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Commentary: Responsible investment requires more than a few CSR programs: Lessons for Chinese Outbound Investors

Author: Jinmei Liu, EarthRights International, Published on: 14 May 2017

"Responsible Investment Requires More than a Few Corporate Social Responsibility Programs: Lessons for Chinese Outbound Investors", 4 May 2017

…Chinese investors…must understand that the meaning of responsible investment is much more than a few corporate social responsibility (CSR) programs.For the China-Myanmar oil and gas pipelines project, CNPC…has spent lavishly on CSR programs, which includes building schools and clinics in communities and bringing electricity to the community…but due to a lack of doctors, nurses, and medicine, the benefits to local communities are very limited…[T]he project [itself] has had tremendous negative environmental and social costs on the local communities along the pipeline route… More than 100 villages have been affected. [T]he most significant issue generally, concerns land…Myanmar China Pipeline Watch Committee and other local civil society organizations (CSOs) along the pipeline have tried to meet with the representatives of CNPC based in Mandalay many times, but had been rejected for different reasons. Recently, there have been regular meetings due to the election of NLD. Difficulties in engagement and communication are common problems with Chinese investors.

 ...Andes Petroleum Ecuador Ltd. [joint-venture of CNPC & SINOPEC]…operates in [Ecuador] Andes Petroleum signed an exploration and development contract for two more oil blocks…[which] overlap with the territory of the Sápara indigenous people...The indigenous people in this region are strongly opposed to any plans for oil development and vow to resist and stop these projects…According to the CNPC, it commits to “obeying the laws and regulations of the countries where we operate and fully respecting local customs…”…[but the company’s] site lacks information about each project the company operates, the corporate structure and board members, or even general updates.

…As these two projects in Myanmar and Ecuador demonstrate, for Chinese investors, CSR translates to building schools and clinics and giving donations. But this is insufficient. Both projects discussed in this post have conducted CSR programs but have largely ignored more pressing issues, such as land compensation, safety concerns, environmental issues, indigenous rights, transparency, and climate change. 

…We strongly suggest that CNPC…adopt and operationalize policies and grievance mechanisms that meet the UN Guiding Principles. This would be a powerful indicator that CNPC takes seriously its role as a responsible international investor, and would go much further than its limited CSR programs have.

Read the full post here

Related companies: Andes Petroleum (joint venture CNPC & Sinopec) China National Petroleum Corporation (CNPC) Sinopec