Challenges of CSR in Africa: Assessing the Practice under the Voluntary and Mandatory Provisions

Abstract

This chapter discusses the concept of Corporate Social Responsibility (CSR) under the voluntary and mandatory provisions covering the practice in Africa. The study aims to assess how the concept can overcome the challenges of CSR, through legislation. CSR originated in the West as voluntary, where Northern businesses have prioritized shareholders’ interests, overlooking stakeholders. The arrival of some Northern multinationals in Africa has revealed corporate governance deficits, pushing some African governments to regulate the practice whose voluntary approach was no longer tenable. Past CSR projects have been deemed as a failure due to the development of a pyramid whose implementation in Africa remains problematic. All this provides challenges to the practice and hence the assessment of the practice. Previous studies have assessed CSR but mostly under the voluntary dimension, which remains common. This study looks further at the issue with existing provisions, which seem to be part of the major developments by African organizations on CSR. Key findings reveal that national action plans developed by some countries using the voluntary approach to conduct their CSR are unproductive, while the mandatory approach seems to be the desirable step, looking at countries with legislation. A qualitative inquiry provides recommendations.

1. Introduction

Corporate Social Responsibility (CSR) has developed as a voluntary practice [1] in the West. The practice focuses on business societal responsibilities that involve responsibilities towards local communities and society at large [2]. However, the mandatory approach to it has recently emerged, especially in the developing world, which has made the practice regarded as an obligation towards the society [3]. This latter aspect is of interest of this study attempting to discuss the legal frameworks in Africa of CSR, that remains dominated by voluntary actions.

As such, philanthropic activities have been most of the projects Northern businesses have been involved in [4]. These are school renovation or social service facilities to support the vulnerable (the elderly, women, and children) as supported by Archie Carroll’s CSR Pyramid, widely used by businesses, worldwide. This is a description of the practice. Philanthropy dates to the eighteenth century when the idea of businesses was to help the poor with the objective of reducing poverty ([5], p. 39). This trend of businesses advocating good causes was the motive of why philanthropy grew out of CSR and that was enough for them to claim some legitimacy. It is in that perspective that Northern businesses, in the aftermath of globalization in the 1990s, thought of pursuing the practice in the global South and particularly in Africa, a region that drew attention for its mineral resources. Back then, CSR faced two main issues: corporate scandals along with the absence of corporate governance (CG) regulation at the global level [6] and the understanding of the practice by Africans, who regulated it. That regulation (mandatory CSR) was based on their CSR understanding. Hence the reason for assessing the practice.

The above idea of CG and CSR understanding by Africans questioned the validity of voluntary CSR, prompting some scholars such as Wayne Visser [7] or Denise Baden [8] to revisit Archie Carroll’s popular model and develop their own to adjust to the realities of the global South and Africa. Africans understanding was to regulate and fix problems brought by the voluntary CSR such as HR abuses. That understanding led to the current provisions covering CSR as well as the developmental objectives ([9], p. 332) pursued by some African governments and to which mandatory CSR can contribute. This contribution expected by businesses is part of their new role, which is inclusive ([10], p. 43). This means, considering not only the interests of shareholders but stakeholders, as stated in the laws. The research question is therefore whether voluntary CSR has had any impact and why mandatory is the desirable pathway.

It is therefore important to assess CSR issues and challenges under the voluntary and whether mandatory has led to a significant impact. An attempt at this area of research has been addressed by scholars mentioned above although little has been said about CSR assessment within the confines of the existing provisions. Assessing CSR is common in the CSR literature due to the development and importance of practice, but the novelty is to assess it based on the existing laws which were established as a result of growing expectations of various stakeholders.

These expectations and standards, expressed by stakeholders are considered to be fair and just [3] calling for the ethical consideration of businesses in their practice [8]. These further arguments give motives for the assessment of the practice in Africa, with specific case studies.

To have a more granular understanding of the development of CSR from the North to the South, the following literature is suggested: the first section of this chapter after the introduction includes the historical perspective of the global movement of CSR drawing on Carroll’s CSR Pyramid, its influence on today’s businesses as well as its inadequacies for CSR in Africa. The same section will highlight the contribution of global bodies in the CSR evolution. Secondly, the development of CSR in Africa and their stance of the practice. Thirdly, NAPs will be displayed by countries using voluntary CSR in Africa, with the related problems. The penultimate section will discuss countries having adopted mandatory CSR, its benefits and challenges drawn from that, before giving reasons for the direction to take regarding both aspects of CSR, in the conclusion.

2. Literature review on the global movement on CSR: historical perspective

This section presents an in-depth literature review and discussion on CSR, and its emergence as a global trend that involves global bodies, states, and civil society organizations. The section will highlight the development of the practice, which began in the West, and its implementation by Western businesses, including their branches outside their countries, as part of the globalization process. This development and practice were carried out without any compass for businesses, at the managerial level. That is why, after history and development, discussing the Archie Carroll Pyramid is fundamental because the framework the author suggested has had an influence on modern businesses in their CSR conduct until today. The global bodies which have shaped and proposed tools for CSR will be discussed. In the implementation of the practice as part of its development process, abuses by businesses were revealed and led to what’s called ‘Business and Human Rights’, a movement that sums up this section on the history development of CSR.

2.1 Introduction to CSR and its major developments

There is a consensus among CSR scholars that most literature on the practice is found in the West [11] and in the developing countries, it has developed, mostly in the 1990s, following corporate globalization [12]. Back then, businesses, in particular those heading to Africa were in search of rare natural resources. But the practice originated well-before.

Indeed, the notion of corporations as social enterprises can be traced back to the eighteenth century with the Christian religious philosophy [13]. Back then, there was scrutiny of corporate conduct that had to build hospitals and homes for orphanages, and the old. That was a time when social context was regarded as a response to the moral failure of society, but the early days of corporate conduct and its societal expectations are known in the twentieth century.

Undeniably, the 1950s and 1960s signaled the modern era of CSR with Howard Bowen who offered a definitional approach to CSR. He believed that corporations had so much power that they had to fulfill their social responsibilities. He defined social responsibilities as [the obligations of businessmen to pursue those policies, to make those decisions, or to follow those lines of action which are desirable in terms of the objectives and values of our society] ([14], p. 6). For Bowen, business decisions affect their stakeholders and have an impact on the quality of life of society as a whole [14]. Stakeholders because valuing them gives businesses an edge over their competitors [15].

The subsequent years have seen a change in attitude towards the discourse around CSR and more business implications directed to their stakeholders, for example in the 1970s. Literature on stakeholder engagement, which is a significant part of CSR and the triple bottom line¹ is offered by various academics and global bodies. While the rise of the stakeholder approach continued in the 1980s with the Bruntland Report² and operationalization of CSR, giving a broader set of responsibilities to corporations, the government’s role in regulating corporate behavior diminished.

As a result of the growing role of corporations, the CSR pyramid was developed by Archie Carroll. This was in response to the initial query by Bowen regarding what those business responsibilities are to the broad society.

Globalization came in the 1990s and the practice interest worldwide grew and was the subject of various discussions during international events. Some of them were the creation of the European Environment Agency (1990) and the UN Summit on the Environment and Development held in Rio de Janeiro (1992) which led to the Rio Declaration on Environment and Development.

The various NGOs used the above global events to air their grievances regarding business scandals, whose global reach increased during the globalization process of the 1990s and during which various stakeholders suffered from their actions [17], without any regulatory tools in place such as human rights jurisdictions [6].

As a result of the above, the United Nations came up with the Global Compact, directed to businesses. The decade of the 2000s that was the recognition and implementation of CSR saw multinational corporations and their actions being scrutinized worldwide. Also, the Millennium Development Goals (MDGs) with the private sector having to contribute to achieving the goals. The most important in that decade was the movement of Business and Human Rights, in particular the role played by the United Nations Guiding Principles on Business and Human Rights [18].

The decades from 2010 to date have broadened the CSR literature to the issues of Environmental, Social, and Governance (ESG), the political CSR developed by Scherer and Palazzo [19], and finally, the Strategic Approach to the practice, advanced by Chandler and Werther.

In the historical perspective of the global movement of CSR, two key highlights can be pointed out: the Brundtland Report in the 1980s and the constant change or dynamism of the practice in the global North.

The 1987 Brundtland Report emphasized two main concepts: sustainable development and CSR. The report which was produced by the UN Commission on Environment and Development had to find a trade-off between economic growth and natural resources or the environment [20] and more importantly the impact of economic growth on the social impact, which focuses on CSR. The normative framework³ suggests the goal of CSR practice, undertaken by businesses is to achieve sustainable development, which is more wanted and expected by countries of the global South, Africa in particular, and Western countries where CSR started being developed. The objective of the study is to assess CSR practice from voluntary to mandatory as the practice faces some challenges in Africa.

The second key highlight of the historical perspective of the global movement of CSR is the constant change of CSR in the global North. While the ethical⁴ aspect of the practice is promoted in some parts of Europe, this does not seem to be the case in the USA. Ethics is widely accepted as an obligation of modern businesses in their CSR, which goes beyond earning money for shareholders [22]. It’s concerned with protecting the interests of all stakeholders, such as employees, customers, suppliers, and the communities, where businesses operate. The interplay between society and ethics seems to be obvious but Carroll [4] clearly indicates how important profit remains for shareholders, in his pyramid. As such, the practice as it is conducted in the UK and the US shows how dynamic it has been over the years.

This diversity of Western approaches reveals the complexity of a CSR having to adapt to several contexts and cultures, which brings out the idea of ​​contextualization of the practice. Besides, in July 2001, the European Commission published a green paper to (promote a European framework for CSR). In 2004, ISO organized a conference on CSR and launched a work program with the aim of establishing international standardization. The ISO 26000 standard was launched in November 2010.

Considering the above, some academics have proposed a unique model taking into account local realities. An illustration is the work of Masoud’s international CSR model that acknowledges a transition from the early concept of CSR which focused on economic responsibilities to one that acknowledges local, legal, ethical, and philanthropic responsibilities, and thus allows a holistic approach to social responsibility practices in different countries [23]. This is important for this study because part of the CSR challenges has to do with contextualization by Western businesses operating in Africa. CSR has been mainly conducted by MNCs, under the voluntary system and it is now indispensable to examine whether MNCs, using the model put in place by Archie Carroll to execute their voluntary CSR have been effective and spared from critics.

2.2 Classical idea developed by Archie Carroll

Archie Carroll came up with a pyramid to bring more clarity to the CSR field that lacked a clear definition [21]. The model that was developed, although revised for updating by some scholars and professionals to meet new demands, remains the most used and influential to date. The author’s grasping of stakeholder engagement is found in the fourth layer of the pyramid, explained in the subsequent paragraphs. He suggested four pillars:

Economic responsibilities: the most important which consists of business organizations being profitable.

Legal responsibilities: according to the law established, if any.

Ethical responsibilities: Avoid harm and do what is right and fair.

Philanthropic responsibilities: Be a good corporate citizen and contribute to improving the community’s quality of life (Figure 1) [4].

Figure 1.

Adapted from Carroll Pyramid for CSR (1991).

The author later admitted that some characteristics of the pyramid were not underscored when initially published and in terms of global applicability and CSR practice [17].

Broadly explained, this model has influenced classical CSR with Western businesses, explained earlier, which has implications for today’s organizations involved in CSR. At the bottom of the pyramid is the profit expected by owner and shareholders, followed by legal duties, if laws are in place. The third pillar is on ethics whereas philanthropy, which is the least significant is the contribution that comes from the profit made by businesses to the stakeholders. This latter pillar, which often indicates businesses are good corporate citizens by using philanthropic actions, remains a common practice for businesses under voluntary CSR. It is also of interest for this study as it provides room for academic and managerial discourse, especially many see it as problematic and no longer applicable.

Discretionary, according to Carroll [21] means not engaging in donations to the communities does not make you liable or does not make you breach any rule. Whether or not this pillar is still consistent with CSR practice despite the laws will be discussed in the third chapter of this paper.

When Carroll established his initial pyramidal depiction of CSR, it was clearly inspired by the US and Anglo-type capitalistic societies in mind given CSR was more a major practice in these liberal societies. Since that time, several writers such as Wayne Visser [7] and Nojeem Amodu [24], all explained in sections 3.4 have revisited and reconstructed Carroll’s pyramid more adapted to developing countries, in particular, Africa.

It is now important to assess how relevant the model appears from the perspective of the mandatory frameworks existing in Africa, where the practice faces challenges of corporate governance.

2.3 Global bodies having shaped CSR/BHR evolution

Although the United Nations remains the most influential body having gathered businesses around to adopt CSR and consider sustainability issues, other bodies such as the EU, the OECD, the WBCSD, and CSR 2.0,⁵ promote the concept and offer practical approaches to the practice.

2.3.1 European perspective on stakeholder engagement

The European Commission’s approach to CSR is for businesses to have an inclusive method for a diversity of available stakeholders regarding CSR [1]. Businesses adopt a multi-stakeholder approach. This implies the creation of open platforms for exchanging ideas and best practices during collaboration with stakeholders.

The idea of the European Union on CSR is the belief that the practice is good for companies. The organization considers that CSR is an asset for Europe’s economy and society since it stands for more stability, sustainability, and innovation. In that sense, in their reports, they disclose information on their strategies in the fields of the environment, social and worker concerns, human rights, the fight against corruption, and boardroom diversity. This is to show openness and inclusion in the practice.

In this context, the Commission recently introduced a European due diligence⁶ standard for companies because they believe in the participatory and inclusive approach that considers aspects such as the protection of human rights in global supply chains.

Although some states have a legislative framework, CSR remains widely voluntary in Europe, according to a research paper which assesses national CSR policies and legislations within selected member States which are France, Germany, Italy, the Netherlands, Poland, and Spain [25]. While the paper queried whether voluntary measures were sufficient, their understanding of CSR, can be found in the European Commission’s definition⁷ of CSR, as a voluntary approach being pervasive across the continent.

The European case is important because not only it belongs to the classical or mainstream CSR, but Europe is arguably the most important economy worldwide. It is home to the largest multinationals in the world ([26], p. 106) with operations in Africa. As such, it makes sense to understand their approach to the voluntary and mandatory CSR, which is applicable to their business branches, affiliates, or partners in Africa, and offer a better understanding of challenges around CSR in Africa.

2.3.2 Organization for economic co-operation and development

The OECD is an international organization that drives policies for better lives. Their goal is to shape policies that foster prosperity, and well-being for all. As a policy organ,⁸ they recommend economic and development issues to their members, whether states or businesses regarding corporate governance and CSR [27]. Talking about CSR, their belief is that it contributes to economic, environmental, and social progress with a view to achieving sustainable development. According to the OECD, corporate governance targets multinationals, and the organization has outlined some principles that cover areas such as the rights of shareholders; the role of stakeholders in governance; disclosure and transparency; etc. All this is included in an effective corporate governance framework.

OECD supports voluntary initiatives and the policy approach to CSR appears to be less frequent for the member states. For the OECD, the role of government is to assess the quality of the corporate governance framework and develop more detailed voluntary⁹ provisions.

As the OECD has shaped the CSR practice at the managerial level over the years, the gist of their guidelines, targeted at MNEs, expected those big businesses to take fully into account established policies in the countries in which they operate ([28], p. 11). Specific emphasis of the guidelines linked to CSR is transparency, human rights issues, monitoring, and verification adhered to by countries that were to develop national action plans (NAP). Some countries in Africa have developed NAPs such as Kenya in 2019 ([24], p. 103) while others (Morocco, Mozambique, Nigeria, South Africa, and Zambia) have committed to producing them. Some of the above countries will be discussed in the subsequent sections.

2.3.3 World business council for sustainable development

The World Business Council for Sustainable Development (WBCSD) is a union of the Business Council for Sustainable Development and the World Industry Council for the Environment created in 1995 with the objective of creating a sustainable future for businesses, society, and the environment.

In line with CSR, their stance on the practice is for businesses to have a collaborative approach involving local authorities, civil society, communities, and academia. In a word, having an integrated plan that includes the broader stakeholder group, is key to achieving sustainable development.

As such, they define CSR as [the continuing commitment by business to behave ethically …. while improving the quality of life of the workforce and their families as well as of the local community and society at large] [29].

From the above definition, it appears the council broadens the interests of shareholders by adopting an inclusive approach to stakeholders while the practice is voluntary [29]. Despite the voluntary nature of CSR, the WBCSD considers investment by businesses to gain legitimacy in society, given they have the potential to generate wealth.

2.3.4 United Nations guiding principles on business and human rights

The Guiding Principles set by the United Nations is an authoritative global statement to date regarding the responsibilities of business with respect to human rights [18]. As such, they are rather in favor of mandatory CSR, by states for which they have recommended guidelines, especially in the Human Rights aspect, having been absent for a long in the CSR literature and implementation.

Therefore, the organization provides grievance mechanisms for individuals affected by businesses, and this is contained in the third pillar of the framework¹⁰ which reveals how important human rights is for CSR assessment. The 31st principle of the guidelines spells out criteria for ensuring the effectiveness of grievance mechanism. The criteria are designed to ensure that business victims, for whom the mechanism is intended are aware of it and are in a position to use it.

While the framework is non-legally binding,¹¹ it encourages states to develop policy tools to protect individuals against corporate abuses, which comes back to mandatory CSR. This is important for this study because, in the current structure of international law,¹² the area of human rights is applicable to states and not businesses [6]. So it is important when assessing CSR in Africa, one looks at the current legislation and the provisions it makes on the issue of human rights, in countries where there is regulation.

Summarizing the global bodies and their perspective on CSR with regards to the voluntary and mandatory approach, it can be said that CSR, influenced by Carroll’s pyramid, has developed under the voluntary regime, which is still widespread in the West with its branches operating in Africa. The mainstream agenda, which remains conducted by Northern actors, usually reflects the priorities of Western societies for their CSR ([31], p. 2). This situation has been contentious and problematic with Western businesses operating in Africa where the practice has not delivered the desired expectations, the continent having its understanding of CSR.

But overall, CSR in the West operates within the confines of the CSR principles and has remained consistent with Carroll’s proposed pyramid. The UNGPs provide the platform for understanding the current CSR challenges when it comes to assessing the concept that remains highly contextual, looking at the historical development of the practice. In that development, human rights have been relegated to the backstage by businesses, yet several abuses have been caused because of the impact of their activities. Hence the rise of the Business and Human Rights movement.

2.3.5 Business and human rights

The reason for the inclusion of Business and Human Rights (BHR) in this study is that in the development of CSR, BHR played a secondary role, yet not only it is important for the CSR practice but it affected individuals, especially in developing countries.

The idea of the governance gap mentioned by Ruggie [6] was in relation to human rights abuses by MNCs, which CSR did address neither in Carroll’s proposed model nor in the conceptualization of the practice by global bodies. BHR debates, in the aftermath of globalization and MNC activities worldwide [32] were frequent in the 1990s and 2000s, a time when academics, states, and businesses had to listen and adhere to the global compact proposed by the UN.

BHR therefore came as a response to the shortcomings of the CSR movement. BHR has been, until the development of various frameworks, the blind spot [33]. Prior to listing the frameworks covering the movement, it is key to remember the various negative effects business activities have had on individuals:

In the Global South, the evidence of harmful events and lack of corporate governance that have discredited MNCs include Reebok’s and Walmart’s operations in India in 2005. Also the involvement of fast-fashion firms in the Rana Plaza accident in Bangladesh in 2014. Both events prompted customers and stakeholder groups to become pickier about the social and environmental effects of business activities.

Still in the Global South but in Africa, with cases in Kenya and Zambia, where some MNC employees were asked to hide, wear protective clothing, or keep their distance from sprayed greenhouses, when controllers and auditors came, for compliance reasons ([34], p. 14). Similar HR violations were signaled in Gabon, South Africa, and Nigeria. This concerns environmental neglect and the clash between local communities and businesses over service delivery empty promises, leading to conflicts [35]. The above situation led to the development of frameworks covering the BHR movement.

The UNGPs came as a result of the BHR movement. Under it, businesses are expected to provide evidence that they do not violate the rights of other stakeholders during their operations ([30], p. 14). If they do, they pay for the damage caused. Specifically, businesses must remedy the situation in line with access to remedies for corporate-related abuse ([30], p. 22). This is broadly explained in the [Protect, Respect and Remedy Framework] [18]; a global framework developed for HR respect by businesses.

Then, there is the Business & Human Rights Resource Centre (BRHRC) which is a UK-based-NGO, founded in 2002. Its mission, as an Implementing and advocacy NGO, is to promote greater awareness and informed discussion of important issues relating to business and human rights.

In the continent, there is the African Business and Human Rights Forum whose mission is to promote responsible business and engagement with key stakeholders, to advance, prevent, mitigate, and remediate business-related human rights abuses in the region for a better corporate governance approach and understanding of BHR.

The organization convenes each year in a forum to bring stakeholders from across Africa to facilitate discussion and exchange to reflect on the importance of local perspectives and solutions in the collective effort to implement the UNGPs in Africa,

Having said all this, it is important to indicate that BHR is part of the challenges of CSR implementation in Africa and an assessment cannot be made without the inclusion of the movement which is part of the CSR development globally.

3. CSR in Africa

This section traces back the CSR migration from the West to Africa. It provides the African understanding of the practice, from the elites to the intended beneficiaries. This is important because it enables us to know whether the message from businesses gets across when it comes to CSR projects. The gist of this is included in the official documents of the African Union and other continental bodies.

CSR has grown in Africa in the last 30 years, especially in 1995, after the World Summit for Social Development in Copenhagen, during which the UN declared the period between 1996 and 2006 the decade for poverty eradication. Businesses had to play a critical role in enabling economic transformation within communities. The challenge was to sustain the development of people and communities.

CSR in Africa has become an important part of business strategy and dominates current debates in the continent as many companies vie to turn out to be corporate citizens. The reason is the new societal expectation placed on businesses that are in search of legitimacy [36]. Very often, across the continent, business practices are rather informal CSR initiatives that involve actions such as charitable activities such as those directed to the communities.

Major areas of CSR are education, social and community development, small business support, training, and skill development, etc. Although they are aligned with CSR core values,¹³ the above practices are far from the Strategic Approach to CSR, advanced by Werther and Chandler [37] in the 2010 Decade and explained earlier in the development of CSR. Rather, the strategic CSR in Africa is conducted by a slim number of businesses. Even those involved in it, use CSR to increase the business’s competitiveness and reputation [38] and not solve social problems for which businesses can create sustainable solutions.

In light of the above, practices of CSR in Africa are mostly dominated by philanthropic activities as businesses understand that interacting with stakeholders ensures the business’s competitiveness and reputation. In a word their brand is known to stakeholders who are more likely to associate themselves with a brand that they consider important ([39], p. 129) from a CSR standpoint.

So having a sense of community relations¹⁴ and customer loyalty are how businesses reach out to the above parties for CSR practices [41]. Has it remained the case in the whole continent? The next section explains how CSR has developed and new challenges faced.

3.1 Advent and development of CSR in Africa

Business’ activities were already prevalent after the colonial period with when MNCs provided housing and hygiene accommodations for their employees [42] even though those ‘CSR activities’ were used as a cover to hide their misuse of the resources of the continent. The above situation was representative of African countries although each country was specific in terms of its characteristics.

Indeed, there is a consensus among scholars that the advent and development of CSR in Africa depend on the specificities and history of each country, unlike the Western countries. As such those scholars highlight the regulating role of the state in the practice [43] because of debates of weak states, lacking the capacity to create the jurisdictions to deal with CSR and business scandals.

It is one of the fundamental arguments of Wayne Visser in the continent’s CSR developmental process. But specifically when assessing and analyzing CSR in Africa, where the challenge has been the failure of the public authorities to defend or protect the general interest [44].

Besides natural resources which were the main reasons for CSR in Africa, global events and two factors have contributed to its advent and development: the 1995 World Summit for Social Development in Copenhagen, the 2002 World Summit on Sustainable Development in Johannesburg, and the 2000 UN Millennium Development Goals.

What all the above summits had in common is poverty eradication which businesses had to play an important part as well as the role of NGOs, which were catalysts in pushing the CSR agenda in Africa. Since then, CSR that was still viewed as ad hoc with philanthropic practices led by businesses started to approach in a more considered way by targeting specifically the communities [45] through concrete projects, especially where authorities were picky in terms of the inclusive approach. The case of BEE in South Africa is an illustration of that change of paradigm where the private sector was to align the government’s identified priorities, included in the provisions or the country’s national action plans.

Besides the above global events that were the ideal platforms for highlighting business misdeeds and reasons for pushing the CSR agenda, two other factors have accelerated the practice in the continent: globalization and campaigning groups known as NGOs. Regarding the first factor, CSR advocates and activists have shown what globalization has brought in terms of the damaging impact of the African countries by businesses on the quality of life of people, where they operate. For the second, campaigning groups, they advocate the CSR cause through human rights or environmental protection. Examples are the Partnership Initiatives in the Niger Delta (PIND) and Tshikululu in South Africa, an investment management agency that provides community grant-making for large and medium-sized businesses ([46], p. 2). These bodies, although different types of organizations, have become influential, and active countrywide and in the continent to compel businesses to cooperate in advancing their cause.

The above internal and external factors have stirred CSR in Africa [42]. From this development of the practice, one can have a sense of the African understanding of CSR which is discussed and explained in the next section.

3.2 African understanding of CSR

Various literature on CSR in Africa indicates that there is little knowledge of the practice, which is poorly understood by people on the ground [47]. That misunderstanding and confusion can be explained by the absence of public debates and CSR disclosure by both businesses and governments. As such, the application of indigenous CSR theories such as Ubuntu (humanism) and African renaissance, part of cultural values has been advanced to explain the concept and contextualize it from the Western version.

Another reason is that the philanthropy aspect of CSR has often been perceived as aid. As many African societies have become reliant on foreign aid, the thinking that has been developed among many is that businesses provide development aid [7]. There is a reason why CSR is seen as a developmental aid. In 2002, Sub-Saharan Africa received around $19 billion of official development assistance and about $150 million from American grant makers alone [7].

Therefore, more knowledge of CSR is critical for the understanding and development of the practice, from the elites. Yet, advocates and organizations of CSR in Africa are of the opinion that the practice needs to be contextualized in its implementation process not only for the importance of the practice but also because of the continent’s rise in global significance. Such organizations are the African Union (AU), the African Coalition for Corporate Accountability (ACCA), the Organization for the Harmonization of Business Law in Africa (OHADA) and the United Nations Economic Commission for Africa (UNECA).

As a result of the above, CSR deserves to be assessed and analyzed because since the arrival of MNCs in Africa in the 1990s, there have been complaints, grievances, and challenges the practice faces. A practice for which, some academics deem to have not achieved the developmental objectives pursued by Africans [48]. So, understanding the perception of Africans of CSR that started in the West is important to know if corrections are needed so that it can be improved.

Studies on CSR in African organizations are critical, increasingly because of the continent’s rise in global significance.

3.2.1 African Union

The African Union’s CSR is indicated in the organization’s 2063 Agenda, in the section directed to businesses regarding the better management of the continent’s commodities and natural resources. These must benefit Africa’s people and drive economic growth. The gist of the 2063 Agenda on CSR is that of the inclusion criteria, CSR having to benefit the people.

In line with the UNGPs and the provision of remedies for affected communities, Section 2(b) of the Agenda’s Strategic Objectives dealing with corporate governance refers to CSR to be in line with national development plans. Section 3(d) mentions considering the interests and needs of under-represented and vulnerable groups. The idea is that CSR initiatives should have a tremendous impact on strengthening national institutions and supporting local livelihoods.

Given the clear neglect of businesses regarding human rights incidences within rural communities during the exercise of business operations, African academics and civil society organizations consider that there must be greater accountability from businesses to the rural African communities when it comes to CSR [49]. The key to this is genuine community relations efforts as opposed to the customary marketing method led by MNCs.

Clearly, from the AU, CSR is a significant practice that needs to be contextualized, meaning that businesses, from the West need to adjust their CSR and consider the expectations of African organizations. The AU’s CSR stance is an invitation to African states, lacking jurisdictions in the field, to put relevant mechanisms addressed to businesses to implement their CSR. Sections dealing with corporate governance and CSR included in the AU Agenda’s Strategic Objectives offer a more comprehensive framework for CSR.

In summary, the AU opts for the development of NAPs at the country level, more accountability at the business level, and more contextualization that takes into account local communities’ needs because they have to benefit from the commodities extracted from their soil. That is the understanding of CSR by the AU.

3.2.2 African coalition for corporate accountability

The ACCA’s idea centers around the promotion and protection of human rights, specifically on victims and affected communities of human rights violations, and the provision of adequate and effective remedies. The coalition has 136 representations from 32 African countries which supports African communities and individuals whose human rights are adversely impacted daily by the activities of corporations.

The stance of the AU is consistent with the African Coalition¹⁵ for Corporate Accountability (ACCA) which emphasizes the idea of business accountability. ACCA does go beyond the voluntary aspect of CSR by emphasizing BHR and businesses operating in Africa. The reason is that the communities are impacted daily by business activities. Accountability is the active engagement of businesses with various constituencies of the community, often affected by business activities. In the ACCA’s CSR and BHR framework, businesses should be accountable for their actions. Accountability is a key corporate governance tool, and the stance of the ACCA can be understood as they promote the idea of a CSR moving from a voluntary approach.

Businesses are less accountable under Carroll’s model in terms of their responsibilities because the practice is voluntary. Corporate accountability offers the possibility for consistent CSR and its impact on beneficiaries [50]. In ACCA’s idea, a structure is needed for businesses to be accountable. Without accountability, the societal responsibilities of businesses are not realistic. To achieve this, all African states, especially home countries of MNCs, must enhance their domestic legislation and adopt mandatory CSR and human rights obligations on businesses.

In line with this study, ACCA does emphasize the human rights issue because the daily activities by MNCs that impact communities are HR abuses and businesses enjoy the benefits of the governance gap [6]. As MNCs and states were all stunned by globalization, the reason to stress BHR and accountability is to face abuses posed by businesses. That is the perception of ACCA regarding voluntary CSR.

3.2.3 Organization for the harmonization of business law

For the Organization for the Harmonization of Business Law in Africa (OHADA), CSR is essential to try to strike a balance between economic, social, and environmental concerns surrounding business life. The OHADA is the most important instrument of legal integration in Africa. In its current CG issues, it proposes the integration of CSR into law as the surest way to achieve its objectives.

With its 17 member states, OHADA strives to integrate the rules¹⁶ of CSR into the law. The integration of CSR into OHADA law is being thought of in terms of the development of legal standards on the incorporation of social and environmental concerns in economic activities. This seems necessary to meet the needs of modernity and adaptability ([51], p. 444). The idea is to adopt an inclusive CSR.

As OHADA’s mission is to harmonize business law in Africa, one way to deal with CSR challenges is to enforce the compliance mechanism [51]. In other words, obliging businesses to be transparent and accountable for social impact, and environmental of their practices in the form of reporting.

The adherence by businesses to OHADA’s proposed law and their adaptation to the legal environment will enable businesses to respond to the needs of various stakeholders and be more competitive and attractive as is the case with most businesses that embark on CSR activities [52].

The organization has developed legal and judicial tools for investors, businesses, and the judicial instruments that could serve the CSR cause. Integrating the tools and fundamentals of CSR is important as the practice is rising in the African continent with businesses having CSR functions, according to a survey.¹⁷

The legal framework of OHADA, in Article 2 of the treaty refers to address needs of vulnerable in developing countries by focusing on greater emphasis on primary needs such as food, access to water, and basic social services [53], which are all consistent with CSR activities. If countries adopt the legal aspect, as a form of governance, the issue of MNCs, violating domestic laws would be partly solved as each country in Africa tends to develop its national law or has no laws covering CSR.

Currently, it is almost impossible for MNCs to navigate between states when extending their branches without HR issue as there is no single law applicable when it comes to CSR, which constitutes an impediment and presents challenges, more for countries with voluntary CSR.

Clearly, OHADA as an organization suggests an alternative with its submission of mandatory CSR to deal with the current challenges of the practice.

3.2.4 United Nations economic commission for Africa

The United Nations Economic Commission for Africa (UNECA or ECA¹⁸) was established in 1958 to encourage economic cooperation among its member states in Africa. The commission’s work is structured into several programs that include the African Centre for Statistics; the macroeconomic policy, and the Social Development Policy. This latter aspect, related to CSR is of interest as UNECA aims to promote the social development of its member States, which remain influenced by the dominant economic system.

UNECA believes that CSR is a concept that developed out of the capitalist economy where the sole business enterprise is profit. Aware of the limited role of the state in the market [54] since the 1980s, the UNECA has adopted specific initiatives as part of its developmental projects, such as a new approach to CSR with policy recommendations to its member states.

Indeed, a new approach to CSR means an improved policy¹⁹ structure to back economic diversification in Africa. To be more specific, establishing national action plans (NAP) and involving businesses to adopt and move CSR to another level of impact-creation.

Aware of the largely voluntary CSR practice among African states, UNECA urges in implementation of NAPs through specific national policies. The policy of local content is part of the NAPs. In Gabon, the policy, included in the Hydrocarbon Code (Law No. 002/2019 of 16 July 2019) refers to the use of human resources, skills, training development and the creation of additional value when it comes to resources. An illustration of an additional value by businesses is the Gabon Special Economic Zone (GSEZ), also tailored as “ARISE” whereby the authorities, following the UNECA’s recommendations, the UNECA have decided that no more timber logs are allowed to leave the country as exports. Minimal transformation now takes place locally.

The above example by Gabon results in the approach by the UNECA’s understanding of CSR in Africa. Based on recent CSR developments in Africa, an approach by African organizations regarding the practice and its current challenges in discussing and assessing voluntary CSR is needed to engage and guide governments, NGOs, CSR practitioners, and the business community.

3.3 Views of scholars, research gaps and limitations

CSR in Africa remains less developed than in the West. That is why more platforms for discussions, instigated by academics and civil society organizations are fundamental to imparting knowledge to the public. Despite this deficit of CSR awareness, African organizations still provide their understanding of the practice through various reports and other publications containing their strategic vision. This understanding is based on stakeholder relations (AU), business accountability (ACCA), adaptability (OHADA), and local content approach (UNECA). These organizations provide recommendations to countries through NAPs. Its implementation in Africa presents challenges, it is therefore important to assess whether the voluntary nature is the motive behind it.

It is in that context that scholars such as Visser and Amodu came up with ideas to respond to the challenges faced by the practice. To respond to the CSR challenges in Africa, Visser [7] revisited the Carroll pyramid, based on the African understanding of the practice that underpins inclusive approaches to CSR:

The reconstructed CSR pillars for developing countries is as follows:

Economic responsibilities: the most important part of the pyramid remains unchanged from Carroll’s.

Philanthropic responsibilities: Businesses are expected to set funds aside for their CSR projects aimed at local communities.

Legal responsibilities: This is in line with stakeholder relations, in particular government representatives that grant businesses licenses to operate.

Ethical responsibilities: This consists of businesses understanding the societal codes in which they operate (Figure 2) [7].

Figure 2.

CSR pyramid for developing countries. Source: Adapted from Wayne Visser Pyramid for CSR.

While economic responsibilities remain unchanged from Carroll’s widely used pyramid, the major input is that the economy is followed by philanthropy, then legal and ethical responsibilities. Such a model is slightly different from the classic Carroll’s CSR pyramid [4]. The argument the author made is that many developing countries have become reliant on foreign aid [7], which is associated with philanthropy.

Secondly and questioning Carroll’s influential CSR Model, it is the author Amodu who provided analyses of both shareholder and stakeholder models under the lens of CSR in Africa. He subsequently promoted the Responsible Stakeholder Model. By contextualizing the practice for Africa and being aware of the importance of shareholders in the current governance structure, the author assumes the need to safeguard the social tenet for the aggregate welfare of stakeholders. Responding to the challenges for the author means contextualizing CSR to be consistent with the African Union which places local communities at the heart of CSR. Doing this can significantly influence CSR and business behavior. In that context, his proposed responsible stakeholder model has the potential to serve as a management approach to guide CSR actions and respond to the challenges Africa faces.

In terms of the gaps identified by the above authors, the legal perspective was absent in their approach and raised doubts about the practical solutions to CSR.

On Visser, the philanthropic pillar, relegated to the top and therefore the least important in Carroll’s pyramid has been a common practice by businesses under voluntary CSR. Responding to the practice challenges by promoting it to the second bottom in the proposed pyramid presents two issues: the role of government and political CSR.

First is the idea that Africans are accustomed to development aid and therefore businesses should promote that pillar as part of their CSR. The development aid is exclusively sought and reserved by the government and not the private sector as part of their CSR. Research shows the role of government in promoting CSR in the UK [55]. This role is also suggested in developing countries through core topics such as building awareness of the CSR agenda, building capacity to shape the practice, engaging businesses in the public policy process, and providing frameworks for assessing priorities and developing strategy [56]. In fact, the government’s role is to seek development aid, to encourage businesses to improve their CSR performance beyond legal standards. This is how a better assessment of CSR contribution can be made. Also, the voluntary measure of CSR has continued in CSR research into its latest contributions called ‘political CSR’, which addresses the role of businesses in public governance and more importantly their provision of public goods such as those deriving from developmental aid. Political CSR, advanced by Scherer and Palazzo [19] focuses on the business’s political responsibilities, which according to many remain unclear and confused from a normative point of view. Although CSR can be a strong tool for governance, its strengths and boundaries should be addressed by governments, academics, and business leaders and escape the practice’s shaping of public policy [57]. The point made by Visser talking about aid by businesses in addressing CSR challenges reminds us how urgent responsibilities and roles between state and MNCs in Africa should be defined concerning CSR and its developmental objectives. Political CSR, according to some scholars questions the sovereign role of the state as the provider of public services [58]. This diminishing role of the state is a concern for the future of CSR and will raise more doubts and challenges for voluntary CSR than they are now.

Turning to the argument of the ‘Responsible Stakeholder Model’ to respond to the challenges of CSR, the author believes that the supremacy of shareholders in the current corporate law structure creates problems in terms of businesses having to address other stakeholders’ needs [24, 26, 59]. As such, he urges magnifying shareholder value by creating wealth for them while ensuring social efficiency that will protect stakeholders and facilitate the aggregate welfare of those stakeholders.

Shareholder primacy is law, and its discussion since the 1980s shows that courts have embraced the concept [60] because it is a basic principle of corporate law, applicable to the current market systems. Its idea simply means any company’s priority is maximizing value for shareholders, which holds that the monetary value to shareholders (dividends, etc.) is the unique measure of a business’s success, with small consideration for social responsibility.

Following the description above, effective stakeholder protection as suggested by Amodu is strenuous without proper mechanisms such as national legislation to constraint businesses to meet stakeholder’s expectations through CSR. Stakeholders, whose needs are expected to be fulfilled by businesses to achieve legitimacy are employees, consumer [61] and in the case of Africa, host communities, primarily indicated in the provisions.

Following the above arguments advanced by scholars in the developing world and Africa particularly, showing voluntary CSR limitations, represented by Carroll’s Model, following the continent understanding of the practice, and in order to move the discussion forward, the development of hypotheses that can be formulated regarding the continent understanding and the need to strengthen the existing legal frameworks to the corporate governance.

3.4 Hypotheses

Based on the perception and understanding of CSR by African organizations cited above and the formulation of models by CSR scholars, the following hypotheses are proposed:

H1 African understanding of CSR should be contextualized.

H2 Legal frameworks should be strengthened and integrated into the corporate governance.

3.4.1 H1 African understanding of CSR should be contextualized

CSR practices in Africa have been motivated by the adherence of global standards, externally [42] and the need for more community inclusion, internally [7] both as a result of the interest in Africa’s natural resources whose economies are still fragile [47]. Following this argument, contextualizing CSR in Africa means emphasizing the moral duty so that businesses prove their corporate citizenship, especially in countries whose CSR remain voluntary. If businesses can consider the moral approach, regardless the dominant Carroll’s pyramid but taking into account the reconstructed one [7] by valuing aid and support while maximizing stakeholder’s welfare [26], the practice could achieve sustainable development in Africa [62]. That contextualization should be taken into account by businesses when operating in Africa.

3.4.2 H2 Legal frameworks should be strengthened and integrated into the corporate governance

Current legal frameworks in Africa lack clarity and depth [35], especially in the area of Business and Human rights (BHR) that has resisted to CSR development [33], yet both movements are interconnected [3]. That is why strengthening the legal frameworks and integrating BHR into the corporate governance for countries moving towards regulating CSR.

4. Methodology

While the researcher recently made empirical research (observations) during a field study in Africa, the gist of the qualitative inquiry was conducted through desktop approach which includes published academic papers, government documents including laws and discussions with both CSR authors and NGOs in Africa.

This methodology employed corresponds with the research objective, which is to discuss the concept of CSR under the voluntary and mandatory provisions covering the practice in Africa. Using a desktop research approach, secondary data was conducted interviewing individuals living within, or with a comprehensive understanding of, the target countries, legislations related to CSR, BHR, MNCs involved in CSR and people being key in the value chain. Case studies were conducted in countries using voluntary CSR (Ghana and Kenya) and those with mandatory CSR (Mauritius, South Africa and Nigeria).

While published academic papers were used for the CSR voluntary cases, valuable insights were provided by academics in Nigeria and South Africa. The advantage is that the researcher, as a former employee in one of the selected countries used former networks to gain the perspective of the challenges related to the practice as well as the emerging trends.

Specific areas of interests in the countries with mandatory CSR were mining, oil and gas regarded as important GDP contributors in the economies of selected countries. Hence the reason why businesses operating in the above industry sectors are subjected to the practice compliance. The subsequent tables provide some of the findings.

5. Results and findings

Many African countries neither have social guidelines nor legal framework for mainstreaming social responsibility by business organizations. This is perhaps paradoxical in that, while there exist very high social expectations of businesses in Africa, this has been voluntary. This section presents some findings with countries using voluntary CSR, based on the current national action plans (NAP).

CSR has remained largely voluntary without mandatory legislation, worldwide. Many African countries do not have institutions capable of enhancing CSR agendas. Research indicates that some of those countries lack good corporate governance and transparency, and CSR is used as an act of philanthropy [55]. This appears inconsistent and perhaps ironic for those countries lacking social guidelines and lacking regulatory frameworks to hope to achieve sustainable development in Africa [62].

These African countries have developed some national action plans (NAPs). However, these NAPs are not legal instruments but recommendations by international bodies such as the United Nations and African bodies mentioned earlier.

5.1 Case studies with countries using voluntary CSR and naps

Some countries in Africa have adopted CSR based on the voluntary format as inspired by Carroll’s pyramid and following recommendations of the UN and AU to use NAPs. Cases of Kenya and Ghana were selected because of the availability of data and projects being carried out by businesses.

5.2 Kenya

Kenya’s NAP is included in the country’s 2030 vision and the SDGs and its specific objectives in line with its CSR are summarized in Table 1.

Strategic objective	Policy action	Responsible actors
To guide the state as it fulfills its duty to protect individuals and communities from business-related human rights abuses, consistent with its domestic and international obligations.	To develop guidelines for businesses to ensure that they are sensitive to the implications of their operations on human rights, the marginalized, and other vulnerable groups in ensuring inclusivity.; To work with stakeholders to develop a natural resource revenue management policy and regulatory framework for administering and managing natural resource revenue paid to host communities.	State and Businesses

Table 1.

National action plans on business and human rights of the Republic of Kenya.

Source: adopted from Kenya NAP on BHR [63].

The Kenyan National Action Plan on Business and Human Rights (NAP) process was launched on 9 February 2016. The idea was to align the NAPs with the SDGs and to enhance coordination between the NAPs process and the national SDG, in a consultation process. Consultations that were undertaken involved communities, including indigenous people, businesses, and government.

To summarize the table, as part of the strategic objectives, the NAPs are consistent with the UNGP recommendations, meaning the Republic of Kenya is to protect them so that businesses can respect them given they cause harm to vulnerable groups through their activities. Respect for the NAPs means engaging with the stakeholders as part of the policy action. The success of the NAPs depends on the willingness of policy actors who are government and business, given one party provides direction and another is responsible for the execution.

In line with CSR/BHR, the NAPs in Kenya aim to provide direction to businesses to adopt an inclusive CSR by undertaking projects that have the potential to transform society. Typical CSR projects in Kenya include Environmental activities like tree planting and clean-ups, campaigns against unhealthy issues like HIV/AIDS and cancer, and employee protection issues such as staff training and development [64], all of which are in line with CSR’s core values, mentioned previously.

5.3 Ghana

The CSR sector has been established significantly over the last two decades and businesses have embraced the practice as part of their management strategy [65]. Businesses pursue social activities, as the state alone cannot manage societal issues, therefore influencing the acceptance by businesses of CSR in Ghana [66]. The country has realized that CSR is key to achieving developmental objectives [66]. As a result, companies provide humanitarian and various projects on a voluntary basis. Typical projects involve healthcare provided in the communities by mining companies and figures indicate that 85% of the areas near mining corporations have access to drinking water, contributing to uplifting the living standard of the communities [65]. The focus is on gold mining because this is the biggest CSR contributor of the country, which is ranked second only behind South Africa as the leading producer of gold in Africa [67].

Unlike Kenya with the national action plans, there have been a few organizations overseeing the CSR environment since 2006 such as the Ghana Business Code (GHBC); the Association of Ghana Industries (AGI), and the Ghana Extractive Industries Transparency Initiative (GEITI).

Table 2 provides a blend of CSR/BHR practices. The Ghana Business Code urges businesses to respect human rights recognized by international law and applicable to businesses in their CSR exercise. Through their CSR, businesses are to avoid being involved in HR abuses. The Association of Ghana Industries oversees the publication of business activities that are involved in CSR. This task is part of the CSR disclosure and aligns itself with the tenets of the practice. As for the GEITI, the body is to promote transparency as recommended by the mother organization regarding all extractive industries [68].

Bodies involved in CSR	Policy action	Responsible actors
Ghana Business Code (GHBC)	The major principles of the GHBC stress the essence of CSR in Ghana. The main idea is for businesses to support and respect the protection of human rights as recognized by international law.	State and Businesses
Association of Ghana Industries (AGI)	The Association of Ghana Industries is Ghana’s most influential business association responsible for the publication of CSR figures as part of business activities, to be issued in an annual publication.	State and Businesses
Ghana Extractive Industries Transparency Initiative (GEITI)	Its core principles are transparency and accountability. It serves as an avenue for promoting CSR in the extractive industry.	State and Businesses

Table 2.

Organizations involved in CSR in Ghana.

Source: Ghana Business News (https://www.ghanabusinessnews.com/2016/10/12/west-africa-centre-welcomes-ghana-csr-policy/) 2016.

These organizations supervise the practice of CSR in business operations, setting norms, and guiding the conduct of business and acceptable standards with regard to the environment and anticorruption in business. Specific emphasis is placed on GEITI, established after the launch of the Extractive Industries Transparency Initiative²⁰ (EITI).

It serves as an avenue for promoting CSR in the extractive industry and looks at issues related to accountability, offering a yardstick for consistent CSR [50] as indicated by the ACCA.

5.4 Case studies with countries using mandatory CSR

Mandatory CSR refers to reporting practices and disclosure activities undertaken by businesses and in line with CSR current standards [69]. It also refers to businesses having to perform their CSR beyond societal expectations as this has the potential to yield positive impacts on the beneficiaries [70]. This is the idea of mandatory CSR. Furthermore, mandatory CSR is the enforcement of a regulatory or legal framework to monitor and assess the societal initiatives undertaken by businesses as part of their CSR projects and subjected to control by lawmakers [71].

Before providing case studies with countries whose CSR falls under the mandatory approach, it is useful to remember that CSR, although being a Western practice, knows some pockets of regulation, here and there. Indeed, the practice as theorized and suggested by Carroll [4] in its pyramid, remains largely voluntary. For example the European Commission’s approach to CSR is fundamentally aimed at a diversity of stakeholders [1] that benefit from CSR projects voluntarily. The investment by businesses is expected to produce positive impacts on those stakeholders and, their environment [70]. However, mainstream CSR has seen some Western governments taking the above approach in promoting and regulating CSR. This is the case of the UK, which has been one of the pioneering countries in endorsing CSR with a ministry dedicated to CSR. A clear indication that despite being a capitalist society, the notion of a business that focuses only on profits is no longer prevailing as the practice has moved on [55]. The practice, over the last 60 years has continued to expand, adapt, reinvent, and stimulate interest from academics and business communities looking at the historical development [23]. The movement for CSR has ‘won the battle of ideas’ [22]. This means CSR has taken over Capitalism with its shareholder value.

The reason why I focused on the West using a European country to look into mandatory CSR from a holistic perspective is simple: Europe has the largest MNCs [26] expanded throughout Africa and embarked on CSR which, despite its voluntary nature, has countries whose practice led by businesses falls under the mandatory CSR.

5.5 Mauritius

Starting with Mauritius, the legal approach of their CSR is on tax. Tax is part of Carroll’s economic and legal pillars [4]. Economic because it involves the financial resources given to governments as part of their revenues [72]. Businesses make profits, and part of that constitutes tax paid to the Mauritius government. Tax is the financial contribution of CSR and part of the legal compliance. The legal aspect is what Carroll described as its second most important pillar after the economy. The legal responsibility depends on the existing laws of a country.

As indicated in Table 3, in Mauritius, the legal entities in charge of monitoring CSR are the Mauritius Revenue Authority (MRA) and the National Social Inclusion Foundation. According to the provisions, 25–50% of CSR funds obtained in the form of tax by businesses are to be paid to the CSR Foundation through the MRA. the fund can go up to 75% depending on the financial year and chargeable income. The money is to serve priority areas such as education, health, disability support, etc. [73]. The business tax adds value to the CSR goals. Following the Finance Act 2016, all businesses should remit a percentage of their CSR fund to the Director General under Section 50L(2)(a) of the ITA. CSR applies to all profitable companies in Mauritius.

Responsible actors	Legal provisions	Financial data
Mauritius Revenue Authority	Section 129 of the Income Tax Act (ITA) set up in 2021	25% of CSR funds to be paid by businesses
National Social Inclusion Foundation	Act 2016 of Income Tax Act	50% of CSR funds to be paid by businesses

CSR fund set up
Period	Percentage	Amount remitted
01 April 2019 to 30 June 2019	25%	Rs. 112,500 Mauritius Rupee (USD 2483,56)
01 July 2019 to 30 September 2019	25%	Rs. 112,500 Mauritius Rupee (USD 2483,56)
31 March 2022	75%	N/A
31 December 2022	75%	N/A

Table 3.

Mauritius legal and financial data covering mandatory CSR.

Source: Government data (2019).

In Africa, many countries face corporate tax dodging and their contribution to GDP is minimal, according to an OECD report [74]. OECD is an organization that has shaped CSR at the managerial level and therefore urging developing countries to use tax effectively. As such, Mauritius uses it for redistribution as it is a major income.

5.6 South Africa

Turning to South Africa, the legal approach of their CSR is on Black Economic Empowerment (BEE), which was developed out of their NAPs to become an economic policy and a law on CSR (referred to as Corporate Social Investment). Businesses that qualify for CSR are big businesses, listed on the Johannesburg Stock Exchange (JSE). Legal frameworks covering the practice are the King Report on Governance for South Africa 2009 and the Companies Act No. 71 of 2008.

Private firms use 2–5% of their profits to demonstrate responsibility in implementing policies associated with the BEE. The South African Regulation Section 5 [75] emphasizes labor and employment as fundamental areas for the country ([76], p. 2). The idea is to address economic disparities and contribute to social development. Section 5 (bb) of the South African Company Act further indicates the need for businesses to invest in the development of the communities where their businesses operate ([76], p. 2). The laws focus on the BEE because of historical reasons, the underprivileged and minorities must benefit from the country’s huge resources. So, the bulk of the country’s CSR is the redistribution and closing the economic gap.

In terms of business performance, first, businesses have realized that the days when the government was seen as the exclusive social change agent and the absolute macro problem solver belong to the past and businesses have accepted their new role ([10], p. 43) in the society. Businesses in South Africa, subjected to mandatory CSR have enjoyed the benefits that go with it. The launch and growth of the Johannesburg Stock Exchange Social Responsibility Index (JSE SRI) in 2004 informs investors and market agents about sustainability policies and practices of listed businesses, encouraging investors to support those businesses that push CSR projects. As a result, countries of the global South such as Africa launched the Responsible Investment concept, which was later followed by Brazil in 2005 (BM&F Bovespa).

In South Africa, mandatory CSR has facilitated businesses to be employers of choice and enhance relationships with clients. Being an employer of choice has meant attracting and retaining caliber employees. Studies have shown that a CSR framework helps businesses become more attractive to potential future employees seeking workplaces with socially responsible practices, community-mindedness, and sound ethics.

It enhances relationships. In South Africa, businesses involved in mandatory CSR have built alliances with major markets and fostered strong working relationships with new clients, all of which have increased their performance and delivered public value outcomes. This is the case with Woolworths, Vodacom, and Nedbank. Three businesses are among the top CSR performers [77]. Thus, what can be said in South Africa is that mandatory CSR has led to the maturity and sophistication of programs that do not exist in voluntary CSR. Monitoring and evaluation for example are prevalent in South Africa and used more strategically than anywhere else in Africa.

However, the country remains with its own challenges like stakeholder engagement. Examples of the challenges facing businesses operating under mandatory CSR are the Anglo-American Group and Lonmin. Indeed, the most challenging for the platinum mining business is the labor strike, since the start of 2014, which has affected the business unit and caused a 25% reduction in commodity prices [77]. A similar situation occurred in Marikana with Lonmin [35] where employees expressed their anger.

Thus, even though voluntary CSR is still predominant in Africa, Mauritius and South Africa have gone beyond business compliance with the law and have taken progressive steps by making CSR mandatory. The above examples show the benefits of mandatory CSR in Africa. The next section discusses Nigeria, a country that has a string of laws obliging businesses to engage in CSR activities.

5.7 Nigeria

Most empirical studies on CSR in Africa focus on South Africa and Nigeria [24, 26, 42]. Hence the idea to include them in this study. South Africa has shown with illustrations the benefits of mandatory CSR, both at legal and business performance levels. Nigeria’s case offers a string of laws relating to CSR, which is relevant for this study as mandatory CSR is about the existing legal frameworks. Nigeria’s laws are the oldest of any other African country.

Legal frameworks covering CSR in Nigeria since 1990 are the Companies and Allied Matters Act (CAMA), the CSR Bill, the 2020 Nigeria Extractive Industries Transparency Initiative (NEITI), and the 2021 Petroleum Industry Act.

CAMA, the first law, has evolved since 1990 to its latest version in 2004. CSR became a topical issue in Nigeria in the 1990s [78] and CAMA was set to address a string of environmental issues. The latter version [79] had to reflect societal expectations, besides the environment ([80], p. 7). These societal expectations are specified in Sections 279 and 279 [8] of CAMA that include the interests of the stakeholder group. Stakeholders expect businesses to involve them in the CSR process. Section 1C/1239 of the Nigeria Bill was to regulate the adverse activities caused by businesses and tend to relieve local communities who suffer from them.

The second law in Table 4 is the CSR Bill, which was intended to control all activities acknowledged by the Nigerian authorities as linked to CSR. Section 5(c), 14 of the Bill emphasizes the needs expressed by communities residing near MNCs’ activities. Providing relief to the local communities means MNCs have to find solutions for environmental instability that destroys their livelihoods.

Nigerian regulatory frameworks on CSR
CAMA	From 1990 to the latest version in 2020, the framework was incorporated to deal with the environment, ([80], p. 7), then relationships with communities [81] and lastly the inclusion ([24, 26] p. 24).
CSR Bill	The establishment of this framework was to provide relief to local communities, identified as victims of business operations. ([82], p. 1241).
NEITI	Its insertion was for transparency and accountability reasons [68].
PIA	Created by the government to control the petroleum sector, so it can contribute to the betterment of the Nigerian people.

Table 4.

Regulatory frameworks covering CSR in Nigeria.

Source: Government data (2020).

As for the NEITI, it derives from the global EITI group in charge of monitoring whether member states comply with the mission which is to release oil companies’ revenues [68]. Hence the idea of transparency and accountability.

The last law is the Petroleum Industry Bill, changed into the Petroleum Industry Act (PIA) in 2021. This latest version of the law on CSR gives more attention to the communities [83], by devoting 2.5% to the development trust. Failure by businesses to incorporate that trust as required by the PIA, may lead to revocation of the lease or license to operate, which indicates the mandatory nature of CSR. These are the four laws available in Nigeria that cover the practice of CSR.

5.8 Online data collection with employees and CSR practitioners

The questions that were asked whether the practice has had any impact so far, and what has the mandatory aspect brought in terms of the desired objectives.

6. Discussion and implications

Kenya and Ghana have businesses involved in the CSR practice although there are some issues encountered with the implementation of CSR projects. A study conducted in Kenya between the decade 2005–2015 in which 47 banks involved in CSR mostly embraced environmental conservation as the preferred CSR project [64]. The return on CSR investment shows how beneficial the practice is for businesses. The question remains on the impact on the beneficiaries as the above study indicates that while profitability is obvious for businesses, little while interaction with stakeholders is taking place. As a result, the impact is to be seen. Table 1 shows that both state and businesses are responsible actors but despite this, businesses have failed to understand CSR, intertwined with the country’s culture and tradition. According to CSR authors, business survives by ensuring the local community prospers and this is only possible by understanding their needs [61]. If this happens is because there is appropriate environment to ensure this local content approach to CSR. This idea leads to the second issue identified: the lack of institutions to guide CSR.

In Kenya, there is no institutional framework as such to push businesses to engage in CSR [84]. As noted, NAPs are not legal instruments but recommendations. Moreover, in some countries, they are in place outside the CSR domain. In CSR, institutions monitoring the practice are NGOs, civil society organizations, or independent groups [43]. They are responsible for monitoring corporate behavior. These institutional bodies can affect the implementation of CSR, and even CSR agenda. Environmental conservation for example has been cited as the preferred CSR project by banks in Kenya but it could well be another area, deemed urgent by the above groups. In the voluntary context of CSR in Kenya, the sustainability of the practice is clearly hampered by stakeholder and institutional elements, suggesting policy enforcement, besides the NAPs.

As for Ghana, particularly the Ghana Extractive Industries Transparency Initiative (GEITI), which promotes tenets of accountability, but more specifically transparency, businesses falling under GEITI carry out their activities on a voluntary degree [85] meaning it is not compelled to sign up. This shows the involvement in CSR in Ghana can often be negligible and done on an ad hoc basis [86]. This can be understood as there is also no legal structure enabling CSR assessment [66]. However, as Table 2 indicates, GEITI, like most businesses involved in CSR, pledged for transparency under the global EITI, whereas corruption is widespread, making CSR ineffective. In Africa, corruption is prevalent in informal institutions [87]. CSR is one as it’s still voluntary. Figures show that businesses are involved in CSR [65] through the donation of equipment and providing support to foundations and other institutions as part of their CSR initiatives but do not reach beneficiaries because of corruption ([75], p. 148). There is an accountability chain hampering the effectiveness of the practice.

The issue of absence of transparency and by extension corruption is emphasized because in the CSR conceptualization, there are core values [24, 26] and one of them is combating bribery for an effective CSR. This value is to be adopted by business executives carrying the practice as well as parties in charge of the execution on the ground. In Ghana, in business and academic circles, CSR has become more associated with ethical and moral issues where individuals and advocacy groups seek to hold businesses responsible for their actions. The issue of corruption is a clear obstacle for CSR, which indirectly calls for the government to interfere.

Overall, some of the issues of voluntary CSR are corporate governance and the government’s lack of institutionalization leading to the challenges of CSR and BHR in Africa. The reasons for questioning voluntary CSR are corporate scandals and human rights abuses as well as the government’s inability to take CSR to new heights and create sustainable solutions to problems faced by the expected beneficiaries in Africa. Before delving into specific problems identified in the case studies on Kenya and Ghana, it is important to clarify why NAPs cannot be alternatives to mandatory CSR or law enforcement.

A cursory look at the CSR and BHR state in Africa shows that there is a dearth of laws to protect the practice. That is why, most governments resort to NAPs. While the idea of the NAPs sounds laudable, more is needed to strengthen this idea such as law enforcement. The current state of the NAPs is insufficient and has proven to be ineffective. While the UNGP’s recommendations on NAPs have been welcomed, their further recommendations were for states to develop enforcement mechanisms that would be extended to non-state actors. NAPs simply do not offer the same level of protection as national law enforcement.

Regarding BHR for example, there is no criminal liability for businesses involved in abuses because BHR is a new concern for governments not only in Africa but worldwide [6]. According to the current structure of international law, HRs apply to states only, and businesses seem to be reaping the benefits of that regulatory void [57]. This situation leaves national governments space to regulate. This is both applicable to BHR and CSR. But the most under-developed field between both remains BHR as explained in the historical development of both movements. An illustration is the lack of grievance mechanisms for victims of complaints. Shell’s case in Nigeria is an example of the 2011 environmental mayhem that caused many victims, unable to find relevant jurisdictions to air their grievances [35]. Beyond NAPs, African governments should develop institutional capacity to make certain HR due diligence is in place. This is important as CSR activities and projects are not one-off but continuous.

Regarding cases of voluntary CSR in Kenya and Ghana, the problems identified are stakeholder involvement and the lack of institutions to guide CSR in Kenya whereas in Ghana, corruption or lack of transparency were the issues.

Governments are responsible for creating institutions as they play a central role in CSR [57]. This question of CSR institutions and their possible influence on businesses has been discussed by scholars such as Matten and Moon [43] and Campbell [88]. Businesses are likely to behave in socially responsible ways if institutions, including law enforcement, are in place [88]. Ghana’s real challenge is on GEITI to disclose figures for transparency reasons and institutions such as the OECD having shaped CSR at the managerial level can also provide appropriate guidance and achieve CSR objectives [89]. In the case of Ghana, bodies such as the Ghana Business Code (GHBC); the Association of Ghana Industries (AGI), and the Ghana Extractive Industries Transparency Initiative (GEITI) are to adopt a good governance approach, that is free of corruption. If the above issues that failed CSR in the past in their development promise [48] can be addressed, achieving sustainable development in Africa [62] can be realistic.

Turning to the mandatory CSR, Mauritius, South Africa and Nigeria offer some interesting legal frameworks regarding CSR as the law’s purpose that targets specific businesses, is to shape their economies, invest in critical sectors, and achieve social transformation.

In Mauritius, CSR initiatives by businesses started more than 20 years ago and the practice has been an emerging trend. The contribution of the private sector to the country’s development goals is noticeable. However, an investigation of the relationship between CSR and development in the Mauritian context reveals how important coordination between businesses, civil society, and the government is needed [90]. An idea also identified by respondents in Table 5. This situation seems to suggest little collaboration between the three parties, expected to make CSR more effective. The practice is not only about reporting CSR contributions regarding income tax but also trust, culture, and corporate strategy. Besides, the country in comparison to the mandatory CSR elsewhere still lacks structure, audit, and organizational strategy [73] which hinders CSR actions.

Country/respondent	Responses
Nigerian employee of an MNC and CSR author	‘While CSR is well-established, businesses still lack certifications and fail to produce regular reports to show the practice has moved beyond voluntary approach’.
South African NGO founder working with local communities	‘Conflict is still too much present between big businesses and stakeholders over projects expected to be delivered’.
Networks in Africa (residents and employees)	There is a need for an extension for the practice to all businesses no matter their size.

Table 5.

Data collected from CSR insiders.

Source: author’s discussion with participants.

In South Africa, the historical context made CSR peculiar in terms of adoption and implementation. Indeed, MNCs were the main beneficiaries of the Apartheid system, until today. Successive post-apartheid governments pushed the BEE policy to be adopted. Today, business spending on CSR exceeds that of Western and wealthier countries [91]. Nevertheless, issues and challenges remain such as corruption, the applicability of provisions, and more importantly stakeholder engagement [35].

Corruption because CSR spending is channeled from businesses through local governments or non-profit organizations. This means any social unrest by the intended beneficiaries often results in the above actors not distributing CSR revenues and not the MNC’s responsibility. As for the BEE policy, some businesses just find it tricky to understand the provisions regarding labor. Indeed, the government expects businesses to employ historically disadvantaged people. The issue is to do so without technical skills, especially in semi-rural areas where the need is dire. Although there is mention of BEE in the provisions the details are not specified. These above examples show that mandatory CSR is not a matter of one country but a handful of countries, hence the importance of assessing the CSR practice under the voluntary and mandatory provisions in Africa. This shows how representative this study can be in providing direction.

In Nigeria, it can be argued that the above laws are consistent with some of the core values of CSR such as human rights, environmental protection, and stakeholder rights ([92], p. 117). However, the changes in the laws over the years were a signal that they were inconsistent with the needs of the communities and needed adjustment to adapt to the practice which has also proven to be dynamic.

For example, CAMA was included in 1990 to deal with environmental issues, ([80], p. 7), then relationships with communities [81], and lastly the inclusion of stakeholders ([24, 26], p. 24). Then comes the CSR Bill whose aim was to provide relief to local communities, because they suffer most from business activities ([82], p. 1241). Afterward, the Nigerian government joined the EITI to audit its CSR sector and showed they wanted to be more transparent and accountable for their actions [68]. The Petroleum Industry Act was set up to contribute to the betterment of the Nigerian people. In light of the above, it is clear that the key themes are consistent with CSR values, imagined, thought, and developed in the West for voluntary CSR. It is also clear that the Nigerian government, under the provisions wanted to manage the way they understand by prioritizing the local communities, as key stakeholders.

However, mandatory CSR in Nigeria is not without its issues and challenges that are known by various authors. Some of these issues are the government’s legitimacy crisis and its ineffectiveness in managing funds received from MNCs for CSR as stipulated in Section 162 [64] of the Nigerian constitution, referring to the case of Niger Delta [93]. This situation leaves stakeholders with little support. Another issue of mandatory CSR in Nigeria is the limits of transparency and accountability of both government and MNCs towards the main stakeholders [94] whose CSR is to serve. This often occurs when both parties are not checked or reminded of their duties of reporting authentic CSR figures by civil society organizations. The last issue drawn from the Nigerian laws and their change over the years is that after investigating CSR origins, the practice needed to be understood in its context.

Coming back to stakeholder engagement, contextualization has been advanced as a potential solution to the challenge it poses. Contextualization is a way of approaching CSR differently, considering the cultural aspect as the practice differs from one society to another but still remains CSR [95]. To be more specific, the African approach (AU) to stakeholder engagement is what is stipulated in the provisions covering the CSR practice in Nigeria. SE in this case is local communities, that enable MNCs to succeed in their CSR efforts and achieve sustainable development ([96], p. 73).

The CSR literature indicates that each country can prioritize its stakeholders (customers, employees, local communities). Besides, SE is applied in different contexts [17]. Often, countries consider the values and attitudes, language, and level of urbanization [97]. This contextualization is a prerequisite for the implementation and improvement of CSR practice in Africa. As such, both voluntary and mandatory could achieve sustainable development.

In terms of the implications, as it has been indicated earlier that some countries have taken the initiative to move from voluntary CSR to mandatory CSR [98], businesses now need structured programs of CSR that are not conducted on an ad hoc basis. Businesses are aware of how much to spend on CSR, which leads to the second idea of reporting. CSR reporting is often applied on a voluntary basis, except in some Northern countries whose CSR is regulated [16]. Reporting gives a competitive edge over other businesses that can remain consistent with organizations such as the Global Reporting Initiative (GRI) and the UN Global Compact, that provide guidelines and indicators to measure the performance of businesses and the impact of their activity on stakeholders.

Another key aspect identified in the second hypothesis dealing with BHR. Recently, the European Union has come up with its Corporate Sustainability Due Diligence Directive (CSDDD)²¹ which will take into account the due diligence discourse with some fines for businesses as part of their human rights corporate abuses.

As the UNGPs indicated most of their recommendations were non-binding, states had the responsibilities to further legislations. This is also an opportunity for African organizations to look at this specific area, overlooked and understudied and presents challenges of CSR in the continent.

7. Conclusion

This study addressed the challenges of CSR by assessing the practice, from a voluntary to a mandatory approach. It showed how Archie Carroll’s CSR pyramid has influenced contemporary businesses to apply the practice that remains voluntary. These businesses have branches in Africa where they carry out CSR projects as they understand them without contextualizing.

Based on findings, this study reveals that both state and businesses are responsible actors in the voluntary context. Another stakeholder is rather important, local communities in the mandatory as the essential of the legal provisions focus on them. Both approaches offer challenges such as lack of institutional framework. Lack of transparency and pervasive corruption in the first group of countries while lack of coordination and applicability of the laws, to adapt to the African context remain challenging.

The study’s results show that the private sector has a clear roadmap with specific budget allocation to the beneficiaries (2–5% of annual profits) making businesses more prone to the performance as stakeholders want to be associated with responsible businesses showing their citizenship through CSR actions.

From the hypothesis and in terms of practical and theoretical implications, African countries now need to revise and adapt the practices and provisions to current discourses such as business and human rights. The originality of this study is the legal or mandatory approach of CSR, little emphasized in Africa despite the popularity and expectations of the practice. Voluntary CSR in Africa is made of trade-offs between businesses and governments, which provides a recipe for the local community’s contestation. Future research could involve developing a model, drawn from the mandatory CSR in Africa as many countries believe sustainable development is achievable through the private sector and CSR.

Acknowledgments

I would like to acknowledge the support of CSR authors and practitioners who have dedicated their time during the early days of my research journey: AMODU Nojeem, AMAESHI Kenneth, UWAFIOKUN Idemudia, Louis Leandre, Dr. ETSILA, Professor Natacha M’BOUNA.

I would not be able to get my work done without the continual support of my supervisor, Shinichi Takeuchi with for his guidance and precious advice.

I would finish by mentioning my mother Eugenie and fiancée Mignora for their support through words of encouragement.

Conflict of interest

The author declares no conflict of interest.

Acronyms and abbreviations

CSR	Corporate Social Responsibility
BHR	Business and Human Rights
CG	Corporate Governance
MNC	Multinational corporations
NAP	National action plans
UN	United Nations
UNGC	United Nations Global Compact
UNGPs	United Nations Guiding Principles on Business and human rights