16048758 csr malaysia nazrul nifkuzyaire

8/8/2019 16048758 Csr Malaysia Nazrul Nifkuzyaire

1/28

1. Introduction to Case study

Malaysian government had already turned to tolls as means of financing highway

development. One of Malaysias first BOT privatizations was the North-South Highway, the

operating company known as PLUS, Projek Lebuhraya Utara Selatan. PLUS is a subsidiary of

United Engineers (M) Ltd., or UEM, a company controlled by the countrys dominant political

party UMNO Handley (1997). Due to the concession contract agreements made in the past with

UEM and now shifted to PLUS BHD, government regardless of public concern and guilt feelings

must make toll collections along the PLUS highways mandatory until the concession period over.

Somehow, The North South Expressways (NSE) was a high profile project with involvement of

many stakeholders. The stake-holders are those involved and affected by the activities of the

company Freeman (1984). They can be latent, dominant, discretionary or definitive stockholders.

The bread and butter of PLUS BHD regardless of stakeholder salience stressed that it owes

obligations only to its stakeholders - the government, its lenders, shareholders, employees as well

as highway users. PLUS BHD is becoming rich enough to acquire other private highways

operators which helping boosting Malaysia economy development and other related facilities. As

a public listed company, PLUS owes a corporate social responsibility to convince the sceptical

lens of millions of Malaysian expressway users that they are giving back to the community. PLUS

BHD under banner of corporate citizenship has been promoting CSR by providing ample

maintenance, operator, clerical as well as other jobs for Malaysian and directly through donations,

fund raisings, sponsorships etc. For many years, PLUS BHD remains overshadowed by security

commission and Bursa requirement for corporate governance disclosure requirements, just

recently PLUS BHD followed its parent company UEM BHD which is also a GLC to quick fix

1


2/28

for Bursa CSR framework. This case study consists in a longitudinal study of PLUS Expressway

BHDs CSR practices from year 2005 to 2007.

1.1 Case Study Objectives

The primary objectives of the case study are:

1) To briefly go through the mainstream literatures of CSR and highlight the CSR

movement in Malaysia as well as CSR practices in PLUS BHD.

2) To justify at what kind of CSR, PLUS BHD is pursuing, either self-interest as coined by

Milton Friedman (1970), selfless (Post-Frideman) or for sustainability. I posit that with

great government holding power over company the philanthropic tendency might greatly

influenced by the government.

3) To critique PLUS BHDs strategic CSR based on CSR strategy matrix table. See table 1.

4) To provide critical thinking views for any loop holes in current CSR practices by PLUS

BHD and provide them with suggestion.

1.2 Company Profile

2


3/28

The company was founded on 27 June 1986 known as Highway Concessionnaires

Berhad, a member of the United Engineers Malaysia Berhad (UEM). On 13 May 1988 , it

changed its name to Projek Lebuhraya Utara-Selatan Berhad (PLUS). The company was

incorporated in Malaysia on 29 January 2002 known as PLUS Expressway Berhad (PEB). On 17

June 2002 , the company was listed on the Main Board of the Kuala Lumpur Stock Exchange

(KLSE, now Bursa Malaysia ).

Plus was incorporated 1986 and under the termed of concessions awarded by the

government of Malaysia has been involved in construction of and improvements to theexpressway network, maintenance works and toll road operations. Concentrated ownership in

Malaysia is mainly attributable to government holding and family control of the public-listed

companies (Azlan et al.).Based on previous argument, PLUS BHD fall under concentrated

ownership category, as evidence to date the Malaysian government owns approximately 63.97%

via Khazanah Nasional (23.76% direct and 40.21% indirectly via the GLC, UEM Group Bhd.

3
http://www.answers.com/topic/june-27http://www.answers.com/topic/1986http://www.answers.com/topic/uem-grouphttp://www.answers.com/topic/may-13http://www.answers.com/topic/1988http://www.answers.com/topic/june-17http://www.answers.com/topic/june-17http://www.answers.com/topic/2002http://www.answers.com/topic/bursa-malaysiahttp://www.answers.com/topic/bursa-malaysiahttp://www.answers.com/topic/june-27http://www.answers.com/topic/1986http://www.answers.com/topic/uem-grouphttp://www.answers.com/topic/may-13http://www.answers.com/topic/1988http://www.answers.com/topic/june-17http://www.answers.com/topic/june-17http://www.answers.com/topic/2002http://www.answers.com/topic/bursa-malaysiahttp://www.answers.com/topic/bursa-malaysia


4/28

Figure 1 PLUS EXPRESSWAYS group structure.

Table 1 List of Top 3 holders allowed for 5% and above

4


5/28

Table 2 List of Top 30 Holders as at 30 April 2008

5


6/28

2 Literature Reviews

Corporate governance is not only about conformance with laws, rules, standards and

codes but also about enhancing performance and shareholder value. Once corporate adopting

single or numbers of pragmatic and normative elements inside their managerial objectives and

roles, going beyond corporate compliances moving beyond traditional philanthropy (arabic word

sadaqah), walking the talk of corporate social initiatives (giving up fishing rode instead of

fishes) and shifting from shareholder maximization towards sustainability interest (the earth) then

they are said to adopt CSR practice. With regard to command and control regulation, CSR

activities can help to enhance compliance with mandatory policies. As for societal governance,

CSR becomes a beyond compliance strategy when it fulfils goals or measures not required by

legislation, as long as CSR is defined as a beyond compliance strategy, voluntary company

activities need to be distinguished from mandatory ones.

As far back as the 1940s, some scholars suggested that a business firm should be viewed

as a citizen in society (Drucker, 1946, p. 137). Bowen (1953) argues that businessmen have the

obligation to pursue desirable policies in terms of societal objectives and values. Carroll (1979, p.

500) specifies that obligations of businesses encompass the economic, legal, ethical and

discretionary expectations that society has of organizations at a given point in time. Businesses

have the ( economic ) responsibility of being profitable (by producing goods and services that

society wants. Some business leaders and researchers equate philanthropy with corporate

citizenship (Drucker (1946), Bowen (1953) and Caroll (1979) cited in Jeremy Garlbreath, 2006 ).

Those companies engage in philanthropic initiatives or community investment only when

6


7/28

resources are available (Rostami, 1998) and believe they are acting as good corporate citizens.

(Drucker, 1946, Bowen, 1953,Carol, 1998l and Rostami 1998 cited in Valrie Swaen and Isabelle

Maignan,2006) Both of them,argue that corporate citizenship is unlikely to be widely embraced

by organization unless it yields concrete business benefits.

The notion that corporations ought to be socially responsible began during the 1960s, a

time when businesses were expanding internationally and growing rapidly in size and power

(cited in Lantos, 2001). In 1979, Carroll proposed a four-part definition of CSR that was

embedded in a conceptual model. In 1991, Carroll revisited his four-part definition of CSR

and organized the notion of multiple corporate social responsibilities in a pyramid

construct. About the same year Well (1990) came out with Corporate Social

Performance model . These two schools of taught if reconciled can provide extension to CSR

impact assessment. Carroll (1998) and view corporate citizenship solely as a discretionary

activity. More recently, demands for greater corporate accountability, responsibility, and

transparency, the terms corporate citizenship and corporate responsibility had emerged, both in

practice and in academic writing. Another major emphasis is currently on sustainability, a term

originally popularized by the Brundtland Commissions 1987 report, which first defined

sustainable development. The term sustainability originally emphasized ecological sustainability.

Long recognized Doing well by doing well is the essence of Corporate Social Responsibility

(CSR). Although this term is in widespread use, it tends to be associated with corporate

philanthropy and other do good efforts even if it comes at the expense of the bottom line and

CSR activities are often thought of as corporate window dressing, i.e., an effort to make the

company look good while it continues to pursue problematic business practices.

7


8/28

Identifying CSR effects: Effects resulting from the adoption of CSR are identified, taking

into account changes in commitment and strategy (CSR output), concrete practices (CSR

outcome) and the consequences for society and the environment (CSR impact). Lantos (200l)

introduced the strategic nature of CSR, providing the following classification firstly, ethical CSR

(including economic, legal and ethical as one group); second, altruistic CSR (philanthropic, going

beyond ethical, regardless of whether or not this will benefit the business itself); third strategic

CSR (fulfilling those philanthropic responsibilities which will benefit the firm through positive

publicity and goodwill). The recent development of Corporate Social Responsibility (CSR) is

now changing the pendulum back to a broader approach of value-creation for the broad group of

stakeholders and emphasizing triple bottom line approach.Andrews (1998) described CSR as

intelligent and objective concern for the welfare of society that restrains individual and corporate

behaviour from ultimately destructive activities, even though those activities ensure immediate

profits (cited in Perera & Hewege, 2007 ).

Any corporations business goal is to provide value and incentive to its shareholders.

Therefore, profit-oriented corporations or organizations are not a charitable organization although

sometimes it is in their direct interest to support charitable activities. Furthermore, sometimes

corporations or organizations carry out certain activities that governments should undertake,

although they are not government agencies (Mudzamir, 2007). Ideally, what good for

government would be good for Government Linked Companies (GLCs) or state owned

companies (SOCs).By nature, altruistic CSR promote by many governments in the world today

are for society betterment. In a simple description, altruistic CSR are any government actions that

8


9/28

substitute for charitable endeavors which help solve the free-riding problem because the

mandatory nature of beneficiaries salience for charitable giving to the government (taxes that we

pay) or in simple laymen terms, pure selfless commitment explain why government imposing

taxes and using the proceeds to produce public goods. In fact looking at our local context the

Government as the producer of altruism also encourage public and private sector to altruistic

CSR. Although government spending largely targets pure-altruism activities such as collecting

taxes that are prone to free riding problem the government still competes to some extent with self

interest corporate activities which basis in shareholder strategy . The shareholder strategy

represents an approach to CSR as a component of an overall profit motive, one that is focused

exclusively on maximizing shareholder returns. This strategic option is best aligned with the

economist Milton Friedman Jeremy Galbreath, 2006). Although perhaps seen as short-sighted in

todays business climate, a shareholder strategy, one based on the classic Friedmanite

argument, is nonetheless a strategic option with respect to CSR he added. Furthermore, any

expenditure that is not related to profit maximization is seen as tax levied on shareholders

(Greenwood, 2002). In academic world, Lockett et al., (2006) find that 89%of theoretical CSR

papers are non-normative (self-interest or profit-driven), but CSR in developing countries

literature; the balance is far more evenly split. This is largely due to the relatively large number of

papers on the role of business in development, which tend to adopt a normative (altruistic),

critical perspective (Blowfield and Frynas, 2005).

CSR for sustainability cannot be maintained unless private firms have some

benefits from CSR activities. Once CSR actions are linked with company business strategy and

9


10/28

are incorporated in to day-to-day operations of the business, some firms have shown positive

results and also the sustainability of CSR (Key and Popkin, 1998). Thus, the citizenship strategy

not only recognizes its responsibilities to potential external constituents beyond its shareholders,

but to its internal constituents as well (Dawkins and Lewis, 2003 cited in Jeremy Galbreath,

2006).

2.1 CSR disclosure in general

The term CSR disclosure reflecting the disclosure of social and environmental

information attracts attention as the information itself involves the living quality despite the fact

that its reporting is voluntary in nature (Mohamad and Ahmad, 2001).Research on factors

influencing CSR disclosure has mainly focused on the significance of a number of corporate

characteristics such as company size (e.g. Belkaoui and Karpik, 1989; Patten, 1991) and industry

type (e.g. Roberts, 1992; Hackston and Milne, 1996; Adams et al., 1998, Mudzamir and

Norfaieszah. However, only recently a few researches have been done on the association between

ownership structure and board practices on CSR disclosure such as (Afzalur and Sudhir, 2008

Many explanations for CSR disclosure some provided by substantive management, and symbolic

management (legitimacy orientation), power capacity of and power relationship of stakeholders

which influence manager prioritization and rise to political costs which influence mangers on the

selection of accounting method. One CSR practice that paramount important is CS Disclosure

(CSD). CSD may have the potential to strengthen stakeholder engagement as reporting promotes

corporate transparency and instills greater confidence and trust amongst stakeholders. CSD is a

10


11/28

means used by firms to inform its stakeholders and also to manage public impressions as

demonstrated by Neu, Warsame & Pedwell (1998).

2.2 CSR in Malaysia

Malaysia strategies for CSR are built to inculcate the level of CSR consciousness amongst

corporate Malaysia, increase the capacity and capability to combat environmental and social

concerns in short to promote responsible businesses to be part of solution towards sustainable

development. More to say, CSR has some impact on earning management and financial

performance for companies listed in Bursa Malaysia. Currently, Malaysian PLCs are in various

stages on the CSR continuum.The CSR continuum for Malaysia was far sighted road from

philanthropy to PR whitewash to ad-hoc CSR to strategic CSR to strategic CR departure;

Malaysia has been traveling the journey of corporate governance and corporate responsibility for

the past twenty years. Indeed CSR requires clarity of corporate purpose, principles and values,

backed up by rigorous internal accountability systems. Milestones in this journey include,

Firstly the establishment of key institutions promoting the corporate governance and CSR agenda

in the form of the Malaysian Institute of Corporate Governance, the Minority Shareholders

Watchdog Group and the Institute of Corporate Responsibility Malaysia and the Green Book on

Corporate Governance ICR Malaysia was established on Nov 16, 2006, to promote socially

responsible business practices, thereby raising business standards of Malaysian companies for the

benefit of all stakeholders and ensuring sustainable development. Second, the implementation of

policies promoting good governance and social responsibility referring to the introduction of the

Malaysian Code of Corporate Governance and Bursa Malaysias Revised Listing Requirements in

11


12/28

2001, focusing on good governance on the one hand, and to the requirements to declare what

companies have done for CSR by the government in the 2007 and 2008 budgets if they want to

tender for government business and Bursa Malaysias updated listing requirements in 2007 for

annual reports on the other. Bursa Malaysia had stated that these reports ranged from a one-line

statement to a standalone report, allowing flexibility to adopt this practice. There is list

requirement for GLCs to adopt the Silver Book process in devising their CSR policies. Third

several high profile conferences have been hosted by the SC on CSR; and Fourth Malaysia

already has a Corporate Governance Index. (Zarinah,2008).Looking at Malaysia scenario, the

adoption of CSR disclosure (cross set diagram of corporate disclosure) has slipped of many PLC

radar screens with exception of a few companies. Fortunately, two CSR subwoofers breaking the

silence recently namely Khazanah Silver Book CSR guideline book for PLCs and Bursa CSR

framework. The Bursa CSR framework will guide these companies in formulating their CSR

statements and agendas (Omar, 2006).Whereas for the more advanced pro-active CSR

companies that perceive CSR as strategic business opportunities and integrated CSR companies

that institutionalise CSR policies and use CSR practices as a strategic differentiator, Bursa will

profile them on a Bursa SRI Index and moot them as investments for national pension funds and

institutional investors. Finally, Bursa will assist mission driven CSR companies, whose purpose is

to improve social or environmental conditions, to gain entry into international indices like the

Dow Jones Sustainability Index, thereby increasing visibility ( Nazatul , 2006 ). The

complementary, Silver Book, was launched from the government- linked company (GLC)

transformation program earlier that the Bursa CSR launch day, this Silver Book provides firms

with scorecards and guidelines to measure these ideas and to gauge how effective their CSR

12


13/28

policies are. CSR reporting was made compulsory in Budget 2006, requiring all public listed

companies to report on their environmental and social responsibility performance. Prior to that

Bursa Securities had released corporate disclosure listing requirement. This listing requirement

also state that any announcement made by listed company, must among others, factual, clear,

unambiguous, accurate , succinct, contain sufficient information and not false. Back up by Bursa

and SC, ICR Malaysia (ICRM) which also has informal network names CSR Malaysia, ACCA

as well as National Integrity Institute are the pillars of CSR hallmark in Malaysia. Apart from

philanthropic and ad hoc CSR, this nation also hunts for sustainable

development(SD).Apparently, national aspiration for SD has give birth to Business Council for

(BSCDM).Sustainable Development. BSCDM is non-profit organization which is embarking on

short and long term environmental education programme to drive the message of sustainable

development, mainly through employees, customers and society. GLCs in Malaysia have started

to rationalize their CSR calls for sustainability. As the result G20 network was established since

end 2007 championed the PINTAR project initiated by the Ministry of Finance and spearheaded

by the Performance Management Office, Khazanah Nasional together with Government-Linked

Companies (GLCs), aimed at improving the socio-economic standard of rural students through

educational achievement.

At the global stage, several Malaysia GLCs signed and took part in the oath ceremony on

the name of the Malaysia Compact and the Caux Round Table, with the support of Khazanah

Nasional Berhad and Talisman Energy, the companies pledged to align and observe the

Compact's te universal principles regarding human rights, labour rights, environmental

13


14/28

sustainability and anti-corruption in their operations and strategies as well as produce a

comprehensive annual report on their implementation (UNGlobal compact news,2008)

2.3 Automatic Tax relief for Philanthropic in Malaysia

Malaysian government through its Lembaga Hasil Dalam Negeri (LHDN) or Inland

Revenue Department (taxation board) lists organizations, clubs, funds and foundations, trusts,

and associations etc every year to ensure the donations made to the organizations listed were tax

exempted. However, beside the list that enabled an automatic tax relief, special requests from

PLCs was made during the mini budget 2009 meeting that the scope of charitable and community

projects eligible for tax deduction be extended to include projects relating to increasing the

income of the poor as well as for the conservation or preservation of the environment.

3.0 PLUS Corporate Citizenship promoting CSR

Sizable amount of PLUS BHD voluntaries, fund raising as well as sponsorship activities

shows that they are pure altruistic company by taking holistic approach integrating philanthropic

into their core business environment. PLUS BHD alternates their CSR tagline caring to

customer and the community with caring corporate citizenship can be found in the annual

reports. The Bread and Butter (Top managers) of PLUS BHD were quick to realize volunteerism

as their corporate shield (virtue) as highlighted in the following PLUSs corporate statement as

quoted volunteerism is also high on the list of virtues that we like to encourage in our

employees. It is with this in mind that we support initiatives by our operations personnel in a

wide range of charitable projects involving low income families, orphanages and other deserving

14


15/28

sections of the local communities that we serve. In year 2005, PLUS BHD got a very seldom

chance to lend helping hand to the Tsunami victims. The fact is that this Tsunami is natural

disaster happen only once every 1000years! Sometimes PLUS BHD chooses activity based

community services to portray their CSR hallmark. During heavy rain season, PLUS BHD will

send the voluntary teams played their part in organizing relief efforts to flood the victims by

providing equipment and supplying manpower to assist with cleaning up activities PLUS

stakeholder participations in activities based CSR can also be found programme such as the

"Kembara Bersama PLUS" Edu-Fun programme which brought together underprivileged school

children from rural areas for an educational and recreational field trip to Kuala Lumpur. PLUS

BHD make their status known amongst the community by sponsoring free daily newspapers for

30 schools along the PLUS expressways as dynamic and maximize the positive ramifications of

their capital donation. The Company also give back to the community in term of donations for

example in 2006 the company brought cheer to University Malaya Medical Centre's Oncology

Pediatric Unit when it presented RM20,000 and gifts to the unit at the annual get-together for

ward staff, patients and their families.

Again social contribution activities were reported in year 2006 with some additional

educational programme launched during the year was the Kembara Bersama PLUS@EduSafe as

well as PLUS@EduClean Campaign which hopes to instill road safety awareness and labour

importance of hygiene respectively among children through educational games and interactive

workshops.

15


16/28

Since a growing trend in philanthropy is to engage several company resources in

supporting a cause and to work closely with academic centers in using those resources wisely .

Tripartite CSR partnerships between PLUS BHD, academic centers, and NGOs are often the

most effective way for fund raising and public relations .Evidences, jointly organized by PLUS

BHD and UMMC (an academic center), the social gathering of patients, families, friends and

hospital staff has become an annual event in which children with cancer are given a special treat

to lift their spirits.

Reconciling a painful past (due to dust and noise during highway construction) with a hopeful

future PLUS BHD company provides business opportunities for communities living near our

expressway facilities. They provide affordable rental rates and continuous training on food

preparation, hygiene and customer service to local entrepreneurs.

3.1 Sustainable development banner of PLUS BHD

It would be meaningful to GLCs when CSR is integral to the heart of their strategy. There

are four broad areas in GLCs where CSR can make a difference. These are taking the lead in

tackling social issues, providing stewardship to environment, being employer of choice and

fighting corruption (Tan, 2005). Narrowing down out scope to PLUS BHD, it is not a surprise to

notice that the group subscribes to the principles of sustainable development which underline all

our activities and decision-making (PLUS corporate statement, 2007).Plus BHD promotes

sustainability CSR through environment stewardship programme for example PLUS BHD

involvement in United Nation Environment Programme in this region, PLUS marketing and

corporate communication general manager Khalilah Mohd Talhah as quoted We will ensure that

the greenery along the North-South Expressway is maintained. So far, we have planted a lot of

16


17/28

trees as a way to maintain the greenery and preserve the environment In addition, the company

realizes the importance of caring for the environment. We have adopted a comprehensive

environmental strategy that includes establishing an environmental management system. This

will allow thorough and efficient monitoring and control of all expressway activities that interact

with the environment, including the treatment of waste water produced at our RSAs.

3.2 Human capital Development

The company has always reveled in its role as a provider of the infrastructure necessary

for economic development, but it also values the opportunity to contribute to society in more

direct and personal ways. Towards this end, job opportunities have been extended to people with

disabilities and we have embarked on an executive development programme, taking a number of

fresh graduates on board to equip them with skills that will enhance their employability. Pipeline

development has become of PLUS BHD de facto for sustainable growth.

4.0 Critical views of PLUSs CSR practices

Table 3

CSR Strategy Matrix

17


18/28

Source: Jeremy Galbreath, 2006 article on corporate social responsibility strategy: strategic

options, global considerations

At maximum, PLUS BHD is successful in sounding CSR statements in their annual

report. The intention is clearly stated in the one of the annual report as quoted to raise the

awareness of CSR to integrate the practice of CSR as part of the way they work and think (care

for environment in which they operate). PLUS BHD has shifted from 100% profit driven to

altruistic to strategic philanthropy. Strategic philanthropy describes practices through which

companies align charitable activities such as donations and volunteerism with a social issue or

cause that supports their business objectives. Thinking about giving strategically (financially,

through in-kind donations, and with volunteers) means considering the value added to your

business through philanthropic initiatives as defined by the Boston College Center for Corporate

18


19/28

Citizenship. Due to so much financial support from government through compensations and tax

deduction, PLUS BHD group do not just give donations to cater the need charity groups they

might also engaging in reciprocal type of CSR practices(see table 1) as seen through their public

relations, partnerships and sponsorships. Likewise, as an exchange and a listed company, PLUS

BHD is in a unique position to face the challenge that CSR poses both from a commercial and

national standpoint. I can see that their CSR activities aligned with national aspiration and

policies. For example, government support for road safety campaign has become catalyst to

PLUS BHD to perform road safety education campaigns etc.

From SD lens, PLUS BHD really is contributing toward economy development to the

nation by connecting north and south regions. They provide many jobs to Malaysian. They pay

huge amount of tax. PLUS BHD also put their effort to contribute to social development of the

new generation through many joint partnerships with NGOs and Academic entities. PLUS BHD

also catalyzing CSR for sustainability through lands acquisitions has speed up the government

aspiration to modernize rural and remote areas triggered up for new township and many industrial

estates. The highway developments have those socio-economic impacts which both been visible

and tangible for example their land acquisition boosting new mega project development such as

Iskandariah region located in south Malaysia. Do you think government will open up Iskandariah

region if no expressways nearby?

CSR might not appear to be related to PLUS BHD profitability in the same period but

some evidences suggests that it might be related to lag profit. Evidence one, PLUS BHD received

government compensation for not increasing the toll, is RM1.1billion to RM1.4billion yearly

19


20/28

from 2004 to 2007.Indirecty this would increase the discretionary resources for charitable

purpose. Evidence two, PLUS BHD also planted Tectona Grandis trees or in Malaysian word

they call Pokok Jati alongside the north south highway .Just imagine the profits they can gain

out of this lag profit in case PLUS cut down the trees in future time. Maybe they plan to harvest

them before the concession end because scientifically the longer the trees live the better the

quality.

Many firms have provided examples of CSR actions, yet there are questions relating to

ulterior motive and the scope of CSR activities these companies indulge in. Close scrutiny of

these CSR actions and the related propaganda by the firms provide evidence for profit

maximization. The verbatim point of PLUS mad rush for profits at the expense of corporate

social responsibility as seen by the latest imposition for fines for motorists who drive too slowly

or spend too much time in the highway should be punished severely, PLUS has shown no

corporate social responsibility. Hence, in order to refute bad image for primacy of profit over

social welfare, PLUS BHD must make sure accountability and legitimacy proving they really

engage in CSR with pure altruism, genuine commitment to society devoid of profit motives.

PLUS BHD owes an accountability report to the public convince that such toll hike and road fine

is absolutely necessary and justifiable. Many doubt the reliability and efficiency of Plus

emergency units in handling accidents in broad daylight let alone past midnight it should give

the 10% discount irrespective of the time of travel. This, then, will not endanger the lives of

Malaysians and so on.

To me PLUS BHD is slightly profit driven, but it is not going to maintain that way for a

long time period as the cash cow concession for PLUS BHD will only valid only for 50 years

20


21/28

before government can have full ownership. Having full ownership meaning government can

reduce toll tax, if thats true fact, and then we may say PLUS BHD is practicing shareholder

strategy (see Table 1) because the short time frame seems valid here. However, some readers

might say that 50 years is a long time frame period thus PLUS BHD might practicing altruistic

strategy by giving back to community in term of check-book philanthropy(see table 1). To

some readers PLUS BHD perform both previous strategies plus reciprocal strategy (see table 1)

which is measured through public relations, sponsorships, community activities and volunteering

etc. I argue that PLUS BHD is matured enough that they engage in citizenship strategy. They

should consider gear up from strategic CSR to Strategic CR.

5.0 Suggestions to improve PLUS CSR engagements and CS reporting.

PLUS BHD could include in their annual report the CSR indicators that they are currently

using to measure their CSR performance. PLUS BHD should embrace in both their strategic and

operation CSR. Companies should develop clear performance metrics to measure the impact of

their CSR strategies. These metrics should be both internal metrics like reputation improvements,

gains in market share, brand perception, increased sales, decreased operational expenditures, and

employee satisfaction, as well as external metrics focused on society and the environment.

Because of the diversity of stakeholder groups to whom accountability is required it is important

to suggest how that accountability can be delivered namely fiscal accountability making sure the

money has been spent as agreed, according to the appropriate rules; Programme accountability

21


22/28

(providing assurance that the charity is effective in achieving results intended); as well as

Accountability for priorities (fulfilling user needs appropriately) and Process accountability

(ensuring proper procedures have been followed to provide value for money) as suggested by

Hayes (1996).

PLUS BHD should provide standalone CSR and publish in detail their CS reporting

through corporate website. They also must introduce key Performance Indicator (KPI) to

standardize performance of the work might it be during construction, operation or maintenance

done. Regulatory bodies such Bursa and SC should act as watchdog to government BOT projects

and other type of governmental privatization projects and ICR Malaysia can become government

arm to give advices to the Malaysia government about best CSR practices.

6.0 Conclusion

Malaysia ex-Prime Minister Tun Dr. Mahathir Mohammeds vision 2020 and

modernization concept shaped a new rhetoric around local corporations in middle 80s. An

advantage local corporations have over the government seeking modernization is that different

corporations can offer different types of market altruism to different people. The forces of

modernization have further emphasized of several BOT projects such as National car project

SAGA and PLUS expressways. The Government of Malaysia has long recognized the need for

an efficient and safe expressway to link the major towns and ports to accelerate economic growth

in the light of the overall development plans. Fortunately, Malaysian government managed to get

private company management and capital to source Malaysias first super highway known as

22


23/28

NSE. The North-South Expressway (NSE) is the mother of all unfair privatizations in Malaysia

claimed Lim Kit Siang, the ex-opposition leader. Without intention to elaborate more on his

statement hardly any trade unionist in our country knew anything about the concept of

privatisation until Dr Mahathir Mohamad started talking about it after he became the Prime

Minister in July 1981. A three-day seminar was held in 1983 in which Mahathir delivered the

keynote address. He said that privatisation would improve efficiency and transparency. As the

PM, he also gave an assurance of open tenders, which, of course, he never ever practiced. The

demerits of privatization (2007).

The first open tender in Malaysia was on BOT highway project, The PLUS. The project was

granted to UEM. Many know that this BOT is one way of privatization which gives some control

to the Malaysia government.

Similar to privatization sudden trigger, was establishment of the GLCs. GLC concept was Tuns

creative way reacting to proponent of CSR like fighting corruption and improving human right of

civil service workers (see global compact principles). He used the power of government through

these GLCs to open up the market and break down the de facto monopolies then in existence. The

role played by his GLCs is a far cry from corruption-ridden variety in existence today.

Since then, Malaysia has become a leader in Corporate Governance (GC) and later Corporate

Social Responsibility (CSR) not just in ASIA but also around the world. The foundations of this

success have been laid by a number of key initiatives including the Putrajaya Committee for GLC

23


24/28

Transformation, the CSR reporting requirements for PLCs and a range of tax incentives aimed at

promoting sustainable investment in environmental, social and governance activities.

In motivation to understand and report real CSR practices by local company, the case

study was looking at the CSR practices by PLUS BHD aiming for clear picture of how private

company is responsible to their business operation. Wholly owned by Khazanah and UEM, PLUS

BHD is expected to fulfill Khazanah silver book and the latest CSD requirement by security

commission of Malaysia Bursa. From the content analysis of the annual reports from year 2005 to

2007, we can found many evidences CSR strategies manipulated by them.

Prior to that, in literature review reader can find about classic views and framework on

CSR.CSR philosophy and CSR development in Malaysia also touched. Previous researches on

Corporate Social Disclosure were also highlighted.I also did critique the current CSR practices

Towards the end I gave some suggestions for PLUS BHD to look into strategize and

operationalize their CSR activities so that they can better results.

References:

Blowfield, M. (2005) Corporate social responsibility: Reinventing the meaning of development?

International Affairs 81(3): 515524.

Chan Ching Thut. (2004, April 14).Private initiative for good corporate behavior. Starbiz

24


25/28

Dima Jamali and Ramez Mirshak (2006). Corporate Social Responsibility (CSR): Theory and

Practice in a Developing Country Context. Journal of Business Ethics (2007) 72:243262

Quarterly 14 (3), 335-344. doi: 10.1207/s15427625tcq1403_12. DOI 10.1007/s10551-006-

9168-4

Freeman, R. E. (1984). Strategic management: A stakeholder approach. Boston: Pitman

Publishing

Frynas, J.G. (2005). The false developmental promise of corporate social responsibility:

evidence from multinational oil companies. International Affairs , 81(3): 581598

Galbreath, Jeremy. (2007) "Drivers of CSR: The role of strategic planning and firm culture." In

Proceedings of the 21st ANZAM conference: Managing our intellectual and social capital, edited

by Urs Daellenbach, Canning Bridge, Western Australia: PROMACO Conventions Pty Ltd,

Handley,Paul. (2007). BOT Privatisation in Asia: Distorted Goals and Processes. Working

Paper series No. 82, Murdoch University, Asia Research Centre.

Hayes,T., (1996)Management, Control and Accountability in Nonprofit/Voluntary

Organizations, Adebury, Aldershot.

Johan Raslan. (2007), , Keynote address at the Public forum - The UN Global Compact:

Corporate Citizenship in the world Economy Securities Commission, Kuala Lumpur, June.

Lantos, G.P. (2001). The boundaries if strategic corporate social responsibility.Unpublished

Paper, Stonehill College, North Easton, MA.

25


26/28

Lockett, A., Moon, J., and Visser, W. 2006. Corporate Social Responsibility in Management

Research: Focus, Nature, Salience, and Sources of Influence. Journal ofManagement

Studies , 43(1): 11536.

L. Chamila Roshani Perera and Chandana Rathnasiri Hewege (2007). Three Types Corporate

Social Responsibility Engagement; Self interest & Altruism on Sustainability.In Proceedings

of Business and Information Volume 4, ISSN 1729-9322, 2007

Lilei Chow (2008, Aug 27). Global Compact gains Momentum in Malaysia.Retrieved from

http://www.unglobalcompact.org/NewsAndEvents/news_archives/2008_08_27.html

Maignan Isabelle and Ferrell O. C. (2001), Antecedents and benefits of corporate citizenship: an

investigation of French Businesses, Journal of Business Research , Vol. 51, pp. 37-51

Mudzamir Mohamed (2007). Corporate Social Responsibility (CSR) Activities in Mobile

Telecommunication Industry: Case Study in Malaysia in conference proceedings, European

Critical Accounting Conference, Scotland, UK, July

Nazirah (2006, Dec 22 ).Doing business with a conscience. Dispatch (Asia edition).Retrieved

from http://www.accaglobal.com/members/publications/accounting_business/oober/2854923

Nik Ahmad, N.N., Sulaiman, M. and Siswantoro, D. (2003), Corporate social responsibility

disclosure in Malaysia: an analysis of annual reports of KLSE listed companies, IIUM

Journal of Economics and Management, Vol. 11 No. 1, pp. 51-86.

26


27/28

PLUS Expressways BHD. Annual report 2006 . Retrieved from http://plus.listedcompany.com



Susan Tam.(2004, August 24) .CSR is more than Philanthropy, Zarinah: Translate ideas into business strategies

Susan Tam.(2007, September 3).The next wave of CSR. Starbiz

Zakaria, Z. (2002), Corporate Social Reporting in Malaysia, MBA thesis, University of Malaya, Sheffield.

Zarinah Anwar (2006) " Corporate Social Responsibility Infusing New Spirit into the Business

World", Keynote address at the Malaysian Corporate Social Responsibility and

Governance Conference,October

Tay Kay Luan (2005, Nov 21). CSR practice in GLCs as friend or foe? The Edge

Zarinah Anwar (2006) " Starbiz-ICRM Corporate Responsibility Awards", Keynote address at the

first annual Starbiz-ICRM Corporate Responsibility Awards. Retrieved from

http://thestar.com.my/starbizicrm/sp-zarinah.html

The demerits of privatization (2007, June 28). Aliran Monthly.

27
http://plus.listedcompany.com/http://plus.listedcompany.com/http://thestar.com.my/starbizicrm/sp-zarinah.htmlhttp://plus.listedcompany.com/http://plus.listedcompany.com/http://thestar.com.my/starbizicrm/sp-zarinah.html


28/28

16048758 csr malaysia nazrul nifkuzyaire

Documents