Minority Chief Whip calls for mandatory CSR law to drive sustainable development

The Minority Chief Whip has called for a national Corporate Social Responsibility (CSR) law in Parliament.

He is the Nsawam Adoagyiri legislator. He believes that voluntary CSR efforts in Ghana have caused inconsistencies and missed opportunities for development.

On March 27, he argued that Ghana needs a structured CSR policy. This policy should hold corporations accountable for their social, economic, and environmental impacts.

"Corporate Social Responsibility is not just charity; it’s an ethical obligation," he stated. He emphasized that businesses must operate sustainably and contribute to society.

Globally, CSR is seen as a strategic necessity. It promotes economic growth, social equity, and environmental sustainability. However, Ghana has not fully utilized its potential in this area.

The MP provided examples of successful CSR frameworks worldwide. He mentioned India’s Companies Act of 2013, which requires large corporations to spend on CSR initiatives. This has led to increased investments in social programs.

In South Africa, the Broad-Based Black Economic Empowerment (B-BBEE) Act has fostered inclusive growth. It raised black ownership of companies from 1.9% in 2001 to 23.3% in 2019 and created over 500,000 jobs.

Countries like Nigeria, Kenya, Brazil, and Denmark also have regulatory frameworks for corporate accountability and social investments.

Despite some progress, Ghana lacks a standardized CSR framework. The Ghana Chamber of Mines reported that the mining sector spent over GH¢1.4 billion ($230 million) on CSR initiatives in 2020.

This was an increase from GH¢1.1 billion ($180 million) in 2019. However, these efforts are mostly voluntary with no mandatory reporting requirements for transparency.

"The absence of a national CSR policy leads to fragmented approaches," he said. Companies often implement sporadic initiatives instead of integrating CSR into their core strategies.

CSR should be fundamental to corporate governance—not an afterthought or public relations exercise," he stressed further.

He criticized weak enforcement mechanisms within Ghana's regulatory environment as well. According to the Ghana Chamber of Mines, 60% of mining companies did not undergo regulatory inspections last year.

A report from the Ghana Environmental Protection Agency revealed that the maximum penalty for corporate environmental violations is only GH¢10,000 ($1,700). He described this amount as "woefully inadequate" to deter violations.

Citing the World Business Council for Sustainable Development (WBCSD), he noted that Ghana ranks 114th out of 129 countries in stakeholder engagement. This highlights the need for structured regulations to improve corporate-community relations.

To address these issues, he proposed several legislative measures:

1. **Mandatory CSR Reporting**: Corporations should legally disclose their CSR activities and financial commitments.

2. **Standardized CSR Frameworks**: Establish clear benchmarks across all industries for uniformity.

3. **Stronger Enforcement Mechanisms**: Empower regulatory bodies with stricter penalties for non-compliance.

4. **Stakeholder Engagement Requirements**: Corporations must consult local communities about their CSR initiatives.

"A national CSR law is urgent," he concluded. It will ensure corporate contributions become structured investments in national development rather than mere goodwill gestures.

His call emphasizes the need for corporate accountability in Ghana and aims to align CSR initiatives with sustainable economic and social progress.