayong of PTT group, Eastern Water and Feed Mill and Food Processing Plant CP Group.

Learning CSR from Neighboring Country -Thailand

Shared lessons learned/reports from the trip with high authorities (DPI, vice governor and department concerned and investor) in investment forum and discuss further on possible implementation in local context of each province.

Checked the vision, mission and record of companies related to CSR, CSR in process and after process of companies.

Included CSR elements in investment monitoring. Conducted exchange day between investors and

communities in Khammouane, Sayaboury, Houaphan.

After the Exposure Trip

2015: 109 Investment Projectsin Luang Namtha, Houaphan, Sayaboury & Khammouane

Hearing from Investors on the business implementation

Investment Aftercare Activity

Investment Aftercare Activity

Hearing feedback of communities surrounding

investment projects

Site Visit

See Reality

Banana Plantation - LuangNamtha

ໂຮງງານແປ້6ງມັ8ນຕົ້:6ນທີ່<=ສ້6າງອ່=າງບຳAາບຳ8ດ

ນA6າເສ້ຍທີ່<=ບຳA=ໄດ6ມັາດຖານWater Treatment of Cassava Factory

ໂຮງງານໄມັ6ອ່8ດທີ່<=ໃຊ້6ແຮງງານເດ8ກChild Labor

in Plywood Factory

MoU Signing with investorsfor business performance,

Khammouane Province

ກະກຽມັຊ້Qມັຊ້:ນCommunity Preparation

Hearing Voices of Communities,

Sayaboury Province

ວັ8ນພົ:ບຳປ້ະລະຫວັ=າງນ8ກລ:ງທີ່Wນ & ຊ້Qມັຊ້:ນ

Exchange Day Between Investors & Communities

Community Preparation

Exchange Day Between Investors & Communities

in Mahaxay district,Khammouane

Exchange Day Between Investors & Communities

Agreement between Investors & Communities

Exchange Day Between Investors & Communities

Exchange Day Between Investors & Communities

Cement Factory, Khammouane Province

Thank you